2024-11-19 06:52

The market assigns a very low probability of ether challenging its year-to-date high of around $4,000 by the end of December. ETH's options-based probability density function shows just a 10% chance of prices testing the year-to-date high of $4,000 by the end of December. ETH faces headwinds from weak fundamentals. Ethereum's ether (ETH), once viewed as the shiny silver to bitcoin's (BTC) gold, has only risen 36% this year, significantly trailing behind BTC's impressive 109% surge. Such is the investor aversion toward ETH that, at the going market rate of $3,100, the cryptocurrency is still well below the record price of $4,832 in 2021, while BTC trades at lifetime highs above $90,000. The underperformance, which makes ETH feel more like palladium struggling to keep pace with gold, is expected to continue well into the year's end, as new research by Amberdata shows only a 10% chance of ether topping the first quarter high of around $4,000 while traders bet on BTC setting new highs above $100,000. The chart shows the probability density function (PDF) and cumulative distribution function (CDF), highlighting the probability of ether trading at various price levels over several time frames. The graphic is derived from ether options trading on the dominant crypto options exchange Deribit. A taller peak at a certain price indicates a greater probability of prices reaching that level and vice versa. At press time, traders assigned just a 10% probability of ether topping the $4,000 mark by the Dec. 27 expiry. It's a sign that the expected regulatory shift away from enforcement actions against decentralized finance and other crypto sectors under Trump's presidency is yet to galvanize investor interest in ETH, even though it has done so for the so-called DeFi coins. Amberdata attributes ETH's dour outlook to weak fundamentals. "ETH faces serious headwinds as the value proposition of “sound money” (aka deflationary supply due to transaction fee burn) has flipped to inflation supply as nearly all DeFi transactions are being executed on L2s as opposed to ETH L1 itself. I believe that’s drastically dragging prices down," Amberdata's Director of Derivatives Greg Magadini said in a newsletter to clients. Last week, at the Ethereum community's biennial Devon gathering, influential researcher Justin Drake proposed an ambitious overhaul of the oldest smart contract blockchain. Among other things, the Beam Chain proposal would cut block times to four seconds from the current 12, which would allow for more blocks, therefore more transactions to be processed. Those improvements, in theory, could lead to more transactions being conducted on the main Ethereum chain rather than auxiliary layer-twos, which in turn might conceivably mitigate the supply issue identified by Magadini. However, Beam Chain could take years to see the light of day, if it does at all. Irrespective of Ethereum's fundamentals, however, a potential acceleration in bitcoin's uptrend could eventually drag ETH above $4,000, while maintaining its underperformance relative to BTC. https://www.coindesk.com/markets/2024/11/19/ethereums-ether-has-fallen-out-of-investor-favor-and-how/

2024-11-19 06:42

QCP traders expect a run to $100,000 — nearly 10% higher than the current record of over $93,000 — in the coming months, with those gains flowing into altcoins in a mark of a general “alt season.” The potential for $100,000 bitcoin has been fueled by anticipated U.S. regulatory changes and strong institutional adoption. There are expectations of an altcoin season following a decrease in Bitcoin's market dominance. Despite the bullish outlook, concerns about overvaluation and potential market corrections persist. Bitcoin (BTC) reaching the mythical $100,000 figure seemed a lofty target as recently as a few months ago, as the asset spent months in a narrow range under $65,000. But the promise of swiftly changing U.S. regulations has revived the dream. “Predictions of BTC at 100K aren't a pipedream anymore as the political and institutional stars start to align,” traders at Singapore-based QCP Capital said in a Telegram broadcast Tuesday. “Despite having net ETF outflows last Thursday and Friday, BTC still looks relatively well supported and institutional adoption remains strong.” The bull run has led to notable bitcoin backers MicroStrategy (MSTR) and Metaplanet announcing fresh BTC purchases on Monday, with the former now holding 1.5% of the asset’s total supply. QCP expect a run to $100,000 — nearly 10% higher than the current record of over $93,000 — in the coming months, with those gains flowing into altcoins in a mark of a general “alt season.” “BTC's dominance is around 60% now and will probably need to be under 58% to signal the start of altcoin season. We anticipate pro-crypto policies from the Trump administration and more rate cuts. We won't be surprised to see altcoin season in full swing in the coming months,” QCP said. Banks and traditional finance analysts have issued targets as high as $200,000 after Republican Donald Trump’s victory in the November elections. A retail sentiment by U.S. bank JPMorgan rose to a record high of 4 earlier this week, indicative of renewed demand from smaller professional investors. The measure is designed to gauge the sentiment of retail investors toward cryptocurrencies, especially bitcoin, based on the activity in the family of BTC products, including spot ETFs. However, not all are bright and optimistic, as near-term concerns remain. “We feel that the 'easy' part of the rally has been done and the next stage will be much trickier with more price choppiness and potential for drawdowns,” Augustine Fan, head of insights at SOFA, told CoinDesk in a Telegram message. “Bitcoin dominance remains on a one-way trend higher reminiscent of the mega-cap dominance in SPX, and is not particularly desirable for this stage of the crypto ecosystem.” “We'll be looking for a potential blow-off top in the near term with market sentiment at highly frothy levels,” Fan added. A blow-off top is a chart pattern recognized in technical analysis that indicates a rapid and steep increase in the price of an asset, followed by an equally rapid decline. In case of a blow off top, the former record high of around $69,000 could be tested again, with a classic bear market wick potentially extending up to lower $60,000, said CoinDesk's senior markets analyst Omkar Godbole. Maksym Sakharov, co-founder of WeFi, mirrors the sentiment. "The upside volatility in the price of Bitcoin has slowed down since it crossed the $90,000 ATH range. The fact that the US Federal Reserve is no longer in a rush to cut interest rates moving forward has further forced investors to re-evaluate their bets on Bitcoin,” Sakharov said. “Should the Fed continue to adopt a mildly hawkish stance toward the rate, the attractiveness of Bitcoin may decrease,” Sakharov added. https://www.coindesk.com/markets/2024/11/19/bitcoin-at-100k-no-longer-a-dream-believe-traders-but-blow-off-top-warning-in-near-term/

2024-11-18 22:16

Kraken asked the judge to allow an appeals court to review his earlier ruling that the SEC had adequately alleged that the cryptocurrencies sold on Kraken’s platform could be securities. A California judge has rejected Kraken’s motion for interlocutory appeal, saying in a Monday decision that allowing an appeal would only “delay resolution” of the U.S. Securities and Exchange Commission’s (SEC) ongoing case against the crypto exchange. Kraken, the second-largest crypto exchange in the U.S., filed a motion for interlocutory appeal (a type of appeal that challenges a judge’s non-final decision while allowing other aspects of a case to move forward) in September, a month after Judge William Orrick of the U.S. District Court for the Northern District of California ruled that the SEC had plausibly alleged that the cryptocurrencies sold on Kraken’s platform may be securities under the Howey Test. In their September motion, Kraken’s lawyers argued that Orrick should grant them permission to appeal his decision with a higher court, arguing that Orrick’s order “involve[d] a controlling question of law as to which there is a substantial ground for difference of opinion” and that “an immediate appeal…may materially advance the termination of the litigation.” But Orrick was unmoved, testily reminding Kraken’s lawyers in his Monday ruling that allowing a motion for interlocutory appeal is “entirely discretionary” and rejecting their hypothesis that an appeal could speed up the case. “Fundamentally, I do not believe that certification will materially advance the ultimate termination of the litigation,” Orrick wrote. “While the SEC has plausibly alleged its theory of securities violations against Kraken, only discovery will establish whether the sales, trades, and exchanges on Kraken truly met all the Howey elements… A complete record is necessary to answer those questions. Certification at this stage would only delay resolution.” The SEC sued Kraken last November for allegedly operating as an unregistered securities exchange, broker, dealer, and clearinghouse, and requesting disgorgement and civil penalties as well as permanent injunctions for the crypto exchange. Kraken denied any wrongdoing and moved to dismiss the case, but the motion was denied in August. https://www.coindesk.com/policy/2024/11/18/california-judge-puts-the-kibosh-on-krakens-interlocutory-appeal-attempt/

2024-11-18 21:04

The availability of options is thought to possibly bring further institutional interest to the bitcoin ETFs. Options on the iShares Bitcoin Trust (IBIT) could start trading on Nasdaq as soon as tomorrow, the stock exchange's head of ETP listings said. The U.S. SEC approved options for the spot bitcoin ETFs on several exchanges in September. Options on the other spot products could also become available in the next couple of days. Options trading on spot bitcoin exchange-traded funds (ETFs) — a long-awaited tool that market participants believe will lure more institutional interest to crypto — could become available as soon as Tuesday, according to Nasdaq. “Our intent at Nasdaq is to list and trade these options as early as tomorrow,” Alison Hennessy, head of ETP listings at Nasdaq, told Bloomberg TV. “Getting these options listed on IBIT into the market I think will be very exciting for investors because that’s really what we have heard from them.” While there are currently eleven U.S.-based spot bitcoin ETFs on the market, only one of them, BlackRock's iShares Bitcoin Trust (IBIT), is listed on Nasdaq and could therefore have options available. Options are a form of derivative that allow investors to purchase or sell an underlying asset —IBIT in this case — at a predetermined price within a specified period. They are particularly attractive to traders because they allow them to not just make leveraged directional bets, but to hedge other positions. The SEC approved the listing of options for IBIT in September. It also approved the rule changes filed by the New York Stock Exchange (NYSE) and Cboe Global Markets, which list some of the other spot bitcoin ETFs. As for the other bitcoin ETFs, options on those could start trading within the next few days as well, said James Seyffart, ETF analyst at Bloomberg Intelligence. “It’s likely that these things start trading this week, potentially within the next day or two" he said. "As far as we can tell, all of the regulatory and bureaucratic hurdles have been cleared. It’s just a matter of crossing t’s and dotting i’s." It's generally assumed that options trading could help to further draw institutions to the crypto market. It remains to be seen how the leverage and hedging associated with options will affect price action. https://www.coindesk.com/markets/2024/11/18/spot-bitcoin-etf-options-could-start-trading-as-early-as-tomorrow/

2024-11-18 20:39

The U.S. government already holds more than 208,000 bitcoin, but retaining it is more complicated than might be assumed. Then-candidate Donald Trump promised to stop selling seized bitcoin back in July. Experts tell CoinDesk that the incoming president might need help from Congress to establish a proper strategic reserve. While Republicans will soon have majorities in Congress, spinning up a bitcoin reserve won’t be high on their list of priorities. Will the U.S. government actually establish a bitcoin (BTC) reserve? It seems to depend on the definition of “reserve” you use. Would the government simply stop selling the bitcoin in its possession, as former President and now President-elect Donald Trump promised in his Nashville speech this summer? Or would it actively purchase bitcoin, as per the wishes of Senator Cynthia Lummis and Trump ally Robert F. Kennedy? The government currently holds 208,109 bitcoin — worth over $19 billion — per Arkham Intelligence. That stockpile was acquired over time through confiscations related to criminal activities. Historically, the government has sold this seized bitcoin in auctions, but Trump announced in July that under his administration, the government would keep 100% of all the bitcoin it currently holds or acquires in the future. It might sound like a simple policy, but there isn’t any established method to implement it, and the procedure would likely involve the coordination of various government agencies like the Department of Justice, the U.S. Marshals Services and the U.S. Treasury. “We don't have anything in writing, right? We’re just kind of going by a speech that was rather generic,” Perianne Boring, founder and CEO of crypto advocacy group The Digital Chamber, told CoinDesk. “Can you just move money between the federal agencies like that? I don't know.” “If you're moving [bitcoin] out of the Department of Justice to the Treasury, and it's like a strategic Bitcoin stockpile fund, that likely requires an act of Congress,” Boring added. “But again, I don't know exactly how much [Trump] can do with his executive powers.” Moish Peltz, a partner at Falcon, Rappaport and Berkman, told CoinDesk that the rules surrounding seized bitcoin might change on a department-by-department basis and vary depending on how the bitcoin was seized in the first place. “Some portion of the seized bitcoin might need an act of Congress, but not necessarily,” he said. Moreover, the process could be gradual. “[The government’s] existing experience with the seizure and custody of large amounts of Bitcoin demonstrates competency and makes it easy to imagine from a technical perspective a relatively low level of difficulty in establishing a strategic reserve,” Peltz said. “Over time, this could evolve into a more significant stance as regulatory clarity improves, legislation is enacted (and implemented), and the government develops a more comprehensive digital asset strategy.” Purchasing more bitcoin Keeping seized bitcoin is one vision for the reserve. But Senator Lummis has argued for a more proactive approach in a new bill: for the U.S. to sell off a portion of its gold reserves and buy 1 million bitcoin. At current prices, that would entail spending a minimum of $90 billion for the acquisition, though the government would likely be front-ran if the bill ever passes. “An executive order could also potentially initiate the process, but substantial financial commitments usually require an act of Congress to allocate funds and create a legal framework,” Peltz said. Boring was optimistic about the bill passing. With Republicans soon to be in control of the House of Representatives, the Senate and the White House, “it's absolutely possible to get it done,” she said, while noting that it was unlikely for the bill to go through the new Congress in the first 100 days. But Nic Carter, a partner at Castle Island Ventures, a public blockchain-focused venture fund, wasn’t so sure. Congressional priorities when it comes to crypto involve passing a stablecoin bill and investigating Operation Choke Point 2.0, Carter posted last week after meeting with members of Congress and the Federal Reserve. The strategic reserve “didn’t come up in any of the convos I had,” he posted on X. So could there be a legal loophole that allows the government to purchase bitcoin without Congressional approval? Maybe. Zack Shapiro, head of policy at the Bitcoin Policy Institute, argued last week in favor of a novel and untested theory: that the Treasury has the authority to acquire bitcoin through the Exchange Stabilization Fund (ESF) by purchasing bitcoin-denominated debt instruments. “Upon maturity, the counterparty would repay the debt obligation in bitcoin, transferring the cryptocurrency to the Treasury,” Shapiro wrote. “This mechanism allows the Treasury to acquire bitcoin without directly purchasing it on the open market, thus avoiding potential market disruptions or price spikes that could result from large direct purchases.” Bettors on Polymarket currently give 30% odds for the government to hold bitcoin reserves between January and April 2025. https://www.coindesk.com/policy/2024/11/18/can-a-strategic-bitcoin-reserve-move-forward-without-congress-experts-disagree/

2024-11-18 16:22

Plus: the market is not confident if Matt Gaetz will be confirmed as Trump's attorney general. This week in prediction markets: A bettor who made millions correctly betting Trump would win loses a cool sum on Mike Tyson. GOP firebrand Matt Gaetz probably won't be confirmed as AG. Polymarket bettors are unsure if Americans are happy. Can't win 'em all. Polymarket user "zxgngl" pocketed $11.4 million by correctly betting that Republican candidate Donald Trump would re-take the White House. But he lost $3.4 million by taking the wrong side of Friday night's match-up between boxing legend Mike Tyson, and influencer-turned-pugilist Jake Paul. Plenty of punters lost money with long-shot bets on Tyson, the geriatric underdog. But "zxgngl" was the night's biggest loser by far. The runner-up in losses clocked a negative $105,390 and the third-place loser is down $99,997. Prediction markets are usually structured as yes/no bets on a given outcome; each share pays out $1 (in cryptocurrency, in Polymarket's case) if the bet proves correct, and zero if not. The price of a share, expressed in cents on the dollar, indicates the market's assessment, when translated into percentage terms, of the prediction coming true. On the eve of the fight, "yes" shares in Paul were trading at 62 cents, signaling a 62% probability he would win. Punters gave 29% odds of Tyson overcoming the age advantage and an 11% chance of the fight ending in a draw or otherwise not designated as a win for either fighter. Even before the match began, boxing commentators were saying that the ending was predictable, and the sad spectacle of a man old enough to be Paul's father laboring intensely to keep up with him in the ring didn't make for great television. The fight almost certainly wasn't rigged, according to a separate Polymarket contract, which gives just a 1% chance of evidence emerging to the contrary by Nov. 23. And for the record, there's not much of a Trump-Tyson correlation. The traders who lost money on the fight made a mix of bets on each presidential candidate. Read More: Polymarket's Probe Highlights Challenges of Blocking U.S. Users (and Their VPNs) Gaetz Probably Won't be Attorney General Polymarket bettors don't think that Matt Gaetz will be confirmed as Attorney General, giving it a 21% chance of happening. Florida's Gaetz is a controversial pick for Attorney General because he courts controversy. Gaetz has been something of a professional troll while in Congress, with a taste for publicity stunts from picking fights with the Republican speaker of the house to making comments about the physical appearance of pro-abortion protestors – and doubling down on those comments. In the eyes of many, he's developed the reputation of an agitator rather than a professional legislator. But Gaetz has also done exceptional work in the House in moving a bill that would restrict members of Congress from owning and trading individual stocks, which saw support from all sides of the political spectrum and counts Representative Alexandria Ocasio-Cortez as a co-sponsor. Gaetz has faced allegations of sexual misconduct, drug use, and accepting inappropriate gifts. The allegations of sexual misconduct led to an investigation where prosecutors declined to press charges. To be confirmed, Gaetz will need the support of 50 of the 53 Republicans in the Senate. Among those 50 are certainly bridges Gaetz has burned, or others that might have grown tired of his antics. "I don't think it's a serious nomination for the attorney general," Republican Senator Lisa Murkowski is quoted as saying in a recent press scrum. And given the odds on Polymarket, the market tends to agree. Meanwhile, at Kalshi, a U.S.-regulated prediction market where bets are settled in dollars, traders give Gaetz slightly better odds at 34%. Are we happy? Will 2024 be a better year than 2023? Polymarket bettors say there's only a 34% chance that the Ipsos "Me Personally" tracker, which polls Americans on how their year went, will reveal that this year was better than the last. Last year the survey found that Americans believed 2023 was generally a good year, driven by positive economic trends like low unemployment and falling inflation. Americans who were surveyed at the time were also optimistic that 2024 would be even better. Fast forward to the penultimate month of 2024, and the economy is a bit of a mixed bag. Some economic indicators, like the Conference Board's Leading Economic Index, are signaling a recession risk and economic uncertainty heading into 2025; the University of Michigan's Consumer Sentiment Index has also declined for most of the year. But at the same time, the economy continues to grow, with GDP up as well as increased investments in manufacturing as the re-industrialization of the U.S. continues. Year-to-date, the S&P 500 is up 23%, and bitcoin has blown past all-time highs with no signs of slowing down. Does all this mean we are happy? The World Happiness Report gives a mixed grade. Overall, North Americans aren't much happier in 2024 than in 2023 and there has been a continued decline in happiness among young people aged 15-24. Maybe there's more to life than money and a good economy. https://www.coindesk.com/news-analysis/2024/11/18/polymarket-trader-loses-millions-on-tyson-after-making-bank-on-trump/