2023-11-09 03:12

Bitwise's CIO sees future upside to bitcoin's price as the world's largest digital asset has 30% this month. The price of bitcoin (BTC) briefly touched $36,000 before settling slightly lower during the Asian trading hours on Thursday, according to CoinDesk Indices data. Bitcoin is up around 30% in the last month, and 93% over the past year. Other large-cap digital assets are also in the green, with ether (ETH) up 20% in the last month. While bitcoin’s gains this year have been impressive, and some have attributed this to the widely expected approval of a bitcoin exchange-traded fund, in a recent interview with CoinDesk, Matt Hougan, Bitwise Asset Management’s Chief Investment Officer, said that an ETF is not yet priced in. "It’s not at all priced in because the people who are going to buy this ETF are not aware that it’s coming or most likely coming; the majority of advisors who are the natural audience for this ETF don’t expect it to come until 2025 or later,” Hougan said. “If the people who are going to buy this ETF don’t think it's going to be approved in the next two months, then I don’t see how it’s priced in.” ETFs, Hougan argued, will play a significant role in opening up cryptocurrency investments to a broader range of investors, particularly financial advisors who manage a substantial portion of the U.S.' wealth. Currently, crypto has been bought by 20% of self-directed retail investors, he said, but a full 80% of the wealth in America is controlled by financial advisors and institutions, who need an ETF to access crypto. "There’s a whole entire new audience for bitcoin,” he said, comparing it to the launch of gold ETFs in the early 2000s. “The approval of a spot gold ETF in 2004 led to eight or nine consecutive years of gold price increases, the longest in its modern history since the dollar’s creation," he continued. Hougan said that BlackRock’s filing for a spot bitcoin ETF in June had a significant psychological impact on the market, effectively dispelling the lingering negative sentiment from the FTX collapse, which he refers to as the “ghosts of Sam Bankman-Fried.” “When BlackRock filed for a bitcoin ETF, and CEO Larry Fink spoke on Fox Business News about bitcoin transcending other currencies, concerns vanished,” he said. https://www.coindesk.com/markets/2023/11/09/bitcoin-tops-36k-as-etfs-not-yet-priced-in/

2023-11-08 21:39

The company sees 2023 mining power guidance reaching 26 EH/s, making it the largest bitcoin mining firm in terms of hash rate. Marathon Digital (MARA), one of the largest bitcoin miners in North America, beat third-quarter earnings estimates while missing revenue expectations. The miner reported a third-quarter earnings of $0.35 per share versus analyst estimate of a loss of $0.11 per share, according to FactSet data. Third quarter revenue was $97.8 million compared to an estimate of $99.6 million. Marathon produced 3,490 bitcoins during the third quarter, up from 2,926 in Q2 and 616 in Q3 one year ago. The company sold 66% of the bitcoin produced last quarter to pay for operating costs, according to the statement. The firm also said it sees 2023 bitcoin mining power, or hash rate, to reach 26 exahashes per second (EH/s) and expects to grow its hash rate by about 30% in 2024. If the company manages to hit the guidance for this year, it will become the largest publicly traded mining company in terms of hashrate. Core Scientific (CORZQ), a miner expecting to emerge from bankruptcy in the fourth quarter, has about 22 EH/s mining power. MARA stock was lower by 6.9% during the regular session Wednesday; in after hours trading, shares have bounced a modest 0.8%. The stock rose nearly 140% this year, outperforming the 73% bitcoin (BTC) price gain. CORRECT (Nov. 8, 21:51 UTC): Corrects to say third quarter earnings was a beat. https://www.coindesk.com/business/2023/11/08/bitcoin-miner-marathon-digital-misses-3q-earnings-and-revenue-estimates/

2023-11-08 21:29

The SEC pushed back against Binance's motion to dismiss its lawsuit in a new filing. Binance's efforts to dismiss a U.S. Securities and Exchange Commission (SEC) lawsuit do not have a basis in the law, the federal regulator said in a filing Wednesday. The SEC pushed back against Binance and Binance.US's motion to dismiss the suit it brought earlier this summer, saying the motion relies on "distorted" and "tortured" interpretations of both federal law and precedents. The SEC first sued Binance in June, a day before suing Coinbase, arguing both companies offered unregistered securities to the investing public (the Binance suit included some other allegations). Binance, Binance.US and Binance founder Changpeng "CZ" Zhao argued in a motion to dismiss that the SEC was overreaching from its mandate and that it hadn't "plausibly alleged" actual securities law violations. In Wednesday's filing, the SEC said Binance's argument would "dismantle decades of foundational precedent upon which the nation’s securities laws operate," instead creating a new "rigid framework" that did not have a basis in either case precedent or existing law. Binance's sale of the BNB token during an initial coin offering as a fundraising mechanism violated securities law, as did its sale of Binance USD (BUSD) as an investment contract, the SEC alleged. Similarly, staking and earn programs also violated federal securities laws, the agency argued. The SEC also pushed back against an argument that its lawsuit violated the "Major Questions Doctrine," a recent Supreme Court ruling that's quickly become a favorite of crypto companies facing litigation from the federal regulator. "Defendants fail to explain why a doctrine intended to protect Congressional authority to make major policy decisions would be served by precluding the SEC from enforcing the Congressional policy choices embodied in the securities laws," the SEC said. https://www.coindesk.com/policy/2023/11/08/binance-has-no-real-argument-for-dismissing-sec-suit-regulator-says/

2023-11-08 21:24

Polygon's MATIC and Chainlink's LINK led altcoin gains Wednesday afternoon. Bitcoin is increasingly coiled below $36,000, supported by consistent buying activity during U.S. hours. LINK and MATIC gained 10%, most among large-cap altcoins. Bitcoin's "Santa Claus rally" could start any moment amid accommodating macro picture, Matrixport said. Bitcoin (BTC) was closing in on the $36,000 key level Wednesday as bulls and bears continued their tug of war at that key level. After quickly giving back a chunk of its short squeeze-related gains on Tuesday, bitcoin took another shot at the $36,000 level early Wednesday afternoon on what appeared to be a renewed bout of spot ETF optimism. At press time, the crypto had again pulled back to just above $35,500, up just modestly over the past 24 hours. Ethereum scaling network Polygon's native crypto (MATIC) and oracle network Chainlink's token (LINK) lead gains in altcoins, surging 10%-11% over the same time period. LINK attracted steady institutional buy flows over the past week, institution-focused trading platform FalconX noted Wednesday. MATIC perhaps benefitted from an early Wednesday news that network developer firm Polygon Labs will work with Near Foundation on a zero-knowledge tech-powered tool for blockchain interoperability. The token is now up roughly 27% since late October's smart contract activation of the upcoming POL ecosystem token, part of a comprehensive network upgrade called Polygon 2.0. The CoinDesk Market Index (CMI), a broad basket of nearly 200 digital assets, was up 0.3% during the day. Bitcoin (BTC) price could break out on declining inflation Crypto investment services firm Matrixport noted in a Wednesday report that bitcoin's breakout above $36,000 is "imminent," fueled by consistent BTC purchases during U.S. trading hours. This is coupled with a more accommodating macroeconomic environment for risk assets, with dovish Federal Reserve messaging, retreating bond yields and the U.S. Treasury Department slowing the pace of long-term debt issuance, the firm added. To the extent it shows a continued slowdown in inflation, next week's U.S. consumer price index (CPI) report might provide the spark for a breakout, suggested Matrixport "The Santa Claus rally could start at any moment," said Matrixport. "With a steady increase in buyers during U.S. trading hours and an ongoing attempt for bitcoin to break out, we could see prices rallying into the end of the month and year." "A break above $36,000 could propel BTC toward our next technical resistance level at $40,000, potentially reaching $45,000 by the end of 2023," the group added. https://www.coindesk.com/markets/2023/11/08/bitcoin-breakout-toward-45k-imminent-says-matrixport/

2023-11-08 21:19

Proposed coalition of professional researchers could help "accelerate decision-making" at the Ethereum layer-2 project, but complaints have surfaced over the cost and potential conflicts of interest. Cost is "more than I pay for Harvard lawyers," one commenter wrote. Based on early results of "temperature check" vote, opinions are pretty evenly divided. The episode offers a fresh example of how blockchain pioneers are struggling to iron out the nettlesome challenge of decentralized governance. In March, Arbitrum, the biggest layer-2 blockchain network atop Ethereum with about $2 billion of deposits, pushed to decentralize its governance – distributing tokens to holders who would get a say in deciding the project's strategy and tactics with votes, via a "decentralized autonomous organization" known as Arbitrum DAO. But a new proposal to professionalize the project's research efforts – by allocating more than $2 million worth of digital tokens to an "Arbitrum Coalition" proposed by the research arm of Blockworks, a crypto media firm – is polarizing the community and generating complaints over the cost and potential conflicts of interest. Currently, the project's research is contributed and aggregated in a community forum, mostly by volunteers. But the coalition proposal has been met with discord in these forums, with the debate hitting on a key tension at the core of all DAOs: how to reconcile "decentralized" decision-making with the need for expert guidance. A key complaint is that there could be conflicts of interest among members of the research coalition. The professional contributors would include Blockworks Research; Gauntlet, a crypto-centric risk and financial advisory firm; and Trail of Bits, a cybersecurity company. An additional organization will be elected to serve as a "DAO Advocate" and act as a "referee between the DAO and the coalition" under the proposal. "Having the same parties review and provide opinions on proposals, cover those proposals publicly via Media Networks, vote on proposals, review the security concerns of a proposal, and then execute the Arbitrum network upgrades is fundamentally lacking separation of powers," wrote one commenter. The person added that proposed members of the coalition also comprise a large percentage of overall ARB votes. The proposal also struck a nerve with some community members who took issue with the proposed cost of the new venture: $2 million for a year-long trial run. A "temperature check" poll on the proposal started on Nov. 3 and ends Nov. 10; the informal tally will help determine whether the proposal should be taken to an official Arbitrum DAO vote. While some large DAO voters still have yet to weigh in, the proposal is currently set to pass its simple-majority threshold, albeit by a thin margin: 52% have voted in favor of the coalition's funding and 46% against it. Arbitrum DAO Arbitrum switched to a DAO-based governance structure in March when it first launched the ARB token and established the Arbitrum Foundation – a non-profit tasked with supporting the development of the Arbitrum network, which helps facilitate faster and cheaper transactions on Ethereum. The guiding role of a DAO like Arbitrum's is to allow a widely distributed community of people – in this case, Arbitrum's ARB token-holders – to decide how a protocol is developed and governed. While Arbitrum's shift to decentralized governance has been official for more than six months, the Arbitrum Foundation and Offchain Labs (the firm that built Arbitrum) continue to play a crucial role in the ecosystem. Their outsized influence can be viewed as a necessary byproduct of how DAOs work: It can be hard to coordinate across a far-flung group of DAO members with varying levels of engagement and expertise. "Arbitrum’s impressive decentralization demonstrates that the DAO can’t rely on single entities such as Offchain Labs or the Arbitrum Foundation," Blockworks Research wrote in its proposal. The research coalition was pitched by Blockworks Research as a way to "accelerate" decision-making on Arbitrum – offloading certain research and diligence responsibilities to a trusted group of expert stakeholders. The coalition described in the proposal is also supposed to help balance power further in favor of the DAO. Arbitrum Community Responds In authoring the proposal, Blockworks Research wrote that it was motivated by the fact that the Arbitrum Forum "includes many worthwhile suggestions, but often lacks the required research, coordination, design, and risk assessment to move forward optimally." (Disclaimer: Blockworks competes with CoinDesk in the crypto media and events space.) In response to a forum comment around concerns that the new coalition could act as a "centralizing force," Blockworks rRsearch responded that "The Coalition does not intend to influence or persuade community members to vote in any direction," adding that the goal would be to "provide objective tools and reports to help delegates and community members make more informed decisions more efficiently." The company specified in the proposal that members of the coalition could be removed or changed after serving a 12-month term. The projected yearly cost for the research coalition would total $2.2 million worth of ARB, Arbitrum’s native token – funds that would come directly out of the Arbitrum DAO treasury. Some of the more heated debate on the proposal was around how these funds would be allocated. 'More than I pay for Harvard lawyers' According to a proposed breakdown of costs, Trail of Bits would receive $800,000 for an engineer to review proposals for 32 weeks over the course of a year. Gauntlet, meanwhile, requested $327,000 for "15 quantitative researcher weeks," and Blockworks requested $780,000 "for a minimum 13 analyst weeks per quarter." "Can the organizations involved demonstrate their time is worth $650-$1500/ hour?" wrote one commenter on Arbitrum's governance forum. "That seems exorbitant … as in 'more than I pay for Harvard lawyers' exorbitant, literally." As to concerns around this proposed payment plan, Blockworks Research analyst Sam Martin told CoinDesk via email that Blockworks "specifically proposed a not-to-exceed price to eliminate the possibility of overspend on the DAO," adding that "the DAO will have our entire team at its disposal which spans in expertise with a wide array of skills." "Our commitment to the DAO and seeing it succeed is rather obvious at this point through our unpaid contributions made thus far," Martin said in the email. https://www.coindesk.com/tech/2023/11/08/arbitrum-voters-polarized-over-research-pitch-with-2m-price-tag/

2023-11-08 20:51

Representatives of the company are answering questions from two divisions of the U.S. Securities and Exchange Commission in the wake of Grayscale's court win over the agency. The U.S. Securities and Exchange Commission (SEC) has opened talks with Grayscale Investments on the details of the company's application to convert its trust product GBTC to a spot bitcoin exchange traded product (ETF), according to a person familiar with the back-and-forth, which could have momentous implications for the crypto industry. An SEC approval of one or more ETF applications is keenly awaited by the sector, which sees that moment as a milestone that could ease everyday investors' path into digital assets. Grayscale has been in contact with both the SEC's Division of Trading and Markets and the Division of Corporation Finance since winning its court fight, said the person, who requested anonymity because the talks remain private. Both SEC divisions would have a role in shaping and approving the firm's ETF application. Grayscale and CoinDesk are part of the same parent company, Digital Currency Group. Grayscale has long had a relationship with the SEC due to its existing Grayscale Bitcoin Trust (GBTC), but when it sought to launch an ETF that would carry direct crypto assets, the agency denied it. A U.S. federal court battle ensued that ended with a panel of judges finding the SEC was "arbitrary and capricious" in its rejection, and the court ordered the agency to erase its denial. The court decision was finalized last month, putting the application back in front of the regulator. "Right now we're just laser-focused on constructively reengaging with Trading and Markets," said Craig Salm, Grayscale's chief legal officer, though he didn't expand on the details of that interaction. "There are still things that have to be worked through," Salm said in an interview, also noting that others among the applicants for bitcoin ETFs – a group that includes financial giants BlackRock and Fidelity – seem to be making progress in SEC talks with their own registrations. "Overall, it's been good engagement, and it's a matter of when, not a matter of if anymore." An SEC spokeswoman declined to comment on the new talks. When pressed two weeks ago about what his agency will do next with Grayscale's application and the others, SEC Chair Gary Gensler said he wouldn't answer while the commission waits for its staff to recommend a course of action. Meanwhile, he published a video earlier on Wednesday spotlighting the work of the agency's corporation-finance arm – dealing with "rapidly evolving technology and business models" – that will be central to Grayscale's application. Read More: SEC’s Grayscale Court Rout Puts Agency in Will-They, Won’t-They Role Starring Gensler https://www.coindesk.com/policy/2023/11/08/us-sec-said-to-open-talks-with-grayscale-on-spot-bitcoin-etf-push/