2024-10-25 11:19

MicroStrategy is up over 240% year-to-date with the NAV premium approaching 3. MicroStrategy’s trading volume reached 17.65% of Nvidia's in October, despite its market cap being only 1.5% of the chip giant. MicroStrategy is just 8% away from reaching a $50 billion market cap valuation. Disclosure: The author of this story owns shares in MicroStrategy (MSTR). Bitcoin (BTC)-holder MicroStrategy’s (MSTR) soaring stock is driving up trading volumes relative to AI-proxy Nvidia (NVDA), one of the biggest companies by market cap, reflecting heightened investor enthusiasm. MSTR has surged over 240% this year, with prices doubling to $236 in the past five weeks alone, according to data source TradingView. That’s the highest level for the stock since the dotcom bubble 25 years ago. The rally has MSTR closing in on a market cap of $50 billion, barely 1.5% of NVDA’s $3.44 trillion. However, MSTR’s trading volume, as a percentage against NVDA, has continued to climb this year, reaching a high of 17.65% this month. According to Investing.com data, this milestone occurred on Oct. 11, as MicroStrategy saw 30 million trading volume, while NVIDIA had 170 million. That’s a significant improvement since the bull market of 2021. Back then, MSTR peaked over $130 on Feb. 9 with a volume of 23.2 million, equating to just 8% of NVDA that day. An increase in trading volumes alongside a price rally may confirm the stock's uptrend. That said, a continued surge in volume relative to NVDA might be telling of a build up of a speculative froth in the market. MicroStrategy outperforms Nvidia With a year-to-date gain of over 240%, MSTR has outperformed NVDA’s 192% surge by a big margin. Since MSTR adopted bitcoin as a treasury asset in August 2020, the gap has grown even bigger, with MSTR up 1,800% versus NVDA’s 1,150%, that’s probably the best evidence of MicroStrategy and its CEO Michael Saylor’s success. MicroStrategy’s net asset value (NAV), which is is calculated by dividing MSTR's market capitalization by the value of its bitcoin stack, continues to expand once again, with bitcoin still trending in the mid $60,000 range. According to the MSTR tracker, the NAV premium currently sits at almost 3, the highest level since early 2021. https://www.coindesk.com/markets/2024/10/25/microstrategy-touches-new-highs-as-trading-volume-relative-to-nvidia-surges/

2024-10-25 09:49

Until now, Canada’s crypto ETF assets have been held under sub-custody arrangements in the U.S. with firms like Coinbase and Gemini. Earlier this week, Canadian crypto custody specialist Balance announced it had become a qualified custodian in the country. Balance CEO George Bordianu says it’s time to bring Canada’s ETF assets back home from sub-custody arrangements in the U.S. with Coinbase and Gemini. Balance, Canada’s long-standing crypto custodian, finally attained qualified custodian status this week, prompting the firm’s CEO, George Bordianu, to say it’s time to start bringing the country’s ETF digital assets “back home.” Bordianu is alluding to the fact that the safekeeping of crypto assets underlying funds issued by ETF providers 3iQ, Purpose Investments and Evolve, end up in sub-custody arrangements and held by blue chip U.S. exchanges like Coinbase and Gemini, rather than remaining on Canadian soil. “We have billions worth of retail assets in Canada’s crypto ETFs that sit in the United States,” Bordianu said in an interview with CoinDesk. “We'd like to bring those assets back home. We're trying to simplify the picture, to make it cheaper and a little bit easier for new asset managers to do a few more ETF and mutual funds in Canada.” Bordianu makes the case that Balance does not avail itself of sub-custody partnerships because the firm has become a qualified custodian based on the strength of its own home built technology stack, as opposed to using third party technology such as a Fireblocks or a Digital Vault. The bigger picture concerns the growth of the crypto sector in Canada more broadly. The amount of crypto collectively held in Canada’s ETFs might not seem like a big deal right now, Bordianu says, but given the growth of things like tokenized real world assets and the proliferation of stablecoins, Canada needs to focus on building its own infrastructure to handle these assets. “It’s like saying the Toronto Stock Exchange should plug into the Depository Trust & Clearing Corporation in the U.S. to clear and settle all of their transactions through that foreign infrastructure,” Bordianu said. “If you put it in those terms, it sounds absolutely bonkers.” https://www.coindesk.com/business/2024/10/25/newly-qualified-crypto-custodian-balance-aims-to-bring-etf-assets-held-in-the-us-back-to-canada/

2024-10-25 08:25

Both retail and sophisticated investors expect bitcoin to trade at least above $100,000 by the end of the year. The way BTC options trading on Deribit are currently priced suggests a 9.58% chance of prices rising above $100,000 by Dec. 27. The possibility of prices rising to $82,000 is higher, according to one observer. Options market probabilities can change quickly with market conditions. As sophisticated and retail investors rally around the possibility of bitcoin's (BTC) price surging to at least $100,000 by the year-end, the options market tied to the cryptocurrency assigns a low probability of such a surge materializing. At press time, the way options were priced on dominant exchange Deribit showed a 9.58% probability of BTC topping the $100,000 mark by the end of December, according to data source Deribit Metrics. Options are derivative contracts that give the purchaser the right but not the obligation to purchase or sell the underlying asset at a predetermined price on or before a specific date. A call option confers the right to buy, representing a bullish bet, while a put protects against downside price swings. The near 10% figure may seem puzzling to the bulls, given the market has moved beyond the supply overhang fears of the second and third quarters and is reportedly on an bullish trajectory, largely due to the Federal Reserve's renewed bias for interest rate cuts. That said, it seems consistent with the steady bitcoin implied volatility, suggesting that market participants don't expect wild moves in the short term. Deribit's bitcoin implied volatility index (DVOL), which shows expected price turbulence over 30 days in annualized terms, remains locked between the three-month range of 50% to 60%, well below the 2024 high of 85% hit in March. Options-implied probabilities are calculated by using the Block-Scholes model or other pricing models that take into account factors like current spot market price, strike price, time to expiration, volatility, and the risk-free rate. Options-based probabilities are positively correlated with implied volatility: The greater the volatility, the higher the odds of bitcoin hitting certain levels. $82K realistic possibility Several traders recently told CoinDesk that prices could rise to around $80,000 by the end of the year, irrespective of who wins the pivotal U.S. election, due Nov. 5. The options market does suggest a possibility of a 22% price swing in either direction by the end of December, which means scope for a rally above $80,000 by the year-end. "The current market implied volatility of BTC at-the-money options expiring on Dec. 27 is 54%, which means that in the best-case scenario, the price of BTC will rise by more than 22% to around $82,000 by the end of the year," Griffin Ardern, head of options trading and research at crypto financial platform BloFin told CoinDesk. "However, volatility is bi-directional, so an equivalent drop cannot be ruled out either," Ardern said. Probabilities are just probabilities Options market probabilities can change quickly with market conditions, meaning the odds of a move to $100,000 by the year-end could improve if implied volatility jumps and prices set new highs. The impending U.S. presidential election due on Nov. 5 could have far-reaching regulatory implications for the digital assets industry and could inject volatility into the market. Currently, the supposedly-pro crypto Republican candidate Donald Trump is ahead of his rival, Democrat Kamala Harris, in election polls. The election result will be declared on Nov. 8. "A Harris or Trump victory is not fully priced in and crypto investors need to be ready for a lot of volatility either way. This reminds me of biotech stocks on the dates the FDA determines if the drugs are approved. These stocks either fly or crash on those days and you can typically bet something volatile will happen," Alexander Blume, CEO of the SEC-registered digital assets advisory Two Prime, said in an email. Blume added that a Harris win wouldn't be positive, at least for some time, as traders anticipating a Trump victory could square off their leveraged bets, injecting bearish volatility into the bitcoin market. https://www.coindesk.com/markets/2024/10/25/the-popular-100k-year-end-goal-for-bitcoin-has-less-than-10-probability-in-options-market/

2024-10-25 07:47

EMURGO, a founding entity of Cardano, will be among ecosystem buildings developing tools and services to attract the BTC capital. Bitcoin rollup protocol BitcoinOS said its Grail bridge was going live for the Cardano network on Thursday, opening the floodgates for capital from Bitcoin flowing into the Cardano ecosystem. EMURGO, a founding entity of Cardano, will be among ecosystem buildings developing tools and services to attract the BTC capital and, vice-versa, send ADA tokens to the Bitcoin network. BitcoinOS claims to be the first to have verified ZK proofs on Bitcoin in April, and its Grail bridge uses that security infrastructure to allow assets to flow between blockchains more securely. “These bridges only require a single honest participant within a pool of potentially hundreds of operators (1-of-n) in a decentralized, dynamic, and permissionless operator set for your funds to remain secure,” BitcoinOS said in its release. Bridges are blockchain-based tools that allow for the transfer of assets between different network where they aren’t originally supported. Zero-knowledge proof (ZKP) is a cryptographic protocol allowing one party to prove if a statement is true without revealing additional information. Bridges are among the most attacked and vulnerable crypto tools despite their large importance in the ecosystem. A ZKP-based bridge, in theory, cuts down on those security fears. At press time, ADA was exchanging hands at 34 cents, down 2.5% in the past 24 hours alongside a wider market drop. https://www.coindesk.com/markets/2024/10/25/bitcoin-liquidity-could-flow-to-cardano-ecosystem-with-new-btc-bridge/

2024-10-25 07:16

Low liquidity led to massive slippage for one entity trying to buy up Trump “yes” shares in a short period. An individual or entity caused a brief mispricing on Polymarket by buying over 4.5 million Trump contracts for the 2024 Presidential Election, pushing the odds to 99% for a portion of the purchase due to the mechanics of the order book. This anomaly occurred despite the actual market odds being around 63% at the time, highlighting how large trades can temporarily skew betting odds on prediction platforms. Republican Donald Trump’s presidential victory odds on Polymarket spiked to 99% for one entity briefly earlier Friday, data shows, as their constant buying led to a temporary mispricing in the order book. The "GCorttell93" account purchased over 4.5 million Trump contracts in the “Presidential Election Winner 2024” market spending over $3 million in a short period. However, due to how the orderbook works, a tranche of $275,000 was filled at 99% odds - a leap from the actual 63% offered odds at the time. The rest of their bets were placed at varying prices, such as a $129,000 tranche at 65.9 cents and a $102,000 tranche at 62.7 cents. How did the slippage occur? On Polymarket, the price of shares in any outcome reflects the market's current belief in the likelihood of that outcome. If a 'Yes' share for an event costs $0.60, the market interprets this as a 60% chance of that event occurring. However, these odds are dynamic and change with each trade as Polymarket works on a blockchain-based order book that lists all the buy (bids) and sell (asks) orders for shares in an outcome. Bids represent the highest price someone is willing to pay for a share, while asks are the lowest price at which someone is willing to sell. This system allows for price discovery and provides liquidity. Users can place limit orders, where they specify the price they're willing to buy or sell, which might not execute immediately if there's no match. However, a market buy may lead to someone's bids getting filled at much higher prices. As such, the order book allows everyone to see the depth of market interest at different price points, showing where other traders are willing to transact. This helps determine any bet’s true market price (compared to a centralized betting marketplace where brokers handle odds). The election winner bet is the largest Polymarket by traded volume as of Friday, with over $2.2 billion in transactions. Trump leads the odds at 63%, while traders have given Democrat Kamala Harris a 36% chance of winning. https://www.coindesk.com/markets/2024/10/25/polymarket-trader-betting-on-donald-trump-win-ends-up-getting-99-odds/

2024-10-25 06:30

The bill aims to provide regulatory clarity for digital assets, including self-custody rights, bitcoin payments, and transaction taxation. Pennsylvania House passes bipartisan bill focused on bitcoin and digital asset regulation. Bill clarifies self-custody rights, bitcoin payments, and transaction taxes. Bill moves to the Senate after the election and then to the Governor's desk. The Pennsylvania House of Representatives has passed a bipartisan bill aimed at providing regulatory clarity for digital assets ahead of the November elections, according to a Fox Business report. House Bill 2481, also known as the Bitcoin Rights bill, received overwhelming support, with 176 votes in favor and 26 against, including unanimous backing from all 100 Republican members, the report said. The bill addresses key areas such as residents' rights to self-custody digital assets, the use of bitcoin as a payment method, and guidelines for taxing bitcoin transactions. Pennsylvania is a crucial state for both Republicans and Democrats, roughly 12% of the 13 million people who reside in the state hold crypto. The bill, developed with the assistance of the bitcoin advocacy group Satoshi Action Fund (SAF), reflects a growing trend of states attempting to establish regulatory frameworks for the crypto industry. The bill now moves to the Republican-led Pennsylvania Senate after the election. SAF has been involved in similar legislative efforts in 20 other states, with laws already enacted in Oklahoma, Louisiana, Montana, and Arkansas. https://www.coindesk.com/policy/2024/10/25/pennsylvania-house-of-representatives-passes-crypto-bill-to-bring-regulatory-clarity-report/