2024-07-11 12:55

The Law Commission said decentralized autonomous organizations appear to fall under existing laws for the time being. Decentralized autonomous organizations (DAOs) don't currently need specific legislation because they look to be subject to existing laws, the Law Commission of England and Wales said. Given the diversity of DAO structures, a single legislative approach is hard to envisage, it said. The Law Commission of England and Wales, which reviews and recommends changes to laws to the U.K. government, said it wasn't recommending setting up a new legal framework for decentralized autonomous organizations (DAOs) because they could fall under existing regulations that require companies to have authorization to operate in the U.K. DAO's could fall under the Financial Services and Markets Act 2000 if they undertake "specified activities" in relation to "specified investments," the independent statutory body wrote in a paper published on Thursday. When governance tokens look like shares, grant voting rights and are issued in exchange for investment into a DAO, then they are regarded as specified investments. Advertising the tokens may fall under promotion rules that prevent unauthorized companies from reaching out to U.K. customers. The legal status of DAOs has recently come under scrutiny and courts in the U.S. are already figuring out how to treat them. According to the commission, differences between DAOs mean they may each be subject to different laws, and a unified legislative approach may not be appropriate. "We do not, at least at this relatively early stage in the development of DAOs, recommend the development of a bespoke legal framework for DAOs in England and Wales," it wrote. "This is largely because there is no consensus on what a DAO is, how it should be structured, or what a DAO-specific entity could or should look like." The public law that applies to a DAO will depend on the type of DAO it is, the report said. Some could be characterized as unincorporated associations, with participants interacting according to the rules set. The people would be liable only for their own actions. In some cases, a DAO may need to pay corporation tax. An international tax framework for DAOs should be considered, the commission said. From a litigation perspective, a "pure" and completely decentralized DAO could still fall prey to a civil action from a third party, an enforcement action by a regulator or prosecution under criminal law, the report summary said. "A smart contract can constitute a legal contract," the report summary added. The commission has previously helped draft legislation to digitize documents that paved the way for distributed ledger technology to be used for trade. Earlier this year it sought views on draft legislation that would label crypto as property. The report also set out that it would be helpful for a body like the Jurisdiction Taskforce, which brings together members of the judiciary, the Law Commission, regulators and other legal professionals, to carry out a fuller analysis of when fiduciary duties might be applied to software developers. https://www.coindesk.com/policy/2024/07/11/dao-specific-legislation-isnt-needed-yet-english-legal-body-says/

2024-07-11 11:04

Key gauge shows that the speculative forth prevalent during the first quarter has dissipated. Key gauge shows that the speculative forth prevalent during the first quarter has dissipated. Speculative washouts mean a healthier market and a potential for a renewed uptick in bitcoin. Bull markets are observed to stall during periods of excessive optimism, only to resume after the speculative froth has been cleared. Capriole Investment's crypto speculation index shows that the speculative excesses prevalent during the first quarter have dissipated, indicating a potential for a renewed bullish price action in bitcoin (BTC), the leading cryptocurrency by market value. The speculation index, which measures the percentage of alternative cryptocurrencies (altcoins) with 90-day returns greater than bitcoin, has stabilized below 10%, down significantly from the January high of nearly 60%. Bitcoin, the leading cryptocurrency by market, hit new record highs above $70,000 in the first quarter and has since cooled to $58,000. As of this writing, more than 14,800 altcoins exist, according to data source Coingecko. Most of these coins are illiquid and struggle to prove their use cases. Hence, altcoins are generally seen as speculative instruments, with volumes closely tied to Google Trends, an indicator of retail investor interest, and altcoin outperformance relative to BTC is seen as a sign of speculative mania. Speculative washouts serve as corrective mechanisms, helping realign asset prices with fundamentals and tempering excessive speculation. Thus, they set the stage for a healthier environment in the long run. That has been the case in the crypto market. Since 2019, a below-10% speculation index has coincided with the beginnings of sharp bitcoin rallies, as observed in the first half of 2019, late 2020, and the second half of 2023. https://www.coindesk.com/markets/2024/07/11/crypto-speculation-index-slide-suggests-bitcoin-bull-market-reset/

2024-07-11 09:06

The Argentina Football Association's ARG is the largest soccer fan token by trading volume, according to CoinMarketCap. Argentina's victory over Canada in the Copa America semi-finals brings cheer to Argentina fan token holders. The token has seen over $20 million in trading volume in the past 24 hours. Defending champions Argentina advanced to the finals of the Copa America soccer tournament on Tuesday, more than doubling the market value of the country's fan token, ARG. According to data source CoinMarketCap, the price of the Argentina Football Association's cryptocurrency has risen 107% to $2.32 since the team's 2-0 victory over Canada, reaching its highest level since May 30, surging over 70% in the past 24 hours alone. Its market value has soared to $27.85 million, the second-highest among soccer fan tokens, but still short of the record $32.4 million reached in the lead-up to the 2022 Qatar World Cup, which it also won. ARG token is also the most heavily traded of the tokens. As of press time, its 24-hour volume stands at $23.57 million, nearly four times more than the Paris Saint-Germain fan token, which is the largest soccer token by market value. The ARG-Turkish lira (ARG/TRY) pair listed on the centralized exchange Paribu accounted for a full 88% of the total volume of the past 24 hours. The ARG-chiliz token (ARG/CHZ) pair listed on Chiliz.net contributed just 0.17% of the global activity. Chiliz.net is the trading platform for all the sports and entertainment tokens partnered with Chiliz ($CHZ) and Socios.com. The Argentine Football Association tapped Socios.com, a fan-engagement platform powered by the Chiliz blockchain, to issue the ARG token in 2021. Token holders can win access to unique team activities, experiences, and VIP services, including meeting the team's players and access to the Estadio Monumental – a football stadium in Buenos Aires, Argentina, known for its rich history. Fan tokens mark the intersection of blockchain and sports, allowing market participants to price in and gauge the financial and economic impact of major sporting events. https://www.coindesk.com/markets/2024/07/11/arg-token-doubles-as-argentina-enters-copa-america-final/

2024-07-11 08:10

Polymarket bettors give a 90% chance that ether ETFs will be approved by July 26. While the supply of ether is rising, the amount that is staked is close to all-time highs, CryptoQuant data shows. Polymarket bettors are assigning a 90% chance to an ether exchange-traded fund being approved in the U.S. by July 26, but there are still several steps that must take place before one can trade. As an ether (ETH) exchange-traded fund (ETF) moves closer to reality in the U.S., the amount of ether staked is nearing a record high, keeping the circulating volume in check even though the total amount of ETH is growing again. "The total number of staked ETH has continued to increase and sits near its all-time high as it stands at 33.3 million ETH or 27.7% of the total supply," Julio Moreno, CryptoQuant's head of research, wrote in a note shared with CoinDesk. The increasing supply of the second-largest cryptocurrency is a sign it has returned to being an inflationary asset, undermining its capability to act as a store of value over time. There are ways to counter this such as staking, which locks ether for a fixed period of time, and burning – or permanently removing from circulation – a portion of the transaction fees paid by users. "ETH supply is growing again, although slowly. But the narrative of ultra-sound money has ended. The total supply is at its highest level since December 11, 2023," Moreno wrote. Moreno also wrote that spot trading volume data shows ether could be as liquid as bitcon (BTC), with ETH spot trading volume being 80%-90% of that of bitcoin in the last few weeks. Data from CoinMetrics, meanwhile, shows that around 12% of ether's supply is being used in smart contracts or bridges that connect between blockchains. Between that amount and the tokens that are staked, roughly 40% of the cryptocurrency is "locked" and not being actively traded. Path to the ETH ETF The race to launch an ether exchange-traded fund (ETF) appears to be heating up, and Polymarket bettors appear to think that they will begin trading before July 26. Recently, Invesco and Galaxy announced they will charge a 0.25% management fee for their proposed spot ether ETFs, slightly higher than VanEck's 0.20%. But before trading can begin, the SEC must provide feedback on the current applications, and issuers need to file final amended forms with fee information and other required details. Over on Kalshi, bettors are giving a 65% chance that ether will outperform bitcoin, but are 95% sure that ether won't hit an all-time high before its larger peer. https://www.coindesk.com/markets/2024/07/11/staked-ether-close-to-all-time-high-as-etf-approval-nears/

2024-07-11 06:46

The data is expected to show a continued progress on the inflation front, cementing the case for Fed rate cuts. Thursday's U.S. CPI updated is expected to offer evidence of continued progress on the inflation front, boosting the Fed rate cut probability. Increased prospects of Fed rate cuts could bode well for BTC's recovery. BTC bulls should watch out for a potential "steepening" of the Treasury yield curve. With the supply overhang from Germany's Saxony state nearly cleared, Thursday's release of the U.S. consumer price index (CPI) report will be pivotal in determining the bitcoin (BTC) market's trajectory. The data due at 12:30 UTC (8:30 ET) is expected to show the cost of living in the world's largest economy rose 0.1% month over month in June after remaining flat in May, leading to a 3.1% rise year over year, according to economists surveyed by Dow Jones. The core CPI, which strips out more volatile food and energy prices, is forecast to have increased 0.2% from May and 3.4% since June last year. If the actual figure matches estimates, it would confirm continued progress toward the Federal Reserve's (Fed) 2% inflation target and set the stage for the bank to begin the much-anticipated rate cut cycle this year. Increased prospects of rate cuts will likely bode well for risk assets, including bitcoin, helping the leading cryptocurrency extend its price recovery from the July 5 lows of around $53,500. CoinDesk data show that the recovery has stalled, with buyers struggling to establish a foothold above the $59,000 mark. "CPI data will be closely watched, with markets expected to react significantly to this release. Analysts' optimistic outlook for late 2024 and 2025 hinges on the FOMC reducing policy rates, as lower rates typically increase liquidity, driving investors towards 'longer-tail' assets like cryptocurrencies," algorithmic trading firm Wintermute told CoinDesk in an email. The inflation rate has slowed dramatically from the high of 9.1% in 2022. Still, in recent months, the Fed has reiterated the need to see further progress on the inflation front before pulling the plug on elevated interest rates. On Tuesday, Fed chief Jerome Powell said the same in his testimony to Congress, while stressing the bank won't wait for inflation to cool to 2% to cut rates. According to the CME's FedWatch tool, since Friday's weak payrolls report, traders have priced about a 70% chance of a Fed rate cut in September and see a rising probability of another cut in December. Focus on bonds The U.S. Treasury yield curve's response to the expected soft CPI release might influence the broader market sentiment, including bitcoin. Slower inflation and increased rate cut bets can boost prices for the two-year note, sending its yield lower. That's because when investors foresee lower interest rates, they are willing to pay a premium for a security with a higher yield in the present. Meanwhile, the yield on the 10-year note will likely stay elevated as markets fear bigger budget deficits under the potential Trump presidency. Republican candidate Donald Trump's odds of winning the Nov. 4 elections have recently increased. The net effect will be a so-called bull steepening of the yield curve, represented by the spread between yields on the 10- and two-year notes. The curve has been inverted, with two-year notes consistently offering a relatively higher yield since mid-2022. According to the CAIA Association, periods of bull steepening, characterizing a fast normalization of an inverted yield curve, have historically occurred during periods of economic contraction and coincided with risk aversion. "Typical bull-steepening periods were: 1990-1992, 2001, 2003, 2008 and 2020, and all were recessionary periods," CAIA said in an explainer. "Equities typically do not fare well during this type of regime, and their performance during these times clearly lags the overall historical average," CAIA added. Noelle Acheson, the author of the Crypto Is Macro Now newsletter, made a similar observation in the July 4 edition, saying, "a sharp steepening has always preceded the beginning of a recession." Acheson added that the curve has recently steepened somewhat due to lingering political uncertainty in the U.S. "It also makes a Trump victory more likely in the interim, which implies a possible inflation uptick driven by tariffs and a flood of issuance to fund the promised tax cuts," Acheson explained. Investment banks like JPMorgan and Citi are betting on the steepening of the yield curve. https://www.coindesk.com/markets/2024/07/11/bitcoin-waits-for-guidance-from-us-inflation-data-bond-market/

2024-07-11 06:29

Both assets are being distributed in an ongoing process to creditors of the defunct Mt. Gox crypto exchange. Here’s how some traders are playing it out. Presto says a market-neutral strategy to profit from the Mt. Gox repayments by betting on bitcoin strength and against bitcoin cash. The strategy stems from the supply/demand dynamics for BTC and BCH due to the distribution of assets worth billions of dollars. Singapore-based trading firm Presto Labs is suggesting clients bet on bitcoin (BTC) strength and against bitcoin cash (BCH) in a market-neutral trade to profit from the ongoing Mt. Gox repayments. Hundreds of millions worth of BTC hit the market last week as defunct exchange Mt. Gox finally began its long awaited repayments to creditors impacted in a 2014 hack. Over $73 million worth of BCH is set to be distributed to traders in the coming months, compared to $9 billion worth of BTC. “The Mt. Gox’s Rehabilitation Trustee plans to distribute multi-billion dollars worth of BTCs and BCHs between July 1st and October 31st, 2024,” Presto market analysts led by Peter Chung told CoinDesk in a note Wednesday. “This can create a shift in supply/demand dynamics in BTC and BCH during this 4-month period, potentially opening up a pair trading opportunity. Pair trading is a trading strategy that involves buying and selling two financial assets simultaneously to profit from their relative price movements. “Our analysis shows that the selling pressure for BCH will be four times larger than for BTC - i.e. 24% of the daily trading value for BCH vs. 6% of the daily trading value for BTC. Long BTC perpetuals paired with short BCH perpetuals is the most efficient market-neutral way to express this view, barring funding rate risk,” Chung added. CoinGecko data shows over $27 billion worth of BTC exchanged hands in the past 24 hours, compared to $180 million of BCH. Presto further assumes that investors who held bitcoin at its earlier stages are likely to be “diamond-handed wealthy Bitcoiners,” and thus more likely to hold part of their repayments instead of selling the asset outright. However, “100% will be the “much weaker investor base” of BCH could see 100% sold in the near term, Presto said. https://www.coindesk.com/markets/2024/07/11/long-bitcoin-and-short-bitcoin-cash-to-benefit-from-mt-gox-repayments-trader/