2024-03-15 08:01

The Foundation first said in December it would invest in meme coin as part of a digital culture drive. Meme tokens are quickly moving from joke coins to a sector that represents the digital culture of any blockchain – with major foundations now directly investing in the growth of such tokens. Avalanche’s first picks are dog-themed kimbo (KIMBO), chicken-themed Coq Inu (COQ), gecko-themed Gecko (GEC), technology joke token TECH, and Avax has no chill (NOCHILL). Avalanche Foundation, a non-profit that maintains the Avalanche blockchain, on Thursday said it had deployed capital into five Avalanche-based tokens based on certain criteria and that it intended to continue such investments in the future. The picks are dog-themed kimbo (KIMBO), chicken-themed Coq Inu (COQ), gecko-themed Gecko (GEC), technology joke token TECH, and Avax has no chill (NOCHILL). These tokens were issued in the past few months and saw daily cumulative trading volumes of millions of dollars. The mem coins jumped as much as 60% after Avalanche’s disclosure, beating a general market-wide drop. DEXTools data further shows a bump in trading volumes on Avalanche tokens alongside a rise in the issuance of new meme tokens, likely in hopes of a new cult becoming the next Foundation pick. Following the disclosure, volumes on the Avalanche exchange Trader Joe grew to $65 million on Thursday from $53 million on Wednesday, although these volumes include all tokens. Avalanche referred to these meme tokens as community coins. “Community coins have become vital Web3 touchstones today. They represent the fun, spirit, uniqueness, and interests of diverse crypto communities,” it stated. COQ was among Avalanche’s runaway meme hits in December amid a meme coin frenzy. A single trader acquired just over $450 worth of COQ shortly after its issuance and managed to turn it into over $2.5 million in a few weeks, with thousands of hopeful memes deployed on the network later on to emulate COQ’s apparent success. Meme coins are often considered a scammy part of the market among blockchain purists, but the success of this niche—led by investments from prominent blockchain teams—could be starting to change the stigma associated with investing in such tokens. https://www.coindesk.com/markets/2024/03/15/avalanche-foundation-snaps-up-kimbo-coq-and-three-other-tokens-as-first-meme-coin-investment/

2024-03-15 07:33

The 90-day and 52-week correlation between bitcoin and Nasdaq-listed chip maker Nvidia is well above 0.80. The 90-day and 52-week correlation coefficient between bitcoin and Nasdaq-listed chip maker Nvidia has risen above 0.80. The positive correlation is noteworthy as several analysts believe the surge in NVDA represents an AI bubble that could soon burst. Bitcoin (BTC) continues to move in tandem with Nvidia (NVDA) shares as some analysts question the surge in the Nasdaq-listed chipmaker’s valuations. The leading cryptocurrency by market value has pulled back over 8% from Thursday’s record high of $73,798. However, prices are still up 60% year-to-date, CoinDesk data shows. Nvidia has pulled back 9% from its lifetime peak of $974 but still boasts a year-to-date gain of 77.5%. In five years, bitcoin’s market capitalization has jumped to $1.43 trillion from $70 billion. Similarly, Nvidia’s market value has increased to over $2 trillion from around $100 billion. The growing demand for Nvidia processors from ChatGPT and other generative artificial intelligence (AI) projects has been primarily responsible for the surge in the chip makers’ valuations. The 90-day correlation coefficient between the two has risen to 0.86, the highest since May 2023, having flipped positive in November, according to charting platform TradingView. The 52-week correlation has been consistently positive since July 2020 and has now risen to 0.88, the highest since January 2023. A coefficient of over 0.80 indicates that bitcoin and NVDA are highly correlated and tend to move in the same direction. The statistical relationship is noteworthy, as some market observers, including investment management firm GMO, worry that the AI frenzy is similar to the dot-com bubble burst in 2000. The launch of ChatGPT in December 2022 helped raise general awareness about artificial intelligence, and the subsequent love affair with AI stocks represents a “bubble within a bubble,” which could start to deflate,” GMO’s Chief Investment Strategist Jeremy Grantham explained in a paper published on Monday. Both bitcoin and Wall Street’s tech-heavy Nasdaq index bottomed out in December 2022. “Every technological revolution like this [AI] – going back from the internet to telephones, railroads, or canals – has been accompanied by early massive hype and a stock market bubble as investors focus on the ultimate possibilities of the technology, pricing most of the very long-term potential immediately into current market prices,” Grantham noted, calling AI a bubble. “And many such revolutions are, in the end, often as transformative as those early investors could see and sometimes even more so – but only after a substantial period of disappointment during which the initial bubble bursts,” Grantham added. Meanwhile, strategists at Citi said AI is the bubble but could last into 2025, according to Investing.com. https://www.coindesk.com/markets/2024/03/15/bitcoins-correlation-to-nvidia-strongest-in-over-a-year/

2024-03-15 04:19

Over $100 million in bitcoin long positions have been wiped out as the world's largest digital asset fell from $70K. Bitcoin dropped to $67,000, tracking overnight losses in gold and Nasdaq. Fading Fed rate cut bets likely catalyzed the drop, one analyst said. Broader uptrend to remain intact while demand for the spot BTC ETFs persists, QCP Capital said. The price of bitcoin {{{BTC}}} fell to as low as $67,000 during Friday's Asian trading hours, down 7%, before recovering to around $68,500. The CoinDesk 20 index, a measure of the largest and most liquid digital assets, fell 6%. Data from CoinGlass shows that over $100 million in long positions have been wiped out over the last 12 hours, while $167 million in longs have been liquidated over the last 24 hours. Other assets like gold and Wall Street's tech-heavy index Nasdaq have also come under pressure this week. Some analysts describe BTC's pullback from record highs as a typical bull breather seen after sharp uptrends. "The recent strong [U.S.] CPI data has further cooled the expectation of a Fed rate cut, and gold prices have also tumbled. The recent surge in bitcoin prices has been too fast for the market to price correctly, so the a current correction is expected," Greta Yuan, Head of Research at VDX, a Hong Kong-licensed exchange said in a note. Adrian Wang, Founder and CEO of Metalpha, said that market could be adjusting to uncertainties ahead of the next month's mining reward halving. "The historical trading volume of Blackrock’s Bitcoin ETF has caused some unease in the market, with some stakeholders fearing that bitcoin's price will surge too much too soon and could experience a flash crash," Wang said in an email interview with CoinDesk. "The price correction indicates the market is adjusting its expectations on bitcoin given the uncertainties presented by the halving event as well." That said, dips are likely to be fleeting, according to Singapore-based QCP Capital. "It is very difficult for these short sell-offs to put a lasting dent on the uptrend as long as the daily BTC spot ETF demand remains strong," Singapore-based QCP Capital said in a note published on Telegram Friday morning, adding that some volatility is expected over the weekend as the market prepares for the release of Federal Open Market Committee minutes next week. "[QCP]'s desk has seen strong demand for year-end BTC 100-150k calls," it continued in the note. A prediction market contract on Polymarket gives a 38% chance that BTC will close above $70,000 by noon Friday in the U.S. Eastern Time, down from a high of 90% earlier this week. https://www.coindesk.com/markets/2024/03/15/bitcoin-tumbles-to-67k-as-asia-begins-trading-day/

2024-03-15 00:43

The Central American nation moved $400 million in BTC into a cold storage wallet this week. El Salvador moved more than 5,000 BTC into a cold wallet this week. The disclosure by President Nayib Bukele nearly doubles the country's known stash of the digital asset. Bitcoin-forward Central American nation El Salvador this week moved $400 million worth of bitcoin (BTC) – "a big chunk" – into a cold wallet, according to its President, Nayib Bukele. In a post on X (formerly Twitter), Bukele referred to the new setup as "our first #Bitcoin piggy bank." El Salvador stored the cold wallet "in a physical vault within our national territory," he said, including a photo of a wallet that held 5,689.68 BTC, worth $411 million at Thursday's prices. A bitcoin treasury of that size places El Salvador's holdings far higher than previously believed. Even on Thursday, public trackers place the nation's trove at less than 3,000 BTC ($205 million). Earlier this week Buckle teased that the country was not simply buying BTC but also getting it by selling passports, through currency conversions for businesses, from mining and from government services. The revelation represents the first time that Bukele has tied his nation's holdings to a specific address. He previously relied solely on social media posts to make claims about the size of his trove, providing occasional updates whenever El Salvador bought more. El Salvador became the first country to purchase bitcoin as a treasury asset in September 2021, when a single coin cost around $52,000. On Thursday BTC prices were north of $72,000, though in the past 24 hours the asset has traded above $73,000 and as low as $68,000. The on-chain transfers into El Salvador's cold wallet occurred over the past week, though the majority arrived Thursday. Most of the bitcoin held in that wallet came from Bitfinex, according to Arkham Intelligence. https://www.coindesk.com/policy/2024/03/15/el-salvador-has-thousands-more-bitcoins-than-previously-known/

2024-03-14 20:43

The issuer of the VanEck Bitcoin Trust this week dropped its management fee to zero for a limited time in an attempt to attract more capital to that fund. With the deadline for a decision on the approval of a spot ether ETF by the U.S. Securities and Exchange Commission (SEC) approaching, industry experts are weighing the potential uptake of such a fund. Some say investing in an ether ETF wouldn’t make sense as such funds won’t likely allow staking reward distribution. Investors, they argue, would thus be better off buying and staking their own ether (ETH). But VanEck, the global investment firm whose Bitcoin Trust (HODL) is among the 10 spot bitcoin ETFs that became available earlier this year, thinks an ether ETF could attract huge demand. “From a market perspective, part of me believes that the market size for a spot ETH ETF is potentially as big if not bigger than the spot bitcoin ETFs,” said VanEck Portfolio Manager Pranav Kanade. That would be a tall task given the more than $10 billion of net inflows into the spot BTC products in only about two months of availability. “The world of investors who are looking for cash producing assets is massive and ETH obviously generates fees that goes to the token holders," explained Kanade. "Even if you don't have an ETF that can offer staking as a part of it, it's still a cash producing asset, so I think ETH could make more sense as an asset to more people than Bitcoin does.” As the Ethereum uses a Proof of Stake consensus mechanism, holders of ether can earn yield by "staking" or putting their tokens to work on the blockchain. On Coinbase, for instance, ETH stakers can earn about a 3% yield. Still, the odds of SEC approval of spot ETH products are far from assured. Analysts at Bloomberg recently lowered the chances of a regulatory green light – even without the staking aspect – to just 30% For his part, Kanade places the odds at more like 50%. HODL fee cut VanEck, which has over 68 ETFs under its umbrella, earlier this week temporarily cut the management fee on its Bitcoin Trust from 0.2% to 0%. The 0% remains in place until March 2025 or the fund gets up to $1.5 billion in AUM.. “Initially we were one of the few that did not do a short term waiver, we came out very aggressively at a low fee right from the start and I had always thought that that was the right level to be at but I think our thinking was that historically with ETF launches, the short term waivers have not gone over that well and frankly, they can be a little confusing, and maybe have a lack of transparency as to how they work,” said Kyle DaCruz, director of digital assets products at VanEck. “But we listened to our investors and it’s clear that that was important to investors in the market so we shifted," he continued. “Relative, we’d like to do better and part of that initiative is that fee waiver.” The move so far is an apparent success. In the roughly two months from launch until the fee trimming this week, HODL had attracted about 4,300 bitcoin and just shy of $300 million in AUM. In the handful of days since, the fund has ballooned to more than 7,200 bitcoin and $527 million in AUM. That level places HOLD fifth in AUM among the nine new spot bitcoin ETFs (excepting Grayscale's GBTC), behind BlackRock, Fidelity, ARK/21Shares and Bitwise, and ahead of Invesco/Galaxy, Franklin Templeton, Valkyrie and WisdomTree. Currently, only about 1% of the firm’s AUM is in crypto, but VanEck CEO Jan Van Eck would like that number to be much larger, according to Kanade. “Jan’s aspiration is to have crypto be 15% of the AUM base one day in the future,” he said. “Sooner rather than later.” https://www.coindesk.com/business/2024/03/14/ether-etfs-could-be-bigger-than-bitcoin-etfs-says-vaneck/

2024-03-14 20:40

The SEC charged 17 individuals tied to the scheme that allegedly scammed more than 40,000 victims. The U.S. Securities and Exchange Commission sued 17 individuals tied to an alleged Ponzi scheme that took in $300 million from over 40,000 victims. The defendants, who targeted the Latino community in 10 U.S. states and two other countries, convinced investors that their funds would be invested in crypto and other assets, but weren't, the SEC said in a press release. The SEC charged a total of 17 defendants, two of whom settled. In a statement, SEC Enforcement Director Gurbir Grewal said the scheme promised "life-altering wealth" to victims. "The only thing that CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across 10 states and two foreign countries," he said. "A scheme of that size requires lots of participants, and as today's action demonstrates, we will pursue charges against not just the principal architects of these massive schemes, but all those who further their fraud by unlawfully soliciting victims." The SEC had previously charged Mauricio Chavez and Giorgio Benvenut, the scheme's leaders, in an emergency action last October. Thursday's filing expands the number of defendants and says at least two of them, Gabriel and Dulce Ochoa, continued soliciting investors past last year's action. https://www.coindesk.com/policy/2024/03/14/a-300m-ponzi-scheme-that-targeted-latinos-falsely-claimed-to-buy-crypto-sec-says/