Polymarket Hits $3.6 Billion in Election Bet Trading Volume

Polymarket Finalizes Presidential Election Market

Polymarket, the crypto-based prediction platform, has closed its US Presidential election bets market, with the trading volume reaching $3.6 billion. Major news networks, including The Associated Press, Fox, and NBC, confirmed Donald Trump’s victory, so the platform resolved Trump as the winner.

However, a brief dispute window remains for users to challenge the resolution, but with top sources backing the outcome, overturning it seems unlikely. Polymarket has attracted attention for its unique approach, which allows users to bet on various political and societal events through its prediction market platform.

Polymarket’s decentralized approach offers an alternative to traditional polls since financial stakes are tied to these predictions. In this election cycle, the platform saw an influx of interest as people placed bets on who would become the next president.

Stakes for Trump and Harris

Over the campaign period, Trump maintained a strong showing on Polymarket, with peak odds of 71.5%, especially after an assassination attempt in July. His primary competitor, Kamala Harris, held her highest chance of winning in August at 54%.

Before election day, traditional polls showed Harris slightly ahead by a percentage point. A last-minute poll from Iowa predicted Harris’s lead would be three points.

The final tallies for Polymarket’s election bets included $1.5 billion for Trump and $1 billion for Harris. Lesser amounts were also available for other potential candidates, including Joe Biden at $72 million, Michelle Obama at $153 million, and Robert F. Kennedy Jr. at $141 million; even Kanye West attracted $9 million in bets.

Polymarket CEO Shayne Coplan expressed satisfaction with the result, claiming it as a win for prediction markets. “Trust the markets, not the polls,” he stated on social media, adding that the Trump campaign team first learned of their victory from Polymarket’s data.

What’s Next for Polymarket?

While the market currently sees a 95% chance of Trump’s inauguration, a small percentage predicts other outcomes. With the election cycle over, Polymarket must consider ways to sustain its user engagement without high-stakes events.

Despite its popularity, Polymarket charges no fees, relying on previous Series B funding of $70 million.

Whales Earn $81M from Trump Election Bets

Crypto whales betting on Donald Trump’s victory reaped millions through the decentralized prediction market, Polymarket. The largest account, “Theo4,” earned over $20.4 million in profit, as revealed by data analytics platform Lookonchain on November 6.

Another top whale, identified as “Fredi9999,” amassed around $15.6 million in profit, while a third whale, “zxgngl,” secured over $11 million. Throughout October, ten whale accounts collectively wagered $70.6 million in USD Coin (USDC) on a Trump win.

This level of investment spiked Trump’s odds on Polymarket, driving up the “Yes” shares for his victory to over 60% by mid-October. Key transactions included Fredi9999’s October 18 purchase of $20 million in “Yes” shares, which pushed Trump’s odds above 60.2%.

This was followed by zxgngl’s $7.22 million investment on October 28, raising the odds to 66%. With the Associated Press calling the election in Trump’s favor on November 6, the whales’ strategy has paid off.

High Concentration of Trump’s Polymarket ‘Yes’ Shares

According to another political bettor, Domer, over half of Trump’s Polymarket “Yes” shares are held by just five whales. Domer noted that these accounts, including Theo4 and Fredi9999, could secure a collective payout exceeding $81 million if all conditions hold.

In contrast, ‘yes’ shares for Vice President Kamala Harris are more distributed. The five largest shareholders in her “Yes” vote control 18% of the total shares, with the highest single account holding 4.4%.

Trump’s top bettor, by comparison, owns nearly a third of all his “Yes” shares, emphasizing the concentration of bets around Trump’s outcome. Hence, Domer claimed that at least four of the top Trump bettors could belong to a single entity confident in Trump’s win.

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Understanding Cryptojacking and How to Protect Your Devices

While not all mining is moral, Bitcoin mining has become a popular method to obtain digital assets. A rising cybercrime called cryptojacking lets attackers mine cryptos from your devices without permission.

The guide will examine cryptojacking, its techniques, and how to protect your devices against these latent threats.

What is Cryptojacking?

“Cryptojacking” is a type of cybercrime in which malicious actors steal Bitcoins by hacking your computer’s computational capability through malware or other hostile programs. Unlike other kinds of cybercrime, this threat does not aim for your personal or financial data.

Instead, it uses your gadget without authorization, causing it to slow down and overheat. Since the malware operates silently in the background, users frequently are unaware that their gadgets are being mined.

Any device, from PCs and cellphones to cloud-based services, can be attacked, making it a general threat.

How does this Hack operate?

Two main ways that cryptojacking works are through browsers and malware. Both techniques seek to take over your device’s processing capability.

Malware-Based

Malware-based cryptojacking can happen through phishing emails, compromised websites, or risky downloads. After infecting your smartphone, the software secretly uses your device’s CPU to mine cryptos.

Usually, this kind of attack lasts for extended periods until an antivirus software finds and eliminates them.

Browser-Based

This approach does not require software installed on your device. It runs via a hostile script included in a website.

The software starts mining cryptocurrency with your device’s power when you visit a compromised website. The mining operation shuts down as soon as you leave the place.

It can compromise your device’s performance even if it is less dangerous than malware-based attacks.

Types of Cryptojacking Attacks

There are various ways that cryptojacking can occur, and as technology develops, fresh approaches will show up. Currently, the typical forms of attacks are:

File-based

The File-based type occurs when phishing emails or fake software updates install malware on your device. Even if the compromised website is closed, the malware stays on your device.

It keeps mining cryptocurrencies without your knowledge.

Internet of Things

Internet of Things (IoT) devices like smart home appliances are prime targets for cryptojackers since they often lack robust security mechanisms. Since they have been taken over and utilized to mine cryptocurrencies, these devices’ performance will greatly slow down.

Cloud-Based

As cloud services grow in popularity, attackers are discovering means to take advantage of flaws in cloud configurations. Having access to cloud-based systems allows them to mine cryptocurrencies using the computing capability of these platforms without permission from the owners.

How to Identify Cryptojacking?

Since cryptojacking leaves no clear signs, detecting it might be difficult. However, there are a few red indicators to check.

Performance Issues

Your gadget may suddenly run slower than usual or become unresponsive. Since mining BTCs requires resources, this hijack might cause your device’s processing capacity to run ineffectively.

Overheating Devices

Cryptojacking causes your gadget to overheat. It could be the reason your phone gets unusually warm.

Increased Battery Drain

Should your laptop’s or smartphone’s battery begin to deplete faster than usual, cryptojacking could be running in the background.

High CPU Usage

Unaccounted spikes in CPU use can also indicate cryptojacking. If your device is running at high capacity, even if you are not using demanding apps, a cryptojacker could be working.

Proven Prevention Methods

Fortunately, there are several ways you can protect your devices against cryptojacking attacks.

Install and update antivirus software. A good antivirus application will find and stop cryptojacking malware before it compromises your device. Routinely update your antivirus program to guard against the newest threats.

Always exercise caution when opening emails from unidentified senders; they may be phony. Also, steer clear of downloading attachments and clicking on dubious links.

Useful browser extensions—such as MinerBlock or No Coin—are specially designed to block crypto mining scripts. Installing these extensions can help stop browser-based cryptojacking.

Make sure your operating system, web browser, and apps are all current. Many times, hackers use flaws in out-of-date programs to spread malware, including cryptojacking.

Track your device’s CPU consumption and performance often. If you find any odd surges or slowdowns, cryptojacking is a possibility.

Ensure robust security systems are in place for cloud-based services. Detect odd activity by routinely checking your cloud resource use and applying multi-factor authentication (MFA).

Conclusion

Understanding how cryptojacking operates will help you guard your devices against being taken over. Hence, be alert, routinely update your software, and employ preventive measures, including antivirus products and browser extensions.

Though anyone can become a victim, with the correct security measures, you can protect your digital assets and devices.

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Bitcoin Dominates Crypto Investment Products: Here’s Why

Crypto investment products have seen heavy inflows in the past couple of weeks, driven by renewed institutional interest and a friendly political climate. According to a report on Digital Asset Fund Flows, Bitcoin funds accounted for most of the $920 million injected into these crypto products.

If this trend continues, October will be among the strongest months for crypto product inflows thus far and evidence of renewed confidence by investors. For the third consecutive week, Bitcoin funds dominated crypto investment products.

This suggests that individual and institutional investors consider it their favorite virtual asset. Moreover, the forthcoming US presidential election is another reason for this increased fund injection into Bitcoin products.

US Politics and Crypto Market Trends

The US has commanded the lion’s share of crypto investment flows, accounting for around $906 million of total inflows. The expectations surrounding the imminent elections have also added to this momentum.

Based on all indications, the election outcome will further influence crypto regulatory policies. Should former US President Donald Trump win, many analysts predict that there won’t be any adverse regulatory changes to the crypto industry.

With the election odds favoring him already, many crypto market participants are already in a celebratory mood.

Bitcoin’s Dominance Among Crypto Investment Products

Compared to other crypto investment products, especially Ether funds, net flows into Bitcoin products have been positive over the past few weeks. For instance, spot Bitcoin ETFs in the US have recorded a cumulative total net inflow of $22.41B since their launch.

In contrast, spot Ether ETFs in the US have a cumulative total net outflow of $505.58M since launch. This trend proves the continued investor interest in the leading cryptocurrency.

Meanwhile, short-Bitcoin products, typically used by investors to bet against the cryptocurrency, reported minor outflows of $1.3 million versus inflows of $12 million the previous week. This shift reflects the optimism over Bitcoin’s present trajectory and expectation of a higher price over the near term.

Also, Bitcoin’s price action in recent weeks has attracted many financial institutions and retail investors who have added BTC to their investment portfolios for the long term. Thus, Bitcoin’s dominance over other digital assets will continue to soar.

Crypto Investment Products and Regional Dynamics

By regional performance, the US tops inflows into crypto products, possibly due to the increasing political support for Bitcoin and other digital assets. Nevertheless, other countries have also seen notable crypto investment activities, particularly among the youths.

For instance, crypto investments in Indonesia are on the rise. According to a study by Bappebti, a regulator of commodities trading in Indonesia, over 60% of crypto investors are below the age of 30.

This stat is similar to what’s obtainable in other parts of the world — younger generations (particularly the millennials and Gen Z) are displaying greater interest in investing in digital assets over the long term. A study conducted by Bitget in 2023 revealed that roughly 46% of millennials own crypto across major economies, with the data noting that such interest keeps growing.

This strong appetite for digital assets among the young generation indicates a possible turning point in the investment landscape, where crypto assets will be prominent in most diversified investment portfolios.

Indonesia’s Crypto Ecosystem

With the establishment of the crypto market in Indonesia, so are the challenges it faces from a number of different regulatory frameworks across regions. Indonesia views crypto as a commodity.

Despite allowing its crypto market to thrive, many crypto players in Indonesia believe there are still gaps in the nation’s crypto regulatory framework. For instance, the authorities consider crypto a commodity, but the country’s primary regulator (Bappebti) has introduced a dual tax system, which includes a 0.11% value-added tax and 0.1% capital gains tax.

In the US, the regulatory environment for crypto is still uncertain. There are still ongoing discussions about frameworks that could provide more clarity to investors.

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How to Stake Ethereum (ETH): A Beginner’s Guide to Earning Rewards

Ethereum (ETH) staking allows you to earn passive income since all you have to do is lock your coins to help secure the network. Anyone who wishes to help the network and get rewards can stake with Ethereum’s proof-of-stake (PoS) blockchain.

Why Ethereum Staking?

Ethereum staking serves two primary purposes: it helps secure the network and generates incentives. Here are some of the possible rewards that can be earned.

Passive income: Staking Ethereum pays you more ETH to help validate network transactions. Its incentives provide a fantastic passive revenue source on ETH holdings of 3% annually.

Securing the Ethereum network: Staking improves the security of the Ethereum network. Ethereum gets safer and more decentralized, and the more people stake, the harder it is for hostile players to exploit the blockchain.

Basic Terminologies in Ethereum Staking

Are you looking to stake your Ether? Below are some terms you need to know about staking on this blockchain.

Proof-of-Stake (PoS): The blockchain’s design lets users called transaction validators stake or deposit Ethereum to participate in the process. The minimum ETH required to be locked and validated is 32 ETH. Thus, users can suggest new blocks and also authenticate them.

Validators: Validators are those who lock their ETHs to consummate transactions. They are responsible for securing transactions and verifying them.

Epochs: An epoch is a specific period that commences and ends with the approval and executive of transactions by validators when new blocks are suggested. An epoch on Ethereum uses up to around 32 slots of 12 seconds each, or around 6.4 minutes.

Slashing: It is the punishment enacted against validators who occasionally engage in misconduct by violating the network’s laws, either deliberately or due to system faults. Malicious behavior by a validator can result in a loss of a fraction of their staked Ethereum.

Staking Pools: These pools allow small ETH holders to contribute and jointly meet the required 32 ETH to become a validator. With the same method, they can also alleviate the costs and risks that come with individual staking, such as hardware purchase and maintenance.

7 Steps to Start Staking Ethereum

You can stake Ethereum in two ways — through the pool or solo staking. Each approach comprises the steps below.

Step 1: Prepare a Safe Wallet

You need an Ether wallet. Hardware wallets such as Ledger or Trezor are among the safest as they have the best protection mechanism to protect your holdings against malicious actors.

Step 2: Buy Ethereum (ETH)

If necessary, buy ETH from trusted brokers like Coinbase or Binance. Similarly, most hardware wallets have a provision to purchase ETH directly.

Step 3: Choose Your Staking Method

Solo staking: You will set up a node and become a validator. This is easy, but for it to work, you need knowledge of the required hardware in addition to the prerequisite 32 ETH minimum.

Staking Pool: A stake pool collects ETH from several users, thereby enabling lower stakeholders to participate and earn yields actively.

Step 4: Deposit Your ETH for Staking

After you have determined which method suits you best, deposit your ETH. For instance, if you’re using Coinbase, ensure your account is confirmed, then move ETH from your wallet to Coinbase.

Your first step is to check out the “Earn” or “Staking” tab on your platform of choice.

Step 5: Start Staking Ethereum

In the staking section of the platform you chose, input the amount of ETH you would like to stake, and the transaction in staking will be completed. The service you pick should also manage technical activities, like joining the network and launching a validator for you.

Step 6: Track Your Rewards

After you are done staking, you must follow your rewards closely. Most platforms display this information clearly in the “My Earnings” or “Rewards” section.

The terms of rewards for staking depend on the network conditions at that time. At present, if you are staking ETH, the expected return is about 3% every year.

Some validators participate with a tool called MEV-boost to increase the reward. This increase can be up to 5.69%.

Step 7: Withdraw Your Rewards or Reinvest Them

You can either reinvest your rewards to earn more over time or withdraw them so you may cash out all your earnings. Your choice depends on your goal of investing in the first place.

Risks to Consider

It is worth noting that staking has its downsides.

Punitive Measures: Validators must follow all the network rules. Otherwise, they risk having their ETH balance decreased. A simple and effective way to avoid such risks is by thoroughly abiding by the recommendations for monitoring your node.

Token Locking: Staked tokens are usually subject to a lockup period, which impedes portability until the time is up.

Conclusion

Investing in Ethereum through staking provides an opportunity to generate passive income. At the same time, it helps maintain the security of the network.

You will still experience benefits and drawbacks, whether you choose to do it yourself or via a pool. Staking your ETH will be a smart choice if you are a long-term holder hoping to get additional ETH.

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Cardano Taps $1.3 Trillion in Bitcoin Liquidity: What to Know

Cardano plans to integrate BitcoinOS, a Bitcoin-based smart contract platform, to enhance its decentralized finance ecosystem and better cross-chain functionality. Accordingly, Cardano will tap into the $1.3 trillion in liquidity held on Bitcoin.

By using zero-knowledge cryptography, the network claims it can give DeFi users secure and decentralized access to Bitcoin liquidity, free of intermediaries and third-party control. The collaboration underlines this blockchain’s objective to contribute toward a more interoperable blockchain ecosystem.

Moreover, the huge market capitalization of Bitcoin will offer great liquidity for Cardano.

ZK-Powered BTC Liquidity on Cardano

The essential building block of this collaboration is the BOS Grail bridge, which links Bitcoin to Cardano’s blockchain with the power of zero-knowledge technology. In contrast with how integrations have typically been done, this bridge utilizes the ZK BitSNARK verification protocol.

Thus, ZK cryptography enables verified transactions without third-party oversight, making the Cardano DeFi ecosystem more efficient and secure. With this integration, the blockchain allows its users to access the functionality of the Bitcoin network on its decentralized network.

Enhancing Cross-Chain Functionality

The Cardano blockchain infrastructural provider, Emurgo, says this integration is a critical step in the network’s mission of improving cross-chain capability. Emurgo CEO Ken Kodama says the ZK-powered bridge offers a secure route to Bitcoin’s liquidity for Cardano users, projects, and developers.

Cardano’s integration with the BOS Grail bridge will also allow the network to accommodate varied DeFi applications. This move will open ways for increased DeFi adoption and improve the functionality of Cardano to make it stronger in this race of blockchains.

The BitcoinOS Grail Bridge

The BitcoinOS Grail bridge represents an integral part of Cardano’s new cross-chain integration plan in partnership with Merlin Chain, a layer-2 scaling solution. More importantly, the bridge allows for the complete decentralization of cross-chain transactions without the need for centralized security measures such as multisig or multiparty computation.

Merlin Chain founder Jeff Yin described the bridge as one of the big milestones for Bitcoin. He explained that it creates a “trustless, decentralized” method for bridging Bitcoin-native assets onto other networks.

Yin further said such a bridge is typical in the industry since every new development comes without a centralized trust mechanism, which increases security and furthers decentralization.

Hoskinson’s Vision

Reacting to the new integration, the blockchain’s founder, Charles Hoskinson, shared an animated celebratory image online. Hoskinson also pointed out SundaeSwap, an AMM decentralized exchange running on Cardano, as a potential site for Bitcoin assets in the process.

Hoskinson’s reaction is proof that this collaboration can unlock massive liquidity on this network, benefitting DeFi developers and users. Access to the Bitcoin market will provide substantial support for Cardano-based DeFi projects, fostering the growth and liquidity of the network.

Hoskinson’s Move for Cardano Adoption in Argentina

Recently, Hoskinson paid a visit to Buenos Aires, the capital of Argentina, for a Cardano Summit. Besides attending this summit, he met the newly elected libertarian President of the nation, Javier Milei.

The network’s founder shared insights about the future of blockchain technology, especially its possible economic impact in Argentina. Hoskinson envisions Argentina’s emergence as the leader in crypto adoption across South America.

He believes that Argentina can be a stable economic gateway for blockchain adoption in the region, the same way as South Africa in the African continent. Due to decades of economic instability and inflation, Argentina has one of the highest rates of cryptocurrency adoption in the world.

Thus, the country is a hotbed for blockchain innovation. Hence, setting up a relationship with its leadership will help Hoskinson advance Cardano’s position in Latin America and increase the continent’s adoption of ADA, Cardano’s governance token.

ADA’s Price Action

Currently trading for under $0.35, ADA has shed close to 90% in value from highs set in 2021, tracking the wider bear market of 2023 and 2024. However, many analysts are predicting a renewed Bitcoin-led market rally by late 2024, which should impact ADA’s price positively.

Should ADA underperform at that time, it might lose even more investor confidence. This period would also be a measure of the token’s strength compared with other leading digital assets as the crypto market is poised for recovery.

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Bitcoin Will Evolve into A Stable Currency in 6 Years – CryptoQuant CEO

CryptoQuant CEO has predicted that Bitcoin (BTC) will transform into a stable currency by 2030 following a 378% increase in its mining difficulty over the past three years. Ki Young Ju believes that institutional investment in large-scale mining operations will push the value of the token higher while there will also be an influx of new miners.

Ensuring Bitcoin Stability through Institutional Influence

According to Ju’s prediction, a rise in mining difficulty is a sign that Bitcoin will stabilize by 2030. He added that the infamous volatility of the cryptocurrency market will be lessened as institutional investors’ influence increases.

In the past, Bitcoin and other digital assets have been known for their erratic price fluctuations, which have helped to create a perception about them as speculative investments rather than a reliable investment portfolio. However, the growing influence of institutional investors has made mining Bitcoin more challenging, resulting in a more centralized allocation of processing power.

While skeptics contend that centralization could compromise this network’s decentralized structure, Ju noted that this change might stabilize the system. In addition to increasing market capital and resources, institutional players also create a more regulated atmosphere, which could lessen sharp price swings.

Ju also forecasted that within the next three years, big financial technology firms would promote the broad use of stablecoins. If his prediction holds, the wider adoption of digital currencies may facilitate BTC’s price stability.

Additionally, Ju is confident that conversations about Bitcoin’s use as a traditional currency will gain more traction by 2028 after the next halving.

Scalability Challenges

Meanwhile, there have been challenges in making this coin’s network useful for regular transactions. A solution to these constraints is the establishment of Layer-2 (L2) solutions, such as the Lightning Network, to facilitate quicker and less expensive transactions.

However, these solutions are still not widely used. Hence, Ju argued that institutional support is essential for the uptake of Bitcoin L2 solutions.

These organizations can offer the infrastructure and funding required to increase L2 technology’s accessibility to a wider range of users. Nevertheless, there is still a lot of competition, especially from options like Wrapped Bitcoin (wBTC).

WBTC is a popular option for investors looking for more seamless transactions. It enables Bitcoin to be integrated into other blockchain ecosystems without the technical complications that frequently accompany L2 infrastructure.

Therefore, widespread adoption of these L2 solutions is still uncertain unless there’s strong institutional support.

$25 Million Bitcoin Options Trade Signals Optimism

Political unpredictability is fueling increased activity in the cryptocurrency market as the US presidential election approaches. Substantial trading activity, such as a record-breaking $25 million Bitcoin options trade on the decentralized derivatives exchange Derive, is one of the notable activities.

Also, an institutional investor’s large transaction indicates a strong belief in a possible BTC price spike following the announcement of the election results. The trade is especially notable because of its complex, multi-legged Bitcoin options strategy.

It entailed selling 200 call contracts at $80,000 and buying 100 call option contracts with a strike price of $70,000. It also wrote one hundred contracts for a $50,000 put option, all of which were scheduled to expire on November 29.

In the event that the price of Bitcoin hits $80,000 by the end of November, this strategy will maximize profits. The organization used eBTC, or restaked BTC via EtherFi, as collateral to secure the transaction.

Notably, this approach offers a twofold benefit: it facilitates the trade and offers the chance to generate passive returns on the Bitcoin staked.

Institutional Interest and Market Response

Without accounting for any possible gains from the staked eBTC, the institution could profit $1.02 million from this single trade if the BTC reaches the $80,000 target before the options expire. Given the current political climate, this noteworthy activity demonstrates the growing confidence of institutional investors.

 Many of them continue to use Bitcoin derivatives as a strategic investment. The growing capital flow into BTC-backed investment products further supports the trend of institutional involvement in the cryptocurrency market.

Furthermore, the change has been significantly influenced by the recent introduction of spot Bitcoin Exchange-Traded Funds (ETFs). According to data from SoSoValue, these ETFs have received $21.34 billion in inflows since their January launch, including a significant net inflow of $192 million on Wednesday alone.

Despite the short-term market volatility, these numbers demonstrate institutional investors’ ongoing faith in Bitcoin’s long-term prospects. Furthermore, the impact of the upcoming election is already influencing Bitcoin’s market behavior.

The price of the asset fluctuated significantly on Thursday, falling to $65,500 before rising to about $67,000.

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Bitcoin ETFs Halt Two-Week Bull Run With $79M in Outflows

Inflows into US spot Bitcoin exchange-traded funds (ETFs) have turned net negative for the first time in two weeks, indicating that momentum pushing prices upward has cooled off.

According to data from Farside Investors, a UK-based investment firm, net flows from the twelve US Bitcoin ETFs were negative on October 22. While the total outflows were $79.1 million, the lion’s share of that came from one ETF product in the ARK 21Shares Bitcoin ETF, with an outflow of $134 million.

The other ETF products either had no activity or still recorded modest inflows. For instance, BlackRock’s iShares Bitcoin ETF, one of the largest ETFs by assets under management, recorded $43 million in inflows.

Bitcoin ETFs and Institutional Demand

Bitcoin has been stuck in its current price range, less than 10% off its all-time high. Some analysts claim that Bitcoin’s sideways trading cooling inflows from institutional investors.

Despite the recent outflows, Bitcoin ETFs have been one of the hottest topics in the cryptocurrency market over the last few months. Institutional ownership of Bitcoin via ETFs has gone up dramatically this year.

According to data from the on-chain analytics platform CryptoQuant, institutional ownership of Bitcoin through ETFs currently comprises about 20% of its circulating supply. Interest in spot Bitcoin ETFs has grown outside the US, with European investors pumping more than 100 million dollars into these US-based crypto products alone in the last month.

Furthermore, on-chain data showed that the net inflow into the US-based Bitcoin ETFs has surpassed $20 billion this year, which was achieved just last week. Notably, there was over $5 billion in net inflows into these investment products in Q3 2024, underlining the continued demand for direct exposure to Bitcoin among institutional investors.

Japan’s Resistance to Crypto ETFs

While the United States and Hong Kong have made policies to accommodate Bitcoin ETFs, the regulatory framework in Japan is stricter. Tax and regulatory policies in Japan continue to impede the growing demand for crypto ETFs in this jurisdiction.

Japan’s primary regulatory body, the FSA (Financial Services Agency), is still cautious about allowing the launch of cryptocurrency-based ETFs in Japan because of their volatility and risks. Similarly, Japan’s Ministry of Finance noted that gains from crypto investment should be categorized under miscellaneous income and that it is subject to a high tax rate of as much as 55%.

In contrast, traditional Japanese ETFs are subject to a 20% capital gain tax. Hence, many investors and advocacy groups within the country have expressed their displeasure at this huge difference.

If Japan can reduce its tax rate on cryptocurrency investments, it would actually spur more innovation and growth.

Growing Support for Crypto-Friendly Tax Reforms

Following the debate regarding crypto taxes, Yuichiro Tamaki, the leader of Japan’s Democratic Party for the People, has publicly called for changes in these tax reforms to accommodate more crypto investors. Tamaki suggested charging a separate tax for crypto assets like other forms of income at 20%, making them equal to more traditional financial instruments such as ETFs.

He added that there should not be any incidence of tax if crypto assets are exchanged against another crypto asset. While Tamaki’s party has a fairly small number of seats in the parliament of Japan, his proposals are attracting the attention of many from different sectors of the crypto community within Japan.

Japan’s Institutional Investors Stay Long on Bitcoin

Despite Japan’s regulatory obstacle, some of the country’s institutional investors remain adamant about having exposure to Bitcoin. For example, Tokyo-listed investment outfit Metaplanet has made the headlines in recent months with its aggressive accumulation of Bitcoin.

Earlier this month, the investment company added another 108.78 BTC, taking its total number to almost 640 BTC, now worth approximately $40.5 million. That move earned it the unofficial nickname of “Asia’s MicroStrategy” — a US-based business intelligence firm known for its BTC holding strategy.

Continued interest from domestic firms such as Metaplanet shows that Bitcoin remains a key asset of interest for institutional investors in the country.

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