2023-11-27 09:38

The sales took place as the discount for Grayscale's bitcoin investment vehicle narrowed to its lowest in over two years, a sign of escalating optimism that a spot bitcoin ETF will finally be approved in the U.S. Cathie Wood's ARK Invest sold more shares in Grayscale Bitcoin Trust (GBTC) last week, offloading 163,722 to earn $5.02 million at closing prices while the investment vehicle's discount to its net asset value narrowed to the least in more than two years. The sales took the November total of shares dropped by the Next Generation Internet ETF (ARKW) to 579,077, earning it about $16.9 million based on the relevant day's closing share price. ARK Invest often loads up on crypto-related shares when they have experienced a downward trend and sells them as they look more bullish to bank some profits. The discount shrank to 8.6% on Friday, the lowest since July 2021, in a sign of escalating optimism that a spot bitcoin exchange-traded fund (ETF) will finally be approved in the U.S. Analysts attributed the improvement to Grayscale's meeting with the Securities and Exchange Commission (SEC) about turning the trust into a spot ETF. The discount hit a record low of almost 50% last December. Read More: Grayscale Bitcoin Trust Could See $2.7B of Outflows if ETF Conversion Is Approved: JPMorgan https://www.coindesk.com/markets/2023/11/27/ark-invest-sold-5m-worth-of-grayscale-bitcoin-trust-shares-last-week/

2023-11-27 08:00

Earlier this month, Ripple-owned infrastructure provider Metaco said it was working with banking powerhouse HSBC. News that Metaco, the Swiss digital assets custody firm acquired by Ripple earlier this year, is working with HSBC, one of the world's largest banks, quickly became a reason to be cheerful for many supporters of the U.S. fintech’s ledger protocol, known collectively as the “XRP army.” Named after the cryptocurrency designed to move liquidity around the XRP Ledger used by Ripple, these avid fans interpret HSBC’s choice of custody tech partner as yet another sign that financial institutions will inevitably adopt XRPL and, crucially, the XRP token. The crypto space is ferociously tribal. Token holders want to believe their blockchain of choice will rise to prominence and deliver a windfall – sometimes to a point that defies logic. For instance, the assumption that Ripple’s recent acquisition spurred HSBC’s decision ignores the fact that Metaco had been courting the bank for over 18 months, according to Adrien Treccani, the Swiss custody firm’s CEO. There is, however, an indirect correlation between Ripple protocols and Metaco’s banking clients, Treccani says. “There is an indirect link, which is that the adoption of Ripple and Metaco's solutions further promotes the adoption of the XRPL as a protocol,” Treccani said in an interview. “Every success of Ripple the company is also a success for the XRP Ledger.” Ripple, for its part, has worked hard at courting banks, with a focus on ways to reduce the friction in areas like cross-border payments. As such, XRPL remains one of the longest-running examples of a private tokenization blockchain, said Treccani. “XRPL is designed for both public and private use and scales substantially better than competitors on the market like the EVM chains,” he said, referring to the Ethereum Virtual Machine. “It natively supports tokenized assets rather than going through smart contracts, and also allows for on-chain trading with other blockchain-based exchanges or AMMs.” AMMs are automated market makers. Combining Metaco and Ripple, therefore, offers a complete vertical stack, Treccani said, comprising an infrastructure layer and a services layer. “We can provide a bank with the infrastructure, and also tokenization life cycle, payments primitives, and liquidity management all from a single vendor – with the proper segregation between that infrastructure and those value-added services,” he said. This is all well and good, but rumors and reports began to emanate following the acquisition of Metaco that some of its banking customers were nervous and thinking about taking their business elsewhere. The reason perhaps concerns Ripple’s dispute with the U.S. Securities and Exchange Commission (SEC). Treccani said some of the speculation was “frankly a little bit crazy,” adding that post-acquisition discussions and reassessments by clients are par for the course, and that many of the contracts signed with the banks are subject to change-of-control clauses. “Yes, there have been such discussions and we have spent recent months clarifying the situation with the banks,” Treccani said. “I think we have been successful. Going forward, you are going to see more tier one bank partnerships that we will soon be announcing in Europe, the U.S., APAC and Africa.” Like many big banks, HSBC is joining the trend towards tokenization, the process of handling the ownership and transfer of real-world assets on blockchains, which requires some solid digital asset custody tech. But Treccani makes clear that cryptocurrency and its libertarian mindset is what drives him. He said he believes many banks will want to offer cryptocurrency-related services eventually, and if they build for tokenization now, these institutions will have everything they need for cryptocurrency entry when the time comes. “If it was just for tokenization, I would not be in this game,” he said. https://www.coindesk.com/business/2023/11/27/ripple-edges-closer-to-banks-via-crypto-custody-firm-metaco/

2023-11-27 07:12

Cosmos Hub is an intermediary among all independent blockchains created within the Cosmos network. ATOM powers the Cosmos ecosystem of blockchains programmed to scale and interoperate with each other. Cosmos' founder Jae Kwon favours splitting the blockchain into two following a decision by the community to reduce Cosmos' native token ATOM's inflation to 10%. The hard fork, dubbed AtomOne, could be bullish for ATOM token, according to one observer. ATOM, the native coin of Cosmos Hub, is nursing moderate losses a day after Comos' founder Jae Kwon called community members to split the blockchain into two, with one observer hailing the potential hard fork as a bullish outcome for the investor community. "Let's coordinate a split," Kwon said Sunday, following a decision by the community to the Cosmos community to approve a proposal to reduce ATOM's inflation to 10% from 14%. Cosmos Hub is an intermediary among all independent blockchains created within the Cosmos network. ATOM powers the Cosmos ecosystem of blockchains programmed to scale and interoperate with each other. The so-called proposal 848, approved with 41.1% support for the reduction from the participating voting power and 31.9% against it, said that ATOM's double-digit inflation rate represented overpayment by the Hub for security and disincentivized ATOM's use in decentralized finance. The approved change is projected to bring down Atom's annualized staking yield from approximately 19% to about 13.4%. Staking refers to locking coins in a blockchain in return for rewards. Kwon, however, wasn't impressed and called for the hard fork. "Despite our voting against the plan… 848 has ended up passing, something that isn't too surprising (though it would be good to know whether the later votes came from newly purchased ATOMs)," Kwon said on X. Kwon referred to the hard fork as AtomOne, which would fork the Cosmos Hub, calling for a final plan whereby the forked chain would support ATOM token along with the native ATOM1. "I believe that the final plan should include an integration of $ATOM and $ATMO/$ATOM1 so that instead of mass selling $ATOM and collapsing it all, we allow participation from $ATOM, but what is in the README can be improved. Tokenomics people take a shot," Kwon said on X. According to X user "John Galt," an expert on Comos and head of the strategy at Stride Zone, a potential hard fork could resolve years of community infighting and bode well for ATOM token holders. "A fork would be very bullish. For years, political tension has impeded the development of Cosmos Hub. Most notably when the ATOM 2.0 proposal was vetoed in the Fall of 2022," Galt said on X. "Without Jae's conservatism, Cosmos Hub could be more innovative." Besides, Galt expects the hard fork to lead to the biggest airdrop for ATOM and could result in a massive increase in trading volume for both ATOM and ATOM1 tokens. Airdrops involve blockchain-based projects and developers sending free tokens to the communities as part of a broader marketing initiative. When a chain splits, the native coin of the new blockchain is usually airdropped to token holders from the original blockchain. "Jae is calling the new chain AtomOne (ATOM1). Most of the ATOM1 allocation would go to ATOM stakers pro-rata their amount. Unclear if liquid ATOM is included," Galt said. Still, as of writing, ATOM traded 3.5% lower on the day at $9.59, according to CoinDesk data. The cryptocurrency peeped above $10 over the weekend but failed to establish a foothold above the three-week-long resistance. The weakness perhaps stems from bitcoin, the industry leaders, struggling to get past the $38,000 mark. https://www.coindesk.com/markets/2023/11/27/cosmos-founder-calls-for-chain-split-atom-down-3/

2023-11-27 05:08

The U.S. Department of Justice (DOJ) argues that Binance's former CEO should remain free until sentencing – but only in the U.S. The U.S. Department of Justice doesn't want Changpeng 'CZ' Zhao locked up until sentencing, but it doesn't want him to leave the United States either, arguing in a new filing that he's a "flight risk that could be managed." Late last week, CZ's counsel argued that the very fact he – a non-U.S. citizen holding UAE and Canadian passports – voluntarily entered the U.S. to appear before a court represents that he's not a flight risk. "Based on all the relevant facts, including Mr. Zhao's voluntary self-surrender, his intent to resolve this case, and the sizable bail package he proposed, Judge Tsuchida found that Mr. Zhao presents no risk of flight, even while residing in the UAE," last week's filing said. But U.S. Attorneys pushed back on that, arguing that the potential severity of the sentence would give Zhao incentive to flee back to the UAE, which has no extradition treaty with the U.S. Last week, prosecutors said Zhao, as a citizen of the United Arab Emirates (UAE), had "minimal ties to the U.S." and may not return should he be allowed to leave. "The reality is that the top-end of the Guidelines range may be as high as 18 months, and the United States is free to argue for any sentence up to the statutory maximum of ten years," the filing reads. "The penalties he faces at sentencing will no doubt seem significant to him, and that weighs in favor of the reasonable restrictions the United States proposes." On Tuesday, Zhao pleaded guilty for breaking anti-money laundering laws in the U.S. and stepped down as Binance's CEO. The exchange, meanwhile, pleading guilty to multiple criminal and civil charges, while agreeing to pay $4.3 billion in penalties, among the largest corporate fines in the history of the U.S. Department of Justice. Fellow former exchange executive Sam Bankman-Fried, who is also awaiting sentencing, remains in custody. https://www.coindesk.com/policy/2023/11/27/binances-changpeng-cz-zhao-is-a-manageable-flight-risk-us-doj/

2023-11-24 09:58

The bitcoin price could come under pressure as some of the money is likely to completely exit the ecosystem, the report said. A significant number of Grayscale Bitcoin Trust (GBTC) shares have been bought in the secondary market this year at a deep discount to net asset value (NAV) in anticipation the trust’s conversion to an exchange-traded fund (ETF) will be approved by the U.S. Securities and Exchange Commission (SEC), JPMorgan (JPM) said in a research report Thursday. The bank estimates a net $2.5 billion has flowed into GBTC since the start of the year, increasing to $2.7 billion if adding the covering of short interest. “Assuming this buying flow was mostly speculative in anticipation of GBTC being converted to an ETF, then it is likely that this $2.7b would come out of GBTC as these investors take profit once GBTC gets converted,” analysts led by Nikolaos Panigirtzoglou wrote. “If this $2.7b exits completely the bitcoin space then such an outflow would of course put severe downward pressure on bitcoin prices,” the authors wrote. “If instead most of this $2.7b shift into other bitcoin instruments such as the newly created spot bitcoin ETFs post SEC approval, which is our best guess, then any negative market impact would be more modest.” Still, the “balance of risks for bitcoin prices is skewed to the downside in our opinion as some of this $2.7b is likely to completely exit the bitcoin space,” the bank said. Much more than $2.7 billion could leave GBTC if its fee is not lowered aggressively after conversion into an ETF, the report added. https://www.coindesk.com/markets/2023/11/24/grayscale-bitcoin-trust-could-see-27b-of-outflows-if-etf-conversion-is-approved-jpmorgan/

2023-11-24 09:40

The settlement will significantly reduce the potential systemic risk emanating from a hypothetical collapse of the crypto exchange, the report said. Binance’s settlement with the U.S. government is positive for the crypto industry as well as the exchange, JPMorgan (JPM) said in a research report Thursday. For the wider market, the exchange's deal “would see significant reduction of a potential systemic risk emanating from a hypothetical Binance collapse,” the report said. It also reinforces an “ongoing shift towards regulated crypto entities and instruments which has been the objective of U.S. authorities post FTX’s collapse,” analysts led by Nikolaos Panigirtzoglou wrote. This shift toward regulated crypto companies and products is positive as more regulation will help attract investors from traditional finance, the note said, adding that the involvement of large asset managers such as Blackrock (BLK) and Fidelity in the approval of spot bitcoin ETFs by the Securities and Exchange Commission (SEC) supports this thesis. The agreement also reduces the uncertainty surrounding the crypto exchange, which will benefit its trading and BNB Smart Chain businesses, JPMorgan said. It noted that Binance had been losing market share due to uncertainty around this issue. “Its market share loss should be contained going forward and perhaps partly reverse once the implications from the settlement on Binance’s operations and business model become more clear,” the analysts wrote. https://www.coindesk.com/business/2023/11/24/binances-settlement-with-us-authorities-is-positive-for-crypto-as-well-as-the-exchange-jpmorgan/