Ether's recent underperformance may be over, Steno Research said in a report.

The report noted that in the last bull market, during altcoin season, ether more than doubled in value compared to bitcoin.

The U.S. Federal Reserve's interest rate cut will result in more onchain activity, which will benefit Ethereum.

Ether's {{ETH}} recent bout of underperformance may be over and the world's second largest cryptocurrency could be ready to shine again, both in fiat terms and relative to bitcoin {{BTC}}, Steno Research said in a report on Thursday.

The native token of the Ethereum blockchain has risen nearly 8% year-to-date, while bitcoin has surged 43% and the CoinDesk 20 index {{CD20}} has gained nearly 11%.

Ether's performance in the last bull market could provide some guidance. ETH surged during the last altcoin season, and in under two months it more than doubled in value compared to bitcoin, the report noted.

This shift was sparked by a surge in onchain activity, the report said, including decentralized finance (DeFi), stablecoin issuance, and the boom in non-fungible tokens (NFTs), all of which happened mainly on the Ethereum blockchain.

The Federal Reserve interest rate cut, earlier this week, will result in increased onchain activity, which will strongly benefit Ethereum, Steno said.

Bitcoin exchange-traded funds (ETFs) are unlikely to continue outperforming ether versions as much, Steno said, noting that ETH has shown its ability to suddenly outperform its larger rival in the past.

There have been three main reasons for bitcoin's recent outperformance over ether. "The impact of U.S. spot ETFs for both bitcoin and ether, the persistent buying pressure from MicroStrategy (MSTR), and a notable decline in Ethereum's transactional revenue in recent months," analyst Mads Eberhardt wrote.

"Ethereum's active addresses remain strong, particularly when factoring in the growing adoption of rollups," Eberhardt wrote, adding that the network's transactional revenue looks to have bottomed in August.

Asset manager Bitwise is also bullish about ether's prospects. The cryptocurrency is potentially a contrarian bet into the year-end, it said in a report on Tuesday.

Read more: Ethereum Is the Microsoft of Blockchains, ETH Underperformance May Reverse Into Year-End: Bitwise

Over 250 BTC from the early days of bitcoin, known as the "Satoshi era," were transferred on Friday in five separate transactions, each moving 50 BTC to new wallets, with a total value close to $13 million.

As of press time, there hasn’t been any movement from the new wallets to crypto exchanges.

This movement adds to previous instances where dormant bitcoin from the Satoshi era, including significant transactions in July and December last year.

Hundreds of bitcoin {{BTC}} acquired by mining them during the network’s early stages were moved on Friday – joining the rare instances where bitcoin from the so-termed “Satoshi era” have been active.

Satoshi era refers commonly to the period when bitcoin’s pseudonymous creator, Satoshi Nakamoto, was active on online forums from late 2009 to 2011.

Over 250 BTC from that period, worth nearly $16 million at current prices, were moved within an hour during the European morning hours, on-chain tracker Whale Alerts flagged on X. Each transaction was a batch of 50 BTC with the tokens being moved to new wallets.

It is unclear if all these wallets belong to the same person or entity. There hasn’t been a movement from the new wallets to crypto exchanges as of press time.

Blockchain data shows these bitcoin were received as a block reward in 2009, just months after the network started. These wallets have shown no activity since then except for the movement on Friday.

💤 A dormant address containing 50 #BTC (3,184,108 USD) has just been activated after 15.7 years!https://t.co/jduMfplXag

— Whale Alert (@whale_alert) September 20, 2024

Several ‘Satoshi era’ bitcoin have been active in the past few years. In July 2023, a wallet dormant for 11 years transferred $30 million worth of the asset to other wallets, while in August, another wallet transferred 1,005 BTC to a new address.

In December last year, over 1,000 BTC were sent to crypto exchanges - where they were likely sold off - marking one of the largest amounts from the Satoshi era moved to exchanges.

Frankendancer, a validator client for the Solana blockchain that adds contributions from Jump Crypto to existing software, is up and running.

The fully new client, Firedancer, is running on testnet, a sign it's on the way to maturity.

SINGAPORE — An early version of Jump Crypto's highly anticipated Solana validator, Firedancer, is live and contributing to the performance of the Solana blockchain, Jump's Chief Science Officer Kevin Bowers said Friday.

Speaking onstage at Solana's Breakpoint conference, Bowers shed light on an "open secret" in Solana's validator community: Some of the computing power underpinning Solana is running "Frankendancer" software that combines predominant validator tech with new contributions from Jump.

Blockchain validators ingest transactions and construct blocks – the most essential process in running a blockchain. Most networks have a single validator client. Solana's plan to have two fully independent validators – one from a Solana spinoff team, Anza, one from Jump – would give it a redundancy boost, and potentially a performance edge, too.

Such behind-the-scenes and in-the-weeds tech developments might seem like a yawner, but at Breakpoint it received top billing. The sellout conference's largest stage was standing room only as Bowers emerged to a rockstar-like atmosphere.

"We view this project as the consumer science equivalent of civil engineering," Bowers said of the effort to build the second validator client. He compared the potential impact of Firedancer as akin to expanding a country road into an interstate highway.

Bowers shed little light on when Firedancer – the fully new client software, as opposed to Frankendancer – would come online. But it is running on testnet, Bowers said, indicating it has achieved minimum viability and is getting close.

SINGAPORE – SG Forge, a subsidiary of Societe Generale, will roll out euro stablecoin EUR CoinVertible (EURCV) on the Solana blockchain, the French financial services firm said Friday.

SG Forge launched EURCV on the Ethereum blockchain last year as a highly regulated, euro-centric alternative to top dollar-linked stablecoins from Tether and Circle.

It has struggled to catch on: EURCV has only 28 holders, 154 lifetime transactions and an issuance of 33 million, according to its Etherscan page.

The Solana debut will test whether crypto users have any appetite for Euro-linked stablecoins on a faster and cheaper network, two attributes SG Forge touted in a press release. CEO Jean-Marc Stenger said in the presser that Solana's speed "will unlock new possibilities for both retail users and institutional players in" decentralized finance (DeFi).

Stablecoins are becoming systemically important to the global financial economy, Bernstein wrote in a recent report. Myriad firms are eager to replicate the success of Circle and Tether, the largest stablecoin issuers who collect major windfalls from ownership of the Treasury notes underlying their respective assets.

Open interest data fromCoinGlass show a nearly $5 billion jump in bitcoin bets since Tuesday.

Solana’s SOL and ether zoomed as much as 7% to lead gains in crypto majors.

Bitcoin {{BTC}} extended weekly gains to 10% after a busy few days, including rate cuts by the U.S. Federal Reserve, a pause in cuts by the Bank of England, and a decision to hold rates by the Bank of Japan (BoJ) on Friday.

BTC briefly crossed $64,000 in Asian morning hours Friday, before paring gains, as BoJ kept policy unchanged in a move that avoided a repeat of July’s market meltdown which followed its decision to hike rates.

Traders said macroeconomic data suggests optimism for riskier bets, such as bitcoin, in the coming months. “The US 2Y/10Y treasury spread, an indicator of recession, has been inverted since July 2022 but has recently steepened to +8bps,” QCP Capital traders said in a market broadcast Friday. “This reflects market optimism and a shift towards risk-on assets.”

Short-term debt instruments with higher yields than long-term ones can be a warning sign for risk assets and the economy - as it indicates that monetary and fiscal policies are restrictive and that the economy may contract in the future.

Open interest data fromCoinGlass show a nearly $5 billion jump in bitcoin bets since Tuesday, a sign of new money rapidly entering the market in expectations of volatility ahead. Traders are biased toward longs - or bets on higher prices - a ratio tracking the active buying volume to active selling volume shows.

Crypto markets jumped higher in the past 24 hours, with memes and layer-1 tokens leading gains. Solana’s SOL and ether {{ETH}} zoomed as much as 7% to lead major gains, while Avalanche’s AVAX, Aptos’ APT, and Immutable’s IMX jumped as much as 12%.

Memecoins led by bonk (BONK) surged as much as 10%, CoinGecko data shows, showing a return of risk-on behavior.

The broad-based CoinDesk 20 (CD20), a liquid fund tracking the largest tokens by market capitalization, rose 3.5%.

BingX was the victim of a hack for more than $43 million.

Its CEO said on X that the assets stolen were minor and any customer losses would be compensated.

Crypto exchange BingX has been hacked for a "minor" amount of assets and the exchange plans to compensate users for any loss, the firm's CEO said in a message on X.

On-chain data suggests nearly $43 million was stolen from the exchange in multiple tranches, with $13.25 million ether, $2.3 million BNB, $4.4 million USDT, among other being drained.

#PeckShieldAlert Another $16.5M worth of cryptos has been drained from #BingX by 0x940362B46faf7DF48Af1c8989d809F50466B5fCA about 7 hours ago. The stolen funds are currently parked at 0x1Dd7dAf089C16856155FeFd7e2170966bb6b3AEE, totaling 5.3K $ETH, 4.1K $BNB & 1.65M $MATIC. We…

— PeckShieldAlert (@PeckShieldAlert) September 20, 2024

The first hack was for approximately $26 million, while a few hours afterward, hackers took an additional $16.5 million from the exchange.

"The total loss is minimal and manageable. This incident will not affect our ongoing business operations," BingX CEO Vivien Lien said on X. "Trading services continue as usual. Withdrawals and deposits are temporarily delayed and are expected to be restored within 24 hours at the latest."

Aside from stablecoins, hackers took more than 360 different types of altcoins.

Data from Etherscan shows most of the stolen crypto was swapped for ETH and BNB at DEXs like Uniswap and Kyberswap.

As of press time the wallet tied to the hack, which Etherscan says received most of its funds from the BingX hot wallet, has over 1,000 ether in it and tokens worth $5 million.

Deus X Capital today launched decentralized finance business Solstice Labs.

The company's first project will be a protocol that offers all investors enhanced yield opportunities.

The protocol will be built on the Solana ecosystem and is expected to go live in early 2025.

Deus X Capital, the $1 billion investment and operating company led by Tim Grant, today launched Solstice Labs, a decentralized finance (DeFi) business, the company said in a press release on Friday.

Solstice Labs is building institutional-grade DeFi products and protocols that will be available to all investors, the company said.

The business' first project is a protocol that offers enhanced yield opportunities, and is expected to go live in early 2025, Deus X said.

It aims to deliver stable and consistent yields for investors, Ben Nadareski, co-founder and CEO of Solstice Labs, told CoinDesk in an interview, and in a democratized fashion, as all users will have the same access to this yield generating opportunity on the Solstice protocol.

The protocol will be developed on the Solana blockchain, and is expected to launch with more than $100 million of total value locked (TVL), with significant investment from Deus X Capital.

Nadareski, who is currently an investment director at Deus X Capital, is co-founder and CEO of Solstice Labs. Tim Grant, CEO of Deus X Capital will be co-founder and chairman of the company. Stuart Connolly, chief investment officer at Deus X and CEO of Alpha Lab 40, is to join the firm as chief investment officer and co-founder.

"Many DeFi products and protocols have been built using exceptional technology stacks like we have seen with Solana but have largely been overlooked for institutional applications," said Nadareski, in the release.

"This presents a huge opportunity to introduce institutional-grade yield-opportunities and infrastructure into DeFi which will allow for a far broader range of investment participation," he added.

Solstice Labs will work closely with Cor Prime, a prime broker, and Alpha Lab 40, a proprietary trading firm, both of which are portfolio companies of Deus X Capital.

Cor Prime launched on Wednesday with a $100 million commitment of risk capital from Deus X Capital, and the company plans to address the supply/demand imbalance for leverage in the crypto market.

Deus X Capital launched in October last year with $1 billion of assets, including existing investments and capital to be deployed.

Read more: Crypto Investment Firm Deus X Capital Launches With $1B in Assets

A panel of judges grilled attorneys for the U.S. Commodity Futures Trading Commission and prediction-betting platform Kalshi over the company's efforts to launch political prediction markets in the U.S., without indicating whether they'd allow Kalshi to offer these products while reviewing a lower court's ruling on the products.

CFTC General Counsel Rob Schwartz and Jones Day Partner Yaakov Roth took turns explaining why an appeals court should or should not block Kalshi from listing these events contracts.

The Thursday hearing came days after a federal judge ruled that the CFTC could not block Kalshi from listing political prediction markets, letting the company list contracts predicting how control of the House and Senate might play out. But it only lasted for a few hours, since the CFTC quickly filed for an emergency stay, which the appeals court granted on a temporary basis.

During the 2.5-hour hearing, the judges did not seem especially impressed by either party, saying various arguments or explanations did not make sense and drilling into specific terms of the Commodity Exchange Act and what they mean. The judges did not get to asking what an event contract actually is until more than two hours into the hearing.

The CFTC's Schwartz called D.C. District Court Judge Jia Cobb's Sept. 12 ruling "seriously flawed," and said it could allow Kalshi – and other companies – to immediately launch "high-stakes" betting markets.

"If that happens, the harm to the public is going to be profound at a time, and I don't mean to be dramatic, but Americans broadly believe that our democracy is under threat," Schwartz said.

"In order to obtain a stay, the commission has to show two things: merit, and that there will be some harm, irreparable harm, absent the stay, and they can't make either of those," Roth said in his opening statement.

Kalshi saw $50,000 deposited in its two political events contracts in the eight hours or so that the products were live before the CFTC filed for an emergency stay, Roth said.

Market manipulation concerns

The CFTC's arguments revolve around the agency's stated inability to police the underlying events – namely, U.S. elections.

Market participants could distort markets to suggest one candidate is doing better than another, Schwartz said, and it would be more difficult to correct than other markets.

A judge posed the hypothetical question of whether a counterparty might take the other side of a bet made for manipulative purposes: "Somebody will take the other side and eat their lunch. Is that what's supposed to happen?"

That is what should happen, but political prediction markets may be susceptible to manipulation that cannot be easily corrected, Schwartz said.

"It's because the sources of information that they absorb and reflect are opaque and unreliable. I am talking about polls with undisclosed methodologies, so, bad methodologies, fake polls, pollsters with agendas, inaccurate news, fake news, on and on," he said. "Normal futures contracts have an objective indicator that is reliable, kind of a published index report."

If these markets are manipulated, that would both harm the market participants and could even undermine election integrity, Schwartz said. Later in the hearing, he drew a distinction between political event contracts and other types of bets that could be placed.

"There's really very little monkeying around you can do with an earthquake," Schwartz said, responding to one example.

Roth, speaking on Kalshi's behalf, pushed back, saying the more robust a market is, the less susceptible it would be to that type of manipulation.

He pointed to the $1 billion already bet on Polymarket, which does not offer services in the U.S. after a settlement with the CFTC, saying the regulator's argument essentially suggests having an overseas vendor provide these products may be better than Kalshi doing so.

"The most important thing I want to make is that the way to reduce that risk is to allow Kalshi markets to offer because right now, this activity is happening and being reported to voters based on markets that are not regulated, that are open to foreign traders, that have no surveillance. … There's no transparency," he said. "We don't know who's buying, who's selling cryptocurrency. If this was happening on Kalshi's markets, we would have this whole suite of regulatory provisions that apply."

'Irreparable harm'

The CFTC needed to show there was a risk of "irreparable harm" in allowing Kalshi to continue listing and trading its events contracts. Todd Phillips, an assistant professor of law at the Georgia State University Robinson College of Business, told CoinDesk it was "unclear if [the CFTC] did that" over the course of the hearing.

The regulator could have done a better job explaining what event contracts actually are and how a state prohibiting gambling on elections counts as gaming for the purposes of the Commodity Exchange Act, he said.

On the other hand, Kalshi also faced tough questioning from the panel of judges on the appeals court.

"Kalshi is making an argument that 'you should allow us to do something that 29 states prohibit, and that's big," he said. "That would be effectively overturning the law in more than half the country.

Marc Hochstein contributed reporting.

Sky, the decentralized finance lender previously known as MakerDAO, will move forward with a plan to offboard wrapped bitcoin (WBTC) as collateral, following a vote that closed on Thursday and garnered overwhelming support from the project's community.

The matter has been closely followed in crypto markets, since the Sky platform has $200 million of loans collateralized by the token, and since WBTC is one of the biggest cryptocurrencies, with nearly $10 billion outstanding.

BA Labs, an influential advisor to the project, had initially floated the idea of reducing exposure to WBTC in August, before confirming the plan last week with an official proposal to move ahead with the vote to eliminate the exposure entirely.

This week's Sky vote, which went live on Monday and was open for three days, and saw 88% of participants vote in favor of ditching wBTC in five separate proposals for a five-step offboarding process. Some 12% abstained.

Following the vote, Sky will move forward with the offboarding of WBTC, with the first phase starting on Oct. 3 and culminating in the final phase on Nov. 28.

BA Labs, in its proposals to offboard WBTC, had cited perceived risks from Tron founder Justin Sun's involvement with BiTGlobal, the custodian for the underlying assets. BitGo, the original custodian for WBTC, announced in August that it planned to transition control of the asset to a joint operation with BiT Global, which has regulated operations based in Hong Kong.

Sun told CoinDesk last week that WBTC has a "sterling track record that is unmatched by any competing offers recently floated by the skeptics."

WBTC is a token that allows investors to use bitcoin (BTC) on other blockchains, such as Ethereum, and often is at the center of the DeFi lending space as collateral. WBTC currently has a $9.7 billion market capitalization.

Separately, The Defiant reported that the community behind Aave, the biggest DeFi lender, is unconvinced of the need to offboard WBTC as collateral.

Read more: DeFi Lending Giant Sky Sets Vote to Offload Wrapped Bitcoin as Justin Sun Concerns Linger

German authorities shut down dozens of crypto platforms they say were connected to the illicit movement of assets.

The exchanges weren't properly tracking their customers' activity, according to the Federal Criminal Police Office.

The German Attorney General's Office Frankfurt am Main (Generalstaatsanwaltschaft) and the country’s Federal Criminal Police Office (BKA) have shut down 47 crypto exchanges allegedly tied to criminal activities including money laundering.

The exchanges purposefully failed to comply with their obligation to carry out certain identity and background checks on their customers, also known as “know your customer” (KYC) requirements, the BKA said in a press release on Thursday.

Some of the exchanges include Xchange.cash, 60cek.org, Baksman.com, alongside other smaller platforms. One of the exchanges had been active since 2012 while others had launched as recently as the previous year.

Some customer and transaction data was seized by the government in the process of the investigation, it said. Given that the people behind those activities often reside in other countries outside of Germany, where criminal activities like this are “tolerated or even protected,” the authorities noted it may be nearly impossible for German government officials to prosecute them.

Instead, they will focus on “weakening” the underlying infrastructure that allowed for those illegal activities, according to the statement.

Earlier this year, the BKA seized 49,857 bitcoin {{BTC}}, worth $2.1 billion at the time, from the operators of a privacy website called Movie2k.to, which was shut down in 2013 for violating the Copyright Act.

The agency proceeded to sell the tokens in July, causing distress in the global crypto markets due to the selling pressure resulting from the dump as well as the simultaneous repayments by defunct bitcoin exchange Mt. Gox, which happened around the same time.

Cryptocurrencies surged higher with bitcoin {{BTC}} nearing $64,000 on Thursday as the Federal Reserve's jumbo rate cut bolstered risk appetite across asset classes.

Bitcoin climbed nearly 6% over the past 24 hours from Wednesday's whipsaw below $60,000 as traders digested the Fed's decision to lower benchmark interest rates by 50 basis points, a move many observers say may mark the beginning of an easing cycle by the U.S. central bank. The largest crypto hit its highest price this month at $63,800 during the U.S. trading hours before stalling and retracing to just above $63,000.

Ethereum's ether {{ETH}}, the second-largest cryptocurrency by market capitalization, bounced off from its crucial 200-week simple moving average and was up over 7% during the same period.

The broad-based crypto benchmark CoinDesk 20 Index outperformed BTC and ETH with its 8% advance, indicating that altcoins led the market higher with native tokens of Solana {{SOL}}, Avalanche {{AVAX}} and Aptos {{APT}} up 10%-15%. All the 20 assets of the index were up today, underscoring the breadth of the rally.

Crypto-focused stocks and listed bitcoin miners also surged, with MicroStrategy (MSTR) and TeraWulf (WULF) leading the sector with 10% gains.

Crypto’s rally over the past 24 hours outperformed most traditional financial asset classes. The S&P 500 and Nasdaq, two stock indexes that bitcoin recently has correlated with, traded 1.7% and 2.5% higher, respectively.

This could be because non-yielding assets like bitcoin or gold are typically preferred investments when interest rates are lower, said Jim Iuorio, managing director of TJM Institutional Services and host of the Futures Edge podcast.

“These assets prefer rates that are lower than where they should be relative to the current economic condition,” he said. “They do well in an environment that could reignite inflation.”

The 10-year U.S. Treasury yield moved higher after the Federal Reserve lowered interest rates on Wednesday which signals that inflation remains a worry. Similarly, bitcoin’s uptick in price could indicate that the Fed’s decision to lower rates may be premature and could result in a weakening of the U.S. dollar, Iuorio added.

Key test for BTC rally at $64,000

Bitcoin's rally faces a key hurdle at the $64,000 level, which was the local peak last month, bouncing from the early August crash due to the strengthening Japanese yen carry trade. The leading crypto should make a higher high to break the bearish trend of making consecutive lower lows since the $73,000 peak in March.

"The easy part of the cycle is almost done," Bob Loukas, a well-followed trader and analyst, said, based on bitcoin's daily cycle pattern. Cycles theory argues that price movements happen in waves with roughly regular periodicity. "Soon bitcoin will have to work for the gains," he added.

Day 13 (of 60) for the #bitcoin Cycle. The easy part of the Cycle is almost done. Soon Bitcoin will have to work for the gains. https://t.co/Mi9CMm2GmH pic.twitter.com/IOHwZTgxM2

— Bob Loukas 🗽 (@BobLoukas) September 19, 2024

Even with a potential pullback in the cards, options traders are anticipating higher bitcoin prices for next month heading into the historically bullish period for the asset.

Options data for October 25, 2024 expiry on crypto derivatives exchange Deribit reveals significant interest at the $70,000 strike, with $130 million in notional value, CoinDesk analyst James Van Stratten noted.

The total open interest stands at 34,199 BTC, with a put/call ratio of 0.55, reflecting a strong bullish sentiment in the market, he added.

While September has been the worst performing month for BTC with an average loss of -4% since 2013, the year-end period starting with October usually brings the greatest returns for the asset, CoinGlass data shows. October's average monthly return is 23%, while Q4's tally is 88% gain, per CoinGlass.

It’s been about 10 months since Sam Bankman-Fried was convicted on seven counts of fraud and conspiracy related to the collapse of FTX. It’s been about six months since he was sentenced (in March) to 25 years in federal prison.

In that time, the crypto industry has moved on: markets are up, VC dollars are back, and politicians are once again supporting the industry. Meanwhile, the mainstream media has almost forgotten about the fallen crypto king, SBF himself. So might a judge and jury see SBF’s case differently should it hear evidence from the FTX founder again? That certainly seems to be the hope of SBF’s new legal team, which took over his case after his trial lawyers, Mark Cohen and Christian Everdell, stepped down following his conviction. On Friday, Sept. 13, his new lead lawyer, Alexandra Shapiro, filed an appeal to the Second Circuit Court of Appeals, laying out why SBF believes he deserves another hearing. “In the United States, people accused of crimes are presumed innocent unless and until proven guilty beyond a reasonable doubt,” Shapiro's appeal begins. “They are entitled to a fair trial by a jury. When the government introduces evidence, defendants have the right to rebut that evidence and present their side of the story. That, at least, is how it’s supposed to work. But none of that happened here.”The 102-page document argues that SBF was unfairly treated at trial, which took place as public scrutiny of the FTX case reached a fever pitch. Shapiro argues SBF was “presumed guilty by federal prosecutors eager for quick headlines,” “presumed guilty by the judge who presided over his trial,” and that the “prevailing narrative” of FTX’s collapse, and SBF’s part in it, was accepted as true, without proper inquiry. “From day one, the prevailing narrative—initially spun by the lawyers who took over FTX, quickly adopted by their contacts at the U.S. Attorney’s Office—was that Bankman-Fried had stolen billions of dollars of customer funds, driven FTX to insolvency, and caused billions in losses,” the appeal continues.

“Now, nearly two years later, a very different picture is emerging—one confirming FTX was never insolvent, and in fact had assets worth billions to repay its customers. But the jury at BankmanFried’s trial never got to see that picture.”

SBF has long maintained that FTX was never really insolvent and it was forced into bankruptcy unnecessarily. It notes that, under the bankruptcy settlement, nearly all its customers are being made whole. Shapiro says Judge Lewis A. Kaplan deprived the jury of “Brady” evidence favorable to the defendant, including that SBF made good investments (such as in Anthropic, the AI startup) alongside the bad ones.

However, lawyers contacted by CoinDesk were skeptical that SBF would win a retrial, given the high bar for such legal turnovers.

“It’s just not very common for an appellate court to double-guess a case like this,” said Tama Beth Kudman, partner at Kudman Trachten Aloe Posner.

SBF’s lawyers would have to prove not only that Kaplan was biased against SBF, she said, and also that such bias led to actions that were prejudicial against SBF.

To allow the appeal to go forward, the Second Circuit Court of Appeals would be saying effectively that it thought the judge in the original case acted inappropriately – something it rarely does, Kudman said.

The appeals court might order a retrial if SBF's lawyers could show that Kaplan had a personal conflict of interest. But there’s no evidence for that, thus far. “Kaplan is known as a well-tempered, good natured judge. I would have thought he would have stepped aside if there was any reason that he shouldn’t be hearing the case,” Kudman said.

Joshua Ashley Klayman, the U.S. head of fintech and head of blockchain and digital assets at Linklaters, said the appeal may have been timed to coincide with sentencing for Caroline Ellison, SBF’s former colleague and sometime lover.

U.S. government lawyers have not requested jail time for Ellison, noting that the SBF case would have been “difficult to prove” without her testimony. Shapiro may be trying to juxtapose SBF’s steep sentencing with Ellison’s much lighter penalty.

“Without expressing a view on the likelihood of success of Sam Bankman-Fried’s appeal, the timing of his filing may be strategic," Klayman said. "SBF’s appeal was filed on September 13, 2024, three days after the filing of Caroline Ellison’s sentencing memorandum. SBF was sentenced to 25 years in prison, while Caroline Ellison’s counsel has requested a non-custodial sentence."

Klayman said news that FTX creditors are being repaid could help SBF's legal team.

“The mainstream media has reported on FTX’s plans to repay customers. Perhaps SBF and his counsel may hope that, with the passage of time, SBF’s arguments [that FTX customers didn’t lose money] may be viewed in a different light."

Since the last bull market, we’ve seen a slight fall in the number of crypto jobs available. But, as professional recruiters, we think the market for hiring is as strong as it’s ever been, especially for experienced candidates.

If you are fortunate enough to have been in crypto for three or more years, this is a prime job market for you. Companies are looking for candidates with a track record and specialization. Our advice: Stay in your lane and avoid being the generalist.

A quick LinkedIn search for profiles containing the keyword “blockchain” on their resumes produces 152,000 results while “crypto” shows 119,000. This is a decline from the peak employment in crypto at about 211,000 mid-2021 due to bear markets, inflation, and layoffs affecting the job market.

past major layoffs pic.twitter.com/vfezRaJoJW

— Rachit Agarwal (@0xagarwal) September 4, 2024

The industry has been hit hard since the last bull cycle, but it’s not all bad news. Professionals in crypto are loyal and we, as recruiters, don’t see anyone leaving; we only see more qualified candidates looking to join the space.

Our LinkedIn DMs and emails are full of people all over the world sharing their resumes and asking for advice on how to transition to Web3.

Compared to 2021, when we had a huge influx of people rushing to crypto, we are seeing a much larger talent pool of candidates with two to four years’ industry experience. This is a milestone for this young industry because talent is more developed, teams have more hiring options, and companies don’t have to use as many resources for onboarding.

Although the depth of candidate experience has increased, the talent pool must continue to expand in order to keep up with industry growth predictions for the years to come. Competition in hiring roles for protocol engineers and developer relations leaders is stronger than ever due to the rise in expectation of industry experience and demand for core company roles that make up founding teams.

Some recent trends from our job board:

Three firms reached out in the span of two days about hiring a protocol engineer

There has been an uptick in listings for compliance and legal roles during 2024

Candidates with a portfolio/personal brand are much more likely to score a first-round interview.

Crypto twitter remains a great outlet for gaining credibility through personal brand building. We know many candidates that get contacted personally by CEOs and executives through X personal accounts. When recruiting, our team considers X profiles to be a strong complement to resumes and portfolios. We even see an opportunity for LinkedIn to become a prime platform for the Web3 community, provided candidates can post engaging content.

Staying active on X, attending conferences, and leveraging your specialization in your experience will be the best way to position yourself in this market. Find the people that want to help because this is an industry of professionals that win and help others win.

The support is evident through tough moments such as:

After a recent layoff at Matter Labs, the co-founder posted on X the letter he sent to employees accounting the difficult decision. Comments from executives and hiring managers flooded the reply section with support and opportunities for those affected. Our advice: Lean into the warm crypto culture and never forget the strength of the community this industry was built on.

I just sent this message to the Matter Labs team:===Today, I’m sharing the hardest change we had to make in the 6-year history of Matter Labs. We are restructuring the organization and parting ways with many amazing team members (~16% of the team). We’ve already reached out…

— Alex G. ∎ (@gluk64) September 3, 2024

Despite what may seem like challenges and setbacks for crypto from the outside, we are seeing the strongest talent pool to date, fierce competition in hiring, and candidates interviewing with many companies at a time.

Candidates with the most success in the job market display a combination of a personal brand, strong network, and know how to leverage their specific skill sets. The biggest trends we see out of this are portfolios, in-person events, and specialized/customized resumes.

The future looks very promising for this seasoned talent pool dedicated to the crypto and blockchain ethos. As more teams build with strong talent, we’ll likely see a new cycle of growth that will continue to welcome new professionals eager to join this vibrant industry.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Are advisors “in” on crypto? This is Crypto for Advisors, after all, so in today’s issue, Roxanna Islam from TMX VettaFi takes us through crypto demand and adoption since the launch of spot ETFs in the U.S.

In Ask an Expert, Bryan Courchesne, CEO of DAIM, looks at whether advisors are supporting their clients investments in crypto and, if not, where the risks lie.

– Sarah Morton

You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.

When Will We Agree on Crypto Demand?

Many of us thought that the launch of spot crypto ETFs would help bring crypto into the mainstream and encourage adoption - particularly by closing the gap between advisors and their clients. While the spot bitcoin ETF launch in January broke records, demand for spot Ethereum ETFs has been muted. And now with no near-term approval for Solana ETFs, this raises the question – does interest in crypto ETFs end with bitcoin? I believe there will be more to the crypto ETF story, but there are three big questions we need to answer about demand.

1. Are clients ACTUALLY interested in crypto?

Seasoned crypto investors see the benefit of investing directly in cryptocurrencies – not just bitcoin. However, crypto ETFs brought access to other groups of investors, including retail investors who are newer to crypto and more comfortable with a traditional vehicle like an ETF.

And unlike the old-school crypto investor, newer investors may be satisfied with a simpler approach to cryptocurrency investing (i.e., investing in just bitcoin ETFs). Despite the fact that bitcoin and ether (symbol ETH, the native cryptocurrency of the Ethereum blockchain) have two very different use cases, it is very easy to use bitcoin as a “just for fun” investment without fully diversifying their crypto allocation.

This has been reflected in net flows for crypto launches. Excluding the Grayscale Bitcoin Trust (GBTC), spot bitcoin ETFs have seen $37.3 billion in net inflows since their launch in January, with net inflows for the iShares Bitcoin Trust (IBIT) bringing in $20.9 billion of those flows. Since their launch in July, spot ether ETFs have seen net inflows of only $2.1 billion (excluding the flagship Grayscale product). The highest inflows were seen in the iShares Ethereum Trust (ETHA), which had only $1.0 billion net inflows – a significant gap from its spot bitcoin counterpart. While I believe interest in spot Ether will grow over time, these trends indicate that mainstream investors still haven’t fully embraced crypto.

2. Are advisors WILLING to allocate to crypto?

Given a niche portion of clients interested in crypto ETFs, the next step is making sure advisors are also open to conversation. The survey results shown below are important because 64% of advisors surveyed—that’s almost two-thirds of advisors—are neutral to negative on cryptocurrencies. Additionally, Bloomberg Terminal data show that the majority of investors who own spot crypto products are self-directed investors—not those who invest through an advisor. According to this data, 80% of shares held of iShares’ (IBIT) and 75% of shares held of the Fidelity Wise Origin Bitcoin Fund (FBTC) are by investors who do not file 13Fs (i.e., self-directed clients).

Unfortunately, there is no clear-cut answer to getting advisors more interested in this asset class. Education – not just for investors, but also focused on advisors – will be the primary solution. Education takes time but should become easier as time passes and ease acceptance among both clients and advisors.

3. CAN advisors allocate to crypto?

Assuming both clients and advisors are interested, there are still some barriers to investing. Many large brokerage firms and asset managers do not allow investment in crypto including crypto ETFs. Vanguard, one of the world’s largest asset managers, has stated on their website that they do not allow crypto ETFs on their platform because they “do not currently believe that there is an appropriate role for them to play in long-term portfolios.” Similarly, Edward Jones released guidance stating that “cryptocurrencies are highly speculative and [they] don’t offer a way to purchase or hold cryptocurrencies” including crypto funds. While Morgan Stanley recently started allowing their financial advisors to offer bitcoin ETFs, there is a significant caveat. They can only offer the two largest funds – Blackrock’s IBIT and Fidelity’s FBTC – and these can only be offered to clients with a net worth of at least $1.5 million with aggressive risk tolerance.

These are likely the most difficult barriers to overcome because they can’t simply be solved by education, but persistent investor and advisor demand should reduce these barriers over time.

Bottom Line: Crypto ETFs have come a long way, and I still believe the industry has room to move forward. But we need to address education to encourage adoption and bridge the gap between advisors and their clients.

- Roxanna Islam, CFA, CAIA, Head of Sector & Industry Research, TMX VettaFi

Ask an Expert

Q. Can advisors help their clients with crypto investments?

It can be challenging for financial advisors to meet the needs of clients when it comes to investing in digital assets. The landscape of cryptocurrencies and blockchain technology is rapidly evolving, and the learning curve for traditional advisors is steep. From understanding the complexities of the crypto market to managing the risks associated with digital assets, the journey can be overwhelming. Many advisors may not even have the capability to invest in a bitcoin ETF, let alone feel comfortable discussing it with clients. As a result, clients often find themselves navigating the crypto market alone, without the guidance of their trusted financial advisor.

Q. How does it impact clients who don’t have advisors help?

This disconnect can lead to significant problems for investors. Without proper guidance, clients may invest in the wrong asset at the wrong time, resulting in substantial losses. Improper portfolio weighting toward cryptocurrencies can also expose investors to unnecessary risk, while the potential for fraud in the crypto space remains a constant threat. These pitfalls can create a sense of distrust and uncertainty around digital assets, causing many to wonder whether they should avoid the space altogether.

Q. What’s the risk to not learning about crypto?

So, as it stands, advisors are not meeting client needs. This will leave clients under-allocated at a time when the asset is still experiencing outperformance relative to traditional assets. The opportunity cost of forgoing significant alpha could significantly impair client performance over the long run. It is crucial for advisors to realize the time is now to position their clients for future success. It’s time for advisors to educate themselves on this asset class and pass on what they learn to clients. Remember, as an advisor, a diversified portfolio does not need a significant allocation to crypto. A 5-10% allocation to bitcoin can go a long way. We are not there yet, but hopefully, the tide is turning.

- Bryan Courchesne, CEO, DAIM

Keep Reading

SWIFT announced plans to integrate cryptocurrencies and digital assets into its payment network.

Inflows returned to BlackRock’s bitcoin ETF after two weeks.

The nation of Bhutan has amassed bitcoin and is holding an amount equivalent to almost one-third of its GDP.

Ethereum developers agreed on Thursday to split their upcoming hard fork, Pectra, into two packages, in a move to make the massive upgrade less unwieldy and reduce the risk of missteps or bugs.

The decision to split up the upgrade wasn't unexpected. Developers had discussed previously that Pectra was becoming too ambitious to ship all at once, floating the idea of splitting it up in order to minimize the risk of finding bugs in the code.

Pectra was on track to be Ethereum’s biggest hard fork to date. (A hard fork is the technical term for when a blockchain splits from its original, and is the method used by Ethereum to implement major software upgrades.) Now, developers will be able to focus on a much narrower scope. Previously, developers shared they would aim to have the upgrade live in early 2025; that is still the case for the first part of the Pectra package.

The core developers decided that eight Ethereum improvement proposals (EIPs) will be included in the first package, which includes EIP-7702, aimed at improving the user-experience of wallets, and famously scribbled by Ethereum co-founder Vitalik Buterin in 22 minutes.

The second package is up to be changed over the next few months, but as of now could include proposals that aim to make changes to the Ethereum Virtual Machine, known as EOF, along with introducing a feature called PeerDAS, which improves data availability sampling and ultimately is beneficial for layer-2 blockchains.

The developers acknowledged that the scopes of these upgrades can change over time, so solidifying this upgrade wouldn't be wise in this moment.

"There seems to be agreements to split current Pectra somehow," said Ethereum Foundation researcher Alex Stokes, who led the call. "And then downstream, we can figure out what comes next."

“I hear everyone that, it can be tricky to not want to put new things in. I would lean towards, again, keeping the scope very small, just because then that's going to maximize our chances of actually shipping the second fork very quickly with respect to this first one,” Stokes added.

Read more: Ethereum Devs Poised to Split Blockchain's Next Big Upgrade, 'Pectra,' in Two

$243 million was stolen from a Genesis creditor on Aug. 19.

An investigation into the theft has led to two arrests, according to ZachXBT.

More than $9 million of the stolen funds have been frozen.

Two people have been arrested following an investigation into a $243 million heist of a creditor of defunct trading firm Genesis, according to blockchain sleuth ZachXBT.

On Aug. 19, the creditor fell victim to a sophisticated social engineering scam after being contacted by a spoofed number that posed as a member of Google support.

1/ An investigation into how Greavys (Malone Iam), Wiz (Veer Chetal), and Box (Jeandiel Serrano) stole $243M from a single person last month in a highly sophisticated social engineering attack and my efforts which have helped lead to multiple arrests and millions frozen. pic.twitter.com/dcY1e9xsPd

— ZachXBT (@zachxbt) September 19, 2024

The victim was convinced to reset their Gemini two-factor authentication settings and send funds to a compromised wallet. Transaction tracing analyzed by ZachXBT shows that the $243 million was split across multiple wallets before being sent to more than 15 exchanges.

A cluster of the stolen funds flowed into luxury goods brokers to purchase cars, watches, jewelry and designer clothes. The culprits were tied to the loot after they accidentally shared an address that has been used to purchase luxury clothing. CFInvestigators, zeroshadow, ZachXBT and Binance Security used this information to freeze more than $9 million, with $500,000 being returned to the victim.

7NewsMiami reports that FBI raided a home in Miami and ZachXBT claims that two of the cybercriminals were arrested, one of them in Los Angeles.

Both Miami and Los Angeles police departments did not respond to CoinDesk's request for comment.

CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.

The CoinDesk 20 is currently trading at 1939.49, up 5.3% (+98.15) since yesterday's close.

All 20 assets are trading higher.

Leaders: AVAX (+12.5%) and APT (+9.9%).

Laggards: XRP (+2.0%) and LTC (+2.5%).

The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.

Cathedra Bitcoin pivots from mining to data centers to increase bitcoin holdings per share, responding to industry pressures created by the bitcoin halving and low mining revenue.

Metaplanet focuses on boosting bitcoin holdings per share monthly, resulting in a 587% increase in stock value year-to-date.

Bitcoin {{BTC}} has emerged as a significant treasury asset for public companies, a trend catalyzed by MicroStrategy's (MSTR) decision to incorporate bitcoin into its corporate treasury in August 2020, resulting in an over 800% increase in its stock value. According to BitcoinTreasuries.net, public companies hold approximately 354,316 BTC, about 1.69% of the total bitcoin supply of 21 million.

This move has inspired a following, with several other companies adopting bitcoin to diversify and protect themselves from inflationary pressures. Notable among these are Metaplanet (3350), Semler Scientific (SMLR) and most recently, Cathedra Bitcoin (CBIT).

Cathedra Bitcoin, a publicly traded company on the TSX Venture Exchange in Canada, has made a strategic shift from focusing solely on bitcoin mining to developing and operating data centers. The change comes as the mining industry faces increasing challenges due to the bitcoin halving. The Hashrate index, which tracks bitcoin mining revenue, is at a relatively low 43 (petahash/second) PH/s, with an all-time low of 36 PH/s, causing many public miners to struggle in 2024.

Cathedra's goal is now to maximize bitcoin holdings per share by moving away from mining to create a more sustainable cash flow. This pivot allows the company to continuously acquire more bitcoin, focusing on long-term growth in bitcoin holdings rather than costly operational ventures.

"Going forward, we will make all capital allocation decisions with the intention of maximizing our shareholders’ per-share bitcoin holdings," the company said.

Also active in the bitcoin treasury arena is Metaplanet, led by CEO Simon Gerovich. Similar to Cathedra, Metaplanet is also prioritizing growth in its bitcoin holdings. Gerovich has emphasized the company's goal of boosting its holdings each month, a strategy that has led to significant gains. Year-to-date, Metaplanet's stock value has increased by 587%, reflecting the market's positive response to its strategic approach.

MicroStrategy remains a pioneer and the most significant participant in the bitcoin treasury space. Under Michael Saylor's leadership, the company continues to innovate and expand bitcoin adoption. On Sept. 18, it announced the pricing of a $875 million convertible senior notes offering, upsized from an initial $700 million.

The notes carry a 0.625% interest rate and mature in 2028. The proceeds will be used to redeem $500 million in high-interest 6.125% senior secured notes at a redemption price of 103.063% of the principal amount, reducing the company's interest payments. The remaining funds will be used to buy more bitcoin. The offering also includes an option for initial purchasers to buy up to an additional $135 million in notes.

In a recent 8-K filing, MicroStrategy introduced an innovative concept called "bitcoin yield," which measures the percentage change in the company's bitcoin holdings relative to its assumed diluted shares outstanding, including both Class A and Class B shares. From January 1 to Sept.12 the company's bitcoin yield was 17%, with a quarter-to-date yield of 4.4%.

According to the MSTR-tracker, the bitcoin per share ratio is currently about 0.0012. This metric suggests that long-term shareholders are experiencing accretive value in their bitcoin holdings.

This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Latest Prices

CoinDesk 20 Index: 1,925.79 +5.55%

Bitcoin (BTC): $62,521.19 +4.22%

Ether (ETH): $2,428.37 +5.2%

S&P 500: 5,618.26 -0.29%

Gold: $2,585.66 +1.03%

Nikkei 225: 37,155.33 +2.13%

Top Stories

Bitcoin rose above $62,000, buoyed by the U.S. Federal Reserve's 50 basis-point rate cut on Wednesday. Reductions in borrowing costs are traditionally a bullish indicator for risk assets such as cryptocurrencies, and easing cycles have historically coincided with surges in BTC's price to all-time highs. Bitcoin has added about 4.35% in the last 24 hours while the digital asset market at large has risen over 5%, as measured by the CoinDesk 20 Index (CD20). Leading altcoins ETH and SOL lead the gains, up 5.8% and 7.4%, respectively.

Despite the long-awaited U.S. rate cut appearing to have the desired effect on crypto markets, traders are warning the rally could be short lived. They argue the bigger picture of economic slowdown and geopolitical uncertainty will hold back cryptocurrency price gains. Presto Research noted the mixed reaction across asset classes to the rate cut, which demonstrates that "growth concerns clearly exist." Arthur Hayes, CIO of Maelstrom, argued that rate cuts will fuel inflation, which could see markets falter and then "they're just going to do more of it and they’re going to make the problem even worse."

Crypto Finance, a subsidiary of Germany's largest stock exchange operator, signed a deal with Commerzbank to offer trading services to the lender's corporate clients just two weeks after reaching a similar agreement with Zürcher Kantonalbank in Switzerland. Commerzbank will provide custody services, the companies said on Thursday. The trading service offered by the Deutsche Boerse unit will be available to clients based in Germany and initially focus on trading in the two largest cryptocurrencies, bitcoin and ether. Commerzbank obtained a crypto custody license in Germany in November 2023, allowing the financial services firm to offer a wide range of services related to digital assets.

Chart of the Day

The chart shows bitcoin's short-term holder (STH) realized price of $61,998.

The STH realized price reflects the average cost for coins moved within the last 155 days, which are the most likely to be spent.

Over the past six months, bitcoin has struggled to remain above this level. A sustained move above the STH realized price would suggest a more robust continuation of the bull market.

Source: Glassnode

- James Van Straten

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Network activity indicates potential price movements as increased transactions signal growing adoption or trading interest.

However, open interest has remained largely unchanged since July, suggesting a cautious or steady market sentiment.

A significant uptick in network activity could spell good news for bullish bets on Dogecoin {{DOGE}}, the Shiba Inu-inspired memecoin that’s the largest by market cap in a multibillion-dollar cohort.

Network transactions crossed over 1.93 million transactions in the past week, IntoTheBlock data shows, beating that of other popular tokens such as Shiba Inu (SHIB), floki (FLOKI), pepe (PEPE) and others.

Dogecoin processed 1.93 million transactions last week, marking the highest weekly transaction count since early July.Although still well below the February peak, this uptick is a promising sign for the $DOGE network. pic.twitter.com/9WfNMAaEZo

— IntoTheBlock (@intotheblock) September 17, 2024

This marks the highest weekly transaction for the cryptocurrency since early July, indicating a resurgence of interest and usage of DOGE. Dogecoin has consistently maintained a higher number of transactions than other memecoins, the data shows.

However, current transaction volume remains below peak levels, so far in 2024, observed in February, which saw weekly transactions soaring above 10 million.

A spike in transactions suggests a potential revival of user engagement and could be indicative of growing adoption or increased trading activity - leading to higher prices.

For now, however, futures bets on DOGE have remained largely steady since late July amid a holiday period and a generally flat market. Open interest - or the number of unsettled futures bets - has hovered around the $500 million mark, CoinGlass data shows, indicating new money did not enter the DOGE market.