What Happened In Crypto Today

Today in crypto, the US SEC has approved in-kind transactions for crypto ETPs; Rakbank became the first traditional bank in the UAE to enable crypto trading for retail users via its mobile app; and hedge fund manager Ray Dalio recommended allocating 15% of a portfolio to Bitcoin and gold amid concerns over the US debt crisis.

SEC approves in-kind creations and redemptions for crypto ETPs

The US Securities and Exchange Commission (SEC) has approved in-kind creation and redemption for cryptocurrency exchange-traded products (ETPs), giving authorized representatives the ability to exchange shares directly for the underlying crypto assets instead of cash.

In a Tuesday announcement, the securities regulator stated that approved Bitcoin (BTC) and Ether (ETH) funds will be permitted to create and redeem shares on an in-kind basis.

“It’s a new day at the SEC, and a key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets,” SEC Chairman Paul Atkins said in a statement.

Atkins said the new rules will make crypto ETPs “less costly and more efficient.”

“In-kind creation and redemption provide flexibility and cost savings to ETP issuers, authorized participants, and investors, resulting in a more efficient market,” said Jamie Selway, director of the Division of Trading and Markets at the SEC.

In the context of the already approved spot crypto exchange-traded funds (ETFs), in-kind redemptions allow investors to receive the underlying assets, such as Bitcoin or Ether, instead of cash when redeeming shares.

This method is generally considered more efficient, as it enables the fund’s authorized participants to avoid selling the assets on the market, potentially reducing transaction costs.

Rakbank becomes the first UAE bank to offer crypto trading for retail

The National Bank of Ras Al Khaimah (Rakbank), a government-owned bank in the UAE, is the first conventional bank in the country to offer retail crypto trading.

In a Tuesday news release, the bank announced the launch of a crypto brokerage service through its mobile banking app, allowing customers to buy, sell and swap cryptocurrencies directly from their UAE dirham accounts.

“We recognize the opportunity this solution will provide to customers in the UAE, as we believe they deserve a more efficient and seamless crypto buying, selling and swapping journey that is fully regulated and entirely in AED [dirhams],” said Raheel Ahmed, group CEO of Rakbank.

The new offering is powered by Austria-based Bitpanda, with transactions facilitated by Bitpanda Broker MENA DMCC, a Virtual Assets Regulatory Authority (VARA)-regulated entity in Dubai.

Rakbank said customers can trade crypto without needing to transfer funds to an external exchange or convert between fiat currencies, eliminating foreign exchange fees. The integration uses Bitpanda’s infrastructure to execute trades and manage custody.

“We are proud to be the first conventional bank in the UAE to enable simple, secure, and regulated access to a world-class digital assets platform,” Ahmed said.

Ray Dalio suggests putting 15% in Bitcoin, gold amid US “debt doom loop”

American billionaire and hedge fund manager Ray Dalio has recommended a 15% portfolio allocation into Bitcoin or gold to optimize for the “best return-to-risk ratio” in light of America’s crippling debt problem and currency devaluation.

“[If] you were optimizing your portfolio for the best return-to-risk ratio, you would have about 15% of your money in gold or Bitcoin,” the founder of hedge fund firm Bridgewater Associates said during an appearance on the Master Investor podcast on Sunday.

Dalio said he has “some Bitcoin, but not much,” and is still “strongly preferring gold to Bitcoin,” however. 

But the exact split between Bitcoin and gold “is up to you,” Dalio said. His 15% suggestion marks a sharp increase from the 1% to 2% Bitcoin allocation he recommended in January 2022.