The biggest crypto news and ideas of the day |
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Bitcoin (BTC) is on track for its worst month in three years, falling 22% as President Donald Trump's tariffs on major U.S. trading partners raise concerns of faster inflation, reduced chance of interest-rate cuts and lowered appetite for risky investments.
The last time the largest cryptocurrency fell as much as June 2022, when it fell by more than a third. This week alone, BTC has dropped almost 18%, the steepest slide since the week ended Nov. 13 of the same year. The slide leaves investors who've bought bitcoin this year severely underwater. The average purchase price is since the start of January $97,880, and BTC dropped below $80,000 earlier Friday, leaving average buyer some 18% worse off.
Historically, this isn't entirely unusual. Investors often face some unrealized losses at the start of the year. It happens when the price of bitcoin falls below the cost basis of the recipients before recovering later in the year.
On-chain data indicates that realized losses escalated as the price fell. Over the past three days, about $1 billion in realized losses have been recorded daily — the most since August’s yen carry trade unwind, when bitcoin fell to $49,000.
Additionally, a whopping $1.1 trillion has been wiped off the crypto market cap, taking the total to $2.59 trillion, according to TradingView metric, Total. |
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CME Launches Solana Futures |
CME Group, the world's largest derivatives marketplace, plans to introduce Solana (SOL) futures on March 17, expanding its suite of cryptocurrency derivatives, it said in a press release on Friday. The new contracts, pending regulatory review, will allow traders to manage SOL price risk with two contract sizes: 25 SOL and 500 SOL.
“With the launch of our new SOL futures contracts, we are responding to increasing client demand for a broader set of regulated products,” said Giovanni Vicioso, CME Group’s Global Head of Cryptocurrency Products. The contracts will be cash-settled, using the CME CF Solana-Dollar Reference Rate, which tracks SOL’s price daily at 4:00 p.m. London time. CME already offers bitcoin and ether futures, which have seen significant growth in trading activity. The firm reported an average daily volume of 202,000 contracts this year, up 73% from 2024. Industry leaders view the move as a step toward greater institutional adoption of crypto. Teddy Fusaro, president of Bitwise Asset Management, noted that CME’s crypto derivatives have helped pave the way for regulated financial products, including ETFs. Kyle Samani of Multicoin Capital added that such products give sophisticated investors more tools to manage risk and exposure. With Solana gaining traction among developers and investors, the addition of SOL futures highlights the increasing demand for regulated crypto trading products. It could also pave the way for SOL exchange-traded funds (ETFs) to be approved by the Securities and Exchange Commission (SEC). "CME’s decision to list SOL contracts today significantly increases the possibility that corresponding spot ETF applications could be approved in the foreseeable future," said Sui Chung, CEO of CF Benchmarks. "While an exact timeline for approval is hard to discern, it’s probable the SEC will want to see several months’ worth of trading on the CME and be satisfied that the futures correlate with the spot market before it looks to approve ETF applications for SOL." |
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BlackRock Adds IBIT to Alternatives |
BlackRock has added the iShares Bitcoin Trust (IBIT), the fund issued by the asset manager that holds bitcoin (BTC), to one of its model portfolios. These models suggest portfolios and rebalances which are then followed by advisors and platforms who can also request adjustments to the models based on their investment needs. BlackRock added a 1% to 2% allocation to IBIT in its target allocation portfolio that allows for alternative assets, according to James Seyffart, ETF analyst at Bloomberg Intelligence. In a report from Thursday, Michael Gates, lead portfolio manager for BlackRock’s Target Allocation ETF models, wrote that there are “several substantive arguments that support bitcoin’s long-term investment merit.” According to Gates, this includes the crypto asset’s novel store of value and global monetary alternative, as well as hedge to the U.S. dollar hegemony and political instability, and proxy play on the “offline” to “online” digital transition of goods and services. “Collectively, these features may help provide unique and additive sources of risk premia and diversification to traditional multi-asset portfolios,” Gates wrote. The model represents one of IBIT’s smaller portfolios, however, the step is significant given that it is the first time BlackRock had made the decision to add IBIT to any of their models. “This is a big deal because this is the first of those models to add bitcoin,” said Seyffart. “It probably won’t be the last but bitcoin is also a lightning rod for many — some will hate this while others will love it — so I don’t know if or when they would add IBIT to their primary models that have a lot more money tracking them.” BlackRock’s model portfolios manage around $130 billion in assets. |
Coinbase, NEAR, Others Launch AI Alliance |
A group of big-name crypto and blockchain firms have joined forces to deliver open artificial intelligence (AI) services using combined infrastructure.
The Open Agents Alliance (OAA) consists of NEAR AI, the payments and AI arms of crypto exchange Coinbase and an array of other blockchain and AI projects. The aim of the alliance is to "ensure secure, open source, economical, and fair AI access," according to an emailed announcement on Thursday.
The participating organizations will offer combined infrastructure, such as AI agent frameworks, cloud hosting and on/off-ramps to fiat and crypto, to allow developers to build and deploy AI tools.
Crypto and blockchain projects have been attempting to capture the zeitgeist of the proliferation of AI in the last couple of years through initiatives that could introduce greater transparency and fairness through decentralization. |
Takeaway: Ending Cap Gains Could Be Bad |
By Robin Singh
In January, following Donald Trump's inauguration, reports emerged claiming that his son, Eric Trump, had confirmed that U.S.-based cryptocurrencies would eventually be exempt from capital gains tax, while non-U.S. based cryptocurrencies would face a 30% tax.
The elimination of capital gains taxes on U.S.-based cryptocurrencies might sound like a dream come true for American investors, but it won't come without a price. Whether it turns into a net negative for the global crypto industry — well, we'll just have to wait and see. But there are some glaring red flags. 1. Markets may wobble after confirmation. If this new rule actually gets approved and takes effect, be prepared for market turbulence as U.S. investors could dump non-U.S. cryptos, take the tax hit and rotate some of their capital into domestic options. This could increase sell pressure on global projects, particularly those with significant U.S. investor exposure. But that would be the least of the concerns — this could have far-reaching, long-term consequences for the entire crypto industry. 2. Making this change before sound regulations are in place could be harmful. This elimination of taxes on crypto investments could trigger a surge in the creation of new cryptocurrencies from the U.S., similar to the 2017 Initial Coin Offering (ICO) boom — in which nearly 80% of projects had collapsed or turned out to be scams within two years. If the U.S. government removes capital gains tax before implementing clear and solid regulations, we could see a repeat of that chaos, but on a much larger scale. A zero capital gains tax would almost certainly lure in U.S. retail investors who’ve never dabbled in crypto, drawn by the obvious tax advantage. But if bad actors flood the space and take advantage of them, it could drive these newcomers away from crypto entirely. 3. Potential harm to the global crypto industry. The U.S. may be home to major crypto projects like Cardano (ADA), Solana (SOL), XRP (XRP) and Hedera (HBAR), but it’s also been a breeding ground for scam tokens. In 2024, the FBI even issued a warning about criminals creating fake crypto tokens that mimicked legitimate ones, preying on unsuspecting investors. In addition, global crypto startups may have a more challenging time securing funding if U.S. venture firms start favoring local projects to maximize tax-free returns on token allocations. This could drain investment from emerging markets, where crypto is often used for real-world financial inclusion. Such a change would also likely bring back many U.S. firms back home after they left because of the SEC’s enforcement-heavy approach under the Biden administration. Even if other countries jumped on the bandwagon with their own zero capital gains tax for local cryptos, it might backfire. The market would likely be flooded with new tokens, trading would become more fragmented, and liquidity would dry up for most of them. While countries like the UAE and Cayman Islands already have zero capital gains tax on crypto, they apply it universally, not just to locally-created crypto tokens. The U.S. taking this approach risks skewing the market, incentivizing artificial token creation and isolating American investors from the global crypto economy. What seems like a tax break now might end up killing competition, pumping money into scams and hurting crypto’s credibility in the long run. |
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