China Confirms a Major Event This Week! US SEC Suddenly Sued by Crypto Community, Yellen Prepares to Ignite a Major Bitcoin Rally?

Bitcoin rebounded before the weekend, reaching $64,500. Chinese media revealed that Hong Kong's first batch of Bitcoin and Ethereum spot ETFs will be listed at the end of April. The U.S. Securities and Exchange Commission (SEC) accused the well-known "MetaMask wallet" of operating without a license, and its parent company, Consensys, subsequently sued the SEC, claiming that the regulatory agency is trying to classify Ethereum as a security. Legendary traders say that the U.S. Treasury Department will announce its quarterly refinancing next week, expected to reaccelerate the cryptocurrency bull market.

The first batch of Bitcoin and Ethereum ETFs, including those issued by Bosera International, China Asset Management (Hong Kong), and Harvest Global, has been officially recognized by the Hong Kong Securities and Futures Commission (SFC) and is set to be listed on April 30. Despite the ETFs being launched by Chinese public fund companies in Hong Kong, it should be noted that mainland Chinese investors are currently unable to participate in trading.

In the list published on the Hong Kong SFC's official website, included are the Huaxia Bitcoin ETF (BUU163) with stock codes 03042, 09042, 83042; Huaxia Ethereum ETF (BUU164) with stock codes 03046, 09046, 83046; Bosera HashKey Bitcoin ETF (BUU104) with stock codes 03008, 09008; Bosera HashKey Ethereum ETF (BUU105) with stock codes 03009, 09009; Harvest Bitcoin Spot ETF (BUT244) with stock codes 03439, 09439; Harvest Ethereum Spot ETF (BUU885) with stock codes 03179, 09179.

Source: SFC

The SFC and the Hong Kong Monetary Authority stated in a joint circular issued in December 2023 that neither the existing virtual asset futures ETFs on the Hong Kong market nor the upcoming spot ETFs can be sold to retail investors in mainland China and other regions where the sale of virtual asset-related products is prohibited.

However, mainland Chinese with Hong Kong ID cards, even if they are not permanent residents, can still trade in virtual asset spot ETFs under compliant conditions. The two ETFs issued by China Asset Management (Hong Kong) have counters in Hong Kong dollars, US dollars, and also set up a renminbi counter.

The SEC accused MetaMask wallet of acting as an unlicensed broker-dealer, violating securities laws. A broker-dealer is a financial entity that conducts securities trading on behalf of clients, but may also trade for itself. When executing orders on behalf of clients, it acts as a broker or agent; when trading for its own account, it acts as a dealer or principal.

Consensys, the Ethereum startup behind the MetaMask wallet, stated: "The SEC claims that by offering this wallet software, Consensys acts as a broker and offers and sells securities. However, MetaMask is just an interface, similar to a web browser, allowing digital asset owners to seamlessly interact with the Ethereum network, including all other network participants and applications."

The lawsuit shows that the SEC also issued three subpoenas to Consensys in 2023 and one in March this year.

According to The Block, Consensys sued the SEC on Thursday, claiming that it is trying to classify Ethereum as a security. Consensys stated in the lawsuit that the SEC has been trying to illegally regulate Ethereum through targeted enforcement actions against Consensys and other companies.

It is seeking a court's confirmation on whether the SEC has the legal authority to regulate user-controlled software interfaces built on Ethereum.

Major U.S. pension funds and the oldest bank are entering the Bitcoin ETF space

A U.S. retirement fund with assets under management of $140 billion, GRP, disclosed to 1.6 million customers that it holds investment exposure in seven Bitcoin spot ETFs. This move signals that U.S. retirement funds are beginning to explore Bitcoin. Increasingly, institutions are recognizing Bitcoin's value storage properties and are considering incorporating Bitcoin into their investment portfolios.

Bitcoin Magazine tweeted on Thursday (April 25): "According to 13F filings, the U.S. retirement fund GRP disclosed that they now have investment exposure in seven Bitcoin spot ETFs. This indicates that retirement funds have begun to explore the Bitcoin ETF market."

Bitcoin Archive reports that the oldest bank in the U.S., Bank of New York Mellon (BNY Mellon), has reported in SEC filings that it holds BlackRock and Grayscale Bitcoin ETFs.

Is Yellen Preparing to Ignite a Major Bitcoin Rally Next Week?

CoinDesk analysis suggests that the key to reviving the Bitcoin bull market is the U.S. Treasury's refinancing announcement. The U.S. Treasury will publish its refinancing announcement on May 1, detailing three months' borrowing needs and the balance in the Treasury's general account. Analysts expect Yellen's quarterly refinancing announcement (QRA) next week to ease pressure on risk assets, potentially quickly restoring a broader upward trend.

Saxo Bank stated that the upcoming QRA could bring relief, with the total quarterly issuance expected to drop from its peak of $7.2 trillion within two years for the first time. Fixed income strategy head Althea Spinozzi said: "The total issuance of marketable U.S. Treasuries is expected to drop for the first time since the second quarter of 2022."

She continued: "Therefore, the market focus will shift to the announcement of the Treasury's general account (TGA) level. If the QRA maintains the TGA target at $750 billion or reduces it, risk assets may rise. If the TGA remains at the current level of $750 billion or lower, it means no change, or possibly more funds released into the economy, thereby stimulating economic activity."

Legendary trader Arthur Hayes also mentioned: "As expected, tax revenues have increased by about $200 billion to the U.S. Treasury's general account. Forget the Fed meeting in May, the Q2 financing announcement for 2024 will be published next week. What strategy will Yellen adopt? Here are a few options, the first, by depleting the TGA to zero to stop issuing government bonds, which would inject $1 trillion of liquidity into the market; the second, shifting more borrowing to short-term Treasury bills, which would withdraw funds from reverse repurchase agreements (RRP), equivalent to injecting $400 billion of liquidity into the market."

"The third, a combination of the first two options, not issuing long-term bonds, only issuing short-term Treasury bills, while depleting the TGA and RRP, which would inject $1.4 trillion of liquidity into the market. The Fed's influence can be negligible, Yellen is a formidable figure."

He forecasted: "If any of these three options occur, the stock market is expected to rise, and most importantly, the cryptocurrency bull market will reaccelerate."