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Welcome to The Node! This is Marc Hochstein to take you through the latest crypto news. In today's news: Privacy blockchain project Nillion raises $25M to expand "blind computing"; U.S. Treasury Department disses crypto; Florida man wants to put state pension money into crypto; as BTC approaches another ATH, is Bhutan getting ready to unload some of its sats? The Takeaway: Coinbase is set to report third-quarter results after the bell Wednesday afternoon. CoinDesk's Helene Braun tells us what to expect.👇 |
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Crypto Ghosted in U.S. Treasury Report |
The U.S. Treasury Department has a new strategy for financial inclusion to help people get access to the financial system, but the 35-page report references cryptocurrency only once – to tout Treasury's work on flagging the industry's hazards. While Vice President Kamala Harris has said on the campaign trail she'll encourage crypto as a part of her economic agenda, the administration she's currently working for is keeping digital assets at arm's length in what may be the Treasury's final mention of cryptocurrency before next week's election. The Biden administration's Treasury Department noted in the Tuesday report that it "cultivates financial inclusion by developing and promoting research," and — to that end — it had issued a report in 2022 on the "risks related to digital assets." From its start, the crypto sector has made a case for itself as a low-barrier entree into finance. That's been among the core selling points, for instance, from industry lobbyists as they explain digital assets to lawmakers and regulators. But while international remittances have been an obvious little-guy use case for crypto, Treasury doesn't seem to have been moved by the industry's inclusion arguments. |
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Privacy-focused blockchain project Nillion has raised $25 million in a funding round led by Hack VC and including backing from angel investors and strategic contributors from projects including Arbitrum, Worldcoin and Sei. Nillion builds its service around the concept of "blind computing," the processing of data without having to reveal its contents, which allows for the creation of an ecosystem of applications co-operating without having to reveal sensitive information. Nillion is attempting to appeal to projects at the intersection of blockchain and artificial intelligene (AI), where huge amounts of data need to be shared and stored securely. Blockchain converges with AI through attempting to decentralize ownership and harnessing of the data required to inform AI engines, thus preventing it being dominated by a handful of centralized entities. |
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Florida Man CFO Eyes State Bitcoin Stockpile |
Florida's chief financial officer proposed that the funds that support retired state workers should dabble in crypto, inspired by Republican presidential candidate Donald Trump's support for the U.S. government stockpiling bitcoin (BTC). "I believe this forethought and innovative thinking from a successful businessman like President Trump must not be taken for granted," state CFO Jimmy Patronis said in a letter to the executive director of Florida's State Board of Administration, advocating for his state to join others that have already made such investments. "Bitcoin is often called 'digital gold,' and it could help diversify the state’s portfolio and provide a secure hedge against the volatility of other major asset classes." He suggested the organization that manages the state pensions that serve Florida's retired firefighters, teachers and other public workers should study how crypto investing may fit into one of its funds and offer "potential benefits we cannot afford to overlook," according to the letter dated on Tuesday. |
As MiCA Looms, Fastex Pushes for Regulatory Compliance What are the three biggest crypto trends of 2024? You could argue the top three trends are regulation, regulation, and regulation. The “Wild West” is no more. Europe’s MiCA framework will soon go into effect. Debates over crypto regulation have spilled into the U.S. presidential election. And one Web3 company is traveling across the globe — quite literally — to show leadership in regulatory compliance: Fastex. Continue reading here. |
Does Bhutan Have Paper Hands? |
The Bhutan government, which holds over $900 million worth of bitcoin (BTC), moved a chunk of its holdings to exchanges on Tuesday, according to Arkham Intelligence, sparking speculation it is on the verge of selling some of its stash in a move that may weigh on market prices. Bhutan moved $65 million worth of bitcoin to crypto exchange Binance late Tuesday as the largest cryptocurrency neared a lifetime peak above $73,500, Arkham data shows. BTC dropped to around $72,400 as of mid-morning in London, according to CoinDesk Indices. The tiny, picturesque Southeast Asian nation emerged as a BTC whale — an influential holder of the asset — earlier this year after Arkham identified wallets belonging to Bhutan for the first time, making it the second nation after El Salvador to officially hold BTC. The country's bitcoin holdings represent nearly a third of its gross domestic product (GDP) and were gained through mining operations run by state-owned Druk Holdings. |
The Takeaway: Coinbase Earnings Preview |
By Helene Braun Wall Street analysts expect a further slowdown in spot trading volume for Coinbase (COIN) in the third quarter, partly triggered by a lack of catalysts for crypto and an uncertain regulatory environment heading into the presidential election. The crypto exchange led by Brian Armstrong (pictured), when it reports its earnings after the stock market closes Wednesday, is expected to show a revenue decline of about 13% in the third quarter, to $1.26 billion from $1.45 billion in the previous quarter, according to estimates on FactSet. Meanwhile, the earnings per share (EPS) are forecasted to be $0.46, up from $0.14 in the second quarter. “Volumes continued to soften through the quarter and we shake out quite a bit below the Street, largely on weaker retail transaction revenues,” Barclays analyst Benjamin Buddish wrote in a note to clients. He has an "equal weight" rating on the stock and raised his price target to $175 from $169 while cutting the EPS estimate to $1.05 from $1.62 in the third quarter. The third-quarter slowdown in trading volume is not Coinbase-specific but an industry-wide phenomenon. Data from The Block shows that roughly $3.3 trillion was traded on all crypto exchanges, compared to $3.92 trillion in the second quarter. Coinbase competitor Robinhood (HOOD) is also set to report third quarter earnings after the stock market closes on Wednesday. Additionally, data revealed that crypto exchange Crypto.com has been the most popular trading venue for investors in the North American region since July when it overtook Coinbase as the exchange with the highest trading volume. One of the reasons why Coinbase might have fallen short in volume is due to Crypto.com’s listing a wider range of tokens. Analysts also believe that regulatory uncertainty due to the upcoming presidential election was one of the main drivers behind lower trading volumes on U.S. exchanges. According to Oppenheimer, the spot volume outside of North America increased 61% from the previous quarter. “We believe lack of catalysts and US election overhang have negatively impacted bitcoin,” Oppenheimer analyst Owen Lau wrote. “International volume was a bright spot.” In addition to lower revenue from trading fees, which continues to be Coinbase’s main stream of income, J.P. Morgan’s Kenneth Worthington expects lower revenue from the exchange’s staking services. This is largely driven by ether (ETH) underperforming in the third quarter, down roughly 24% from Q2, according to the bank. “Ether [has] particularly underperformed [during the quarter] despite seeing the launch of its spot ether ETPs intra-quarter,” Worthington wrote. “We see this market cap contraction particularly weighing on Coinbase’s staking revenue in 3Q and subscriptions and services revenue overall. Read the rest |
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