Today’s Crypto News
1: Bitcoin Slips. The Worst Might Not Be Over:
BitcoinBTCUSD –0.99% slipped and other cryptocurrencies were mixed on Monday after a dramatic selloff late last week that plunged digital assets through key technical levels that could pave the way for even further declines.
The price of Bitcoin has fallen less than 1% over the past 24 hours to $26,050, stabilizing around the $26,000 mark after last week’s drop took the largest crypto to as low as around $25,500 from $29,000.
“The market is still above the previous local lows of June, giving hope for a continued uptrend. However, it is worrying that July’s highs are lower than April’s,” said Alex Kuptsikevich, an analyst at broker FxPro. “Bitcoin closed the week with a notable drop below its 200-week and 200-day moving averages, signaling a shift to a bearish trend.”
2: Shiba Memu Ignites the Crypto World: $2M Presale Surge as Meme Coin Races Towards Listing:
Shiba Memu, a dynamic new cryptocurrency meme coin supported by AI, is causing a stir as its presale surpasses the impressive $2 million fundraising milestone. This remarkable achievement was further spurred by the recent news it would list on BitMart, a renowned crypto exchange, all within the first month of the presale’s launch.
The inception of the Shiba Memu AI stems from the team’s previous experiences with exorbitant marketing agency fees. This motivated Shiba Memu to develop a self-promoting AI solution capable of adapting to various practical applications.
Presently at $0.021700 per token, Shiba Memu’s price experiences scheduled increments every 24 hours due to the team’s well-crafted smart contract. This mechanism is particularly appealing to presale supporters, as it ensures that the token purchase price remains lower than the eventual listing price on exchanges. For instance, if purchased today at $0.021700, the increase by the end of the 60-day presale would amount to 10%.
Those interested can acquire SHMU tokens via the official Shiba Memu website.
The Surge of Shiba Memu: Unleashing AI Potential
Shiba Memu’s remarkable success can be attributed to its untapped AI potential. In its nascent stages, the AI employs Natural Language Processing (NLP) and Sentiment Analysis to scour the web, primarily focusing on social platforms, for mentions of Shiba Memu. It tailors its promotions accordingly, transforming the brand from a simple cute dog meme to an amusing and engaging one, infused with a sharp sense of humor. The project’s forthcoming AI dashboards scheduled for Q4 further stimulate investor interest in meme coins with tangible utility.
The project’s tokenomics demonstrate a robust structure, with 85% of tokens allocated to the presale, 10% to exchange listing liquidity, and 5% to development. This allocation empowers SHMU holders to actively participate in the future development of the dApp.
3. Crypto Miners Are Attempting to Diversify Into Other Business Areas: JPMorgan:
Bitcoin (BTC) miners are moving into new business areas, including offering high performance computing (HPC) services to the fast growing artificial intelligence (AI) market, to reduce their dependence on crypto, JPMorgan (JPM) said in a research report Wednesday,
The cost of the new investments has been funded in part by miners selling coins in recent quarters, the report said.
Some bitcoin mining firms have rebranded to reflect the diversification, with Hive Blockchain Technologies (HIVE) becoming Hive Digital Technologies, and Riot Blockchain (RIOT) changing its name to Riot Platforms.
It’s not just miners of the world’s largest cryptocurrency, bitcoin, that are looking for new revenue streams. Former ether (ETH) miners have also shown a tendency to offer HPC services, the bank said, noting that since the Ethereum blockchain Merge, there has been a high supply of graphics processing units (GPUs) for sale in the secondary market because GPUs used for ether mining “lost their utility.”
Some ether miners sold their GPUs to salvage their investment, while some repurposed their machines for gaming, image and video rendering services, and mining other proof-of-work cryptocurrencies such as ethereum classic (ETC), ravencoin (RVN) and ergo (ERG), the note said.
“However, mining these cryptocurrencies were not as profitable as mining ether due to their lower market caps and questions about their long-term viability,” analysts led by Nikolaos Panigirtzoglou wrote.
“With the rapid growth of AI, the increased demand for high performance computing is now opening a new and perhaps more profitable avenue for utilizing GPUs previously used for ether mining,” the analysts wrote.
Bitcoin miners are also trying to diversify in terms of geography, with Russia emerging as one of the global leaders second to the U.S., in terms of bitcoin mining power consumption, the report added.
4. Bitcoin stabilizes as ETF enthusiasm tapers off:
Bitcoin and Ether fell during Monday afternoon trading in Hong Kong, along with most other top 10 non-stablecoin cryptocurrencies by market capitalization.
5. Crypto Exchange Bitget to Tighten ID Requirements as Regulators Cite Fraud Concerns:
- New customers will have to complete level 1 know-your-customer (KYC) verification starting Sept. 1.
- Regulators often criticized crypto exchanges for a perceived laxity in KYC checks, saying they lead to fraud, money laundering and terrorist financing.
Seychelles-based cryptocurrency exchange Bitget is to tighten its know-your-customer (KYC) requirements for users wishing to deposit or trade on its platform from the start of next month.
From Sept. 1, new customers will have to complete level 1 KYC verification, which involves submitting an identity document like a passport and completing facial authentication. Existing customers have until Oct. 1 to complete the process, after which time they will only be able to withdraw, cancel orders or close positions, Bitget announced on Monday.
Crypto exchanges have been criticized for a perceived lack of stringent KYC checks, with regulators saying that these lead to fraud, money laundering and terrorist financing. As a result, some exchanges have been tightening these requirements in recent months. Larger rival Kucoin introduced a similar program in June.
Bitget says it has 20 million users worldwide and has 24-hour trading volume of around $310 billion, according to data by CoinGecko. Kucoin had 27 million users as of end-2022, while the two largest exchanges, Binance and Coinbase have more than 100 million each.
6. Bitcoin and U.S. Real Yield Reach Strongest Inverse Correlation Since April:
Bitcoin (BTC) and the U.S. inflation-adjusted bond yield are again moving in opposite directions, exhibiting the strongest negative correlation in four months.
The 30-day correlation coefficient between bitcoin and the 10-year U.S. inflation-indexed security turned negative this month, declining from +0.28 to -0.72, a level last seen in April, according to charting platform TradingView. A reading of 1 implies assets are moving in lockstep, and -1 suggests the opposite.
The current reading indicates the renewed influence of traditional finance and macro factors on the bitcoin price. The negative correlation broke down in July amid optimism over the possible approval of a spot ETF.
Treasury inflation-indexed securities are indexed to inflation – the non-seasonally adjusted U.S. city average of all items consumer price index for all urban consumers. The Bureau of Labor Statistics publishes the data. The yield on these securities is called real or inflation-adjusted yield.
When real yields are negative, investors tend to seek returns from high-risk alternatives like technology stocks and cryptocurrencies, as we saw in the year following the coronavirus-induced crash of March 2020. When real yields are positive and rising, investors feel encouraged to invest in fixed-income securities.
The yield on the 10-year U.S. inflation-indexed security rose to 1.97% last week, the highest since February 2009.
Bitcoin, the leading cryptocurrency by market value, fell over 10%, registering its most significant weekly decline since early November. Gold, known to have an inverse relationship with real yields, fell more than 1%, its fourth straight weekly decline, and Nasdaq dropped 2.22%.
The outlook for risk assets, in general, has worsened due to hardening real yields, rising energy costs, concerns about China’s economy and major central banks’ commitment to keep borrowing costs higher.
7. By royal decree — the UK moves toward regulating crypto:
At the height of summer, when most policymaking grinds to a halt, the U.K. took a major step forward in its goal of becoming a crypto hub when King Charles III granted the Financial Services and Markets Bill (FSMB) the Royal Assent, formally making the bill an act of law.
Tucked within this comprehensive act — which gives regulators more powers over the financial services industry — are provisions for digital assets. The act enables the country’s treasury, the Financial Conduct Authority (FCA) and its central bank to treat crypto as a regulated activity, meaning secondary legislation can now be introduced to regulate the sector.
Other provisions include bringing stablecoins within the scope of existing payment rules and enabling the supervision of crypto promotions.
This comes as the U.K. tries to establish itself as a crypto hub after facing various stops and starts. In recent years, digital asset firms have struggled to register with the FCA, while the U.K. government halted its Royal Mint non-fungible token (NFT) plans in March. Some of the country’s biggest digital asset conferences have also now dropped capital city London as a location for their events.
Now with crypto’s inclusion within FSMB, the U.K. is seen as taking a measured approach to the industry. Venture capital firm Andreessen Horowitz (a16z) commended the government on seeing “the promise of Web3” as it set up its first international outpost in the country. U.K. Prime Minister Rishi Sunak said he’s determined to turn “the U.K. into the world’s Web3 center.”
The positive momentum has helped revitalize a deflated crypto industry, which has been grappling with the after effects of the collapse of crypto exchange FTX and its impact on regulatory uncertainty, particularly in the U.S. But while the U.K. is making all the right noises, policymakers, lobby firms and industry figures are quick to note that the country is only at the start of its regulatory journey with its biggest challenges yet to come.
8. Bitcoin Extends Losses as Global Jump in Bond Yields Deters Dip Buying:
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Bitcoin added to losses racked up during the token’s worst week since November last year as the prospect of higher-for-longer borrowing costs saps demand for riskier investments across global markets.
The largest digital asset fell almost 1% toward $26,000 as of 8:33 a.m. in London on Monday, trading near a two-month low after shedding more than 10% in the seven days through Sunday. Smaller coins like Ether and XRP also slid.
Longer term US Treasury yields are around multi-year highs, part of a global bond selloff that reflects the risk of a prolonged period of restrictive monetary settings to choke inflation. Such a backdrop portends constrained liquidity that would pose a challenge for riskier assets like stocks and crypto.
Top central bankers are due to meet in Jackson Hole this week for the Federal Reserve’s annual symposium. Fed Chair Jerome Powell’s comments due on Friday will be closely parsed for clues about the policy outlook.
“The market potentially is hoping there is going to be some dovish rhetoric coming out of Jackson Hole,” said Tony Sycamore, a market analyst at IG Australia Pty. “I don’t think they are going to be dovish.”
Sycamore expects the S&P 500 stock index to drop another 2% to 3% amid a climb in the 10-year US Treasury yield past 4.33%, with Bitcoin extending its decline to about $25,000.
The crypto industry continues to hold out hope for a tailwind from pending applications to start US spot Bitcoin and Ether futures exchange-traded funds.
“Despite the macro risk, there is a strong potential crypto catalyst in the wings: the listing of ETFs,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.
Some of the technical signals followed by chart analysts paint a mixed picture. A gauge of momentum known as the 14-day relative strength index suggests Bitcoin is close to the most oversold level since mid-2022.
An Ichimoku Cloud study — which uses mathematical formulas to help define areas of resistance and support — indicates Bitcoin may be on the cusp of a deeper retrenchment if it sinks below $25,700.
Bitcoin’s drawdown last week was the largest since the collapse of the FTX crypto exchange in the final quarter of 2022. Its year-to-date gain stands at 57%, down from 90% through mid-July.
Other metrics point to a reluctance among retail and institutional investors to engage with crypto following last year’s rout, blowups like FTX and an ever-shifting regulatory landscape.
For instance, average daily spot volumes on centralized digital-asset exchanges over the past four months were the lowest since October 2020 — when Bitcoin was at about $10,000, according to research company Kaiko.
9. DeFi Protocols Exactly and Harbor Attacked in Separate Hacks:
DeFi Exactly And Harbor Protocols Were Separately Attacked
On August 18, decentralized finance (DeFi) platforms Exactly and Harbor suffered separate attacks, as reported by blockchain security firms DeDotFi and PeckShield.
The exploits resulted in the theft of 4,323.6 Ether (ETH), equivalent to almost $7.3 million at the time, from Exactly Protocol. The hackers then moved 1,490 ETH through the Across Protocol and 2,832.92 ETH to the Ethereum network via Optimism Bridge.
Exactly Protocol operates as a crypto lender on the Optimism network. Although initial reports indicated around 7,160 ETH (nearly $12 million) was stolen, this figure was later adjusted. The attacker targeted the DebtManager contract by exploiting a malicious market contract address, evading the permit check, and executing a harmful deposit function. The protocol filed a police report and aims to communicate with the attackers for the return of the assets.
In a separate incident, interchain stablecoin protocol Harbor fell victim to an attack that resulted in losses from its stable-mint and various vaults containing stOSMO, LUNA, and WMATIC. The exact amount stolen remains unknown, and Harbor is actively tracing funds and assessing the extent of the losses.
Prior DeFi incidents include a vulnerability in the Vyper programming language leading to the theft of over $61 million from Curve Finance’s stablecoin pools, as well as losses suffered by Earn.Finance and Zunami Protocol, totaling at least $287,000 and $2.1 million, respectively.
10. NFT Platform Recur Shuts Down Despite $50M Raise and Big Name Partnerships:
NFT Platform Recur is Closing Down
NFT startup Recur has declared the winding down of its Web3 platform, attributing its decision to the challenges of the crypto winter, despite hosting major brand IPs like Hello Kitty and Nickelodeon.
Over the coming months, the core features of Recur’s platform, including NFT withdrawals, stablecoin cash-outs, and collectible trading on their marketplaces, will gradually phase out. The company acknowledged these difficulties were unexpected and mentioned shifts in the business landscape.
The NFT market’s recent setbacks are exemplified by Recur’s announcement, as the popularity of digital collectibles dwindles. Despite a promising partnership with Hello Kitty and Nickelodeon characters like Tommy Pickles, Recur’s ambitions have been curtailed. Recur was established in 2021 as a provider of Web3 “building blocks” for creating in-game assets, loyalty programs, and collectibles utilizing NFTs.
To ensure the survival of various digital collectibles, Recur plans to migrate metadata and media for its NFTs to the InterPlanetary File System (IPFS) and host other assets on Filecoin’s network. Recur Pass, once valued highly and offering early NFT access, has seen its value decrease substantially.
Although valued at $333 million in late 2021 after a $50 million Series A funding round, Recur is now facing the difficult decision to shut down.
11. Bitcoin, Ether stable after last week’s nosedive; XRP leads crypto gains; US stock futures mixed:
Bitcoin edged up on Monday morning in Asia to trade slightly above the US$26,000 support level, after sliding over 10% for the week. Ether also moved higher but remained below US$1,700 following last week’s losses. Other top 10 non-stablecoin cryptocurrencies traded mixed. XRP led the winners, despite the U.S. Securities and Exchange Commission (SEC) moving to challenge a June court ruling in favor of Ripple Labs. Meanwhile, the Forkast 500 NFT index dropped as NFT marketplace OpenSea said it will stop enforcing creator royalties from August 31. U.S. stock futures traded flat after Wall Street logged weekly losses at close of trading Friday.
12. Crypto Startup Aims to Tokenize Stocks by Playing by the Rules:
For years, cryptocurrency startups have tried to replicate parts of the US stock market on the blockchain for use by digital-asset investors around the world, often without worrying too much about getting approval from regulators first.
The latest project, however, is an attempt to turn equities into crypto tokens in a way that won’t run afoul of securities laws, and it has scored the backing of one of Wall Street’s most well-known trading firms. Susquehanna International Group joined former Coinbase Global inc. executive Balaji Srinivasan and other investors in funding the company called Dinari, based in Los Altos, California.
The co-founders of Dinari have acquired a broker-dealer in the US, subject to final approval by the Financial Industry Regulatory Authority. They’ve also registered with the Securities and Exchange Commission as a transfer agent, allowing the company to perform tasks such as distributing dividends and maintaining records of securities ownership.
“Oftentimes people, especially in the crypto space, are just afraid of regulation. And the thing is, in a lot of ways, they shouldn’t be,” Gabriel Otte, co-founder and chief executive officer of Dinari, said in an interview. “Look at the US stock exchanges. We are probably one of the highest-regulated ecosystems in the world. But it’s allowed us to flourish and grow since the 1920s into what really has become the most-robust market for securities in the world.”
The project is part of a growing list of efforts to turn real-world assets into digital tokens that trade on blockchains. Decentralized finance, the corner of the crypto world that proponents hope to make a more transparent and decentralized version of Wall Street, once offered triple-digit returns during an era of ultra-low interest rates. But the tables have turned following last year’s collapse of several lending projects and an environment of more-favorable returns in the relative safety of traditional assets.
Founded in 2021, Dinari’s flagship product, Dinari Securities Backed Tokens, or dShares, allows investors outside the US a way to use cryptocurrencies to buy shares of some of the largest US companies and exchange-traded funds, including Tesla Inc., Walt Disney Co. and Nvidia Corp. The platform, which went live earlier this month, is offered under Regulation S, a set of rules that allows for SEC-compliant sales of securities to overseas investors.
Unlike some previous projects, these tokenized stocks are backed one-to-one by real-world shares purchased by Dinari. The company uses Alpaca Securities LLC and Interactive Brokers Group Inc. for custody of the actual equities.
The most well-known previous efforts to tokenize US stocks included the Mirror Protocol built on the Terra blockchain. Those unregistered tokens drew SEC scrutiny even before the collapse of Terra’s stablecoin caused some $40 billion in losses and triggered a global manhunt for the project’s co-founder, Do Kwon. Kwon is currently serving a four-month sentence in Montenegro for traveling on a fake passport, and both the US and South Korea are seeking his extradition to face charges for his alleged role in the stablecoin’s failure to maintain its intended $1 value.
Read: SEC Seeks to Question Do Kwon’s Terra Co-Founder in South Korea
Dinari has raised $7.5 million in seed investment from investors including SPEILLLP, which is a Susquehanna International Group company, venture-capital firm 500 Global, former Coinbase chief technology officer Srinivasan and VC investor Sancus Ventures.
Once a user is verified by Dinari according to “know your client” rules, the investor can purchase tokenized shares by paying with stablecoins such as USDC. Token holders earn dividends, but cannot vote directly as shareholders. The platform collects a fee from every purchase.
Every trade on Dinari can be monitored by anyone, thanks to the underlying blockchain technology. Otte said they are looking for a third-party auditor.
Dinari has its work cut out for it when it comes to creating anything that remotely resembles the functionalities of the world’s largest stock market.
Holders of the stock tokens initially can only sell them back to Dinari. The platform’s goal is that the tokens will be widely used in the crypto market — either as collateral for borrowing or by swapping them for other security tokens. Purchases of the tokens are not available outside of US trading time. And according to Jake Timothy, co-founder and chief technology officer, Dinari is non-custodial, meaning that users need to hold the tokens in their own digital wallets.
Navigating securities laws around the world will also be a challenge. Dinari faces “complex regulatory landscapes across jurisdictions,” said Lake Dai, founder and managing partner at Sancus Ventures, one of the project’s investors.
“The end game of Dinari is to use our broker-dealer licenses to be able to have an operating exchange where these securities can be traded,” Chas Rampenthal, co-founder and chief legal officer of Dinari, said in an interview. “In order to run, you have to walk, and in order to walk, you have to crawl,” he said. “This is kind of our way of getting started.”