Floki prices rallied on Sunday amid a bitcoin-led market push and bets on the token’s “China narrative.”
Floki (FLOKI) spiked over 10% on Sunday and saw its highest trading volumes in over three weeks as traders bet on the tokens amid a China-focused push for its Valhalla metaverse game.
Trading volumes for the tokens, which are fashioned after the Shiba Inu dog breed, jumped to over $60 million, up from last week’s $25 million average. The spike comes as ads for its Floki game featured in some Chinese sporting tournaments. This could have attracted some speculators who hypothesized that the move might attract new traders from China.
In a tweet, Floki developers said they saw an influx of Chinese-based community members on their social media groups.
Floki previously said it was targeting China in its latest push toward attracting more users for its Valhalla game, as previously reported. The game’s content and technical documents will be available in both traditional Chinese and simplified Chinese and are specifically targeted toward the Chinese gaming market, developers added at the time.
The “China narrative” has caught on among some on Crypto Twitter ahead of lax laws for retail trading in Hong Kong, driving up prices of some Asia-focused tokens, such as conflux (CFX) in the past few weeks.
Starting June 1, Hong Kong will allow traders to invest in some tokens, such as bitcoin, ether and solana, on regulated exchanges in the country. Traders are not allowed to hold any stablecoins, but the move has fuelled sentiment that wealthy Chinese speculators could soon plough money into the crypto markets.
“While most major economies are expected to slow down this year, the Chinese economy is projected to grow strongly,” said Floki core developer @100bviking in a Twitter message to CoinDesk. “J.P. Morgan projects a 4% GDP growth for China in 2023; that’s 2.5 times more than what is projected for the global economy and 4 times more than projected US economic growth.”
“This strong growth will spill over into crypto, especially with Hong Kong legalizing crypto in a few days’ time which is a sign of China warming up to crypto. There is a very high probability that China will drive the next crypto bull run,” @100bviking added.
The joint venture between Gulf Innova and Binance aims to begin offering crypto services in the country later this year.
Gulf Binance, a joint venture between crypto exchange Binance and Gulf Energy’s innovation arm Gulf Innova, has received a digital asset operator license in Thailand, according to a Friday press release.
The rubber-stamp from Thailand’s Ministry of Finance will allow the firm to advance plans to open a regulated crypto exchange and broker in the southeast Asian country. The platform will likely launch by year’s end, according to a press statement.
“By harnessing Binance’s expertise together with Gulf’s established local presence and network, Gulf Binance aims to showcase the full potential of blockchain technology to meet the needs of Thai users, Binance Head of Asia, Europe, and MENA Richard Teng said in a statement. Gulf Energy is one of Thailand’s largest private power producers.
Thailand has signaled it is warming up to positioning itself as an emerging Asian crypto hub. In January, the country’s regulators introduced a set of rules for crypto custody services, and later announced a $1 billion tax break for firms issuing digital tokens for investment. A 2022 ban on crypto lending and staking services and restrictions on digital asset-related advertising, however, indicates the nation is taking a careful approach to supervising the emerging market.
The latest price moves in crypto markets in context for May 17, 2023.
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.
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Blockchain-based play-to-earn project Axie Infinity’s native cryptocurrency AXS ralliedafter the company’s card-based strategy game debuted on the Apple app store. AXS surged over 12% from $7.16 to $8.04 on the news, becoming the top gainer on CoinDesk Indices’ leaderboard. The game will initially launch in the Apple store across Latin America and Asia. Bitcoin traded down on Wednesday, struggling to hold the $27,000 mark as investors keep a close eye on developments around raising of the debt ceiling in the U.S. The world’s largest cryptocurrency by market value has lost 9% over the past month.
Crypto companies fleeing U.S. regulatory uncertainty have been offered a welcome in France, by officials boasting a regulatory framework that offers relative predictability. The European Union member already boasts around 74 registered crypto companies. “In France, we are proud to be pioneers,” said Benoît de Juvigny, Secretary General of the Autorité des marchés financiers (AMF), noting his country’s crypto service asset provider regime – known as PSAN – was passed in 2019, “If American players want to benefit, in the very short term, from the French regime, and from the start of 2025 from European arrangements, clearly they are welcome,” he added. “We have good relations and discussions with our U.S. counterparts.”
Using distributed ledger technology (DLT) in securities markets could create savings north of $100 billion per year, a report produced by a major traditional-finance lobby group has said. In a paper published Tuesday evening, the Global Financial Markets Association (GFMA) called for regulators to allow the technology that underpins crypto to aid collateral management, asset tokenization and sovereign bond markets.“ Distributed ledger technology holds promise for driving growth and innovation,” said Adam Farkas, Chief Executive of GFMA, whose affiliates in the U.S., Europe and Asia count major players such as JPMorgan Chase, HSBC and Nomura among their members.
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The agreement offers Talos clients connectivity to Coinbase Prime for spot liquidity and custody services.
Talos, a crypto trading platform for institutional investors, is working with Coinbase Prime to expand access to digital assets for customers of both firms.
With rising demand from institutional investors for more secure and efficient trading platforms, the agreement offers Talos clients access to Coinbase Prime for spot liquidity and custody services, according to a press release. Coinbase Prime, which is typically used by institutional investors, is an integrated system that offers users offline storage and advanced trading.
The pact will also give Coinbase Prime clients access to Talos’s trading and connectivity products, according to the press release.
With institutional investors pushing further into crypto, demand for more sophisticated means of trading, investing and managing the digital asset has ramped up. Last week financial institutions T. Rowe Price, WisdomTree and Wellington Management joined layer 1 blockchain Avalanche’s Evergreen subnet to make execution and settlements more efficient. Last month, Nasdaq said it is aiming to debut its crypto custody services by the end of the second quarter.
“We’ve seen consistently growing demand, despite recent market conditions, for high-performance digital asset trading platforms as institutional investors continue to build for long-term participation in this emerging asset class,” Anton Katz, co-founder of Talos, told CoinDesk in an interview.
Katz added that unlike retail investors, institutional firms entering the space require trading platforms with a much higher standard for safety and reliability along with more efficient means of trading that matches what they’re accustomed to in the traditional financial (TradFi) world.
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Talos raised $105 million in a Series B funding round last May that included investments from U.S. financial services giants Citigroup (C), Wells Fargo (WFC) and BNY Mellon (BK). The crypto trading platform offers institutional investors a “full trade lifecycle” which includes liquidity aggregation, trading, analytics and settlement through a single point of access, according to the statement.
Creditors can expect to receive between 40% and 65% recoveries, ideally in crypto, attorneys for the bankrupt crypto lender said in court Wednesday.
Voyager Digital was taken by surprise when Binance.US canceled a $1 billion deal to buy its assets on Tuesday. The exchange was still showing interest as recently as last week, Voyager’s attorneys said in a New York courtroom on Wednesday.
Binance.US had made an offer for the bankrupt crypto lender in December but pulled out on Tuesday, citing an “uncertain regulatory climate” in the U.S.
“The debtors have been in constant contact and communication with Binance.US and as lately as this past Friday, Binance.US had expressed the desire to close the transaction as soon as possible,” Christine Okike of law firm Kirkland & Ellis, representing Voyager, told a bankruptcy court in the Southern District Court of New York, adding that “the debtors reserve all rights against Binance.US for breach” of the deal.
Given the collapse of the Binance.US deal, likely recoveries for Voyager creditors are in the range of 40% to 65%, Okike said, depending on whether Voyager wins a parallel lawsuit involving bankrupt crypto exchange FTX, and how much recovery FTX offers its creditors.
Okike also said Voyager would attempt to give creditors back their holdings in original cryptocurrency, dismissing speculation it would instead seek to pay the cash equivalent.
“The debtors have every intention of making ‘in kind’ distributions subject to regulatory restrictions and our platform functionality,” Okike said, but warned that a shifting legal position from U.S. regulators could complicate Voyager’s ability to do so.
“We’re faced with a situation where the SEC [Securities and Exchange Commission] may not have taken a position or issued a formal order with respect to [Voyager’s token] VGX,” Okike said, “But they’ve made certain allegations that could make it untenable in certain situations for the debtors, for instance, to sell VGX into the market.”
The regulatory uncertainty that would require payments to be made in cash applied to tokens with a likely total value of $1.6 million within an overall estate of around $1 billion, Okike said.
Voyager filed for bankruptcy in July, and a deal by FTX to buy its assets fell through after FTX also collapsed in November. The Binance.US deal was held up in part by protestations from the SEC that the fine print of the deal offered exoneration for breaches of tax or securities law.
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Todd Groth of CoinDesk Indices shares some thoughts on how macro analysis works in crypto.
One thing I like about macro investing is the scope.
While financial analysts and their respective crypto degens counterparts are looking at balance sheets, earnings statements, Solidity code and social media sentiment, macro strategists get to think about the consequences of exogenous things.
Put another way, while the analysts examine the forest tree by tree, macro investors sit on a hill, surveying the whole valley and considering which parts of the forest will be nourished or threatened by rainfall, forest fires, changes in land use and other factors outside of the idiosyncrasies of the micro analysis.
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Being macro in digital assets means considering historical environments in which cryptocurrencies have thrived as well as more challenging environments, such as 2022.
Last year, digital assets were clearly sensitive to the Federal Reserve’s efforts to tighten financial conditions. There are many ways to measure financial conditions, but to keep it simple we can simply use trends in nominal and real yields, U.S. dollar exchange rate baskets and corporate credit spreads. From these measures we can create a financial conditions indicator and see how it relates to the historical risk-adjusted performance of digital assets, as proxied by bitcoin (BTC) and ether (ETH).
To estimate trends in these financial-condition proxies we utilize a trend signal similar to the one used in the Bitcoin Trend indicator (BTI) released recently by CoinDesk Indices.
To represent nominal yields (“NomRates”), we use two-, five- and 30-year U.S. Treasury yields; we subtract the five-year breakeven inflation rate derived from TIPS to create a proxy for two-, five- and 30-year real yields (“RealRates”). U.S. dollar denominated baskets of advanced and emerging economy currencies are used alongside a broader basket as three proxies for the dollar (“FX_USD”). And option adjusted spreads (OAS) for high-yield corporate bonds rated BB and CCC are used alongside an investment-grade index to represent U.S. credit conditions (“Credit_OAS”).
Trend signals are generated from the data within these four macro indicator buckets, then averaged to result in a positive, neutral and negative score for the financial condition regime. Risk-adjusted return ratios (annualized return per unit of volatility) are calculated on BTC and ETH within each regime and compared to an unconditional buy-and-hold strategy (“BuyHold”) shown in the figure below.
(CDI Research, St Louis FRED)
From this preliminary macro regime analysis it’s clear that financial conditions matter when investing in digital assets. Keeping a pulse on market conditions, particularly real and nominal interest rates and credit conditions, can help to navigate the crypto cycle better by offering a better risk-adjusted return than a simple buy-and-HODL approach.
In summary, as investors in cryptocurrencies we’d all benefit from taking a broader macroeconomic and market perspective to not miss the forest for the trees.
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The U.S. Department of Justice last year charged three members of a Miami crew in a crypto-related scheme from 2020.
The leader of a Miami crew charged by the U.S. Department of Justice (DOJ) with defrauding banks in a 2020 cryptocurrency-related scheme has pleaded guilty, an official notice from Wednesday said.
Esteban Cabrera Da Corte was one of three individuals arrested in relation to the crime, and was accused of “participating in a scheme to steal millions of dollars’ worth of cryptocurrency and trick U.S. banks into refunding the millions used to purchase that cryptocurrency, in part by using personal identifying information stolen from other people.”
The scheme saw U.S. banks processing more than $4 million in false reversals, while a cryptocurrency exchange lost around $3.5 million worth of digital assets, the DOJ’s notice said.
Cabrera, a 26-year-old from Miami Florida, pled guilty to “one count of conspiracy to commit wire fraud,” which comes with a 20-year prison sentence, and has agreed to pay restitution of $3.6 million – with an additional forfeiture of $1.2 million.
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The FIX Protocol has added support for the Digital Token Identifier (DTI) to simplify and standardize communication for trading digital assets.
A key piece of plumbing in conventional markets is getting enhanced in a way that could make it easier for stalwarts of traditional finance (TradFi) to trade crypto.
The Financial Information eXchange Protocol (FIX) – a common language that çağdaş trading systems (investors’ machines, exchange computers and the like) use to speak with each other – has added greater support for cryptocurrencies and other digital assets. It’s done so by adopting the Digital Token Identifier (DTI) ISO standard, according to a Monday press release.
Stocks, bonds and other older financial instruments around the globe already use various standardized ID codes – a way to make it simpler to find and trade them and one of the accouterments Wall Street–types expect when navigating markets. So, the emergence of DTI is a way to make crypto more palatable for TradFi. Meanwhile, FIX is what conveys trades throughout TradFi.
“Adding the DTI standard to the FIX Protocol was an easy decision as the DTI extends the existing functionality to the world of digital assets, which helps the market evolve to work with this asset class,” Jim Kaye, executive director at FIX, said in the press release. “We can see many benefits of adding the DTI, including making it easier for the industry to audit their transactions and increase transparency, thereby bringing more efficiencies to the market.”
The press release noted that DTI can be used by regulators to monitor digital trades for anti-money laundering and monitoring risk in trading, too.
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Over 1,300 DTIs have been issued already, according to the press release. This includes private ledgers and tokenized assets.
European Union countries are making the transition to a tough new crypto regime set by Brussels.
Existing crypto companies could get a “fast-track regime” to new European crypto rules, the country’s Financial Markets Authority (AMF) said in a Friday statement.
France recently toughened its crypto registration procedures in the wake of FTX’s collapse, and in preparation for the European Union’s Markets in Crypto Assets law, MiCA.
The European Parliament voted in favor of MiCA last week, and the rules are set to take effect starting around July 2023.
There’ll now be “consideration of a possible fast-track modular licensing” between France’s existing regime, known as PSAN, and MiCA, which includes much tougher governance, consumer-protection and financial-stability rules, the AMF said.
The regulator said it will also consider how to bring provisions on reserves, conflicts of interest, custody, and documentation in line with Europe.
Under MiCA, companies already registered in France – such as Binance or Bitstamp – will get an extra 18 months to comply with the higher European norms.
“These players can, during this period, continue to offer their services solely to the French public,” the said the AMF, responsible for administering one of the most advanced crypto regimes currently in effect in Europe.
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