2024-02-12 05:45

The central banker said fiat money is more credible than stablecoins because it has the power of government behind it. Stablecoins are only as stable as their issuer’s balance sheet, New Zealand’s central banker said during a hearing. Fiat currency is the best kind of money because it is backed by the government, he continued. Stablecoins are an oxymoron, New Zealand central bank governor Adrian Orr said during a parliamentary heading, according to a report by Bloomberg. “Stablecoins are not stable. They’re only as good as the balance sheet of the person offering that stablecoin,” he is quoted as saying. Some stablecoins have had their peg tested because of concerns about their balance sheet or the health of the institutions that store their assets. TrueUSD (TUSD) was knocked off its peg and remains trading at under $1 because of concerns about its ability to redeem the issued stablecoins for fiat currency, CoinDesk reported in January. Last year, USDC fell to around 95 cents on the dollar when Circle announced that it had significant reserves stuck at the failed Silicon Valley Bank. The New Zealand dollar and similar fiat currencies are backed by parliamentary authority and upheld by an independent central bank to ensure low, stable inflation, Orr is quoted as saying. Meanwhile, there is a growing chorus of voices from both the Federal Reserve and academia to build systems to ensure stablecoin stability. In January, Cantor Fitzgerald CEO Howard Lutnick, whose firm manages a significant amount of Tether's assets, said during a Bloomberg TV interview that the stablecoin issuer “has the money.” “I manage many of their assets,” said Lutnick. “From what I’ve seen – and we did a lot of work – they have the money they say they have.” https://www.coindesk.com/markets/2024/02/12/new-zealand-central-banker-adrian-orr-says-stablecoins-arent-stable-report/

2024-02-12 05:36

The S&P 500 look expensive relative to bonds, but that does not imply risk aversion or outflow of money from stocks and crypto and into Treasury notes. Bitcoin surged over 13% last week to register its best performance since October. The AI-led surge in the S&P 500 is supportive of the bullish momentum in the crypto market. Bulls seem to be dominating the supposedly risky corners of the financial market. Bitcoin (BTC), the leading cryptocurrency by market value, rose nearly 13.5% to $48,300 in the seven days to Feb. 12, the biggest single-week gain since October, according to CoinDesk data. At the same time, CoinDesk 20 Index, a measure of the biggest cryptocurrencies, has risen 11%. The rally happened as continued inflows into the U.S.-based spot bitcoin exchange-traded funds (ETFs) likely overshadowed reports of bankrupt crypto lender Genesis seeking approval to liquidate its $1.6 billion bitcoin holdings. On Thursday, spot ETFs accumulated over $400 million in inflows, registering the best day in nearly a month. The S&P 500, Wall Street’s benchmark equity index, rose for the fifth week, closing above the $5,000 mark for the first time on record. According to Amberdata’s Director of Derivatives Greg Magadini, the boom in artificial intelligence-related stocks has driven the index higher, and the bullish momentum bodes well for the crypto market. "It’s hard to say that AI is overvalued. We’re really at the beginning of the AI story and an explosion of adoption. How do you value the future of AI? It’s definitely unknown, in my opinion. Crypto is in a similar position. [It is] likely a compliment to AI technology given decentralized on-chain data assets and the unknowable future use cases,” Magadini said in an email. “This investor risk appetite for tech is good for crypto and vice versa,” Magadini added. Shares in NVIDIA, which are already up over 40% for the year, are leading the AI-led rally in stocks. Some observers are of the opinion that stocks look expensive, as the S&P 500 equity risk premium has dropped to its lowest since at least 2003. The equity risk premium compares the projected annual corporate earnings growth with the yield on the 10-year U.S. Treasury note or the so-called risk-free rate to gauge the relative attractiveness of stocks. The sharp decline in the risk premium means stocks are expensive and Treasury notes are cheap. This does not necessarily imply risk aversion, which leads to outflow from stocks and cryptocurrencies into bonds. “We can see that stocks are expensive (or treasuries are cheap) given this measure. Another way to read this is that risk-on sentiment is very strong in the market,” Magadini noted. https://www.coindesk.com/markets/2024/02/12/bitcoin-logs-biggest-weekly-gain-since-october-as-sp-500-tops-5k/

2024-02-12 03:45

Spot bitcoin ETFs have amassed more than 192,000 bitcoin in holdings, as of Friday, since their launch nearly a month ago. Bitcoin prices could top out at the $112,000 level if current buying pressure from ETFs continues. The “worse case” scenario is at least $55,000, which is still a nearly 15% rise from current levels. Bitcoin prices could touch $112,000 this year if the current trend of inflows related to spot exchange-traded funds (ETFs) continues, on-chain data provider CryptoQuant said Sunday. CEO Ki Young Ju said on X the “worse case” for bitcoin was at least $55,000, or a nearly 15% bump from Monday’s prices. The targets were made based on the effect of inflows on bitcoin’s market capitalization and a metric ratio that has historically indicated if prices were “overvalued” or “undervalued.” “Bitcoin market has seen $9.5B in spot ETF inflows per month, potentially boosting the realized cap by $114B yearly,” Ki said. “Even with $GBTC outflows, a $76B rise could elevate the realized cap from $451B to $527-565B.” Ki cited a ratio tracking bitcoin’s market capitalization to realized capitalization – a measure of active tokens at thier last traded price – as potentially marking a top for bitcoin at the $104,000 to $112,00 mark. The ratio would reach 3.9 at those prices, a level that has historically marked a price top. Spot bitcoin ETFs have amassed more than 192,000 bitcoin in holdings, as of Friday, since their launch nearly a month ago. The funds have only been on the market for less than one month but have already attracted billions of dollars from investors looking to gain exposure to bitcoin without having to buy and store it directly. https://www.coindesk.com/markets/2024/02/12/bitcoin-etfs-flows-could-propel-btc-prices-to-112k-this-year-cryptoquant/

2024-02-11 19:06

Metaco CEO Adrien Treccani and Chief Product Officer Peter DeMeo have left the crypto custody firm that was acquired by Ripple last year. The CEO and chief product officer of Metaco, the cryptocurrency custody firm acquired by Ripple in May 2023, have left the company. A Ripple spokesperson confirmed CEO Adrien Treccani and Chief Product Officer Peter DeMeo were gone and said: "We appreciate the strong and industry-leading custody business that Adrien and his team built, as well as his leadership in integrating the custody team and solution with Ripple following the acquisition last year. Custody remains integral to Ripple's growing business as we continue to provide best-in-class enterprise crypto solutions for our customers around the world." Before being acquired by Ripple, Metaco had become a favorite partner for European banks looking for assistance with the custody of digital assets. Most recently, Metaco signed up HSBC, although there had been reports that banks were re-evaluating their relationship with Metaco in the wake of the acquisition. https://www.coindesk.com/business/2024/02/11/ripple-owned-crypto-custody-firm-metacos-ceo-and-head-of-product-depart/

2024-02-09 17:46

An initial lawsuit accusing crypto firm DCG of cheating people out of $1 billion has been amplified by investors coming forward with losses tripling that, the NY attorney general said. New York Attorney General Letitia James now says Digital Currency Group and Gemini are responsible for $3 billion in investor losses, boosting the size of her fraud lawsuit tied to the defunct Gemini Earn program. The companies are accused of misleading investors by assuring them their money was safe, when that, according to New York, was not the case. New York Attorney General Letitia James has amplified its civil fraud case against Digital Currency Group (DCG), now saying the company is responsible for $3 billion in investor losses tied to the Gemini Earn product and to direct investments with Genesis, according to a new court filing. As stated in an initial $1 billion fraud lawsuit against DCG, its defunct lending platform Genesis and Gemini Trust Co. in October, the companies are accused of misleading investors and assuring them of the safety of their money even as the companies' managements were aware that doom fast approached them. The fraud case focused at first on the Gemini Earn investment program that Genesis and Gemini ran together, but after the lawsuit, James' office said many more investors raised complaints of being swindled by Genesis more directly. As many as 230,000 people lost as much as $3 billion, according to the attorney general, spurring Friday's expansion of the lawsuit in the New York Supreme Court. "The fraud and deceit were so expansive that many additional people have come forward to report similar harm," James said in a statement. "This illegal cryptocurrency scheme, and the horrific financial losses that real people have suffered, are yet another reminder of why stronger cryptocurrency regulations are needed to protect all investors." The company responded Friday by accusing the attorney general of playing for headlines. “There is nothing new here," a DCG spokesperson said in an emailed statement, accusing the attorney general of making a "baseless complaint" to seek more press attention. "We will fight the claims aggressively and we will win. DCG has always conducted its business lawfully and with integrity, and DCG and Barry Silbert will be fully vindicated.” Read More: Gemini, Genesis, DCG Sued by New York AG for Allegedly Defrauding Investors of $1B https://www.coindesk.com/policy/2024/02/09/new-york-expands-fraud-case-against-digital-currency-group-to-3-billion/

2024-02-09 15:17

Spot bitcoin ETFs attracted Thursday their third-largest net inflows since debut, increasing their holdings by 9,260 BTC. Bitcoin jumped to $47,600 Friday U.S. morning hours, then quickly sold off 2%. Spot bitcoin ETFs saw over $400 million in inflows Thursday, their best day since Jan. 17, BitMex Research data shows. Bitcoin (BTC) climbed past $47,000 Friday as U.S.-based spot bitcoin exchange-traded funds (ETFs) booked one of their largest net inflows Thursday since their debut. The largest crypto by market capitalization ran to as high as $47,699, the highest since the bitcoin ETF launch day, before it buckled to $46,700 in a swift sell-off. Soon after, prices quickly rebounded slightly over $47,000. At press time, BTC was up 4.5% over the past 24 hours, outperforming the CoinDesk 20 Index (CD20), a measure of the biggest cryptocurrencies, which advanced 3.8%. The price surge happened as spot ETFs increased their net bitcoin holdings by 9,260 BTC, according to CoinDesk calculation based on the issuers' website. That translated to over $400 million in inflows, according to BitMex Research data, the highest figure since January 17. "This is the 3rd biggest inflow day for the group since their launch," James Seyffart, ETF analyst at Bloomberg Intelligence, said in an X post. "Still a big day." While bitcoin gained nearly 10% in a week, the rally still has room to run, analysts said. Alex Kuptsikevich, FxPro senior market analyst, told CoinDesk in an email interview that bitcoin is poised for higher prices for bitcoin after reclaiming the key 50-day moving average. 10X Research's Markus Thielen said earlier this week that bitcoin targets $48,000 in the short-term fueled by strong historic gains around the Chinese New Year festivities. In the mid-term he forecasted BTC to reach $52,000 in March completing the fifth wave of its uptrend. https://www.coindesk.com/markets/2024/02/09/bitcoin-tops-47k-as-spot-bitcoin-etfs-book-one-of-their-best-days/