2024-04-08 08:18

Broader crypto markets remained little changed over the weekend, but some Ordinal ecosystems saw gains as a proxy for BTC. Bitcoin rose above $71,000 in Asian afternoon hours for the first time since April 1 ahead of the reward halving expected later this month, boosting Ordinal and BRC-20 ecosystem bets. The halving will reduce the rate at which new coins are created, an event that has historically preceded a bull market for the cryptocurrency. Bitcoin topped $71,000 in Asian trading hours Monday ahead of the reward halving expected on April 20, giving some Ordinal and BRC-20 ecosystem bets a boost even as the broader crypto market remained little changed. BTC rose 2% in the past 24 hours taking it to the highest since April 1, data from CoinGecko shows. The broad-based CoinDesk 20, an index of the most liquid tokens excluding stablecoins, was up 0.43%. When halving occurs, the reward for mining transactions is cut by 50%, reducing the rate at which new coins are created and thus lowering the available new supply. This has historically preceded a bull market for the token. The current block reward is 6.25 BTC, and will drop to 3.125 BTC after the halving. Open interest on BTC-tracked futures has maintained record-high levels at above $25 billion for a few weeks, indicative of leveraged bets on more expected price volatility. Some Bitcoin ecosystem tokens and projects rose as traders expect a BTC rally following the halving event. Such bets are a way to gain proxy exposure to bitcoin's rise without using futures products or leverage. Data shows Ordinals volumes were higher than those of usual leaders Ethereum and Solana in the past week, led by NodeMonkes and Pups. Non-fungible token (NFT) buying and selling activity declined 95% across all networks in the same period, suggestive of an isolated rise in Ordinals. The BRC-20 category of tokens gained nearly 6% in the past 24 hours. Infrastructure token Multibit (MULTI) rose 22%, while meme coins pepe (PEPE), alex (ALEX) and pizza (PIZA) rose as much as 60%. PUPS, the token of the Pups Ordinal, lost 22% as traders took profits after a 500% jump over the weekend. Ordinals are a way to embed data into the Bitcoin blockchain by inscribing references to digital art into small bitcoin-based transactions. The BRC-20 standard (BRC stands for Bitcoin Request for Comment) was introduced last year to allow users to issue transferable tokens directly through the network for the first time. https://www.coindesk.com/markets/2024/04/08/bitcoin-tops-71k-ordinals-bets-rise-ahead-of-halving/

2024-04-08 06:31

"HashKey Group aims to establish one of the world's largest cluster of licensed exchanges within the next 5 years, surpassing all current regulated exchanges," said Livio Weng, COO of HashKey Group. The HashKey Group has launched an exchange after winning a license to operate in Bermuda. For now, the exchange will offer spot trading services for 21 digital assets, including BTC, ETH, USDT, and USDC. The HashKey Group, an Asian firm offering digital asset services, has launched the HashKey Global exchange after being granted a license in Bermuda to offer licensed digital asset trading services, it announced on Monday. “HashKey Group aims to establish one of the world’s largest clusters of licensed exchanges within the next 5 years, surpassing all current regulated exchanges,” said Livio Weng, COO of HashKey Group. The firm, which is headquartered in Hong Kong and has operations in Singapore and Tokyo, achieved unicorn status earlier this year after a fundraising round that helped it “nearly” meet its $100 million fundraising target. For now, HashKey Global will offer spot trading services for 21 digital assets, including bitcoin (BTC), ether (ETH), Tether’s USDT, and Circle's USDC, with futures trading product services set to be launched within weeks. Read More: Hong Kong Crypto Exchange HashKey Becomes Crypto Unicorn After $100M Raise Sam Reynolds contributed to this report. https://www.coindesk.com/policy/2024/04/08/hashkeys-crypto-exchange-goes-live-after-winning-license-in-bermuda/

2024-04-05 19:43

The SEC accused Kwon and his company of misleading investors about the stability of their so-called “algorithmic stablecoin” Terra USD. NEW YORK – A Manhattan jury has found Terraform Labs and its co-founder, Do Kwon, liable on civil fraud charges brought by the U.S. Securities and Exchange Commission (SEC) in connection with the $40 billion implosion of the Terra ecosystem in May 2022, according to a Friday statement from the SEC. The SEC accused Terraform Labs and Kwon of misleading investors about the stability of its so-called “algorithmic” native stablecoin, Terra USD (UST), and the use cases for the Terra blockchain. The jury delivered the verdict on Friday, just two hours after lawyers for both the SEC and the defendants gave their closing arguments at the end of the nine-day trial in New York. Jurors agreed with the SEC that Kwon and, under his direction, Terraform Labs deceived everyday investors about the nature of the supposed algorithm that kept UST pegged to the U.S. dollar. Though Kwon insinuated that it could “automatically self-heal” in the event of a de-peg, it actually relied on continuous trading activity, including large-scale trading done by institutional investors. “We are pleased with today’s jury verdict holding Terraform Labs and Do Kwon liable for a massive crypto fraud,” Gurbir Grewal, SEC Division of Enforcement director, wrote in a statement. “The defendants caused devastating losses for investors and wiped out tens of billions of market value nearly overnight. For all of crypto’s promises, the lack of registration and compliance have very real consequences for real people. As the hard work of our team shows, we will continue to use the tools at our disposal to protect the investing public, but it is high time for the crypto markets to come into compliance,” Grewal added. SEC attorney Laura Meehan told the jury during her closing arguments on Friday that one of those institutional investors – Jump Trading – had made a secret deal with Kwon and Terraform Labs to rescue UST during a de-pegging event in May 2021, stepping in and buying millions of dollars of UST off-chain to reinflate its value and bring it back to parity with the dollar. Meehan added that, after Jump’s intervention, Kwon and his company intentionally kept the firm’s rescue mission quiet, wanting instead to use the re-pegging as evidence of the algorithm’s effectiveness. Lawyers for Terraform Labs and Kwon attempted to wave Jump’s involvement away as a regular part of their relationship with Terraform Labs as a market maker. They said that all “reasonable” investors knew that the algorithm that kept UST pegged to the dollar was not a “magical machine” or “computer that functioned on its own” but instead, minting and burning done by market participants. The jury, as evidenced by their verdict, did not agree. A spokesperson for Terraform Labs told CoinDesk: “We are very disappointed with the verdict, which we do not believe is supported by the evidence. We continue to maintain that the SEC does not have the legal authority to bring this case at all, and we are carefully weighing our options and next steps.” Kwon was not in Manhattan for his civil trial; instead, he was stuck in Montenegro, where he had been since his arrest in March 2023. Kwon was caught en route to Dubai attempting to use fake Costa Rican travel documents after months on the run. Kwon also faces criminal charges in the U.S. and his native South Korea, which are tied to the implosion of the Terra ecosystem. Both countries are currently vying for his extradition, but his final destination remains unclear as Montenegro's Supreme Court weighs the competing requests. https://www.coindesk.com/policy/2024/04/05/new-york-jury-finds-do-kwon-terraform-labs-liable-for-fraud-in-sec-case/

2024-04-05 19:19

The company in February got permission from a New York bankruptcy court to sell approximately 36 million shares of Grayscale's Bitcoin Trust. Genesis has sold its shares of Grayscale Bitcoin Trust (GBTC) and used the proceeds to buy 32,041 bitcoins The bitcoins are worth $2.2 billion at today’s prices Bankrupt crypto lender Genesis has completed the sale of its Grayscale Bitcoin Trust (GBTC) shares and used the proceeds to purchase 32,041 bitcoins, according to court documents filed Friday. The sale of GBTC shares was completed on April 2, the documents show. On Feb. 15, Genesis received permission from a New York bankruptcy court to sell the nearly 36 million shares in GBTC, as well as additional shares in two Grayscale Ethereum trusts. At the time of the application, lawyers for the estate valued the Grayscale shares at a collective $1.6 billion – nearly $1.4 billion in GBTC, $165 million in Grayscale Ethereum Trust, and $38 million in Grayscale Ethereum Classic Trust. At today’s price of around $67,500, the bitcoin purchased with the proceeds of the GBTC shares alone are worth nearly $2.2 billion. As for what Genesis will do with its large bitcoin stack, initial plans are for the tokens to be distributed to its Gemini Earn creditors. https://www.coindesk.com/business/2024/04/05/genesis-completes-redemption-of-gbtc-shares-buys-32k-bitcoins-with-proceeds/

2024-04-05 18:39

The much stronger-than-expected inflows into the spot bitcoin exchange-traded funds (ETFs) have already caused concerns about a supply shock in the bitcoin market, potentially taking away some of the impacts of the halving. Bitcoin's upcoming halving might not have as much of an impact on the price of bitcoin as seen in previous cycles, experts predict. This is because the spot bitcoin exchange-traded funds (ETFs) have already pushed bitcoin to new highs as pressure on supply strengthened. Nevertheless, the long-term effects on both the price of bitcoin and subsequently flows into the ETFs will be positive. Bitcoin's (BTC) halving - which is often seen as a bullish catalyst for the price - may not be as positive as the market thinks, thanks to the approval of spot exchange-traded funds (ETF). Halving, which occurs every four years, cuts bitcoin's supply growth by half, historically causing upward pressure on the price of the largest digital asset. The previous halving cycles pushed bitcoin to new highs, and this time, strong demand from the spot ETF may add even more fuel to the rally. “If we look at demand generally since the ETFs have launched, it has created tremendous supply shock already,” said Brian Dixon, CEO of investment firm Off the Chain Capital. “Once the halving occurs, and that supply is further reduced, it's only logical to think that the price will appreciate.” On the surface, that may be the case as the demand from the funds has been significantly more than the 900 new BTC that are mined daily. And when that supply gets cut in half, it might create an even bigger pull on the prices. However, it might not play out the same way this time. The price of bitcoin had rallied 46% since Jan. 11, when the spot ETFs started trading in the U.S. The demand from these funds has been so strong that the price of the digital asset rallied to a new all-time high to keep up with the onslaught of bitcoin purchases. But the market may have gotten a bit ahead of itself in the hype. “This is the first time in which bitcoin broke its all-time highs before the halving, so there is a little bit of a concern that the ETFs have pulled demand forward and that maybe we're going to linger where we are for a little bit," said David Lawant, Head of Research at FalconX. Anthony Anderson, founder and CEO of Param Labs and Kiraverse, echoed this sentiment. "Bitcoin ETFs preempted the impact of halving on supply by massively acquiring BTC since the beginning of the year." Also, halving might not affect the ETF flows either due to the already strong demand from the investors, at least not in the short term, according to Bloomberg Intelligence's ETF analyst James Seyffart. "We know many miners use OTC desks to offload their BTC and the ETF issuers also use OTC desks to obtain their Bitcoin as flows come into the fund. So theoretically the potential halving of miner bitcoin sales could mean that ETF inflows will have a greater impact on the underlying market. But for the last few months the ETF inflows have vastly exceeded anything the miners provided from operations," he said. "So if it does have an impact it’s unlikely to be anything extremely impactful in my view," Seyffart added. This is not to say that halving won't be a significant catalyst for bitcoin and the ETF flows in the long term. After all, the success of the ETFs seems to be closely correlated to the price of BTC and vice versa. The halving may even accentuate the appeal of bitcoin as an asset class to institutional investors. “I think the halving is going to be one of the best things for bitcoin since the ETFs launched,” said Bob Iacchino, co-founder of analytics firm Path Trading Partners. “At its core is an inflation protection mechanism and inflation is ramping back up.” In fact, the hype around halving might help bitcoin bring it in front of many investors looking for alternative assets to hedge against the global macro volatility. "This [Halving] is happening at a time when folks are somewhat queasy about the risk that Bitcoin hedges against," said Lawant, pointing out that many investors are starting to pay more attention to how to protect their portfolio against any significant change in global economy and having spot ETF and an asset class with shrinking supply "would be positive for ETF flows." This supply shortage might also lead to a longer-term impact on the ETF flows as it will impact bitcoin's "marginal supply into perpetuity," said Seyffart. He added that, even though the impact of the marginal supply from ETF inflows in the first three months has been much higher than the halving can have, the slashing of the supply of BTC is "permanent and goes into perpetuity." Whatever the case may be, the market may need to brace for volatile short-term trading for bitcoin and perhaps for the ETF flow after the halving, said Anderson, noting that in the long term, net flows for the funds should come in at a similar pace that is seen currently. https://www.coindesk.com/markets/2024/04/05/did-strong-bitcoin-etf-demand-kill-halvings-potential-bullish-rally/

2024-04-05 17:56

The proposal, introduced in February, could harden Ethereum's native cryptocurrency, ether (ETH), as a form of money – by reducing the inflation of new supply. But some members of the community say if it's not broke, don't fix it. The Ethereum Foundation researchers' original goal was partly to keep the liquid-staking industry's dominance from growing even further – by reducing the incentives for new stakers. But the proposal has led to pushback from some quarters of the community, who question whether the change is needed, or if these sorts of manual adjustments can succeed in addressing the desired changes in market demand. The discussion also has prompted some observers to wonder aloud if the Ethereum Foundation, where Vitalik Buterin works, wields too much influence over the decentralized network. Earlier this year, a pair of Ethereum Foundation (EF) researchers put forth a proposal to reduce the pace of new issuance of ether (ETH) tokens. It was part of a concerted plan to reduce incentives for new stakers – the investors who lock cryptocurrency into the blockchain as a way of helping to secure the network. The freshly minted ETH is a crucial component of the rewards these investors hope to receive, in the form of staking yields. As the researchers' thinking went, there's already enough stakers to provide effective security for the blockchain, and in fact any additional increases in the level of participation could enable the unwanted dominance of fast-growing third-party staking platforms like Lido. A side benefit of the proposed changes would be to harden ether as a form of money, since the total supply of the cryptocurrency wouldn't grow as quickly – effectively tapering ether's inflation rate. Now, though, some members of the community are pushing back, questioning whether there's really a need to change the tokenomics of ether and, in the extreme, whether the Ethereum Foundation plays an outsize role in influencing code upgrades on the decentralized network. The proposal was initially introduced in February by Ansgar Dietrichs and Caspar Schwarz-Schilling, both researchers at the EF. It suggests setting the blockchain's parameters so that the annual issuance of new ETH would not exceed 0.4% – a step change lower than the current effective limit of 1.5%. The big idea is that top Ethereum researchers are satisfied with the number of stakers already working to secure the network, so it might make sense to reduce the incentives for newcomers. The change would also avoid extra dilution for ETH investors. The current issuance rate "dilutes ETH holders beyond what is necessary for security," the researchers wrote. They estimated that the proposal would reduce ETH staking yields by nearly a third. Some members of the Ethereum community argue that the proposal is being rushed ahead without enough time for outside feedback. Viktor Bunin, a protocol specialist at Coinbase Cloud, wrote on the social-media platform X, “If it's not broke don't fix it.” Reduction in ETH staking yield ETH staking is the main way the Ethereum network stays secure: Ethereum's "proof-of-stake" consensus model lets users deposit ("stake") ETH with the network in exchange for yield, and to help run the chain. The substance of Dietrichs and Schwarz-Schilling's concern is that too many ETH tokens are getting staked with the network via third-party liquid staking services like Lido – crypto protocols that stake on behalf of users, and then issue derivative assets called "liquid staking tokens" (LSTs) representing their users' underlying deposits. The EF researchers say they're concerned that LSTs like Lido's stETH token – the most-traded asset on Ethereum other than the ETH token itself – could eventually replace the blockchain’s native currency as the network's de facto money, making the entire system less secure. Ethereum's security model needs ETH to be valuable in order to work, and a chief concern driving the new proposal is that if the cryptocurrency were to fall behind LSTs, it could go down in price relative to other assets. Mike Neuder, another researcher at the EF, expanded on the initial proposal by explaining that, as “real yield from staking goes to zero," stakers will need to "rely on exogenous rewards for profitability.” Reducing the ETH issuance rate could enhance Ethereum's economic model by making ETH scarcer, potentially increasing its value. What is the role of the Ethereum Foundation? Some community members, however, are pushing back on the argument that changing the tokenomics of the blockchain will improve Ethereum’s economic model. Jon Charbonneau, co-founder at crypto investment firm DBA, wrote on X that “these tweaks try to solve an unsolvable problem of fundamental tradeoffs in PoS.” PoS stands for "proof-of-stake," which is the core process or "consensus mechanism" used to secure the blockchain. Paul Dylan-Ennis, a lecturer and assistant professor at the University College Dublin School of Business, wrote that “it seems to me it's not really issuance that is at stake, so much as people have a sense that EF-associated devs and researchers appear to have an outsized power.” He added that “they are not engaging in the appropriate level of 'rough consensus' from the wider set of stakeholders.” The skepticism elicted responses from key figures within the Ethereum ecosystem, and at the Ethereum Foundation specifically. Notably, Vitalik Buterin, the influential co-founder of the Ethereum blockchain, is one of three members of the executive board of the Ethereum Foundation, according to its website. The organization is described as a "non-profit that supports the Ethereum ecosystem," and part of a "larger community of organizations and individuals that fund protocol development, grow the ecosystem and advocate for Ethereum." Tim Beiko, protocol support lead at the foundation, pushed back on Dylan-Ennis’ commentary, arguing that “it's pretty empirically untrue that 'core devs' or 'the EF' are uncontested re: governance. this current conversation is a clear example.” "Core devs" is shorthand for the broader, group of developers – drawn from multiple companies and organizations, as well as individuals – who participate in regular discussions over the network's rules, code, upgrades and strategy roadmap. Beiko added that: “I think core devs + researchers generally treat ethresearch+ethmag as a place to post WIP ideas/proposals, whereas the broader community tends to perceive it as a place where the Official Roadmap gets shared after it's ~final.” Dietrichs, the co-author of the initial proposal, responded that the "intention was purely to propose this change for consideration to the community." “Of course any change to such a sensitive part of the protocol requires broad community buy-in," Dietrichs wrote. "We tried to be clear about that from the beginning, but could certainly have done a better job.” https://www.coindesk.com/tech/2024/04/05/ethereum-foundation-researchers-proposal-to-slow-eth-issuance-draws-pushback/