Bullish? On-chain Signal Previously Preceding Parabolic Bitcoin Runs Flashes

Capriole Investments founder Charles Edwards has been observing Bitcoin’s on-chain activity and metrics which can often provide signals for major market moves.

On Oct. 18, he tweeted a chart that depicts the MVRV z-score which uses blockchain analysis to identify periods where Bitcoin is extremely over or undervalued relative to its “fair value.”

MVRV Predicts Incoming Bullish Run

The metric was created by Murad Mahmudov and David Puell by dividing the market capitalization by the realized capitalization for getting a sense of when prices are below “fair value.” The z-score is a standard deviation test that pulls out the extremes in the data between market value and realized value.

The last time the MVRV z-score crossed 3 was in late 2020, just before BTC broke above its previous all-time high of $20K to surge to a new one of $65K four months later.

It happened three times during the 2017 bull run that saw Bitcoin print several new all-time highs. It also occurred in 2014, which saw another cycle peak, and again during 2011, which had another cycle top.

MVRV ratio highs have coincided with these cycle peaks on five previous occasions, so if it continues higher, another one could be on the cards in the next few months.

Stock-to-Flow Status

Another on-chain price prediction model is also right on track and hinting at further gains. The stock-to-flow model measures the relationship between the production of supply and the current stock available, essentially calculating Bitcoin’s value through scarcity.

The brainchild behind the popular pricing model, ‘PlanB,’ posted an update on Oct. 18 showing that prices had reentered the ‘blue zone,’ which is the middle band of the range. The model predicts an average price of around $100K for this cycle though actual prices could range way above or below that.

The analyst has previously stated that the model indicates that the second leg of this bull run has yet to materialize fully. Other popular strategists have also predicted that the real Bitcoin bubble hasn’t really started, as reported by CryptoPotato.

Bounce and Arpa Chain surge 25% on Coinbase Pro listings

The “Coinbase effect” has just been observed for two of three tokens freshly listed on the exchange’s Pro platform.

Leading U.S. cryptocurrency exchange Coinbase has announced three new listings on its Pro exchange, predictably causing the tokens’ prices to pump.

On Oct. 19, Coinbase Pro announced new listings in ARPA Chain (ARPA), Bounce (AUCTION), and Perpetual Protocol (PERP). It confirmed that trading will become available on or after 21.00 PT on Oct. 19, provided ample liquidity enters the market. The three tokens will be each paired with USD, EUR, and USDT.

While AUCTION and ARPA rallied during the hours leading up to the announcement’s publication to each gain roughly 25% in the past 24 hours, the news appears to have stirred little interest among PERP traders.

After seeing a slight initial climb at the time of the announcement, PERP has lost 5% in the past 24 hours to last trade hands for roughly $17. PERP is currently down 30.7% from its Aug. 30 all-time high of $24.40, according to CoinGecko.

ARPA Chain, which enables privacy-focused smart contracts and off-chain transactions began to see momentum roughly 9 hours before the official announcement was published. According to CoinGecko, ARPA is up 25% over the past 24 hours and is roughly 8% of its Oct. 13 all-time high.

AUCTION, the native token of decentralized auction protocol Bounce, also surged at the time of the announcement, climbing 23% from roughly $33 to $40 in the past 24 hours.

Related: Regulatory and privacy concerns trail SEC’s threat to Coinbase

According to a Coin Metrics report published in June 2020, the impact of token listings on Coinbase Pro is significantly overstated. Concluding that new Coinbase markets typically posted average price movements of around -1% to +14% from ten days before until ten days after the listing announcement.

In April this year, Messari posted a contradictory report finding that the “Coinbase effect” results in new tokens gained roughly 90% on average after five days.

Arbitrum extends lead over Optimism as Uniswap posts record volume on L2

DeFi users appear to be choosing Arbitrum over Optimism for scaling as Uniswap’s layer-two volume presses into record highs.

The world’s most popular decentralized exchange, Uniswap, is seeing layer two volumes surge as Ethereum transaction fees surge once again.

On Oct. 19, Uniswap founder Hayden Adams tweeted that daily volume across v3 deployments of the decentralized exchange on layer-two networks has pushed into record levels. Adams estimated that Uniswap v3 processed an unprecedented $115 million in combined daily volume across the Arbitrum and Optimism networks without providing a source.

While Adams’ post was published amid peak U.S. trading hours, data sourced from analytics provider Nomics at the time of writing (3 am UTC) suggests that Uniswap v3 drove $80 million in volume on Arbitrum and roughly $14 million on Optimism over the past 24 hours respectively.

However, Uniswap v3’s combined layer-two volumes are still tiny compared to its mainnet deployment — which currently represents $1.3 billion in daily activity according to CoinGecko.

Related: Ethereum layer-twos reportedly processing more transactions than Bitcoin

Despite the Ethereum Foundation and crypto venture giant Andressen Horowitz backing Optimistic Ethereum, Arbitrum appears to have emerged as the DeFi community’s second-layer rollups solution of choice.

According to layer-two data aggregator L2beat, Aribtrum represents 60% of the total value locked (TVL) across layer-two networks combined since its mainnet launch in early September. Arbitrum’s TVL currently sits at $2.29 billion after increasing by 14% over the past week.

Decentralized derivatives exchange dYdX ranks second behind Arbitrum with $838 million or 22% of value locked in the sector. Comparatively, Optimism has just attracted just $269 million in locked capital, ranking as the third-largest layer-two with a 7% share of second-layer TVL.

The combined TVL of layer-two networks tagged a record-high $3.8 billion on Oct. 17.

Bitcoin Price Just Had Its Best Weekly Close In History

Bitcoin prices held above $60K for most of the weekend, but a late Sunday slump threatened to wipe out recent gains. The dip to $59K did not last long, and BTC prices are marching higher again during the Monday morning Asian trading session.

The candle closed at $60,856, which is higher than the previous weekly high in early April.

BTCUSD_2021-10-18_10-09-58
Chart by TradingView

Back then, BTC prices pushed on to reach an all-time high of around $65K by mid-April. At current prices around $62K, Bitcoin is just 4% away from making a new record price high.

Bitcoin ETF Momentum Building

Recent momentum has been driven by the increasing likelihood of a Bitcoin futures exchange-traded fund finally being approved by the U.S. Securities and Exchange Commission.

October 18 is the day that the ProShares Bitcoin Strategy ETF could begin trading. On Oct. 19, The Invesco Bitcoin Strategy ETF may also be approved, marking the second in as many days.

The decision date for two more exchange-traded products from VanEck and Valkyrie is also approaching on Oct. 25, so there could be several of them launching around the same time.

The move is a big deal in the crypto industry as it legitimizes the asset class which has largely been frowned upon by financial regulators. The next step is to get a physically-backed Bitcoin ETP through the regulatory process, and Grayscale is already planning one according to reports.

Grayscale hints at plans to convert Bitcoin trust into BTC-settled ETF

Grayscale looks to be seeking to restructure its Bitcoin Trust into a physically-backed fund after the SEC approved a Bitcoin futures ETF.

Institutional investment giant Grayscale is reportedly considering converting its Bitcoin Trust into a physically settled exchange-traded fund (ETF).

On Oct. 17, Barry Silbert, the CEO of Grayscale’s parent company Digital Currency Group, hinted that Grayscale is making plans to convert its Bitcoin Trust into a spot-settled Bitcoin fund.

After having taken to Twitter to criticize the cash-settled Bitcoin futures ETF recently approved by the U.S. Securities and Exchange Commission (SEC), Bitcoin commentator Preston Pysh chimed in to ask Silbert when Grayscale’s Bitcoin Trust would be converted into a BTC-settled ETF. “Stay tuned,” Silbert responded.

However, Grayscale Bitcoin Trust investors appear to have been unsettled by Silbert’s remarks, with Twitter user “svrgnindividual” questioning what a restructure would mean for investors holding shares in Grayscale’s Bitcoin Trust.

“What happens to us Grayscale investors once the spot ETF is approved? Is our investment converted into ETF shares?” they tweeted.

Rumors of Grayscale’s purported ambitions for a Bitcoin ETF began circulating late week after a CNBC report citing anonymous insiders claimed that Grayscale was waiting for the Securities and Exchange Commission to finally approve a Bitcoin ETF.

On Oct. 15, the SEC announced it had accepted the registration of securities from ProShares Trust’s futures-based Bitcoin (BTC) exchange-traded fund. ProShares’ ETF offers investors exposure to contracts that speculate on the future price of BTC that are settled in cash.

Related: Grayscale Bitcoin Trust FUD is now over as the last GBTC unlock totals just 58 BTC

Despite the ETF’s approval being cited as the primary catalyst for Bitcoin’s recent bullish market action, many analysts have criticized the fund for its cash-settled structure, instead advocating for the SEC to approve a Bitcoin ETF that is backed by and settled in BTC.

According to Grayscale’s latest holdings update on Oct. 15, the firm boasts $52.6 billion in assets under management (AUM) — 73% of which is held in the Bitcoin Trust. The data suggests that Grayscale’s Bitcoin stash comprises roughly 620,000 BTC or 3.3% of Bitcoin’s total supply.

Retro NFT packs drive frenzied Top Shot speculation

NFTs celebrating significant basketball moments from the mid-2000s have proved to be a big hit among NBA Top Shot collectors.

Trade volume for NBA Top Shot’s nonfungible tokens has skyrocketed over the weekend following the launch of their retro Run It Back 2005-06 packs on Friday, Oct. 15.

According to Crypto Slam, daily volume on Top Shot’s marketplace jumped by more than 440% from $829,520 on Oct. 14 to more than $4.5 million the next day. Oct. 16 also saw more than $4 million worth of tokens trade hands.

Top Shot’s NFTs feature video highlights depicting key moments from the history of professional basketball, with the latest packs celebrating the stars of the 2005 - 2006 season.

On Oct. 17, NBA Top Shot tweeted that nearly 10,000 Run It Back packs had been sold in 24 hours at a rate of seven purchases per minute.

The packs started at $169 each, with collectors competing to snag moments depicting basketball legends such as LeBron James and Shaquille O'Neal. Top Shot’s packs feature three tiers of rarity ranging from “common” to “legendary.”

Crypto Slam data shows that the NBA Top Shot marketplace has hosted a whopping $744 million worth of secondary sales since July 2020. Top Shot trade activity peaked during the first quarter of 2021, with $45.7 million worth of trades occurring within 24 hours on Feb. 22.

While more than $200 million worth of Top Shot NFTs changed hands during the months of February and March, monthly volume has since retraced sharply with approximately $20 million of trades taking place during September and October.

Related: Top Shot to sell exclusive NFT moments at live basketball games

After its weekend surge, Top Shot is ranked as the third-largest NFT project by daily secondary volume, with more than $2.5 million in tokens trading hands in the last 24 hours according to Crypto Slam.

Axie Infinity ranks in first place with $18.6 million worth of trades for the past day, while CryptoPunks is second with a 24-hour volume of $6.2 million.

In late September, Dapper Labs, the team behind Top Shot, announced plans to branch out beyond basketball and launch an NFT platform and marketplace in partnership with the National Football League (NFL). Dapper Labs is currently targeting to have completed its first NFL drop by the end of 2021.

Half of unique active crypto wallets played a blockchain game in Q3

In-game NFTs have generated $2.3 billion in sales over the past three months and Axies are the top sellers.

The number of crypto wallets participating in blockchain games has surged in recent months according to new research.

According to DappRadar’s Q3 ‘Blockchain Game Report’, unique active wallets connected to gaming decentralized applications reached a total of 754,000 for the period. This represents almost half of the industry’s activity with the blockchain industry registering 1.54 million daily unique active wallets on average over the three-month period.

The unique active wallet metric refers to unique addresses that interact with a given smart contract, so it does not necessarily translate to daily active users.

The increase in gaming activity has been largely driven by the play-to-earn movement and in-game nonfungible tokens. These in-game NFT collectibles generated $2.32 billion in sales during Q3, the research stated, adding that this represents 22% of the total NFT trading volume for the period:

“In the midst of all the euphoria around Ethereum collections like CryptoPunks and Bored Ape Yacht Club (BAYC), the role that NFT in-game items played, may be overlooked.”

Around $10.67 billion in trading volume was recorded for the NFT space from July to September, an increase of just over 700% from the previous quarter.

The Axie Infinity metaverse has been one of the major driving forces for blockchain gaming. Players collect and raise “Axies” which are virtual creatures that can be used in player-versus-environment (PvE) and player versus player (PvP) battles in the game.

Axie Infinity amassed $2.08 billion in trading volume in Q3 and has currently hit $2.55 billion in total volume. DappRadar reports that there have been more than 6.7 million sales to date, and the current 24-hour volume is $15.2 million.

NFT tracker CryptoSlam lists Axie Infinity as the top-selling collection by sales volume over the past 30 days with $504 million.

Related: The Metaverse, play-to-earn and the new economic model of gaming

In late September, Axie Infinity enabled staking for its native AXS token which adds an additional layer of passive income on top of Axie’s play-to-earn potential. The move ignited AXS trading and drove prices to an all-time high of $155 on Oct. 4. The token has gained 743% over the past three months.

Play-to-earn gaming societies such as Yield Guild Games, which raised $12.5 million in a 30-second IDO (initial DEX offering) in July, have also seen massive momentum in recent months.

The Guild has been actively adding play-to-earn games to its growing ecosystem recently including Thetan Arena, CyBall, Influence, Merit Circle, and Star Atlas so far this month alone.

SEC likely to allow Bitcoin futures ETF to trade next week: Reports

The long-awaited launch of a Bitcoin exchange-traded fund could finally arrive on Monday.

The long wait for a Bitcoin exchange-traded product could soon be over according to sources reported by financial media giant Bloomberg.

Citing “people familiar with the matter” Bloomberg has reported that the U.S. Securities and Exchange Commission is poised to approve the first Bitcoin futures exchange-traded funds in the country.

The anonymous sources said:

“The regulator isn’t likely to block the products from starting to trade next week.”

A futures product is likely to be the first one approved since they are viewed more favorably by regulators. Futures are governed by the Chicago Mercantile Exchange (CME) and require investors to put down cash on margin to trade them.

Bloomberg senior ETF analyst, Eric Balchunas, is confident that the ProShares Bitcoin Strategy ETF could be the first one launched as the decision deadline is Oct. 18. The Invesco Bitcoin Strategy ETF may be approved the following day barring any further delays by the SEC.

In a tweet on Oct. 15, the analyst stated: “Pretty much done deal. Expect launches next week,” before adding the “odds now over 90% IMO.”

SEC chair Gary Gensler has voiced favor for funds based on CME-traded Bitcoin futures filed under a 1940s law, adding more weight to the potential of a long-awaited approval.

Related: SEC Chair Gary Gensler actually is pro-Bitcoin, Volt Equity CEO argues

On Oct. 14 Cointelegraph reported that Ark Invest had teamed up with 21Shares to file for an ETF that will trade in Bitcoin futures indicating that they too were confident that product approval is imminent.

Deadlines for ETF applications from VanEck and Valkyrie are also approaching on Oct. 25 so there could be a slew of them hitting exchanges over the next couple of weeks.

Monday, Oct. 18 could be a big day for Bitcoin prices as markets have been bubbling up in anticipation of this landmark event. At the time of writing, BTC had just spiked to $59,600 before a slight retreat according to CoinGecko.

Uniswap taps former Obama campaign spokesperson to handle comms

The Washington insider will help the company navigate through increasingly turbulent regulatory waters.

Decentralized exchange Uniswap has been making some interesting hires, the latest being a communications expert with close ties to the U.S. Democrat party.

Former senior spokesperson for Barack Obama, Hari Sevugan, has joined the Uniswap Labs team according to protocol founder Hayden Adams who welcomed him aboard on Oct. 14.

The hire may be part of the team’s ongoing effort to prepare for stormy regulatory weather ahead in the United States.

The Washington insider was well known for his role in former President Barack Obama's 2008 campaign. Sevugan will be managing media affairs for Uniswap in addition to assisting the firm with relations to new and existing users.

Sevugan stated that it is “no longer in question” that blockchain and crypto will be part of the future, before adding:

“I'm excited to join the brilliant team at Uniswap because they're committed to making sure we build in a way that reaches crypto's potential of giving more people ownership of their own financial futures and the value they create.”

The hire comes at a time when Uniswap and the entire decentralized finance sector are coming under increasing scrutiny by U.S. financial regulators and policymakers.

In early September, Cointelegraph reported that the Securities and Exchange Commission had launched an investigation into Uniswap Labs, the firm behind the world’s most popular decentralized exchange. It was reported at the time that enforcement attorneys were seeking more information regarding Uniswap’s marketing and investor services.

Related: DeFi regulation must not kill the values behind decentralization

In June, the Uniswap community voted in favor of a controversial DeFi Education Fund backed by UNI treasury tokens allocated to lobbying and educational initiatives to support the DeFi sector and protect it from over-regulation.

Sevugan’s role is likely to see him involved in liaising with lawmakers in an effort to increase awareness for the protocol and the DeFi ecosystem.

“Crypto is opaque and intimidating to many outside of it. I want to help more people connect to it by making it more relatable and understandable,” he stated.

G7 leaders issue central bank digital currency guidelines

Financial leaders from the G7 agree that CBDCs would complement cash and should not be detrimental to the monetary system.

Group of Seven advanced economic nations has been discussing central bank digital currencies (CBDCs) this week, concluding that they should “do no harm” and meet rigorous standards.

Finance leaders from the G7 met in Washington on Oct. 13 to discuss central bank digital currencies and endorsed 13 public policy principles regarding their implementation.

The G7, which comprises Canada, France, Germany, Italy, Japan, the U.K., and the U.S., mandated that any newly launched CBDCs should “do no harm” to the central bank’s ability to maintain financial stability. In a joint statement, G7 finance ministers and central bankers said:

“Strong international coordination and cooperation on these issues helps to ensure that public and private sector innovation will deliver domestic and cross-border benefits while being safe for users and the wider financial system.”

It added that CBDCs would complement cash and could act like liquid, safe settlement assets in addition to anchoring existing payments systems. Digital currencies must be energy efficient and fully interoperable on a cross-border basis, the statement added.

Leaders from the G7 nations confirmed that they had a shared responsibility to minimize “harmful spillovers to the international monetary and financial system.”

CBDC issuance should be “grounded in long-standing public commitments to transparency, rule of law, and sound economic governance,” the statement continued. A G7 nation has yet to issue a CBDC but several such as the United Kingdom are actively researching the technology and economic impacts.

Related: Cointelegraph predictions for the first 5 CBDCs of 2021–2022

Echoing a similar statement made by the larger G20, they reiterated that no global stablecoin project should begin operation until it addresses legal, regulatory, and oversight requirements. The comments may be in reference to Facebook’s planned Diem cryptocurrency which has raised red flags for financial leaders and central bankers.

The U.S. has been dragging its feet with CBDC plans and the Federal Reserve remains highly skeptical about digital dollars. As reported by Cointelegraph in September, America is in danger of being left behind technologically and financially if it doesn’t start seriously considering its own CBDC.

China is already way ahead of the pack with its digital yuan, and its latest crackdown on crypto is likely to be part of its grand plans to further promote and control central bank monetary flows.

Bitcoin miner Stronghold will list almost 6M shares in its $100M IPO

The firm uses a sustainable energy source by converting waste coal into power to mine Bitcoin.

U.S. Bitcoin mining company Stronghold Digital Mining will list almost six million shares in an initial public offering on the Nasdaq.

Stronghold plans to list 5,882,352 Class A common stock shares priced between $16 and $18 under the ticker “SDIG”. Taking the average proposed offering price puts the IPO at around $100 million.

The Kennerdell, Pennsylvania-based firm first filed with the Securities and Exchange Commission for a Nasdaq IPO in July. It will fund an almost 900% expansion in capacity in the coming year. The final prospectus has already been filed with the SEC, but it has yet to become effective.

Stronghold plans to become the first North American crypto mining company to go public through an actual IPO, according to Nasdaq. This is different from the now popular direct listing and Special Purpose Acquisition Companies (SPAC) avenues.

Stronghold intends to grant underwriters, or intermediaries that help the firm prepare for the offering, a 30-day option to purchase as many as 882,352 additional shares of its stock at the IPO price, in addition to the 5.8 million offering to the public.

B. Riley Securities, Inc. and Cowen will be acting as joint book-running managers, while Tudor, Pickering, Holt & Co. are serving as lead managers.

Stronghold describes itself as an “emerging growth company” which currently operates approximately 3,000 crypto miners with a hash rate capacity of around 185 petahash per second (PH/s) according to the prospectus.

It stated that it has entered into agreements with three suppliers to provide an additional 26,150 miners with a total hash rate capacity of over 2,500 PH/s. Delivery of 72% of them has been scheduled for delivery this year, with the remainder being delivered in 2022.

Stronghold intends to acquire even more hardware with the proceeds of the IPO as an additional 55,800 miners have been planned.

Related: US miner raises $105M to recycle waste coal into crypto

The firm owns and operates the “Scrubgrass Plant” in Pennsylvania which has been recognized as an alternative energy source since it converts waste coal into energy. The prospectus stated:

“We are committed to generating our energy and managing our assets sustainably, and we believe that we are one of the first vertically integrated crypto asset mining companies with a focus on environmentally beneficial operations.”

New Australian ransomware plan allows for seizure of crypto

Australian authorities will be able to seize or freeze cryptocurrencies linked to cybercrime under new legislation.

Australian lawmakers are taking a tougher stance against ransomware with a new plan that increases penalties for offenders.

The new measures and proposed Surveillance Legislation Amendment announced by the federal government on Oct. 13 come after a 60% surge in cyberattacks on Australian businesses and state agencies last year. According to reports, these incursions cost the economy $AU1.4 billion (around $US1 billion).

The Ransomware Action Plan would give authorities the power to seize or freeze financial transactions in cryptocurrencies that are associated with cybercrime regardless of the country of origin.

The government aims to modernize current legislation to make it easier for authorities to try and recover crypto funds stolen by cybercriminals.

Home Affairs Minister Karen Andrews said that the new measures were designed to deter the targeting of Australian businesses by international hackers. “Our tough new laws will target this online criminality, and hit cybercrooks where it hurts most — their bank balances,” she added.

Dealing with stolen data and buying and selling malware used in ransomware attacks will also be criminalized.

A multi-agency task force called Operation Orcus was set up in July to tackle ransomware attacks. Most of the attacks originated in Russia with the deployment of malware such as REvil or DarkSide which encrypts or steals data then demands a ransom in cryptocurrency.

There have been several recent ransomware attacks on Australian targets including Uniting Care Queensland, brewing company Lion, Nine Entertainment, the NSW Labor Party, Toll Holdings, and BlueScope Steel. The attack on the JBS meat processing company in May forced it to shut down its 47 sites in Australia.

Related: Don’t blame crypto for ransomware

Lawmakers in the United States are also ramping up efforts to tackle ransomware. Earlier this month anti-crypto Senator Elizabeth Warren introduced the Ransom Disclosure Act which aimed to gather data on the role of cryptocurrency in ransomware attacks.

On Oct. 6, blockchain analytics firm Chainalysis purchased cybercrime investigative firm Excygent to bolster its arsenal in the ongoing war against ransomware.

Rari Capital doubles TVL to $1B in just two weeks thanks to high yields

The billion-dollar TVL has been driven by massive yields on the DeFi aggregation platform.

The total value locked on the decentralized finance protocol Rari Capital has surged past $1 billion.

The DeFi lending, borrowing, and yield generating protocol has surpassed the key milestone in TVL according to the app dashboard, and DeFiPulse confirms the all-time high TVL figure, reporting it at $1.09 billion.

On Sept. 30, Cointelegraph reported that Rari’s TVL had topped $500,000 so the doubling of collateral has taken around a fortnight. (DeFi Llama meanwhile, estimates TVL at $889M but going up fast.)

Rari launched in July 2020 to automate DeFi by optimizing and moving users’ funds to the highest yielding incentives at the time. It gained a certain amount of attention at the time as it was launched and run by teenagers and those just out of their teens.

Recent momentum has been driven by a number of liquidity pools offering higher than industry typical returns. It is currently offering a 21.67% annual percentage yield on USDC deposits and 26.43% APY in the DAI pool.

Its Fuse protocol has been extremely popular as it allows users to create custom lending and borrowing money markets with any assets and unlimited parameters.

The top pool called “Tetranode's Locker” has $655 million supplied, or 62% of the total, across 18 crypto assets earning various yields. Within that pool, the OlympusDAO sOHM token is currently yielding a whopping 7,594% APY.

OlympusDAO is an algorithmic currency protocol that allows users to supply crypto assets such as ETH or DAI to create bonds that back its native currency OHM. The complex bonding process acts as a hybrid fixed income product and a derivatives contract with quotes provided in OHM for trades at a future date.

Rari Capital thanked the “Ohmies” for helping propel its TVL to record levels.

Rari also offers permissionless pools which allow any user to create any pool of assets including NFTs offering any interest rates.

Venture Partner at 3SE Crypto, David Silverman, congratulated the young team on the achievement:

“Huge congrats to @JackLipstone @jai_bhavnani @davidslucid and the whole @RariCapital team!”

The Rari protocol, like most in the DeFi sector, has its own governance token called RGT which has also been performing well recently.

Related: There’s more to DeFi than just providing liquidity

RGT hit an all-time high on Monday, Oct. 11 when it surged to $34 according to CoinGecko. It has gained 50% over the past fortnight and is up 93% over the past 30 days. At the time of writing, RGT was changing hands for $29.77.

Rari Capital was exploited for $11 million in May which caused token prices to crash to $4.80 following the hack.

Bitcoin futures ETF will likely be delayed until 2022 says research firm CFRA

Regulatory uncertainty could be the cause for yet more delays in the approval of long-awaited Bitcoin exchange-traded products.

Crypto asset investors may have a longer wait for a Bitcoin futures exchange-traded product according to Todd Rosenbluth, the senior director of ETF and mutual fund research at research firm CFRA.

Speaking on CNBC’s “ETF Edge” on Oct. 12, Rosenbluth stated that while a Bitcoin futures product is likely to be the first crypto ETF to gain approval, he cautioned that the current clouded regulatory situation could cause further delays.

There are more than 20 crypto asset-based exchange-traded products waiting for Securities and Exchange Commission approval, and the regulator is yet to pass any, instead kicking the can down the road on multiple occasions.

The researcher suggested that regulators could be waiting for all of these products to meet their goals so that they can be approved at the same time to avoid a “first-mover advantage,” before adding:

“It’s possible — in fact, we think it’s likely — that we’re going to see a delay of a Bitcoin futures ETF until 2022, until the regulatory environment is more clear.”

Van Eck Associates CEO, Jan van Eck, commented that the primary concern for the SEC is the discrepancy between actual Bitcoin prices and the price of the futures contract, in addition to the potential of funds getting too large.

When there is a Bitcoin rally, futures strategies can underperform by as much as 20% a year, he stated before adding “the SEC wants to have some visibility into the underlying Bitcoin markets.”

Van Eck also suggested that the regulator needs to gain more control over crypto trading which it appears to be attempting with its recent threats against Coinbase and the exchange’s stablecoin lending product. Other popular trading platforms such as Robinhood are already regulated and registered as broker-dealers.

Related: Are whales front-running the approval of a Bitcoin futures ETF?

Any speculation over a possible delay could hit the Bitcoin price as analysts had suggested that big investors may be buying up BTC in anticipation of an ETF approval this month. The asset has rallied 37.5% over the past fortnight to reach a local top of $58,000 on Oct. 12, but more regulatory procrastination could quash current market momentum.

Bloomberg senior ETF analyst Eric Balchunas is still confident that there is a 75% chance that an ETF will be approved this month.

Earlier this month, the SEC extended the deadline of four BTC ETFs — the Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Kryptoin Bitcoin ETF — for 45 days.

In September, Van Eck’s physically-backed Bitcoin ETF was delayed for the second time this year with a decision date set for Nov. 14 by the SEC.

FTX Launches Solana NFT Marketplace in the United States

The Solana NFT Marketplace has been officially launched, according to an Oct. 12 tweet from the FTX exchange. Any NFT pieces or collections on the new platform must be on the Solana blockchain; however, there are also plans to support Ethereum-based tokens, which are the industry standard.

The FTX.US North American affiliate of the popular exchange will allow users to mint, hold, authenticate, and trade NFTs on the marketplace, which is integrated into FTX’s platform.

The marketplace will take a 2% fee from both the buyer and seller from each sale or trade, along with a $1 fee to mint or list NFTs.

Metaplex NFTs Only

All tokens on the platform will be using the Metaplex Solana protocol, which means it is unlikely that they will be compatible with other leading marketplaces unless they integrate the technology.

Due to US regulations, FTX also has stringent KYC (know-your-customer) requirements for NFT trading which are not required at other marketplaces such as OpenSea. This may deter artists that wish to remain anonymous while promoting their work.

FTX does support bank transfers and credit cards to purchase NFTs, with newly minted tokens available for listing in USD, SOL, or ETH.

FTX and Solana founder Sam Bankman-Fried did not elaborate on why the system was based solely on Solana. Brett Harrison, president of FTX.US, said:

“We decided to create an NFT marketplace on FTX US after becoming immersed ourselves in the NFT ecosystem. The NFT ecosystem has started to infiltrate pop culture, but has been lacking a platform that provides easy access and exposure to the mainstream audience.”

Harrison stated that around 40 of 70 of its verified collections are currently visible.

SOL, FTT Prices Slide

Solana’s native SOL token has been on fire this year, driven by the momentum from the FTX exchange, which has been aggressively marketed in the U.S.

However, SOL has slipped a little today, retreating 5.5% over the past 24 hours, according to CoinGecko. SOL is currently changing hands for $143, which is down 14.5% over the past week.

The token has slid 33% from its Sept. 9 all-time high of $213 but has made almost 300% since the beginning of August.

FTX’s FTT token has dropped 2% on the day to trade at $53 at the time of writing. It has dropped by 37% from its all-time high of $84, also on Sept. 9.

THORSwap relaunches cross-chain trading on four of five networks

THORSwap users can now transact across Bitcoin, Litecoin, Binance Smart Chain and Bitcoin Cash networks.

Cross-chain decentralized exchange (DEX) THORSwap appears to be on the path to recovery after the THORChain network was taken offline following major exploits just three months after entering its guarded launch.

The Cosmos-powered network aims to support decentralized trades executed across different blockchain networks such as Bitcoin (BTC) and Ethereum (ETH). According to an Oct. 12 progress report, the team behind the project’s decentralized exchange THORSwap has so far restored functionality for four of the five networks it supported prior to going down in July.

The update states that THORSwap has resumed swap functionality across the Bitcoin, Bitcoin Cash (BCH), Litecoin (LTC), and Binance Smart Chain networks, adding that the team is currently in the process of reinstating support for Ethereum.

THORSwap added it is working to integrate support for the Terra stablecoin network and the Cosmos’ decentralized finance hub, Gaia. Further integrations with other crypto assets, including Dogecoin (DOGE), Decred, Haven and Monero (XMR), are also under development.

The team is also working to improve the performance of network nodes.

THORSwap’s highly guarded “chaosnet” was partially launched in April, following the launch of THORChain’s initial systems in July 2020.

Despite apparent early success, the THORChain network would suffer three hacks during June and July, forcing it to take some services offline.

Related: Possible ‘white hat hacker’ exploits THORChain for $8M, proposes 10% bounty

THORChain was initially exploited in June. However, the team downplayed the incident at the time, stating that the first exploit attempt was limited to $140,000, "which is a small amount compared to other exploits."

The network was exploited again for a much larger $7.6 million in Ethereum on July 16 after a hacker discovered a vulnerability resulting in the suspension of operations. THORChain was attacked for a third time on July 23 when a hacker exploited the network’s Ethereum router to steal $8 million worth of ETH.

"It's been a tough time for THORChain during the last few months, but fundamentals never changed," said the THORSwap team.

Long-term Bitcoin bulls hodl strong despite five-month price high

Bitcoin wallets that haven't seen outflows for more five months and are currently sitting on $754 billion worth of the asset.

On-chain analytics provider glassnode reports that long-term Bitcoin holders are refusing to sell despite the BTC markets rallying to a five-month price high.

In its Oct. 11 “Week on Chainreport, Glassnode noted that “long-term holders” — BTC wallets that have not seen outflows for more than 155 days — are currently sitting on nearly 13.3 million BTC or 70% of Bitcoin’s supply.

The report notes that long-term holders have increased their collective stash by more than 2.37 million BTC (roughly $134 billion at current prices) over the past seven months. With only 186,000 BTC being newly minted by miners during the same period, Glassnode concludes that long-term whales are accumulating 12.7 times more BTC than is created as new supply.

Despite long-term holders refusing to sell, Glassnode noted an uptick in on-chain activity as Bitcoin’s price pushed up to a local high of $57,860 on Oct. 12.

October has seen the number of active addresses on-chain increase 19% to 291,000 — levels not seen since the lead up to December 2020’s meteoric bull-trend. Glassnode suggested the spike in activity could foreshadow further bullish momentum, stating:

“More active market participants have historically correlated with growing interest in the asset during early stage bull markets.”

The report also noted an increase in median transaction size to roughly 1.3 BTC per transfer, suggesting an increase in institutional-sized capital flows on-chain. During August, the median transaction size fell as low as 0.6 BTC per transfer.

Last week, the Bitcoin network registered its highest ever daily value settlement of $31 billion.

Related: Bitcoin outflows from centralized exchanges surge to 100K BTC monthly

On Oct. 12, Glassnode reported that Bitcoin balances on centralized exchanges had fallen to a three-year low of 2.4 million BTC, further evidencing many investors are choosing to hodl for higher prices.

Industry observers have suggested that whales could be front-running the BTCmarkets in anticipation of a Bitcoin ETF approval this month.

Massive Sell Order Flash Crashed Bitcoin’s Price to $51K on Bitstamp

Bitcoin tapped a fresh high during Monday morning’s Asian trading session. At the time of writing, BTC prices were still close to those levels at $56,700.

  • Bitcoin has posted its third weekly green candle and fourth on the daily time frame. The asset has gained an impressive 17% over the past 7 days and 31% over the past fortnight.
  • However, there was a discrepancy on one popular trading venue, as pointed out by the Twitter trader “Hsaka” –  a flash crash that occurred on the Bitstamp exchange. Prices plummeted to around $51K on the platform following a large spot sale, but markets elsewhere were not affected.
  • A flash crash is typically described as an event in which the price of an asset drops immediately by a large percentage and spikes back up immediately. This is what transpired on Bitstamp hours ago.
  • BTC stood around $55,500 before it suddenly plummeted to $51,000, as the chart below demonstrates. It bounced off just as fast. TradingView volume data shows that there were 212 bitcoins being sold at that minute, which most likely caused the sharp drop.
BTCUSD Flash Crash on Bitstamp. Source: TradingView
BTCUSD Flash Crash on Bitstamp. Source: TradingView
  • It’s worth noting that this is not an isolated incident in the cryptocurrency space. CryptoPotato has reported several such examples in the past where the price of BTC dumped by double-digit percentages in seconds.
  • Also, some alternative coins have been affected. Earlier this year, the DOT/USD Quarterly perpetual futures contract on the COIN margined section of Binance Futures went through a massive flash crash as the price dipped from a high of $33.862 to a low of $0.20 in an instant.

Bitcoin network tags record high for daily settlement volume

More than $30 billion was settled on the Bitcoin blockchain in a single day last week.

The value settled on the Bitcoin network has been surging recently, reaching a new daily all-time high last week.

Bitcoin’s daily settlement value hit an all-time high on Oct. 6, with $31 billion worth of transactions being settled on-chain using the Bitcoin network.

The record high marks an increase in the network’s daily settlement volume of approximately 40 times since the beginning of 2020.

According to data from Coin Metrics, daily settlement volume has since pulled back sharply, with the Bitcoin network settling $11.6 billion worth of transactions on Oct. 10.

On-chain analyst Willy Woo commented the uptick in activity and settlement value over the weekend, tweeting that volume money moving on Bitcoin's blockchain currently dwarfs that of major centralized payment networks Visa and Mastercard in the United States.

“[The Bitcoin network is] presently doing ~$190k per second. Compare this to $130k per second by Visa for US customers and $55k per second for Mastercard.”

Related: ETH’s trading volume grew much faster than BTC’s in first half of 2021

According to Bitinfocharts, the average value of a transaction executed on the Bitcoin network has also been steadily increasing over the past three months to tag $732,000 — an increase of 273% since the beginning of July.

Chinese media outlet Wu Blockchain has also observed a spike in the number of transactions valued at over $10 million.

Ethereum’s daily transfer value is currently $5.3 billion according to Coin Metrics. Ethereum had briefly flipped Bitcoin’s daily settlement volume in early September, but Bitcoin regained its lead within a couple of weeks.

Nuclear engineer sells classified data to undercover FBI agents for crypto

The FBI paid tens of thousands worth of cryptocurrency to a nuclear engineer in exchange for SD cards containing classified data.

A nuclear engineer and his wife have been arrested in West Virginia on charges of espionage and selling restricted data.

The couple sold classified information regarding the designs of nuclear-powered warships to an individual they believed to represent a foreign nation for almost a year. However, the contact was an undercover FBI agent who sent payments for the data in cryptocurrency.

Jonathan and Diana Toebbe were apprehended by the FBI and the Naval Criminal Investigative Service (NCIS) on Saturday, Oct. 9. They will appear in federal court on Tuesday, Oct. 12. According to a statement from Attorney General Merrick B. Garland:

“The complaint charges a plot to transmit information relating to the design of our nuclear submarines to a foreign nation.”

Jonathan Toebbe served as a nuclear engineer assigned to the Naval Nuclear Propulsion Program and held active national security clearance through the U.S. Department of Defense.

In April 2020, the FBI became suspicious of Toebbe after spotting that he sent a package containing sample data and instructions on how to establish covert communications and purchase more information.

In June of this year, an undercover agent sent $10,000 in an unspecified cryptocurrency to Toebbe as “good faith” payment after receiving some sample data. The couple used a “dead drop” to hide an SD card containing more information inside half a peanut butter sandwich for which the agent paid a further $20,000 in crypto for the decryption keys.

A second dead drop saw the FBI pay a further $70,000 worth of crypto to Toebbe in exchange for further data on U.S. nuclear submarines. The FBI nabbed the couple after a third drop was organized.

Related: Blockchain could become a part of the US military’s strategic weaponry

The incident is not the first time U.S. federal agencies have used cryptocurrency as part of investigations targeting criminal activity.

In August, the U.S. State Department began offering compensation in the form of cryptocurrency through its “rewards for Justice” website in exchange for information leading to the capture of high-ranking foreign terrorism suspects.

Old News With Dubious Sources: Tether Responds to Bloomberg’s Accusations

Bloomberg launched a scathing attack on the stablecoin issuer in a BusinessWeek article on Oct. 7 titled “Anyone Seen Tether’s Billions?”

In it, the financial news giant stated that the stablecoin is essentially a fraud because it does not have the assets to back it. At the time of writing, there were 69 billion USDT tokens in circulation, according to Tether’s own transparency report.

“Tether Holdings doesn’t have enough assets to maintain the 1-to-1 exchange rate, meaning its coin is essentially a fraud.”

As if to run salt in the wounds, Bloomberg followed up with another article on Oct. 8 highlighting the key points from the previous one.

It claims that part of Tether’s reserves includes “billions of dollars of short-term loans to large Chinese companies.” It added that some loans are crypto-backed, but Tether has already confirmed this.

Bloomberg pointed at Tether Chief Financial Officer Giancarlo Devasini, citing former chief executive officer of Noble Bank, John Betts. He alleges Devasini invested some of the reserves “to earn potentially hundreds of millions of dollars of profit for himself.”

It also reiterated older reports that Tether executives were targets of a criminal bank fraud investigation by the U.S. Department of Justice.

Tether Bites Back

Tether posted a response to the scathing reports on Oct. 7, stating it was:

“A one-act play the industry has seen many times before, taking snippets of old news from various places and dubious sources, and making it fit a pre-packaged and pre-determined narrative.”

The company added that Bloomberg “refuses to let the facts get in the way of the story” and relied on John Betts, whom Tether fired as its banker. Tether fingered Betts in return, adding that:

“Betts has also been accused of engaging in egregious and wasteful self-dealing and seeking to enrich himself at Noble’s expense.”

When Audit?

Tether maintains that all of its tokens are “fully backed” but has yet to submit a complete and full audit of its reserves. According to a court filing in May, USDT reserves are heavily dollar-weighted but also include cash equivalents, bonds, secured loans, crypto assets, and other investments.

In late July, Tether general counsel Stuart Hoegner stated that the firm hopes to be the first to conduct a full audit which will be coming in months, not years.

U.S. regulators meanwhile continue to put the squeeze on stablecoins with the same tired claims that they threaten the traditional financial system. In essence, this was their purpose, as Tether attests in its rebuttal.

“While this may threaten the establishment of traditional financial systems, we will continue to work for the underrepresented.”

Amount of ETH held by miners reaches highest level since 2016

Ethereum miners are reluctant to sell their assets and appear to expect further price increases.

The amount of Ethereum that is being held by miners has reached record levels in U.S. dollar terms as they remain reluctant to sell.

The balance held by Ethereum miners is the largest it has been since shortly after the network was launched five years ago. When converted into USD, it is at a historic peak of $1.85 billion, according to data provided by analytics platform Santiment.

The firm stated that the 532,750 ETH is the largest balance held by miners since July 13, 2016. The amount equates to around 0.45% of the total circulating supply of Ethereum which is currently 117.8 million ETH.

Ethereum miner balances and price - santiment.net

Miners usually sell the asset regularly to cover expenses which include electricity and hardware costs. A reluctance to sell suggests that miners could be holding out for further price increases.

Hash rate not hit

The Ethereum hash rate, which is often viewed as a reflection of network health and security, slumped during the miner exodus from China along with Bitcoin’s. Ethereum's hash rate fell to 477 TH/s in late June but has fully recovered over the past three months and surged to new peaks. It is currently up 150% since the beginning of the year.

That’s despite China-based Ethereum mining pools dropping out of the race, with SparkPool and BeePool suspending operations in recent weeks. Curiously, there has been no noticeable drop in hash rate which hit an all-time high of 745 terrahashes per second (TH/s) on Oct. 5 according to Bitinfocharts.

Related: Miners have accumulated $600M worth of Bitcoin since Feb

Cointelegraph reported in September that Ethereum miners had started hoarding the asset following the London hard fork in early August. Research from the Kraken crypto exchange suggested that miners were expecting further price increases from potential deflationary properties following the launch of EIP-1559 which burns some of the transaction fees.

Since the upgrade went live on Aug. 5, 473,120 ETH worth around $1.7 billion has already been burnt according to Ultrasound.Money.

Further adding to the supply squeeze, a large percentage has also been staked on the Eth2 Beacon Chain contract. Around 6.7% or 7.9 million ETH has been locked for staking according to the Eth2 explorer. At current prices of around $3,577, this equates to roughly $28 billion worth.

Gelato raises $11M from heavyweight backers for Web 3 automation

Gelato aims to simply DeFi by automating smart contract operations and helping users rebalance their portfolios.

Smart contract automation network Gelato has become the latest to receive big backing from crypto venture capital giants.

Gelato has raised $11 million in a Series A funding round led by Dragonfly Capital and with participation from ParaFi Capital, Nascent, IDEO CoLab Ventures, and Aave founder Stani Kulechov.

The funds were raised through a closed-door token sale and will go toward onboarding more blockchains to the network and increasing its staff from the current team of 15.

Gelato automates Ethereum smart contract operations by using what it calls “arbitrary logic” and bots. Its most prominent use case is addressing liquidity and volatility issues with cryptocurrency trading. The protocol can protect traders from severe losses by automatically rebalancing portfolios and executing trades on their behalf.

Third-party servers and systems are required to monitor smart contracts and conditions for their execution. Gelato does away with the intermediaries by using a decentralized network of bots to carry out these operations, simplifying DeFi for end users.

Mika Honkasalo of ParaFi Capital explained that:

“Gelato expands the capabilities of smart contracts, which are by default inactive and only execute when a user triggers them.”

Gelato co-founder Hilmar Orth elaborated that Web 3 developers can now plug into an existing decentralized network instead of having to write custom bots run on centralized servers.

The Gelato Network currently supports smart contracts on Ethereum, Polygon and Fantom and will add additional support for Binance Smart Chain, Arbitrum, Optimism, and Avalanche. Several projects are already using the system to automate contracts including MakerDAO, Instadapp, B Protocol, and QuickSwap.

Related: Gelato Network launches ‘G-UNI’ Uniswap v3 management token

In June, Gelato introduced an automated liquidity manager for Uniswap called G-UNI which combined the capital efficiency of Uniswap v3 with the user experience of v2.

In August, Gelato integrated with DeFi aggregator Zerion to improve liquidity management for its users. This enabled Zerion’s 200,000 or so active monthly users to have their Uniswap v3 positions managed automatically.

Financial Watchdogs Welcome SEC Investigation into Insider Trading at the Fed

Better Markets, a non-profit independent organization promoting public interest in financial markets, has reported that it would welcome any action by the SEC investigating insider trading at the Fed.

On Oct. 6, Dennis Kelleher, co-founder, and President of Better Markets stated that a thorough, independent investigation by the SEC is so important.

He stated that the organization welcomes the SEC’s de facto confirmation of its investigation into the trading during the pandemic by numerous Federal Reserve leaders.

Fed Executives Moving Millions

Earlier this week, it was reported that Federal Reserve Vice Chair Richard Clarida traded millions in and out of securities and mutual funds on Feb. 27, 2020, just one day before Fed Chair Powell issued an emergency pandemic statement.

It was also reported that Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren had also actively traded in stocks and real estate assets while the central bank was engaged in an extensive rescue of financial markets as the pandemic worsened. Both Fed executives resigned in late September.

Anti-banking and anti-crypto Senator Elizabeth Warren was particularly incensed and sent a letter to SEC Chair Gary Gensler earlier this week. As she has done with crypto recently, Warren pulled no punches:

“The reports of this financial activity by Fed officials raise serious questions about possible conflicts of interest and reveal a disregard for the public trust. They also reflect atrocious judgment by these officials, and an attitude that personal profiteering is more important than the American people’s confidence in the Fed.”

Tip of The Iceberg

Kelleher echoed the sentiment in his statement yesterday, adding “In addition to violating Fed policies, failing to provide leadership, and violating the public trust by seeking to enrich themselves while their policy actions impacted the price of financial assets, and while apparently in possession of material nonpublic information, this trading may well have violated the law.”

He added that people still have no idea if this trading by a handful of Fed leaders was just the tip of an iceberg of widespread insider trading.

Earlier this week, Gary Gensler said “we as an agency look into things that are brought to our attention,” but did not confirm or deny any of the allegations.

Meanwhile, regulators and a number of hardline politicians still maintain that the crypto industry is the axis of evil when it comes to shady financial dealings.

Featured Image Courtesy of FT

FTX customer seeks help after mistaken deposit allegedly results in $1M in fees

DeFi blog Rekt claims that FTX failed to adhere to its own terms and conditions by imposing the fee.

A crypto hodler is outraged after allegedly copping a $954,135 fee from centralized exchange FTX. The trader claims the fee was charged over a mistaken deposit they believe was the exchange’s fault.

On Oct. 6, the Rekt Blog published screenshots of correspondence that suggest the problems began when the customer deposited around $6.3 million in USDP, the stablecoin token for DeFi borrowing platform Unit Protocol, in late September.

Unfortunately, the Paxos stablecoin has also rebranded to USDP and the exchange changed the PAX ticker to USDP in late August. So the user apparently deposited $6.3 million of unsupported USDP tokens into the exchange’s address for the Paxos stablecoin.

FTX compensated the user for the mistaken deposit by returning around $5.4 million in stablecoins but deducted a 15% fee. The disgruntled user fired back:

“You have deducted more than $1m off my initial deposit amount. This does not align to your "Wrong Address or Chain" policy. I did not deliberately deposit USDP to your FTX exchange, I was misled. I wish to appeal please.”

Rekt reported that FTX did not abide by its own terms and conditions which state a fee up to 5% will be charged in such circumstances.

However, when Cointelegraph checked, the conditions currently state that a minimum of 5% may be levied if the exchange has to recover deposits to incorrect addresses.

Related: FTX smashes crypto funding record with $900M raise to become exchange decacorn

Rekt said it had verified the deposits on the blockchain and contacted FTX for comment but had not received a response. It called on the exchange to rectify the problem.

“As decentralized exchanges grow in popularity, trust becomes the most valuable feature that a CEX can offer. In this case, FTX has broken that trust, and they must now take action to fix it.”

The claims were also posted on the FTX Official subreddit but had been deleted late last month. One respondent to Rekt's tweet claimed he had posted the blog in the FTX Telegram group and got banned instantly.

Cointelegraph has contacted FTX for comment. There had been no response at the time of writing.

Price spike: Are whales front-running the approval of a Bitcoin futures ETF?

Bloomberg senior analyst Eric Balchunas says there is a 75% chance that the SEC will approve a Bitcoin futures ETF this month.

A surge in Bitcoin prices today may be in response to increased speculation that an exchange-traded product could finally be approved in the coming weeks.

BTC prices are up 7% over the past 24 hours and have surged a whopping 32% over the past week according to CoinGecko. This bullish price action for BTC only, may be a form of front-running by big bag holders in anticipation of a futures ETF approval by the U.S. Securities and Exchange Commission.

On Oct. 7, Bloomberg senior analyst Eric Balchunas responded to an exclamation from founder and partner at Morgan Creek Digital, Anthony Pompliano, stating “things are going to get insane” if an ETF is approved in Q4. Balchunas reaffirmed he was 75% certain approval was imminent.

“While we [are] confident Bitcoin futures ETFs will be approved very soon (like within two weeks) we [are] less confident they will be a huge hit like a physically backed ETF would be. Big step tho nonetheless.”

Given comments made by SEC boss Gary Gensler, a futures product is likely to be approved first which allows institutional investors to gain exposure to BTC and bet on its future price without actually holding any. Balchunas stated that he does not think that a physically-backed ETF would be approved any time soon, but said it would eventually:

“At some point physical will happen. Timing just so unclear tho. Anyone’s guess. Prob months or years.”

He cited “multiple reasons both technical and anecdotal,” for the two-week futures ETF approval prediction, adding that he was 75% confident.

Prominent analyst Alex Krüger also cited the EFT approval hype as being a driver of BTC price action at the moment:

He added, “by the time the SEC makes the announcement an ETF would be halfway priced in.” General partner at crypto venture firm Blocktower, Mike Bucella, also said he believes “folks are front-running a futures-based BTC ETF” after analyzing current market activity.

Related: Futures-based Bitcoin ETF has '75% chance of approval' in October

Matthew Dibb, co-founder, and chief operating officer of Stack Funds, echoed the sentiment commenting “rumors of a BTC ETF decision later in the month is spurring further demand,” before adding that this rally coincides with anticipation of the Proshares ETF approval on Oct. 18.

Whales have certainly been buying as observed by Crypto Quant CEO Ki Young Ju, who noted $1.6 billion in market orders in just a few minutes on Oct. 6.

In late September, Bloomberg Intelligence commodity strategist Mike McGlone predicted that the SEC would approve a BTC futures product “potentially by the end of October.”

On Oct. 5 McGlone speculated that Bitcoin price resistance at $50K was about to flip to long-term support in the fourth quarter.

Gary Gensler: The SEC Has No Plans to Follow China and Ban Bitcoin

Speaking at the House Financial Services Committee hearing on Oct. 5, the SEC chief stated that the agency has no plans to follow China’s lead and impose an outright ban on crypto. “That would be up to Congress,” he added.

Late last month, Andreessen Horowitz partner Katie Haun said following in China’s footsteps would be very bad for the U.S.

At the same committee hearing last week, Federal Reserve Chair Jerome Powell echoed the sentiment stating that the central bank had no plans to ban crypto.

Congresswoman Maxine Waters, who chaired the committee, commented that the SEC has been presented with historic challenges following “the incredible growth of unregistered and volatile cryptocurrency assets, as well as the emergence of cryptocurrency intermediaries, market exchanges, and decentralized protocols.”

Consumer Protection Priority

Responding to questions from Congress, Gensler stated that “It’s a matter of how we get this field within the investor consumer protection that we have, and also working with bank regulators and others.”

The concern is whether the Treasury department can encompass crypto within anti-money laundering and tax compliance frameworks.

The SEC may harp on about protecting consumers, but its recent actions against Coinbase and Ripple could well end up costing token holders, or “consumers” in its terminology, billions of dollars should the industry be negatively impacted.

Representative James Himes asked him to provide guidance on the subject of cryptocurrency regulation, and Gensler reiterated his previous position. Digital asset exchanges would need to register with the SEC, and decentralized exchanges (DEXs) would also be subject to regulations, he explained.

“Even in decentralized platforms – so-called DeFi platforms – there is a centralized protocol. And though they don’t take custody in the same way, I think those are the places that we can get the maximum amount of public policy.”

GaryGensler
Gary Gensler. Source: Bloomberg

Concern Over “Poker Chips”

Gensler also reiterated concerns over stablecoins, which he has previously labeled casino poker chips, stating “the financial stability issues that stablecoins could raise” would be a priority for the SEC.

“The $125 billion of stablecoins we have right now are like poker chips at a casino. I do think that if this continues to grow – and it’s grown about tenfold in the last year – it can present those systemic wide risks.”

The issuer of the world’s second-largest stablecoin, Circle, reported yesterday that it had been subpoenaed by the SEC.

Featured Image Courtesy of the Globe and Mail

Mirror opens access to its blockchain blogging platform to all

The Mirror Protocol now accepts any contributor as long as they have an Ethereum address and wallet.

Ethereum-based decentralized blogging platform Mirror has opened its doors to the wider public after months of running vote-based contributions only.

Mirror was launched in December 2020 to enable selected writers to publish on the decentralized blogging platform. Contributors could gain access by getting voted for in weekly competitions using the platform’s native token WRITE, with just ten content creators selected per week.

In an announcement on Oct. 6, Mirror stated that it has now done away with this system and has opened up to anyone with an Ethereum address and wallet. Unlike most large commercial blogging platforms that sell advertising to traffic generated by content, publishers on Mirror control their own content as it is stored on a decentralized blockchain instead of company servers.

That content is cryptographically secure so cannot be modified or corrupted and users can exit the platform with all of their data if they no longer wish to be a part of it. The Mirror team elaborated:

“Mirror has evolved from a tool for writers to a full-stack web3 creative suite for communities and DAOs.”

Once an Ethereum wallet is connected, users can start creating content and embedding media blocks such as videos, iFrames, social media posts, NFTs, auctions, and crowdfunds. Blogs can also be imported from other platforms such as Medium or Substack.

Mirror users can share and fund their own work using the platform and the integration of Ethereum addresses.

Blogs can be minted as what the platform terms “Entry Editions” which are a way for users to create NFTs of content and potentially monetize it.

Industry leaders such as Ethereum co-founder Vitalik Buterin, and a number of DAOs such as the Aave Grants DAO have used the platform this year to publish content. In July, a documentary about the development of Ethereum used Mirror to raise 1,036 ETH from a crowdfund on the platform.

Related: Ethereum documentary featuring Vitalik Buterin raises $1.9M in 3 days

Content creators that used Mirror’s previous method of allowing writers to contribute, called the WRITE Race, will be offered additional incentives such as staking. The protocol’s native WRITE token, which was granted through the voting system to obtain publishing power on Mirror, has yet to be listed on major tracking websites or exchanges.

The project stated that it would be integrating the Ethereum Name Service (ENS) and introducing new features such as subscriptions, feeds, and an improved editing interface.

It shouldn’t be confused with the DeFi protocol called Mirror Finance that uses the MIR token ticker and enables the minting of synthetic assets.

Cosmos sees 1 million transfers in a month across the ecosystem

The Inter Blockchain Communication protocol that powers Cosmos has been growing steadily over the past 6 months.

The Cosmos cross-chain network has been growing steadily along with the projects that run on top of it and it’s just reached a milestone in terms of activity.

The Inter Blockchain Communication protocol (IBC), which is the backbone of the Cosmos ecosystem, has seen a surge in activity over the past month with more thanone million transfers logged.

Cosmos launched the IBC in March to enable cross-chain decentralized finance and interoperable nonfungible token transfers. Over the past six months, it has grown substantially, onboarding new projects and blockchains into the ecosystem.

Other notable projects operating on the protocol include Terra, Band, Kava, and THORchain’s Chaosnet.

The Mapofzones Cosmos ecosystem explorer shows that there have been 1,071,132 transfers over the past 30 days and 45,738 transfers on IBC over the past 24 hours.

The Osmosis automated market maker is responsible for the lion’s share of those IBC protocol transfers with 44% of the total, with the Cosmos chains recording 307,855 transfers, or 29% of the IBC total, over the past 30 days.

The IBC standard provides a secure method of exchanging data between independent blockchains while scaling through sharding and sidechains for various applications. Cosmos is just one network of many operating on the IBC protocol.

The digital asset payments and wallet provider Crypto.com also runs on the Cosmos network. In late September it launched its own NFT platform and marketplace which has driven further momentum.

Related: Cosmos-Based Interoperable DeFi Project Launches on Mainnet With BNB Collateral

In June, the Kava DeFi platform launched on Cosmos enabling Binance Coin deposits to collateralized loans in its USDX stablecoin.

Cosmos is also working on rollup scaling technology to allow developers to build Cosmos-based blockchains as rollups which can be deployed as clusters within the IBC zones. In a tweet on Oct. 6, it explained that the scaling tech called Optimint would be a “drop-in replacement” for the current Tendermint framework that it is built on.

Cosmos has its own native token called ATOM which has fallen 5.1% over the past 24 hours to trade at $35.39 according to CoinGecko. The token has made a solid 37% gain over the past month, however, and is just 19% down from its Sept. 20 all-time high of $44.42.

Circle reveals cooperation in ongoing SEC investigation

Circle has published filings revealing it is cooperating with a subpoena from the SEC that it received in July.

Circle, the company behind the world’s second-largest stablecoin USD Coin, has been subpoenaed by the U.S. Securities and Exchange Commission (SEC).

According to an Oct. 4 regulatory filing from Circle, the SEC issued an “investigative subpoena” from its Enforcement Division in July.

Circle, which is behind the USDC stablecoin, stated that it would be fully cooperating with the regulator after receiving the request:

“In addition, in July 2021, we received an investigative subpoena from the SEC Enforcement Division requesting documents and information regarding certain of our holdings, customer programs, and operations. We are cooperating fully with their investigation.”

The Circle filing is part of its plan to go public via a special-purpose acquisition vehicle through a merger with Concord Acquisition Corp, with the firm valued at $4.5 billion.

CIrcle issued an identical statement in an August filing amid the SEC’s investigations into its operation of former subsidiary Poloniex. That same month, Circle agreed to pay the SEC more than $10 million in fines for charges against Poloniex for operating as an unregistered cryptocurrency exchange.

Related: Coinbase removes ‘backed by US dollars’ claim for USDC stablecoin

In late July, Circle released a disclosure report revealing that 61% of USDC’s reserves were held in cash and cash equivalents, the remainder in commercial paper accounts, treasuries, and bonds.

In early September, the SEC threatened to sue USDC-issuing Centre Consortium member Coinbase over a proposed lending product that would yield interest rates for select holders of USDC.