Matrixport Forecasts Bitcoin Bull Market Breather Ahead

HashKey on-boards market makers to boost liquidityHashKey, a licensed crypto exchange in Hong Kong, has unveiled plans to onboard individual and enterprise market makers to enhance liquidity on its platform.Photo by engin akyurt on UnsplashMarket maker programIn an announcement on Tuesday, the exchange disclosed that interested parties, whether individuals or entities, can apply to become market makers on HashKey. To qualify, applicants need to engage in cryptocurrency trading worth a minimum of $5 million per month on the exchange.The exchange outlined that the program aimed to “recognize and incentivize users actively contributing to the liquidity” of the platform.Upon submitting their business plans for review, successful applicants will be invited to enter into a contractual agreement with the exchange’s due diligence team, commencing trading activities from Dec. 28 onwards when the program goes live.Commission free tradingThe exchange aims to encourage liquidity providers by offering a commission ranging between 0.005% and 0.015% of the transaction value, determined by monthly rankings or trading volumes, falling within a tiered structure set out within the program. Market makers demonstrating a trading volume of at least $100 million per month stand to enjoy the highest tier of commission revenue. Notably, all market makers will be exempt from commission fees on their trades.Market makers who participate via the program will be on trial for an initial two-month period. Those who are participating in market maker programs on other platforms currently will be able to avail of equivalent trial fee rates through the HashKey exchange.Service expansion trendThe move by HashKey follows a broader trend in Hong Kong, where regulated exchanges have been expanding their services and forming strategic partnerships since the issuance of the first licenses in August. In a recent development, OSL, another Hong Kong licensed exchange, collaborated with Interactive Brokers on November 28, enabling Hong Kong clients to buy Bitcoin through Interactive Brokers’ investment accounts.Additionally, on November 30, OSL welcomed Victory Securities for crypto trading services on its platform. That move came about following Victory’s acquisition of a retail crypto trading license some days beforehand. Notably, OSL received a $90 million investment from blockchain entity BGX in November.While HashKey has been extending its altcoin offerings, exclusively available to accredited investors meeting a $1 million portfolio requirement, the exchange has been proactive in enhancing user security. On Nov. 16, the platform introduced comprehensive insurance coverage for users’ and enterprise assets stored within its digital wallets in collaboration with fintech firm OneDegree.Earlier this week, it emerged that the platform had experienced an unprecedented surge in daily trading volumes. The surge had been attributed to a token rewards program that the exchange is currently running, that offers the distribution of HSK tokens or EcoPoints.As HashKey opens its doors to market makers, the move is poised to contribute to increased liquidity on the exchange, aligning with the broader trend of Hong Kong’s regulated crypto exchanges expanding their offerings and forming strategic partnerships.

Early on Thursday bitcoin surged to a record high in terms of its valuation in Japanese yen, outpacing its valuations in other leading fiat currencies such as U.S. dollars, euros, British pounds and Australian dollars. Currency devaluationThis increase in yen valuation can be attributed to the recent depreciation of the Japanese currency against the backdrop of continued money printing by the Bank of Japan (BoJ) and resurging inflation, which have collectively weakened sentiment surrounding the yen. Fiat currencies, including the Japanese yen, lack backing by hard assets and derive their value solely from market perceptions. The current rally of bitcoin is indicative of the prevailing market sentiments, with the yen exhibiting particular vulnerability among major fiat currencies. For instance, early market activity on Thursday witnessed bitcoin, often hailed by proponents as digital gold, hitting a fresh all-time high of 7.9 million yen on Tokyo-based cryptocurrency exchange bitFLYER. In contrast, the cryptocurrency's dollar-denominated price hovered above $52,000, still 32% below its peak of $69,000 in November 2021. This price disparity underscores the strain on the Japanese yen, fueled by the Bank of Japan's persistent liquidity easing measures, rising inflationary pressures and indications of economic fragility.Photo by jun rong loo on UnsplashEntering recessionThis recent surge coincides with reports confirming Japan's descent into an economic recession by the end of the previous year, slipping to fourth place behind Germany in terms of the world’s largest economies. While central banks worldwide, including the Federal Reserve, aggressively raised interest rates in attempts to curb inflation, the Bank of Japan maintained near-zero interest rates and continued printing fiat currency. A recession characterized by inflation without corresponding growth prompts investors to seek refuge in safer havens like gold and digital gold. With that, there could be further opportunities for bitcoin to make further in-roads in Japan. In 2023, Japan's core inflation, excluding volatile food and energy components from the consumer price index (CPI), rose by 3.1%, marking its most significant increase since 1982. Consequently, the yen depreciated to a 33-year low against the dollar, declining by 13% and 7.5% against the dollar previously, with an additional 6.4% decrease this year. Bitcoin's persistent premium in Japanese yen terms suggests that it may continue to maintain higher valuations unless the Bank of Japan accelerates its exit from the ultra-loose monetary policy it has been pursuing. That would make yen holdings relatively more attractive compared to other assets. Although a complete regulatory framework for digital assets in Japan is still lacking, the country has recently moved to make tax rules more crypto-friendly. Bitcoin's elevated valuation against the Japanese yen underscores the challenges facing Japan's fiat currency, driven by monetary policy decisions and economic uncertainties.

Mirae Asset Securities, South Korea’s largest asset management firm, has begun suspending trading for bitcoin ETFs, according to industry sources on Friday. This comes after an announcement made by the Financial Services Commission (FSC) stating that brokering spot bitcoin ETFs may be considered a violation of the government’s stance on virtual assets and the Financial Investment Services and Capital Markets Act.Photo by Dmytro Demidko on UnsplashTaking preemptive measuresThe asset manager has blocked new purchases of spot bitcoin ETFs listed in Canada and Germany starting yesterday and is considering suspending trading of bitcoin futures ETFs that have been listed in overseas markets since 2021. This includes the Proshares Bitcoin Strategy ETF, Valkyrie Bitcoin Strategy ETF, Invesco Galaxy Bitcoin Strategy ETF and VanEck Bitcoin Strategy ETF. As Korean financial authorities are putting the brakes on domestic investments in the recently approved spot bitcoin ETF by the U.S. Securities Exchange Commission (SEC), it is believed that Mirae Asset Securities is putting a preemptive halt to trading in other bitcoin ETFs. Spot vs futuresSpot bitcoin ETFs differ from futures ETFs in that they track the price of Bitcoin by actually holding the cryptocurrency, while the latter tracks its price through futures contracts. South Korean securities firms have been brokering futures ETFs listed in overseas market for a while now.