Reaction or the lack thereof, by crypto assets to the political developments in Argentina, should serve as a good reminder of the asymmetric and inconsistent behavior which makes the asset class notoriously difficult to analyze, and in turn, continues to put-off a number of established firms from entering the space. Specifically, the Argentine Peso tumbled by 30.3% to 65 per USD, while the country’s sovereign century bonds plunged by the largest amount since they were first sold in 2017. At the same time, Argentina’s major stock exchange also dropped down 11% shortly after trading opened and continued to sink throughout the day, sinking down 33% at one point. This all happened in reaction to the news that Macri, the pro-business leader, was defeated by leftist president Alberto Fernández and vice-presidential candidate Cristina Fernández de Kirchner.
Over in Hong Kong, hundreds of pro-democracy protesters have staged a new rally at Hong Kong’s airport, a day after a massive demonstration triggered a shutdown at the busy international travel hub. The unprecedented cancellation of all flights on Monday followed a fourth consecutive day of protests at the airport and, as part of increasingly hostile posturing by China, a Chinese official stating that “terrorism” was manifesting in the city. As such, there is a risk that tensions will escalate from here and spur on capital flight from the state, where a number of crypto exchanges are based.
In other news, the Securities and Exchange Commission (SEC) again postponed decisions on three bitcoin exchange-traded fund (ETF) proposals. Two of the three ETF proposals filed earlier this year, one by Bitwise Asset Management under NYSE Arca and the other by VanEck/SolidX under Cboe BZX Exchange, are yet to get the much sought after approval. Wilshire Phoenix Funds joined the waitlist in June by proposing a fund that hedges bitcoin with Treasury bills. According to reports, the new deadline for the SEC to make a decision on Wilshire Phoenix is Sept. 29, while for Bitwise and VanEck/SolidX the dates are Oct. 13 and Oct. 18.
Looking elsewhere, according to Gulf News, Mubadala Investment Capital, the world’s thirteenth largest sovereign wealth fund by total assets, has invested “a seven-figure” USD amount in Abu Dhabi-based upcoming cryptocurrency exchange MidChains. The deal took about a year to get finalized and MidChains is expected to launch its platform later this year at Abu Dhabi Global Market (ADGM), the city's international financial free zone within the UAE.
Thank you for reading,
The BeQuant’s Analytics team