Taiwan’s Financial Supervisory Commission (FSC) has made a significant move. Now, professional investors can invest in foreign crypto ETFs through local securities firms. However, regular investors are still not allowed to join in. This change is aimed at high-net-worth individuals, institutional investors, and clients with significant assets. They can now use a method called “re-entrustment” to invest in these foreign crypto ETFs.
Only professional investors are allowed to invest in foreign crypto ETFs in Taiwan. These include institutional investors and high-net-worth people. Regular investors are kept out of this opportunity. The FSC wants to make sure that only those who understand the risks can invest. Securities firms must check if an investor is qualified before they make their first investment. They need to evaluate the investor’s experience, knowledge, and ability to handle the risks involved.
Securities firms in Taiwan have important responsibilities. They must have a proper system to check if investors qualify for investing in foreign crypto ETFs. Before an investor makes their first move, firms are required to evaluate their experience and knowledge about virtual assets. They also need to make sure that investors can handle the risks involved. Firms must train their staff regularly to stay up-to-date on crypto products. This way, employees can provide accurate information to clients.
The FSC has decided to keep regular investors out of investing in foreign crypto ETFs. Virtual assets like cryptocurrencies can be very volatile. Their prices can change rapidly, which can lead to significant losses. By limiting investments to professional investors, the FSC aims to protect regular people from these risks. Investors must also sign risk warning forms and get detailed information before making any investments.
Around the world, different countries have taken steps to approve crypto ETFs. The United States is ahead of the game with its 11 spot Bitcoin ETFs. Canada was one of the first countries to approve a Bitcoin fund. In April, after seeing America’s success, Hong Kong approved three crypto ETFs. Germany has also launched crypto ETPs, which work similarly to ETFs. Taiwan’s move to allow professional investors to invest in foreign crypto ETFs is a significant step in the same direction.
Taiwan has had a complicated relationship with cryptocurrency. After events like the FTX collapse and local fraud incidents, the FSC decided to tighten crypto regulations. Virtual Asset Service Providers (VASPs) now have strict rules to follow. In July, the FSC made it mandatory for VASPs to register for Anti-Money Laundering (AML) compliance under the Money Laundering Control Act. Without registration, VASPs cannot do business in Taiwan. This applies to both local operators and offshore firms wanting to offer crypto services in Taiwan.
VASPs are required to submit a compliance declaration to prove they are following the rules. This is especially important for money laundering prevention. The FSC demands operational transparency and consumer protection from these service providers. By enforcing these regulations, Taiwan aims to create a safer environment for cryptocurrency transactions.
Cryptocurrency transactions in Taiwan are subject to a 5% Value Added Tax (VAT). Sellers who are residents or companies must register for tax purposes unless their monthly sales are below NT$40,000, which is about $1,300. This tax applies to all cryptocurrency transactions, adding another layer of regulation to the industry.
In the global market, Bitcoin (BTC) has been on a winning streak. It has registered its first three-week winning trend since February. Traders are buying call options at the $75,000 strike price and beyond on the Deribit exchange. This indicates a bullish outlook for Bitcoin’s price. Investors are also selling put options, which suggests they expect the price to rise.
Several factors have contributed to Bitcoin’s recent price increase. China’s large stimulus announcement and inflows into U.S.-listed spot ETFs have helped maintain the upward trajectory. The inflows are equivalent to more than a month’s supply of newly mined BTC. This has created a bullish sentiment in the market.
Analysts believe that Bitcoin could break out of its six-month-long corrective trend. A break above $75,000 could lead to a swift rally through all-time highs toward $100,000. The last tranche of call buyer activity is concentrated at the $100,000 strike price for the December 27, 2024 expiration. This suggests that traders are anticipating significant price acceleration.
The bullish flow of increased call buying and put selling suggests expectations that prices will soon break out. Investors are optimistic about Bitcoin’s future. The expanding triangle pattern, referred to by veteran analyst Peter Brandt, indicates that the broader uptrend from October 2023 lows under $30,000 has resumed.
Taiwan’s decision to allow professional investors to invest in foreign crypto ETFs is a significant development. By tightening regulations and requiring AML compliance, the FSC aims to protect investors and ensure transparency. At the same time, the global cryptocurrency market is experiencing bullish trends, with Bitcoin potentially breaking above $75,000. These developments could have lasting impacts on how cryptocurrencies are traded and regulated in Taiwan and around the world.
