In an unfolding legal battle against two major cryptocurrency exchanges, Coinbase and Binance, the United States Securities and Exchange Commission (SEC) has declared various tokens as securities. These tokens include SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO in the case against Coinbase. For Binance, the list features SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI.
This declaration by the SEC highlights its ongoing effort to regulate the cryptocurrency market and could have substantial implications for these tokens and their holders. If the SEC succeeds in classifying these tokens as securities, it would subject them to more stringent regulatory rules and obligations.
Barry Silbert, the founder of Digital Currency Group (DCG), commented on the situation via Twitter, noting, “No Proof of Work tokens in any of the lawsuits, I believe (BTC, LTC, XMR, ETC, ZEC, etc.).” Silbert’s tweet refers to the SEC’s decision to not include tokens that use Proof of Work (PoW) consensus mechanism in their lawsuits. This includes Bitcoin (BTC), Litecoin (LTC), Monero (XMR), Ethereum Classic (ETC), and Zcash (ZEC), among others.
The implication of Silbert’s statement suggests that the SEC might be differentiating between PoW tokens and other tokens. This differentiation could lead to different regulatory standards and implications for tokens depending on their underlying consensus mechanism.
This ongoing case and the SEC’s decisions could set a precedent for future regulations and classifications in the crypto market. As such, all eyes within the crypto community are keenly focused on the developments. It is yet to be seen how these decisions will shape the regulatory landscape of digital assets.
The Securities and Exchange Commission (SEC) has leveled a series of accusations against the US operations of cryptocurrency exchange Binance, casting a significant cloud over the future of the platform in the United States.
In a formal complaint, the SEC claimed that Binance US facilitated trading in a range of tokens identified as securities without the requisite permissions. The assets in question include Binance Coin (BNB), Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity Shards (AXS), and Coti (COTI).
The SEC’s allegations also extend to investment schemes run by the platform. Binance’s BNB Vault and Simple Earn programs, as well as a staking investment plan, are accused of having operated outside of US regulatory oversight.
The accusations seem to point to a fundamental charge of intentional evasion of US supervision by Binance, a claim that could carry significant implications for the cryptocurrency exchange’s operations within the country.
However, it is important to clarify the nature of these charges. The allegations brought forth by the SEC, as well as those by the Commodity Futures Trading Commission (CFTC), against Binance are civil, not criminal in nature. This marks a distinction from the money laundering charges faced by other exchanges such as BitMEX in previous cases.
The fallout from the accusations is yet to be fully realized, but this could mark a pivotal moment in the ongoing tug-of-war between cryptocurrency exchanges and regulatory bodies. As Binance contends with these accusations, the crypto industry will no doubt be watching closely, aware that the outcome could have far-reaching implications for the future of digital asset trading in the United States.
Digital asset manager CoinShares says last week’s crypto market recovery was accompanied by significant institutional investment inflows for several large digital assets.
According to the latest Digital Asset Fund Flows Weekly report, the largest crypto by market cap, Bitcoin (BTC), enjoyed last week’s largest share of institutional investments.
“Bitcoin continues to lead the inflows with US$71m last week, the largest since early December with this 3-week run of inflows totaling US$108m. Volumes in Bitcoin investment products remained low last week at US$1.8bn versus US$3.4bn the previous week.”
Leading smart contract platform Ethereum (ETH) suffered its ninth consecutive week of outflows, losing $8.5 million in institutional investments last week.
“Investment products flows for Ethereum suggest investors remain bearish with outflows of US$8.5m, having entered the 9th week run of outflows totaling US$280m…”
Meanwhile, Ethereum challengers Solana (SOL), Polkadot (DOT), Terra (LUNA) and Cardano (ADA) all saw inflows totaling $2.4 million, $2.2 million, $1.4 million and $1.1 million, respectively. This was the first week of significant institutional investor inflows for LUNA.
Source: CoinShares
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/PHOTOCREO Michal Bednarek
Morgan Creek Capital Management’s Mark Yusko is naming four crypto assets that he believes could withstand a market downturn relatively well.
According to a Business Insider report, Yusko says that the native tokens of smart contract-enabled blockchains Solana (SOL), Avalanche (AVAX), Cosmos (ATOM) and Polkadot (DOT) are among the crypto assets capable of surviving a bear market.
In the case of Solana, the Morgan Creek founder says that the seventh-largest blockchain by market cap is a “great protocol.”
“There’s probably still some potential volatility in the price ahead. But long term, I think it’s a great protocol.”
According to Yusko, cryptocurrencies will be in a bear market for the next 12 months or so before the next Bitcoin halving event kicks off a bull cycle.
“What you’re seeing is crypto is definitely in a bear cycle. It’s going to struggle for the next 12-ish months then we’ll go back to the next bull cycle triggered by the next halving event.”
The last Bitcoin (BTC) halving event occurred in May of 2020. The next one is expected to take place during the first six months of 2024.
Yusko also says that Bitcoin is not correlated to stocks though it might appear to be so on shorter time frames. For instance, Bitcoin is down 7.77% year-to-date compared to the tech-heavy Nasdaq which has fallen 9.89% year-to-date in the wake of the Federal Reserve’s intentions to hike rates.
“You can’t calculate correlation over the short-term. Just the math doesn’t work. And so yes, it is true that in times of stress, ‘all correlations go to one.’
Zoom out, the correlation of Bitcoin to equities is 0.15 for long periods of time. Some weeks, some months, it goes higher, but over the long term, it’s still 0.15 and to bonds, it’s 0.”
Correlation can take a value of between -1 and 1. The higher the value, the stronger the correlation, and the lower the value, the weaker the correlation.
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Polarpx/Natalia Siiatovskaia
New data reveals that Ethereum challenger Polkadot (DOT) consumes the least amount of electricity out of any leading blockchain.
According to new research conducted by the Crypto Carbon Ratings Institute (CCRI), the interoperable blockchain platform uses less power than other popular crypto assets such as Bitcoin (BTC), Ethereum (ETH) and Solana (SOL).
The institute found that DOT consumes just 6.6 times the electricity the average US household uses in a year, making it the least power-draining digital asset among the top chains.
For comparison, ETH uses 1.6 million times what the average US household uses in electricity while that number jumps up to 8.6 million for BTC, according to the CCRI.
“An average US household consumes about 10,600 kWh per year and therefore, the least electricity consuming network Polkadot consumes about 6.6 times the electricity and the most electricity consuming network Solana about 200 times the electricity (U.S. Energy Information Administration, 2021)…
Bitcoin consumes much more electricity than any Proof of Stake system due to its Proof of Work consensus mechanism, resulting in the deployment of energy-intensive hardware.”
Source: Crypto Carbon Ratings Institute
The data shows leading smart contract platform ETH is right behind BTC in terms of power usage, followed by other layer-1 protocols SOL, Cardano (ADA), Algorand (ALGO), Avalanche (AVAX) and Tezos (XTZ).
“Algorand consumes up to the factor of 9 compared to other cryptocurrencies such as Cardano and Polkadot. Tezos is in between these two groups. It consumes up to factor 5 of the low-energy blockchains, but only about 50% of Algorand’s consumption.”
Polkadot is exchanging hands at $21.45 at time of writing, an 23% increase from its seven-day high of $17.42.
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Space creator/monkographic
This week in coins. Illustration by Mitchell Preffer for Decrypt.
After a veryrocky start to the year, crypto price watchers finally saw the start of a promising recoverylast week. This week, prices continued to rise. In fact, today’s growth alone has been particularly noteworthy: The global crypto market cap climbed 10% in just 24 hours, to hit $1.9 trillion.
The two market leaders posted noteworthy gains this week. Friday, Bitcoinrecrossed the $40k threshold, and it sustained that growth well into Saturday. The world’s most popular cryptocurrency has grown 8.8% over the last week and currently trades at $41,460.
But Bitcoin’s growth has been overshadowed by Ethereum, which grew 16% this week and trades at $3,015.
In fact, all top 30 cryptocurrencies (excluding stablecoins) are up this week, except for Fantom, which lost 0.6% and trades at $2.16.
The biggest successes of the week are: Solana, up 17% to $115; Polkadot, up 15% to $21.60; Avalanche, up 10% to $78.36; Litecoin, up 10% to $121.95; Near Protocol, up 18% to $13.29; and Decentraland, up a whopping 26% to $2.99.
News of the week
On Monday, the International Monetary Fund’s financial counselor, Tobias Adrian, warned of creeping ‘cryptoization,’ his term for cryptocurrency crossing over into the financial mainstream. The senior official said “capital flow management measures will need to be fine-tuned.”
Adrian highlighted some of the risks we’re facing: “Crypto is being used to take money out of countries that are regarded as unstable [by some external investors].”
Adrian also noted that Bitcoin is now showing a strong correlation with traditional financial markets: “The correlation between crypto and equity markets has been trending up strongly. Crypto is now very closely tied to what is happening in equities. We can’t just dismiss it.”
On the same day, JP Morgan senta note to investorswarning that Bitcoin is still too volatile for mass institutional adoption. Meanwhile, Ethereum, which has enjoyed second place in the market cap table thanks largely to the NFT and DeFi capabilities of its smart contract-enabled blockchain, is facing pressure from competitors like Solana and Terra.
On Tuesday, Indian finance minister Nirmala Sitharaman announced a30% tax on crypto incomewith no exemptions or deductions. Investors filing their tax returns won’t be able to show losses due to price crashes or theft in order to offset the tax on their profits.
At the same time, Sitharaman said that the Reserve Bank of India (RBI) will introduce a digital rupee in the next financial year. The minister confirmed that this will be a blockchain-basedCBDC, but gave no further details.
The British government updatedthe ruleson DeFi and staking on Wednesday. Her Majesty’s Revenue and Customs (HMRC) confessed that “it is not possible to set out all the circumstances in which a lender/liquidity provider earns a return from their activities and the nature of that return,” and offered crypto investors four “guiding principles” to help them fill out their tax returns. (Across the pond, a U.S. lawsuit may have implications for how the Internal Revenue Servicetaxes staking rewards.)
Finally, Meta (formerly Facebook) had a tough week.Shares plummeted 21%in pre-market trading on Thursday. CEO Mark Zuckerberg blamed a fall in projected first-quarter earnings on “increasing competition,” particularly from TikTok, but the billions Meta has thus far spent in developing its metaverse pivot could also be a major factor in the expected shortfall.
Meta was also hit by allegations of verbal abuse and sexual harassment during atech demofor the company’s virtual reality metaverse. Add to that the fact that the company’s “borderless global currency” Diem is nowdead in the water: Meta officially announced it was selling off all of the project’s assets and intellectual property to Californiancrypto-friendly bank Silvergate.
Still, in spite of, or perhaps because of Meta’s bad news, Metaverse-related tokensare surging right now.
Crypto analyst and host of Altcoin Daily Aaron Arnold is eyeing a popular layer-1 smart contract platform to possibly have a breakout year in 2022.
In a new video, the closely followed trader tells his 1.21 million subscribers that Avalanche (AVAX) looks primed to give fellow Ethereum (ETH) competitor Solana (SOL) a run for its money as Solana rebounds from network overload issues last month.
“I think [Avalanche] has the potential to flip Solana, whether it’s in the short term, mid-term, or long term.
I think it has a strong potential future.”
The Altcoin Daily host says that AVAX might also flip Ethereum in terms of transaction volume.
“Obviously Ethereum is the leader for layer-1, open-source DApp [decentralized application] platforms, but… daily transactions of Ethereum and AVAX, the difference here is now just 3% or 33,000 transactions.
AVAX is looking like it’s about to flip Ethereum in transactions, which is a pretty big deal, pretty big metric.”
Arnold next highlights the variety of niches within the crypto space that Avalanche now services.
“The AVAX ecosystem [is] one of the biggest in the space. Huge DeFi [decentralized finance] sector bringing over tons of people from Ethereum’s DeFi sector.
Big NFT [non-fungible token] and gaming sector. We have tooling DApps, privacy wallet…
AVAX is certainly one to watch.”
The YouTube personality also mentions how Avalanche is taking a cue from Ethereum’s successful token-burning mechanism.
“It’s worked out so well [for Ethereum that] AVAX is… doing their own version where they have their own burning mechanism as well.
Supply is reduced in AVAX as AVAX is burned, from transaction fees, creation of assets, creation of blockchains, creation of subnets.
Bull case for Avalanche is that it has a fixed-cap supply like Bitcoin. Not as decentralized as Bitcoin but its tokenomics are similar in that it’s fixed and capped, unlike Ethereum which is not capped.”
Arnold then references a post from the official Avalanche Twitter account which notes that over 700,000 AVAX have been burned including all transaction fees, before concluding,
“I want you to put AVAX on your radar today as a possible 2022 gem.
I think we’re going to see AVAX’s momentum continue.”
Avalanche is up an impressive 12.1% to $75.79 at time of writing, having rallied from a monthly low under $60 two weeks ago. AVAX began the year trading for $110.70.
[embedded content]
I
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Ana Aguirre Perez/Nikelser Kate/monkographic
Ethereum and Solana have both enjoyed healthy gains over the last day.
Ethereum, the second-largest crypto network after Bitcoin, is currently up over 8%. Solana, another smart contract-enabled network, is up a whopping 11%.
These double-digit recoveries come shortly after one of this year’s largest exploits.
Wormhole, a crypto bridge protocol that lets different networks interact with each other, washacked for $320 millionin Wrapped Ethereum on Wednesday.
Wrapped Ethereum is a cryptocurrency that is pegged (and backed) 1:1 to the price of Ethereum and is interoperable with other Wormhole-compatible networks, like Ethereum, Solana, Avalanche, Binance Smart Chain, Polygon, and more.
The attacker was able to freely mint 120,000 Wrapped Ethereum without needing to stake an equivalent amount of Ethereum.
Though the exploit was primarily related to how Wormhole and Solana were linked (rather than an explicit bug in Solana itself), the SOL token plummeted.
And just to clarify – this was not a “Solana bug” in the same way as “theDAO hack” was not an “Ethereum bug”. Both Ethereum (EVM) and Solana are tools and it takes quite some time till people learn how to use those tools safely. And the EVM is simply a few years ahead here.
— Martin Köppelmann (@koeppelmann) February 3, 2022
Shortly after the hack, SOL fell from $111 to $97, before dropping to $95 on February 3.
The nature of the hack also meant that existing WETH on the Solana network (ported over through Wormhole) was essentially unbacked, as the attacker was able to mint the asset without staking the underlying token.
To calm markets and return this backing, Jump Crypto, a crypto trading house based in Chicago, stepped in to fill the deficit.
.@JumpCryptoHQ believes in a multichain future and that @WormholeCrypto is essential infrastructure. That’s why we replaced 120k ETH to make community members whole and support Wormhole now as it continues to develop.
— Jump Crypto 🦬 (@JumpCryptoHQ) February 3, 2022
The president of Jump Crypto, Kanav Kariya,saidthat “Jump put up 120k of its own ETH because we believe in Wormhole and want to support it in this stage of its development. And we’re going to come out stronger than ever.”
He added that a detailed incident report from Wormhole would soon be released.
Since then, both Solana and Ethereum have rebounded. SOL is currently back trading just above $105 and ETH is holding about $2,837.
An executive at Santiment crypto analytics firm is analyzing a handful of altcoins that surged in price earlier this week but have since corrected.
In a new YouTube video, Santiment director of marketing Brian Quinlivan says that the 30-day market value to realized value (MVRV) metric is helpful when hunting for crypto bargains.
The MVRV metric reveals the average profit/loss for coins in circulation.
According to the analyst, decentralized crypto exchange Uniswap (UNI) falls into a “good opportunity zone,” right now in terms of its 30-day MVRV.
“We typically look for anything below 15% to be a good opportunity zone, and we definitely jumped way below 15% there… we are well into the opportunity zone still for Uniswap.”
Uniswap, however, has seen surging inflow onto exchanges, with exchange supply going up accordingly, Quinlivan explains. The analyst says this development is “a little bit concerning.”
Quinlivan says whales have been accumulating the governance token of Aave (AAVE), a DeFi lending protocol. The analyst says that’s “a good sign from the key stakeholders” of the crypto asset. He adds that AAVE is displaying a few more bullish metrics than Uniswap.
Quinlivan notes that investors appear to be shorting virtual reality platform Decentraland (MANA) on the crypto exchanges Binance and FTX.
The crypto analyst notes this actually is an optimistic development for the crypto asset.
“It’s pretty cyclical, and right now, this is one of the most bullish metrics for MANA, because there’s such an immense amount of shorting that… these huge spikes are bound to be liquidated at some point because people shorting to this extent usually doesn’t go too well.”
However, Quinlivan also notes that Decentraland’s MVRV and on-chain metrics look bearish.
The crypto analyst says development activity on the smart-contract platform Solana (SOL), measured by daily GitHub submissions, has been on the rise in the past year.
“The daily GitHub submissions is sitting at about a little over 500 a day right now, after… a year ago being at 190. So that’s a very good sign, and it’s indicative of the fact that Solana’s team still believes in improving the product, innovating where possible, and they believe that it has long-term sustainability, and that’s a really great thing to keep in mind when it comes to any asset.”
Solana’s native token, SOL, is trading at $97.90 at time of writing, down 10.35% in the past day.
[embedded content]
I
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Pavel Chagochkin/Natalia Siiatovskaia/Tun_Thanakorn
Smart contract platform Solana (SOL) is launching a new peer-to-peer payments feature that lets customers directly pay merchants.
According to an announcement by Solana Labs, consumers can now deposit cryptocurrencies or fiat dollars directly into vendor accounts for less than the cost of a penny using Solana Pay, cutting out the need for expensive intermediaries and middlemen.
“Solana Pay, a new payments protocol, ushers in a new era of payments and commerce. Our team helped create the building blocks for a decentralized, open and truly peer-to-peer payment protocol.
We believe this will pave the way for a future where digital currencies are prevalent and digital money moves through the internet like data – uncensored and without intermediaries taxing every transaction.”
Solana Pay would also serve as a communication hub between buyers and sellers.
“The core premise behind Solana Pay is that the payment and underlying technology goes from being a necessary service utility to true peer-to-peer communication channel between the merchant and consumer.”
Solana Labs says that the next phase of the feature would allow merchants to send digital assets directly back to customers.
“The next phase of development of the protocol will enable merchants to send digital assets back to the consumers which will open up new capabilities in commerce not possible before…
When a customer buys something, it’s a vote of support. A merchant should reward that support with personalized offers, on-chain loyalty programs, and unique virtual goods to accompany physical purchases.”
Solana is exchanging hands at $98.12 at time of writing, a 12% increase from its seven-day high of $87.63.
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
