Crypto Daily News from ZBG Exchange
1. Market Wrap: Bitcoin Returns Above $46K; ‘Bored Apes’ Fetch $24M
Some analysts see a temporary retracement for bitcoin and expect buyers to step in.
Bitcoin’s price is back above $46,000 on Thursday but the cryptocurrency is down about 4% over the past week, with some technical indicators suggesting bitcoin is oversold.
Some analysts view that selling as a temporary retracement and expect buyers to step in. “Leverage longs are flushed with funding rates reset and expect bitcoin to continue trading in an upward channel,” crypto investment firm StackFunds wrote in a report published on Wednesday.
“Bitcoin had seven consecutive weeks of positive upward momentum, which led to an overheated backdrop,” Ulrik Lykke, executive director of crypto hedge fund ARK36 said.
“We managed to scale a little off some positions, but I expect upward momentum to keep going,” Lykke said. The fund is concentrated in bitcoin and ether and recently increased positions during the latest sell-off.
“The biggest upside potential is in the application domain of digital assets,” Lykke said, referring to the fund’s third-largest holding in the Polkadot blockchain’s DOT token, which rallied about 50% over the past month, compared to a 3% rise in bitcoin during the same period.
Bitcoin (BTC): $46,598, +0.6%
Ether (ETH): $3,470, -1.3%
S&P 500: -0.5%
Gold: $1,792, +0.2%
10-year Treasury yield closed at 1.297%
On Thursday, the European Central Bank said it will slow the average pace of asset purchases but will keep the overall size of its quantitative easing program intact.
Cryptocurrencies and risky traditional assets like stocks have been major beneficiaries of the liquidity-boosting programs launched by global central banks.
Elsewhere, the market for non-fungible tokens (NFT) is heating up. A collection of 101 Bored Ape Yacht Club (BAYC) NFTs sold for $24.4 million at a Sotheby’s auction Thursday.
2. NFT Trading Volume Plummets but Analysts Say NFT Craze Is Far From Over
Daily trading volume on the top NFT marketplace has dropped by more than 80% over the past month.
Daily trading volume on OpenSea, the largest non-fungible token (NFT) marketplace, has fallen dramatically from the $323 million peak in August to about $52 million Thursday, according to Dune Analytics.
The staggering drop could affirm thinking in some corners that the NFT market is a bubble that has popped. But several market observers say the market remains vibrant and far from finished.
“This doesn’t mean the NFT season is just over yet,” Ong Joo Kian, research analyst at Delphi Digital, wrote in a market commentary to clients. “There’s still a lot of attention on the space.”
Ong said that a few hyped projects such as Mutant Apes Yacht Club caused “a massive uptick” in NFT trading volume at the end of August and that a subsequent slowdown was not unexpected.
Others say the NFT market has merely hit a temporary plateau, as it looks for the next big project to generate more cash and new users.
“It’s possible we’re experiencing a top in certain NFT categories like PFP [profile pics] or avatar NFTs,” Messari Senior Research Analyst Mason Nystrom said. “But it only takes one new and exciting project to help the market reach a new top.”
But observers do not know what new NFT themes will spur a market resurgence. A number of recent projects have covered roughly the same ground.
“The number of projects with similar ideas — such as those Loot copycats — has increased, but we are not seeing more new participants coming into the NFT sector,” Martha Zhang, founder of NFT platform StarryNift told.
The top NFTs by trading volume were Loot, CryptoPunks and Bored Ape Yacht Club, according to OpenSea, which is a secondary marketplace for bidding on and trading NFTs. The daily trading volume for CryptoPunks declined by more than 90%. The floor price for CryptoPunks, according to NFT Price Floor, is currently at around 90 ether, down from an August peak of 132 ether. Floor price refers to the lowest price of any NFT within a certain category (in this case, the CryptoPunk collection).
3. CFTC’s Berkovitz to Step Down Next Month
Dan Berkovitz, who recently warned that DeFi derivatives may violate federal regulations, took office in 2018.
Dan Berkovitz, one of the top officials at the Commodity Futures Trading Commission (CFTC), intends to depart the agency on Oct. 15.
Berkovitz announced his departure on Thursday, noting he has worked with the CFTC, Congress and the private sector over the past 20 years on financial markets, including with the Dodd-Frank Act. He has served as a CFTC commissioner since September 2018.
In a statement, the regulator thanked his fellow commissioners, the CFTC staff he worked with and the lawmakers whose work involves the agency.
“As the CFTC gained responsibility over the swaps market, and new products like cryptocurrencies have emerged, the staff has worked diligently to expand its expertise and capabilities,” Berkovitz said. “Today, the CFTC is both a national and a global leader in financial market regulation. This well-deserved reputation is largely due to our talented staff.”
The regulator has warned in the past that certain products built on decentralized finance (DeFi) may violate federal laws, pointing to derivatives in particular.
“DeFi markets, platforms or websites are not registered as DCMs [derivatives contract markets] or SEFs [swap execution facilities]. The CEA [Commodities Exchange Act] does not contain any exception from registration for digital currencies, blockchains or smart contracts,” he said in a speech in June.
He has also warned that there are no federal consumer protection regulations around DeFi trading platforms, and a lack of intermediaries may mean that certain protections that exist in centralized markets just don’t exist with their DeFi counterparts.
Berkovitz will be the second CFTC Commissioner to step down in 45 days. Brian Quintenz, who served as a commissioner for four years, left the role in August. On Thursday, it was announced that Quintenz had taken on a part-time advisory role with the crypto division at Andreessen Horowitz, the venture capital firm.
Former Chairman and Commissioner Heath Tarbert also left the agency earlier this year, after serving for two years.
With the departures, the CFTC is reduced to just two commissioners: Acting Chairman Rostin Behnam and Commissioner Dawn Stump.
President Joe Biden is reportedly considering Emory University Professor Kristin Johnson to fill at least one of the empty seats. Senate Majority Leader Mitch McConnell (R-Kent.) will likely also be able to nominate some individuals.
The CFTC can seat up to five commissioners (with one acting as the chair) at a time.
4. Giancarlo on Coinbase-SEC Clash: ‘Don’t Apply 90-Year-Old Statutes’
The former CFTC chairman described the current rules for digital assets as anachronistic and unevenly enforced during his appearance on CoinDesk TV.
Coinbase’s tussle with the U.S. Securities and Exchange Commission (SEC) highlights the need for clearer rules for digital assets, according to former Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo.
In an appearance on CoinDesk TV’s “First Mover” Thursday, the regulatory veteran, nicknamed “Crypto Dad” for his favorable views of the technology, described the current rules as anachronistic and unevenly enforced.
“The chairs [of regulatory agencies] have a fair amount of discretion in terms of applying rule sets,” Giancarlo said. “It’s important for this new innovation that we don’t apply 90-year-old statutes, which is effectively what we have.”
His comments come in the wake of Coinbase’s revelation that the SEC threatened to sue the cryptocurrency exchange should it introduce a proposed savings account-like product. Coinbase said it disagreed with the agency’s contention that the product would meet the definition of a security. Uniswap Labs, the development group behind a decentralized competitor to Coinbase, also is reportedly under investigation by the SEC.
“Ultimately, it will be the courts that will have to determine jurisdiction and apply the security laws to these asset classes, and I’m optimistic that Congress steps in,” Giancarlo said in response to a question about Coinbase’s situation. “Congress in the last few months has really recognized crypto […] and has woken up to this technology and its power and potential.”
Coinbase also claimed that it had approached the SEC for feedback on the proposed product and never got any feedback until the agency opened an investigation.
Perhaps in reference to this, Giancarlo said Thursday that “dialogue is critically important.”
5. Fractionalized NFTs Get Funding Boost as SZNS Raises $4M From Framework, Dragonfly
As PleasrDAO and Paperclip grab headlines, a new service is aiming to popularize DAO-governed NFT collecting and investing.
Following the success of non-fungible token (NFT) trading collectives like PleasrDAO and Paperclip, a new platform is aiming to make governing, fractionalizing and collateralizing digital art easier.
In a blog post Thursday, SZNS (pronounced “seasons”) announced a $4 million funding round led by Framework Ventures and Dragonfly Capital, with contributions from Pear.vc and Baller ventures, among others.
SZNS allows users to create “albums,” or collections of NFTs, that can be fractionalized as governance tokens and managed by a decentralized autonomous organization (DAO). (Roughly speaking, DAOs are internet communities with a shared checkbook.)
There are a swath of fractionalization services currently on the market, including NFTX and Fractional, but according to SZNS founder John Bisu, the new platform is aiming to expand functionality.
“There’s a limitation on what users can do with their fractionalized tokens,” Bisu said. “It’s very buyout-based, where the only option for them is to buy out the NFT.”
He said that giving users access to the upside of non-fungible assets is a “very noble” thing; SZNS is aiming for a more fluid vault model that allows for easy entry and exit of assets based on governance decisions.
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September 10, 2021