CME Group Expands Crypto Reference Rates to Asian Markets

Metaplanet, the Tokyo-headquartered Bitcoin corporate treasury firm, has purchased an additional 696 BTC, following a stock split, bringing its total Bitcoin holding to 4,046 BTC.Photo by Kanchanara on Unsplash$341 million in BitcoinThe company publicized details of its latest Bitcoin purchase on X on April 1. It outlined that funding of this purchase was enabled through the allocation of cash held by the firm as a consequence of the sale of put options.  The average purchase price of the 696 BTC was 14,586,230 yen ($97,694). The average price the firm has paid per Bitcoin in relation to its entire holding of the leading digital asset is 12,943,181 yen ($86,689). Its overall Bitcoin holding has a total value of approximately $341 million. Taking to X, the firm’s CEO, Simon Gerovich, said that Metaplanet’s Bitcoin Income Generation business achieved 770 million yen ($5.2 million) in Q1 revenue, while year-to-date its Bitcoin yield has reached 95.6%. Stock split & bond issuanceThis purchase follows both a stock split and the issuance of bonds worth 2 billion yen ($13.3 million). On March 31, Metaplanet filed a disclosure outlining details of the bond issuance. The company issued the zero interest bonds via its Evo Fund. Buyers will be permitted to redeem the newly issued bonds at face value by Sept. 30. In an X post, Gerovich suggested that the bond issuance was being implemented in order to facilitate the company “buying the dip,” taking advantage of a downturn in the Bitcoin unit price over recent weeks. In a notice filed on Feb. 18, Metaplanet outlined details of its 10-to-1 stock split. The company described how it executed a reverse 10-to-1 stock split last August. This has created a problem for investors as in the interim, the stock price has increased significantly. Consequently, the share price is unwieldy, placing a substantial financial burden on investors. On that basis, the latest stock split will enable greater investor accessibility and improved liquidity. Arising from that, Metaplanet expects that it will gain a broader investor base. On March 30, Gerovich reported that Metaplanet stock is now a component within Betashares’ Crypto Innovators ETF. Betashares is an Australian asset manager with over $50 billion in assets under management.  The Metaplanet CEO suggested that the development pointed towards “growing interest from institutional investors,” while expressing his satisfaction with Australians now having access to Metaplanet’s Bitcoin First Strategy via the Australian Securities Exchange (ASX). The ‘Asian MicroStrategy’Metaplanet is being regarded by many industry commentators as the “Asian MicroStrategy,” referring to the American Bitcoin treasury firm that recently rebranded to Strategy, having pioneered a particular approach to building a position in Bitcoin within a corporate treasury. Metaplanet appears to have adopted the same Bitcoin playbook. In an appearance on the Coin Stories Podcast recently, Metaplanet’s Gerovich said that he encourages his friends to put “100% of their net worth into Bitcoin.” Last month, the company confirmed that it was pursuing a strategy to accumulate 10,000 Bitcoin in 2025 and 21,000 Bitcoin by 2026. The firm is now ranked ninth in the world as a corporate Bitcoin holder. Within Asia, it is the leading corporate holder of the world's largest digital asset.

In less than a year since Hong Kong regulators gave the green light to crypto exchanges, there's been a noticeable surge of interest among traditional financial institutions and brokerages eager to secure their digital asset licenses for trading.Photo by Florian Wehde on UnsplashTiger BrokersTiger Brokers, a Beijing-headquartered one-stop trading brokerage with nine million international customers, offers one such example. The firm upgraded its Type 1 Hong Kong Securities & Futures Commission (SFC) license in January to include crypto trading for professional investors and financial institutions based in Hong Kong. The move followed an uptick in interest from mainland China-based firms in Q4, 2023.In a recent interview with Cointelegraph, John Fei Zeng, the CFO and director of Tiger Brokers, revealed that the firm currently boasts 865,500 funded accounts in Hong Kong, managing $18.9 billion in assets. Zeng stated: "Residents of Hong Kong will be able to trade virtual assets such as Bitcoin and Ethereum alongside stocks, options, futures, funds, and ETFs [Through Tiger Trade]." He explained that as part of the firm's expansion plans, additional digital assets will be evaluated. HKMA guidance on crypto custodyAs a testament to the regulatory clarity that has attracted firms like Tiger Brokers, on Tuesday Hong Kong's central bank issued guidance for authorized institutions interested in offering custody services for digital assets. The Hong Kong Monetary Authority (HKMA) outlined comprehensive risk assessment procedures and emphasized the importance of robust policies, oversight, and resource allocation to manage custodial activities effectively. Notably, the HKMA's guidance seeks to address concerns stemming from recent industry mishaps, including the collapse of FTX, Terra and Three Arrows Capital (3AC), by mandating stringent safeguards to protect clients' digital assets from theft, fraud or misappropriation. Key requirements include independent systems audits, secure storage practices and transparent record-keeping, underscoring the regulator's commitment to fostering trust and stability in the digital asset ecosystem. Victory SecuritiesIn a similar move to that of Tiger Brokers, Victory Securities, another Hong Kong brokerage, secured a license from the SFC last November to offer crypto trading services for retail investors. The company reported a significant surge in virtual asset transactions and new customer acquisitions, prompting plans to introduce trading discounts to incentivize compliant and safe virtual asset trading services. Moreover, OSL, a licensed Hong Kong crypto exchange, joined forces with Interactive Brokers in November 2023, enabling the latter to offer bitcoin and ether trading to retail investors through its platform. Further underscoring the evolving regulatory landscape, crypto exchange Bybit submitted a retail trading license application in Hong Kong, indicative of the sector's continued growth and maturity. Nevertheless, navigating the regulatory framework isn't without its challenges. Web3 firms eyeing Hong Kong may need to invest up to $25 million in corporate infrastructure and compliance to secure licensing approval, reflecting the stringent requirements imposed by regulators. As Hong Kong continues to refine its regulatory framework and enhance investor protections, the stage is set for further collaboration between traditional financial institutions and emerging crypto players within the Chinese autonomous territory.

Bhutan Quietly Mining Bitcoin Since $5,000The tiny nation of Bhutan continues to be full of surprises recently where crypto is concerned, with the latest report suggesting that the kingdom has been mining bitcoin for a number of years already.© Pexels/Pema GyamtshoAccording to a recent report in The Bhutanese, a Bhutan-based publication led by investigative journalist, Tenzing Lamsing, the landlocked nation had been mining bitcoin over the course of a “few years” already, in an effort to diversify its sovereign portfolio.Long-term investment strategyUjjwal Deep Dahal, CEO of Druk Holding and Investments (DHI), told the publication that the venture was part of a long-term investment strategy. DHI is the commercial arm of the Royal Government of Bhutan. It was formed pursuant to a Royal Charter in 2007 with the mandate of making investments on behalf of Bhutan while optimizing usage of resources.The mining activity had centered on Bitcoin although there was a small provision for Ethereum-based mining when Ethereum was a mineable proof-of-work (PoW)-based blockchain network. It’s unclear of the precise timeline but the report outlines that DHI has engaged in the mining space over a number of years, and at a time in which the Bitcoin unit price was as low as $5,000.Exploiting cheap hydroNestled in the Himalayas, Bhutan has considerable hydroelectric resources. Bitcoin mining is ordinarily an expensive exercise but in scenarios where there are plentiful energy resources with a marginally cheaper cost of production than the average, it can be an attractive and profitable enterprise. Dahal outlined that these conditions enabled DHI to reinvest profits back into additional mining equipment.The precise time-frame of DHIs entry into Bitcoin mining is open to speculation. However, we do know that the Bitcoin unit price was last below $5,000 at the onset of the pandemic in March 2020. Prior to that, Bitcoin had risen above $5,000 in April 2019 following an acute bear market in 2018.Crypto lender entanglementsBhutan and DHI hit the crypto radar last month when it was revealed that the kingdom had made significant investments into and out of failed crypto lenders Celsius and BlockFi. Dahal has said that the royal charter-mandated firm had taken out loans with both crypto lenders and had fully repaid those loans. However, that may have been something that happened later than anticipated. The Bhutanese company had a $30 million loan from BlockFi. BlockFi liquidated the Bitcoin collateral associated with that loan in 2022 but it left a shortfall of $800,000. The failed lender subsequently sued DHI. As of an April 13 court filing, BlockFi submitted a voluntary dismissal of the lawsuit to the courts, presumably because the shortfall was subsequently paid by DHI.In the case of Celsius, DHI had withdrawn $65 million from the lending platform prior to it declaring bankruptcy. Consequently, the matter has been the subject of speculation relative to the potential for the Celsius bankruptcy estate to pursue DHI for a clawback of the withdrawn funds.