British CBDC - Britcoin - one step closer to implementation

After several weeks of price declines, bitcoin saw a slight rebound last week, returning to $26. Bitcoin kicked off the week on the platform eToro around $25. Although it has been rather in reverse since the end of May, the trend has reversed slightly, with the cryptocurrency rising by about 600%. within seven days. The market probably benefited from the suggestion that the US rate hikes were put on hold, but the overall reaction was rather subdued.

Ethereum saw no such rebound, falling by around 1,4 percent. per week, now trading at around $1700, up from $1730 earlier last week. Ethereum ended up relatively stable. In the middle of the week there was a big drop, but towards the end of the weekend the price increased slightly.

One step closer to Britcoin

CBDC, or central bank digital money, has been widely discussed in the cryptocurrency realm for some time, but so far few major releases have been realized. However, a version of the British pound, the so-called "Britcoin", seems to be one step closer to realization.

The Bank of England has finished experiment with the Bank for International Settlements (BIS) called Project Rosalind, exploring the profitability of the British digital pound. The study found that such a CBDC could help make payments for individuals cheaper and more efficient, while companies would be able to offer new types of financial products and reduce fraud cases.

It is easy to confuse CBDC with the broader cryptocurrency market, but in essence they are not very similar, especially when it comes to processes such as decentralization or value. CBDCs are primarily a centralized response to the burgeoning crypto-asset market. And while they may prove useful, they are not fundamentally the same as cryptocurrencies like Bitcoin or Ethereum.

Bitcoin exchange flow is at its highest level in five years

According to the company in Glassno the flow of cryptoassets to exchanges thanks to bitcoin miners has reached the highest level in five years.

This change suggests that a large proportion of miners want to monetize their cryptocurrency holdings and are preparing by placing assets on the exchange. It is difficult to interpret whether this is a good or bad signal for the market - miners may want to cash in resources before the expected drop in value or bet on the increase in the price of cryptocurrencies and rub their hands for potential profits.

Miners still hold large amounts of bitcoin, worth around $50 billion. Glassnode data shows outflows from the bitcoin exchange outpacing inflows at a three-month low, suggesting that investors are holding onto their cryptocurrencies for now.

BlackRock is applying for a bitcoin spot ETF

BlackRock, a major global asset manager, has applied to list a bitcoin spot ETF in the US. It's not the first financial institution to do so, and probably won't be the last, but it's likely to be more likely than other, smaller entities to overcome regulatory hurdles.

The potential of the Bitcoin Spot ETF to move the market is not very clear and depends on demand. BlackRock however, it manages a huge amount of global capital, so the success of a spot ETF could unlock massive liquidity in the bitcoin market.

The Spot ETF from the company has some pretty serious caveats, such as the inclusion of surveillance data sharing to prevent market manipulation. Bitcoin supporters will likely complain about this as it goes against the spirit of a decentralized resource, but it may be the price to pay for bringing such a product to market.