Kategorie: Crypto News

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Lido price staggers ahead of the 1.5 million LDO token unlock

  • At press time, Lido Finance (LDO) was trading at $1.47, down 1.41% in the past 24 hours.
  • Lido Finance is set to unlock 1.5 million tokens in the next 24 hours.
  • The tokens to be unlocked constitute approximately 0.27% of the circulating supply.

Lido Finance (LDO) has garnered notable attention lately, primarily due to its involvement in Ethereum (ETH) staking. However, an impending token unlock scheduled within the next 24 hours is poised to augment the circulating supply of its ecosystem token, LDO. 

The key questions are how significant this token increase might be to the circulating supply and what potential ramifications it could entail.

Unlocking More Tokens at Lido Finance

In accordance with a post by Token Unlocks dated September 11, Lido Finance is slated to undergo its final token unlock on September 13. This unlocking event will introduce 1.50 million LDO tokens into circulation, valued at approximately $2.24 million, constituting approximately 0.27% of the circulating supply.

CoinMarketCap’s data indicates that the circulating supply of LDO at press time exceeded 888 million tokens. With the impending release of these unlocked tokens, the circulating supply is set to surpass 889 million.

According to data on CoinMarketCap, Lido Finance experienced a significant surge in trading volume over the past 24 hours. The volume chart on Santiment also depicts a minor spike resulting from this uptick. It’s worth noting that the volume had been on a declining trajectory until this recent surge.

As of the time of writing, the trading volume was well over $41 million.

Expected impact of the LDO token unlock

While token unlocks are known to cause a significant price drop due to a sudden increased supply, it may not be the case for the LDO token taking into account the prevailing state of trading volume at press time and historical trends. The forthcoming unlock of LDO tokens is unlikely to exert a substantial impact on LDO’s price trajectory.

Given that the total value of the LDO tokens set to be unlocked amounts to $1.5 million, or roughly $2.24 million, market conditions appear capable of absorbing this amount without causing significant disruption.

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BitMEX co-founder says BTC price may rise if monetary policies tighten

  • The Federal Reserve has increased its benchmark rate from 0.25% to 5.25% over the past year.
  • BitMEX co-founder believed that bondholders might seek more lucrative “risk assets,” such as Bitcoin.
  • Bitcoin’s four-year cycles might be linked to central banks’ low-rate policies.

Challenging the conventional wisdom regarding the relationship between Bitcoin and interest rates, BitMEX co-founder and a well-known macro-analyst Arthur Hayes recently authored a blog post in which he argues that traditional economic logic would crumble under the immense debt burden of the US government.

Hayes said that “central banks and governments are grappling with the use of outdated economic theories to address the unique challenges of today.”

Hayes’ assertions come as the Federal Reserve increased its benchmark rate from 0.25% to 5.25% over the past year in an effort to curb inflation and maintain a 2% target. Although the Fed has succeeded in this endeavour, Hayes voiced concerns that inflation might persistently exceed expectations, given the substantial nominal GDP growth of 9.4% in Q3, contrasted with the 5% yield on 2-year US Treasury bonds.

GDP growth remains astonishingly high

In his analysis, Hayes highlighted that according to data from the Atlanta Fed’s GDPNow forecast, nominal GDP growth remained “astonishingly high.” Conventional economic theory would suggest that as the Fed raised rates, a credit-sensitive economy should falter. Indeed, this was evident in financial asset markets, including stocks and Bitcoin, which experienced a downturn in 2022, eroding government capital gains tax receipts.

However, this decline in tax revenue led to increased government deficits, which needed to be funded by issuing more bonds to repay existing debt. In the context of a high-interest-rate environment, this translated to higher interest payments to wealthy bondholders.

Hayes succinctly summarized this chain of events: “To summarize: as rates rise, the government pays more interest to the wealthy, the wealthy spend more on services, and GDP continues to grow.”

As long as the economy outpaces the government’s debt obligations, Hayes believed that bondholders might seek more lucrative “risk assets,” such as Bitcoin.

Efforts to combat inflation favour high-risk assets like Bitcoin

Hayes contended that the Federal Reserve’s efforts to combat inflation would ultimately favour “finite supply risk assets” like Bitcoin. In a recent blog post, Hayes argued that the Fed’s strategy was siphoning money from one part of the economy while injecting it into another. As long as the Fed’s approach to taming inflation remained uncertain, assets like Bitcoin were likely to experience long-term growth.

In a previous essay, Hayes had posited that Bitcoin would thrive in response to a tightening Fed, whose actions might inadvertently increase the money supply. He asserted, “If the Fed believes that it must raise interest rates and reduce its balance sheet to quell inflation, it’s essentially self-sabotaging.”

Generally, analysts perceive lower interest rates as beneficial for Bitcoin and other risk assets, as they create an environment where investors have room to speculate for potentially higher returns. In June, Coinbase analysts issued a report suggesting that Bitcoin’s four-year cycles might be linked to central banks’ low-rate policies.

Hayes acknowledged the positive influence of low rates on Bitcoin’s price, characterizing the asset’s relationship with central bank policy as a “positive convex relationship.” He concluded, “At the extremes, things become non-linear and sometimes binary. The US and the global economy are currently operating in such an extreme environment.”

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Binance US reduces staff by a third, CEO leaves

  • Binance US has been facing regulatory pressure from the SEC.
  • Binance’s US cryptocurrency market share dropped from more than 22% in April to approximately 0.9% by June 26.
  • Norman Reed, the Chief Legal Officer of Binance US, has assumed the role vacated by Brian Shroder.

Binance US, the US branch of the Binance cryptocurrency exchange, has undertaken significant restructuring measures, which include a workforce reduction of approximately one-third, equivalent to the elimination of 100 positions. Brian Shroder, the President and CEO of Binance US, has also stepped down from his role.

Brian Shroder joined Binance US in September 2021, and his departure coincides with a wave of regulatory actions taken against the exchange in recent months.

As a temporary measure, Norman Reed, the Chief Legal Officer of Binance US, has assumed the role vacated by Brian Shroder.

A spokesperson representing Binance US officially verified these layoffs and Brian Shroder’s departure and said that the actions were taken to bolster the exchange’s financial resilience, providing it with a substantial financial buffer as it transitions into a crypto-only exchange.

Impact of SEC’s regulatory action against Binance

 The cryptocurrency exchange spokesperson emphasized the impact of the Securities and Exchange Commission’s (SEC) robust regulatory action on the cryptocurrency industry asserting that the actions of the regulator have tangible repercussions on American jobs and innovation.

Earlier this year, both the SEC and the Commodity Futures Trading Commission (CFTC) initiated legal action against Binance, Binance US, and the exchange’s co-founder, Changpeng “CZ” Zhao for operating an illicit exchange, selling unregistered securities, violating commodities regulations, and mismanaging customer funds.

In response to the regulatory challenges, on June 9, Binance US suspended dollar deposits and communicated the temporary cessation of fiat withdrawal channels during its ongoing battle with the SEC. The exchange subsequently operated exclusively as a crypto-only platform for two months before reintroducing USD transaction capabilities in August after a partnership with MoonPay.

According to a July report from Reuters, which cited data from Kaiko, Binance US experienced a substantial reduction in its market share in the US cryptocurrency market. Its market share plummeted from more than 22% in April to approximately 0.9% by June 26, underscoring the evolving landscape and challenges faced by the exchange in the United States.

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Asset manager Franklin Templeton applies to launch a spot Bitcoin ETF

  • Franklin Templeton joins other asset management firms like Grayscale that have applied to offer crypto ETFs.
  • The SEC was mandated by the court to evaluate Grayscale’s application to convert its Bitcoin futures ETF into a spot ETF.
  • Franklin Templeton will collaborate with CF Benchmarks to ensure accurate valuation.

Franklin Templeton, a prominent asset management firm with $1.5 trillion in assets under management, has submitted an application to the United States Securities and Exchange Commission (SEC) seeking approval for the launch of a Bitcoin exchange-traded fund (ETF) that would track the price of Bitcoin in real-time.

This move by Franklin Templeton follows a series of notable developments in the cryptocurrency ETF space. In late August, the SEC opted to delay its decisions regarding spot ETF applications from several other companies, including WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise, and Invesco. Furthermore, a significant court ruling on August 29th mandated that the SEC must evaluate Grayscale’s application to convert its Bitcoin futures ETF into a spot ETF.

Franklin Templeton’s ETF application

In their application, Franklin Templeton outlines the structure of the proposed fund. It would function as a trust, with Coinbase serving as the custodian for Bitcoin holdings. Bank of New York Mellon would take on the roles of cash custodian and administrator. Fund shares are intended to be traded on the Cboe BZX Exchange, a major securities exchange in the United States. The SEC has set its next deadline for making a decision on this application for October 16th.

In recognition of the regulatory uncertainties surrounding the digital asset market in the United States, Franklin Templeton explicitly acknowledges the risks in its application. They highlight the potential adverse impacts of legislative or regulatory developments, which could significantly affect the value of Bitcoin and the shares of the proposed ETF. Such impacts could include bans, restrictions, or imposing stringent conditions on various aspects of the cryptocurrency ecosystem, including trading, mining, digital wallets, custody services, and the overall operation of the Bitcoin network.

CF Benchmarks and Franklin Templeton partnership

To ensure accurate valuations, Franklin Templeton plans to collaborate with CF Benchmarks, a digital asset index provider regulated in the United Kingdom. CF Benchmarks would provide daily valuations based on data from reputable cryptocurrency exchanges, including Coinbase, Bitstamp, iBit, Kraken, Gemini, and LMAX Digital. These valuations would be updated at 5-minute intervals to reflect the real-time nature of the cryptocurrency market.

At the time of writing, the price of Bitcoin was trading at $25,952.26, underlining the dynamic and ever-changing nature of the digital asset market that Franklin Templeton seeks to tap into with its proposed Bitcoin ETF.

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Bitget earmarks another $100 million for global expansion

  • Bitget announced a new $100 million fund it’s calling Empower X on Tuesday.
  • The crypto exchange wants to tap on investment opportunities to diversify its business.
  • Bitget made the announcement today at its 5th anniversary summit in Singapore.

Bitget is in focus this morning after announcing plans of spending big on global expansion.

Bitget has established a new fund

On Tuesday, the crypto exchange revealed “Empower X” – a $100 million fund dedicated to investing in media organisations, data analytics firms, and regional exchanges.

Bitget expects tapping on such investment opportunities to help diversify its business. According to its Managing Director Gracy Chen:

Through strategic, targeted investments that foster long-term growth, we aim to expand our ecosystem of services to better serve evolving needs of users.

The Seychelles-based company made the aforementioned announcement at its 5th anniversary summit in Singapore. It was recently named one of the top four centralised exchanges by TokenInsight.

Bitget is committed to global expansion

Earlier this year, Bitget had earmarked $100 million to invest in Asia-focused Web3 startups. Its Managing Director Chen also said in a press release today:

CEX landscape is evolving … and more investment, merger and acquisition will happen in the following months. Our vision goes beyond the present.

In March, the crypto exchange also spent $30 million to secure a controlling stake in BitKeep and rebranded the decentralised multichain wallet as Bitget Wallet.

The announcement arrives shortly after Bitget reported a 1.8% increase in its market share in the second quarter of this year to 8.7%. It has recently registered successfully in Lithuania.

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