2024-11-21 21:14
The company's market cap this week rose to more than three times the amount of bitcoin it held. One of the more impressive runs higher ever seen in stocks took at least a brief breather on Thursday, with Bitcoin Development Company MicroStrategy (MSTR) sporting a double-digit percentage loss even as the price of bitcoin (BTC) surged to a new record high just shy of $100,000. At one point lower by more than 20%, MicroStrategy closed the session down 16.2%. The move isn't much more than a large blip on the longer-term chart, with shares still higher by more than five-fold for 2024 and ahead nearly eight times from the level of one year ago. "MicroStrategy's [valuation] has completely detached from bitcoin fundamentals," wrote Citron Research's Andrew Left earlier in the day. A former bull on the stock who recommended four years ago that investors get long bitcoin by buying MicroStrategy, Left said he remains bullish on BTC but has hedged by shorting MSTR. Of that valuation, MicroStrategy's market cap yesterday and earlier on Thursday topped $100 million, or more than three times the value of the roughly 331,000 bitcoin on its balance sheet ($32.5 million at the current price near $98,000). With today's price decline, MicroStrategy's market cap has sunk to about $80 million. "MicroStrategy has officially met my criteria for a textbook parabolic short," wrote well-followed technician Bracco on X prior to the market open on Thursday. Bracco noted three consecutive days of double-digit percentage gains and another major overnight gap higher, among other factors, including that MSTR's dollar volume on Wednesday topped that of mega-cap names like Nvidia and Tesla and that a leveraged ETF dedicated to the stock was the fifth-most traded fund in the entire market. Writing early Thursday in the WSJ's Heard on the Street column, Jonathan Weil took note of the positive flywheel effect that's provided such a boost to the stock of late. The stock's high valuation allows the company to raise capital at favorable prices and buy bitcoin. Bitcoin rises, the stock rises further, Executive Chairman Michael Saylor and team buy even more bitcoin. And so on. "If you want to speculate that bitcoin is heading higher, buy some," concluded Weil. "To go long MicroStrategy’s stock is to wager that bizarrely inefficient markets will become even more so." https://www.coindesk.com/markets/2024/11/21/microstrategy-falls-16-despite-new-bitcoin-record-as-some-question-valuation/
2024-11-21 18:00
Gensler's plan to fully leave the commission — not just step down as chairman — on Jan. 20 answers the major question of whether he'd stick around to defend his policies until his term ends in 2026. U.S. Securities and Exchange Commission Chair Gary Gensler — a frequent foe of the cryptocurrency industry — said he will fully leave the agency the day Donald Trump becomes president in January. He's not just stepping down as head of the main U.S. securities regulator. He will also not stick around as a commissioner, meaning he won't be around to defend his regulatory policies, which have included an aggressive stance toward crypto. Gensler's resignation will be effective at noon on Jan. 20, the moment President-elect Trump is sworn in, the SEC said in a press release. In a statement, Gensler called the regulator "a remarkable agency." "The staff and the Commission are deeply mission-driven, focused on protecting investors, facilitating capital formation, and ensuring that the markets work for investors and issuers alike. The staff comprises true public servants," he said. "It has been an honor of a lifetime to serve with them on behalf of everyday Americans and ensure that our capital markets remain the best in the world." The statement went on to thank President Joe Biden and Gensler's fellow commissioners. Gensler, who took office in April 2021, oversaw a number of enforcement actions and rulemakings directly affecting the crypto industry. Though industry participants hoped he would offer a light-touch approach to crypto, the regulator instead expanded its enforcement actions from targeting crypto issuers, as it did under former SEC Chair Jay Clayton — who served under Trump — to instead filing suit against crypto trading platforms. The SEC sued Binance, Binance.US, Coinbase, Kraken, Shapeshift and others during Gensler's tenure, alleging the exchanges were unregistered securities brokers and clearinghouses. Gensler also oversaw the first approval of spot bitcoin and ether exchange-traded products, after a decade of crypto companies trying to introduce these products to U.S. markets. He initially opposed them, but a court ruling against the agency pushed him to vote alongside the five-member commission's two Republicans to ultimately approve the ETFs. Trump has not yet named his nominee to succeed Gensler as SEC chair. A number of individuals have been floated, including former SEC and now private practice attorney Teresa Goody Guillén, former Acting Comptroller of the Currency Brian Brooks — who also briefly ran Binance.US — and a number of others. Trump's SEC chair, Clayton, has been named as the next president's U.S. Attorney for the Southern District of New York — the Department of Justice branch usually associated with prosecuting corporate crimes. In Gensler's absence, the commission will have two members from each party, not yet allowing a three-member Republican block until Trump's future appointment is confirmed by the Senate. Until the GOP has a majority at the commission, major policy shifts or enforcement decisions may have to wait. In the SEC's press release, Gensler said his work built on Clayton's, including with the lawsuits alleging registration violations. "In the last full fiscal year, according to the SEC's Office of the Inspector General, 18 percent of the SEC's tips, complaints, and referrals were crypto-related, despite the crypto markets comprising less than 1 percent of the U.S. capital markets," the press release said. "Court after court agreed with the Commission's actions to protect investors and rejected all arguments that the SEC cannot enforce the law when securities are being offered — whatever their form." Still, Thursday's announcement came hours after a federal judge in the Fifth Circuit ruled that the SEC's effort to expand the definition of a "dealer" exceeded its authority in a lawsuit brought by crypto lobbyists. https://www.coindesk.com/policy/2024/11/21/crypto-foe-sec-chair-gary-gensler-will-quit-when-trump-takes-office/
2024-11-21 17:09
Dubbed "smart money" of late, retail bitcoiners are starting to sell, but exchange balances are falling, suggesting plenty of buyers. "Shrimps" have been net sellers of about $7 billion in bitcoin over the past 30 days. On the other hand, just under 3 million bitcoin are sitting on exchanges, a two-year low. OTC desk balances, though, have seen a rise of roughly 100,000 bitcoin. With bitcoin (BTC) continuing to post record highs and now nearing the $100,000 level, profit-taking is on the rise — $4 billion of realized profit in each of the last two days, according to Glassnode — but for every seller, there's a buyer, so a closer look at the data might be warranted. So-called "shrimps" or retail investors have sold approximately 75,000 BTC ($7 billion), according to Glassnode. That's the largest distribution from this cohort since bitcoin broke its all-time in March at above $73,000. While it's commonly thought that retail investors may represent "dumb money," at least some research suggests otherwise. And who is buying retails' bags? Large holders — dubbed "sharks — who hold a bitcoin balance between 100 and 1,000 BTC have accumulated over 140,000 BTC, according to Glassnode. Divergence occurring between exchange balances and OTC desks The exchange balance action might tell a different story. Over-the-counter desk balances have continued their strong rise over the second half of 2024, suggestive of large investors cashing in on bitcoin's surge. Bitcoin's breach of $90,000 this week led to OTC desk balances rising by another 20,000 tokens, according to CryptoQuant. Retail exchange balances, however, have fallen to less than 3 million tokens, according to Glassnode, the lowest level in two years. That would seemingly be evidence of strong buying interest. Bottom line: There appears to be a tug of war in the data, with one set indicating sizable retail profit taking similar to the market top earlier this year and another set showing the opposite. As always, the short-term outlook remains cloudy. https://www.coindesk.com/markets/2024/11/21/bitcoin-retail-investor-selling-signals-coming-pullback-but-there-might-be-a-catch/
2024-11-21 14:00
Mastercard’s Multi-Token Network (MTN) is joining forces with the bank’s Kinexys Digital Payments unit, the recent rebranding of JPM Coin. The collaboration is to enhance B2B cross-border payments “providing greater transparency and faster settlement as well as reducing time zone friction.” By integrating Mastercard MTN's connectivity with Kinexys Digital Payments, mutual customers of MTN and Kinexys will be able to settle B2B transactions through a single API. CORRECTION (Nov. 21, 19:14 UTC): Corrects headline to say the partnership is for cross-border payments. A previous version of the story said it was for FX. Removed fourth paragraph about FX settlement on blockchain and clarified details of Kinexys rebranding. Mastercard (MA) has connected its blockchain-based system for shifting tokenized assets, the Multi-Token Network (MTN), with JPMorgan’s (JPM) recently rebranded digital assets business Kinexys (formerly known as Onyx). The collaboration is to enhance B2B cross-border payments, the companies said in a press release on Thursday, “providing greater transparency and faster settlement as well as reducing time zone friction.” The payments giant said it has invited a number of banks onto its MTN when the platform emerged in mid-2023 with a view to testing out tokenized bank deposits, the use of stablecoins and central bank digital currencies (CBDC). Mastercard’s token network is working specifically with the JPMorgan’s Kinexys Digital Payments, which was formerly known as JPM Coin. The firms said in a joint statement that by integrating Mastercard MTN's connectivity with Kinexys Digital Payments, mutual customers of MTN and Kinexys will be able to settle B2B transactions through a single API. “At Kinexys, we believe our solutions can play a transformative role in the ecosystem for digital global commerce and digital assets, where the value proposition of commercial transaction venues is enhanced by the availability of commercial bank payment rails that can natively integrate with any digital marketplace or platform,” said Naveen Mallela, co-head of Kinexys by J.P. Morgan in a statement. “By bringing together the power and connectivity of Mastercard’s MTN with Kinexys Digital Payments, we are unlocking greater speed and settlement capabilities for the entire value chain. We are excited about this integration and the new use cases it will bring to life, leveraging the strengths and innovations of both organizations,” said Raj Dhamodharan, executive vice president, Blockchain and Digital Assets at Mastercard in a statement. The banking giant recently rebranded its blockchain platform, Onyx, to Kinexys as it doubled down on real-world asset tokenization efforts. The rebranding was accompanied by plans to introduce on-chain foreign exchange capabilities to the platform as early as the first quarter of 2025, paving the way for the "automation of 24/7, near real-time multicurrency clearing and settlement." Other efforts to tokenize FX payments include the Monetary Authority of Singapore’s Project Guardian, of which JPMorgan is a participant. https://www.coindesk.com/business/2024/11/21/mastercard-and-jpmorgan-link-up-to-bring-foreign-exchange-on-the-blockchain/
2024-11-21 10:31
Bitcoin has added $30,000 since Donald Trump won the U.S. presidential election and closing in on a $2 trillion market cap. Bitcoin futures open interest on the CME exchange has hit 218,000 BTC ($21.3 billion). The cryptocurrency's market cap is closing in on a historic $2 trillion. CME growth is largely coming from active and direct participants, K33 research says. Bitcoin (BTC), the largest token by market capitalization, is approaching a $2 trillion market cap for the first time after its price added $30,000 since Donald Trump won the U.S. presidential election at the beginning of the month. Currently at $1.93 trillion, a price of about $101,000 per bitcoin would achieve this landmark. The BTC price crossed $97,000 for the first earlier Thursday, and its market dominance reached a high of just below 61.8%. According to Coinglass data, bitcoin futures open interest (OI) on the Chicago Mercantile Exchange (CME) hit a record 218,000 BTC ($21.3 billion), more than a third higher than before the Nov. 5 election. Rising open interest when prices are also ratcheting higher is a sign of bullish sentiment in the market. "The relentless surge in CME open interest shows no sign of stopping; back-to-back all-time highs," Velte Lunde, head of research at K33, wrote in a post on X. "To contextualize, the growth in CME OI over the past 15 days is larger than the average notional open interest on CME in any year before 2022." Lunde noted that active and direct market participants are behind the rally. This cohort engages directly with the futures market, whereas other growth could have come from futures-based exchange-traded funds (ETFs) such as the ProShare Bitcoin ETF (BITO), as CoinDesk reported last month. The introduction of options tied to U.S. spot ETFs should also help CME futures grow. "CME open interest crosses 200k BTC, with active market participants continuing to be the force moving exposure higher. Expect CME futures to continue to thrive with the launch of ETF options", Lunde wrote. Volatility should decrease over time The larger bitcoin's role and the more intertwined it becomes with the traditional financial (TradFi) system, the more likely volatility will decline over time. We have seen this over the past few years, as realized volatility has decreased from over 100% to approximately 40%, according to Glassnode data. Cash-margin contracts are also at an all-time high. These contracts use stablecoins or U.S. dollars as the underlying collateral and are inherently not volatile. That's in contrast with crypto collateral, which is volatile by nature. CME uses only cash margin for futures open interest, while retail-focused exchanges such as Binance are prepared to accept crypto margin. Glassnode data shows that the CME dominates the futures open interest market by 33%, a margin that is still growing. Glassnode data also shows that the percentage of futures contracts that are margined in crypto and not in cash is at an all-time low of just 16%. The lower the number, the less volatility we should see in the bitcoin price. https://www.coindesk.com/markets/2024/11/21/futures-open-interest-on-cme-surpasses-215k-bitcoin-for-the-first-time-as-btc-eyes-100k/
2024-11-21 09:21
The chillguy meme has recently gained traction on platforms like TikTok and among brands. But its creator is unamused with a parody memecoin. Phillip Banks, the creator of the "Chill Guy" meme, said he's copyrighted the character and plans to issue takedown notices for any for-profit use. Notable figures in the crypto community responded by humorously suggesting Banks accepts tokens or money through a Solana address. The CHILLGUY token's popularity was supposedly fueled by its viral spread on TikTok, where even non-crypto users were discussing how to buy it, leading to a speculative trend of searching for new viral tokens on social media. Chillguy's 100,000 token holders aren’t feeling so chill anymore. Phillip Banks, the meme’s creator, is threatening to issue takedown notices for profit-related assets or applications using the character he created as a spoof meme token that went viral on Crypto Twitter. “Chill guy has been copyrighted. like, legally. I'll be issuing takedowns on for-profit related things over the next few days,” Banks said on X. “not like brand accounts using him as a trend, that's kinda something i dont really care about (i do just ask for credit. or xboxes.). mainly unauthorized merchandise and shitcoins.” Banks’ legal threats turned down the heat on the CHILLGUY token, whose creator is unkown. It is almost 50% below its Wednesday peak, with the decline strengthened by profit-taking. Notable Crypto Twitter traders, meanwhile, are asking Banks to post a Solana address for receiving money or tokens — in the hopes of keeping the fun going. It's not clear whom Banks plans to target. The meme took Crypto Twitter by storm this week as the parody Solana-based CHILLGUY token rocketed more than 1,000% in a single day, notching up a $500 million market capitalization at Wednesday's peak. Chillguy portrays a character unfazed by life's challenges. It has attracted interest from brands to El Salvador's President Nayib Bukele, boosting narratives around the token. Early backers claimed the memecoin went viral on video content network TikTok, where “normies” — or the general public that doesn’t hold crypto — were supposedly making videos on how to buy the token and how it was on track for higher gains ahead. That spurred an entire narrative of scouring TikTok for new crypto picks, with speculators hoping to find tokens going viral among normies for short-term trading. Such memecoins often rise rapidly due to speculation, community hype and social media trends. They are, however, also extremely volatile, with prices driven more by sentiment and marketing than a strong community. These trends often don't last long. They can peak quickly due to hype but are prone to rapid declines once the excitement wanes. New memes constantly emerge, diverting attention and investment — leaving investors who bought into the narrative with near-worthless bags. https://www.coindesk.com/markets/2024/11/21/chillguy-creator-threatens-legal-action-as-crypto-trenches-scour-tiktok/
