2024-11-07 21:08

FTX's collapse blew a bitcoin-sized hole in Solana DeFi. Can Coinbase's cbBTC finally fill it? Coinbase introduced cbBTC, which brings bitcoin to the Solana blockchain. Bitcoin helps power trading, lending and borrowing on centralized crypto exchanges, but this crucial functionality requires extra effort in DeFi. Some hope Coinbase's move will spur more DeFi activity on Solana. Nearly two years ago, FTX's collapse blew a bitcoin-sized hole in Solana-based decentralized finance that hadn't truly been filled — possibly until now. Bitcoin (BTC) remains a benchmark asset for trading, lending and borrowing on centralized crypto exchanges. It takes extra effort to bring that crucial financial functionality to DeFi on other blockchains. Basically, someone must issue a token backed by and pegged to bitcoin on the chain. Exchange giant Coinbase is trying to fill that role on Solana (SOL) with cbBTC. Launched Thursday, it lets traders swap in and out of the bitcoin-backed token by sending it between the exchange and their Solana wallets. That ease of entry and exit has contributors at many Solana-based protocols hopeful cbBTC can become a gold standard that ripples across the entire ecosystem. One high-ranking official in Solanaland said there's "much higher hopes" Coinbase's cbBTC will be a hit — especially at a time when bitcoin, the world's biggest cryptocurrency, is ripping to new all-time highs in the wake of Donald Trump's election. Solana DeFi hasn't enjoyed a comparably straightforward bitcoin stand-in since the mysterious demise of the last standard-bearer, soBTC. That wrapped bitcoin token is widely believed to have been controlled by FTX. It died with the fraudulent exchange in November 2022. SoBTC's failure left the chain's entire DeFi ecosystem without a widely recognized standard for trading bitcoin on Solana. This put it at a disadvantage to Ethereum DeFi, which has long had its own solution (including a new one from Coinbase itself) that Solana protocols accessed via bridging. Coinbase's native issuance of cbBTC on Solana "reduces the risk surface by half," said InfraRay, a contributor to popular Solana-based decentralized exchange Raydium. "We could see a surge of BTC liquidity on-chain, which could increase usage" in many different DeFi protocols, Tom said. "It’s early, but the hope is that robust liquidity for cbBTC could get some of those flywheels going." That's only if Coinbase succeeds in turning cbBTC into Solana's standard stand-in for bitcoin. Other companies have failed at that effort. 21.co has less than $1.5 million worth of its 21BTC circulating in Solana DeFi. Threshold's tBTC hasn't done much better. By comparison, Coinbase has nearly $10 million worth of cbBTC ready to deploy into Solana DeFi, according to blockchain data. An additional $500,000 of cbBTC is already sloshing around trading pools on Meteora and Orca and in a reserve on trading protocol Kamino. "I think and hope it’s gonna be big," said Kamino co-founder Marius Ciubotariu. "There’s no reason for most BTC DeFi stuff to happen on Ethereum." Coinbase hasn't historically participated in Solana DeFi. CbBTC is its first token issued natively on the Solana blockchain. The exchange is much more involved in the Ethereum world, particularly via its own layer-2 network, Base. "Unlocking BTC utility for our customers across the on-chain economy is at the heart of our decision to launch cbBTC. Expanding support to Solana and potentially other chains gives our customers more options and aligns with our overall strategy of bringing billions of users on-chain," a company spokesperson said. In September, Coinbase first rolled out cbBTC on Base and Ethereum with the promise of supporting more chains later. But cbBTC traders moving bitcoin to Base get a small leg up on those moving bitcoin to Solana. Coinbase-to-Base bitcoin transfers are free; Coinbase-to-Solana bitcoin transfers cost 40 cents. https://www.coindesk.com/business/2024/11/07/coinbase-brings-bitcoin-to-solana-spurring-high-hopes-for-defi-surge/

2024-11-07 19:19

The prestigious team of developers say that the new method for adding "covenants," while still in need of refinement, could bring greater programmability to the Bitcoin blockchain without requiring a notoriously difficult-to-pass upgrade known as a soft fork. A group of top Bitcoin developers collaborating across multiple teams is claiming a breakthrough on the oldest and largest blockchain, outlining a way of adding a type of programming known as "covenants" that could unlock crucial functionality such as new wallet and vault features and more efficient layer-2 protocols. Importantly, the technique would not require changes to Bitcoin's main underlying code, a notoriously fraught process where consensus is typically seen as the threshold required to greenlight major upgrades known as a "soft fork." The announcement was detailed on Thursday in a research paper titled, "ColliderScript: Covenants in Bitcoin via 160-bit hash collisions." The publication comes as Bitcoin, the oldest and largest blockchain, has attracted hordes of developers trying to add programmability and additional network layers that could lead to not only more applications being built atop the peer-to-peer network but also faster and cheaper venues for transaction execution. The goal is to catch up to what Ethereum, the second-largest blockchain, has achieved — but with Bitcoin's famously robust security. 'Pretty awesome idea' The team was led by Ethan Heilman, who separately is one of the authors of a proposed technique known as OP_CAT that could increase Bitcoin's programmability. However, that effort would require changes to the Bitcoin software, as would a separate proposal for covenants known as OP_CTV, proposed by the developer Jeremy Rubin. Other authors of the new research paper include Victor Kobolov and Avihu Levy of the StarkWare project and Andrew Poelstra, a longtime Bitcoin developer who currently serves as head of research at Blockstream. StarkWare's official account on X posted a link to the paper on Thursday, writing: Robin Linus, a Bitcoin developer who has made waves for a project known as BitVM and more recently BitVM2 that could unlock greater programmability, told CoinDesk in a Telegram message that the research paper was "not really practical" in its current form but represented a "pretty awesome idea." "It would cost like north of $10m to execute such a covenant, but the idea behind it is ingenious," Linus wrote. "I hope people will try to come up with optimizations to make it practical." https://www.coindesk.com/tech/2024/11/07/bitcoin-developers-working-with-starkware-blockstream-claim-breakthrough-on-covenants/

2024-11-07 19:09

Fed Chair Jerome Powell's speech later today could shake up markets as he will face questions about the central bank's outlook on monetary policy and inflation after Donald Trump's decisive win in the U.S. presidential election. As widely expected by market participants, the U.S. Federal Reserve lowered its benchmark fed funds rate by 25 basis points to 4.5%-4.75% on Thursday, following the footsteps of other central banks to loosen monetary policy. "Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low," the press release said. "Inflation has made progress toward the Committee's 2% objective but remains somewhat elevated." The Bank of England also cut rates by 25 bps earlier today, while Sweden's Riksbank eased key interest rates by half percentage points. Fed Chair Jerome Powell, who spoke for the first time since Donald Trump's decisive win of the U.S. elections, said that the election results have "no effect" on the Fed's policymaking in the near-term, quelling fears of a hawkish surprise. Some observers mulled the possibility that the new president-elect's proposed policies such as tax cuts, tariffs and deregulation to stimulate economic growth could reignite inflationary pressures, prompting the Fed to take a more cautionary approach. Powell said that monetary policy is still restrictive even with today's easing, but downside risks to economic growth has diminished since the Fed's September 50 bps cut. To reporter questions, he also said he would not resign if Trump asked him to leave and firing or demoting him is "not permitted under the law." Following Powell's remarks, the price of bitcoin (BTC) hit $76,951, a fresh record high before slightly retreating, still up 1.6% over the past 24 hours. The broad-market CoinDesk 20 Index outperformed gaining 4.5% during the same period. U.S. stock indexes also hit session highs, with the S&P 500 and tech-heavy Nasdaq up 0.8% and 1.5% through the day, respectively. Expectations for the Fed to pause rates at their upcoming December meeting decreased to 28% from 33% before the meeting, the CME FedWatch Tool showed. https://www.coindesk.com/markets/2024/11/07/fed-cuts-rates-by-25-basis-points-bitcoin-price-at-record-ahead-of-powells-first-speech-since-trump-win/

2024-11-07 18:53

Bitcoin (BTC) just hit a new all-time high, but Ethereum's ether (ETH) is the bigger winner. Bitcoin has made a new all-time high, continuing its strong performance after Donald Trump won the U.S. presidential election. Ether outperformed by rising 8% in the last 24 hours ahead of Federal Reserve policymakers' meeting. Bitcoin (BTC) just made a new all-time high, continuing its powerful advance following Donald Trump's election victory. The top cryptocurrency is currently up 2.3% in the last 24 hours and trading for $76,600, buoyed by former President Trump's win, as well as market expectations that the Federal Reserve will announce a 0.25% federal interest rate cut after Thursday's Federal Open Market Committee meeting. It's been less than a day since bitcoin notched its last all-time high of $76,480 — a price that broke a seven-month-old record. It's not the only coin doing well. The CoinDesk 20 — an index of the top 20 cryptocurrencies by market capitalization, excluding stablecoins, exchange tokens and memecoins — is up 4.3% in the last 24 hours. Surprisingly, Ethereum's ether (ETH) has proved to be one of the index's best performers. The largest smart contract platform has surged 8% and is now priced at almost $2,870 — showing signs of breaking away from the $2,800 to $2,300 range where it's been stuck. "Beyond ... bitcoin pushing to a fresh record high, the market should perhaps be paying attention to what could be a more bullish development," Joel Kruger, market strategist at LMAX Group, said in a Thursday market update. "The crypto market is looking for a resurgence in the decentralized finance space, with Ethereum playing an important part in this initiative." "Now that BTC has finally pushed through $75,000 and ETH has broken back above $2,800 the stage is set for what could be a strong close to 2024 and bright outlook in 2025," he added. Other winners: Cardano's ADA is up 10.4%, while Polygon's POL has risen 6.6% so far. Solana (SOL) also keeps inching toward new highs. Now up 5%, the coin is trading for $195 and is only 33% away from its 2021 all-time high. On the equities side, bitcoin mining firm Core Scientific (CORZ) has surged more than 11% on the day after a Wednesday earnings call revealed the company was executing on its artificial intelligence ambitions. Meanwhile, MicroStrategy's (MSTR) 5.8% gain has taken it to a new 20-year high. Coinbase (COIN) is taking a breather after blasting upwards 31% Wednesday, and is only up 1.1%. The price action happened before an FOMC decision that could shake up digital asset markets. The Fed is widely anticipated to lower interest rates by 25 basis points, but Fed Chair Jerome Powell's press conference on policy and inflation for the first time since Trump won the election could induce volatility. https://www.coindesk.com/markets/2024/11/07/post-election-deja-vu-bitcoin-spikes-to-a-new-record-high-while-ether-and-solana-rally-ahead-of-fomc/

2024-11-07 18:35

With the crypto-friendly Donald Trump being elected president, industry leaders are now awaiting his first big move, which could be appointing a new chair of the U.S. Securities and Exchange Commission. One of President-elect Donald Trump's many promises — to fire Gary Gensler and appoint a new chair of the U.S. Securities and Exchange Commission — could happen as soon as Jan. 20, the day of his inauguration. Gensler, for example, took office less than 11 weeks after being appointed by President Joe Biden on Feb. 3, 2021. Gensler could also step down before Trump takes office, in which case the Democratic Party would appoint an interim chair. U.S. President-elect Donald Trump's many endorsements from crypto leaders — the Winklevoss twins, Marc Andreessen and Ryan Selkis, just to name a few — were the result of the real-estate mogul's many promises to support the expansion and continued development of the digital asset industry in the United States. Arguably one of the most crucial promises Trump made to pull the crypto community onto his side was this: "On day one, I will fire Gary Gensler." While he can't force Gensler to step down as a commissioner at the U.S. Securities and Exchange Commission, he can name a new interim SEC chair as soon as he's inaugurated on Jan. 20. He can also nominate a new commissioner to the Senate, which has to confirm the pick. Given Republicans have retaken control of the Senate after flipping several seats during Tuesday's presidential election, Trump's pick would have a good chance of making it through the vote and a new chair could take office within a few months. Gensler, for example, was nominated by current President Joe Biden on Feb. 3, 2021, confirmed by the Senate on April 14 and sworn into office on April 17. Gensler has made many enemies in the crypto sector due to his insistence that the agency has sufficient rules and regulations for the industry already, a status quo crypto leaders disagree with. One of the most fundamental differences is Gensler's insistence — one he shared with his predecessor, the Trump-appointed Jay Clayton — that most cryptocurrency transactions on centralized exchanges violate federal securities laws. Excluding this year's launch of the spot bitcoin and ether exchange-traded funds, which were approved by the current SEC after years of conversations and a legal victory by asset manager Grayscale, the financial regulator hasn't done much to help stir crypto companies in the right direction of what is legal and illegal, as it has yet to be determined whether all cryptos are securities or not. Gensler has been on the forefront of those actions, being openly skeptical of cryptocurrencies. Just last month, he reiterated his views haven't changed. Speaking at NYU's School of Law in Manhattan in October, he said: "With all respect, the leading lights of this field in 202[4] are either in jail or awaiting extradition right now." Knowing Trump's plan for him, Gensler could also choose to resign before the new President takes office in January. If that were to happen, an interim chair would be appointed by President Joe Biden from the remaining Democratic commissioners until Trump is inaugurated, before Trump names his interim after taking office. Whoever Trump nominates would probably replace Commissioner Caroline Crenshaw, who is currently up for renomination. If Gensler resigns from the commission entirely, he'll also need to be replaced through the nomination and confirmation process. A number of cryptocurrencies that the SEC named as unregistered securities in various lawsuits against exchanges have seen their prices rise over the past day or so, including Filecoin (FIL), Algorand (ALGO), Polygon (POL) (formerly MATIC) and Near (NEAR), possibly in anticipation of a more lax regulatory regime under the Trump administration. https://www.coindesk.com/policy/2024/11/07/heres-how-quickly-gary-gensler-could-lose-his-sec-chair-gig-under-trump/

2024-11-07 10:50

BlackRock's iShares Bitcoin Trust registered $4.1 billion in volume traded as bitcoin broke out to all-time highs. Bitcoin rose more than 9% on Wednesday to claim a record high. BlackRock's IBIT exchange-traded fund saw its biggest volume traded since its introduction. U.S. spot-listed bitcoin ETFs saw over $620 million of net inflows. Bitcoin (BTC) posted its fourth-best day of the year on Wednesday following the U.S. presidential election victory of Donald Trump, who voiced support for the crypto industry during his campaign. The largest cryptocurrency by market value climbed more than 9% to hit a record $76,481, CoinDesk Indices data show. It hit 9.7% at the end of February, during a rally that took it to the previous high in March, gained 10% after dropping from that high and added 12% after the Aug. 5 yen carry trade unwind. While Wednesday's swing may concern investors who think the gain is unsustainable, earlier research indicated BTC could rise 11% on a Trump victory. Bitcoin ETF inflows The rally coincided with massive inflows into spot bitcoin exchange-traded funds (ETFs), which added a net $621.9 million, according to Farside data. The flow, one of the highest figures since the products' introduction in January, snapped a three-day streak of outflows. Total net inflows have now reached $24.2 billion. Among notable performances, Grayscale's Bitcoin Mini Trust (BTC) registered $108.8 million, its second-biggest day since the start of trading. Bitwise Bitcoin ETF (BITB) saw a $100.9 million inflow, also one of its biggest net inflow days. BlackRock's iShares Bitcoin Trust (IBIT), in contrast, posted a second-straight day of net outflows, losing a total of $113.3 million over the period. Trading volume in the ETF was at a record level, according to Senior Bloomberg ETF analyst Eric Balchunas. "IBIT just had its biggest volume day ever with $4.1b traded," Balchunas wrote. "That's more volume than stocks like Berkshire, Netflix, or Visa saw today. It was also up 10%, its second-best day since launching, some of this will convert into inflows". Overall, "the group of bitcoin ETFs did $6b, their best day since the crazy early days. Most of the ETFs did 2x their average. It was just an all-around banger day for an infant category that never ceases to amaze," he wrote. To provide some historical context, ETF trade volume reached a $9.9 billion peak during the March bull run, according to data from checkonchain. Total trade volume on Nov. 6 reached approximately $76 billion, comprising futures volume of $62 billion, spot volume of $8 billion and ETF trade volume of $6 billion, so ETF trade volume is still a small percentage of the total. Ether (ETH) is lagging behind bitcoin's 2024 performance. Net inflows into ether U.S. spot ETFs totaled $52.3 million, the most since Sept. 27, according to Farside data. As of press time, bitcoin is trading at just over $75,000, up 77% year-to-date, while ether is trading at $2,822, up 20% year-to-date. https://www.coindesk.com/markets/2024/11/07/bitcoin-registers-fourth-best-day-of-2024-as-blackrock-etf-posts-record-volume/