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Bitcoin, Blockchain

Metaplanet sells put options to grow Bitcoin stash by nearly 24 BTC

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Bitcoin investment firm Metaplanet said it sold 233 BTC put options and earned a premium of 23.97 BTC, according to an Oct. 3 statement.

The firm stated it sold 223 contracts for $62,000 BTC put options, set to expire on Dec. 27, 2024. These contracts were fully backed by $13.8 million generated from Metaplanet’s 11th stock acquisition rights exercise.

A put option is a type of financial contract that gives the buyer the right, but not the obligation, to sell a specific stock or asset at a set price (called the strike price) within a specific time period.

Each contract earned Metaplanet 0.1075 BTC in premiums, accumulating to a total of 23.97 BTC. This income brought the firm’s total Bitcoin holdings to 530.72 BTC, acquired at a cost of ¥4.965 billion (around $33.8 million).

Metaplanet revealed it had entered into this agreement with QCP Capital, a Singapore-based digital asset trading firm.

Why Metaplanet is pursuing this strategy

Metaplanet explained that its goal was to leverage Bitcoin’s volatility to generate income while keeping its cash-secured position. It stated:

“This strategy not only enhances the Company’s Bitcoin reserves but also reinforces its balance sheet, aligning with our ongoing financial strategy to strengthen long-term Bitcoin exposure and improve the Company’s financial position, supporting its path toward profitability.”

Metaplanet CEO Simon Gerovich highlighted the strategy’s alignment with the company’s broader goals. He emphasized that this approach allows them to grow their Bitcoin holdings without solely relying on direct purchases.

Gerovich explained that while most of their assets remain in Bitcoin, using some for options strategies helps generate additional income. This dual approach allows them to increase holdings while benefiting from a steady income stream.

The strategy also supports Metaplanet’s aim to generate annual profits and increase shareholder value, all while maintaining its focus on Bitcoin.

He concluded:

“Metaplanet remains committed to being a Bitcoin-only company, focused on maximizing our long-term exposure to this transformative asset. By utilizing both direct holding and yield-generating strategies, we position ourselves to capitalize on Bitcoin’s growth potential while maintaining a stable and profitable foundation.”

Uncategorized

Latest data reveals global economic downturn, building stronger case for Bitcoin

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Global economic data released today shows slowing growth across major economies, potentially impacting crypto markets and building the longer-term case for Bitcoin. Purchasing Managers’ Index (PMI) figures from Australia, Japan, and the Eurozone indicate contractions or weakened expansions in both manufacturing and services sectors.

Global economic slowdown highlights the long-term case for Bitcoin

As economies grapple with slowing growth and central banks consider accommodative monetary policies, fiat currencies may face devaluation risks. 

High inflation rates in countries such as Turkey, where annual inflation has reached 49.38%, further erode confidence in conventional monetary systems. From a Bitcoin advocate’s perspective, these developments highlight the appeal of Bitcoin as a decentralized store of value that is insulated from government-induced inflation and monetary policy shifts.

Moreover, the persistent economic uncertainties and divergent policy responses could lead investors to seek refuge in assets not correlated with traditional markets. 

Bitcoin’s fixed supply and decentralized governance model offer an alternative to fiat currencies that are susceptible to long-term inflationary pressures and political influence.

As global trade tensions and supply chain disruptions continue to affect economic stability, Bitcoin provides a reliable, borderless financial tool. 

Advocates argue that integrating Bitcoin into the global financial system could mitigate systemic risks, promote financial inclusion, and offer a hedge against macroeconomic instability.

Latest global economic data release paints a concerning picture

Data from the Trading Economics financial calendar today revealed Australia’s Judo Bank Composite PMI fell below the 50 threshold to 49.6, signaling contraction, while the Services PMI dropped to 50.5. 

The trade surplus remained steady at A$5.644 billion, but both exports and imports declined by 0.2%. This stagnation may reflect weakened global demand, potentially influencing commodity prices and, consequently, the value of commodity-backed tokens.

Japan’s Jibun Bank Composite PMI decreased to 52.0, with the Services PMI at 53.1, suggesting a deceleration in growth. Reduced consumer spending and business activity could affect investor sentiment in digital assets as Japan looks to play a significant role in crypto adoption and regulation.

In the Eurozone, Germany’s HCOB Composite PMI remained in contraction at 47.5, and France’s Composite PMI declined to 48.6. 

Spain showed resilience with a Composite PMI of 56.3, indicating robust expansion. The overall Eurozone Composite PMI stood at 49.6. Negative Producer Price Index (PPI) year-over-year figures in the Eurozone, at -2.3%, suggest deflationary pressures that may influence European Central Bank policy decisions. 

Adjustments in monetary policy could affect the euro’s exchange rate, impacting crypto trading pairs involving EUR.

Turkey’s inflation rate remains elevated at 49.38% year-over-year, with a monthly increase of 2.97%. 

Persistent inflation may erode purchasing power, leading investors to consider cryptocurrencies as a hedge against currency devaluation. High inflation environments have historically driven interest in Bitcoin and other digital assets due to their decentralized nature and limited supply.

South Africa’s S&P Global PMI improved slightly to 51.0, indicating modest expansion. 

Economic stability in emerging markets may affect investor confidence in regional crypto initiatives and blockchain projects. Increased adoption in these regions could contribute to the global growth of DeFi platforms.

Russia’s S&P Global Composite PMI dropped below 50 to 49.4, suggesting a contraction in business activity. 

Ongoing geopolitical tensions and economic sanctions may exacerbate economic challenges, potentially influencing global energy markets. Given that Russia is an increasing player in crypto mining due to its energy resources, disruptions could impact mining operations and the broader crypto ecosystem.

The United Kingdom’s S&P Global Composite PMI decreased to 52.6, reflecting slower growth. The Bank of England’s policy responses to these trends could impact the pound’s value, affecting crypto trading pairs involving GBP. 

Monetary policy adjustments may also influence institutional investment strategies related to digital assets as investors seek diversification amid economic uncertainties.

Impact on the broader crypto market

Fluctuations in global economic performance may lead to increased volatility in crypto markets in the shorter term. Investors might adjust their portfolios in response to central bank policies and economic indicators, affecting liquidity and trading volumes. 

As traditional markets exhibit signs of instability, cryptocurrencies can either serve as alternative investment vehicles or face correlated declines due to broader risk-off sentiments.

Per the latest data, market participants should monitor future economic developments closely, as shifts in global conditions may have increasing short-term effects on crypto markets. 

The interplay between macroeconomic factors and digital asset markets spotlights the importance of staying informed in a tentatively balanced financial landscape.

Blockchain, Business, defi, NFT

Tokenized funds get preliminary approval to be used as collateral in the US

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A subcommittee of the Commodity Futures Trading Commission’s (CFTC) Global Markets Advisory Committee voted to approve guidelines for using tokenized shares of money-market funds as collateral for traditional financial operations.

As reported by Bloomberg on Oct. 2 citing an anonymous source, the recommendations aim to integrate blockchain technology in managing non-cash collateral consistent with margin requirements set by US regulators and derivatives clearing organizations.

If approved by the full committee later this year, the recommendations could significantly increase the adoption of tokenized collateral on financial markets. Moreover, it would improve the capital efficiency of companies looking to use tokenized collateral.

This movement benefits BlackRock’s tokenized fund BUIDL and Franklin Templeton’s FOBXX.

BUIDL currently leads the tokenized US treasuries market, with over $518 million in market size, as per rwa.xyz data. Meanwhile, FOBXX holds $435 million in market share.

Notably, BUIDL and FOBXX are the two largest tokenized money-market funds, holding nearly half of the $2.3 billion tokenized US treasuries sector.

Additionally, besides BlackRock, the subcommittee includes members such as Citadel, Bank of New York Mellon, and Bloomberg LP.

DeFi applications looking for integrations

Decentralized finance (DeFi) applications are already looking for the benefits created by merging traditional finance products and blockchain features.

Leading money market Aave proposed a new GHO Stability Module (GSM) on Aug. 26, which would use BUIDL shares to keep its stablecoin pegged to the US dollar.

The proposal consisted of using USD Coin (USDC) provided by users as collateral to get GHO to buy BUIDL shares and lock them in a smart contract.

The benefits, according to the proposal content, are two-fold: GHO’s backing gets diversified with real-world assets, while BUIDL yields create value accrual for stablecoin holders.

Moreover, stablecoin issuer Ethena Labs announced a new stablecoin completely backed by BUIDL, the UStb.

Using a real-world money-market fund deployed on-chain, Ethena wants to provide a more stable alternative to its funding rate-backed stablecoin USDe.

Uncategorized

CFTC loses appeal as US court greenlights prediction markets involving elections in Kalshi case

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The United States Court of Appeals for the District of Columbia Circuit ruled that prediction markets that allow betting on US elections are legal.

The decision came in an Oct. 2 ruling that rejected an appeal made by the US Commodity Futures Trading Commission (CFTC) urging the court to issue an administrative stay in a previous ruling against the regulator in its case versus prediction market Kalshi.

The court determined that the CFTC failed to prove that the public would suffer irreparable injury from the offering of US elections-based contracts.

Tarek Mansour, founder of US-based prediction market Kalshi, shared on X:

“US presidential election markets are legal. Officially. Finally. Kalshi prevails.”

As a result, Kalshi can now resume offering US election-related contracts. Nevertheless, a new motion for a stay can be renewed if

“substantiating evidence arises,”

the Circuit judges highlighted.

The CFTC prohibited Kalshi from offering political-related contracts on its platform on Sept. 22, 2023, after the prediction market asked the regulator to list a contract based on which party would control the US Congress this year.

Thus, the prediction market sued the CFTC, claiming that the regulator’s prohibition was outside its authority. Judge Cobb then sided with Kalshi, leading to the motion for a stay.

A potential win for crypto platforms

US lawmakers urged a CFTC crackdown on US elections prediction markets in a letter to Chair Rostin Behnam on Aug. 5.

Among the eight legislators who signed the document were Senators Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), and Sheldon Whitehouse (D-RI), along with Representatives Eleanor Holmes Norton (D-DC) and Jamie Raskin (D-MD).

The document claimed that elections are not a for-profit enterprise and that enforcement action against the platforms offering these contracts would “restore trust” in the elections.

On the other hand, Congressman Richie Torres also addressed a letter to CFTC Chairman Behnam asking for the regulation of prediction markets related to elections instead of the prohibition proposed by lawmakers in August.

The recent legal win by Kalshi might favor crypto-native prediction markets, such as BET and Polymarket, in case the CFTC decides to comply with the enforcement call.

Bitcoin, Markets

Bitcoin’s Q4 rally uncertain amid weak demand signals – CryptoQuant

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Bitcoin (BTC) has entered its historically favorable fourth-quarter period, but the potential for a strong rally remains uncertain due to weak demand growth, according to an Oct. 2 CryptoQuant report.

The report noted that while Bitcoin typically performs well during the fourth quarter in halving years, the lack of significant demand recovery may hinder its ability to reach projected price targets of $85,000 to $100,000.

Since July, Bitcoin’s demand has stagnated, fluctuating between -23,000 and +69,000 Bitcoin monthly. This stands in stark contrast to the surge in April when demand increased by 496,000 Bitcoin, propelling prices to nearly $70,000.

The current flat demand poses a risk for Bitcoin’s fourth-quarter performance, despite its historically positive seasonality during halving years like 2016 and 2020, when prices rose by 59% and 171%, respectively.

Mixed signals

The recent activity in US-based spot exchange-traded funds (ETFs) offers some hope for renewed demand despite providing mixed signals over the last few months.

On Sept. 26, spot ETFs net purchased 7,000 Bitcoin, reversing their earlier net selling of 5,000 Bitcoin on Sept. 2. This marked the largest daily purchase since July, though it remains below the first-quarter average, when ETFs bought 9,000 Bitcoin daily, driving prices higher.

If ETF demand continues to increase, it could provide a much-needed boost to Bitcoin prices in the coming months. However, current levels suggest that demand still has room for improvement.

Meanwhile, CryptoQuant’s “Total Supply by Age” data indicates that Bitcoin’s short-term supply has followed patterns similar to those seen in previous halving cycles. In both 2016 and 2020, short-term supply decreased as demand paused after the halving but spiked again later in the cycle as new buyers acquired Bitcoin from long-term holders.

The report suggested that if demand picks up, short-term supply could increase sharply in the fourth quarter, further supporting a price rally.

Demand recovery is crucial

While Bitcoin’s bull-bear cycle indicator shows the flagship crypto entering the first quarter in a bull phase, the momentum is weaker compared to previous halving years.

In 2020, Bitcoin was in a clear bull phase that resulted in a 171% price gain by year-end. This year, however, Bitcoin has been hovering between bull and bear phases since August, signaling less certainty in market direction.

On-chain valuation metrics point to price resistance between $85,000 and $100,000, levels where short-term traders typically take profits after a rally. These price bands acted as resistance earlier this year when Bitcoin reached its all-time high of $73,600 in March.

According to CryptoQuant, Bitcoin could push toward these levels if demand resumes, but without a significant uptick in buying pressure, the rally may fall short of these ambitious targets.

Altcoins, news

Ripple execs slam SEC decision to appeal XRP ruling

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The Securities and Exchange Commission (SEC) has announced its decision to appeal a federal court ruling in its prolonged legal battle against Ripple Labs and XRP.

The SEC’s notice of appeal, filed with the Second Circuit Court of Appeals on Oct. 2, follows a key August ruling that dealt a mixed outcome in the regulator’s high-profile case against Ripple.

Ripple CEO Brad Garlinghouse and CLO Stuart Alderoty expressed disappointment with the regulator’s decision to appeal and reaffirmed their intent to fight the case in court.

SEC appeal

The SEC, which sued Ripple in December 2020 over allegations that the company conducted a $1.3 billion unregistered securities offering through XRP sales, contends that the district court’s decision conflicts with longstanding Supreme Court precedent.

Ripple had initially celebrated parts of the ruling as a victory for the crypto industry. US District Judge Analisa Torres ruled that programmatic sales of XRP to retail investors via crypto exchanges did not violate securities laws.

However, the judge also found that Ripple’s direct sales of XRP to institutional investors — worth $728 million — did constitute unregistered securities sales, resulting in a $125 million penalty for the company.

The SEC had originally sought a significantly higher $2 billion fine, but the lower-than-expected penalty was seen as a win for Ripple. Nevertheless, the case’s unresolved status now returns to the forefront with the SEC’s appeal.

The news of the SEC’s move sent XRP tumbling further in value, dropping around 9% over the past day to trade just above $0.54 as of press time, based on CryptoSlate data.

Ripple execs slam SEC

Garlinghouse said he was “frustrated” with the agency’s continued legal battle, accusing it of wasting taxpayer money on a case that has already been decided in Ripple’s favor on key issues. He argued that the SEC had

“lost on everything that matters”

under Chair Gary Gensler and reiterated that XRP’s status as a non-security remains the law, regardless of the agency’s appeal.

Garlinghouse further criticized the SEC for its lack of accountability, noting that the agency faces no consequences for continuing what he considers a losing battle. He emphasized that Ripple, the crypto industry, and the rule of law have already prevailed, and this appeal would not change that outcome

Meanwhile, Alderoty echoed the sentiment and reiterated that the court determined there were no “victims or losses” in the case. He stated:

“Instead of faithfully applying the law, this agency, under this Chair, continues to engage in litigation warfare against the industry. We are evaluating whether to file a cross appeal.”

Blockchain, NFT, Uncategorized, Web3

Franklin Templeton adds Aptos to tokenized Treasuries fund

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Franklin Templeton, a leading investment manager with over $1.4 trillion in assets, has expanded its tokenized US treasuries fund—Franklin OnChain U.S. Government Money Fund (FOBXX)—to Aptos, a Layer-1 blockchain powered by the Move programming language.

FOBXX is a regulated 1940 act fund that invests at least 99.5% of its total assets in government securities and other financial instruments collateralized by government securities. Aptos is now the fifth blockchain to join the FOBXX fund, joining Avalanche, Arbitrum, Stellar, and Polygon.

Market observers stated that the move marks a significant development in integrating traditional finance with decentralized networks. Franklin Templeton was one of the several Wall Street giants that launched successful spot Bitcoin and Ethereum ETFs this year.

Meanwhile, despite news of the Franklin Templeton expansion, the Aptos APT token is down by around 1% in the last 24 hours, trading at $7.76 as of press time.

Why Aptos?

Roger Bayston, Head of Digital Assets at Franklin Templeton, explained that the firm’s decision to expand to Aptos was based on its compatibility with its Benji blockchain-integrated system.

He reportedly said:

“We chose the Aptos Network given its unique characteristics, which meet our rigorous suitability standards for the Benji platform.”

Aptos has gained considerable traction since its launch in October 2022, growing to be among the top 25 digital assets by market capitalization, according to CoinMarketCap data.

Notably, the blockchain network also sees significant usage, with its users’ daily transaction volume recently hitting a peak of more than 3 million. In addition, the platform also boasts over $545 million in total value locked across DeFi activities, according to DeFillama data.

About FOBXX

FOBXX is a digitized fund that allows investors to allocate funds into U.S. government securities, cash, and repurchase agreements.

Launched in 2021, FOBXX became the first U.S.-registered mutual fund to adopt blockchain, initially utilizing Stellar. Its shares are tokenized and represented by the BENJI token, maintaining equal value.

Investors can purchase FOBXX shares and store them in digital wallets using Franklin Templeton’s Benji Investments mobile app.

Currently, the fund manages over $435 million in assets, making it the second-largest tokenized fund globally, according to rwa.xyz.

Notably, the firm has hinted at further launching its mutual fund to the Solana blockchain.