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Indian Crypto Regulation Is Planned for February: Report

Indian Crypto Regulation Is Planned for February: ReportThe Indian government is reportedly planning to introduce cryptocurrency regulation by the time of the next general Budget, which is in February next year. Instead of banning cryptocurrencies, like bitcoin, the government is likely to regulate crypto assets as commodities, according to reports. Indian Crypto Law Could Comes as Early as February The Indian government […]

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Federal Reserve, FDIC, OCC Discuss Allowing Banks to Hold Crypto on Balance Sheets

Federal Reserve, FDIC, OCC Discuss Allowing Banks to Hold Crypto on Balance SheetsA group of U.S. banking regulators is working on how banks can be allowed to offer crypto services and hold cryptocurrencies on their balance sheets. The chairman of the Federal Deposit Insurance Corporation (FDIC) said, “If we don’t bring this activity inside the banks, it is going to develop outside of the banks … The […]

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Friday’s jaw-breaking $3.2B Bitcoin options expiry could kick-start a new rally

Bitcoin bulls could be in for a $715 million profit if BTC price is above $60,000 ahead of Friday’s $3.2 billion options expiry.

Bitcoin (BTC) has been trading in a descending channel pattern since its $67,000 all-time high on Oct. 20, which was just one day after ProShares’ Bitcoin Strategy ETF (BITO) debuted at Nasdaq.

However, bulls have a sufficient number of incentives to peg Bitcoin's price above $60,000 on Oct. 29 when the $3.2 billion monthly options expiry settles.

Bitcoin price in USD at Coinbase. Source: TradingView

Currently, investors are displaying mixed feelings about the exchange-traded fund’s approval, even though it reached $1 billion in assets under management in 48 hours. Either market expectations for these funds were insanely high, or the 42% gain in October until Oct. 19 was previously priced into the event.

The regulatory uncertainty in the United States is also a decisive factor in keeping some large institutional investors from entering the sector. At an Oct. 26 hearing of the United States Senate Committee, Rostin Behnam, the acting chairperson of the Commodity Futures Trading Commission (CFTC), likened the government agency's enforcement of the digital asset space to a beat cop on duty.

Behnam added:

"The market transactions that are taking place right now are a huge part of the risk that digital assets pose."

Bulls are in for a potential $715 million profit

Typically, these remarks would have little to no impact on a bullish market, which raises the question of whether the 13% correction since the Oct. 20 all-time high marks the end of a positive cycle.

The Oct. 29 monthly expiry will be a strength test for bears because any price above $58,000 means a $385 million or higher profit for bulls.

Bitcoin options aggregate open interest for Oct. 29. Source: Bybt

At first sight, the $1.94 billion call (buy) instruments dominate the monthly expiry by 56% compared to the $1.24 billion put (sell) options.

However, the 1.56 call-to-put ratio is deceiving because bears were caught by surprise and will have most of their put options wiped out if Bitcoin's price remains above $58,000 at 8:00 am UTC on Oct. 29.

Owning a put option, which is the right to sell Bitcoin at $55,000, becomes worthless if BTC price is trading above that level.

Bulls are comfortable above $58,000

Sixty-eight percent of the put options, which denotes the right to sell Bitcoin at a pre-established price, have been placed at $58,000 or lower.

Below are the four most likely scenarios that consider the current price levels. In addition, the data shows how many contracts will be available on Oct. 20 for both bulls (call) and bear (put) instruments.

  • Between $52,000 and $55,000: 6,500 calls vs. 6,530 puts. The net result is balanced between bulls and bears.
  • Between $55,000 and $58,000: 9,510 calls vs. 4,610 puts. The net result favors bulls by $270 million.
  • Between $58,000 and $60,000: 9,900 calls vs. 3,490 puts. The net result continues to favor bulls by $385 million.
  • Above $60,000: 13,870 calls vs. 1,970 puts. The net result will benefit bulls by $715 million.

As shown above, the imbalance favoring either side represents the potential theoretical profit from the expiry.

This crude estimate considers call (buy) options used in bullish strategies and put (sell) options exclusively in neutral-to-bearish trades. However, a trader could have sold a put option, effectively gaining a positive exposure to Bitcoin above a specific price. Unfortunately, there's no easy way to estimate this effect.

Can bears pin Bitcoin below $55,000?

Bears need a 6% correction from the current $58,500 price to avoid a $270 million loss. Although it might not seem much at first, traders must also account for the bullish momentum brought by the ETF approval.

With less than 36 hours ahead of the Oct. 29 expiry, bulls are likely to secure a win by keeping Bitcoin above $59,000. As for the bears, the path to sub-$55,000 seems distant, but might be worthy.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Biden’s pick for CFTC chair wants the agency to be a ‘beat cop’ with the authority to oversee 60% of digital asset market

Rostin Behnam said it was "critically important to have a primary cop on on the beat" of an emerging market that included cryptocurrencies and stablecoins.

Acting chairperson of the Commodity Futures Trading Commission, or CFTC, Rostin Behnam has likened the government agency’s enforcement of the digital asset space to a beat cop on duty.

At an Oct. 27 hearing of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry to assume his position on a permanent basis, Behnam said to chairperson Debbie Stabenow the CFTC has been “aggressively pursuing enforcement cases” in the crypto space for some time, including its $100 million case against crypto derivatives exchange BitMEX and the $42.5 million in fines it levied against Tether and Bitfinex. However, he asked that the committee consider expanding the authority of the CFTC given the emerging digital asset market.

“This is the tip of the iceberg,” said Behnam. “As of yesterday, the total size of the digital asset market was $2.7 trillion. Among that $2.7 trillion, nearly 60% were commodities [...] given the size, the scope, and the scale of this emerging market, how it’s interfacing and affecting retail customers, and with the scale of the growth being so rapid, potential financial stability risks in the future, I think it’s critically important to have a primary cop on on the beat.”

Behnam also responded to a question from Ohio Senator Sherrod Brown on whether the CFTC would require “additional tools” to handle enforcement in the crypto space, saying the agency as well as the Securities and Exchange Commission would likely need “a regulatory structure for both securities and commodities.” Both groups in addition to the Financial Crimes Enforcement Network currently handle digital asset regulation in the United States, but with different jurisdictional claims, resulting in a patchwork approach companies must navigate to legally operate.

“The markets and the market transactions that are taking place right now are a huge part of the risk that digital assets pose,” added Behnam.

Related: CFTC commissioner says agency has broad enforcement authority on crypto derivatives

There are currently only two commissioners serving at the CFTC out of the normal five since the departure of Dan Berkovitz earlier this month, Brian Quintenz in August, and former chair Heath Tarbert in January. Behnam — who has been serving as acting chair at the agency following Tarbert’s departure — is President Joe Biden’s pick to lead the CFTC. In addition, Biden has chosen Kristin Johnson and Christy Goldsmith Romero to fill two of the remaining three seats. All must be confirmed by the Democrat-controlled Senate.

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Nigerian Judge Rules in Favor of Accused Crypto Startup, Accounts to Be Reopened

Nigerian Judge Rules in Favor of Accused Crypto Startup, Accounts to Be ReopenedA Nigerian Federal Court judge recently ruled that the two frozen bank accounts belonging to Rise Vest Technologies, which is accused of trading cryptocurrencies, must be reopened. CBN’s Bank Account Freeze Order Dismissed In a ruling that overturns the Central Bank of Nigeria (CBN)’s August 17 decision to freeze the bank accounts, Judge Taiwo Taiwo […]

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US regulators are exploring policy for banks to handle crypto, says FDIC chair

“Establishing clear regulatory expectations will be paramount to give this market an opportunity to grow and mature in a responsible manner,” said Jelena McWilliams.

Jelena McWilliams, the chairperson of the Federal Deposit Insurance Corporation, or FDIC, has said the agency is working with other regulators in the United States to explore “under what circumstances banks can engage in activities involving crypto assets.”

In a speech at the Money20/20 fintech conference on Oct. 25, McWilliams said the FDIC, in coordination with the Federal Reserve and the Office of the Comptroller of the Currency, is looking to provide regulatory clarity for banks handling crypto assets including stablecoins. The chairperson said the FDIC planned to issue “a series of policy statements” in the coming months on guidance for banks.

According to McWilliams, stablecoins have many potential benefits to consumers, such as faster, cheaper, and more efficient payments. However, she claimed that if “one or more were to become a dominant form of payment in the United States or globally” there could be significant effects on that country’s financial stability with funds no longer being held in insured banks.

“In order to realize the potential benefits stablecoins have to offer, while accounting for potential risks, stablecoins should be subject to well-tailored government oversight,” said the FDIC chairperson. “That oversight should rest on the foundation that stablecoins issued from outside the banking sector are truly backed 1:1 by safe, highly liquid assets.”

Related: SEC chair compares stablecoins to casino poker chips

McWilliams’ remarks came the same day Bloomberg reported many U.S. regulators had agreed on the Securities and Exchange Commission leading the nation’s efforts to regulate stablecoins. The Department of the Treasury said in July it was exploring the creation of a type of banking charter for stablecoin issuers.

The seeming lack of regulatory clarity concerning digital assets in the United States has been an issue for many firms fearing legal action or other forms of governmental backlash. Some lawmakers have put forward legislation for U.S. regulators to work with participants in the crypto space to better define what’s expected of them.

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Alleged South African Bitcoin Fraudster Makes First Court Appearance Since Arrest

Alleged South African Bitcoin Fraudster Makes First Court Appearance Since ArrestSandile Shezi, the South African bitcoin trader accused of defrauding investors, recently made his first court appearance before a Johannesburg magistrate. Shezi out on Bail The bitcoin trader’s court appearance came just days after he honored his pledge to surrender himself to the police. However, according to a report by the Sowetan, Shezi — who […]

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BNY Mellon Urges Ireland to Adopt Crypto Rules Before EU Regulations, Report Reveals

BNY Mellon Urges Ireland to Adopt Crypto Rules Before EU Regulations, Report RevealsAs authorities in the EU are still discussing union-wide cryptocurrency regulations, a major U.S. bank has reportedly lobbied the Irish government to adopt its own rules for the space. BNY Mellon launched its digital asset business in Ireland this year to provide custodian services to institutional investors. Banking Giant BNY Mellon Calls for Irish Crypto […]

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Russian Crypto Industry Association Slams Government for Doing ‘Nothing’ to Regulate Sector

Russian Crypto Industry Association Slams Government for Doing ‘Nothing’ to Regulate SectorThe main organization representing participants in the Russian crypto space has lambasted authorities in Moscow for not doing enough to regulate the industry. The criticism comes four years after President Putin directed institutions to legally define the status of digital financial technologies. Regulators Accused of Failure to Take Russian Crypto Market Out of Shadow Russian […]

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