Crypto market capitalization has tanked to its lowest point since early November with $240 billion getting wiped out over the past day.

This has resulted in a 6% fall to $2.6 trillion as all post-US election gains have now been wiped out.

Ethereum has taken the brunt of the fall, losing a whopping 16% over 12 hours as it fell from around $2,140 to just below $1,800. Moreover, ETH is struggling to recover and was trading at $1,860 at the time of writing.

ETH Death?

The last time Ethereum traded below $1,800 was in October 2023, when it was slowly emerging from the two-year-long bear market.

There is solid support at current levels, which must be held to prevent the asset from tanking back to bear market lows following the formation of what appears to be a double-top chart pattern.

Analysts have warned that if support here is lost, ETH could fall as low as $1,200.

Ethereum is currently down a painful 62% from its all-time high in 2021, and the ETH/BTC ratio – which is a measure of the price of ETH in terms of Satoshis – is at its lowest level since December 2020, having fallen to 0.023 today, according to Tradingview.

Only Dogecoin (DOGE) had heavier losses than Ethereum in the crypto top twenty today, with the memecoin melting by 11%.

It does beg the question of who would be selling ETH at $2,000 and the answer appears to be whales that are trying to avoid being liquidated, according to Lookonchain.

Needless to say, the Ethereum derision and FUD had escalated to new heights on Crypto Twitter as traders and investors licked their wounds.

Ethereum Testnet Attacked

The ETH angst has been exacerbated by problems with Pectra testing and an unknown attacker sending zero-token transfers, causing empty blocks.

On March 9, Ethereum developer Marius van der Wijden said the issue had been fixed:

“We suspected that the attacker was reading some of our chats, so we decided not to publicize the fix, but only update a few nodes that we controlled in order to get more full blocks on the network,”

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Last week Japan’s Financial Services Agency disclosed that a new Bill has been submitted to the National Diet to update the Payment Services Act, the legislation that governs stablecoins and cryptocurrencies.

The key changes relating to stablecoins and crypto include:

• More diversity in stablecoin reserves for trust-style stablecoins
• The ability to order exchanges to provide onshore custody of all spot crypto and stablecoins for the purposes of bankruptcy protections
• Creating a new kind of intermediary that acts as a broker, introducing clients to crypto exchanges.

Stablecoin reserves can include government bonds

The existing version of the Payment Services Act supports the issuance of stablecoins by three types of institutions: banks, money transfer businesses and trust companies. While stablecoins are still extremely nascent in Japan, it’s expected that trust companies are likely to be the most prolific as they support issuance on behalf of third parties and are similar to structures used elsewhere. For example, Mitsubishi UFJ Trust had discussions about working with Binance for stablecoin issuance.

Current legislation requires trust company stablecoins to keep all reserves in demand deposits at banks. The Bill allows up to 50% of reserves to be held in term deposits and/or government bonds, provided the one-to-one backing is maintained.

Crypto custody in Japan

Japan was the host of the first big cryptocurrency exchange collapse – Mount Gox in 2024. Hence, when FTX went bankrupt in 2022, users of FTX Japan were not impacted by the foreign bankruptcy proceedings. However, the reason was because FTX provided derivatives trading and regulators had issued an order requiring it to hold all client assets in Japan. If a cryptocurrency exchange only deals in spot transactions, the regulator could not make such an order. Hence, regulators want the law changed, so domestic custody orders can be made for spot (only) crypto exchanges.

New type of crypto broker intermediary

Currently in Japan, if a broker introduces clients to a cryptocurrency exchange, the broker is expected to register as an exchange themselves. The Bill aims to create a new class of intermediary for introducers that do not operate an exchange. Like exchanges, they will be responsible for asset and risk disclosures to clients. Crypto advertising restrictions will also apply.

However, they will not hold client funds, so will not be subject to capital requirements. Given the exchanges have to conduct anti money laundering compliance on all clients, the intermediary won’t need to. This new intermediary role also applies if some is an introducer for stablecoins.

As a sign of how nascent stablecoins are in Japan, crypto exchange SBI VC Trade recently landed the first license in Japan as an “Electronic Payment Instruments Exchange Service Provider”. This is required to deal with foreign stablecoins, allowing SBI VC Trade to support USDC.

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Swiss stock exchange group SIX released its 2024 results today. New CEO Bjørn Sibbern announced a three year program, Scale Up 2027, which aims to improve growth and margins. It will see 150 people lose their jobs, some of them through attrition. Plus, as part of the push, it plans to merge the blockchain-based SIX Digital Exchange (SDX) into its Securities Services business unit.

It portrayed this as a growth initiative, saying that SDX’s technology will now be rolled out across the group. SIX wants to “capitalize on synergies and fully leverage the potential of SDX as part of the broader SIX ecosystem.”

The SIX Digital Exchange was the first regulated secondary market for digital securities in the world, one of several world firsts. The exchange is also the first to host a production wholesale central bank digital currency (wCBDC), although technically the Swiss National Bank’s wCBDC is part of an extended two year pilot of Project Helvetia. SDX also holds a license as a central securities depository (CSD).

Since its launch SDX has hosted the issuance of more than CHF 1.5 billion in digital bonds. Today’s report says SDX has 14 members across its digital securities and web3 / crypto services, with at least nine more committed to join.

The digital CSD is already integrated with the conventional CSD in order to allow issuances to list on the main exchange and for investors to engage without needing to touch blockchains. However, today’s announcement talks about “synergies from shared infrastructure.”

Integration – returning to the original plan

In many ways SDX is now coming full circle. Its first CEO, Martin Halblaub, resigned in 2019 over strategic differences. He wanted SDX to be more independent, but the strategy at the time was to be more integrated. He was replaced by Tim Grant who lasted about 17 months, before State Street veteran, the inimitable David Newns, stepped in for the 2021 launch and has provided continuity since.

While these changes represent the stamp of a new SIX CEO, there are likely more to come. Javier Hernani, the former CEO of SIX-owned BME and Head of SIX Securities Services, departed in early February and has not yet been replaced. Any new head of SIX Securities Services will likely set a new agenda.

Meanwhile, SIX reported a net profit of CHF 38.7 million for 2024 after writing off CHF 167.7 million relating to the valuation of its holdings in Worldline. Before that adjustment (and tax), net profit would have been CHF 204.4 million, an increase of 12.3%.

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