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1. S&P launches crypto indices

The Facts:

  • S&P Dow Jones Indices announced that they would launch indices for the performance of Bitcoin, Ether, and a “MegaCap” index tracking both Bitcoin and Ether.
  • Additional indices on more cryptocurrencies are in planning.
  • S&P first made their intentions public in December 2020.

Why it’s important:

  • The launch of crypto indices by S&P represents a further step in the institutionalization of the crypto space. A trustworthy price source might enable the creation of further financial products.
  • This may also accelerate the approval of a crypto ETF in the U.S., since a trusted price source might alleviate some of the SEC’s concerns regarding price manipulation.

 

2. Uniswap v3 is live on Ethereum

The Facts:

  • Uniswap v3 has been launched on the Ethereum mainnet on May 5.
  • The new version comes with features such as concentrated liquidity provision and multiple fee tiers.
  • It also provides improved price oracles for other DeFi applications, and liquidity pools will be represented as NFTs.

Why it’s important:

  • The launch of v3 has been long-awaited in the crypto community, as it will enhance capital efficiency of providing liquidity on Uniswap and hence the user experience on both the supply (liquidity providers) and demand (traders) side.
  • The new Uniswap v3 is more complex than the current v2, but offers a range of tools for skilled market makers to implement their own strategies. This might lead to a professionalization of the liquidity provider space.
S01E13_UniNFTs
Source: Twitter

 

3. Mastercard study reveals interest in crypto payments

The Facts:

  • A recent survey by Mastercard found that 40% of people plan to use cryptocurrencies as a payment method in the next year.
  • Also, 3 out of 4 millennials are keen to learn more about crypto.
  • The interest is especially high in “floating digital currencies” such as Bitcoin, according to the study.

Why it’s important:

  • The results of Mastercard’s study revealed that people are willing to use and adopt cryptocurrencies as a means of payment – not only stablecoins, but also volatile currencies like Bitcoin.
  • It also highlights that payments infrastructure providers certainly need to take a close look at how integrations with the crypto space are possible.
  • Number of the Week
    $1.5 trillion
    Spot crypto trading volume in April

 

4. U.S. banks get access to Bitcoin

The Facts:

  • Customers of some U.S. banks might soon be able to purchase Bitcoin directly through their bank account.
  • The offering will be made possible through NYDIG, a subsidiary of multi-billion asset manager Stone Ridge.
  • Current services by U.S. banks, such as Morgan Stanley’s crypto fund offering, mostly target wealthy clients.

Why it’s important:

  • The new offering will open up the possibility for retail clients to easily gain exposure to Bitcoin.
  • It also further illustrates the continued institutional interest in crypto, not only from an investment point of view, but also in building infrastructure and on-ramps for it.
  • Every day that goes by and Bitcoin hasn't collapsed due to legal or technical problems, that brings new information to the market. It increases the chance of Bitcoin's eventual success and justifies a higher price.
    Hal Finney, June 2011

 

5. CME launches Bitcoin micro futures

The Facts:

  • On May 3, the CME launched Bitcoin micro futures, with a size of 1/10 of a Bitcoin.
  • Besides their size, the Bitcoin micro futures are identical to the Bitcoin futures available on the CME since 2017. Measured by open interest, the CME Bitcoin futures are the third largest futures market.
  • In the first three days, ca. 40’000 contracts were traded.

Why it’s important:

  • The previous Bitcoin futures had a contract size of 5 BTC (or ca. $250k at current prices), which limited market access for smaller investors. With the new micro futures, investors will be able to fine-tune their positions according to their needs.
  • CME Bitcoin futures have become an important trading vehicle over the past years, and the introduction of micro futures may lead to further growth.

 

In other news

  • PayPal explores stablecoin (via The Block)
  • Galaxy Digital purchases BitGo for $1.2 billion (via WSJ)
  • Coinbase acquires data and analytics platform Skew (via The Block)
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