1. Market Wrap: Bitcoin Rises as Traders Accumulate Positions
Sentiment is improving as traders eye positive technical indicators.
Bitcoin held above the $46,000 support level on Wednesday as bullish sentiment improves. The cryptocurrency was up about 3% over the past 24 hours, compared with a 5% gain in ether, the world’s second-largest cryptocurrency by market value, over the same period.
“[Blockchain] metrics continue to show whale (large bitcoin buyers) accumulation,” Marcus Sotiriou, a trader at U.K.- based digital asset broker GlobalBlock told.
“A four-hour bullish divergence on the relative strength index (RSI) indicator has been confirmed, indicating short-term continuation to the upside,” Sotiriou wrote. The RSI is now overbought on the four-hour chart, suggesting that buyers could struggle ahead of the $50,000 resistance level.
Bitcoin (BTC), $48,152, +3.4%
Ether (ETH), $3,553, +5.6%
S&P 500: +0.9%
Gold: $1,792, -0.7%
10-year Treasury yield closed at 1.302%
Traders are also awaiting the quarterly bitcoin options expiration date on Sept. 24, which could be a source of volatility. The chart below shows $50,000 is the strike with largest options open interest, according to Skew.
2. Crypto Hedge Fund Fraudster Sentenced to 7 1/2 Years for Ponzi Scheme
Australian national Stefan Qin bilked investors in his two hedge funds out of $90 million, according to authorities.
Stefan Qin, a 24-year-old hedge fund founder who federal prosecutors said defrauded more than 100 people out of roughly $90 million, was sentenced on Wednesday to 7 1/2 years in prison, according to a Bloomberg report.
In February, Qin pleaded guilty to lying about the performance of his Virgil Sigma Fund LP of New York, which he said exploited differences in cryptocurrency prices on different exchanges, and instead used his investors’ money to fund a lavish lifestyle.
Qin then attempted to cover his fraud by paying back Sigma investors by dipping into another fund he was operating, the VQR Multistrategy Fund LP of the Cayman Islands. He operated the two funds between 2017 and 2020.
In sentencing Qin, U.S. District Judge Valerie Caproni called him “a potentially very dangerous person” who “deliberately and consciously chose a path” to take advantage of his investors.
A money judgement of $54.8 million was also imposed against Qin, representing the proceeds traceable to his offenses.
Qin faced as much as 20 years in prison for his crimes.
3. Coinbase Applies to List Crypto Futures Products
The company filed to become a member of the National Futures Association.
Coinbase has taken the first step to try and list crypto futures products.
The San Francisco-based crypto exchange filed to become a member of the National Futures Association and register as a futures commission merchant (FCM), according to a search of the NFA website and a tweet by the firm.
“This is the next step to broaden our offerings and offer futures and derivatives trading on our platforms,” Coinbase tweeted.
Coinbase Inc. appears as “not an NFA member,” but Coinbase Financial Markets Inc. is “a pending NFA member.”
According to the NFA website, Coinbase Financial Markets’ CEO is Joseph Nikolson, who joined the exchange in 2018.
He has been a registered broker with the Financial Industry Regulatory Authority (FINRA) for over 20 years, according to FINRA’s BrokerCheck.
4. MIT Spin-Out Floating Point Group Closes $10M Series A Round
The startup is creating key trading services for institutional crypto market participants.
Floating Point Group (FPG) closed a Series A funding round on Wednesday, securing $10 million in capital to expand its growing operations. The Hoboken, N.J.-based startup, which was founded at MIT, offers custody and algorithmic trading services to institutional investors, including hedge funds, asset managers and brokers.
Floating Point Group says it plans to use the capital to hire several U.S.-based software engineers to meet “surging investor demand” and to expand into new markets.
The Series A round included Tribe Capital, Coinbase Ventures, F A S T by GettyLab, Borderless Capital, CapitalX and Formulate Ventures. Other funds came from the personal capital of SkyBridge Capital’s Anthony Scaramucci and executives from GoldenTree Asset Management, HC Tech and Pythagorus Investments.
Floating Point Group co-founder and CEO John Peurifoy said in a statement that he was proud of his team’s “exceptional work.” “With this funding comes a host of brilliant, dedicated partners helping us pave the way forward for trading, custodying and ultimately using digital assets,” he said.
“Digital assets are at the forefront of financial innovation with promise to revolutionize money for small businesses and financial institutions alike,” said Scaramucci. “Floating Point Group is building transformative technology to deliver that promise.”
Floating Point Group’s new platform provides its institutional clients with direct market access to both centralized and decentralized cryptocurrency exchanges and OTC desks. The company’s products have been used by dozens of hedge funds, asset managers and brokers to trade billions of dollars of cryptocurrencies.
Last year, the company raised a $2 million seed round from AngelList founder Naval Ravikant, pif.vc and BoxOne Ventures, among others.
5. Insider Trading Allegations Rock OpenSea, NFT Marketplace Responds
Nate Chastain, OpenSea’s head of product, is at the center of the scandal that emerged on Twitter on Tuesday night.
In a statement issued Wednesday morning, leading non-fungible token (NFT) marketplace OpenSea said it uncovered evidence of insider trading by one of its employees.
“Yesterday we learned that one of our employees purchased items that they knew were set to display on our front page before they appeared there publicly,” the statement reads.
The statement doesn’t have a byline, but the public relations team for Andreessen Horowitz, a major investor in OpenSea, has been handling company communications around the scandal, which comes less than two months after OpenSea snagged a $1.5 billion valuation in a $100 million funding round.
Allegations of insider trading at OpenSea appeared last night, courtesy of a Twitter account called @ZuwuTV, and quickly went viral.
In a thread, the Twitter user assembled a paper trail of transaction receipts tied to Nate Chastain, OpenSea’s head of product. Chastain, the Twitter account alleged, was investing in NFTs just before OpenSea featured them on the front page of its website, and then cashing out on the consequent price increase.
Chastain didn’t immediately return a request for comment.
Insider trading on NFTs is, of course, not explicitly illegal yet, because there’s so little legal precedent for digital assets on the blockchain, but OpenSea is coming down hard anyway.
The company says it’s implementing new policies that prohibit this kind of behavior.
“For a new, more open internet that empowers creators and collectors, we will need to bake in trust and transparency into all that we do,” reads the statement. “We’re committed to doing the right thing for our users and earning back the trust of the community we serve.”
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September 16, 2021