The biggest crypto news and ideas of the day |
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Traders expect bitcoin (BTC) choppiness to continue with a possible rotation to altcoins, as a major options expiry weighs on market dynamics in the festive week ahead. “All eyes are on the massive expiry this Friday, where almost $20B notional across BTC and ETH options will expire,” Singapore-based QCP Capital said in a broadcast message early Tuesday. “This represents almost half the total OI on Deribit. We believe it's quite possible especially if spot continues to range here and as option sellers continue to roll their shorts out.” "Rolling" means that instead of letting their options expire, traders shift their positions to later expiration dates. This is often done to keep the trade active if they still believe in their market forecast. High volatility can be good for option buyers because it increases the chance that the option will be “in-the-money” (profitable) at some point before expiry — creating profit for buyers. “As BTC continues to struggle below 100k, we could also see alts start to play catch up again,” QCP said, adding that a similar trend was observed a month ago when bitcoin was trading at current price levels. The ether/bitcoin ratio bounced off a 0.032 support at the time, as reported, spurring movement in altcoins. The crypto market often goes through cycles in which bitcoin leads the charge, followed by altcoins. Investors sitting on fresh market gains seek additional returns, and a flow of capital to altcoins leads to wild rallies in short periods. |
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A message from The central bank of Latvia |
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The central bank of Latvia, Latvijas Banka, has announced free pre-licensing consultations for crypto-asset service providers looking to pursue the EU MiCA license – the new EU-wide united license and legal framework for the crypto-asset industry. Latvijas Banka will begin accepting applications and issuing operating permits starting January 2025, when the MiCA license will go into effect.
Latvijas Banka has developed both licensing and pre-licensing processes to provide the best possible support for innovators in the financial sector.
The pre-licensing process offers individual consultations with Latvijas Banka experts, ensuring guidance on the viability of applications, regulatory compliance, and document readiness. Latvijas Banka emphasizes accessibility and responsiveness, ensuring prompt, human-centered communication with an average response time of 48 hours.
A license from Latvijas Banka provides the opportunity to scale fast across the EU market and passport the services cross-border.
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CEOs Gain From Post-Election Rally |
The leaders of the companies responsible for the river of money that flooded U.S. political shores this year have already benefited tremendously from the outcome of last month's election — increasing their personal fortunes by billions of dollars, far outpacing the large spending they devoted to crypto-friendly candidates. Coinbase Inc. (COIN) CEO Brian Armstrong and his company devoted some $74 million to the industry's dominant political action committee, Fairshake, putting Armstrong in a close lead over a few other crypto insiders. That's an especially significant amount of money from a company that booked about $95 million in 2023 profits. But the elections went their way, and the company's value has ballooned by $21 billion since Nov. 4, the day before in-person voting began and the outcome became clear. In a pre-programmed series of trades starting less than a week after the election, Armstrong sold $100 million worth of his Coinbase shares. Those same shares on the night before the election had been worth about $39 million less. A week after that, he cashed in about $313 million — all part of a selling strategy he'd set in motion if the price spiked. Since then, the co-founder and CEO sold smaller amounts week after week, for a total of about $437 million for stock that was worth $308 million before the victories of President-elect Donald Trump and a slate of congressional lawmakers backed by crypto. In other words, the pro-crypto sentiment surging after the election outcome that Armstrong helped shape earned him an additional $129 million in wealth for the shares he sold. He still owns more than 10% of the largest U.S. crypto exchange, and the value of about 24 million shares tucked into his trust, according to the latest Securities and Exchange Commission filings, is about $6.4 billion — up near $2 billion since Nov. 5. Armstrong's stock sales were planned less than three months before the U.S. elections, submitted in a formal strategy meant to distance corporate insiders from accusations of gaming the markets. And the sales haven't yet reached the halfway point of the SEC-disclosed intent to offload as many as 3.75 million shares, depending on the stock price meeting "certain threshold prices specified in the Armstrong Plan." He took to social media site X to explain the plan several days before the elections, saying he was diversifying "to make investments in moonshots" but would be keeping the "vast majority" of his shares. He said he put the price targets so high that he didn't expect that most of it would sell in the next year "unless we do much better than expected." COIN's stock is currently trading around $276, up from around $186 on Nov. 4. A Coinbase spokesperson referred CoinDesk to that post when asked for comment. His rivals among crypto leaders who devoted similar levels of cash to the elections included Ripple Labs CEO Brad Garlinghouse and the namesake chiefs of investment firm Andreessen Horowitz (a16z). Ripple gave $73 million, and a16z put in $70 million, including large amounts held over for the next election cycle in 2026. |
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$14B Bitcoin Options Expiry Looms |
Just when you thought the year-end couldn't get any more intriguing, a significant options expiry is set to shake things up in this highly levered-up market. Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a preset price at a later date. A call gives the right to buy, and a put confers the right to sell. On Friday at 8:00 UTC, 146,000 bitcoin options contracts, valued at nearly $14 billion and sized at one BTC each, will expire on the crypto exchange Deribit. The notional amount represents 44% of the total open interest for all BTC options across different maturities, marking the largest expiry event ever on Deribit. ETH options worth $3.84 billion will expire as well. ETH has dropped nearly 12% to $3,400 since the Fed meeting. Deribit accounts for over 80% of the global crypto options market. As of writing, Friday's settlement looked set to see $4 billion worth of BTC options, representing 28% of the total open interest of $14 billion, expire "in the money (ITM)," generating a profit for buyers. These positions may be squared off or rolled over (shifted) to the next expiry, potentially causing market volatility. "I suspect a fair bit of open interest in BTC and ETH will be rolled into Jan. 31 and Mar. 28 expiries as the nearest liquidity anchors at the start of the new year," Simranjeet Singh, portfolio manager and trader, at GSR said. It should also be noted that the put-call open interest ratio for Friday's expiry is 0.69, meaning seven put options are open for every 10 calls outstanding. A relatively higher open interest in calls, which provides an asymmetric upside to the buyer, indicates that leverage is skewed to the upside. The issue, however, is that BTC's bullish momentum has run out of steam since last Wednesday's Fed decision, where Chairman Jerome Powell ruled out potential Fed purchases of the cryptocurrency while signaling fewer rate cuts for 2025. BTC has since dropped over 10% to $95,000, according to CoinDesk indices data. This means that traders with leveraged bullish bets are at risk of magnified losses. If they decide to throw in the towel and exit their positions, it could lead to more volatility. |
Growth, Trust and Global Adoption on Display at Fastex Harmony VI Meetup Both literally and figuratively, Dubai sits at the center of trade and commerce. The roots run deep. Dating back to the spice routes of antiquity, the region has long connected East and West and served as a global hub. Now Dubai is a flourishing environment for blockchain and Web3, making it the perfect setting for Fastex’s Harmony VI meetup. Held at the Intercontinental Ras Al Khaimah, this summit of experts, founders and CEOs underscored Fastex’s leadership, growth and focus on one crucial concept: trust. Continue reading here. |
The Russian government imposed a six-year ban on crypto mining in 10 regions due to the industry's high power consumption, Tass reported. The ban, which includes participation in a mining pool and temporary restrictions in other regions during periods of peak demand, takes effect Jan. 1 and ends March 15, 2031, Tass said, citing a decision by the Council of Ministers. The country legalized crypto mining in July, with the law taking effect last month. Russia bans the use of cryptocurrencies as legal tender for regular payments internally, but does allow cross-border payments with crypto in an attempt to evade sanctions imposed after it invaded Ukraine. The regions affected by the ban include Dagestan, North Ossetia and Chechnya, and can be altered depending on a government commission examining changes in energy demand. The ban also takes into account inter-regional subsidies on electricity that make it cheaper to use power in some regions. |
The Takeaway: Cynthia Lummis |
This profile is part of CoinDesk's Most Influential 2024 package. For all of this year's nominees, click here. “Lummis like hummus” reads the press secretary’s signature. It’s a nod to how sometimes people mispronounce the name of the junior senator from Wyoming. But it’s a good bet most people in crypto know how to say it these days. Lummis is the the most important advocate for crypto in Congress, being the main proponent for the creation of a Strategic Bitcoin Reserve and a key advocate for stablecoin legislation in the second chamber. Both issues are likely to come up for votes this year as Republicans take control of all three branches of government in 2025. “President Trump has made it clear he is interested in comprehensive digital asset legislation and creating a Strategic Bitcoin Reserve to address our crippling national debt,” Lummis told CoinDesk in a written statement. “And I am excited to partner with him to get these initiatives across the finish line.” CoinDesk started covering Lummis in 2020, when the now 70-year-old was first running for Senate. She told us she’d held bitcoin since 2013 and that she had an intrinsic sense of why bitcoin matters. “Each of those cattle," she said, pointing outside to her Wyoming ranch, "they’ve decreased by over $400 a piece because of coronavirus. We need stores of value that are decoupled from the economy." By then, Wyoming had already passed a number of crypto-favorable laws, with Lummis’s help. And, at the time, she was one of the first Senate candidates to have made crypto a part of her pitch to voters. Once in Congress, Lummis continued to champion crypto, even as it became unfashionable to do so following the FTX scandal. This year, she introduced stablecoin legislation with New York Senator Kirsten Gillibrand (D) and looks set to be a key advocate on that issue too. When Lumms joined a stage at the Bitcoin Conference in Nashville in July and proposed a Bitcoin Strategic Reserve, few people had heard of the idea, let alone talked about it. But now it’s become a fixture of Trump’s agenda, and Lummis tells us she hopes Republicans will pass legislation on it in the first 100 days of the new administration.
Exactly how the Trump administration will set up the Reserve is an open question, with legal experts disagreeing about the authorities needed. In its simplest form, the Reserve would be made up of the roughly $20 billion in bitcoin the U.S. Treasury currently holds, largely from seizures in federal cases.
But Senator Lummis has argued for more. Her bill would also sell off a portion of U.S. gold reserves and buy 1 million bitcoin, with the eventual goal of acquiring a total stake of about 5% of bitcoin issuance.
"This is very much in line with what the U.S. has done with gold reserves and something we can accomplish without spending additional taxpayer dollars,” Lummis told CoinDesk. “President Trump has made it clear he wants to harness the power of Bitcoin to alleviate the strain our soaring national debt has put on American families and I am hopeful this is something we can accomplish in the first one hundred days of his presidency.”
Lummis also intends to keep pushing for a law on stablecoins, the most popular form of digital assets by transaction volume.
“We need to get my bipartisan legislation with Senator Gillibrand establishing a comprehensive regulatory framework for digital assets across the finish line so we can prevent illicit finance and ensure we don’t derail innovation,” Lummis said.
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