Grayscale Investments CEO Michael Sonnenshein discusses the recent crypto market boost and what he believes will come next. Grayscale is the world's largest digital currency asset manager.
Video courtesy of CNBC
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The cryptocurrency world is watching closely this week as the Securities and Exchange Commission (SEC) faces key deadlines to approve or reject several proposed bitcoin exchange-traded funds (ETFs). Friday marks the deadline for the SEC to make initial decisions on ETF applications from financial firms Hashdex and Franklin Templeton. The regulator could approve the applications, reject them outright, or punt the decision down the road by extending the deadline into 2023. Another Delay Coming? According to ETF specialist James Seyffart of Bloomberg Intelligence, there is a "good chance" the SEC will choose the third option and delay the bitcoin ETF decisions until January 2024.
If Not Now, Soon... While Bloomberg's James Seyffart predicts a delay this week, he remains optimistic that some bitcoin ETFs will ultimately get approved by January 10th, giving this prediction a 90% chance of happing. However, ETF excitement also led to some market manipulation last week. An unknown actor submitted a fake application for a Ripple (XRP) ETF from Blackrock, briefly causing XRP to spike 10%. The price quickly corrected, but not before causing $5 million in liquidations for XRP leverage traders caught on the wrong side of the swings. The SEC has yet to approve any cryptocurrency ETFs, repeatedly citing concerns around volatility, manipulation, and adequate oversight. But many investors hope that 2023 could finally be the year bitcoin ETFs get the green light in the US, opening the doors to greater mainstream adoption. Crypto Mining PRAISED for the ENVIRONMENTAL BENEFITS... in Study Released by the World Bank!11/7/2023 For the first time ever, a study regarding 'cryptocurrency mining' and 'the environment' was released, and instead of scolding miners for their high electricity usage, they're being praised for being part of the solution. If this isn't surreal enough already - the study comes from a source that typically argues the benefits of the traditional fiat banking system - the World Bank (WB). So, Why The Sudden Praise from Environmentalist and Traditional Banking? This creative partnership brings together two sectors often criticized for their environmental impacts - oil industry and Bitcoin mining. Here's How It Works... When drilling for oil, companies typically hit pockets of natural gas before reaching the deeper oil deposits. Since oil is far more profitable, the companies release the natural gas into the air, often simply lighting it on fire in a practice called 'flaring' and continue drilling. The escaped gas, mainly methane, acts as a potent greenhouse gas. By partnering with Bitcoin miners, oil companies can monetize these gas pockets rather than wasting them. In this arrangement miners create mobile mining rigs equipped with equipment that allows them to capture and use the natural gas to generate electricity for their rigs. When drilling is finished at one location, they tow everything to the next drilling site. The miners pay a highly discounted rate for the gas, which provides a new revenue stream for oil companies while reducing emissions. Now there are several mining companies successfully using this method to power their business, which means they've also unplugged from their previous electricity source - the powered grid, which still runs on coal in most cases - further decreasing their carbon footprint of the mining industry as well. Natural gas burns cleaner than other energy sources, producing about half the emissions of coal. So using it for Bitcoin mining is a win-win - oil companies reduce pollution and earn additional income, while miners cut costs and reliance on dirtier power. The World Bank's study titled 'Financing Solutions to Reduce Natural Gas Flaring and Methane Emissions' examined Bitcoin mining company Crusoe Energy, based in Colorado - they currently are working with oil giant Exxon at their drilling sites to power their Bitcoin mining business, and in a recent interview stated they're looking to the middle east next. A Perfect Partnership... I can't think of any other example where two industries are rewarded with higher profits almost immediately for taking steps to improve their impact on the environment. Companies often struggle to 'go green' as doing so involves large upfront expenses that can take decades to break-even on. Some US states where oil drilling takes place are considering passing laws requiring oil companies to capture most of the natural gas that currently escapes into the atmosphere. If this happens, oil companies involved in mining cryptocurrency will become standard.
Over the last week there has been a growing chorus of voices, particularly among certain US senators and congressmen, claiming cryptocurrency is being used to fund terrorism, supporting the likes of the Hamas organization and other terrorist groups. They are now calling for investigations into USDT issuer Tether and exchanges like Binance US. While we support investigating such allegations, it's equally important to for the industry to immediately shut down any attempts by established anti politicians to fabricate, or exaggerate the claims. The allegations against Tether and Binance US stem from a Wall Street Journal report that claims these crypto entities facilitated transactions involving individuals and entities subject to U.S. sanctions. The report further suggests that Tether used U.S. bank accounts for potentially suspicious transactions. If There's Proof, It's Been Hard To Find... Blockchain analysis company Elliptic says it has found no evidence to support the claims of The Wall Street Journal. They argue that the data has been misinterpreted. Binance and Tether are so sure the story is wrong that they are urging the U.S. government to verify the facts, saying the Wall Street Journal's report contained misleading statements. Both have unequivocally stated they operate under a strict zero tolerance policy when it comes to providing services to anyone linked to terrorism. If Shady Journalists and Politicians are Successful in Linking Crypto to Terrorism, We Could See A New Level Of Government Aggression. The allegations that organizations like Hamas used crypto assets to raise funds before attacks in October have far-reaching implications. They not only affect the cryptocurrency sector but also muddy the waters when it comes to regulatory clarity for the crypto ecosystem in the United States. What they're doing is obvious - making sure they can still say 'We never claimed crypto was being used to fund terrorism' - and instead they just 'asked what we can do to prevent that from happening' - fully aware that this advances a misconception that crypto is key to shutting down terrorism financing, all while lacking any supporting evidence. What's ironic in all of this, is that traditional banks have had a long history of being caught, knowingly or unknowingly, moving funds for everything from terrorists to cartels. Where are those bankers today? Still fully operational and controlling billions. ING helped Iran move billions while under sanctions, they paid $619 million in fines. Standard & Charterer's also paid fines of $340 million after hiding being caught hiding records of Iranian clients transactions. Or HSBC who basically became the official bank of Mexican drug cartels - leading to a fine of 1.9 BILLION. Instead of rushing to judgment, it's crucial to conduct thorough investigations and present concrete evidence The truth is, if there is any crypto being used to fund terrorists, there's no signs any company has helped them, and the amount must be so small that it isn't enough for researchers to spot on the blockchain. The SEC's legal battle against Ripple involved coming after them on 2 fronts - first was their claim the company illegally profited by selling an unlicensed security (XRP Tokens) violating the Securities Act of 1933. The second targeted the company's co-founders Christian Larsen and Bradley Garlinghouse, saying they were the ones who made the decisions at the company, so they were charged with "aiding and abettting”. Today, the SEC's targeting of Larsen and Garlinghouse has officially come to an end as District Judge Analisa Torres announced that the US securities regulator notified the court that it would not continue in the case and has issued a “voluntary dismissal”. Ripple's lead lawyer Stuart Alderoty shared the news first saying; "The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives. This is not a settlement. This is a surrender by the SEC. That’s 3 consecutive wins for Ripple including the July 13 decision ruling that as a matter of law XRP is NOT a security, the Oct 3 decision denying the SEC’s bid for an interlocutory appeal, and now this." on X. Current CEO Brad Garlinghouse responded saying; "In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a decade. The SEC repeatedly kept its eye off the ball while secretly meeting with the likes of SBF – failing again and again to protect US consumers & businesses. How many millions of taxpayer $ were wasted?! Feels good to finally be vindicated." FTX a Massive Blemish On An Already Troubled SEC... The SEC's 'crack down' on crypto has targeted companies like Coinbase, Binance and Ripple - but where are the investors accusing these companies of wrongdoing? Who did Coinbase, Binance, or Ripple scam? You would think reddit and other crypto related forums would be full of these complaints, but when searching for terms that should lead to them, nothing is found. While the SEC was busy targeting these companies, FTX was actively misusing users funds and behaving suspiciously fearless of being caught. Ironically, it was one of the people under SEC investigation who brought the FTX issue to light - Binance CEO 'CZ'. This means if CZ had not exposed Sam Bankman-Fried, FTX would still be freely spending their users funds, while their top 2 competitors faced SEC harassment - suspicious to say the least. It makes you wonder - could SEC deliberately be hiding corruption by appearing ignorant and disorganized? The Strangest Contradiction... The most alarming and confusing factor in the SEC's current actions has to be the fact that the SEC evaluated Coinbase just a couple years ago, when they approved the company to go public and sale shares of their stock. This process involves a deep evaluation of the business, and obviously, if a business's main source of income was unlawful, they would not have been approved. But they were approved. Coinbase even passed a phase where the SEC asked questions about any parts of the business they wanted clarification on, Coinbase answered them, and they were approved. Nothing has changed since Coinbase was worthy of SEC approval. There's no new leadership at the SEC since they deemed Coinbase's business legitimate just two years ago, Coinbase isn't offering anything now that they were not then. But seemingly out of nowhere, suddenly Coinbase is operating outside of the law. So SEC saying; just because they approved a company seeking approval to go public and sell share shares on the stock market, it does not mean that company is legitimate - no one has been able to make sense of why the SEC is now undermining themselves in such an extreme way. Next For Ripple... While the charges against company founders are dropped, the case against the company itself is still considered ongoing. While the SEC lost on their first attempt, the last statement from them was that they are appealing that decision. But some say dropping the charges against the founders is a sign they may do the same with the charges against the company - because if the company is guilty, those running it would be as well - it would be odd to drop one and not the other. Ethereum just lost one if it's biggest bragging points, and its transition from a deflationary to an inflationary asset marks a potentially pivotal moment in its trajectory. While the platform continues to be a dominant player in the decentralized finance (DeFi) space, these economic and market shifts warrant close observation by investors and stakeholders. What Happened? Ethereum's shares the most common cause of currency inflation with governments around the world, specifically when they print too much money. There have been 68,000 new ETH issued, compared to its burning 38,000 ETH over the last 30 days - add this excess together with a bearish month, and the additional supply enters the ecosystem as inflation. Ethereum has a system where a portion of the transaction fees (or "gas") is burned, reducing the overall supply of ETH, while another portion compensates validator nodes. Some Perspective... It's crucial to note that Ethereum's annual inflation rate remains relatively subdued at 0.3%, especially when compared to Bitcoin's 1.6% and certain fiat currencies, which hover around 3.7%. Bitcoin has been categorized as inflationary due to its capped supply of 21 million coins and the halving of its block rewards approximately every four years, which restricts its issuance and, by extension, its inflationary potential. In contrast, fiat currencies, like the US dollar, can be issued without an upper limit, leading to inflation when the supply outpaces demand. So, while 0.3% is an insignificant amount and there's no need for investors to modify their outlooks, yet, this is something worth keeping an eye on. Unless hit with large downturn (which I haven't seen anyone predicting) Ethereum can re-take it's 'deflationary' title fairly easily. Plus, For the First Time in YEARS - Ethereum Users Didn't Pay the Most in Total Transaction Fees... Another interesting thing stood out when reviewing Ethereum's previous month - a significant drop in total transaction fees. After 3+ years embarrassingly high, sometimes absurd fees - this is a good thing. In the last 30 days, the Tron network generated $87.4 million in fees and $65.8 million in token incentives, resulting in net profits of $21.6 million. Ethereum, on the other hand, generated $82.2 million in fees but offered token incentives of $82.9 million, leading to losses of $20.6 million. Other platforms including Lido Finance ($46.9 million), friend-tech ($30 million), Bitcoin ($27 million), Uniswap ($23 million), Aave ($8.8 million), and BNB Chain ($ 8 million), surpassed Ethereum in generating fees. -----------
When the story broke that prosecutors made a deal with Sam's ex-girlfriend, many responded surprised that Sam managed to even have a girlfriend. Then we met Caroline Ellison, and it all made sense. For the last 2 days she's been out for revenge, saying it was Sam who instructed her to break the law. But one question remains - will Sam's defense center around placing the blame on Ellison? Video Courtesy of CBS News Michael Lewis met with Sam Bankman-Fried over 100 times, for a book that was intended to simply be about an 'interesting character' - then things take a dramatic turn as Sam is arrested for fraud. Lewis, known for bringing vibrant characters to life in his writings, navigates through the intricate and now controversial journey of Sam, providing readers with a compelling story that intertwines ambition, innovation, and the shadowy facets of financial operations. This narrative, once a tale of financial ingenuity, is now imbued with the stark realities and consequences that sometimes lurk behind the scenes of financial success. Video Courtesy of 60 Minutes Failed crypto lending platform, Celsius, is on the brink of initiating the process to reimburse its clients. The plan involves returning over $2 billion in digital assets to customers, and has garnered the approval of creditors. Legal filings pertaining to the Celsius case reveal that the company's bankruptcy team secured approval from 95% of former users to implement their proposed resolution. However, the plan's execution still hinges on judicial approval, which will be sought during a hearing at the Bankruptcy Court in the Southern District of New York, where the final plan to return user funds will be determined. The reorganization strategy of Celsius orders the allocation of approximately USD 2.03 Billion, denominated in BTC and other cryptocurrencies, to creditors. The Celsius team notes that the coin's value is susceptible to the volatile nature of the crypto market. Moreover, the reorganization plan, portrayed as a "swift and feasible route" to navigate out of bankruptcy and ensure maximal fund recovery for clients, envisions the formation of a new cryptocurrency entity. The Remaining Celsius Leftovers Will Be Used to Create a Whole New Company... The plan also states that NewCo, serving as the conduit through which Celsius client funds would be disseminated, will be endowed with up to USD 450 million in cryptocurrencies to fuel its development. Celsius Network was a prominent cryptocurrency entity in the United States until it filed for bankruptcy July 2022. Although its downfall was triggered by the collapse of Luna and the Terra protocol, in which it was heavily invested, many attribute the company's failure to an unsustainable business model, saying that Celsius would collapse in a dramatic way, sooner or later. Author: Oliver Redding PayPal's foray into the stablecoin market with PayPalUSD (PYUSD) has been nothing short of remarkable. This meteoric rise can be attributed to its adoption by several leading centralized exchanges. The surge in supply aligns with the trading volumes, which have amplified fourfold, touching $9.29 million. Since its inclusion on September 7, Huobi has become a dominant force, accounting for 57% of the coin's trading volume. Currently, PYUSD predominantly trades against other stablecoins such as USDT, USD, and EUR. However, Crypto.com stands out as the sole exchange offering trading pairs with major cryptocurrencies like bitcoin (BTC) and ether (ETH) against PYUSD, though these pairs have yet to gain substantial volume. The potential for PYUSD's growth is palpable, especially as more exchanges are poised to introduce diverse trading pairs. Launched on August 7, PYUSD is underpinned by dollar deposits and short-term US Treasuries, operating as an ERC-20 token on the Ethereum network. Could PYUSD be gearing up to challenge sUSDT and USDC? ------- |