Binance has released a self-custody Web3 wallet that can be used to interact with the DeFi ecosystem. Users are required to use the Binance app to create a wallet, with the app serving as the venue for activities such as staking, lending and borrowing. The wallet will also use multiparty computation (MPC), which involves a private key being broken into three parts of which the wallet owner controls two, as a means of removing the need to memorize seed phrases. The new wallet appears to compete with TrustWallet, which the exchange bought in 2018. TrustWallet's native token (TWT) fell following Binance's announcement. TWT had experienced a positive week prior to this, thanks in part to Binance listing TWT futures on its exchange, which saw volume increase from around $80 million to $476 million on Monday.

(Binance)

HSBC said it plans to start a custody service of tokenized securities for institutional clients alongside Swiss crypto custodian Metaco. The service is set to go live in 2024 and will complement HSBC's existing platform for digital asset issuance and its recent tokenized physical gold offering, the bank said. HSBC pointed out that the service will not pertain to cryptocurrencies or stablecoins. Tokenization, the process of issuing and trading real-world assets on blockchains, is one of the most prominent ways in which major financial institutions are becoming involved in the digital asset industry. Boston Consulting Group estimated last year that tokenization could become a $16 trillion industry by 2030.

Grayscale's investment product linked to Chainlink's LINK token is trading at a 200% premium to spot prices, which suggests institutional demand. The Grayscale Chainlink Trust (GLNK) closed at $39 on Monday compared with $21 on Oct. 31. Each GLNK share holds just $12 worth of LINK, making it nearly three times pricier than the actual value of held assets. The product has historically traded at a premium of over 20%. While premiums have reached as much as 150% on two separate occasions since the product's launch in May last year, Monday's is its highest ever. LINK tokens themselves have surged over 76% in the last month.

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Investment adviser Two Prime says it has seen $2 billion worth of demand for bitcoin-backed loans since it started offering them in September, in what could be a sign of bullish sentiment embedding itself in the crypto market.

Cryptocurrency lenders BlockFi, Celsius and Voyager all saw tremendous growth during the bull run of 2020-21 before the market headed south. All three filed for bankruptcy last year. At its peak, Celsius had over $20 billion worth of assets under management and more than 1.7 million users.

Crypto-collateralized lending involves a borrower pledging their digital assets as security to secure a loan, usually in the form of fiat currencies. The value of the collateral is typically far greater than the loan's value as a buffer for the lender in case of a decline in value of the crypto asset, as occurred in 2022.

"After the fall of Genesis, BlockFi, Celsius, and others, a major gap in the market emerged for responsibly managed secured loans for institutions. Two Prime is well-positioned to fill it," Blume said, adding that the firm is focused on institutional borrowers.

- Omkar Godbole