Binance to IPO in the UK?

Reportedly, the worlds largest crypto exchange is looking to list on the London Stock Exchange in a bid to find a more accommodating regulatory environment.

An Opportunity for the UK?

In February, UK Prime Minister Rishi Sunak launched a consultation to develop a regulatory framework for the crypto sector. The government seems to be trying to set up the country as a global hub for crypto, though how amenable the new regulations will be towards innovation is still being studied.

Last week, the UK-based Financial Times held a summit on crypto in which the Chief Strategy Officer for Binance, Patrick Hillman, said that the company would do "everything we can" to gain regulatory compliance in the UK. The move, he explained, was driven by recent actions taken by the Security and Exchange Commission (SEC) against some rivals. "The US is right now in this strange place" where regulatory enforcement seems arbitrary and harsh, making it difficult to do any business in the country.

The Chances of an IPO

Binance has been considering IPO-ing in the US for years, but given the comments by the CSO, this seems increasingly less likely. Meanwhile, UK regulators are trying to simplify standard and premium listing rules to attract foreign interest to London's sluggish capital markets in the wake of Brexit. But that doesnt mean smooth sailing. In 2021, the UK Financial Conduct Authority (FCA) ordered Binance to cease operations and UK banks have stringent limits on how much customers can transact between crypto and currencies.

The move by global central banks to tighten monetary policy to head off spiralling inflation has put the breaks on crypto. But with inflation coming down and many analysts expecting a recession in the latter half of the year, there is growing expectation that central banks will cut interest rates. Futures markets are pricing in two BOE rate cuts by the year's end. The Fed is expected to cut rates as much as 50bps by the end of December. Looser monetary policy is seen as a catalyst for both IPOs and a potential renewed interest in cryptos.

BTC in Falling Wedge Pattern

As with other risk assets, expectations of easing have carried BTC as high as 83% this year, with the recent losses bringing that down to around 60% YTD. The decline from the 31k peak appears to be attributed to reaching the target following the breakout of the most recent rising flag from 25250 down to 19580. But since the whole leg from the low of 15480 has printed in a 5-wave structure, any drop might as well be a dip for grabs. One short leg below 25800 would complete a falling wedge, with the upper trendline breakout offering an opportunity for further upside towards 34280 and 39670. Conversely, losing 25300 will expose the flag low below 20k and perhaps 18400. Only a move lower could trigger a selloff to new lows.

Source: SpreadX / BITCOIN (USD)

Key Takeaways

Binance, the worlds largest crypto exchange, is reportedly considering listing on the London Stock Exchange due to a more accommodating regulatory environment as UK regulators are trying to simplify listing rules to attract foreign interest. The UK government is trying to develop a regulatory framework for the crypto sector and set up the country as a global hub for crypto despite Binance being ordered to cease all operations last year. The move towards looser monetary policy could catalyse both IPOs and renewed interest in cryptos, with the falling wedge in BTC presenting a potential upward continuation.