Crypto Daily News from ZBG Exchange
1. Market Wrap: Bitcoin Stabilizes as Risk Appetite Weakens
Support is seen above $40,000.
Bitcoin continued to struggle after Monday’s sell-off, although the cryptocurrency appears to be stabilizing at just above the $40,000 support level at press time. BTC is down 3% over the past 24 hours, and analysts expect the pullback to come close to an end later this week.
“Before the flash crash earlier this month, funding rates were pretty high, which tends to imply an influx of longs levering up,” Delphi Digital, a crypto research firm, wrote in a Tuesday report. “However, this time around, the market was not positioned as aggressively, leading to a slightly brighter outcome.”
The funding rate is the cost to fund long positions in the market for bitcoin perpetual swaps, a type of derivative in cryptocurrency markets similar to futures contracts in traditional markets.
For now, technical charts show strong overhead resistance at above $45,000, which could limit short-term buying. Volatility could remain elevated this week with the U.S. Federal Reserve policy meeting concluding on Wednesday and the quarter-end bitcoin options expiry on Friday.
Over the long term, however, bitcoin’s uptrend remains intact. “The long-term uptrend still has a hold on bitcoin, with our monthly indicators pointing higher, putting short-term volatility into a bullish context,” Katie Stockton, managing director of Fairlead Strategies, wrote in a Monday report.
Stockton added that a broader pause in assets deemed to be risky such as equities, commodities and cryptocurrencies has prohibited alternative coins from regaining leadership for now.
Bitcoin (BTC), $42,109, -4.5%
Ether (ETH), $2,894, -6.3%
S&P 500: -0.1%
Gold: $1,774, +0.6%
10-year Treasury yield closed at 1.321%
Despite the recent sell-off, bitcoin continues to outperform traditional assets such as equities and gold year to date. Still, BTC’s correlation with the S&P 500 has risen over the past few months, leaving the cryptocurrency vulnerable to general shifts in investors’ appetite for risk.
“Truth be told, the market rout we’re seeing is reflecting a wider set of risks than just Chinese property, and comes after increasing questions have been asked about whether current valuations could still be justified, with talk of a potential correction picking up,” Jim Reid, a strategist at Deutsche Bank, wrote in a Tuesday note.
Some 68% of investors surveyed by Deutsche Bank last week expect at least a 5% correction in equity markets before year end.
2. Blockchain Infrastructure Firm Blockdaemon Nabs $1.3B Valuation in $155M Funding Round
SoftBank Vision Fund 2 led the funding, which also included Matrix Capital Management, Sapphire Ventures and Morgan Creek Digital.
Blockdaemon has raised $155 million in a Series B capital round at a valuation of $1.3 billion, the provider of blockchain staking infrastructure said Tuesday.
The company said it would use the capital to expand its teams in Singapore, Japan, the U.K. and Germany and to make strategic acquisitions that would enable it to build out its tech stack. Blockdaemon also said that its valuation makes it the biggest blockchain infrastructure company in the world for node management and staking.
SoftBank Vision Fund 2 led the Series B round, which also included Matrix Capital Management, Sapphire Ventures and Morgan Creek Digital. Seed investors Boldstart Ventures, Goldman Sachs, Greenspring Associates, Kenetic, Kraken Ventures, Borderless Capital and others upped their investments in this latest round.
“This latest large infusion of capital will ensure that we continue to revitalize existing financial infrastructure,” said Blockdaemon CEO and founder Konstantin Richter. “We are committed to a future of decentralized financial infrastructure and accelerating the ease of integration to bridge traditional banking to the crypto ecosystem.”
In June, the company raised $28 million in a Series A led by Greenspring Associates and including Goldman Sachs.
The blockchain infrastructure space has grown increasingly competitive this year. In January cryptocurrency exchange Coinbase acquired Bison Trails. Four months later, Alchemy completed an $80 million Series B round at a $505 million valuation, and in August, Figment raised $50 million to expand its infrastructure across the proof-of-stake (PoS) industry.
3. Crypto Companies Continue ETF Proposal Spree With Bitcoin, DeFi Filings
Tuesday regulatory filings show Amplify, Invesco and Galaxy Digital submitting a pair of crypto ETF bids to the SEC.
A spate of cryptocurrency exchange-traded fund (ETF) filings continued Tuesday after Amplify, Invesco and Galaxy Digital filed for a pair of such products.
Invesco and Galaxy jointly filed a registration statement for a physically-backed bitcoin ETF, while Amplify set its sights more broadly in filing for a decentralized finance (DeFi) and crypto ETF, according to a pair of regulatory filings.
The Amplify ETF application would allow the fund to invest in bitcoin futures, Canadian bitcoin funds and companies that hold more than 50% of their net assets in bitcoin, ether or another “liquid” cryptocurrency.
“Initially, the Fund expects to directly invest up to 15% of its total assets in Grayscale Bitcoin Trust (‘GBTC’) and Canadian bitcoin ETFs investing in bitcoin,” the filing said.
The prospectus is still subject to completion and key backend roles are yet to be filled. For example, the pair still need to appoint a bitcoin custodian.
Invesco already has an application for a futures-linked bitcoin ETF before the Securities and Exchange Commission (SEC). A ruling on that filing is expected in October.
4. Coinbase to Propose Crypto Regulations to US Officials
Coinbase is said to be working on a pitch to federal regulators on how to oversee the crypto industry.
Crypto exchange Coinbase is preparing to pitch a proposed regulatory framework to federal officials.
The exchange plans to publicly roll out this proposal in the coming days, according to sources familiar with the regulatory discussions. Details of the proposal were not available at press time, but among other matters the company intends to argue what should and should not be defined as a security within the U.S.
When reached by CoinDesk, a Coinbase spokesperson declined to comment.
The news comes after Coinbase announced it was ceasing plans to offer a crypto lending product, which the Securities and Exchange Commission (SEC) said would violate securities laws.
Earlier this month, Coinbase Chief Legal Officer Paul Grewal and CEO Brian Armstrong revealed that the SEC had sent a Wells Notice to the exchange, which said the regulator would sue Coinbase should its “Lend” product launch.
The SEC cited two U.S. Supreme Court precedents — the Howey and Reves cases — in arguing that Lend appeared to violate securities laws.
While Coinbase did not publish the Wells Notice, legal experts told us the regulator might be comparing Lend to stocks or certificates of interest, which are securities under the SEC’s purview.
5. Asset Manager Osprey Launches Polygon Fund
The fund will invest in Polygon’s native token, MATIC.
Osprey Fund has introduced its fifth digital asset investment product — a Polygon trust that invests in MATIC, the native token of the Polygon network, the asset manager announced on Tuesday.
“Polygon is a disruptive layer-2 technology that gains from Ethereum’s secure network while mitigating common blockchain pain points, such as high gas fees and slow transactions,” Greg King, CEO of Osprey, said in a press release. “We’re excited to offer investors a new way to tap into the growing Ethereum market via the Osprey Polygon Trust.”
Osprey is a digital asset manager that’s part of a crop of new crypto funds aimed at serving institutional investors. Its Osprey Bitcoin Trust (OBT) is registered as an U.S. Securities and Exchange Commission reporting company and competes with the market-leading Grayscale Bitcoin Trust (GBTC), a fund that is owned by Digital Currency Group.
Publicly traded crypto exchange Coinbase is serving as the fund’s custodian. Theorem Fund Services will be the fund administrator, and Grant Thornton will be its auditor.
The trust is available to accredited investors with a $10,000 minimum investment, and Osprey plans to list the fund on the over-the-counter OTCQX exchange to remove fees on shares and open it up to retail investors.
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September 22, 2021