Here comes Friday, October 13th. As the week comes to an end we can focus on the highlights of the crypto industry over the past few days.
Bitcoin’s market dominance hits two-year high
The alpha cryptocurrency’s market dominance index (BTC.D) reaches 51.1%, inching closer to April 2021 levels, according to data provided by TradingView.
BTC.D peaked at roughly the same values as it did in June this year, but quickly corrected.
Based on data from CoinGecko, the digital gold is trading at $27,100 as of this writing – the asset has surged 66% over 2023. The total capitalization of the coin amounts to $528.8b.
Its closest competitor in terms of market cap, Ethereum, saw its increase by only 32% over the same period. The asset’s exchange rate is now $1554.
Bitcoin has been adrift in the flat over the previous week, demonstrating extremely low volatility. Most altcoins are still in the red.
André Dragosch, Deutsche Digital Assets Head of Research, told The Block that the ether underperformance is due to the “lukewarm reception” of recently launched Ethereum Futures ETFs based on the second most capitalized cryptocurrency.
“In aggregate, Ethereum ETPs only attracted a meager plus $0.9 million in net inflows last week despite the debut of these new ETFs. In comparison, net inflows into Bitcoin ETPs amounted to plus $85.4 million last week,” Dragosch added.
Earlier, a CryptoQuant expert dubbed Maartunn said that the BTC exchange rate is expecting a “a significant price surge” should it adjust above $27,900. The level corresponds to the MVRV indicator as applied to short-term market participants.
As you may remember, back in September, SkyBridge Capital founder Anthony Scaramucci projected a bullish decade for the first-ever crypto. The investor suggested that the worst events in the current bear market are now over.
Binance CEO $1b plan to save crypto market went down the drain
The founder of the renowned crypto exchange Changpeng Zhao failed to fulfill his initiative of setting up a $1 billion fund to revitalize the industry after the collapse of FTX, Bloomberg reports.
Zhao’s back-up plan was to raise a massive amount of money from major industry players. During the G20 summit, the founder of the exchange reiterated the importance of protecting users and urged cooperation.
Binance stressed that about 18 companies took part in the effort, but only nine of them have been publicly listed.
According to Bloomberg, the initiative was only able to generate $64m. So far, only one of the named participants has invested all of the promised funds.
The organization was not structured as a foundation. Contributors disposed of the money they received as they saw fit.
“It’s a matter of accountability, and there wasn’t much of that for this recovery fund,” said Clara Medalie, director of research at blockchain analytics firm Kaiko.
In total, Zhao’s initiative sponsored 14 projects that were not outlined in public. The company added that Binance has transferred $985m of the fund’s investment back to corporate treasury and now plans to use it for investments.
Approximately $32.4m remains in public crypto wallets linked to the company.
It should be noted that Binance also continues to suffer from market-related challenges. In September, its spot market share dropped by as much as 34%. The index shows a downward trend for the seventh consecutive month.
SEC: crypto has no intrinsic value
Cryptocurrencies have no “innate or inherent value”. This statement was made by SEC representative during a hearing on the regulator’s case against Coinbase, Decrypt says.
As an outcome of the hearing, the judge rejected the agency’s request for summary judgment. The filing was the response to the platform’s appeal to dismiss the SEC’s lawsuit.
Coinbase then clarified, citing the Howey test, that cryptocurrencies in the secondary stock market do not form part of any agreement under which a sale of a contract-linked asset is made. Moreover, token issuers do not have any obligations to investors.
The SEC noted that many cryptocurrencies are distinct from each other simply because they “have no innate or inherent value of its own.” However, the tokens brought in the lawsuit meet the criteria of the Howey test.
Coinbase previously brought to mind that it has complied with all regulatory requirements throughout the years and repeatedly seeked direct guidance from the SEC on the enforcement of the federal securities laws as they relate to the crypto industry.
In a separate document, Coinbase alleged a violation of its due process rights and a possible violation of the core-issues legal doctrine on the part of the Commission. The exchange requested a seven-week deadline for filing its motion, objecting to the regulator’s response, and its own response thereto.
You may recall that Coinbase refused to change its business model due to the SEC’s complaint.
Bitfinex owner to make $150m share buyback
Hong Kong-based iFinex, the holder of crypto exchange Bitfinex, is considering a $150 million buyback of the platform’s shares, Bloomberg reports.
iFinex proposed $10 each for each of the exchange’s 15 million securities. As per the documents, the deal amounts to 9% of the firm’s outstanding capital with total value of $1.7b.
The viability of the offering is dependent on cash inflows from at least one of iFinex’s affiliates.
The initiative is targeted at shareholders who bought shares under an exchange agreement with investment platform BnkToTheFuture concluded in 2016. That same year, about 71 million BTC was stolen from Bitfinex as a result of a hack, estimated to be worth about $2b as of this writing.
The buyback is a result of the organization’s “positive performance” over the past few years, the company said in a statement. Several executives of iFinex and its subsidiaries will be permitted to participate in the deal.
Both Tether and Bitfinex CFO Giancarlo Devasini is listed in the document as a direct shareholder.
According to the terms, there is no minimum threshold for the exchange’s shares put up for sale. iFinex is ready to buy any number of securities within the $150m limit.
Earlier, the media reported that Bitfinex holds digital gold on its balance sheet. According to insiders, the platform has historically retained a portion of fees from bitcoin transactions “as a long-term commitment to the world’s first and largest cryptocurrency.”
In May, the exchange-linked Tether Limited revealed that it owned the first-ever crypto worth $1.5 billion. The USDT issuer later announced that it would regularly allocate up to 15% of its net realized operating profit to bitcoin purchases.
Note that in July, US authorities refunded Bitfinex $314,000 seized due to the hack.