Crypto Companies Raising Capital, Working with Regulators, and Building Cash Reserves for Prolonged Downtrend
Amidst the increasing regulatory scrutiny over the cryptocurrency industry, UK-based crypto exchange Coinpass said it had received approval from Britain’s Financial Conduct Authority (FCA) to operate in the country as a crypto asset company.
“We’re exceptionally pleased to be among one of the first UK-based cryptocurrency Trading Exchanges for retail investors and businesses to be fully registered with the Financial Conduct Authority as a crypto-asset firm,” Coinpass CEO Jeff Hancock said in a statement.
Prepare For A “Crypto Winter”
In the meantime, UK-based Blockchain, which is one of the longest operating firms in the crypto space, is building out its cash reserves in preparation for a ‘crypto winter’ on the horizon.
“I think when I look out over the space right now, there's going to be a lot of folks who are unprepared for that,” said CEO and co-founder Peter Smith in an interview.
But not just for a prolonged downturn, a bear market, but Blockchain is working on making sure they’re here in 2030 too. The company recently obtained a $5.2 billion valuation after several rounds of funding this year alone.
Much like Blockchain, US-based Coinbase has also amassed $4.36 billion in cash to prepare for a “crypto winter” so that they can “continue to grow our products and services” even then, said Chief Financial Officer Alesia Haas last month.
Besides a bear market, the funds were stockpiled to weather a host of other business risks, including the stricter regulatory regime, potential trading declines, or possible cyberattacks, she added.
According to The Scoop podcast, 75% of Coinbase’s large hedge fund clients own assets outside of Bitcoin. Also, its institutional division has hundreds, about 250 outstanding requests from traditional finance firms to leverage their technology to build crypto products.
Shifts In The Crypto Industry
Leading cryptocurrency exchange Binance, as we reported, is planning to take its US-based entity public in the next three years. Also, the exchange is rumored to be considering obtaining investment from government funds at a valuation of $200 billion.
“Likely that soon binance will publicly confirm their raise rumored at $200bn. This will catalyze a fire under the exchange token sector as late-stage beta chasers scramble for exposure,” noted mgnr. “FTT is likely the largest beneficiary of this rotation.”
FTX’s native coin is already enjoying an uptrend, up 40% in the last 7-days and trading around $69 after hitting a new all-time high of almost $70 a few hours back.
FTX US crypto market share has quietly surged throughout 2021 – August share has passed 14% with over $50 billion in notional traded.
FTX volumes are still ~60% of Coinbase, but they're catching up alarmingly fast 👀 pic.twitter.com/tlQO1AJpO6
— Hide Not Slide (@HideNotSlide) September 1, 2021
While Binance has been in the regulatory limelight and other popular exchanges Huobi and OKEx have been tightening their derivatives rules following China’s crackdown on leverage trading, with FTX following the regulatory rule book, it is working in the exchange’s favor.
FTX’s partnerships and regulatory relationships, while aggressively ramping up its marketing efforts, push it among the top crypto trading platforms.
“Binance still reigns supreme in global spot markets,” Kaiko wrote in its weekly report, “but as we know by now in the rapidly shifting crypto industry, exchange dominance is tenuous.”