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Coinbase Stock Surges on Grayscale’s Favorable Federal Ruling

by Isaac lane
written by Isaac lane

Coinbase’s stock (COIN) experienced a substantial surge on August 29 following reports of a federal judge’s ruling favoring Grayscale in its legal dispute with the U.S. Securities and Exchange Commission (SEC). By the end of the trading session, COIN reached $85.13 per share, marking a remarkable 15% increase compared to the previous day’s closing price. Coinbase, the largest U.S. cryptocurrency exchange, has been listed on Nasdaq since 2021.

Screenshot showing Coinbase stock’s price increase. Source: Coinbase

Legal Victory for Grayscale Boosts Sentiment

A federal court decision on August 29 deemed the SEC’s justification for rejecting Grayscale’s proposal to convert its Bitcoin trust into a traditional exchange-traded fund (ETF) inconsistent. This ruling, perceived positively by investors, has ignited hopes for the potential introduction of a Bitcoin ETF. Coinbase is being considered as a partner for sharing surveillance data and acting as a custodian for some ETF candidates.

Potential for Bitcoin ETF and Market Collaboration

If approved, these ETFs would enable the sharing of trading, clearing, and customer identification data between Coinbase and other participants. The collaborative effort seeks to mitigate market manipulation risks and enhance the security of Bitcoin storage supporting the fund shares.

Despite the absence of a spot Bitcoin ETF in the U.S. due to SEC hesitancy, investors are eager for investment tools offering direct exposure to Bitcoin. Leading asset manager BlackRock, along with other notable applicants, is seeking SEC approval. CEO Larry Fink acknowledged substantial client demand for cryptocurrency exposure.

Bitcoin’s Market Performance

At the time of writing, Bitcoin was trading at $27,982 per coin, reflecting a more than 7% increase in the past 24 hours, as reported by CoinMarketCap. However, the cryptocurrency’s value remains significantly lower, nearly 60%, compared to its peak of $69,044 in November 2021.

In summary, Coinbase’s stock witnessed a surge due to a positive legal verdict for Grayscale against the SEC. The ruling potentially paves the way for a Bitcoin ETF, while Coinbase’s role in data sharing and custody further supports the market’s collaborative efforts.

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BitcoinMarket

BTC Price Consolidates as Analysts Remain Cautious

by Isaac lane
written by Isaac lane

Bitcoin’s price hovered around $27,000 after the August 30 Wall Street opening, showing muted response to Grayscale’s legal victory. Despite initial excitement, analysts express doubt about the sustainability of the rally, citing lackluster buyer interest.

Limited Buyer Interest Despite Grayscale’s Win

The positive outcome of Grayscale’s legal battle failed to generate strong buyer interest in Bitcoin. Data from Cointelegraph Markets Pro and TradingView indicated that while Bitcoin saw a 7.5% surge to $28,143 on Bitstamp, it eventually retraced to consolidate lower. Analysts noted that the rally seemed to originate from derivatives exchanges, and there was a noticeable absence of significant activity on spot markets.

BTC/USD 1-hour chart. Source: TradingView

Despite closing above crucial moving averages, these levels had not yet solidified as robust intraday support. Analysts adopted a cautious stance, as trading volumes remained below previous uptick levels in 2023. While price changes can be pronounced even with lower trading volumes due to reduced overall liquidity, caution was advised against expecting a dramatic rally.

Long-Term Outlook and Similarities to Past Patterns

Prominent trader and analyst Rekt Capital shared a conservative long-term perspective. Comparisons were drawn between Bitcoin’s current price action and its behavior around the all-time high in 2021. Although a new price peak isn’t anticipated, the recent tops around $31,000 on the weekly chart resembled patterns observed before the 2022 bear market. If history repeats, Bitcoin’s price could face further downside, with $26,000 transitioning from support to resistance.

Bitcoin: Trading Volume (Spot VS. Derivative) chart. Source: CryptoQuant

Importance of $23,000 Target

Earlier reports highlighted $23,000 as a critical level for a potential BTC price bottom. Analysts continued to emphasize the significance of this level as a possible rebound point. Rekt Capital identified it as a key level based on the 2022 bear market bottoming structure, characterized as an inverse head and shoulders pattern.

Bitcoin: Trading Volume Ratio (Spot VS. Derivative) chart. Source: CryptoQuant

Bitcoin’s price consolidation around $27,000 post-Grayscale’s legal win raises concerns about sustained buyer interest. Analysts exercise caution due to the subdued activity on spot markets and draw parallels to past patterns. The importance of the $23,000 level remains a focal point for potential price rebounds as market sentiment continues to be closely monitored.

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Bitcoin

BTC Price Surges to Two-Week Highs on Grayscale’s Legal Victory

by Isaac lane
written by Isaac lane

Bitcoin’s price experienced a surge to its highest point in two weeks on August 29, following news that Grayscale, a digital asset manager, had emerged victorious in a legal battle against U.S. regulatory authorities.

Market Reaction and Price Movement

BTC/USD witnessed an instant price reaction, gaining $1,700 within approximately 30 minutes after the news broke. The positive development ended a period of stagnation in Bitcoin trading, which had been lingering since mid-August due to sudden losses.

The U.S. Court of Appeals for the District of Columbia Circuit deemed the U.S. Securities and Exchange Commission’s (SEC) rejection of Grayscale’s application to launch a Bitcoin-based exchange-traded fund (ETF) as “arbitrary and capricious.” The court’s ruling highlighted the SEC’s inconsistency in treating similar products differently. The court subsequently granted Grayscale’s petition and vacated the order of denial.

Potential Implications and BlackRock’s ETF Application

Grayscale now joins other entities awaiting approval to launch the first U.S. Bitcoin spot ETF, while the SEC is yet to greenlight any such application. Analysts speculate that this legal victory could bode well for existing ETF applications, including that of global asset manager BlackRock. This development is seen as a possible catalyst for the beginning of a bullish cycle in the Bitcoin market.

Grayscale’s Journey and CEO’s Response

Grayscale’s battle with the SEC has been marked by persistence, with CEO Michael Sonnenshein vowing not to relent until permission was granted to convert Grayscale Bitcoin Trust (GBTC) into an ETF. Following the news of the SEC’s setback, Sonnenshein expressed gratitude to investors and announced that the legal team was actively reviewing the court’s opinion.

The share price of Grayscale Bitcoin Trust (GBTC) surged over 17% on the day, reaching $20.60 at the time of writing.

 

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BitcoinCryptoMarket

Bitcoin Price Prediction: $23,000 BTC Price Floor

by Isaac lane
written by Isaac lane

Bitcoin price is expected to dip to $24,000, according to crypto asset manager Capriole Investments. The firm believes that the BTC price will find support at $23,000, which is the average miner’s electricity bill per BTC worldwide. This price level has acted as strong support in the past, with the dip to two-year lows in November 2022 being no exception.

Capriole also points to the EP as a “historically hard price floor and level with a 100% long hit rate.” The firm believes that these two price points provide strong confluence for a buying opportunity at $23-24K.

Miner Pain on the Horizon?

Meanwhile, Bitcoin miner revenue is currently sitting at $25.5M, just above the 365SMA of $22.5M. This suggests that miners are starting to feel the pain, and could be forced to sell their BTC holdings in order to cover costs. If this happens, it could put further downward pressure on the price of Bitcoin.

Overall, the outlook for Bitcoin price is bearish in the short term. However, investors who are willing to wait for a few weeks could be rewarded with a buying opportunity at $23-24K.

 

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BitcoinCryptoMarket

Analysts Present New Model to Understand Bitcoin Economy During Bearish Trend.

by V. Sinclair
written by V. Sinclair

Investment company Ark Invest, in collaboration with blockchain security enterprise Glassnode, has presented a novel conceptual framework to understand the Bitcoin economy, especially during the prevailing bear market.

Ark Invest recently released a whitepaper named “Cointime Economics: A New Framework For Bitcoin On-chain Analysis”. Authored by David Puell from ARK Invest and James Check from Glassnode, this research introduces a unique approach to understanding Bitcoin’s economic nuances.

While traditionally, the focus was on unspent transactions (UTXO), this paper introduces the “cointime” model which gauges the “actual economic significance of a Bitcoin”. It emphasizes the importance of a Bitcoin based on its last movement.

A new term “coinblock” is introduced which multiplies a Bitcoin’s quantity by the number of blocks created while it remains stationary. For instance, if 10 coins stay put during the creation of 10 blocks, it amounts to 100 coinblocks.

According to the paper, a considerable destruction of coinblocks suggests that long-standing Bitcoin holders are parting with their assets. These investors, often referred to as the “smart money”, usually have significant Bitcoin holdings, benefit from lower trading costs, and realize higher returns.

The whitepaper also presents two innovative metrics to evaluate Bitcoin’s economic health: “liveliness”, indicating network activity and the frequency of coin movements or destruction, and “vaultedness”, which points to the volume of stored coins, reflecting the network’s inactivity.

The authors believe that this cointime model offers a systematic and mathematical method to gauge each Bitcoin’s economic value over time. They point out that, unlike the UTXO model, the cointime model assigns weight to each coin based on its stationary period. Consequently, when older coins are transacted, they have a more profound impact on Bitcoin’s economic activity.

However, Bitcoin’s path to its next bullish phase is laden with challenges. With the global economy witnessing rising interest rates, investors often favor assets with guaranteed returns, like Treasury bills, over Bitcoin which lacks inherent value and cash flow potential.

Furthermore, Bitcoin needs to validate its purpose beyond just being an investment medium. Currently, while its disruptive potential is recognized, most people hold Bitcoin hoping for its value to surge, rather than using it.

Yet, there’s an optimistic perspective tied to Bitcoin’s halvening event scheduled for April 2024. Historically, this event, which slashes rewards for Bitcoin miners, has been a precursor to market uptrends.

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BitcoinNews

Bitcoin-Powered App Developer Primal Secures $1 Million Investment

by Isaac lane
written by Isaac lane

Primal, a company focused on creating bitcoin-integrated applications for the Nostr social network, has successfully raised $1 million in funding from investors including Ten31 and Hivemind Ventures.

Empowering Primal’s Mission

Primal’s core objective is to enable users to send micro bitcoin payments, called “zaps,” to fellow users who share enjoyable content or items globally. Founder and CEO Miljan Braticevic emphasizes the platform’s user-friendly interface, akin to Twitter, combined with the decentralized Nostr protocol. With approximately 30 million users, Nostr’s influence continues to expand.

Decentralizing Social Media

The initiative addresses the challenges of centralized social media, where dominant corporations wield control over permissible content. Primal’s model strives for a censorship-resistant and fully decentralized platform. Notably, both conservative and liberal voices have faced content removal or censorship, highlighting the broader concern.

Hope for Uninhibited Discussions

The decentralized nature of platforms like Nostr offers the potential for unimpeded discussions without hosting platform interference. This approach could foster open and candid conversations while minimizing retaliation risks.

Max Webster, the founder of Hivemind Ventures, which participated in the funding round, shared insights about Nostr’s unique approach.

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BitcoinCryptoNews

Glassnode Co-Founders: Positive Signs for Bitcoin in September, but Challenges Persist

by Isaac lane
written by Isaac lane

Glassnode’s Co-Founders share insights about Bitcoin’s potential performance in September, noting optimistic signals from the relative strength index (RSI). However, a critical level presents a hurdle.

Source: Negentropic/X

The co-founders of crypto analytics firm Glassnode, Jan Happel and Yann Allemann, known as Negentropic on X social platform, anticipate a promising trajectory for Bitcoin (BTC) in the coming month. The duo highlights Bitcoin’s relative strength index (RSI) as a bullish indicator as September approaches.

While the RSI, situated just below 30 on the scale, usually indicates an oversold zone, the co-founders emphasize that a dip below the crucial $25,500 mark could complicate an upward move.

The August journey of Bitcoin has intrigued the crypto community. The daily RSI draws parallels with patterns from June 2022, stirring curiosity about September. Key considerations revolve around potential challenges under $25,500 and the lack of buy orders beyond $26,000.

Source: Negentropic/X

Chart Analysis and Current Dynamics

Chart analysis reveals short-term energy waning, potentially influencing the $25,200 level, distinct from the neutral long-term perspective. September holds promise as the RSI signals a possible resurgence. However, a cautious approach is necessary due to the potential difficulty in breaching the $25,500 threshold and surpassing the $26,000 mark. This balancing act will shape Bitcoin’s path forward. The co-founders underline that although bears currently dominate the market, the pace of BTC selling is slowing down. They are closely monitoring for signs of a relief rally, which could lead to Bitcoin retesting the $27,000 level.

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BitcoinCryptoNews

Hashdex Enters the Competition for Spot Bitcoin ETF

by Isaac lane
written by Isaac lane

Crypto asset management firm Hashdex has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a unique Bitcoin futures exchange-traded fund (ETF) that will hold spot Bitcoin. This move puts Hashdex in the race alongside other contenders for a spot Bitcoin ETF in the United States.

Divergent Approach to Spot Bitcoin Acquisition

Hashdex’s strategy stands apart from recent filings as it seeks to acquire spot Bitcoin from physical exchanges within the CME market, rather than depending on the Coinbase surveillance sharing agreement. This approach is outlined in a 19b-4 filing by NYSE Arca with the SEC. The company intends to integrate spot Bitcoin into its Bitcoin futures ETF, and as part of this strategy, it aims to change the ETF’s ticker to Hashdex Bitcoin ETF.

Innovative Strategy and Expert Opinions

Financial analysts have taken notice of Hashdex’s distinctive filing. James Seyffart from Bloomberg highlighted that the strategy involves exchange for related positions transactions, where futures contracts are exchanged for equivalent spot exposure instead of direct cash purchases from exchanges. This approach is believed to have a higher likelihood of receiving SEC approval, considering various recent developments in the regulatory landscape.

Nate Geraci, President of The ETF Store, investor Alistair Milne, and finance attorney Scott Johnsson have also weighed in on Hashdex’s approach. They speculate that this unique filing could address certain concerns of the SEC related to Bitcoin market manipulation and liquidity issues.

Uncertain Regulatory Response

As of now, the SEC and its Chair, Gary Gensler, have not issued any official comments on the recent surge of Ethereum ETF applications or the potential approval of a spot Bitcoin ETF within the current year. The landscape remains uncertain, with market participants eagerly awaiting regulatory decisions that could significantly impact the cryptocurrency investment landscape.

 

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BitcoinNews

Bitcoin’s Value Under Inflation Scrutiny, Jackson Hole Event in Focus

by Isaac lane
written by Isaac lane

Bitcoin’s value could dip below $20,000 in 2023 when considering inflation, despite reaching highs of $69,000 in the past years. Adjusted for inflation, the cryptocurrency’s price has remained relatively static since 2017, hovering just above its old all-time high. As of August 25, 2023, the value of $20,000 worth of Bitcoin purchased in 2017 has only appreciated to $24,942. This highlights the cryptocurrency’s stable yet modest performance over the years.

BTC/USD 1-month chart. Source: TradingView

Bitcoin’s Role as a Store of Value

Bitcoin enthusiasts note that even with inflation adjustment, the cryptocurrency’s ability to retain its value is noteworthy. Anonymous marketing officer BTCGandalf of Bitcoin mining company Braiins acknowledges the lack of attention to this issue, despite its implications.

Jackson Hole Event’s Impact on Bitcoin

Market attention is now directed towards the annual Jackson Hole Economic Symposium on August 25, where Federal Reserve Chair Jerome Powell is expected to discuss economic policies. Investors hope for insights that could break the current status quo of Bitcoin’s price. The event’s outcomes could lead to increased volatility and potentially a market shift.

U.S. Inflation Calculator data (screenshot). Source: usinflationcalculator.com

Liquidity Concerns and Future Outlook

An analysis of the BTC/USD order book on Binance reveals a scarcity of significant liquidity above $25,000, suggesting the potential for swift and sizable price fluctuations. This raises the prospect of a “bearadise,” a term coined to describe a bear market scenario with lower prices. With U.S. inflation data and the Jackson Hole event shaping market sentiment, the cryptocurrency landscape remains uncertain.

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BitcoinMarket

Binance’s update to zero-fee Bitcoin trading might mirror the March decline.

by V. Sinclair
written by V. Sinclair

Leading cryptocurrency exchange Binance revealed its intention to overhaul the zero-fee Bitcoin trading structure on August 24. This action could be compared to the abrupt 90% drop in trading volume that was observed after Binance stopped offering zero-fee trading in March.

Binance publicly announced its choice to begin September 7 with an update to the no-fee Bitcoin trading system. With regard to spot and margin trading, they will specifically modify the zero-fee trading structure for Bitcoin (BTC), which has a price of $26,035, when matched with True USD (TUSD).

Prior to this modification, trading BTC with TUSD pairs was free of maker and taker costs. A standard taker cost based on the user’s VIP status will be applied going future. Maker costs won’t apply to the BTC/TUSD spot or margin trading pair, though.

The volume will be taken into account for all Liquidity Provider schemes and the user’s VIP tier calculations for transactions involving the BTC/TUSD spot and margin trading pair. The volume of BTC/TUSD trading will also once more be subject to BNB discounts, referral bonuses, and other fee adjustments.

It seems like Binance is gradually withdrawing its support for zero-fee Bitcoin trading with TUSD, indicating waning faith in the TUSD stablecoin for a number of reasons. Trading Bitcoin in conjunction with the FDUSD spot and margin trading pair, however, will continue to be free for both makers and takers.

This modification to Binance’s fee policy for trading BTC/TUSD could unwittingly lead to another market sell-off.

According to data from CoinMarketCap, the BTC/TUSD and BTC/USDT combinations are the most frequently traded Bitcoin pairs, accounting for 11% and 7% of all transactions, respectively. After Binance stopped supporting BUSD and started only recognizing TUSD for fee-free Bitcoin trades, the volume of trading in Tether (USDT) pairs significantly decreased.

The less well-known FDUSD stablecoin appears to be receiving more attention from Binance than the well-known TUSD stablecoin. It’s important to remember that FDUSD has a market cap of $324 million right now and isn’t among the top 10 Bitcoin pairs by volume.

 

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