2024-09-16 15:30

Nearly $1 billion has been staked on the election at the crypto-based prediction market. Plus: are you ready for 20x leveraged election betting? This week in prediction markets: Second assassination attempt not boosting Trump’s odds as election betting nears $1 billion on Polymarket Oral arguments set for Thursday in CFTC appeal of the case it lost to Kalshi. Are you ready for 20X leveraged election betting? What will Trump say tonight? Donald Trump survived an apparent second assassination attempt over the weekend. The U.S. Secret Service found a man hiding in the bushes with an assault rifle at Trump's golf course in Florida while the former president was playing. While the gunman, identified as Ryan Wesley Routh of Hawaii, didn’t fire a shot, the very notion of a second assassination attempt during the presidential campaign created headlines like this one from The Economist: “Another attempt on Donald Trump’s life will shake up the election” (though it was later changed to “Another attempt to kill Trump raises fears of political violence"). Maybe editors at the magazine took a look at crypto-based prediction market platform, Polymarket, where election trading is about to hit $1 billion, because bettors are brushing off this incident as a non-issue. Trump’s odds actually went down in the hours after the incident, and as of midmorning Monday in New York, he was trailing Democratic nominee Kamala Harris by 49-50. To be fair to the Economist, the first assassination attempt, when a shot was fired and grazed Trump's ear, boosted his odds significantly – though that was when he was still running against the senescent incumbent, Joe Biden. The probabilities are based on how much traders are willing to pay for shares that pay out money if the predictions come true and become worthless if they don't. Bets on Polymarket are programmed into a smart contract on the Polygon blockchain and paid out in USDC, a dollar-linked token. Under a regulatory settlement, the platform blocks U.S. users, although crafty American traders have used VPNs to get around the geofencing. Eye on swing states As with any U.S. presidential election, a lot is riding on the swing states. Polymarket bettors are fairly convinced that neither candidate will win all of them: one contract asking if Harris will win all six only gives a 24% chance of that happening, while another asking if Trump will do the same is at 17%. For the individual state contracts, currently Republicans lead in Arizona with a 61% chance, Georgia at 59%, North Carolina at 57%, and Pennsylvania at 51%. In Nevada, the race is tied 50-50, while Democrats lead in Michigan and Wisconsin. Meanwhile, Polymarket continues to cast the race as closer than what professional pollsters are calling. Nate Silver’s Silver Bulletin model from Sept. 11 gives Trump a strong chance to win the all-important electoral college at 61%, which, if won, dictates the rest of the election. (Silver is an advisor to Polymarket.) While all this is happening, U.S.-regulated prediction market Kalshi has frozen its long-sought election markets pending a court decision in an appeal brought by the Commodity Futures Trading Commission. A Kalshi contract on which party will win the House in November had volume of $20,000, while another about which party will win the Senate had volume of $45,000. The freeze looks set to last at least three more days. Oral arguments in the appeal are scheduled for Thursday, according to a Monday court filing. Another CFTC-regulated exchange, Interactive Brokers' ForecastEx, has said it will soon list election markets. Unlike Polymarket, ForecastEx and Kalshi settle bets in fiat. 20X leverage incoming LogX, a perpetual futures crypto trading protocol, said it raised $4 million to expand into leveraged prediction markets. The noncustodial "DEX-like" market, which is building what it called a DeFi superapp to onboard the next generation of retail users, said on its website that it will offer up to 20X leverage on contracts on outcomes such as whether Trump or Harris will win the election. This platform’s approach to prediction markets is similar to D8X, which launched leveraged prediction market trading in July, insofar that it relies on an oracle from Polymarket to scrape pricing data and put it into LogX for traders. However, D8X maxes out at 2X leverage. Akshit Bordia, LogX’s Founder, explained in an interview that once the pricing data is on the platform, his protocol's market makers will take opposite positions on Polymarket to generate liquidity. Right now, Bordia says the maximum bet for Trump or Harris election contracts is $100,000. “What we're seeing now is the next iteration of prediction markets," Bordia said in an interview with CoinDesk. “Many of these have grown significantly, gaining mass media attention. That's why it's become so exciting and much bigger than it was in the previous cycle." What’s the plan for after the election? Sports and crypto price betting. Hashed Emergent, Cumberland, DWF Ventures, and Orderly Network CEO Ryan Lee participated in the round. Sorry, Milady Trump has been called the first crypto president by his fans, but he hasn’t mentioned bitcoin or other digital assets in his recent public appearances, such as an X space with Elon Musk or the recent presidential debate. This is likely to change when he takes to Rug Radio late Monday to launch World Liberty Financial, making him the first president to both endorse a specific crypto project and launch a business on the campaign trail. Bettors on Polymarket are putting their money on Trump saying "crypto" at least five times, giving it a 66% chance of happening and a 34% chance of him saying "bitcoin" that many times. Unfortunately for those holding Milady NFTs – a collection of characters with bizarrely shaped heads and large, expressive anime-style eyes – there’s only a 3% chance the Republican presidential candidate will name-drop them during the broadcast. https://www.coindesk.com/news-analysis/2024/09/16/second-assassination-attempt-barely-moves-trumps-polymarket-odds/

2024-09-16 12:26

Analysts suggest the ETH/BTC ratio might drop further, potentially to the 0.02-0.03 range, unless there's a significant change in investor sentiment or regulatory clarity that might favor riskier assets. The ETH/BTC ratio has hit its lowest since April 2021, dipping below 0.04, signaling a decline in investor interest in ether relative to bitcoin. The preference has swung towards bitcoin, which was influenced by the introduction of bitcoin ETFs, which saw significant inflows compared to ether ETFs experiencing net outflows. Some traders say this shift indicates a broader market favoring bitcoin's perceived stability over ether's riskier, high-yield potential. Analysts suggest the ETH/BTC ratio might drop further, potentially to the 0.02-0.03 range, unless there's a significant change in investor sentiment or regulatory clarity that might favor riskier assets like altcoins. A closely watched ratio tracking the relative price strength of ether (ETH) against bitcoin (BTC) has dropped to its lowest level since April 2021, indicative of a fallout in investor demand for the world’s second-largest token. The ether-bitcoin trading pair fell under 0.04 late Sunday to trade at 0.039 in European morning hours Monday, extending year-to-date losses to nearly 30%. Although colloquially called a ratio - ETH/BTC is simply the trading pair of ether against bitcoin on crypto exchanges, which attracts hundreds of millions in daily volumes. Over the past five years, the ETH/BTC ratio has risen from 0.02 to a peak of above 0.08 in early 2022 - meaning ETH had quadrupled in value relative to BTC at the time. Its value proposition has been on the decline ever since - bitcoin set fresh lifetime highs in April in U.S. dollars (before tumbling 20%), while ether is yet to break its highs from 2021 and is down 52% from its 2021 peak. Year-to-date, bitcoin has returned over 40% to investors while ether holders have gained just under 1%. A surge indicates that ether is outperforming bitcoin and vice-versa. During a rise, traders consider a preference for ETH as beneficial for riskier assets and Ethereum ecosystem bets. On the other hand, a slide indicates a preference for Bitcoin and blockchains other than Ethereum. Some traders say that demand for ether relative to bitcoin peaked in 2023, following which spot exchange-traded funds (ETFs) moved the goalposts in BTC’s favor. “The long-term reason for the rise has been the activity of Ethereum developers, both in relation to the blockchain itself and the growing ecosystem around it,” FxPro senior analyst Alex Kuptsikevich said in an email to CoinDesk. “However, by the end of 2023, the trend shifted in Bitcoin's favor as the prospect of exchange-traded ETFs gained prominence.” “It is important to note that the launch of ETFs on Ethereum has neither attracted similar buying interest, resulting in net outflows, nor reversed this downward trend in ratio,” Kuptsikevich added. Ether ETFs have recorded net outflows of $580 million since going live in late July. In comparison, bitcoin ETFs took on over $12 billion in their first two months, and have recorded over $17 billion in net inflows in just over eight months of trading. Technical aspects and the promise of better yield on other blockchains also contributed to the lack of demand for ETH, some opine. “ETH/BTC is reaching new lows as the yield from staking ETH continues to be uncompetitive at around or less than 3% APR while staking stablecoins or trading other ecosystem tokens like TON deliver high yields,” crypto market researcher Nick Ruck said in a message to CoinDesk. “BTC has also held up well within its range as the bitcoin spot ETFs recorded their best day of inflows in the last two weeks on Sept 13th, adding to its allure against ETH,” Ruck added. Meanwhile, traders such as Kuptsikevich see further pain ahead for those betting on the ETH/BTC ratio. “This ratio has the potential to fall further into the 0.02-0.03 range. This is surprising given the generally positive investor sentiment towards altcoins a few months after the BTC halving and the generally higher beta of altcoins to the stock market, which has been quite strong in recent months,” he noted. “Investors are likely waiting for more clarity on the future monetary and regulatory regime. Only a sustained rally will encourage investors to seek higher returns and take more risks by buying altcoins,” Kuptsikevich concluded. https://www.coindesk.com/news-analysis/2024/09/16/ether-bitcoin-ratio-drops-to-lowest-since-april-2021-heres-why-it-matters/

2024-09-16 11:00

The SEC filed its proposed amended complaint against Binance on Thursday with a greater emphasis on the exchange's token listing process. The U.S. Securities and Exchange Commission filed a proposed amended complaint against Binance. The SEC mostly won against Binance's motion to dismiss its initial lawsuit, but a few questions about certain tokens remained unanswered in the order on a motion to dismiss. The SEC also addressed two issues it lost – secondary BNB sales and Binance Simple Earn – in its proposed filing. The U.S. Securities and Exchange Commission (SEC) wants to take another whack at its lawsuit against crypto exchange Binance, filing a proposed amended complaint Thursday night a few months after the federal judge overseeing the case allowed most of the regulator's charges to survive a motion to dismiss. The SEC argued its proposed amended complaint addressed some of the judge's concerns in dismissing parts of its initial lawsuit – namely around ongoing BNB sales and Binance's Simple Earn product – and bolstered other charges that the judge did not fully address in her ruling, specifically around 10 digital assets the SEC used as examples of Binance operating as an unregistered securities purveyor. "The MTD Order dismissed these claims based on insufficient factual allegations to meet the Howey test, as opposed to a defective legal theory," the SEC filing said. The SEC first sued Binance in June 2023, alleging the exchange was operating as an unregistered broker, clearinghouse and trading venue, offered unregistered securities through BNB and the BUSD stablecoin, as well as its staking service. Binance, Binance.US (otherwise known as BAM Trading) and Binance executives moved to dismiss the lawsuit. Judge Amy Berman Jackson, in a June 2024 ruling, dismissed charges tied to Binance's Simple Earn product and secondary BNB sales, but allowed most of the SEC's charges to proceed. However, in a July 2024 hearing, attorneys went back-and-forth over whether the judge's ruling meant that 10 cryptocurrencies the SEC alleged were also sold as unregistered securities were still part of the case. "The PAC also bolsters allegations not expressly ruled upon concerning certain offers and sales of BNB and the Ten Crypto Assets to address Defendants’ prior dismissal arguments and Defendants’ anticipated argument that the MTD Order’s reasoning as to BNB secondary sales should apply to allegations concerning the Ten Crypto Assets," Thursday's SEC filing said. Granting the motion to file an amended complaint won't unduly harm Binance and its affiliated persons and entities, given they'll still have a chance to respond and have been aware of the allegations since last June, the SEC said (it filed the proposed amended complaint at a court-ordered deadline; Binance has until Oct. 11 to oppose the motion). BNB, tokens focus A redline version of the proposed amended complaint walks through the differences, showing far more detail on the SEC's allegations about Binance's listing of various tokens – including BNB, its native coin – and how the regulator thinks the company promotes investments in these tokens. One line adds that in addition to some cryptocurrencies being native to a specific blockchain, others may be built on top of blockchains. Another line clarified that proof-of-stake networks still reward validators like proof-of-work networks. The proposed filing also adds "initial exchange offerings" to its section on initial coin offerings. One substantial addition alleges that Binance is "an integral part of the markets for crypto assets, including those that are offered and sold as securities, and Binance fills these markets with information republishing and amplifying the issuer and promoter statements and activity." The filing adds other paragraphs focusing on Binance's own role in allegedly promoting digital assets it lists and trades. The filing emphasizes the SEC's allegation that BNB is a token that is offered and sold as a security, and the exchange's customers, employees and investors share this expectation. "Binance has offered and sold BNB as an 'exchange token,' marketing it to investors as an investment in the success of the Binance.com Platform and touting the potential returns that investors could expect from a potential increased demand and price for BNB as the platform grew," the filing said. Binance's BNB burns and its support of projects that use BNB are also designed to help the token increase in value, the SEC alleged. Binance paid U.S. employees, including BAM Trading (Binance.US) executives, in BNB, the SEC alleged. "In internal Binance town halls, Zhao frequently touted Binance’s ETOP [employee token option plan] as essentially equivalent to employee stock options – i.e., as a direct way for employees to share in any profits from the growth of the Binance.com Platform and the Binance enterprise," the filing alleged. The filing goes into similar additional detail around Binance Simple Earn and the 10 digital assets – SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI – it alleges were sold as unregistered securities on the Binance platform. "As part of their business practices and provision of intermediary services, Binance and BAM Trading promote the Ten Crypto Assets as attractive investments for their customers, including by amplifying and reinforcing the promotional statements and activity of the crypto asset issuers and promoters," the filing said. Binance and the issuers of the tokens provide "selective information" to encourage Binance's customers to invest in the tokens, the SEC alleged, using screenshots of Binance's Solana page as an example. "When Binance and BAM Trading approve a listing of a crypto asset, they typically negotiate and enter into agreements with the crypto asset issuers that impose various requirements on the issuer to incentivize trading by customers of the Binance Platforms," the filing said. Other pages on Binance's website, like its explanation of the term "tokenomics," also refers to tokens' market value and "equate the purchase and sale of crypto assets to trading in the traditional securities markets," the filing said. Token issuers have similarly touted their teams' efforts, the SEC alleged. Crypto asset securities In its proposed amended complaint motion, the SEC said it was doing away with the phrase "crypto asset securities," saying in a footnote that the agency "is not referring to the crypto asset itself as the security." Rather, the SEC said it "regrets any confusion it may have invited" by using the phrase to refer to "the full set of contracts, expectations and understandings centered on the sales and distributions" of whichever digital assets were at question. "As the Court explained, the crypto asset is the subject of the investment contract. Defendants appear to argue that, even if the Ten Crypto Assets were offered and sold as securities during the ICOs, they do not remain securities into perpetuity. The SEC is not advancing this argument," the footnote said. "The SEC’s allegations with respect to the Ten Crypto Assets at issue in secondary markets are that that their promotions and economic realities have not changed in any meaningful way under Howey, such that they continue to be offered and sold as investment contracts." In the proposed amended complaint itself, the SEC replaced "crypto asset securities" with "crypto assets that were offered and sold as securities" at various references. https://www.coindesk.com/policy/2024/09/16/sec-places-heavier-scrutiny-on-binances-token-listing-trading-process-in-proposed-amended-complaint/

2024-09-16 10:48

Flappy Birds is back, but without the support of its creator. The creator of the ultra-addictive mobile-phone game Flappy Bird has disavowed plans to relaunch the title as a GameFi product in his first social media appearance since 2017. Flappy Bird was pulled from both the Apple App Store and Google Play in February 2014 as its creator, Dong Nguyen, blamed himself for the game’s addictive nature and didn’t appreciate the fame the title’s worldwide success brought him along with allegations that he stole art and character designs from Nintendo. The game required users to keep a cartoon bird airborne as it flew between columns of pipes without hitting them. Last year, Gametech Holdings filed a motion opposing Nguyen’s retention of the Flappy Bird trademark, arguing that it was abandoned because the game had been out of virtual stores for nearly a decade. A U.S. trademark court gave Gametech a default judgment after Nguyen failed to respond. And now for the GameFi twist: Cybersecurity researcher Varun Biniwale spotted a number of deleted pages on the game's website that mention Solana, TON and a $FLAP token complete with the promise of a ‘Flap-to-Earn’ mode. One developer attached to the game, Michael Roberts, told CoinTelegraph that “more information should be unfolding here shortly” in response to questions about the game’s possible crypto connections. Meanwhile, on X, initial press coverage of the game’s relaunch, which said the community had purchased the rights from Nguyen, was contradicted by community members noting that it was taken from him “due to inactivity” and the relaunch has nothing to do with him. https://www.coindesk.com/web3/2024/09/16/flappy-bird-creator-dong-nguyen-comes-out-of-social-media-retirement-to-take-a-swing-at-gamefi/

2024-09-16 07:40

The project is offered on both Arbitrum and Avalanche blockchains. Monday’s exploit impacted only the version on Arbitrum as of European morning hours. Over $6 million in tokens were drained from DeltaPrime wallets due to a private key leak, affecting only the Arbitrum version of the project. The exploit involved a hacker gaining control over an admin proxy, redirecting it to a malicious contract, leading to significant financial loss. Over $6 million worth of various tokens from wallets belonging to on-chain brokerage DeltaPrime were drained early Monday after an apparent private key leak, security researchers said on X. The project is offered on both Arbitrum and Avalanche blockchains. Monday’s exploit impacted only the version on Arbitrum as of European morning hours - and users could not withdraw funds (on Arbitrum) due to how the utilization of borrowing and lending works on the platform. A hacker gained control of 0xx40e4ff9e018462ce71fa34abdfa27b8c5e2b1afb, which is the admin of proxies. Then, the hacker upgraded the proxies to point to malicious contract 0xD4CA224a176A59ed1a346FA86C3e921e01659E73, Fuzzland founder Chaofan Shou said on X. Proxy is a contract that interacts with users and other contracts. It contains minimal logic and serves as an intermediary, but it is a key part of any application, as a compromise can mean the entire protocol is impacted. Security firm Cyvers confirmed the exploits in a Telegram message to CoinDesk, stating tit detected “multiple suspicious transactions” involving Delta Prime and that it “seemed that admin has lost the private key. “Affected pools so far are the #DPUSDC, #DPARB, #DPBTCb,” Cyvers said, referring to on-chain lockers holding USDC stablecoins, Arbitrum’s ARB and bitcoin (BTC). Messages sent by Delta Prime team members on its Discord channel viewed by CoinDesk said the team was investigating and working on the issue. They did not outright confirm or announce the exploit or reveal specific details as of European morning hours. DeltaPrime’s PRIME tokens are down 6.5% in the past 24 hours, tracking a market-wide drop led by ether (ETH). https://www.coindesk.com/markets/2024/09/16/crypto-broker-deltaprime-drained-of-over-6m-amid-apparent-private-key-leak/

2024-09-16 07:15

"Rarely has the market gone into the Fed meeting with maximum uncertainty (halfway between 25bps and 50bps)," Marc Chandler, chief market strategist at Bannockburn Global Forex The Fed faces split rate cut expectations as markets price in 50% probability for both 25 bps and 50 bps move this Wednesday. Bitcoin has pulled back from above $60,000 amid rate cut uncertainty. The coming week is shaping up to be that rare one when markets are left guessing about the Federal Reserve's impending interest rate move. The peak uncertainty seems to have put brakes on bitcoin's (BTC) price bounce. The Fed is widely expected to announce an interest rate cut on Sept. 18, kicking off the so-called easing cycle, which has historically supported risk assets, including bitcoin. Traders, however, are split on the size of the impending rate cut, setting the stage for a potential volatility explosion in financial markets after Wednesday's rate decision. At press time, the Fed funds futures showed a 50% chance of the Fed reducing rates by 25 basis points (bps) to the 5%-5.25% range. At the same time, markets saw a similar probability of a bigger 50 bps rate cut to the 4.7%-5% range. Bitcoin's upward momentum from recent lows of $52,530 has stalled amid the rate cut uncertainty. The leading cryptocurrency by market value has pulled from $60,660 to $58,700, at the time of writing. "Rarely has the market gone into the Fed meeting with maximum uncertainty (halfway between 25bps and 50 bps)," Marc Chandler, chief market strategist at Bannockburn Global Forex and author of "Making Sense of the Dollar," told CoinDesk in an email. "I suspect a 50 bps cut would not be good for risk assets on ideas that the Fed is more concerned about the economy and would seem to be acknowledging that it should have cut in July," Chandler added. Several analysts have warned that a 50 bps cut could signal panic, denting demand for riskier assets, including cryptocurrencies. The probability of a 50 bps cut rose last week after Wall Street's Journal's Nick Timiraos published an article the size of the rate cut was up for debate. A few Fed policymakers also raised the specter of a bigger move, bringing cheer to risk assets. "The market had been settling on a 25 bps rate cut before what some suspect is a planted story by Fed officials to put 50 bps back on the table Thursday. The market took the bait and ratcheted up the odds of not only one, but two half-point cuts and a quarter-point cut in the three remaining meetings of the year," Chandler said, adding that traders should also keep an eye on the Fed's summary of economic and interest rate projections. "The market is currently pricing in a sub-3% Fed funds target by the end of next year. Also, at 4.3% in July (4.2% in August), the unemployment rate is at the Fed’s long-term equilibrium level. Will this be changed?," Chandler quipped. https://www.coindesk.com/markets/2024/09/16/bitcoin-slips-to-58k-as-fed-faces-split-rate-cut-expectations-as/