The biggest crypto news and ideas of the day |
Were you forwarded this newsletter? Sign up here. Don't want this newsletter? Unsubscribe |
|
|
Welcome to The Node! This is Ben Schiller to take you through the latest crypto news. In today's news: former SEC commissioner Paul Atkins reluctant to take chair role; Polymarket retains loyal user base after the election; XRP is up 430% in 30 days with whales leading the way; MicroStrategy set to join to Nasdaq, opening up new investment in bitcoin. The Takeaway: EY's Paul Brody predicts that regulators will look favorably on corporations that work with public blockchains, flipping the script on the preference for private chains in recent years.👇 |
|
|
Atkins Reluctant to Take SEC Top Job |
A lot of stars would need to align for Paul Atkins, reportedly president-elect Donald Trump’s top candidate to chair the U.S. Securities and Exchange Commission, to take the job. It is an unattractive role for him because of the amount of work needed to turn around the bloated agency he believes was mismanaged by outgoing SEC chair Gary Gensler, a person familiar with Atkins' thinking said. Reluctance to clean up Gensler's “mess” has been shared by former Commodity Futures Trading Commission chair Chris Giancarlo, who has advocated for Atkins to take the SEC job and was once considered a candidate himself. Atkins, a former SEC commissioner, was spotted at Trump's Mar-A-Lago resort this week, one industry source said. He was scheduled to interview for the SEC chair role Sunday and Monday, said another person with knowledge of the meetings. Atkins is the founder and CEO of Patomak Global Partners, a global consulting firm specializing in strategy, risk management, and regulatory compliance. Patomak serves crypto firms, but they are a small part of its diversified practice, which includes traditional financial clients, public companies, trade associations, law firms, banks and insurance companies. Prior to starting Patomak, Atkins was a commissioner of the SEC from 2002 to 2008, appointed by former President George W. Bush. During his time at the SEC, Mark Uyeda and Hester Pierce, who later became commissioners, worked as counsel to Atkins. Atkins is well regarded in conservative circles. According to a source close to Atkins, he is friendly with Key Square Group founder Scott Bessent, the billionaire hedge fund manager selected by Trump to become Treasury Secretary. Atkins is reluctant to leave his practice, the person familiar with his thinking said. Taking up the SEC chair role would require him to resign from his business interests, which he may only do once his firm is well-positioned to operate without him, sources said. |
|
|
Top Crypto Gifts for 2024 DePIN gadgets. A Web3 phone. A crypto gift card. A programmable hoodie. When it comes to crypto, we normally think of virtual things. But there are plenty of ways to get physical this holiday season. CoinDesk teamed up with DIMO to curate this guide to all things crypto hardware. It contains nine cool hardware ideas, from NFC-encrusted nails to a state-of-the-art wallet to a “burner card” for stablecoins. Enjoy and give the gift of crypto this holiday season. |
|
|
Polymarket Users Loyal After Election |
During the dog days of summer, Polymarket’s election betting surged on (correct) speculation that the Democrats would make a "hot swap" of Joe Biden for Kamala Harris as their presidential candidate. Trading volume grew and grew through the fall. All along, doubts lingered about whether the platform’s trader base would hold steady after the ballots were cast.
On Election Day, the research arm of gaming and VC giant Animoca put out a report with a bold prediction: there's nothing for Polymarket to worry about. The crypto-based prediction market, according to the report, had a significant base of non-election bettors to carry it through. Naturally, there would be smaller numbers – what can be as captivating as a political face-off involving Donald Trump? – but it'd be a far cry from a ghost town. Three-quarters of Polymarket users, Animoca noted, trade contracts unrelated to the election. A month later, that analysis is looking right. A key data point to track is the open interest on Polymarket. Open interest, which is the total value of active positions in Polymarket’s prediction markets, reflects the platform’s liquidity, user activity, and overall market engagement.
Data from a Dune Analytics dashboard shows that while open interest hit peaked just above $475 million on Election Day – and, predictably, significantly declined in the days after – it has been ticking back up in the last week.
The data shows open interest dropped to a low of $93.91 million on November 12, then slowly climbed to $104 million by November 15 and further to $115.25 million by November 30. These aren't bad numbers for Polymarket by any means, because this is where open interest was in mid-September, when election fever was in full swing. |
|
|
Bitcoin’s Pumping. Memes Are Minting Millionaires. The bear market’s snoozing, and the bull run is here.
Consensus Hong Kong is where you level up, make moves and position yourself to win. Top global leaders will be there. Will you?
Prices rise Dec. 13 at 10 a.m. ET/ 11 p.m. HKT—save $700 and get an extra 15% off with code NODE15. Don’t miss out. Register today. |
|
|
XRP prices have zoomed 430% in the past 30 days, reaching price levels last seen in 2018 and leaving scores of Crypto Twitter traders surprised with the strength. The rise started in early November after the Republican victory in the U.S. election reignited investor confidence in tokens linked to U.S. companies, including XRP's associated Ripple Labs.
Large holders are playing a key role in contributing to the move. CryptoQuant data shows whale activity – which tracks movements from large wallets to and from exchanges – has been consistently elevated since the past month, multiples higher than any other period. Whales can move markets with their buying or selling pressure, and tracking this can indicate their market sentiment. For instance, if the cryptocurrency's inflow into exchanges (Exchange Inflows) is significant, it might suggest that whales are preparing to sell, potentially signaling a bearish market trend. Conversely, large outflows from exchanges might indicate accumulation by whales, which could be bullish.
However, such whale movements tend to coincide with local peaks, CryptoQuant's contributing analyst Woominkyu said in a post Monday, as sophisticated participants sell on retail inflows. “Historically, significant spikes in whale-to-exchange transactions (marked by red circles) align closely with XRP price peaks,” Woominkyu stated. “This suggests that whales tend to move large amounts of XRP to exchanges to sell near local or cycle tops.”
“The latest spike in whale-to-exchange activity coincides with XRP reaching a local price of around $2.3. This could indicate whales preparing for potential profit-taking or increased market activity,” Woominkyu added.
XRP is up 14% in the past 24 hours, outperforming bitcoin and all other crypto majors, according to CoinDesk data. The token flipped Solana’s SOL and tether (USDT) in quick succession over the weekend — standing as the third-largest token by market cap as on Tuesday. |
Successful Trading Takes More Than a Bull Market Choosing the right exchange is crucial throughout the business cycle. This has been a very, very good month to trade in crypto. People who regularly read CoinDesk are making money just by checking their phone alerts. And yet, this environment isn’t as kind to the exchanges. Continue reading here. |
Microstrategy to Drive Interest in Bitcoin |
Despite all the weird memecoins and degen behavior in 2024, ETFs are in the running for story of the year in cryptocurrency investing. And that story — which began when bitcoin and ether exchange-traded funds debuted to great fanfare — might not be over. After a sixfold surge in its stock price this year, Michael Saylor's bitcoin (BTC) investment firm MicroStrategy (MSTR) looks poised to join one of the biggest exchange-traded funds around, the $312 billion Invesco QQQ ETF (QQQ). That fund tracks the Nasdaq-100 Index. Every December, Nasdaq shakes up the membership list for that benchmark, which then filters into the Invesco fund (which copies Nasdaq's decisions exactly). The Nasdaq-100, roughly speaking, tracks the 100 largest non-financial companies listed on the Nasdaq exchange. There are other eligibility criteria that must be met — and MicroStrategy checks those boxes. “The index is passive and rules-based and it should just follow the rules. The market is indicating that MSTR belongs in the index and thus the ETF, and therefore it should be added,” said James Seyffart, ETF analyst at Bloomberg Intelligence. This conveys more than bragging rights; it's membership in an exclusive club alongside giants like Nvidia (NVDA), Apple (AAPL) and Microsoft (MSFT) in an ETF that regularly boosts daily trading volume in the tens of billions of dollars. It guarantees passive, permanent capital will flow in. Getting added "will open up flows to a new class of investors that would not otherwise have singularly bought a stock like MSTR on their own," said Jeff Park, head of alpha strategies at Bitwise. "Indexing, in a way, is a financial tool, like banking is a financial tool, because it is a liquidity transformation tool." The decision would also essentially bring more bitcoin into the index. Saylor has loaded up MicroStrategy with a $37 billion stockpile of bitcoin over the past four years, transforming his decades-old software firm into one of the largest crypto investors in the world. To conceptualize how much bitcoin that is, Bloomberg data shows that the $37 billion holdings are now worth more than Nvidia's (NVDA) $34.8 billion (NVDA) and Tesla's (TSLA) $33.6 billion cash and marketable securities holdings. Now, the fortunes of a prominent conventional stock index and ETF would ride to an even greater degree on bitcoin. Tesla is already in the index and holds the cryptocurrency. "For millions of passive investors, owning ETFs like QQQ (which tracks the Nasdaq-100) will provide indirect bitcoin exposure to their portfolios through MicroStrategy's holdings," said Ben Werkman, founder of quant research firm NumerisX. "Since these funds are often buyers at any price, their participation has the ability to potentially exert significant upward pressure on the price of the equity." |
Takeaway: Corporations Use Public Chains |
By Paul Brody, E&Y The default assumption in the world of financial institutions for the last decade when it comes to digital assets is that closed, private blockchains are preferable to open, permissionless systems. Many, if not most of the world’s biggest banks and financial institutions have invested in, and tested out digital assets on private, permissioned blockchain networks. None of them have achieved traction with customers, businesses, or institutional investors. A key argument that financial institutions have made for prioritizing these efforts over putting assets on public blockchains is that regulators and regulations strongly prefer, and in some cases, specifically require permissioned blockchains. I believe that time is coming to an end. I predict that the evolution of the ecosystem and the “default” regulatory perspective is going to evolve much more over the coming years. Though it might be hard to see now, I believe we’re not far from a time when regulators will look on with suspicion not at putting assets on a public chain, but keeping them on private networks. Three factors will drive this change. Liquidity matters First and most importantly, liquidity matters. Public networks like Ethereum have millions (soon billions) of users and will hold hundreds of billions (soon to be trillions) in capital. Digital assets trading on Ethereum get the benefit of all those customers with capital to invest. Like big, public stock markets, the more buyers and sellers there are in a market, the more likely it is that your product will be priced fairly and find buyers willing to pay a fair price. Digital assets that are only bought and sold on private networks may not get the same fair pricing opportunities. Indeed, I am already aware of at least one case where a real-world asset, tokenized and launched on a private network, has fallen below its net asset value in price. This could, of course, represent a reasonable expectation that the asset’s underlying value is set to further decline, but it could also be an indicator that the private network doesn’t have a robust group of buyers who would normally snap-up such deals. I don’t think it will be long before the first angry customer with an underperforming token and no buyers complains to a regulator about that financial entity. They will claim that in selling them as an asset only tradeable on a private network, they were not treated fairly. Evolving technological maturity and resilience The second big driver that will transform how regulators look at public networks is their evolving technological maturity and resilience. Not only have permissioned systems not really achieved take off, but their evolution has also been relatively slow, and the offerings developed relatively few. The most ambitious permissioned systems today have less than a dozen products and many that are in production have only a few users. The lack of privacy in blockchains means that many permissioned systems have only one entity that can directly access the chain and all the others must access the network through restricted APIs. Compare this to public blockchains. Ethereum alone has several hundred thousand smart contracts, nearly 3,000 operational protocols, and is processing several trillion dollars a year in payments and asset transfers. The Ethereum ecosystem is going through a substantial hard fork every 3-6 months and its overall capacity has risen from about a million transactions a day by itself, to hundreds of millions a day through more than 50 layer 2 networks and dozens of independent analytics vendors, compliance providers, and auditors. This is more than an order of magnitude bigger than any permissioned blockchain. Regulatory acceptance of public blockchain ecosystem Lastly, as regulators accept more and more frameworks and infrastructure for cryptocurrency, they will be forced to accept that the same Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) rules that work for selling and transferring cryptocurrencies can work for stablecoins and other digital assets. Crypto only exists on public networks and its widespread acceptance around the world has blazed a trail for digital assets of all kinds. Regulations like the EU’s Markets in Crypto Assets (MiCA) is a good example of where things are headed. MiCA was developed with knowledge of public networks in mind and while it does not require them, it has unlocked a wave of investment and innovation in Europe’s banking in public blockchain ecosystem. Bottom line: the advantages that digital assets on private networks have had with regard to regulator comfort and compliance are eroding, if they have not eroded entirely yet. We have already reached the point in many parts of the world that regulators are not systematically blocking offerings simply because they will be on public networks. Sooner or later, I think they will take one step further and start asking anyone trying to offer assets on a private network just what it is they think they are doing. Don’t say I didn’t warn you. |
|
|
|
