Bitcoin rose above US$31,000 this week. Fidelity confirmed its application for a Bitcoin spot ETF. The total assets of the first eight Wall Street institutions that entered the cryptocurrency market reached US$27 trillion. HSBC in Hong Kong, which had rejected cryptocurrency, opened its customers to trade Bitcoin, Ethereum ETF creates an extremely optimistic outlook for crypto market liquidity. An important research report on Tether and China reveals that China has never left the currency circle.

China and the United States enter the market at the bottom: Bitcoin ETF becomes a hot commodity

Fidelity Investments has determined to resubmit its listing application for the Bitcoin spot ETF. According to documents submitted on June 29, Fidelity’s Bitcoin spot ETF is called Wise Origin Bitcoin Trust and is owned by Fidelity Digital. Assets is responsible for hosting the Bitcoin of this fund, Fidelity Service Company serves as the manager, and FD Funds Management is the sponsor and will provide financial support.

Since BlackRock, the world's largest asset management company, applied for a Bitcoin spot ETF on June 16, many financial institutions that had failed in the past have also followed suit and resubmitted applications, such as cryptocurrency asset management company Bitwise, Fund management company WisdomTree, asset management company Invesco, and digital asset company Valkyrie Funds are among these well-known companies that have repeatedly applied to the U.S. Securities and Exchange Commission, but all ended in failure.

According to news from the Chinese currency circle, HSBC allowed customers to buy and sell Bitcoin and Ethereum ETFs listed on the Hong Kong Stock Exchange at the beginning of this week, becoming the first bank in Hong Kong to allow customers to buy and sell cryptocurrency ETFs. So far, there are three cryptocurrency ETFs approved for public sale in Hong Kong, namely Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ethereum Futures ETF.

You know, if the time is pulled back to 2021, HSBC CEO Noel Quinn stated in 2021: "Due to the volatile price trends, we do not regard Bitcoin as an asset class." He also said that he has no intention to launch Cryptocurrency trading platform, or providing cryptocurrency services to its own customers.

Today, the situation has completely changed. Although the iron fist of the US Securities Regulatory Commission is still firmly grasped, traditional Chinese and American institutions seem to disagree and take advantage of this low point to enter the market and perfectly perform the play of bargain hunting.

Bitcoin’s key turning point: Wall Street institutions enter the market with $27 trillion

Meltem Demirors, Chief Strategy Officer of CoinShares, emphasized that at least eight major financial institutions have stated that they will enter the field of digital assets, including BlackRock’s spot Bitcoin ETF filing, and Fidelity’s crypto wealth management solutions. Others include JPMorgan Chase, Morgan Stanley, Goldman Sachs, BNY Mellon, Invesco and Bank of America.

She noted: “Many of the largest financial institutions in the United States, with $27 trillion in assets under management, are actively working to provide services such as Bitcoin.”

According to CoinGecko, Bitcoin price reached this year’s high of $31,185 on June 24 due to high confidence. This week, Bitcoin stood at $31,000, showing extreme optimism. However, Meltem reminded investors that while "these institutions are coming," it's still more of a trickle than a wave. "We see the bridge being built in real time," she added.

It’s worth noting that the $27 trillion figure is an estimate of total assets managed by eight institutions, only a small portion of which may be allocated to cryptocurrency investments. Nonetheless, Reflexivity Research co-founder Will Clemente agreed with Meltem, pointing out that Bitcoin’s market capitalization is less than $600 billion.

“Between HSBC, BlackRock, Fidelity and Charles Schwab, we are talking about $25 trillion in assets under management that will soon be available to buy Bitcoin.”

Institutional investors have shown greater interest in Bitcoin-related funds, with the ProShares Bitcoin Strategy ETF reportedly seeing its largest weekly inflows in a year, taking its assets under management to more than $1 billion.

Earlier this week, Federal Reserve Board of Governors member Michelle Bowman criticized the lack of a regulatory framework for cryptocurrencies, claiming that uncertainty about the asset class has left the agency in a “regulatory vacuum.”

Tether important research report: China has never left the currency circle

Tether, the world’s largest stablecoin issuer, recently confirmed that a significant portion of its reserves are commercial paper and other securities tied to Chinese banks and entities. But Tether’s ties to China run deeper than this piece of commercial paper. China has been an important part of Tether’s history from the beginning, from the experience of its executives to the assets that make up the reserve to the real-world use cases Tether has discovered.

Brock Pierce is the founder of Tether, and before that, he ran a company called Internet Gaming Entertainment (IGE), which sold EverQuest, World of Warcraft, and other online games of virtual goods. IGE relies on workers across China to mine digital gold and then sell it to IGE, which then resells it to primarily Western markets.

Tether CEO is Steve Bannon, who has close ties to Chinese billionaire Guo Wengui, both of whom have been accused by the U.S. Securities and Exchange Commission of selling unregistered securities related to G-coin.

A recent Freedom of Information request from foreign media seeking Tether’s support in the New York Attorney General’s Settlement Agreement revealed that Tether was backed by a variety of Chinese commercial papers in March 2021. The commercial paper includes several Chinese banks, namely Agricultural Bank of China, Bank of China Hong Kong, Bank of Communications, Industrial and Commercial Bank of China, China Merchants Bank, China Construction Bank, China Everbright Bank, and China Development Bank. Commercial paper accounted for approximately half of Tether’s reserves during this period.

Tether has relied on the Bahamas-based Deltec Bank since 2018, and the bank even sent out a letter on October 31, 2018, claiming that Tether’s “portfolio cash value” exceeds the amount of USDT in circulation.

Isola Capital is a Chinese asset management and family office platform originally established as Deltec Capital. Jean Chalopin, the current chairman of Deltec Bank and Trust Co., was also listed as executive chairman of Deltec International Group on the old Isola website, while Chalopin is not listed on the new Isola website.