2024-11-05 15:11

The company requires financing conditions to remain agreeable, and there needs to be continued investor demand for the firm's convertible debt, the report said. MicroStrategy's $42 billion bitcoin acquisition strategy has some risks, the report said. CoinShares said financing conditions need to remain favorable and there needs to be investor demand for the company's convertible debt. MicroStrategy is tied to its bitcoin holdings, the asset manager said. MicroStrategy's (MSTR) ambitious plan to buy $42 billion more worth of bitcoin (BTC) is not without risks, CoinShares said in a research blog Monday. The company, founded by Michael Saylor, announced a $21 billion at-the-money offering of its own stock last week to raise capital to buy more bitcoin. This is part of a larger plan to buy another $42 billion of the world's largest crypto over the next three years. MicroStrategy's ability to successfully execute on its bitcoin acquisition plan is dependent upon a number of factors, according to CoinShares. The software company needs "financing conditions to remain favourable, and necessitates demand for their convertible notes," analysts Alexandre Schmidt and Satish Patel wrote. The cost of servicing its debt is also rising. CoinShares noted that in 2021, MicroStrategy was able to raise debt at zero-coupon convertibles, but these coupon rates have since been rising with new issues. The report said MicroStrategy is also "tied to its bitcoin holdings," adding that there is a risk that if the company chooses to sell some of its bitcoin pile, its valuation premium could disappear. However, Michael Saylor said previously that he is not interested in selling his company's bitcoin holding, saying, "Bitcoin is the exit strategy." Furthermore, any disposals could also trigger tax events, which could be sizable, the report said, adding that in the future, the firm could be taxed on unrealized gains related to its crypto stack. The company's "bitcoin business may have outgrown its software business," CoinShares said, adding that cash flows from the legacy operations may not be enough to cover future coupon payments. The firm's stock has been praised by the investors even after announcing the large financing that will dilute the shareholders. Last week, Wall Street broker Canaccord said that MicroStrategy is one of the best ways for equity investors to gain bitcoin exposure. The MSTR shares were about 8% higher in early trading on Tuesday as bitcoin price heads towards $70,000. https://www.coindesk.com/markets/2024/11/05/microstrategys-ambitious-42b-bitcoin-acquisition-plan-is-not-without-risks-coinshares-says/

2024-11-05 11:23

The Bitcoin hashrate, on a seven-day moving average, hit a record high of 755 EH/s last week. Bitcoin mining difficulty hits over 100T for the first time. The seven-day moving average hashrate reached a peak of 755 EH/s. The higher difficulty puts more pressure on small miners than larger ones. Bitcoin’s (BTC) mining difficulty hit an all-time high of 101.65 trillion (T) Monday, adding to pressure on smaller miners, who may not have as much cash available as their publicly traded rivals to keep their rigs going. Mining difficulty measures how hard it is to discover new blocks on the Bitcoin blockchain. The network automatically adjusts every 2,016 blocks, or roughly every two weeks. This year, difficulty has adjusted 23 times, almost 60% of the time has seen a positive adjustment which makes the process harder. The higher the difficulty, the more strain on the mining industry to produce a block. As mining is an extremely competitive and capital-intensive industry, smaller or private companies, whose access to cash may be more constrained than their publicly traded rivals, might need to sell their bitcoin production to fund operations. Hashrate hits all-time high Bitcoin’s hashrate hit a record high on a seven-day moving average of 755 EH/s last week. Hashrate is the computational power required to mine and process transactions on a proof-of-work blockchain. At the end of October, hashrate surged almost 12% in one day, one of the biggest rises year-to-date, according to Glassnode data. Miners are, on average, spending 100% of the total mined supply. In October, there was a brief period of miners retaining a portion of their bitcoin, adding to treasury reserves after a massive depletion in August and September. In this current epoch, miners are mining, on average, 450 bitcoin a day. If the whole lot is sold, that amounts to roughly $31.5 million of sell-side pressure. Overall, this shows that miners are currently in a relatively healthy spot. The less they spend on the mined supply, the less sell-side pressure occurs. https://www.coindesk.com/markets/2024/11/05/bitcoin-mining-difficulty-tops-100t-for-first-time-piling-pressure-on-small-miners/

2024-11-05 07:54

BTC fell amid a transfer of $2.2 billion worth of the asset by defunct exchange Mt.Gox from its storage to new wallets. DOGE's increase is largely attributed to a renewed endorsement from Elon Musk linked to his proposal for a "Department of Government Efficiency" (D.O.G.E.). U.S.-listed spot bitcoin ETFs experienced net outflows, with significant withdrawals from major funds like Fidelity's FBTC and Ark Invest's ARKB, except for BlackRock’s IBIT which saw inflows. The crypto market's reaction appears influenced by the narrowing lead of Donald Trump in election polls, traditionally seen as more favorable towards cryptocurrencies, some traders said. Dogecoin (DOGE) was the only major token in green ahead of the widely-watched U.S. elections, with some expecting a marketwide surge in the coming weeks regardless of whichever candidate wins. The memecoin has jumped over 10% in the past 24 hours even as bitcoin (BTC) lost nearly 3%, and all major tokens registered losses between 1%-5%. The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by market capitalization, fell 3%. DOGE has risen 50% in the past 30 days on a renewed endorsement by technology entrepreneur Elon Musk as part of the Republican campaign. Musk has been proposing a Department of Government Efficiency — which is abbreviated as D.O.G.E; a clear nod to the token — as an agency that will make government spending and monetary planning more effective. Bitcoin fell as defunct exchange Mt.Gox sent $2.2 billion worth of tokens from its storage to new wallets. Such moves have historically preceded creditor repayments and caused prices to dip lower, and traders expect short-term selling pressure when the assets are further moved to exchanges. Elsewhere, U.S.-listed spot bitcoin exchange-traded funds (ETFs) recorded $541 million in net outflows on Monday - the highest since May - dashing hopes for increased institutional interest in the asset after a week that saw consecutive days of net inflows above $800 million. BlackRock’s IBIT was the only product showing net inflows at $38 million. Fidelity’s FBTC led outflows at $169 million, its highest since going live, followed by Ark Invest’s ARKB at $138 million and Grayscale’s mini bitcoin trust (BTC) at $90 million. Meanwhile, traders say the correction comes amid shifting election polls that have neared coin-toss odds on some marketplaces. “Markets are falling because traders are no longer confident that Trump will have an "easy" victory on Tuesday, and that doesn't bode well for crypto as he's been perceived as the more pro-crypto candidate,” Jeff Mei, COO at crypto exchange BTSE, told CoinDesk in a Telegram message. “On betting platforms such as Polymarket and Kalshi, and polls across the country, his lead over Harris has deteriorated over the weekend and people think it's going to come down to a very close decision,” Mei said, adding that “the real kicker” could be a Fed rate cut decision on Thursday where the agency is expected to continue to cut rates in a move that could “boost markets in the short run.” https://www.coindesk.com/markets/2024/11/05/dogecoin-rallies-bitcoin-etfs-bleed-ahead-of-us-elections/

2024-11-05 07:35

Lawyers slammed the SEC for a lack of clarity on regulation when it comes to virtual assets. A motion to dismiss an amended complaint was filed on Nov. 4. It claimed the SEC is refusing to “articulate any standard” when it comes to determining which crypto asset transactions qualify as investment contracts. Lawyers representing Binance and former CEO Changpeng “CZ” Zhao have made a fresh attempt to dismiss the Securities and Exchange Commission (SEC) lawsuit against them. On Monday, they filed a motion to dismiss an amended complaint submitted by the SEC last month. Their filing argues that the amended complaint pays “lip service” to an earlier court ruling that crypto assets are not in and of themselves securities but “refuses to accept the logical conclusion of that ruling—that secondary market resales of the assets long after they were first distributed by their developers are not ‘securities’ transactions.” “Instead, the SEC’s Amended Complaint continues to insist that virtually all transactions involving crypto assets—including blind secondary market resales of tokens—are securities transactions because some buyers might hope the assets will increase in value,” it said. It also slammed the SEC for a lack of clarity on regulation when it comes to virtual assets. “The SEC still refuses to articulate any standard for courts, litigants, or market participants to know which crypto-asset transactions qualify as investment contracts, and which do not,” it stated. “And the SEC continues to choose winners and losers arbitrarily, recently abandoning with no explanation its claim that transactions involving Ether—the second most common crypto asset, after Bitcoin—are investment contracts.” The SEC initiated the lawsuit against Zhao and three companies, BAM Management U.S. Holdings, BAM Trading Services and Binance Holdings in June 2023. The case is separate to the criminal charges brought against Zhao and Binance Holdings by the Department of Justice. In November 2023, Binance admitted to engaging in anti-money laundering, unlicensed money transmitting and sanctions violations. Binance was fined $4.3 billion and Zhao spent four months in prison in the U.S. He has since been released. The SEC has also brought cases against several other cryptocurrency companies and last week the regulator issued a Wells notice to gaming company Immutable. https://www.coindesk.com/policy/2024/11/05/binance-czs-lawyers-file-motion-to-dismiss-amended-complaint-in-sec-lawsuit/

2024-11-05 06:28

"It looks like bitcoin options traders appear to be hedging their bets to the downside ahead of the U.S. election this week," one observer said, noting pricier puts on the CME. U.S. election uncertainty spurs demand for short-term protective measures put on the CME. Pricing for longer-duration options on both CME and Deribit signals a constructive outlook. Bitcoin (BTC) traders are seeking protection against price weakness amid projections of a U.S. election-induced volatility boom. That's according to CME's bitcoin options market, where put options, offering protection against price drops and expiring within a week, were pricier relative to calls on Monday, according to data source CF Benchmarks and QuickStrike. The so-called 25-delta risk reversal for contracts expiring Friday (P2XE24) was -1.3% on Monday, showing a bias for puts. The metric measures the difference in implied volatility between out-of-the-money higher strike calls and lower strike OTM puts, providing an easy to read picture of the market sentiment. A call option gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price at a later date. A put options gives the right to sell. "It looks like bitcoin options traders appear to be hedging their bets to the downside ahead of the U.S. election this week. Through a .25 delta risk reversal we can see that contracts expiring within a week are slightly negative – meaning puts more expensive than calls – compared to longer-dated maturities of either 2 weeks or 30 days, where the skew reverts to being positive again," researchers at CF Benchmarks told CoinDesk in an email. Bitcoin's price has pulled back to $68,000 from near record highs above $73,500 in one week, alongside a drop in the more pro-crypto Donald Trump's chances of election victory. The pricing for longer-duration options was positively skewed in favor of calls, indicating a broader constructive outlook, consistent with the consensus analysts' expectations for a year-end rally to $80,000 and higher. The latest polls show that Democrat Kamala Harris and her rival Republican candidate Donald Trump, perceived as crypto-friendly, are running neck and neck in most swing states, including Pennsylvania and nationally. Per some observers, the 50-50 odds mean the eventual outcome, expected Friday, could lead to a BTC price swing of $6,000-$8,000. Options trading on the leading exchange Deribit also show a broader bullish outlook with a largely neutral bias for this week, according to data source Amberdata. The 25-delta risk reversals show barely a difference between pricing for calls and puts expiring this week. The sentiment is decisively bullish from the Nov. 15 expiry and beyond. https://www.coindesk.com/markets/2024/11/05/bitcoin-traders-wary-of-price-drop-in-us-election-week-cme-options-show/

2024-11-05 03:16

A majority of that stash, or nearly 30,400 BTC, was sent to “1FG2C…Rveoy” and 2,000 BTC was moved to “15gNR…a8Aok” after first being sent to a Mt. Gox cold wallet. Mt. Gox moved of over 32,000 BTC ($2.2 billion) to new wallet addresses in preparation for future sales. The ongoing repayment plan, now extended to October 31, 2025, involves significant bitcoin transfers which affect market volatility. Bitcoin (BTC) prices dropped early Tuesday as defunct crypto exchange Mt.Gox processed its largest transfer in months in preparation for a sale sometime in the future. BTC slid under $68,000, losing 2% in the past 24 hours to influence a broader market slide ahead of the U.S. elections scheduled later in the day in U.S. morning hours. Traders expect a surge in market volatility this week with price swings of as much as $8,000. Mt. Gox transferred over 32,000 BTC, worth $2.2 billion at current prices, to unmarked wallet addresses data from Arkham shows. A majority of that stash, or nearly 30,400 BTC, was sent to “1FG2C…Rveoy” and 2,000 BTC was moved to “15gNR…a8Aok” after first being sent to a Mt. Gox cold wallet. Such wallet transfers are usually a consolidation of holdings to new addresses before they are sent to crypto exchanges, where the bitcoin is sold on the open market. Mt. Gox’s repayments are largely considered to add selling pressure to bitcoin (BTC) markets as early investors will receive assets at a much higher value than their entries before 2013, making them inclined to sell at least a part of holding, traders said. Mt. Gox was once the world’s top crypto exchange, handling over 70% of all bitcoin transactions in its early years. In early 2014, hackers attacked the exchange, resulting in the loss of an estimated 740,000 bitcoin (more than $15 billion at current prices). The hack was the biggest of the many attacks on the exchange in the years 2010-13. Trustees have put together a repayment plan that has been in the works for several years, and received a deadline of October 2024 from a Tokyo court last year. However, in October, the repayment deadline was extended by another year to October 31, 2025. https://www.coindesk.com/markets/2024/11/05/btc-drops-under-68k-as-mtgox-sends-22b-bitcoin-to-two-wallets/