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South Africa Re-Elects Cyril Ramaphosa of the ANC As President
South African President Cyril Ramaphosa of the African National Congress (ANC) party was re-elected on Friday, and will lead the country's first multi-party coalition government.
The ANC managed to secure only 159 seats in this the election, short of the 200 seats required for a majority. After days of back-and-forth discussion, they announced the formation of a fragile coalition government – dubbed the government of national unity – with their biggest opposition party, the centrist Democratic Alliance, as well as the Inkatha Freedom Party and the smaller Patriotic Alliance.
The ANC has ruled the country for 30 years since the end of apartheid in 1994. This election gives the ANC at least another five years to rule the country, though the party will not be ruling with the strong majority it once had. In the previous parliament it had 230 seats.
The election results are not expected to have a significant impact on South Africa's burgeoning crypto industry. The country's top regulator, the Financial Sector Conduct Authority, recently set up a licensing regime for crypto, making it one of the first African nations to do so. The country recently started licensing digital asset firms, and crypto companies Luno, Zignaly, and VALR were among the first to get a license in April. In 2022, the country included crypto providers in its Financial Advisory and Intermediary Services Act so it could regulate digital assets as financial products.
The nation's Intergovernmental Fintech Working Group is also expected to examine use cases for stablecoins, consider a policy and regulatory response this year, and explore the implications of tokenization.
South Africa also started consulting on a directive in April that would include crypto in the country’s Travel Rules. The rules will take effect once they are put in the gazette. The directive requires virtual asset service providers to transmit information on wallets and passports when making transfers.
Many nations around the world are implementing the Financial Action Task Force's travel rule, which requires nations to share information on crypto transactions and curb money laundering.
Read more: South Africa’s Election Won’t Interfere With Crypto Policy: Industry Watchers
The ANC managed to secure only 159 seats in this the election, short of the 200 seats required for a majority. After days of back-and-forth discussion, they announced the formation of a fragile coalition government – dubbed the government of national unity – with their biggest opposition party, the centrist Democratic Alliance, as well as the Inkatha Freedom Party and the smaller Patriotic Alliance.
The ANC has ruled the country for 30 years since the end of apartheid in 1994. This election gives the ANC at least another five years to rule the country, though the party will not be ruling with the strong majority it once had. In the previous parliament it had 230 seats.
The election results are not expected to have a significant impact on South Africa's burgeoning crypto industry. The country's top regulator, the Financial Sector Conduct Authority, recently set up a licensing regime for crypto, making it one of the first African nations to do so. The country recently started licensing digital asset firms, and crypto companies Luno, Zignaly, and VALR were among the first to get a license in April. In 2022, the country included crypto providers in its Financial Advisory and Intermediary Services Act so it could regulate digital assets as financial products.
The nation's Intergovernmental Fintech Working Group is also expected to examine use cases for stablecoins, consider a policy and regulatory response this year, and explore the implications of tokenization.
South Africa also started consulting on a directive in April that would include crypto in the country’s Travel Rules. The rules will take effect once they are put in the gazette. The directive requires virtual asset service providers to transmit information on wallets and passports when making transfers.
Many nations around the world are implementing the Financial Action Task Force's travel rule, which requires nations to share information on crypto transactions and curb money laundering.
Read more: South Africa’s Election Won’t Interfere With Crypto Policy: Industry Watchers
Two Men Charged With Running Darknet Marketplace Empire Market
Federal prosecutors in Illinois have charged two men with owning and operating Empire Market, a darknet marketplace, according to court documents filed Friday.
Prosecutors say Thomas Pavey, 38, of Florida, and Raheim Hamilton, 28, of Virginia, owned and operated Empire Market from 2018 to 2020. During the period Empire Market operated, prosecutors say the pair processed $430 million in transactions on the site, which allowed users to anonymously purchase illegal goods and services.
According to a Thursday press release from the Department of Justice (DOJ), Empire Market was used to sell things like drugs and stolen credit card information. All transactions were made with cryptocurrency. Empire Market shut down in August 2020.
Pavey and Hamilton were already in custody for separate charges – prosecutors had previously charged the pair with allegedly selling counterfeit currency on another darknet market, AlphaBay, which shut down in 2017.
The new charges against Pavey and Hamilton include conspiring to engage in drug trafficking, computer fraud, access device fraud, counterfeiting, and money laundering. According to the DOJ’s press release, the charges against both men are punishable by a maximum sentence of life in prison.
Law enforcement seized $75 million in cryptocurrency during the investigation, along with an unspecified amount of cash and precious metals, the press release said.
Arraignments for Pavey and Hamilton have not yet been scheduled.
Prosecutors say Thomas Pavey, 38, of Florida, and Raheim Hamilton, 28, of Virginia, owned and operated Empire Market from 2018 to 2020. During the period Empire Market operated, prosecutors say the pair processed $430 million in transactions on the site, which allowed users to anonymously purchase illegal goods and services.
According to a Thursday press release from the Department of Justice (DOJ), Empire Market was used to sell things like drugs and stolen credit card information. All transactions were made with cryptocurrency. Empire Market shut down in August 2020.
Pavey and Hamilton were already in custody for separate charges – prosecutors had previously charged the pair with allegedly selling counterfeit currency on another darknet market, AlphaBay, which shut down in 2017.
The new charges against Pavey and Hamilton include conspiring to engage in drug trafficking, computer fraud, access device fraud, counterfeiting, and money laundering. According to the DOJ’s press release, the charges against both men are punishable by a maximum sentence of life in prison.
Law enforcement seized $75 million in cryptocurrency during the investigation, along with an unspecified amount of cash and precious metals, the press release said.
Arraignments for Pavey and Hamilton have not yet been scheduled.
Mass Adoption Would Ruin Crypto. Keep It a Niche
Crypto would be better off remaining a niche.
The greatest crisis in crypto so far has been, undoubtedly, the rapid decline and tremendous fall of FTX. At the time of the collapse of what turned out to be Sam Bankman-Fried’s personal piggy bank, it was the third-largest crypto exchange. Its demise caused shockwaves across the industry, bringing down not just prices but a litany of companies.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.
At the time, in late 2022, it was unclear if crypto as a concept would ever recover – the blatant fraud of what was, up to then, among the most consumer-savvy and trusted crypto companies appeared to confirm the widespread assumption that all of this was just artifice covering up fraud.
Today, things are looking up, though there remains a pervasive fear that the industry is repeating old mistakes and bound for another comeuppance. For veteran crypto investors and observers, this is and always has been normal: ever since the bitcoin {{BTC}} market crash of 2014, following the failure of Mt. Gox, and subsequent rebound, the cyclical nature of the market has been an accepted part of life.
But isn’t it odd that this maturing industry has normalized these boom-and-bust cycles? It seems to me that mass adoption for any blockchain or consumer application is contingent upon the price of its token – or the industry itself – not always being at risk of imminent collapse.
See also: You Want Crypto Regulation? I’ll Give You Crypto Regulation | Opinion
And that’s the thing. To a large extent, the biggest problem with growing crypto is the growth of crypto. This whiplash between euphoria when the markets surge and despair when it shrinks, every four years or so, is a result of crypto’s pursuit of mass adoption.
Crass adoption
The process is clear, a textbook case of economist Robert Shiller’s “irrational exuberance.” Promises of reinventing everything from money to the internet itself spark interest. People buy into the dream of decentralization (or, for many, the promise of a fast buck). Popularity drives prices up, which reflexively drives them up further as more and more people invest – until something breaks.
Almost always, the things that fail are the things that blockchains were built to mitigate or replace. And these things, almost always, were built to make crypto palatable and/or easy-to-use. It’s not an uncommon opinion that “the masses” likely won’t self-custody. But without self-custody, what’s even the point of something like Bitcoin?
“The risk of growing adoption is that new entrants aren’t aware of Bitcoin’s core principles: decentralization, self-custody, hard money, etc. If new entrants don’t learn, understand, and espouse these core beliefs, the features that make them reality may not remain in the protocols over time,” said Alex Thorn, the head of firmwide research at investment bank Galaxy Digital.
See also: An Ode to LocalBitcoins | Opinion
Adoption means following the law (which is often at odds with crypto's values) and creating easy-to-use sign-ins and on-ramps (which can be compromised). There is a tension – if not direct competition – between the aims of decentralization and mass adoption. Grow crypto too big, and you risk destroying what it is actually useful for. “Simply becoming folded into the dominant financial system ends up ceding a lot of the opportunities that matter with this tech,” said Nathan Schnieder, professor of media studies at the University of Colorado Boulder and author of “Governable Spaces.”
It’s a point echoed by University College Dublin lecturer Paul Dylan-Ennis, who said “crypto is a subculture that cannot accept it is a subculture. Most of our troubles stem from how talk of 'onboarding the next billion' causes us to decay our values.”
There all along
There is a certain irony that developers, founders and investors have spent 15 years and billions of dollars searching for a “killer app” for blockchain, and yet it already has one.
Satoshi Nakamoto, and those who actually walk in his footsteps, have built digital bearer instruments that can be used any which way and cannot (easily) be taken from you.
That’s it. That’s the whole point of crypto.
That’s why, while almost no one pays for coffee with bitcoin, many use the privacy coin monero {{XMR}} to buy this or that on the darkweb. If you look at how crypto is actually used to connect with the real economy, you’ll see it's essentially in niche areas. These include black or gray markets, stablecoin remittance corridors and hobbyist pursuits.
Mind you, these are huge markets. But today, as in other periods where it seems like crypto is right on the cusp of breaking through, this usage pales in comparison to the speculative use of crypto, where capital goes in, jumps around from coin to coin or protocol to protocol and causes the number to go up – essentially creating a circular economy.
And that’s fine. Gambling is a use case to a certain extent. But if people want crypto to be used productively, developers, founders and investors should be building for people who have an actual need for censorship-resistant money and tools. Almost by definition, that’s a limited audience.
This is just my opinion. Many disagree.
Other views
Molly White, author of crypto-critical news services Web3IsGoingGreat and “Citation Needed,” argues that crypto is already mainstream. “There are individual projects that are still small and niche, but with Brian Armstrong and Sam Bankman-Fried rubbing elbows in Congress, and BlackRock and Fidelity launching bitcoin ETFs, I think that ship has probably sailed,” she said in a direct message.
Privacy advocate, educator and monero superuser SethforPrivacy sees things differently., The “unfortunate reality is that most people don't yet realize the need for Bitcoin nor are they willing to take on that much personal responsibility, and as such we must focus our efforts on improving Bitcoin for those who do realize the need today," he said.
See also: In Defense of Meme Coins | Opinion
There’s also an argument that decentralization is precisely the reason crypto will go global, so to speak.
“The ONLY thing that makes Bitcoin’s global ascension possible is its most cypherpunk attribute: that it is owned by no one, and operated by the users, not states or corporations," said Alex Gladstein, chief strategy officer at the Human Rights Foundation.
However, it’s not exactly clear what the masses want. Ethereum advocate Emmanuel Awosika, for instance, admits that “while we believe *everyone* wants privacy, censorship-resistance and protection against nation-state attacks, some people are fine with a product that solves a problem and has good UX.”
While not everyone needs, let alone wants, privacy, censorship resistance and maximum decentralization, Awosika added, “We should explore getting crypto in the hands of as many people as possible."
Likewise, Roko Mijic, of “Roko’s basilisk” fame, argued that it’s actually scale that gives decentralized tools any power, which is observably true in that Bitcoin is difficult to attack because it has miners spread across the world. “You can't resist censorship from inside a small-scale crypto network because the government will just bring down the whole network,” Mijic said.
Justin Ehrenhofer, founder of Moonstone Research in Chicago, echoed this sentiment, pointing out that a currency is only useful if it is widely accepted, and so “cypherpunks should focus on building systems that appeal to outsiders.” However, he did add that “with wide-scale adoption” there has been a degradation in the spirit of crypto, given that the average user stores their wealth in custodial exchanges.
I suppose the question is, how valuable are crypto’s core values?
The greatest crisis in crypto so far has been, undoubtedly, the rapid decline and tremendous fall of FTX. At the time of the collapse of what turned out to be Sam Bankman-Fried’s personal piggy bank, it was the third-largest crypto exchange. Its demise caused shockwaves across the industry, bringing down not just prices but a litany of companies.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.
At the time, in late 2022, it was unclear if crypto as a concept would ever recover – the blatant fraud of what was, up to then, among the most consumer-savvy and trusted crypto companies appeared to confirm the widespread assumption that all of this was just artifice covering up fraud.
Today, things are looking up, though there remains a pervasive fear that the industry is repeating old mistakes and bound for another comeuppance. For veteran crypto investors and observers, this is and always has been normal: ever since the bitcoin {{BTC}} market crash of 2014, following the failure of Mt. Gox, and subsequent rebound, the cyclical nature of the market has been an accepted part of life.
But isn’t it odd that this maturing industry has normalized these boom-and-bust cycles? It seems to me that mass adoption for any blockchain or consumer application is contingent upon the price of its token – or the industry itself – not always being at risk of imminent collapse.
See also: You Want Crypto Regulation? I’ll Give You Crypto Regulation | Opinion
And that’s the thing. To a large extent, the biggest problem with growing crypto is the growth of crypto. This whiplash between euphoria when the markets surge and despair when it shrinks, every four years or so, is a result of crypto’s pursuit of mass adoption.
Crass adoption
The process is clear, a textbook case of economist Robert Shiller’s “irrational exuberance.” Promises of reinventing everything from money to the internet itself spark interest. People buy into the dream of decentralization (or, for many, the promise of a fast buck). Popularity drives prices up, which reflexively drives them up further as more and more people invest – until something breaks.
Almost always, the things that fail are the things that blockchains were built to mitigate or replace. And these things, almost always, were built to make crypto palatable and/or easy-to-use. It’s not an uncommon opinion that “the masses” likely won’t self-custody. But without self-custody, what’s even the point of something like Bitcoin?
“The risk of growing adoption is that new entrants aren’t aware of Bitcoin’s core principles: decentralization, self-custody, hard money, etc. If new entrants don’t learn, understand, and espouse these core beliefs, the features that make them reality may not remain in the protocols over time,” said Alex Thorn, the head of firmwide research at investment bank Galaxy Digital.
See also: An Ode to LocalBitcoins | Opinion
Adoption means following the law (which is often at odds with crypto's values) and creating easy-to-use sign-ins and on-ramps (which can be compromised). There is a tension – if not direct competition – between the aims of decentralization and mass adoption. Grow crypto too big, and you risk destroying what it is actually useful for. “Simply becoming folded into the dominant financial system ends up ceding a lot of the opportunities that matter with this tech,” said Nathan Schnieder, professor of media studies at the University of Colorado Boulder and author of “Governable Spaces.”
It’s a point echoed by University College Dublin lecturer Paul Dylan-Ennis, who said “crypto is a subculture that cannot accept it is a subculture. Most of our troubles stem from how talk of 'onboarding the next billion' causes us to decay our values.”
There all along
There is a certain irony that developers, founders and investors have spent 15 years and billions of dollars searching for a “killer app” for blockchain, and yet it already has one.
Satoshi Nakamoto, and those who actually walk in his footsteps, have built digital bearer instruments that can be used any which way and cannot (easily) be taken from you.
That’s it. That’s the whole point of crypto.
That’s why, while almost no one pays for coffee with bitcoin, many use the privacy coin monero {{XMR}} to buy this or that on the darkweb. If you look at how crypto is actually used to connect with the real economy, you’ll see it's essentially in niche areas. These include black or gray markets, stablecoin remittance corridors and hobbyist pursuits.
Mind you, these are huge markets. But today, as in other periods where it seems like crypto is right on the cusp of breaking through, this usage pales in comparison to the speculative use of crypto, where capital goes in, jumps around from coin to coin or protocol to protocol and causes the number to go up – essentially creating a circular economy.
And that’s fine. Gambling is a use case to a certain extent. But if people want crypto to be used productively, developers, founders and investors should be building for people who have an actual need for censorship-resistant money and tools. Almost by definition, that’s a limited audience.
This is just my opinion. Many disagree.
Other views
Molly White, author of crypto-critical news services Web3IsGoingGreat and “Citation Needed,” argues that crypto is already mainstream. “There are individual projects that are still small and niche, but with Brian Armstrong and Sam Bankman-Fried rubbing elbows in Congress, and BlackRock and Fidelity launching bitcoin ETFs, I think that ship has probably sailed,” she said in a direct message.
Privacy advocate, educator and monero superuser SethforPrivacy sees things differently., The “unfortunate reality is that most people don't yet realize the need for Bitcoin nor are they willing to take on that much personal responsibility, and as such we must focus our efforts on improving Bitcoin for those who do realize the need today," he said.
See also: In Defense of Meme Coins | Opinion
There’s also an argument that decentralization is precisely the reason crypto will go global, so to speak.
“The ONLY thing that makes Bitcoin’s global ascension possible is its most cypherpunk attribute: that it is owned by no one, and operated by the users, not states or corporations," said Alex Gladstein, chief strategy officer at the Human Rights Foundation.
However, it’s not exactly clear what the masses want. Ethereum advocate Emmanuel Awosika, for instance, admits that “while we believe *everyone* wants privacy, censorship-resistance and protection against nation-state attacks, some people are fine with a product that solves a problem and has good UX.”
While not everyone needs, let alone wants, privacy, censorship resistance and maximum decentralization, Awosika added, “We should explore getting crypto in the hands of as many people as possible."
Likewise, Roko Mijic, of “Roko’s basilisk” fame, argued that it’s actually scale that gives decentralized tools any power, which is observably true in that Bitcoin is difficult to attack because it has miners spread across the world. “You can't resist censorship from inside a small-scale crypto network because the government will just bring down the whole network,” Mijic said.
Justin Ehrenhofer, founder of Moonstone Research in Chicago, echoed this sentiment, pointing out that a currency is only useful if it is widely accepted, and so “cypherpunks should focus on building systems that appeal to outsiders.” However, he did add that “with wide-scale adoption” there has been a degradation in the spirit of crypto, given that the average user stores their wealth in custodial exchanges.
I suppose the question is, how valuable are crypto’s core values?
Bitcoin Plunges to $65K, Altcoins Bleed 10%-20% As Week Turns Ugly
What looked like prime time for crypto assets on softening inflation data has turned into an ugly week with bitcoin {{BTC}} tumbling to its weakest price in four weeks on Friday.
BTC tumbled more than 2% in an hour to $65,100 during the U.S. trading session from around the $67,000 area. The leading crypto was down 7.5% over the past seven days.
Smaller cryptocurrencies saw even steeper declines, with the broad-market benchmark CoinDesk 20 Index shedding almost 12% week-over-week. Ether {{ETH}} dropped to $3,400, losing over 10% during this period, while native tokens of rival layer-1 networks Solana {{SOL}}, Avalanche {{AVAX}}, Cardano {{ADA}} and Near {{NEAR}} sported 15%-20% declines, CoinGecko data shows.
The swift tumble liquidated nearly $180 million of leveraged derivatives trading positions across all crypto assets over the past 24 hours, most of them longs betting on higher prices, CoinGlass data shows. This week's shake-out saw a total of over $870 million in liquidations, flushing excess leverage from markets.
Analysts and many market participants just a few days ago anticipated an imminent breakout for bitcoin to new record highs, supported by a slower pace of inflation and softer economic data, but attempts for rallies were quickly sold off, leaving BTC stuck in its sideways range.
Read more: Here's Why Bitcoin's Not Keeping Pace With Nasdaq
The Federal Reserve this Wednesday projected only one rate cut for this year, less than the central bank's previous forecast, dashing investor hope for looser monetary policy coming this summer. Political uncertainty in Europe with a snap election being called in France also pushed the U.S. dollar index (DXY) higher against other major currencies to its strongest level in more than a month, putting pressure on bitcoin.
Bitcoin also struggled with increased selling from miners and profit-taking from long-time holders near the $70,000 area, 10X Research noted, weighing on the broader crypto market.
BTC tumbled more than 2% in an hour to $65,100 during the U.S. trading session from around the $67,000 area. The leading crypto was down 7.5% over the past seven days.
Smaller cryptocurrencies saw even steeper declines, with the broad-market benchmark CoinDesk 20 Index shedding almost 12% week-over-week. Ether {{ETH}} dropped to $3,400, losing over 10% during this period, while native tokens of rival layer-1 networks Solana {{SOL}}, Avalanche {{AVAX}}, Cardano {{ADA}} and Near {{NEAR}} sported 15%-20% declines, CoinGecko data shows.
The swift tumble liquidated nearly $180 million of leveraged derivatives trading positions across all crypto assets over the past 24 hours, most of them longs betting on higher prices, CoinGlass data shows. This week's shake-out saw a total of over $870 million in liquidations, flushing excess leverage from markets.
Analysts and many market participants just a few days ago anticipated an imminent breakout for bitcoin to new record highs, supported by a slower pace of inflation and softer economic data, but attempts for rallies were quickly sold off, leaving BTC stuck in its sideways range.
Read more: Here's Why Bitcoin's Not Keeping Pace With Nasdaq
The Federal Reserve this Wednesday projected only one rate cut for this year, less than the central bank's previous forecast, dashing investor hope for looser monetary policy coming this summer. Political uncertainty in Europe with a snap election being called in France also pushed the U.S. dollar index (DXY) higher against other major currencies to its strongest level in more than a month, putting pressure on bitcoin.
Bitcoin also struggled with increased selling from miners and profit-taking from long-time holders near the $70,000 area, 10X Research noted, weighing on the broader crypto market.
MicroStrategy Increases Convertible Note Offering By 40% to $700M in Bitcoin Splurge
MicroStrategy raised its latest convertible note offering by $200 million from an original plan of $500 million.
It also offered initial buyers an option to purchase an additional $100 million of the notes.
Broker Bernstein set a $2,890 price target for the company's shares.
Nasdaq-listed software firm MicroStrategy (MSTR), the largest corporate holder of bitcoin {{BTC}}, increased its convertible note offering by 40% to $700 million and priced it to offer a 2.25% annual yield.
The notes, available to institutional investors in a private offering, will be unsecured, senior obligations and mature in June 2032, the company said in a Friday press release. The Tysons Corner, Virginia-based company also granted initial buyers an option to purchase an additional $100 million of notes within 13 days of the first issuance. The company expects to close the offering on Monday. The proceedings of the issuance will be used to acquire more bitcoin and for general corporate affairs.
The company's shares added nearly 2% in the early Friday session, changing hands at slightly above $1,500 following yesterday's 7.5% decline. Earlier today, brokerage firm Bernstein initiated coverage of Microstrategy, setting a $2,890 price target and assigning an outperform rating.
MicroStrategy started buying the oldest and largest crypto asset in 2020 for its treasury. Now, it holds 214,400 BTC worth some $14 billion, making the company the biggest publicly listed bitcoin holder. The company's executive chairman, Michael Saylor, is a vocal supporter of bitcoin.
It also offered initial buyers an option to purchase an additional $100 million of the notes.
Broker Bernstein set a $2,890 price target for the company's shares.
Nasdaq-listed software firm MicroStrategy (MSTR), the largest corporate holder of bitcoin {{BTC}}, increased its convertible note offering by 40% to $700 million and priced it to offer a 2.25% annual yield.
The notes, available to institutional investors in a private offering, will be unsecured, senior obligations and mature in June 2032, the company said in a Friday press release. The Tysons Corner, Virginia-based company also granted initial buyers an option to purchase an additional $100 million of notes within 13 days of the first issuance. The company expects to close the offering on Monday. The proceedings of the issuance will be used to acquire more bitcoin and for general corporate affairs.
The company's shares added nearly 2% in the early Friday session, changing hands at slightly above $1,500 following yesterday's 7.5% decline. Earlier today, brokerage firm Bernstein initiated coverage of Microstrategy, setting a $2,890 price target and assigning an outperform rating.
MicroStrategy started buying the oldest and largest crypto asset in 2020 for its treasury. Now, it holds 214,400 BTC worth some $14 billion, making the company the biggest publicly listed bitcoin holder. The company's executive chairman, Michael Saylor, is a vocal supporter of bitcoin.
Drake on Brink of $1M Bitcoin Loss As NHL and NBA Bets Sour
The Edmonton Oilers and Dallas Mavericks are both down 3-0 after another round of losses.
Drake bet $500,000 on each team to win the National Hockey League and National Basketball Association finals.
Drake placed the bets using bitcoin on crypto casino Stake.
Canadian singer Drake is on the cusp of losing $1 million worth of crypto after he placed two individual $500,000 bets on the Edmonton Oilers and the Dallas Mavericks to win their respective Stanley Cup and NBA finals.
The Oilers lost their third straight game against the Florida Panthers in the hockey championship on Thursday whilst the Mavericks are down 3-0 in the basketball tournament after losing in consecutive games against the Boston Celtics. Both contests are best-of-seven series.
Drake indicated on June 6 that he had placed the bets on crypto casino Stake using bitcoin {{BTC}} by posting the betting slips on Instagram, accompanied by a message: "Dallas cause I'm a Texan. Oilers are self explanatory. Picks in are @stake."
It's worth pointing out that Drake has had partnerships with Stake in the past, so he may have an incentive to post about his bets on the platform, even if they don't pay off. Stake partnered with Drake in 2022 in a deal that the singer described as "inevitable." Stake made $2.6 billion in revenue in the same year.
Drake stood to win $1.025 million and $1.375 million if the Oilers and Mavericks managed to win their respective series, according to the betting slips. To date, no NBA team has ever managed to win a series in the playoffs or finals after being down three games with no wins.
Drake won’t have to wait long to know the outcome of both bets; tipoff for game 4 of the NBA Finals is Friday whilst the Oilers play Saturday. Both teams need to avoid defeat to extend the series.
The 37-year-old is no stranger to losing bitcoin by betting on sports. He also placed a $615,000 bet on Francis Ngannou to beat Anthony Joshua in a boxing bout in March; Joshua ended up winning by knockout in the second round.
Drake bet $500,000 on each team to win the National Hockey League and National Basketball Association finals.
Drake placed the bets using bitcoin on crypto casino Stake.
Canadian singer Drake is on the cusp of losing $1 million worth of crypto after he placed two individual $500,000 bets on the Edmonton Oilers and the Dallas Mavericks to win their respective Stanley Cup and NBA finals.
The Oilers lost their third straight game against the Florida Panthers in the hockey championship on Thursday whilst the Mavericks are down 3-0 in the basketball tournament after losing in consecutive games against the Boston Celtics. Both contests are best-of-seven series.
Drake indicated on June 6 that he had placed the bets on crypto casino Stake using bitcoin {{BTC}} by posting the betting slips on Instagram, accompanied by a message: "Dallas cause I'm a Texan. Oilers are self explanatory. Picks in are @stake."
It's worth pointing out that Drake has had partnerships with Stake in the past, so he may have an incentive to post about his bets on the platform, even if they don't pay off. Stake partnered with Drake in 2022 in a deal that the singer described as "inevitable." Stake made $2.6 billion in revenue in the same year.
Drake stood to win $1.025 million and $1.375 million if the Oilers and Mavericks managed to win their respective series, according to the betting slips. To date, no NBA team has ever managed to win a series in the playoffs or finals after being down three games with no wins.
Drake won’t have to wait long to know the outcome of both bets; tipoff for game 4 of the NBA Finals is Friday whilst the Oilers play Saturday. Both teams need to avoid defeat to extend the series.
The 37-year-old is no stranger to losing bitcoin by betting on sports. He also placed a $615,000 bet on Francis Ngannou to beat Anthony Joshua in a boxing bout in March; Joshua ended up winning by knockout in the second round.
DeFi Heavyweight Curve Focused on Becoming ‘Safest’ Lending Platform, Founder Says
The Monday exploit of UwU Lend resulted in a series of events that led to Michael Egorov's $100 million loans from various protocols being automatically liquidated, causing the CRV token to drop by up to 30%.
Despite the bad debt and liquidations, Egorov said he remains committed to ensuring that all users can withdraw their deposits and is focused on making Curve Finance's lending/borrowing products the safest in the industry.
The exploit of UwU Lend on Monday put in motion a series of events that led to Thursday’s multimillion liquidations on DeFi lending giant Curve, representatives for its founder Michael Egorov told CoinDesk over Telegram messages on Friday.
Egorov’s $100 million in loans taken from various protocols using Curve’s CRV tokens started to automatically liquidate on Thursday, sending the token down as much as 30% before it briefly recovered.
The catalyst for the bad debt and liquidations has been traced back to UwU Lend, a crypto protocol that allows users to burrow, lend, and stake tokens.
“On April 15 they (UwU Lend) deployed vulnerable code for new (sUSDe) markets, and those markets are not isolated, so the whole platform takes the risk,” Egorov said. “UwU was hacked, and the hacker, as a part of cash-out play, deposited CRVs taken from UwU to lend.curve.fi (LlamaLend) and disappeared with the funds, leaving his debt in the system.”
UwU Lend lost $20 million on Monday after being hit by a flash loan attack and another $3.7 million on Thursday in a separate attack. As of Friday, it is offering a bounty reward of $5 million to catch the attackers.
In an X post, Egorov estimated bad debt in a particular CRV lending pool at $10 million. While this market is fully isolated from other lending pools, depositors in the CRV could not withdraw their funds as long as the bad debt existed.
The Curve Finance team and I have been working to solve the liquidation risk issue which happened today. Many of you are aware that I had all my loans liquidated. Size of my positions was too large for markets to handle and caused 10M of bad debt. Only CRV market on…
— Michael Egorov (@newmichwill) June 13, 2024
However, Egorov said that the situation could help bolster Curve’s security measures and loan mechanisms and could create a better service for users in the coming months.
“Yesterday the system was tested in unthinkable conditions,” Egorov said. “We have a lot to process, but most importantly we have all the information on how to make the safest and the most resilient lending/borrowing ever existed.”
“I am dedicated to ensuring that all users can withdraw their deposits without any hassle. I always think that Curve Finance is my priority, and the most important is our community,” he added.
Curve is among the largest crypto protocols with over $2 billion in locked assets as of Friday, DefiLlama data shows.
Despite the bad debt and liquidations, Egorov said he remains committed to ensuring that all users can withdraw their deposits and is focused on making Curve Finance's lending/borrowing products the safest in the industry.
The exploit of UwU Lend on Monday put in motion a series of events that led to Thursday’s multimillion liquidations on DeFi lending giant Curve, representatives for its founder Michael Egorov told CoinDesk over Telegram messages on Friday.
Egorov’s $100 million in loans taken from various protocols using Curve’s CRV tokens started to automatically liquidate on Thursday, sending the token down as much as 30% before it briefly recovered.
The catalyst for the bad debt and liquidations has been traced back to UwU Lend, a crypto protocol that allows users to burrow, lend, and stake tokens.
“On April 15 they (UwU Lend) deployed vulnerable code for new (sUSDe) markets, and those markets are not isolated, so the whole platform takes the risk,” Egorov said. “UwU was hacked, and the hacker, as a part of cash-out play, deposited CRVs taken from UwU to lend.curve.fi (LlamaLend) and disappeared with the funds, leaving his debt in the system.”
UwU Lend lost $20 million on Monday after being hit by a flash loan attack and another $3.7 million on Thursday in a separate attack. As of Friday, it is offering a bounty reward of $5 million to catch the attackers.
In an X post, Egorov estimated bad debt in a particular CRV lending pool at $10 million. While this market is fully isolated from other lending pools, depositors in the CRV could not withdraw their funds as long as the bad debt existed.
The Curve Finance team and I have been working to solve the liquidation risk issue which happened today. Many of you are aware that I had all my loans liquidated. Size of my positions was too large for markets to handle and caused 10M of bad debt. Only CRV market on…
— Michael Egorov (@newmichwill) June 13, 2024
However, Egorov said that the situation could help bolster Curve’s security measures and loan mechanisms and could create a better service for users in the coming months.
“Yesterday the system was tested in unthinkable conditions,” Egorov said. “We have a lot to process, but most importantly we have all the information on how to make the safest and the most resilient lending/borrowing ever existed.”
“I am dedicated to ensuring that all users can withdraw their deposits without any hassle. I always think that Curve Finance is my priority, and the most important is our community,” he added.
Curve is among the largest crypto protocols with over $2 billion in locked assets as of Friday, DefiLlama data shows.
First Mover: Bitcoin Struggles Near $67,000 As Cryptos Lag Behind Stocks
This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.
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Bitcoin wavered near $67,000 early Friday as the crypto market consolidated. BTC is stuck in a sideways channel after previous attempts for rallies earlier this week fizzled out. In a sign of diminishing investor confidence, U.S.-listed spot bitcoin exchange-traded funds suffered $226 million of net outflows on Thursday. Fidelity's FBTC led the outflows with only BlackRock's IBIT recording positive, albeit minor, inflows. BTC declined 1.3% over the past 24 hours, while the broader crypto market was also down nearly 1%, as measured by the CoinDesk 20 Index (CD20).
Bitcoin will hit $1 million within 10 years, brokerage company Bernstein said while setting a massive price target for MicroStrategy. BTC, the largest and oldest crypto asset, could reach a cycle-high of $200,000 by 2025 en route to the 2033 forecast. The firm also initiated coverage for Michael Saylor's MicroStrategy (MSTR), the biggest corporate owner of bitcoin, setting a price target of $2,890 per share with an outperform rating. That would translate to an almost 100% rally for the stock, which closed Thursday at $1,480.
Former Goldman Sachs executive Connie Shoemaker joined the board of directors of crypto custody firm Anchorage Digital. The company is the only crypto bank chartered by the Office of the Comptroller of the Currency (OCC) in the U.S. In a Thursday announcement, the company said the addition was part of an effort to “meet rising institutional demand for safe, secure and federally regulated digital asset infrastructure.” Shoemaker was Goldman Sachs’ global head of strategy during the 2008 global financial crisis overseeing the growth of Goldman Sachs Asset Management (GSAM), and later served as chief administrative officer.
Chart of the Day
The chart shows the seven-day change in open interest (OI)-adjusted cumulative volume delta (CVD) in futures tied to the top 25 cryptocurrencies by market value.
TRX is the only coin to have seen a positive CVD, a sign of new inflows into the market.
A positive CVD means more buyers are in action, while a negative print implies there are more sellers.
- Omkar Godbole
Trending Posts
Taiwan Crypto Advocacy Body Becomes Formally Active With 24 Entities
U.S. Judge Signs Off on $4.5B Terraform-Do Kwon Settlement With SEC
More Central Banks Are Exploring a CBDC, BIS Survey Finds
Latest Prices
Top Stories
Bitcoin wavered near $67,000 early Friday as the crypto market consolidated. BTC is stuck in a sideways channel after previous attempts for rallies earlier this week fizzled out. In a sign of diminishing investor confidence, U.S.-listed spot bitcoin exchange-traded funds suffered $226 million of net outflows on Thursday. Fidelity's FBTC led the outflows with only BlackRock's IBIT recording positive, albeit minor, inflows. BTC declined 1.3% over the past 24 hours, while the broader crypto market was also down nearly 1%, as measured by the CoinDesk 20 Index (CD20).
Bitcoin will hit $1 million within 10 years, brokerage company Bernstein said while setting a massive price target for MicroStrategy. BTC, the largest and oldest crypto asset, could reach a cycle-high of $200,000 by 2025 en route to the 2033 forecast. The firm also initiated coverage for Michael Saylor's MicroStrategy (MSTR), the biggest corporate owner of bitcoin, setting a price target of $2,890 per share with an outperform rating. That would translate to an almost 100% rally for the stock, which closed Thursday at $1,480.
Former Goldman Sachs executive Connie Shoemaker joined the board of directors of crypto custody firm Anchorage Digital. The company is the only crypto bank chartered by the Office of the Comptroller of the Currency (OCC) in the U.S. In a Thursday announcement, the company said the addition was part of an effort to “meet rising institutional demand for safe, secure and federally regulated digital asset infrastructure.” Shoemaker was Goldman Sachs’ global head of strategy during the 2008 global financial crisis overseeing the growth of Goldman Sachs Asset Management (GSAM), and later served as chief administrative officer.
Chart of the Day
The chart shows the seven-day change in open interest (OI)-adjusted cumulative volume delta (CVD) in futures tied to the top 25 cryptocurrencies by market value.
TRX is the only coin to have seen a positive CVD, a sign of new inflows into the market.
A positive CVD means more buyers are in action, while a negative print implies there are more sellers.
- Omkar Godbole
Trending Posts
Taiwan Crypto Advocacy Body Becomes Formally Active With 24 Entities
U.S. Judge Signs Off on $4.5B Terraform-Do Kwon Settlement With SEC
More Central Banks Are Exploring a CBDC, BIS Survey Finds
Nigeria Drops Tax Charges Against Binance Executives: Family Spokesperson
The tax charges brought by the Federal Inland Revenue Service (FIRS) of Nigeria against Binance executives Tigran Gambaryan and Nadeem Anjarwalla have been dropped, a family spokesperson said in an emailed statement on Friday.
The FIRS agreed to revise the charges so that it serves only Binance, through its local representative. Gambaryan will no longer need to appear in court for the FIRS case and Binance is now the sole defendant in the case.
A money laundering trial is still scheduled with Gambaryan and Nadeem Anjarwalla remaining on that case. The next hearing in this case is scheduled for June 19th "where the application for an order for the enforcement of fundamental rights will be heard," the statement said. The trial is due to resume on June 20th. Gambaryan is still detained at Kuje prison.
The FIRS agreed to revise the charges so that it serves only Binance, through its local representative. Gambaryan will no longer need to appear in court for the FIRS case and Binance is now the sole defendant in the case.
A money laundering trial is still scheduled with Gambaryan and Nadeem Anjarwalla remaining on that case. The next hearing in this case is scheduled for June 19th "where the application for an order for the enforcement of fundamental rights will be heard," the statement said. The trial is due to resume on June 20th. Gambaryan is still detained at Kuje prison.
More Central Banks Are Exploring a CBDC, BIS Survey Finds
The Bank for International Settlements found that 94% of the central banks in its most recent survey were exploring a central bank digital currency.
The central banks said they would probably issue a wholesale CBDC for institutions before a retail one.
More central banks than ever before are exploring a central bank digital currency (CBDC), according to a Bank for International Settlements (BIS) survey published Friday.
Among the 86 banks that participated, 94% said they were looking at a digital version of their national currencies. That's up from 90% of 81 respondents in a 2021 survey conducted by the BIS, an umbrella organization for the world's central banks.
Respondents also said they're more likely to issue a wholesale CBDC than a retail version within the next six years. A wholesale version would be accessible only to banks and financial institutions, while a retail version could be used by the public for day-to-day life.
Countries worldwide have been exploring whether or not to produce a digital currency for years, with China among one of the earliest. Nigeria and the Bahamas were among the first countries to issue their own CBDCs.
"For retail CBDCs, more than half of central banks are considering holding limits, interoperability, offline options and zero remuneration," the BIS said.
The survey, conducted between October 2023 and January 2024, also found that stablecoins, cryptocurrencies whose value is pegged to a specific asset such as the dollar or gold, are rarely used for payments outside the crypto ecosystem.
The central banks said they would probably issue a wholesale CBDC for institutions before a retail one.
More central banks than ever before are exploring a central bank digital currency (CBDC), according to a Bank for International Settlements (BIS) survey published Friday.
Among the 86 banks that participated, 94% said they were looking at a digital version of their national currencies. That's up from 90% of 81 respondents in a 2021 survey conducted by the BIS, an umbrella organization for the world's central banks.
Respondents also said they're more likely to issue a wholesale CBDC than a retail version within the next six years. A wholesale version would be accessible only to banks and financial institutions, while a retail version could be used by the public for day-to-day life.
Countries worldwide have been exploring whether or not to produce a digital currency for years, with China among one of the earliest. Nigeria and the Bahamas were among the first countries to issue their own CBDCs.
"For retail CBDCs, more than half of central banks are considering holding limits, interoperability, offline options and zero remuneration," the BIS said.
The survey, conducted between October 2023 and January 2024, also found that stablecoins, cryptocurrencies whose value is pegged to a specific asset such as the dollar or gold, are rarely used for payments outside the crypto ecosystem.
Bitcoin Traders See Short-Term Bearish Target At $60K As Miners Pare Holdings
Traders anticipate a deeper drop for bitcoin (BTC) in the coming weeks, despite a strong equity market and favorable U.S. crypto policies, pointing to selling activity from miners and general profit taking.
Bitcoin's upper potential may be limited due to miners' cash demand, with on-chain data showing an increase in the transfer of BTC from mining pools to exchanges.
The movement of funds to an exchange is often seen as a sign of an impending sale.
Traders foresee a deeper bitcoin (BTC) price correction in the coming weeks despite a strong equity market and favorable U.S. crypto policies due to selling activity from miners and general profit-taking.
"There's a new wave of dollar strength and demand for equities. Risk asset demand is gradually diminishing, forming a sequence of declining intraday highs for bitcoin," shared Alex Kuptsikevich, FxPro senior market analyst, in a Friday email to CoinDesk.
"Bitcoin continues to test the strength of the 50-day moving average, but it doesn't find enough reason to dive lower. Such persistent testing of the lows sets the bears up for quick success with their next target at $60,000," he added.
Miners, or entities that supply extensive computing resources to keep the bitcoin network running, may be among the selling groups, some observers said.
"Bitcoin's upper potential may be limited due to miners' cash demand," shared analysts from Japanese crypto exchange bitBank in an email. "Since May, bitcoin miners' net position–BTC inflow - BTC outflow–has been gradually declining, suggesting their operation has become tight after the Bitcoin network went through halving in April."
"The increasing net BTC outflows from miners do not necessarily put pressure on the price of bitcoin. However, prices tend to stagnate," analysts added.
On-chain data cited by CryptoQuant in a Wednesday report showed an increase in the transfer of BTC from mining pools to exchanges – which reached a two-month high on June 9. Selling via professional over-the-counter desks also spiked to the largest daily volume since late March, the firm said.
#Bitcoin hashrate's 18-month upward trend has broken, suggesting some miners are capitulating.h/t @jjcmoreno pic.twitter.com/JOyIUpAIKj
— Ki Young Ju (@ki_young_ju) June 13, 2024
Bitcoin jumped from $68,000 to $70,000 on Wednesday as May's U.S. CPI came in cooler than expected. However, the price quickly retraced the gains on Thursday after agencies at the Federal Open Market Committee (FOMC) reduced their rate cut forecast for this year from three times to only once.
Major tokens such as BNB Chain's BNB, XRP and Solana's SOL are down more than 10% since Monday, while riskier meme coins such as dogecoin (DOGE) and shiba inu (SHIB) have lost 15%.
Such moves came amid continual outflows in U.S.-listed spot BTC exchange-traded funds (ETFs), which have seen a net $500 million leave the 11 products since Monday. This marks their worst week since the end of April when they lost $1.2 billion over six days.
Bitcoin has also seemingly decoupled from the technology index Nasdaq, deviating from its usually positive correlation with this index, which is heavy on technology stocks.
Meanwhile, some market observers said that ether "looks worse" than bitcoin in terms of short-term sentiment.
"Looking at the technicals, both Bitcoin and Ethereum look bearish, but ETH looks worse than BTC," Rachel Lin, CEO and co-founder of SynFutures, said in a Telegram message. Unless ETH reclaims the $3,700 level soon, we might see more downside in the coming days and weeks.
"For BTC, $67,000 remains the crucial level," Lin said, adding the long-term outlook remains bullish in her view.
Bitcoin's upper potential may be limited due to miners' cash demand, with on-chain data showing an increase in the transfer of BTC from mining pools to exchanges.
The movement of funds to an exchange is often seen as a sign of an impending sale.
Traders foresee a deeper bitcoin (BTC) price correction in the coming weeks despite a strong equity market and favorable U.S. crypto policies due to selling activity from miners and general profit-taking.
"There's a new wave of dollar strength and demand for equities. Risk asset demand is gradually diminishing, forming a sequence of declining intraday highs for bitcoin," shared Alex Kuptsikevich, FxPro senior market analyst, in a Friday email to CoinDesk.
"Bitcoin continues to test the strength of the 50-day moving average, but it doesn't find enough reason to dive lower. Such persistent testing of the lows sets the bears up for quick success with their next target at $60,000," he added.
Miners, or entities that supply extensive computing resources to keep the bitcoin network running, may be among the selling groups, some observers said.
"Bitcoin's upper potential may be limited due to miners' cash demand," shared analysts from Japanese crypto exchange bitBank in an email. "Since May, bitcoin miners' net position–BTC inflow - BTC outflow–has been gradually declining, suggesting their operation has become tight after the Bitcoin network went through halving in April."
"The increasing net BTC outflows from miners do not necessarily put pressure on the price of bitcoin. However, prices tend to stagnate," analysts added.
On-chain data cited by CryptoQuant in a Wednesday report showed an increase in the transfer of BTC from mining pools to exchanges – which reached a two-month high on June 9. Selling via professional over-the-counter desks also spiked to the largest daily volume since late March, the firm said.
#Bitcoin hashrate's 18-month upward trend has broken, suggesting some miners are capitulating.h/t @jjcmoreno pic.twitter.com/JOyIUpAIKj
— Ki Young Ju (@ki_young_ju) June 13, 2024
Bitcoin jumped from $68,000 to $70,000 on Wednesday as May's U.S. CPI came in cooler than expected. However, the price quickly retraced the gains on Thursday after agencies at the Federal Open Market Committee (FOMC) reduced their rate cut forecast for this year from three times to only once.
Major tokens such as BNB Chain's BNB, XRP and Solana's SOL are down more than 10% since Monday, while riskier meme coins such as dogecoin (DOGE) and shiba inu (SHIB) have lost 15%.
Such moves came amid continual outflows in U.S.-listed spot BTC exchange-traded funds (ETFs), which have seen a net $500 million leave the 11 products since Monday. This marks their worst week since the end of April when they lost $1.2 billion over six days.
Bitcoin has also seemingly decoupled from the technology index Nasdaq, deviating from its usually positive correlation with this index, which is heavy on technology stocks.
Meanwhile, some market observers said that ether "looks worse" than bitcoin in terms of short-term sentiment.
"Looking at the technicals, both Bitcoin and Ethereum look bearish, but ETH looks worse than BTC," Rachel Lin, CEO and co-founder of SynFutures, said in a Telegram message. Unless ETH reclaims the $3,700 level soon, we might see more downside in the coming days and weeks.
"For BTC, $67,000 remains the crucial level," Lin said, adding the long-term outlook remains bullish in her view.
Taiwan Crypto Advocacy Body Becomes Formally Active With 24 Entities
As many as 24 cryptocurrency-related entities have come together to form the Taiwan Virtual Asset Service Provider Association.
The building blocks of the industry association were put in place by nine members last year with government approval in 2024 setting the stage for the first formal meeting held on Thursday.
Taiwan's crypto advocacy body, the Taiwan Virtual Asset Service Provider Association, was formally established with a founding meeting of 24 cryptocurrency-related entities, according to an announcement on X and a blog post by the XREX blockchain firm.
The body will aim to act as a bridge as the private sector and the government work together to supervise the industry. Its first task will be to formulate a self-regulation code that covers industry classification, listing and delisting, consumer protection, risk control, transaction monitoring and advertising solicitation, according to the blog post.
We celebrate this momentous day with all virtual asset service providers in #Taiwan as an official industry association is formed.This marks an important milestone in an ongoing process towards a consultative and unique regulatory model for the #VASP industry in Taiwan. (1/4) pic.twitter.com/thzW3htCy2
— XREX Inc. (@xrexinc) June 13, 2024
The preparations for the establishment of the association began in September, when nine entities came together to kickstart the process.
Taiwan's Interior Ministry approved the formation of the body in line with the law in March 2024 and the founding meeting was held on Thursday. BitoPro founder and CEO Titan Cheng will be the chair and XREX Chief Revenue Officer Winston Hsiao will be the vice chair.
Taiwan has taken steps to introduce legislation to regulate the crypto sector after the FTX scandal forced it to change its earlier fairly hands-off stance.
Read More: Taiwan Crypto Regulation Gets Going With First Reading of Digital Asset Bill
The building blocks of the industry association were put in place by nine members last year with government approval in 2024 setting the stage for the first formal meeting held on Thursday.
Taiwan's crypto advocacy body, the Taiwan Virtual Asset Service Provider Association, was formally established with a founding meeting of 24 cryptocurrency-related entities, according to an announcement on X and a blog post by the XREX blockchain firm.
The body will aim to act as a bridge as the private sector and the government work together to supervise the industry. Its first task will be to formulate a self-regulation code that covers industry classification, listing and delisting, consumer protection, risk control, transaction monitoring and advertising solicitation, according to the blog post.
We celebrate this momentous day with all virtual asset service providers in #Taiwan as an official industry association is formed.This marks an important milestone in an ongoing process towards a consultative and unique regulatory model for the #VASP industry in Taiwan. (1/4) pic.twitter.com/thzW3htCy2
— XREX Inc. (@xrexinc) June 13, 2024
The preparations for the establishment of the association began in September, when nine entities came together to kickstart the process.
Taiwan's Interior Ministry approved the formation of the body in line with the law in March 2024 and the founding meeting was held on Thursday. BitoPro founder and CEO Titan Cheng will be the chair and XREX Chief Revenue Officer Winston Hsiao will be the vice chair.
Taiwan has taken steps to introduce legislation to regulate the crypto sector after the FTX scandal forced it to change its earlier fairly hands-off stance.
Read More: Taiwan Crypto Regulation Gets Going With First Reading of Digital Asset Bill
Here's Why Bitcoin's Not Keeping Pace With Nasdaq
Bitcoin lost 6% in one week even as Nasdaq climbed to an all-time high.
Crypto-specific factors like profit-taking by holders and increased selling by miners seem to be holding back the BTC price.
Bitcoin {{BTC}} has declined over 6% in seven days, deviating from its usually positive correlation with the equity market's tech-heavy Nasdaq Composite Index.
While the popular narrative blames bitcoin's slide on the Federal Reserve's decision to signal just one U.S. interest-rate cut for the rest of the year, technology stocks extended gains after Wednesday's decision, indicating crypto-specific factors may be stopping BTC from keeping pace with the Nasdaq.
"When a market continues to sell off at a specific level, it has less to do with events, narratives, or fundamentals. Instead, a large seller perceives prices to be overvalued at that level," Markus Thielen, founder of 10x Research, said. "The November 2021 all-time high of nearly 70,000 is a level where long-term holders are willing to sell their Bitcoins, as they are the most likely candidates to cash out."
Earlier this week, a wallet that had been inactive since 2018 moved 8,000 BTC worth over $500 million to crypto exchange Binance. A move from a wallet to an exchange is often a signal of an impending sale. The wallet reportedly acquired the BTC at less than $4,000.
Data tracked by analytics firm CryptoQuant show that the number of BTC inactive for at least 12 months and two years has declined, a sign of holders have taken profits as the bitcoin price holds near record highs.
"Addresses with supply inactive for 1 and 2 years have been selling since around price hit record high. This is offsetting accumulation by longer-term holders (+3-year)," Ilan Solot, co-head of digital assets at Marex Solutions, said in an email on Wednesday.
According to Thielen, 1.8 million BTC have not moved for over a decade, potentially including the 1.1 million BTC mined by Satoshi himself. "This is why we would also expect that most of the Mt. Gox holders will convert their BTC into fiat once they take possession of their BTC in October/November 2024," Thielen noted.
Mt. Gox, a crypto exchange that imploded due to a hack in 2014, is gearing toward distributing 142,000 bitcoin (BTC) worth roughly $9.5 billion and 143,000 bitcoin cash (BCH) worth $73 million to creditors, CoinDesk reported in April. A distribution could pose a substantial overhang on digital asset prices. The trustees of the defunct exchange last year set an Oct. 31, 2024 deadline to reimburse creditors.
Another reason for BTC's price weakness could be increased selling by miners, or those responsible for making coins. Miners receive BTC as a reward for approving blocks on the blockchain and additional revenue from user transaction fees.
Listed miner Marathon Digital (MARA) has sold 1,400 bitcoin worth $98 million this month. According to CryptoQuant, miners sold at least 1,200 BTC on June 10 via the over-the-counter desks, the highest single-day volume in over two months.
The hashrate, or the computing power dedicated to the Bitcoin blockchain, has declined from 622 exahashes per second (EH/s) to 599 EH/s this month. That's a sign of miner capitulation.
#Bitcoin hashrate's 18-month upward trend has broken, suggesting some miners are capitulating.h/t @jjcmoreno pic.twitter.com/JOyIUpAIKj
— Ki Young Ju (@ki_young_ju) June 13, 2024
Crypto-specific factors like profit-taking by holders and increased selling by miners seem to be holding back the BTC price.
Bitcoin {{BTC}} has declined over 6% in seven days, deviating from its usually positive correlation with the equity market's tech-heavy Nasdaq Composite Index.
While the popular narrative blames bitcoin's slide on the Federal Reserve's decision to signal just one U.S. interest-rate cut for the rest of the year, technology stocks extended gains after Wednesday's decision, indicating crypto-specific factors may be stopping BTC from keeping pace with the Nasdaq.
"When a market continues to sell off at a specific level, it has less to do with events, narratives, or fundamentals. Instead, a large seller perceives prices to be overvalued at that level," Markus Thielen, founder of 10x Research, said. "The November 2021 all-time high of nearly 70,000 is a level where long-term holders are willing to sell their Bitcoins, as they are the most likely candidates to cash out."
Earlier this week, a wallet that had been inactive since 2018 moved 8,000 BTC worth over $500 million to crypto exchange Binance. A move from a wallet to an exchange is often a signal of an impending sale. The wallet reportedly acquired the BTC at less than $4,000.
Data tracked by analytics firm CryptoQuant show that the number of BTC inactive for at least 12 months and two years has declined, a sign of holders have taken profits as the bitcoin price holds near record highs.
"Addresses with supply inactive for 1 and 2 years have been selling since around price hit record high. This is offsetting accumulation by longer-term holders (+3-year)," Ilan Solot, co-head of digital assets at Marex Solutions, said in an email on Wednesday.
According to Thielen, 1.8 million BTC have not moved for over a decade, potentially including the 1.1 million BTC mined by Satoshi himself. "This is why we would also expect that most of the Mt. Gox holders will convert their BTC into fiat once they take possession of their BTC in October/November 2024," Thielen noted.
Mt. Gox, a crypto exchange that imploded due to a hack in 2014, is gearing toward distributing 142,000 bitcoin (BTC) worth roughly $9.5 billion and 143,000 bitcoin cash (BCH) worth $73 million to creditors, CoinDesk reported in April. A distribution could pose a substantial overhang on digital asset prices. The trustees of the defunct exchange last year set an Oct. 31, 2024 deadline to reimburse creditors.
Another reason for BTC's price weakness could be increased selling by miners, or those responsible for making coins. Miners receive BTC as a reward for approving blocks on the blockchain and additional revenue from user transaction fees.
Listed miner Marathon Digital (MARA) has sold 1,400 bitcoin worth $98 million this month. According to CryptoQuant, miners sold at least 1,200 BTC on June 10 via the over-the-counter desks, the highest single-day volume in over two months.
The hashrate, or the computing power dedicated to the Bitcoin blockchain, has declined from 622 exahashes per second (EH/s) to 599 EH/s this month. That's a sign of miner capitulation.
#Bitcoin hashrate's 18-month upward trend has broken, suggesting some miners are capitulating.h/t @jjcmoreno pic.twitter.com/JOyIUpAIKj
— Ki Young Ju (@ki_young_ju) June 13, 2024
Bitcoin Could Hit $1M Within 10 Years, Bernstein Says As It Initiates Coverage of MicroStrategy
The bitcoin price could hit $1 million by 2033 and is likely to reach a $200,000 cycle-high by 2025.
MicroStrategy initiated as outperform with a $2,890 price target at Bernstein.
The software company's long-term convertible debt strategy means it has time to benefit from bitcoin upside with limited liquidation risk to the crypto on its balance sheet, the report said.
The price of bitcoin {{BTC}} is likely to hit $1 million by 2033 and reach a cycle-high of $200,000 by 2025, Bernstein said as it initiated coverage of software developer MicroStrategy, the biggest corporate owner of the largest cryptocurrency, with an outperform rating.
MicroStrategy now owns 1.1% of the global supply of the world’s largest cryptocurrency, worth about $14.5 billion, having transformed itself from a small software company in the space of four years, the broker said in a research report on Thursday.
Bernstein initiated coverage of the Tysons Corner, Virginia-based company with a $2,890 price target. The shares closed at around $1,484 on Thursday. The Nasdaq-listed firm currently holds 214,400 bitcoin. It began buying the cryptocurrency in 2020, adopting it as a reserve asset.
The company’s founder and chairman, Michael Saylor, “has become synonymous with brand bitcoin and has positioned MSTR as a leading bitcoin company, attracting at-scale capital (both debt and equity) for an active bitcoin acquisition strategy,” analysts Gautam Chhugani and Mahika Sapra wrote.
Microstrategy positions itself as an “active leveraged bitcoin strategy versus passive spot exchange-traded funds (ETFs),” the report said, noting that over the last four years the company’s active strategy has produced a higher bitcoin per equity share.
The broker's BTC price forecast is driven by the unprecedented demand from spot exchange-traded funds (ETFs) and because supply of the cryptocurrency is constrained. Bernstein now estimates that bitcoin could reach $500,000 by 2029. The 2025 estimate was raised from $150,000.
MicroStrategy’s long-term convertible debt strategy means it has enough time to benefit from potential bitcoin upside with limited liquidation risk to the cryptocurrency on its balance sheet, the report added.
The company yesterday proposed a $500 million debt sale of convertible notes to boost its bitcoin stash.
Read more: MicroStrategy Now Holds $13.6B Worth of Bitcoin, 1% of Total Circulating Supply: Canaccord
MicroStrategy initiated as outperform with a $2,890 price target at Bernstein.
The software company's long-term convertible debt strategy means it has time to benefit from bitcoin upside with limited liquidation risk to the crypto on its balance sheet, the report said.
The price of bitcoin {{BTC}} is likely to hit $1 million by 2033 and reach a cycle-high of $200,000 by 2025, Bernstein said as it initiated coverage of software developer MicroStrategy, the biggest corporate owner of the largest cryptocurrency, with an outperform rating.
MicroStrategy now owns 1.1% of the global supply of the world’s largest cryptocurrency, worth about $14.5 billion, having transformed itself from a small software company in the space of four years, the broker said in a research report on Thursday.
Bernstein initiated coverage of the Tysons Corner, Virginia-based company with a $2,890 price target. The shares closed at around $1,484 on Thursday. The Nasdaq-listed firm currently holds 214,400 bitcoin. It began buying the cryptocurrency in 2020, adopting it as a reserve asset.
The company’s founder and chairman, Michael Saylor, “has become synonymous with brand bitcoin and has positioned MSTR as a leading bitcoin company, attracting at-scale capital (both debt and equity) for an active bitcoin acquisition strategy,” analysts Gautam Chhugani and Mahika Sapra wrote.
Microstrategy positions itself as an “active leveraged bitcoin strategy versus passive spot exchange-traded funds (ETFs),” the report said, noting that over the last four years the company’s active strategy has produced a higher bitcoin per equity share.
The broker's BTC price forecast is driven by the unprecedented demand from spot exchange-traded funds (ETFs) and because supply of the cryptocurrency is constrained. Bernstein now estimates that bitcoin could reach $500,000 by 2029. The 2025 estimate was raised from $150,000.
MicroStrategy’s long-term convertible debt strategy means it has enough time to benefit from potential bitcoin upside with limited liquidation risk to the cryptocurrency on its balance sheet, the report added.
The company yesterday proposed a $500 million debt sale of convertible notes to boost its bitcoin stash.
Read more: MicroStrategy Now Holds $13.6B Worth of Bitcoin, 1% of Total Circulating Supply: Canaccord
Bitcoin ETFs See $226M Outflows Led By Fidelity’s FBTC
U.S.-listed bitcoin ETFs experienced outflows totaling over $226 million on Thursday, marking the third day of outflows this week.
This trend echoes the stream of outflows that took place at the end of April.
U.S.-listed bitcoin {{BTC}} exchange-traded funds (ETFs) posted over $226 million in net outflows on Thursday for a third day of outflows this week and reminiscent of the stream of withdrawals that occurred at the end of April.
Fidelity’s FBTC recorded the highest outflow, with $106 million withdrawn, preliminary data from SoSoValue shows. Grayscale’s GBTC recorded $62 million in outflows, and Ark Invest’s ARKB saw $53 million taken out.
Only BlackRock’s IBIT recorded a net inflow, gaining $18 million. The ETFs offered by Valkyrie, Franklin Templeton, Hashdex and WisdomTree showed no inflow or outflow activity.
Wednesday was the only day this week that registered a net inflow of these U.S.-listed products, which added $100 million on the day. The activity comes amid a generally volatile week for bitcoin and the broader crypto market, centered on Wednesday's key U.S. inflation report and Federal Reserve meeting.
The withdrawals bring the net amount taken out of the exchange-traded funds to $564 million in three days. That's about half the $1.2 billion taken out of six days at the end of April.
U.S. inflation came in lower-than-expected, briefly boosting bitcoin prices to $70,000 from $68,000 before tumbling back under $67,000 as traders likely took profits on the move.
This trend echoes the stream of outflows that took place at the end of April.
U.S.-listed bitcoin {{BTC}} exchange-traded funds (ETFs) posted over $226 million in net outflows on Thursday for a third day of outflows this week and reminiscent of the stream of withdrawals that occurred at the end of April.
Fidelity’s FBTC recorded the highest outflow, with $106 million withdrawn, preliminary data from SoSoValue shows. Grayscale’s GBTC recorded $62 million in outflows, and Ark Invest’s ARKB saw $53 million taken out.
Only BlackRock’s IBIT recorded a net inflow, gaining $18 million. The ETFs offered by Valkyrie, Franklin Templeton, Hashdex and WisdomTree showed no inflow or outflow activity.
Wednesday was the only day this week that registered a net inflow of these U.S.-listed products, which added $100 million on the day. The activity comes amid a generally volatile week for bitcoin and the broader crypto market, centered on Wednesday's key U.S. inflation report and Federal Reserve meeting.
The withdrawals bring the net amount taken out of the exchange-traded funds to $564 million in three days. That's about half the $1.2 billion taken out of six days at the end of April.
U.S. inflation came in lower-than-expected, briefly boosting bitcoin prices to $70,000 from $68,000 before tumbling back under $67,000 as traders likely took profits on the move.
Former Goldman Sachs Exec Joins Anchorage Digital’s Board of Directors
Crypto custody firm Anchorage Digital has added Connie Shoemaker, a former Goldman Sachs executive, to its board of directors.
Shoemaker currently serves as the COO and CFO of Bridgewater Associates Holdings, the parent company of Bridgewater Associates, the world’s largest hedge fund.
Anchorage Digital is the only crypto bank currently chartered by the Office of the Comptroller of the Currency (OCC). Other institutions, including Paxos and Protego, have attempted to receive a full charter from the OCC but have failed to move past the provisional charter hurdle. With the boom of institutional interest in crypto spurred by the approval of spot Bitcoin exchange-traded funds (ETFs), Anchorage Digital’s business is growing, a company spokesperson said.
In a Thursday announcement, Anchorage Digital said the expansion of its board of directors was part of an effort to “meet rising institutional demand for safe, secure and federally regulated digital asset infrastructure.”
Anchorage Digital’s co-founder and CEO Nathan McCauley told CoinDesk through a company spokesperson that Shoemaker’s track record in the trad-fi world will be “invaluable” as the company continues to grow, adding that her experience building the commercial bank division at Goldman Sachs is “highly applicable” to Anchorage Digital’s work.
“By adding Connie to the board of Anchorage Digital Bank, we are doubling down on our commitment to advance the institutional ecosystem with our federally regulated offering,” McCauley said.
Shoemaker was Goldman Sachs’ global head of strategy during the 2008 global financial crisis, during which she oversaw the growth of Goldman Sachs Asset Management (GSAM). She was later Goldman Sachs’ Chief Administrative Officer.
Shoemaker currently serves as the COO and CFO of Bridgewater Associates Holdings, the parent company of Bridgewater Associates, the world’s largest hedge fund.
Anchorage Digital is the only crypto bank currently chartered by the Office of the Comptroller of the Currency (OCC). Other institutions, including Paxos and Protego, have attempted to receive a full charter from the OCC but have failed to move past the provisional charter hurdle. With the boom of institutional interest in crypto spurred by the approval of spot Bitcoin exchange-traded funds (ETFs), Anchorage Digital’s business is growing, a company spokesperson said.
In a Thursday announcement, Anchorage Digital said the expansion of its board of directors was part of an effort to “meet rising institutional demand for safe, secure and federally regulated digital asset infrastructure.”
Anchorage Digital’s co-founder and CEO Nathan McCauley told CoinDesk through a company spokesperson that Shoemaker’s track record in the trad-fi world will be “invaluable” as the company continues to grow, adding that her experience building the commercial bank division at Goldman Sachs is “highly applicable” to Anchorage Digital’s work.
“By adding Connie to the board of Anchorage Digital Bank, we are doubling down on our commitment to advance the institutional ecosystem with our federally regulated offering,” McCauley said.
Shoemaker was Goldman Sachs’ global head of strategy during the 2008 global financial crisis, during which she oversaw the growth of Goldman Sachs Asset Management (GSAM). She was later Goldman Sachs’ Chief Administrative Officer.
U.S. Judge Signs Off on $4.5B Terraform-Do Kwon Settlement With SEC
A U.S. judge has agreed to a settlement between the SEC, Do Kwon and Terraform Labs.
The settlement involves a $4.5 billion penalty and a ban on trading "crypto asset securities."
A U.S. District Court judge has agreed to a settlement between the Securities and Exchange Commission (SEC), Terraform Labs and its former CEO, Do Kwon, which would have them pay billions in penalties as well as virtually ban them from the crypto industry, according to the court filings.
The settlement approved by Judge Jed Rakoff of the Southern District of New York (SDNY) involves Terraform Labs Kwon paying $4.5 billion in disgorgement and civil penalties while being permanently banned from buying and selling "crypto asset securities," including Terra ecosystem tokens. It's unclear if this also applies to other cryptocurrencies.
This settlement is below the SEC's first offer of $5.3 billion but much higher than the $1 million civil penalty that Terraform first proposed.
Kwon, still in custody in Montenegro awaiting a decision on his extradition, did not appear at the trial where the settlement was reached.
Terraform Labs is currently in Chapter 11 bankruptcy protection, its CEO Chris Amani testified at the trial, and has approximately $150 million in assets on hand.
The settlement involves a $4.5 billion penalty and a ban on trading "crypto asset securities."
A U.S. District Court judge has agreed to a settlement between the Securities and Exchange Commission (SEC), Terraform Labs and its former CEO, Do Kwon, which would have them pay billions in penalties as well as virtually ban them from the crypto industry, according to the court filings.
The settlement approved by Judge Jed Rakoff of the Southern District of New York (SDNY) involves Terraform Labs Kwon paying $4.5 billion in disgorgement and civil penalties while being permanently banned from buying and selling "crypto asset securities," including Terra ecosystem tokens. It's unclear if this also applies to other cryptocurrencies.
This settlement is below the SEC's first offer of $5.3 billion but much higher than the $1 million civil penalty that Terraform first proposed.
Kwon, still in custody in Montenegro awaiting a decision on his extradition, did not appear at the trial where the settlement was reached.
Terraform Labs is currently in Chapter 11 bankruptcy protection, its CEO Chris Amani testified at the trial, and has approximately $150 million in assets on hand.
HLG Down Over 60% As Exploiter Mints 1 Billion New Tokens
The native token of the Holograph protocol is down over 60% after an exploit allowed an attacker to mint 1 billion HLG
On-chain data suggests that the wallet acc01ade.eth was involved with the exploit, and a Github page lists an individual with the same handle as a contributor to HLG.
The native token of the Holograph protocol (HLG) was down as much as 60%, according to CoinGecko data, after a malicious actor ran an exploit that allowed them to mint 1 billion HLG tokens.
The Holograph Operator contract has been exploited by a malicious actor, enabling the hacker to mint 1 billion additional HLGThe team has patched the initial exploit & is working with exchange partners to lock the malicious accountsThe team has launched an investigation & is…
— Holograph (@holographxyz) June 13, 2024
"The team has launched an investigation & is in the process of contacting law enforcement," the protocol posted on its X page.
The Holograph protocol enables a single contract address across all EVM blockchains, which ensures consistent tokenization, seamless interoperability, and secure cross-chain asset transfers, according to a description on its website.
At current market prices, the 1 billion HLG that the exploiter absconded with is worth slightly more than $6.7 million.
On-chain data suggests that the ENS wallet acc01ade.eth was involved in the exploit. A Github page suggests that they are also a contributor to the project.
A X page with the same name describes itself as a "super shadowy coder" based in Paris. The account did not respond to a request for comment by CoinDesk.
On-chain data suggests that the wallet acc01ade.eth was involved with the exploit, and a Github page lists an individual with the same handle as a contributor to HLG.
The native token of the Holograph protocol (HLG) was down as much as 60%, according to CoinGecko data, after a malicious actor ran an exploit that allowed them to mint 1 billion HLG tokens.
The Holograph Operator contract has been exploited by a malicious actor, enabling the hacker to mint 1 billion additional HLGThe team has patched the initial exploit & is working with exchange partners to lock the malicious accountsThe team has launched an investigation & is…
— Holograph (@holographxyz) June 13, 2024
"The team has launched an investigation & is in the process of contacting law enforcement," the protocol posted on its X page.
The Holograph protocol enables a single contract address across all EVM blockchains, which ensures consistent tokenization, seamless interoperability, and secure cross-chain asset transfers, according to a description on its website.
At current market prices, the 1 billion HLG that the exploiter absconded with is worth slightly more than $6.7 million.
On-chain data suggests that the ENS wallet acc01ade.eth was involved in the exploit. A Github page suggests that they are also a contributor to the project.
A X page with the same name describes itself as a "super shadowy coder" based in Paris. The account did not respond to a request for comment by CoinDesk.
Crypto for Advisors: Advisors and Crypto
At Consensus 2024, held in Austin, there was an exclusive RIA & FA Day session. Approximately 120 financial advisors spent the day learning about digital assets, engaging with industry thought leaders and networking with peers.
The energy was positive, and the conversations meaningful, with investors' interest in this asset class growing. Although the event was closed-door, key themes are worth sharing. Thank you to Adam Blumberg, one of the day's contributors, for highlighting trends and takeaways in today’s newsletter.
- Sarah Morton
You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.
Consensus 2024: A Breakthrough for Financial Advisors and Crypto Integration
Consensus 2024 marked a significant milestone for the crypto industry, driven by positive legislative developments and the approval of an Ethereum ETF. The atmosphere was electric, with enthusiasm reaching new heights.
FA/RIA Day: A Focused Learning Experience
Thursday was dedicated to financial advisors and registered investment advisors (FA/RIA), drawing approximately 120 professionals keen to explore integrating crypto into their practices. The day was filled with insightful discussions, networking opportunities and expert guidance.
The recent ETF approvals and bullish price trends have piqued the interest of more advisors and investors, creating a fertile ground for knowledge-sharing and growth.
Prioritizing Practical Integration Over Technical Jargon
The primary objective of FA/RIA Day was to provide actionable insights on incorporating crypto into financial practices. Instead of delving into the technical intricacies of blockchain and price movements, the focus was on practical application within a financial advisory context.
Education: The Cornerstone of Crypto Adoption
A recurring theme was the crucial role of education. Advisors must understand the available options, strategic allocation, investment theses, regulatory landscape and compliance requirements.
Equally important is the need to educate investors. Despite growing awareness of bitcoin and crypto, a significant knowledge gap persists. Effective education equips advisors to discuss crypto allocations confidently and have informed conversations with clients.
Exploring Investment Options
Panel discussions covered a range of investment options, including direct ownership, custody through SMA platforms, ETFs and investments in public companies like MicroStrategy and bitcoin mining companies.
Each option has its pros and cons.
While direct ownership embodies the ethos of crypto, it introduces compliance and administrative challenges that many advisors prefer to avoid.
ETFs provide price exposure to the underlying asset without the complexities of custody and reporting, making it easier for advisors to allocate within any account type, integrate investments into AUM and reporting, and facilitate rebalancing, as do public company investments.
Conversations and Portfolio Allocations
Understanding crypto is one thing; fitting it into a portfolio is another. Advisors shared their experiences in client conversations and their strategies for crypto allocation.
These discussions often involve setting realistic expectations, aligning with clients’ investment goals and conducting thorough risk assessments to gauge tolerance for volatility.
We heard that generally, advisors allocate 2-5% of a portfolio to crypto, categorizing it as an Alternative Investment. ETFs have enabled advisors to discuss the benefits of rebalancing and its positive impact on portfolio performance.
Advisors must also determine the most suitable accounts for crypto holdings, whether taxable or non-taxable, such as IRAs.
Navigating Compliance and Regulation
Crypto's intersection with politics in the U.S. adds a layer of complexity. Positive legislative momentum was evident just before Consensus, with several Democrats supporting pro-crypto regulation.
A conference highlight was a keynote chat by CFTC Commissioner Summer Mersinger, who outlined the CFTC's perspective on crypto regulation and its implications for financial advisors. The need for regulatory clarity remains paramount as advisors navigate this evolving landscape.
Conclusion
Consensus 2024 underscored the growing integration of crypto in financial advisory practices. By focusing on education, practical application and regulatory insights, advisors are better equipped to meet the rising demand for crypto investments and guide their clients through this dynamic asset class.
- Adam Blumberg, Interaxis
Keep Reading
Stock trading app Robinhood announced it has entered into an agreement to acquire crypto platform Bitstamp for $200 million.
U.S. spot bitcoin ETFs now hold a combined $63 billion of AUM, six months after the first U.S. listing.
A recent report published by the world’s largest bank, the Industrial and Commercial Bank of China (ICBC), likened bitcoin to gold and ether to digital oil.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
The energy was positive, and the conversations meaningful, with investors' interest in this asset class growing. Although the event was closed-door, key themes are worth sharing. Thank you to Adam Blumberg, one of the day's contributors, for highlighting trends and takeaways in today’s newsletter.
- Sarah Morton
You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.
Consensus 2024: A Breakthrough for Financial Advisors and Crypto Integration
Consensus 2024 marked a significant milestone for the crypto industry, driven by positive legislative developments and the approval of an Ethereum ETF. The atmosphere was electric, with enthusiasm reaching new heights.
FA/RIA Day: A Focused Learning Experience
Thursday was dedicated to financial advisors and registered investment advisors (FA/RIA), drawing approximately 120 professionals keen to explore integrating crypto into their practices. The day was filled with insightful discussions, networking opportunities and expert guidance.
The recent ETF approvals and bullish price trends have piqued the interest of more advisors and investors, creating a fertile ground for knowledge-sharing and growth.
Prioritizing Practical Integration Over Technical Jargon
The primary objective of FA/RIA Day was to provide actionable insights on incorporating crypto into financial practices. Instead of delving into the technical intricacies of blockchain and price movements, the focus was on practical application within a financial advisory context.
Education: The Cornerstone of Crypto Adoption
A recurring theme was the crucial role of education. Advisors must understand the available options, strategic allocation, investment theses, regulatory landscape and compliance requirements.
Equally important is the need to educate investors. Despite growing awareness of bitcoin and crypto, a significant knowledge gap persists. Effective education equips advisors to discuss crypto allocations confidently and have informed conversations with clients.
Exploring Investment Options
Panel discussions covered a range of investment options, including direct ownership, custody through SMA platforms, ETFs and investments in public companies like MicroStrategy and bitcoin mining companies.
Each option has its pros and cons.
While direct ownership embodies the ethos of crypto, it introduces compliance and administrative challenges that many advisors prefer to avoid.
ETFs provide price exposure to the underlying asset without the complexities of custody and reporting, making it easier for advisors to allocate within any account type, integrate investments into AUM and reporting, and facilitate rebalancing, as do public company investments.
Conversations and Portfolio Allocations
Understanding crypto is one thing; fitting it into a portfolio is another. Advisors shared their experiences in client conversations and their strategies for crypto allocation.
These discussions often involve setting realistic expectations, aligning with clients’ investment goals and conducting thorough risk assessments to gauge tolerance for volatility.
We heard that generally, advisors allocate 2-5% of a portfolio to crypto, categorizing it as an Alternative Investment. ETFs have enabled advisors to discuss the benefits of rebalancing and its positive impact on portfolio performance.
Advisors must also determine the most suitable accounts for crypto holdings, whether taxable or non-taxable, such as IRAs.
Navigating Compliance and Regulation
Crypto's intersection with politics in the U.S. adds a layer of complexity. Positive legislative momentum was evident just before Consensus, with several Democrats supporting pro-crypto regulation.
A conference highlight was a keynote chat by CFTC Commissioner Summer Mersinger, who outlined the CFTC's perspective on crypto regulation and its implications for financial advisors. The need for regulatory clarity remains paramount as advisors navigate this evolving landscape.
Conclusion
Consensus 2024 underscored the growing integration of crypto in financial advisory practices. By focusing on education, practical application and regulatory insights, advisors are better equipped to meet the rising demand for crypto investments and guide their clients through this dynamic asset class.
- Adam Blumberg, Interaxis
Keep Reading
Stock trading app Robinhood announced it has entered into an agreement to acquire crypto platform Bitstamp for $200 million.
U.S. spot bitcoin ETFs now hold a combined $63 billion of AUM, six months after the first U.S. listing.
A recent report published by the world’s largest bank, the Industrial and Commercial Bank of China (ICBC), likened bitcoin to gold and ether to digital oil.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
Assured Spot Ether ETF Approval Fails to Stir Slumping Crypto Market
Cryptocurrency markets remained under pressure during U.S. trading hours on Thursday, continuing a pullback that began a day earlier when the Fed signaled it only expected to cut rates once this year.
The price of ether {{ETH}} for a led a mid-morning bounce after U.S. Securities and Exchange Chairman Gary Gensler – in testimony at a Senate hearing – said he expected spot ether ETFs to have received full approvals from his agency by the end of the summer.
The news sent ether higher by 1%, but it turned out to have been a selling opportunity, with the price reversing more than 3% just one hour later. At press time, ether was changing hands at $3,440, down 5% over the past 24 hours. The broader CoinDesk 20 Index was lower by 4.9% over the same period.
Also lower by nearly 5% was the price of bitcoin {{BTC}}, which was trading near a one-week low of $66,300.
Markets began heading south on Wednesday afternoon after the Federal Reserve's hawkish policy meeting results. The U.S. central bank held its benchmark fed funds rate range steady at 5.25%-5.50%, but surprised with its updated projections suggesting an expectation for just one 25 basis point rate cut in 2024. Rate futures markets, meanwhile, had been pricing in two to three 25 basis point moves this year.
Failing to improve the macro mood in crypto was U.S. economic data Thursday morning suggesting a continued softening in both the inflation and the economy. The May Producer Price Index (PPI) fell 0.2% against expectations for a rise of 0.1%. On a year-over-year basis, PPI was higher by 2.2% versus forecasts for 2.5%. There were also initial jobless claims which rose to nearly a one-year high of 242,000 versus expectations of 225,000.
"$66K seems like equilibrium," said well-followed analyst Skew in an X post, who along with others is trying to decode a market that won't go sustainably higher despite a lot of recent bullish news: improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, spot ETH ETF approvals, and other risk asset markets (namely U.S. stocks) ripping to new all-time highs.
The price of ether {{ETH}} for a led a mid-morning bounce after U.S. Securities and Exchange Chairman Gary Gensler – in testimony at a Senate hearing – said he expected spot ether ETFs to have received full approvals from his agency by the end of the summer.
The news sent ether higher by 1%, but it turned out to have been a selling opportunity, with the price reversing more than 3% just one hour later. At press time, ether was changing hands at $3,440, down 5% over the past 24 hours. The broader CoinDesk 20 Index was lower by 4.9% over the same period.
Also lower by nearly 5% was the price of bitcoin {{BTC}}, which was trading near a one-week low of $66,300.
Markets began heading south on Wednesday afternoon after the Federal Reserve's hawkish policy meeting results. The U.S. central bank held its benchmark fed funds rate range steady at 5.25%-5.50%, but surprised with its updated projections suggesting an expectation for just one 25 basis point rate cut in 2024. Rate futures markets, meanwhile, had been pricing in two to three 25 basis point moves this year.
Failing to improve the macro mood in crypto was U.S. economic data Thursday morning suggesting a continued softening in both the inflation and the economy. The May Producer Price Index (PPI) fell 0.2% against expectations for a rise of 0.1%. On a year-over-year basis, PPI was higher by 2.2% versus forecasts for 2.5%. There were also initial jobless claims which rose to nearly a one-year high of 242,000 versus expectations of 225,000.
"$66K seems like equilibrium," said well-followed analyst Skew in an X post, who along with others is trying to decode a market that won't go sustainably higher despite a lot of recent bullish news: improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, spot ETH ETF approvals, and other risk asset markets (namely U.S. stocks) ripping to new all-time highs.