2024-11-09 15:56

Even after breaking through $77,000 for the first time, bitcoin's price looks very likely to keep surging, CoinDesk senior analyst James Van Straten argues. Bitcoin (BTC) keeps hitting new highs, propelled above $77,000 on Nov. 8 for the first time ever by crypto industry optimism about Donald Trump winning the U.S. presidential election. Other cryptocurrencies are soaring, too. Ethereum's ether (ETH), for instance, just surpassed $3,000 for the first time since August. What's intriguing is that instead of selling off, bitcoin plowed through prior highs on Nov. 6 ($76,400), Nov. 7 ($76,900) and Nov. 8 ($77,200). Gold and U.S. equities are doing the same thing, hitting highs and then breaking them. This illustrates how strong the current rally is — and how likely it is to continue. Bitcoin's Google search interest is way below highs The bitcoin rally can keep going due to several factors. First, Google searchers' interest in the term is still relatively low. Searches were considerably higher in November 2021 and March 2024, so, even though search interest has perked up in the past week, this suggests we are far away from market euphoria. Profit-taking is below the 2017 all-time high CoinDesk has been monitoring profit-taking over the past few weeks. Are investors cashing in as bitcoin soars? They are. Glassnode data shows that on Nov. 6, the day after the U.S. election, $3.5 billion of profit was realized as bitcoin jumped from $68,000 to $76,000, while the total for the next two days was $3.2 billion. However, even though this may seem like a lot, it's tiny compared with prior all-time highs. In March, when bitcoin finally rose above its 2021 record, profit-taking soared to $10 billion. Throughout the 2021 bull run, it got as high as $6 billion. It was even higher in 2017 — sometimes around $4.6 billion — when bitcoin records were around $20,000. Current profit-taking isn't even topping that despite bitcoin's price being far higher. Bitcoin has been stuck between $50,000 and $70,000 for seven months. Despite breaking out of that range, investors are patiently waiting for higher prices. Bitcoin is still below the inflation-adjusted record Using inflation from the U.S. Bureau of Labor Statistics, you can measure how much purchasing power has been lost versus previous years. Bitcoin's November 2021 record of around $69,000 converts to about $78,000 in today's U.S. dollars, barely above its current price. Investors may want more for their bitcoin on an inflation-adjusted basis. https://www.coindesk.com/markets/2024/11/09/why-bitcoin-will-soar-above-its-fresh-record-van-straten/

2024-11-09 13:00

Trading tools on Solana are immensely profitable. In fact, they tend to rival or exceed DeFi blue chips like Maker, Aave or Lido. Solana's on-chain trading ecosystem is generating surprisingly high revenues. That's because of the network's unique architecture and the possibilities it affords traders. As a sector in its own right, Solana trading-linked activity is the third most profitable financial category in crypto, behind stablecoins and layer 1s. There's a lot of money to be made in providing infrastructure for Solana on-chain markets. That's according to David Duong and David Han, head of institutional research and institutional research analyst at crypto exchange Coinbase, who made the case in a Friday report that, if one looks at Solana's on-chain trading ecosystem as a financial sector in its own right, it's the third-most-profitable category in crypto — right behind stablecoins and layer 1s. "Solana's trading-linked activity regularly accounts for 75-90% of [Solana] transaction fees, substantially higher than that of Ethereum and other networks like Base and Arbitrum," Duong told CoinDesk. "While layer 2 solutions have also shown growth and innovation, they face different scalability challenges and user fragmentation issues compared to Solana," Duong added. "Solana's approach, especially its fee dynamics and user activity patterns, remains distinct." Coinbase somewhat put its money where its mouth is this week, announcing cbBTC, which brings the ability to trade, lend and borrow bitcoin (BTC) on Solana — crucial functionality likely needed for decentralized finance, or DeFi, to take off in that ecosystem. By the numbers: Tether's USDT and Circle's USDC stablecoins have produced $93 million and $28 million in revenue, respectively, in the last seven days, according to DefiLlama data, while the Ethereum, Tron and Solana networks saw $19 million, $11 million and $9.6 million. Solana-based protocols and trading bots, meanwhile, are right behind. Trading bot platform Photon and memecoin powerhouse pump.fun have both generated over $6 million in the last seven days, exceeding Ethereum-based decentralized finance, or DeFi, heavyweights such as Maker, Lido or Aave in terms of revenue. Most of this is thanks to memecoins — joke cryptocurrencies that don't pretend to have any utility and tend to be very volatile. Pump.fun, a Solana-based protocol that allows users to easily create new tokens, has made the network a central hub for memecoin trading activity. Over 3 million coins have been launched on pump.fun since the protocol went live in January 2024, Coinbase said. That's where Telegram trading bots — which help users buy and sell memecoins even faster — step in. "The magnitude of revenue generated by Telegram trading bots is surprising, even exceeding that of pump.fun," the Coinbase analysts wrote. The most profitable bots, like Photon, Bankbot and Trojan, are all exclusively based on Solana, the report noted. "This suggests that a large number of traders on Solana are less sensitive to execution fees, perhaps due to the higher volatility (and also lower liquidity) of the underlying assets," the analysts wrote. "What we've also uncovered in our research is that Solana's fee spending generally peaks later in the day, coinciding with the U.S. West Coast hours, which suggests a distinct cohort of active users there," Duong told CoinDesk. Tailoring an on-chain ecosystem to users Solana builders are aware that the network's on-chain environment has produced unique dynamics — and some of them are trying to take advantage of that to the fullest. For example, Zeta Markets, a decentralized exchange, or DEX, that offers perpetual contracts, wants its users to be able to buy their memecoins and take on leverage without needing to use multiple wallets. "Traders are like, 'Why would I go trade on a centralized exchange [CEX]?' They have all their funds already on the Solana chain," Zeta Markets Founder Tristan Frizza told CoinDesk in an interview. "If you already have your Phantom wallet with all your memecoins, then you might want to hedge it out using perpetual futures. That's like one click away [with DEXs]." Ease of use is a massive draw, but it also implies listing risky coins that aren't yet present on any CEX, Frizza said. Not to mention the ability to use Solana tokens as collateral for the perps positions, instead of simply stablecoins. "No one wants to be holding stables in a bull market," Frizza said. "They just want to take whatever's in their wallet and chuck this into their margin account." All of this ends up showing up in the data. The convenience of trading on Solana DEXs has led these protocols' volumes to deviate from Coinbase's — even as Ethereum DEX volumes have become more correlated. "This suggests that the trading activity on Solana is relatively decoupled from CEX activity and appears to be forming its own distinct ecosystem," the Coinbase report said. https://www.coindesk.com/business/2024/11/09/the-unique-way-the-solana-trading-ecosystem-is-making-bank/

2024-11-09 08:42

ETH is on track to register its biggest weekly since May, but remains well below its record high. ETH jumps to highest since Aug. 2. Hopes for regulatory relief under the Trump presidency and Fed rate cuts galvanize demand for ETH. When a beleaguered asset is met with a burst of good news, it can unleash powerful bullish momentum, often outshining the broader market. Ethereum's native token, Ether (ETH), is experiencing this phenomenon following pro-crypto Donald Trump's victory in the U.S. election and the Fed rate cut earlier this week. ETH, the world's second-largest cryptocurrency by market value, surged past $3,000 on Saturday, reaching the highest since Aug. 2, according to CoinDesk data. Prices have risen 23.39% this week, the biggest gain since May, outperforming BTC's 11.2% gain by a significant margin. The total crypto market capitalization has increased by 13.5% to $2.5 trillion. ETH's market-beating surge could be attributed to two factors. First, there is hope that the Trump administration will relax regulatory barriers for the digital assets industry, potentially fostering growth in decentralized finance, a sector dominated by Ethereum. Another equally important factor is the Fed rate cut cycle, which is restoring ether's appeal as an internet bond, offering a fixed-income return through staking rewards. On Thursday, the Fed reduced the benchmark borrowing cost by 25 basis points to a range of 4.5%-4.75%, having delivered an outsized 50 bps cut in September. The rate reduction has narrowed the so-called Fed-ether yield differential in favor of ETH. The way ether options listed on Deribit are currently priced suggests the ETH rally is expected to continue. The call-put skew is positive across time frames, indicating a relative richness of call options offering asymmetric upside potential to the buyer. Inflows into the spot ether exchange-traded funds (ETFs) have picked up as well. On Friday, BlackRock’s iShares Ethereum Trust ETF (ETHA) registered an inflow of nearly $60 million, the highest in three months, according to Farside Investors. Note that ETH is still well below its 2021 peak of $4,868, while BTC is trading at record highs above $75,000. https://www.coindesk.com/markets/2024/11/09/ether-blows-past-3k-builds-bullish-momentum-after-trumps-election-win-and-fed-rate-cut/

2024-11-08 21:00

Cardano's ADA, Polygon's POL advanced 15% as the broad-market CoinDesk 20 Index outperformed BTC. Cryptocurrency price milestones continue to topple in the aftermath of Donald Trump's election victory, as bitcoin (BTC) on Friday surpassed $77,000 for the first time and some laggard altcoins joined the rally following the Federal Reserve's rate cut. The largest and oldest crypto eked out a new record price of $77,105 during U.S. trading hours, according to the CoinDesk Bitcoin Index (XBX), though it's only eked out a 0.2% gain over the past 24 hours. The broad market CoinDesk 20 Index outperformed, with the native tokens of Cardano (ADA) and Polygon (POL) surging 15%. Ethereum's ether (ETH) advanced 3% to just shy of $3,000, its strongest price in more than three months, as the decentralized finance (DeFi) sector gains steam. DeFi stands to gain the most from more accommodating digital asset regulations in the U.S. that crypto market participants hope for from a new administration led by Trump. Solana (SOL), a layer-1 blockchain network considered the main contender for Ethereum's DeFi dominance, topped $200 for the first time since April. A look at traditional markets shows the S&P 500 crossing the 6,000 mark for the first time ever amid upbeat equities markets following Trump's decisive win in the U.S. presidential election. While crypto assets booked double-digit gains during this week, with BTC sitting at record highs, funding rates for perpetual swaps on crypto exchanges are much closer to neutral levels than the market top in early March, CoinGlass data shows. Funding rate refers to the amount long traders pay shorts to take the opposite side of a trade. When funding rates are negative, shorts pay the fee to longs, as this relationship often occurs during bearish periods. "Zero signs of market froth in funding rates," noted Sean Farrell, head of digital asset strategy at Fundstrat. The muted frothiness suggests that crypto prices have much more room to advance higher, with one market participant seeing bitcoin getting as high as $125,000. "We're in the 7th inning of [the] bull market," or at the beginning of the final third of the rally, Ari Paul, founder and CIO of digital asset investment firm BlockTower, said in an X post. He said recent buyers appear to be positioning for a six- to 12-month rally, driven mostly by institutional investors rather than retail, suggesting a more gradual climb to his targets. Retail interest will increase along with leverage as the rally progresses. He recommended buying and holding a few select crypto assets as a strategy over the coming months, arguing that more active trading will likely be more profitable at the final stages of the bull run. "This phase, the 7th inning, takes us to $90K-$125K," Paul said. "Then we have 2 more innings left and the last are usually the most parabolic." https://www.coindesk.com/markets/2024/11/08/bitcoin-hits-another-milestone-topping-77k-for-first-time-funding-rates-suggest-crypto-rally-can-keep-going/

2024-11-08 16:54

The foundation has spent roughly $240 million since March 2022, and holds most of its treasury in ether, which has slid roughly 22% since the last financial report. The Ethereum Foundation on Friday released its long-awaited financial report, revealing it had $970.2 million in its treasury as of Oct.31 That's down 39% from $1.6 billion on March 31, 2022, the last date for which the foundation published its financials. Most of foundation's holdings are in crypto (81.3%), with the vast majority of that held in ether (ETH). The foundation spent about $240 million over 2022 and 2023, and ETH has slid 22% since the last snapshot from March 2022. The Ethereum Foundation, which stewards development of the second-largest blockchain, on Friday released its long-awaited financial report, revealing it had $970.2 million in its treasury as of Oct.31. That's down 39% from $1.6 billion on March 31, 2022, the last date for which figures were previously available. The disclosure comes as many community members have pushed the foundation to be more transparent about its financial holdings, given its critical role and vast influence over the Ethereum ecosystem. The last time the foundation published a financial report was in April 2022. Most ($788.7 million, or 81.3%) of the foundation's treasury is held in crypto, with the vast majority (99.45%) of that in ether (ETH). The remaining $181.5 million is non-crypto investments and assets. “We choose to hold the majority of our treasury in ETH. The EF believes in Ethereum’s potential, and our ETH holdings represent that long term perspective,” the report says. “At the same time, the goal of the EF’s treasury is to fund important public goods for the Ethereum ecosystem for years into the future. To achieve this goal we must follow a conservative treasury management policy that ensures we have sufficient resources even in the case of a multi-year market downturn.” Since the last snapshot in March 2022, when ETH was trading around $3,300, the price has slid 22% to roughly $2,600, according to CoinMarketCap data. The foundation spent $105.4 million in 2022 and $134.9 million last year, it revealed. The figures are consistent with statements made in September by foundation researcher Justin Drake, who shared in a Reddit AMA that the foundation spends about $100 million a year and holds $650 million in its main wallet. The foundation has roughly 10 years of runway, Drake said then. The foundation also revealed it is implementing a new conflict of interest policy, emphasizing that researchers and developers must inform the organization if they plan to take on any additional outside work and whether they plan to invest in funds. If the outside work pays more than $25,000 annually, and if they want to make investments, these must be reviewed by a discussion group. People working at the foundation will not be allowed to take on outside work and get paid in illiquid assets with an unknown market value, including advisorship token packages before the launch of projects, the report emphasized. The conflict-of-interest policy comes after two top Ethereum researchers, Drake and Dankrad Feist, revealed last week that they would be leaving their advisorship roles at EigenLayer, the giant restaking platform on Ethereum. Their positions with the Eigen Foundation came with a significant token payout from EigenLayer, a fact that raised concerns of conflict of interests when the two developers disclosed their new roles in May. https://www.coindesk.com/tech/2024/11/08/ethereum-foundations-treasury-shrunk-39-over-2-12-years-to-970m/

2024-11-08 13:30

The Hong Kong-based trials will allow for registration on a regulated stablecoin app and the purchase of tokenized financial products. Flare and Red Date Technology are conducting trials in Hong Kong to allow mainland Chinese residents to purchase stablecoins issued by IDA through anonymous registration and compliance with Chinese real-name laws. The initiative uses the China Real-Name Decentralized Identifier System (RealDID) to enable legal transactions with stablecoins like HKDA, aligning with Hong Kong's new stablecoin regulations. Major stablecoins such as Tether and Circle's U.S. dollar stablecoins do not appear to be included in these trials. Layer-1 blockchain Flare and decentralized cloud infrastructure company Red Date Technology have announced two trials that will allow mainland Chinese residents to buy stablecoins issued by virtual asset company IDA in Hong Kong. The first trial will permit anonymous registration on a regulated stablecoin app and the other will facilitate the purchase of tokenized financial products with the stablecoin. "With Hong Kong on the cusp of announcing new stablecoin regulations allowing digital currencies on public blockchains, the introduction of this KYC solution trial gives Mainland Chinese residents their first opportunity to legally hold public chain wallets and transact with stablecoins, such as HKDA, a fiat-referenced Hong Kong Dollar stablecoin issued by IDA. This project signals a possible first step in aligning with China's long-term approach to integrating blockchain technology," the companies said in a statement. China has a strict stance on residents dealing in cryptocurrencies, still the country has been investing heavily in blockchain technology. Despite the popularity of crypto trading, state-backed projects are often more focused on B2B and corporate use cases. Blockchains tend to be permissioned rather than permissionless, and NFT projects — including ones released by local museums — have been warned that their purpose should be for collecting rather than speculation. The trials in Hong Kong will use the China Real-Name Decentralized Identifier System (RealDID) for anonymous registration. A blockchain-based ID system launched in China in December last year, and it is being run by the Blockchain-based Service Network, which is backed by Red Date Technology, and the Ministry of Public Security's First Research Institute. Under Chinese law, users on digital services platforms are required to undergo real-name registration. But by using RealDID, they can remain anonymous to companies and platforms while still meeting real-name compliance requirements under Chinese law. In Hong Kong, they will be able to access stablecoins and other token-based financial products without needing to submit passports or bank statements. It does not appear that major stablecoins such as Tether and Circle's U.S. dollar stablecoins will be available. https://www.coindesk.com/policy/2024/11/08/layer-1-flare-and-red-date-technology-set-to-trial-stablecoin-buying-for-chinese-nationals-in-hong-kong/