Yellen Crypto, Bitcoin, IG Group $1bn Buy, Spain FX Warning: Editor’s PickJanuary 24, 2021
In a busy week for news, let’s take a look back at the biggest stories from the worlds of forex, fintech, and crypto, in our best of the week segment.
IG Group Proposes $1 Billion Acquisition of Tastytrade
IG Group announced this week the proposed acquisition of the US-based online broker and a trading education platform, Tastytrade, in a $1 billion deal.
According to the official details, $300 million out of the total $1 billion will be paid in cash while the remaining $700 million will be offered in the form of 61 million IG shares. Subject to regulatory approvals, the proposed deal is expected to close in Q1 of IG’s financial year ending May 31, 2022.
Read more on the IG Group Purchase of Tastytrade here.
Janet Yellen Changes Tone on Cryptocurrency Assets
Janet Yellen, the former chair of the Federal Reserve and Joe Biden’s nominee for the US Treasury Secretary, changed her stance on cryptocurrencies.
According to her latest remarks published by the Senate Committee on Finance, digital currencies can improve the efficiency of the financial system. Yellen plans to encourage the use of cryptocurrency assets for legitimate activities. She3 also discussed crypto use for criminal activities/
Read more on the latest Yellen crypto statement here.
Cryptocurrency Polkadot Jumps 100% in 7 Days, Beats XRP and Litecoin
As Finance Magnates reported this week, The price of DOT gained more than 100% in the last 7 days.
According to the data gathered by Coinmarketcap, the price of Polkadot (DOT) jumped from $7.80 on 11 January to as high as $18.90 on 17 January. As of writing, the price of Polkadot is consolidating near $17.50.
The recent price rally helped Polkadot to reach a market cap of $15 billion. The cryptocurrency is now more valuable than Bitcoin Cash, Cardano, Litecoin, and XRP. Polkadot is the fourth-largest cryptocurrency in the world behind Tether.
Read more on Polkadot here.
Biden to Pick Former Ripple Board Member as OCC Head, XRP Jumps
Michael Barr, a former US Treasury official and previously a key member of Ripple’s advisory board, will replace Brian Brooks as the Head of the Office of the Comptroller of the Currency (OCC).
According to the WSJ report, US President Joe Biden will nominate Barr soon. If nominated and confirmed, Barr will become one of the few individuals in the US administration with strong knowledge about cryptocurrencies. He joined Ripple as an advisor in 2015 and worked closely with the core team of Ripple Labs.
Read more on the Michael Barr appointment here.
Bitcoin Crash Intensifies, BTC Drops Below $32,000
The Bitcoin rollercoaster ride continued this week. Bitcoin dropped below $32,000 on Thursday as the cryptocurrency lost around 20% of its value since the last week. The selling pressure on BTC is mounting due to significant activities by Bitcoin whales at leading crypto exchanges. Approximately $726 million worth of long BTC positions got liquidated between Wednesday and Thursday.
As Finance Magnates reported, Bitcoin whales have rook nearly 270,000 BTC out of the liquid supply over 24 hours.
Read more on the Bitcoin crash here.
Grayscale Purchases $600 Million Bitcoin in 24 Hours
Grayscale, the world’s largest cryptocurrency asset management firm, has accumulated 16,244 Bitcoin worth more than $600 million in the last 24 hours due to growing institutional demand. The company now has more than 630,000 BTC worth nearly $23 billion.
Grayscale’s total crypto assets under management (AUM) jumped above $27 billion on Tuesday as the price of Bitcoin crossed $37,000. The total market cap of cryptocurrencies reached $1.06 trillion.
As Finance Magnates reported, the company has accumulated nearly 26,000 Bitcoin in the last 7 days.
Read more on the Grayscale Bitcoin purchases here.
BlackRock Greenlights Two Associated Funds to Invest in Bitcoin
BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, is allowing two of its biggest funds to engage in Bitcoin derivatives.
According to ‘additional information’ provided in prospectus documents filed with the SEC, BlackRock has added bitcoin futures to derivatives products that its two funds can invest in. BlackRock Global Allocation Fund Inc. and BlackRock Funds V are cleared to invest in commodities, currencies, interest rates, credit events, or indices.
Read more on the BlackRock Bitcoin investments here.
UK’s Fintech Sector Secures $4.1 Billion Investment in 2020
Fintech companies in the UK attracted £3 billion ($4.1 billion) investment in 2020, the highest figure across Europe. The amount was invested across a total of 408 deals last year. The US remained the leader in global fintech capital raised as the American companies attracted nearly $22 billion in funding in 2020.
Global fintech investment reached $44 billion in 2020, a 14% jump compared to 2019.
Read more on the UK’s Fintech funding here.
Spain is Fed up with Cypriot Brokers’ Practices, CySEC Warns
In a circular to its regulated investment Firms (CIFs), CySEC drew the attention of firms that provide investment services in Spain towards a recent statement released by its financial regulator.
The CNMV issued a circular that adopted an aggressive tone and threatened some European brokers that they could end up closing their activity in Spain, as the watchdog was fed up with their unfair practices. In essence, the guidance concerns companies that offer forex, contracts for difference (CFDs), and other speculative products among retail investors in Spain.
At the time, the Spanish regulatory body said it mainly examines CFD brokers based in Cyprus, and that it has its sights set on those who use overly aggressive tactics and practices.
Read more on the Spanish CySEC warning here.
Analysis: How New Tax Law Could Kill CFDs Trading in Germany
Finance Magnates delved deep into the German trading scene this week.
German investors trading a variety of derivatives products are subject to new capital gains taxes following an amended law that was pushed almost secretly through the Bundestag during 2020 Christmas holidays.
The legislative proposal went initially unnoticed when it was first introduced and then passed more than a year ago. But, shortly after, it made a big noise as the new regulation drastically limits the ability of individual traders to offset their losses against profits they earn from derivative transactions.
Read more on the German Tax Law Here
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