Month: October 2024

The U.S.’s rise and fall with crypto is a cautionary tale that sets the scene for what could be to come in AI. In early crypto days, the U.S. was the promise land with a plethora of startups and investment funding flowing into the space creating room for innovation, growth and mass adoption. In recent years, this has slowed down due to a lack of regulation and policy. The SEC started bringing in lawsuits and regulatory policies based on pre-crypto laws – essentially trying to fit a round peg into a square hole. They went after Consensys, Coinbase, Ripple and other companies that have a reputable standing in Web3, just to make… what point? The lack of clear policies and regulation hinders progress, forcing these companies to spend resources on legal battles, while pushing companies and talent elsewhere to continue building the decentralized dream.

The minutes from the September Fed meeting, released Wednesday, showed policymakers were divided on how aggressive the central bank should be. “A substantial majority of participants” favored cutting the interest rate by half a percentage point, though some expressed misgivings about going that large, the minutes said. “Crypto sentiment has moved back into the fear zone (39), reinforcing the contrast with 72 (greed) in equities,” said Alex Kuptsikevich, a senior analyst at FxPro. “This dynamic is easily explained by the appreciation of the dollar and the increased attractiveness of bonds, which reduces institutional traction in bitcoin.” The dollar index (DXY), rose to 102.97, the highest since Aug. 16, taking the cumulative gain since the Sept. 30 low of 100.18 to 2.7%, according to data source TradingView.

During the course of their investigation, Federal Bureau of Investigation (FBI) agents created an Ethereum-based cryptocurrency, called NextFundAI, with the help of “cooperating witnesses” and used it to “identify, disrupt, and bring these alleged fraudsters to justice,” according to a Wednesday press release. The token, according to court documents, is also a security. A representative for the FBI added that there was limited trading “activity” on the coin but declined to share any additional information beyond what is currently available in public documents, including whether the FBI worked with any crypto companies on the project. Joshua Levy, the Acting U.S. Attorney for the District of Massachusetts, said trading on the token was disabled during a press call Wednesday afternoon.

Traditional finance heavyweights and global banks are getting increasingly involved in the tokenization of traditional financial instruments, or real-world assets (RWA), placing bonds, funds, credit or commodities onto blockchain rails. The process promises operational benefits such as increased efficiency, faster and around-the-clock settlements and lower administrative costs.

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VanEck Ventures, with $30 million in assets under management (AUM), marks a strategic expansion for the firm into the venture capital space, it said in a press release. It will be led by Wyatt Lonergan and Juan Lopez, who both previously led Circle Ventures, the venture arm of stablecoin issuer Circle.

A large bitcoin options trade anticipates a shift from the present low-volatility regime to a period of heightened price swings, potentially exceeding the $53,000-$87,000 range. The trade saw the entity pay a net premium of over $1 million to purchase 100 contracts of the $66,000 strike call and put options expiring on Nov. 29, according to data confirmed by Lin Chen, head of business development Asia at Deribit. A long straddle is preferred when the market is expected to move far enough in either direction to make the call or the put option worth more than the cumulative premium paid. For the strategy to turn profitable and overcompensate for the premium paid, the bitcoin price needs to move either above $87,000 or below $53,000 by the end of November, Chen told CoinDesk.

The dominant model of token distribution in the crypto space these days is the so-called “low-float, high FDV” launch. In this model, projects launch with a low fraction of the total supply in circulation, where most of the supply is locked, typically unlocking gradually after a year. This low circulation is often coupled with, and perhaps even explicitly designed to encourage, a high fully-diluted valuation. According to research by CoinGecko, today nearly a quarter of the industry’s top tokens are low float. Notable recent launches which used this model include Starknet, Aptos, Arbitrum, Optimism, Celestia, and Worldcoin (where an astonishing 95.7% of supply remains locked as of this writing).