2024-07-12 13:19
The conclusion of the probe into Hiro, formerly known as Blockstack, which raised $70 million via token sales from 2017 to 2019, is another win for the crypto industry in its years-long struggle with the regulator. The U.S. Securities and Exchange Commission dropped a three-year-old investigation into Hiro Systems, a blockchain software developer (formerly known as Blockstack) that raised $70 million in token sales from 2017 to 2019, according to a Friday filing. The probe's conclusion is another win for the crypto industry in its years-long struggle with the regulator and follows news, reported by Fortune earlier this week, that the agency had ended an investigation into stablecoin issuer Paxos. "Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against Hiro Systems PBC, formerly known as Blockstack PBC," the SEC's division of enforcement said in a letter to Hiro attached to the Friday filing. The letter contained a boilerplate caveat that such a notice "must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff's investigation." Hiro makes tools for developers to build apps on Stacks, a layer-2 blockchain that supplements Bitcoin. Stacks is the brainchild of crypto industry veteran Muneeb Ali, who is now CEO of Trust Machines, another builder in the ecosystem, and a board member at Hiro. In a tweet Friday after the filing came out, Ali wrote that the SEC's probe looked into the Stacks protocol, not just the Hiro entity. Sufficiently decentralized? The company, then known as Blockstack, launched the first version of the Stacks chain, with its eponymous token (STX), in 2018. Early on, the company treated the tokens it sold as securities. It conducted a portion of its token sales under the SEC's Regulation A+, which allows issuers to sell limited amounts of securities to the public without registering. Other tokens were sold under the exemptions for securities sold only to accredited (Reg D) or international (Reg S) investors. In January 2021, a new version of Stacks launched, with a new consensus mechanism (proof of transfer). To Hiro's mind, the network had become fully decentralized. In an SEC filing that month, the company said it was no longer providing "essential managerial services to the Stacks Blockchain," and therefore it was no longer necessary to treat Stacks tokens as securities. Apparently, the SEC was skeptical of that interpretation. In September 2021, Hiro disclosed that it was responding to an inquiry from the division of enforcement. Friday's filing marks the end of that inquiry and, presumably, the removal of a sword of Damocles that had been hanging over the firm. https://www.coindesk.com/policy/2024/07/12/sec-drops-investigation-of-bitcoin-l2-stacks-builder-hiro-filing-says/
2024-07-12 12:51
Some traders consider the current price lull to be stemming from market participants remaining “on the sidelines” amid sales pressure from defunct exchange Mt. Gox and the German state of Saxony. Bitcoin (BTC) fell 2.3% in the past 24 hours to $57,000 after briefly surpassing $59,000 on Thursday. XRP tokens were the only major gainers, rising 5% in the past 24 hours amid favorable developments. One trader said bulls were likely "on the sidelines" amid selling pressure from bitcoin wallets belonging to the German state of Saxony. Bitcoin (BTC) slumped 2.3% in the past 24 hours to pare back Thursday’s brief gains after a spike following the latest U.S. CPI readings, bringing down with it the broader crypto market. Core CPI for June rose 3.3% versus an expected 3.5%, appearing bullish for risk assets such as cryptocurrencies. However, it turned out to be a “buy the rumor, sell the news” event with many already anticipating a good report and prices being driven up in the days prior, analysis firm Santiment said in an X post. BTC briefly traded above $59,000 on Thursday, falling to $57,000 in European afternoon hours on Friday. Losses in major tokens followed as ether (ETH) and BNB Chain’s BNB dropped 2.2%, while Solana’s SOL and dogecoin (DOGE) lost as much as 5%. The broad-based CoinDesk 20 (CD20), a liquid index of the largest tokens by market capitalization, fell 2.48%, indicating losses across the market. Only XRP is in the green among majors with a 5% gain in the past 24 hours, data shows. Such gains came as traditional futures powerhouse CME and CF Benchmarks announced the debut of indices and reference rates for XRP on Thursday, one that Brad Garlinghouse, the CEO of closely related blockchain payments firm Ripple, said could boost institutional adoption. Some traders consider the current price lull to be stemming from market participants remaining “on the sidelines” amid sales pressure from defunct exchange Mt. Gox and the German state of Saxony. “Bitcoin is back at $57K after a failed assault on $60K on Thursday,” shared Alex Kuptsikevich, FxPro senior market analyst, in an email to CoinDesk. “German authorities are actively selling off previously confiscated Bitcoins. This volume is not huge, but some potential buyers prefer to stay on the sidelines, seeing the overhang of sales.” Kuptsikevich ruled out gains in major tokens until BTC made a move higher. “An altcoin season could only begin when the prices of the largest coins, such as bitcoin, have reached all-time highs and appear overvalued to some,” he said. The German state of Saxony transferred over $600 million worth of BTC to exchanges on Thursday – moving one of the biggest chunks in weeks. Arkham data shows that it moved more than 3,000 BTC in early Asian hours on Friday to various exchanges and OTC trading firms, leaving just over 6,000 BTC in its wallets, worth $340 million at current prices. https://www.coindesk.com/markets/2024/07/12/xrp-is-the-sole-major-in-green-as-bitcoin-bulls-remain-sidelined/
2024-07-12 11:11
At first glance, a Fed interest-rate cut appears to be a bullish signal, but that's not necessarily true. Thursday's inflation report probably set the stage for the Fed to begin cutting interest rates this year. While the crypto community expects the first rate cut to kickstart a bull run for bitcoin, the reaction depends on the context in which the bank eases. The Federal Reserve (Fed) seems increasingly likely to start cutting interest rates this year after yesterday's inflation report, fulfilling crypto bulls' long-standing desire for a more risk-amenable macroeconomic environment. The consensus in the crypto market community is that rate cuts, likely to begin in September, will boost fiat liquidity, catalyzing demand for riskier investments like bitcoin (BTC). While that's plausible, markets may have already priced in any easing. Rate-cut expectations have dominated crypto and traditional market sentiment since the second half of 2022 and are among the key catalysts behind bitcoin's surge from 2022 lows near $15,000 to record highs above $73,000 this year. Consequently, the actual rate cut might elicit only a tepid response from the market. What's likely to be more important is the context in which any interest-rate reduction takes place. A stimulative effect on asset prices is likely to be more pronounced if a cut comes at a time of low inflation and a thriving economy. One that occurs amid signs of economic fragility might convey a negative signal, prompting investors to rotate money out of riskier assets and into safer ones such as government bonds. "If the Fed cuts rates solely due to inflation concerns in September 2024, it could be short-term bullish for bitcoin," Markus Thielen, founder of 10x Research, said in a note shared with CoinDesk. "However, if growth concerns drive the cut, either in September or later, bitcoin might face significant selling pressure." Historically, bitcoin has gained the most when the Fed pauses its cycle of rate increases, Thielen said. The arrival of the first cut has typically met with a tepid response. "During the Fed's pause from rate hikes until July 2019, bitcoin experienced explosive growth, returning +169%. Following a seven-month pause in 2019, the Fed cut interest rates, initiating a steep rate-cutting cycle. Initially, bitcoin responded positively, rallying +19% within a week after the July 31, 2019, rate cut. However, two weeks later, Bitcoin was back to flat," Thielen said. Thielen added that the rate cuts in the second half of 2019 were due to economic uncertainties and weighed over BTC's price. The cryptocurrency's price fell 33% in the second half of the year, CoinDesk data show. U.S. stocks show a similar pattern. "The arrival of a Fed rate cut cycle has tended to coincide with a sizable stock-market drawdown,” Austin Pickle, a strategist at Wells Fargo Investment Institute, said last month, according to MarketWatch. “Since 1974, the average drawdown has been roughly 20% over 250 days following the first Fed rate cut.” Pickle added that the stock market would suffer if the Fed is forced to cut rates in response to macro weakness. That means crypto traders should be watchful of signs of weakness in the U.S. economy. According to Fidelity's business cycle tracker, the U.S. economy was in the late stage of expansion at the end of the second quarter. Leading indicators like new orders for consumer goods and materials, consumer sentiment and building permits signaled weakness ahead. Should the weakness become more pronounced in coming months, a rate cut will do little for risk assets, including BTC. https://www.coindesk.com/markets/2024/07/12/the-bullish-fed-rate-cut-play-in-bitcoin-is-not-as-straightforward-as-you-think/
2024-07-12 09:30
The investment was led by Peak XV Partners with contributions from Valor Capital Group and Jump Trading Group. Partior is a joint venture between DBS, JPMorgan and Standard Chartered aimed at establishing unified blockchain-based interbank payment rails for instant clearing and settlement. Using blockchain-based technology to expedite such banking processes is now fairly commonplace. Partior, a blockchain payment network backed by banking giants JPMorgan (JPM), DBS (D05) and Standard Chartered (STAN), has raised $60 million in Series B funding. The investment was led by Peak XV Partners with contributions from Valor Capital Group and Jump Trading Group, according to an emailed announcement on Friday. JPMorgan, Standard Chartered and existing investor Temasek also joined the round. Partior is a joint venture between DBS, JPMorgan and Standard Chartered aimed at establishing unified blockchain-based interbank payment rails for instant clearing and settlement. The new capital will be used to expand Partior's capabilities in intraday foreign-exchange (FX) swaps and cross-currency repurchases. Using blockchain-based technology to expedite such banking processes is now fairly commonplace. JPMorgan's Onyx network has settled hundreds of billions of dollars of transactions since going live a few years ago. Last month, Fidelity used Onyx to tokenize shares in a money market fund. Read More: Don't Tell Anyone, but Private Blockchains Handle Over $1.5T of Securities Financing a Month https://www.coindesk.com/business/2024/07/12/partior-blockchain-payment-network-backed-by-jpmorgan-and-dbs-raises-60m-series-b/
2024-07-12 09:08
The bitcoin miner’s shares slumped yesterday after a Culper Research report said the site was unsuitable for artificial intelligence and high-performance computing. Iris Energy shares slumped 14% after a short seller said the company's Childress site was unsuitable for hosting artificial intelligence or high-performance computing. Bernstein notes that the company never said it intended to retrofit the bitcoin mining site to AI. Iris Energy (IREN) shares fell almost 14% yesterday following the publication of a short-selling report by Culper Research that noted the unsuitability of the bitcoin miner's Childress, Texas site for artificial intelligence (AI) or high-performance computing (HPC). The company, however, has committed most of the planned expansion at the site to bitcoin (BTC) mining, broker Bernstein said in a research report, and the existing power and data center infrastructure there work very well for that purpose. “Iris Energy has not claimed it intends to retrofit its bitcoin mining site in Childress to AI,” analysts led by Gautam Chhugani wrote. The broker also estimates 65% of the company's value is derived from bitcoin mining and the remaining 35% from AI/HPC. Bernstein said it completely disagrees with the view that the mining activity is valueless. Potential AI upside for Iris Energy comes mostly from the 1.4 gigawatt West Texas site that has a power interconnect, the report said, and the opportunity lies in the monetization of the land and the power supply. The broker said Iris Energy’s current $1 million/megawatt capital expenditure metric is a reflection of bitcoin mining capex. Comparing it to AI/HPC capex is not meaningful. The company’s valuation is in line with other bitcoin miners such as CleanSpark (CLSK) and Marathon Digital (MARA), whose entire valuation is driven by mining, the report said. Bernstein initiated coverage of Iris Energy earlier this week with an outperform rating and $26 price target. The shares closed at $11.20 on Thursday. https://www.coindesk.com/markets/2024/07/12/iris-energy-has-committed-most-of-childress-site-to-expansion-of-bitcoin-mining-bernstein/
2024-07-12 05:58
Bitcoin could not topple a key resistance on Thursday despite positive U.S. inflation report. BTC bulls failed to penetrate critical resistance after positive U.S. inflation data, leaving the doors open for more losses. Downside may be limited as recent supply overhang from Germany's Saxony state has exhausted. Fed rate cut bets, FTX repayments may offer support, according to a prime broker. Thursday was a significant day for crypto markets as bitcoin (BTC) failed to surpass a key resistance despite a positive U.S. inflation report, maintaining the downward trajectory observed since early June. On Thursday, after the U.S. reported the first drop in consumer prices in four years markets quickly lifted the Fed rate cut bets, sending higher-risk assets, including BTC. For a moment, it appeared that bitcoin bulls would establish a foothold above the descending trendline, characterizing the sell-off from June highs near $72,000. Such a move would have signaled an end to the pullback and could have drawn in momentum traders, as discussed in Thursday's First Mover America. However, bullish hopes were quickly dashed as prices turned lower from the trendline resistance, falling below $57,000 early today. The latest bull failure, observed against the backdrop of positive macro news flow, might mean more price weakness ahead. A similar trendline rejection on July 1 proved costly, deepening the sell-off. Still, there is hope for the bulls. The daily chart MACD histogram, an indicator used to gauge trend strength and changes, is teasing a crossover above zero, a sign of an impending bullish shift in momentum. The supply overhang from Germany's Saxony state, which catalyzed the price drop early this month, is nearly running dry. Besides, it remains uncertain what percentage of the 95,000 BTC, which represents a portion of the total 140,000 BTC scheduled to be distributed to Mt. Gox's creditors, will be liquidated. "The prospect of some of the $16.3 billion FTX repayment over the next months translating into buying pressure, the increasingly positive stance toward crypto on both sides of the aisle, and the potential of an interest rate cut in September benefiting risk assets more generally should embolden medium- and long-term bulls," crypto prime broker FalconX said in a newsletter Friday. FalconX added that potential selling by Mt. Gox's creditors may have a different profile than Saxony's sales. "For example, maybe more flow will go to exchanges versus professional liquidity providers, or maybe a more diversified holder base will out sales over time," FalconX noted. https://www.coindesk.com/markets/2024/07/12/bitcoin-bulls-fail-again-but-there-is-still-hope/
