2024-08-23 14:14

Bitcoin rose in the immediate aftermath of his remarks at the Fed's Jackson Hole conference. As expected, Jerome Powell indicated that a rate cut is coming in September Bitcoin and traditional markets at least initially have moved sharply higher Investors will now focus on whether the initial rate cut will be 25 or 50 basis points After a long wait, central bank rates in the U.S. now appear certain to be headed lower in September after Jerome Powell said the "time has come" for an easing in monetary policy. "My confidence has grown that inflation is on a sustainable path back to 2 percent," said Powell in his keynote address at the Kansas City Fed Jackson Hole Symposium. "The labor market has cooled considerably from its formerly overheated state," he continued. "We do not seek or welcome further cooling in labor market conditions." "The time has come for policy to adjust," added Powell. "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks." Though markets fully expected Powell to indicate that a rate cut was coming at the Fed's September meeting, the tone of his remarks likely leaned a bit more dovish than anticipated. In the minutes following the release of his speech, bitcoin (BTC) added more than 1% to $61,900. A check of traditional markets finds big gains as well: The Nasdaq is higher by 1.7%, while the S&P 500 is up 1.2% and gold has climbed 1%. The 10-year Treasury yield has dipped five basis points to 3.80% and the U.S. dollar index has fallen 0.6%. After years of near-zero Fed policy rates, the U.S. central bank in early 2022 embarked on a long series of rate hikes, eventually taking its fed funds rate up to the 5.25%-5.50% range in 2023. Since, it's been a waiting game, with the Fed wanting to see crystal clear signs that inflation was meaningfully slowing to its 2% target before moving to begin trimming rates. That day surely has now arrived. The question going forward will be if the Fed cuts the fed funds rate by 25 or 50 basis points at its mid-September meeting. Markets continue to lean towards 25 basis points, but the chances of a 50 basis point move have grown to 32.5% currently from 24% one day ago, according to CME FedWatch. There remain some key economic reports between now and that September decision – August's employment and inflation numbers among them – which should be key to Fed's ultimate decision. "Lower real interest rates tend to weigh on the value of the dollar and can support assets that compete with the dollar, like gold and bitcoin," said Zach Pandl, head of research at Grayscale Investments. "The combination of Fed rate cuts, improving U.S. political sentiment around crypto, and net inflows into U.S. crypto ETFs should support bitcoin’s price to return to all-time highs in the coming months." https://www.coindesk.com/markets/2024/08/23/fed-chair-jerome-powell-time-has-come-for-policy-to-adjust/

2024-08-23 10:05

“It’s time we take a stand – together,” Trump wrote on his Truth Social account with a Telegram group link to the unreleased decentralized finance platform. Donald Trump is promoting "The DeFiant Ones," a new family-run decentralized finance (DeFi) platform, on Truth Social. This move is part of his broader appeal to the crypto community, positioning himself as a pro-crypto U.S. presidential candidate. However, specific details about the platform's functionality or launch date remain scant as of Friday. Donald Trump is pushing a family-run crypto project as he positions himself as a pro-crypto candidate ahead of the U.S. presidential election in November. Trump on Thursday promoted the forthcoming decentralized finance (DeFi) platform "The DeFiant Ones" to his 7.5 million followers on the social application Truth Social, including a link to a Telegram group page for the project, which had over 40,000 subscribers as of Friday. “For too long, the average American has been squeezed by the big banks and financial elites,” Trump wrote. “It's time we take a stand—together.” Trump’s son, Donald Trump Jr., reposted the image on his X account, having promoted the platform alongside brother Eric Trump for weeks. The scions are leading the project. Little is known about the platform, including launch dates or specific details. However, messages posted on the DeFiant Ones’ Telegram group call it the ”Trump DeFi project” and the “future of finance.” In separate posts earlier this month before the project was revealed, Eric Trump said he had “truly fallen in love with Crypto / DeFi” and was “about to shake up the crypto world with something HUGE.” Trump, the Republican candidate, is no stranger to crypto projects. Trump-related companies or official licensing was previously used for non-fungible token (NFT) projects and a line of bitcoin-themed sneakers that sold out hours after launching. An August disclosure showed Trump holds between $1 million and $5 million of ether (ETH) and made over $7 million in an NFT-licensing deal. In July, he revealed plans to release a fourth NFT collection. In July, at the Bitcoin Conference in Nashville, Trump promised to maintain a "strategic national bitcoin reserve" if elected. https://www.coindesk.com/business/2024/08/23/donald-trump-teases-the-defiant-ones-crypto-project-on-truth-social/

2024-08-23 09:06

Total value locked across the crypto ecosystem is expected to reach an all-time high in the first half of next year, the report said. Decentralized finance is making a comeback, and the total value locked in the crypto market is expected to hit an all-time high next year, the report said. Steno said interest rates are the most important factor in influencing DeFi's appeal. This year's expansion in stablecoin supply and the growth in real-world assets are also tailwinds for the DeFi market, the note said. Decentralized finance (DeFi) summer is making a comeback, and while total value locked (TVL) in the crypto ecosystem is still well below its 2021 peak, it could climb to an all-time high as soon as the first half of next year, Steno Research said in a report on Friday. DeFi's imminent resurgence is linked to interest rates, particularly in the U.S., because the decentralized finance market is predominantly U.S. dollar-centric, the report said. "Interest rates are the most critical factor influencing the appeal of DeFi, as they determine whether investors are more inclined to seek out higher-risk opportunities in decentralized financial markets," analyst Mads Eberhardt wrote. Steno notes that the first DeFi summer, in 2020, came hot on the heels of Federal Reserve interest-rate cuts in response to the Covid outbreak. Still, interest rates are not the only driver behind a comeback in DeFi. There are also crypto-native factors at work. The growth in stablecoin supply, which has expanded by about $40 billion since January, is crucial because "stablecoins are the backbone of DeFi protocols," Steno said. "As interest rates decrease, the opportunity cost of holding stablecoins diminishes, making them more attractive – much like the broader appeal of DeFi in such an environment," Eberhardt wrote. The continued growth of real-world assets (RWAs) such as tokenized stocks, bonds and commodities is another key factor, and the 50% surge in these assets year-to-date indicates robust demand for on-chain financial products such as DeFi. Lower fees on the Ethereum network, the blockchain most widely used for DeFi, also makes decentralized finance more accessible, the report added. https://www.coindesk.com/markets/2024/08/23/defi-summer-is-making-a-comeback-steno-research-says/

2024-08-23 08:43

Comments at the Jackson Hole symposium later Friday may give clues about the Federal Reserve monetary policies, will boost or undermine prices of risk assets, including bitcoin. Bitcoin has been mostly trading between $59,000 and $61,000, with traders eyeing the Jackson Hole meeting for potential market-moving comments. Most major cryptocurrencies were little changed, while ADA and AVAX experienced notable gains. While U.S. bitcoin ETFs, particularly BlackRock's IBIT, continue to see inflows, ether ETFs are facing significant outflows, reflecting bearish sentiment toward products related to the Ethereum blockchain. Bitcoin (BTC) rose through $61,000 in Asian trading hours while being mainly confined between that level and $59,000 over the past two weeks. Some traders are looking to the Federal Reserve's annual Jackson Hole symposium, scheduled for later Friday, for comments that may influence markets. Major tokens were little changed, with ether (ETH), Solana's SOL, BNB Chain's BNB and xrp (XRP) moving less than 2% in 24 hours. The broad-based CoinDesk 20 (CD20), a liquid meaure tracking the largest tokens by market capitalization, rose 1.7%. Cardano's ADA added 3%, while Avalanche's AVAX jumped 10% after the blockchain was added as a network option for Franklin Templeton's OnChain U.S. Government Money Market Fund (FOBXX). FOBXX started trading in 2021 and became the first money-market fund to use a public blockchain to record transactions and ownership. Spot bitcoin exchange-traded funds (ETFs) listed in the U.S. recorded $64 million in inflows, extending a winning streak to six days. Market leader BlackRock's IBIT took on the highest inflows at $75 million, data shows. However, some firms consider a general slowdown in the rate of inflows to be bearish. Ethereum ETFs, in contrast, extended a record outflow streak to six days, continuing a dismal first month for products tracking the world's second-largest token by market cap. These ETFs lost just over $800,000 on Thursday, taking cumulative outflows to over $458 million since they went live on July 23. Some market participants are looking to the annual Jackson Hole meeting later Friday for comments that may indicate the Federal Reserve's monetary policy direction, which will influence prices of risk assets including bitcoin. "The downward revision of U.S. non-farm payrolls highlighted a weaker labor market, sparking concerns that the Fed might delay rate cuts, triggering a selloff," QCP Capital noted in a Telegram broadcast Thursday, referring to a Wednesday report on jobs growth in the year ended March. "These worries eased after the July FOMC minutes revealed some policymakers were open to rate cuts, signaling a more dovish stance balancing inflation and employment goals." "Attention now turns to Fed Chair Powell's Jackson Hole speech tomorrow for more rate-cut signals. With markets betting heavily on rate cuts, unexpected economic data can have a significant impact. We favor principal-protected products capturing topside gains," QCP said. Powell is expected to confirm a pivot to lower borrowing costs next month, as previously reported. This step has historically buoyed bullish sentiment among traders because access to cheap money ofter spurs growth in riskier sectors. Some are taking a cautious view, however. "Risk markets might be more disappointed as Powell might want to do their best to give themselves some wiggle room against the four cumulative cuts priced into the year-end," Augustine Fan, head of insights at SOFA, told CoinDesk in an interview. "That said, Jackson Hole has generally been a 'risk-positive' stock even in the past, so expect traders to be better buyers on dips." https://www.coindesk.com/markets/2024/08/23/bitcoin-tops-61k-ahead-of-jackson-hole-as-ether-etfs-extend-record-outflow-streak/

2024-08-23 07:18

AAVE has outperformed every other top 100 cryptocurrency by market value in the past four weeks. Proposals aimed at overhauling AAVE's tokenomics and protocol's risk management have galvanized investor interest in the cryptocurrency, observers said. The so-called Umbrella proposal could ease sell-side pressures for AAVE in the market, said Katie Talati, head of research at Arca. AAVE, the native token of the decentralized crypto lending platform Aave, has rallied over 45% to $135 in four weeks, outperforming every other top 100 cryptocurrencies by market value, including market leaders bitcoin (BTC) and ether (ETH). Such has been the investor bias for AAVE that Helium's HNT is at a distant second position with a price gain of 26%, according to data source Coingecko. AAVE's price rally began in late July after the Aave-Chan Initiative founder Marc Zeller proposed a fee switch to distribute some of the platform's net excess revenue to the critical actors in the ecosystem and buy back tokens from the secondary market. "There has been speculation that AAVE could activate their 'fee switch' to redistribute excess revenue generated by the platform to stakers. This follows a proposal aimed at seeking governance feedback on the protocol's potential to buy back tokens using surplus revenue and redistribute them to AAVE stakers and the minters of their stablecoin, GHO," Joshua de Vos, research lead at London-based digital assets data and index provider CCData told CoinDesk. "This has boosted market sentiment around the project, with the possibility of new incentives for holding and staking AAVE," Vos added. Another proposal called for replacing the "seize and sell" loan liquidation process that negatively impacts the AAVE price with a "seize and burn" mechanism that AAVE's GHO stablecoin and aTokens, representing assets deposited in the protocol. According to Katie Talati, head of research at Arca, this so-called Umbrella proposal could ease sell-side pressures for AAVE in the market. "The proposal aims to create a new system, called Umbrella, which would use a variety of assets to cover “bad debt” in the protocol (when a position is liquidated and the collateral does not cover the cost of liquidation) versus only using the AAVE token to cover bad debt. The new system, therefore, would relieve some of the sell pressure on AAVE," Talati said in a note in late July. Web3 agency Deelabs explained on X that buybacks would create persistent bullish pressure in the market and Umbrella would eliminate the negative impact on AAVE price during loan liquidations. "This just scratches the surface. There is a lot more to this proposal," Deelabs said. These proposals aimed at overhauling AAVE's tokenomics and protocol's risk management galvanized institutional interest in the token, algorithmic trading firm Wintermute said. "The tokenomics update discussion brought more eyes on the protocol back in July, and it's generally seen as a 'blue chip' defi asset that tracks the growth of crypto in general. Additionally, large funds have been allocated, and research notes have been written up for their investors," Wintermute told CoinDesk. "We have also seen similar OTC flow in the name from institutional counterparties wanting to get exposure," Wintermute added. Aave is also the top protocol in terms of revenue and fees earned over the past four weeks. According to data tracked by TokenTerminal, Aave has generated over $27 million in fees, outshining other lending and borrowing protocols. As such, some in the crypto community believe the token is undervalued. https://www.coindesk.com/markets/2024/08/23/aave-token-has-beaten-the-market-with-a-45-price-surge-heres-why/

2024-08-23 06:45

The Judge ruled that Bit Trade Pty Ltd. issued its financial product to retail clients without having first made a target market determination for the product. An Australian court ruled in favor of the securities regulator that Kraken's local operator contravened a rule regarding its margin extension product. A Kraken spokesperson said "Overall, we’re disappointed by today’s ruling, but we’re prepared and willing to comply with the court’s decision." The Federal Court of Australia ruled on Friday that cryptocurrency exchange Kraken's operator in the country, Bit Trade Pty Ltd, "contravened" with a section of the nation's Corporations Act. The case against Bit Trade was brought by the Australian Securities and Investments Commission (ASIC). Section 994B of the Corporations Act requires an issuer of a financial product to make a “target market determination” prior to the product being offered to consumers. Justice Nicholas determined that "By issuing the Product to retail clients without having first made a target market determination for the Product, Bit Trade contravened s 994B(1) of the Corporations Act when read with s 994B(2)." ASIC said "Since 5 October 2021, Bit Trade’s “margin extension” product has been available to customers trading on the Kraken exchange without a target market determination, as required by law." ASIC's announcement also said that the Judge "found the obligation to repay a digital asset was not an obligation to repay money and was therefore not a deferred debt" but agreed with ASIC that "a margin extension in a national currency created a deferred debt which meant that the product was a credit facility." "Overall, we’re disappointed by today’s ruling, but we’re prepared and willing to comply with the court’s decision," a Kraken spokesperson said in a statement sent via email. “We’re pleased the judge understood the nuances in this case, and recognised the challenges in applying existing regulatory frameworks to innovative technologies." Kraken's legal spokesperson cited the judgment as an example of how "the law with respect to crypto offerings in Australia is not clear, adding that the "Court found that Kraken's Margin offering is subject to a set of regulations called the Design and Distribution Obligations when we extended fiat currency to clients, but not when we extended cryptocurrency to clients." "This is an unsatisfactory position for Australian investors. While we prefer that to be through legislative reform rather than test cases, at least we now have clarity from the Court in respect of our Margin offering, and will move quickly to comply and continue to service our customers." ASIC said "the two parties have been given seven days to agree on declarations and injunctions" and that it would "seek financial penalties against Bit Trade." "This is a significant outcome for ASIC involving a major global crypto firm," said Sarah Court, ASIC Deputy Chair. "We initiated proceedings to send a message to the crypto industry that we will continue to scrutinise products to ensure they comply with regulatory obligations in order to protect consumers." Read More: Australian Securities Regulator Nabbed More Than 600 Crypto Investment Scams in a Year https://www.coindesk.com/policy/2024/08/23/australias-securities-regulator-wins-case-against-krakens-local-operator/