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10/3 News Roundup: Ethereum, Binance, SBF, Pudgy Penguins, Uptober

A futures-based Ethereum ETF was launched in the United States. Binance stopped euro trading and deposits. Sam Bankman-Fried is in the headlines again. Pudgy Penguins toys combine the real world with NFT technology. Uptober got off to a promising start!

Ethereum ETF launch in the US

The United States has taken a new step in the cryptocurrency revolution. The second largest cryptocurrency in the market, Ethereum, is in the headlines. No less than nine different Ethereum ETF investment products entered the market yesterday!

ETF is an abbreviation for Exchange-Traded Fund. ETF shares can be bought on the stock exchange like ordinary stocks. An ETF can contain, for example, shares, commodities, and cryptocurrencies. ETFs are hugely popular among both retail investors and professionals.

Ethereum ETFs have yet to gain significant popularity. This is understandable, as the market is experiencing a really quiet period.

Regarding ETFs, it is important to distinguish between spot ETFs and futures-based ETFs. The Ethereum ETFs launched yesterday are futures-based, as are all Bitcoin ETFs in the US.

A futures-based ETF does not own any real cryptocurrency at all. The futures-based Ethereum ETF follows the Ethereum price by trading Ethereum futures. The futures, in turn, follows the spot rate of Ethereum. A futures-based ETF is not the most optimal way from the point of view of a long-term holder.

Investors eagerly await the spot Bitcoin ETF launch in the United States. The SEC has so far rejected all applications. However, the situation changed substantially during Midsummer week, when the world’s largest asset manager, Blackrock, announced that it had submitted a spot Bitcoin ETF application.

Virtually every Blackrock ETF application has been approved by the SEC, and investors believe the SEC will also approve the spot Bitcoin ETF application. The final decision will be made in the coming months.

The approval of the spot Bitcoin ETF would also open the way for the spot Ethereum ETFs. A spot ETF would significantly impact demand for Ethereum, unlike a futures-based ETF that does not hold ETH tokens.

Read more about the pros and cons of ETF investing in the new article: Bitcoin ETF. It goes through the topic from the perspective of Bitcoin, but the same principles also apply to the Ethereum ETF.

Most likely, the ETFs released yesterday will not greatly impact Ethereum’s price. However, it was an important step for adopting cryptocurrencies in the United States, the world’s largest financial market.

Euro trading ended on Binance

Binance is the world’s largest cryptocurrency exchange. The company is currently in a tough fight with the regulators of various countries. Binance is especially targeted by the US SEC and CFTC, but the company also faces other challenges.

The turn of September and October also saw some changes for European customers: euro deposits are no longer possible with SEPA transfers. This is because Binance’s banking partner, Paysafe, terminated its cooperation agreement earlier this summer. The matter has already been reported before, so this did not come as a surprise to users.

This week, Binance has also removed EUR trading pairs. A message has been sent to Binance customers about the topic, but not everyone has necessarily received the information yet. You can see the content of the message in the embed below.

There is no information on when Binance will get a new banking partner. Buying cryptos with euros on Binance is still possible with a debit card. Purchases with other currencies and cryptocurrencies work as before.

Binance continues running normally in other respects. Trading on Binance is mainly done with USDT pairs, so removing EUR trading pairs is not a significant problem. The lack of SEPA transfers is a far bigger issue for European customers.

One way to solve the problem is to deposit euros in Coinbase, convert them into USDT stablecoins, and then transfer the USDT tokens to Binance. This is not optimal for traders with a small portfolio, as trading and transaction fees are easily tens of euros.

The removal of euro transfers will reduce Binance’s popularity in the short term, as some traders have switched to competing platforms. This year, the fight with the regulators has also broadly weakened the stock exchange’s market position. From a neutral point of view, it’s a good thing for the whole system since Binance’s position has been so dominant in recent years.

Michael Lewis received criticism for his SBF statements

Exactly one year ago, Sam Bankman-Fried, or SBF, was the hottest name in the crypto scene. He was a multi-billionaire who hung out with politicians and celebrities. He also ran the industry’s fastest-growing stock exchange (FTX) and the Alameda Research trading firm, which earned billions of dollars.

Now Sam Bankman-Fried is awaiting trial in a US prison, and the man is accused of the biggest scam in the financial world since Bernie Madoff. There are two news related to the topic.

First, Michael Lewis hit the headlines. If the name is unfamiliar, he is the man who has written books such as, Moneyball, The Blind Side, and The Big Short. Each of these is also familiar to movie fans, and crypto investors are especially familiar with The Big Short.

Lewis also followed Sam Bankman-Fried closely in 2020-2021 as he wanted to turn SBF into a book. Lewis didn’t guess what kind of ending he would get for his work.

Yesterday, the author came under fierce criticism when the man’s interview from the 60 Minutes program went viral on social media.

Lewis said in the interview that FTX was “a great real business,” which caused the crypto scene to rage for a reason. Even though he is writing a book on the subject, Lewis doesn’t seem to understand how the FTX was run.

FTX was not a bank but a cryptocurrency exchange that embezzled customers’ money and probably also committed hundreds of other crimes in the financial world in the background. It wasn’t really “a great real business” but a complete scam.

Lewis also dropped another news bomb in the interview. According to him, Sam Bankman-Fried would have offered Donald Trump 5 billion dollars for Trump not to enter the presidential race of 2024. SBF generously supported many Democrats and thus sought to improve Biden’s chances. The claim was completely debunked by the Trump camp, as expected.

Another piece of news related to the SBF trial starting today in New York. At worst, Bankman-Fried faces up to 110 years in prison. The man’s situation looks bad because SBF’s closest colleagues have negotiated with the prosecutor to lower their sentence.

We will provide more news about the development of the trial in the coming months.

Do you still remember how the FTX crash happened? Read more in this article.

Pudgy Penguins to Walmart’s selections

The media has declared the NFT sector dead in recent months. The prices and trading volumes of the largest NFT collections have collapsed by 90 percent of the 2021 drug. However, the NFT technology is as strong as at the peak of 2021. It is the investors’ willingness to take risks that has collapsed. This can be seen starkly in the NFT market, arguably the most speculative part of the crypto sector.

Innovation is happening in the background, and last week, there was some interesting news from the United States. The Pudgy Penguins NFT collection has been created into physical toys launched for sale at Walmart department stores.

Walmart is not particularly familiar to Europeans, but it is the largest company in the world by turnover and the largest private employer in the United States. Pudgy Penguins’ deal was, therefore, significant in its size category.

Penguin toys bring digital NFT technology to the real world. Each Pudgy Penguins toy contains a unique certificate, which enables you to use unique features for the Pudgy character in the digital Pudgy World game.

Each physical toy is also linked to an existing NFT, so owners of the digital art still get a small slice of royalties from its sale. You could previously buy penguin toys in an online store, but now, for the first time, they are also available in a physical store.

Uptober got off to a promising start

October has been named Uptober in the Bitcoin world. The reason for this is Bitcoin’s historically good course development during October. Over the past ten years, Bitcoin’s price has developed in October as follows:

  • 2013: +61%
  • 2014: -13%
  • 2015: +33%
  • 2016: +15%
  • 2017: +48%
  • 2018: -4%
  • 2019: +10%
  • 2020: +28%
  • 2021: +40%
  • 2022: +6%

The numbers are based on data from the Coinglass website, which has been available since 2013, i.e., the previous ten years. The price of Bitcoin has fallen in just two October, and even then, a modest 3.83% and 12.95%. Both coincide with bear markets (2018 and 2014) seen every four years. In 2022, the price rose by 5.56% despite this.

November is a stronger month calculated by averages, but the increases have been achieved mainly in the early years of Bitcoin. No less than four out of the five previous November have been negative. February is the only month besides October to have only two red months in ten years. However, the price increases in February are smaller in size.

Is there any logical explanation for a good October? Big price increases could be explained by the miserable August and September when red has been seen no less than eight times in the previous ten years. In turn, the weak results of these months are explained by the holiday period and the resulting market lull.

The phrase “Sell in May and go away” is also known in the stock world, which refers to the weak returns of the summer months. October is the month when the gamblers in the market have returned from vacations, social media comes to life and the coverage of the industry increases again after the summer months. This can explain the good result in October.

October 2023 started with nice gains, but the short-term situation is very challenging from a macroeconomic point of view. Interest rates are still rising, and recession is now a real threat to the United States. The US dollar has also sharply risen, which is bad for risky assets.

You shouldn’t pop the champagne just yet, because Uptober may even be in the red this year!

AboutBitcoin Team

Hey! We're the AboutBitcoin squad, a team of crypto lovers who've been all about cryptocurrency since 2017. Every week, we drop the latest news and cool insights from the crypto world. Come hang with us as we dive into the crazy, ever-changing scene of cryptocurrencies – it's gonna be an awesome adventure!