On Wednesday, Grayscale’s bitcoin (BTC) exchange-traded fund (ETF) witnessed an unprecedented daily outflow of approximately $18 million, marking a significant departure from its usual outflow patterns since its inception in January. Reports from Bitmex Research and Farside Investors revealed this record-low figure.

This notable development comes shortly after Grayscale CEO Michael Sonnenshein indicated that outflows from the Grayscale Bitcoin Trust (GBTC) are approaching an “equilibrium,” suggesting that the selling pressure associated with settlements of bankrupt crypto firms like FTX has largely subsided.

Analysts at Coinbase Institutional have speculated that the recent uptick in GBTC selling could be attributed, at least in part, to Genesis selling shares as part of its bankruptcy proceedings.

Since its launch, the GBTC product has witnessed a staggering $15 billion in bitcoin outflows and has experienced consistent outflows almost every week, contributing to downward pressure on the asset.

Furthermore, the ETF imposes the highest annual fees among its counterparts, standing at 1.5% of holdings, compared to rates as low as 0.19% for Franklin Templeton’s EZBC.

Despite these challenges, bitcoin continues to trade resiliently, hovering just above $70,600 during European morning hours, reflecting a 2.2% increase in the past 24 hours. The broader CoinDesk 20 index also saw a 1.7% rise.

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According to a recent report by JPMorgan (NYSE:JPM), the likelihood of approval for spot ether (ETH) exchange-traded funds (ETFs) in May remains uncertain, with no more than a 50% chance of approval. The report suggests that if the Securities and Exchange Commission (SEC) does not approve these products next month, litigation against the regulatory body is probable.

JPMorgan reaffirms its stance, initially expressed in January, that approval for spot ether ETFs is unlikely in the upcoming month. The SEC is expected to make final decisions on certain ETF applications by May 23, following its approval of spot bitcoin (BTC) ETFs earlier this year, sparking speculation about potential approval for ether ETFs.

Analysts at JPMorgan, led by Nikolaos Panigirtzoglou, anticipate potential litigation against the SEC if spot ether ETFs are not approved in May. They suggest that the SEC is likely to face legal challenges, similar to previous cases involving Grayscale and Ripple, and eventually approve spot ether ETFs, albeit not in May.

The report highlights one reason why the SEC might face difficulties in any potential litigation: the decreasing concentration in staking on the Ethereum network, which reduces the likelihood of Ether being classified as a security.

Additionally, JPMorgan points out in a recent report that the share of staked ether held by Lido has continued to decline, alleviating concerns about network concentration.

The investigation by the SEC into companies associated with the Ethereum Foundation aligns with JPMorgan’s cautious outlook, reinforcing the uncertainty surrounding spot ether ETF approval in May.

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Bitfinex Securities El Salvador S.A. de C.V., a leading tokenized securities platform, is driving an innovative initiative to finance the construction of a Hampton by Hilton hotel complex at El Salvador International Airport through a tokenized debt issuance.

The token, dubbed HILSV, will be pegged to the U.S. dollar and tether (USDT) and will be issued on the Liquid Network, a bitcoin sidechain, as detailed in a recent press release.

This groundbreaking tokenized debt offering, marked by the launch of HILSV, signifies a significant milestone in the development of El Salvador’s capital markets. Bitfinex Securities has partnered with Inversiones Laguardia (HILSV), a reputable entity in El Salvador, to oversee the tokenized debt, with Ditobanx managing the tokenization and structuring of the transaction on the Liquid blockchain.

HILSV seeks to raise $6.25 million and will offer a 10% coupon over five years, with a minimum investment threshold of $1,000. Inversiones Laguardia S.A. de C.V. will facilitate the issuance of the tokenized debt.

The raised funds will be allocated towards the development of a 4,484-square-meter hotel complex, boasting 80 rooms, five commercial spaces, a swimming pool, restaurants, and various amenities across five levels. While Hilton Hotels is associated as a franchisor, it does not endorse any offering and bears no responsibility.

Despite Hilton’s limited involvement, the project is anticipated to create significant economic opportunities, with approximately 1,000 jobs during construction and up to 5,000 direct and indirect jobs upon operationalization.

Paolo Ardoinio, Bitfinex Securities CTO, hailed the launch of HILSV as a pivotal moment for El Salvador’s capital market, offering investors access to previously unavailable asset classes while enabling issuers to tap into new funding sources.

Roberto Laguardia, President of Inversiones Laguardia, emphasized the transformative impact of the project, leveraging digital asset laws to unlock capital markets and foster economic growth.

Bitfinex Securities made history in January by becoming the first regulated entity to secure a license for operation in El Salvador under the nation’s Digital Asset Securities Law. This landmark achievement aligns with the growing demand for regulated investment avenues, following the successful introduction of U.S. spot bitcoin exchange-traded funds.

Building on its momentum, Bitfinex Securities is set to unveil a series of financial asset issuances in the first half of this year, following the success of its tokenized bond offering in Kazakhstan.

El Salvador’s proactive stance on crypto adoption, including granting Bitcoin legal tender status and launching the “Adopting El Salvador Freedom Visa” program, further underscores its commitment to fostering innovation and financial inclusion.

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Cryptocurrency exchange Luno has become one of the inaugural firms to secure a license from South Africa’s Financial Services Conduct Authority (FSCA), solidifying its status as a recognized financial services provider within the country.

The granting of the financial services provider license to Luno comes in the wake of the FSCA’s classification of crypto assets as financial products under the Financial Advisory and Intermediary Services Act of 2002 (FAIS).

Expressing enthusiasm about this milestone, Christo de Wit, Luno’s South Africa country manager, underscored the significance of being the premier licensed crypto asset service provider in the nation. He emphasized Luno’s decade-long commitment to the crypto market and its dedication to ensuring compliance, safety, and security for its clientele.

Luno, initially launched in 2013, operates as a crypto exchange alongside offering a cryptocurrency investment app, extending its services to over 40 countries across Europe, Africa, Asia, and Australia.

The FSCA’s move to authorize operating licenses for 59 cryptocurrency exchanges signifies a broader regulatory framework taking shape. Out of over 300 South African crypto providers seeking permits, only 59 have met the FSCA’s criteria for approval. As per regulatory mandates, digital asset exchanges must obtain permits to conduct operations within the country.

In alignment with its stance on regulatory oversight, the FSCA had previously classified cryptocurrency assets as financial products in 2022, underscoring the necessity for regulation to safeguard financial consumers and combat illicit financial activities like money laundering and terrorism financing. Exchanges were given until November 30 to apply for licenses, failing which they risked enforcement actions.

The FSCA’s approach to regulating crypto assets, outlined in 2021, emphasizes a phased and structured integration into the South African regulatory landscape. With a surge in retail interest in crypto assets, the FSCA remains vigilant against instances of consumer abuse, fraud, and market misconduct, both domestically and internationally. Recent media reports have highlighted schemes exploiting crypto assets, further reinforcing the imperative for regulatory intervention to uphold market integrity.

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