The CCIP protocol is designed to help build cross-chain applications and services and went live for early access users on the Avalanche, Ethereum, Optimism and Polygon blockchains this week.
Chainlink tokens surged Thursday as wealthy investors swapped ether for link (LINK) following the release of the company’s Cross-Chain Interoperability Protocol (CCIP) earlier this week, data shows.
LINK exchanged hands for $8 around midday in Europe as trading volume more than doubled to $580 million, helping extend weekly gains to over 25%.
On-chain data shows some whales – or large holders of an asset – added upward of $6 million to their link holdings during the morning, with the increased demand lifting prices as much as 6%.
CCIP is designed to help build cross-chain applications and services. It was being tested by at least 25 partners that are now beginning to move to the mainnet, and was pushed live for early access users on the Avalanche, Ethereum, Optimism and Polygon blockchains.
On Thursday, CCIP will become available to all developers across five testnets: Arbitrum Goerli, Avalanche Fuji, Ethereum Sepolia, Optimism Goerli and Polygon Mumbai.
Prices of some other oracle protocols also rose, CoinGecko data shows. In the past 24 hours, Band Protocol’s BAND added 9% while Uma’s UMA and API3 both jumped 5.4%.
Oracles are blockchain-based services that fetch data from outside a blockchain. Blockchains, by design, are immutable stores of data, but can’t verify the veracity of information. This is where oracle networks like Chainlink help – they refer multiple sources of information to provide reliable data to blockchain-based services and products for users.
The share of bitcoin trade volume on Japanese exchanges rose from 69% to 80% in the first six months of the year, data tracked by Kaiko show.
Since the Federal Reserve (Fed) started its aggressive interest rate hike campaign in March 2022, the Japanese yen has depreciated sharply, registering one of the most severe exchange rate turbulence on record.
The volatility has traders from Japan-focused digital assets exchanges turning to bitcoin (BTC), the world’s leading cryptocurrency by market value, widely touted as a hedge against traditional finance.
The share of bitcoin trade volume on Japanese exchanges rose from 69% to 80% in the first six months of the year, according to data tracked by Paris-based Kaiko. The total trading volume on Japanese exchanges was $4 billion in June, amounting to a 60% year-to-date surge.
The share of the bitcoin-Japanese yen (BTC/JPY) pair in total volume in bitcoin-fiat trading pairs has also increased from 4% to 11% this year.
“It signals rising appetite on Japanese markets,” Dessislava Aubert, research analyst at Kaiko, said in an email. Kaiko’s aggregate figures for Japan represent data from Bitflyer, Coincheck, Bitbank, Quoine, and Zaif.
Bitcoin is widely considered a digital gold and a hedge against traditional finance and fiat currencies, which are said to lack intrinsic or fixed value and are not backed by any tangible asset. Citizens from countries ridden with inflation and fiat currency volatility have previously embraced digital assets.
Bitcoin has surged 84% to over $30,000 this year while trading at a premium on Japanese exchanges.
“On average, BTC traded at a premium ranging between 0.5% and 1.25% on Japanese markets this year,” Dessislava Aubert, research analyst at Kaiko, said in an email.
The yen has depreciated 6.3% against the U.S. dollar this year, extending the past year’s near 14% slide. The divergent monetary policy paths adopted by the Federal Reserve and the Bank of Japan, which has maintained its pro-easing stance amid global tightening, have been primarily responsible for the yen’s decline.
Volumes have picked up on Japanese exchanges. (Kaiko) (Kaiko)
The chart shows trading activity on Japan-focused exchanges has picked up faster than Korean markets and the Nasdaq-listed Coinbase exchange.
The trend might continue considering Japan already has a regulatory framework, unlike the U.S. where authorities still rely on enforcement to oversee the industry. Last month, Japan passed a landmark stablecoin bill for investor protection.
The yen volatility will likely persist as speculation is simmering that the Bank of Japan could announce a hawkish tweak to its policy next week.
Lastly, the unthinkable is happening – inflation is rising in Japan and a key gauge that excludes energy component recently hit a four-decade high. Higher inflation after decades of chronic deflation may see more robust demand for perceived alternatives like bitcoin.
During a pilot phase, the environment was used to test the eco-friendliness of decentralized ledgers.
The U.K. Financial Conduct Authority (FCA) plans to provide access to a digital sandbox, or testing environment, for firms to see how their products perform at an early stage of development, the regulator said on its website on Thursday.
The sandbox, which started operating on a trial basis in 2020, is also open to data providers and will offer firms access to data sets, application program interfaces (API) and data security protection. During one of the two pilot phases, it was used to evaluate sustainability performance, including eco-friendly decentralized ledgers.
A sandbox provides a secure setting in which developers can test and evaluate their products in the knowledge that any unintended side effects will be isolated from a live environment. The FCA’s offering can be configured to support a number of distributed ledgers and digital-asset use cases, like building interoperability between networks, according to a person familiar with the project.
Former Economic Secretary John Glen set out plans for the sandbox in a speech last year, in which he said he wanted the country to foster crypto innovation, a sentiment echoed by his successor, Andrew Griffith.
Previously, the sandbox was available only during pilots and TechSprints, which brought people from the financial industry together to address industry challenges.
The latest price moves in crypto markets in context for July 20, 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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Bitcoin spot ETFs could increase BTC demand to the tune of $30 billion, according to a report by NYDIG. The crypto trading firm estimates that there are $27.6 billion in spot-like products, compared with $210 billion invested in funds for gold, to which bitcoin is often compared. “Bitcoin is about 3.6x more volatile than gold, meaning that on a volatility equivalent basis, investors would require 3.6x less bitcoin than gold on a dollar basis to get as much risk exposure. Still, that would result in nearly $30B of incremental demand for a bitcoin ETF,” NYDIG writes. The possibility of a spot bitcoin ETF in the U.S. looks far more likely since BlackRock submitted an application to list one with a “surveillance-sharing” agreement, which the SEC sees as necessary to prevent market manipulation.
El Salvador’s junk-rated bonds due 2027 have seen a substantial upward trend in the last six months amid bitcoin’s rally, defying some analysts’ expectations. The Central American country, which made BTC legal tender in 2021, had its debt rating downgraded by Fitch last September with a prediction of a debt default in January. In fact, the junk-rated bonds are up 62% since the start of 2023 and are trading at 72 cents on the dollar. Bitcoin rose 79% in the same period. El Salvador’s bonds have, however, even outperformed the Invesco Emerging Markets Sovereign Debt ETF (PCY), one of the largest holders of the country’s debt, according to Factset.
Kuwait’s financial regulator has banned crypto payments, investment and mining as a means to combat money laundering. The prohibitions are aimed at coming into compliance with the Financial Action Task Force’s (FATF) global recommendations for crypto assets, according to the regulator. “Securities regulated by the Central Bank of Kuwait and other securities and financial instruments regulated by the Capital Markets Authority are excluded from this prohibition,” the regulator said in a circular. FATF compliance does require guardrails against money laundering, but the international watchdog says it has not asked any countries to ban crypto, it told CoinDesk in May.
The protocol was built on the architecture of LayerZero, which raised $120 million at a $3 billion valuation earlier this year.
The venture capital arm of Binance has invested $10 million in Radiant Capital, a decentralized finance (DeFi) lending and borrowing protocol.
The new funds will go toward tech and product development, which includes expanding collateral and deployment on the Ethereum mainnet
Radiant is built on architecture from LayerZero Labs, another Binance Labs portfolio company. The lending platform aims to take on DeFi’s fragmented liquidity problem by serving as a money market where users can deposit and borrow assets across multiple chains.
Traders, known as Dynamic Liquidity Providers, can lock in the native RDNT token to profit from interest and flash loan fees and have governance authority within the Radiant DAO. The protocol’s platform fees are paid out in bitcoin (BTC), ether (ETH), BNB Coin (BNB) and stablecoins.
Radiant, which currently has about $265 million in total value locked, according to DeFi Llama data. The platform supports more than 20 collateral options and plans to add new options in the future as the Radiant DAO expands the functionality to additional chains.
“Radiant Capital’s commitment to facilitating seamless cross-chain transactions for DeFi, and performance on Arbitrum and BNB Chain demonstrates its potential for driving mass adoption,” said Yi He, co-founder of Binance and head of Binance Labs, in the press release.
Radiant was built on the interoperability and cross-chain messaging infrastructure of LayerZero, which raised $120 million in April at a $3 billion valuation.
Tokens of Radiant Capital RDNT jumped over 10% to 31 cents after the news of Binance’s investment.
UPDATE (July 20, 13:03 UTC): Adds RDNT token move in last para. Updates headline.
Some argue it would weaken crypto’s payments use case or form a bridge to a digital dollar.
The U.S. Federal Reserve’s controversial instant payments service, FedNow, went live Thursday with 35 banks and credit unions participating, the central bank announced.
Early adopters include JPMorgan Chase and Wells Fargo, with 16 other institutions supporting processing of payments that the Fed argues will offer just-in-time access to paychecks and invoices.
“The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient,” Federal Reserve Chair Jerome Powell said in a statement.
Officials including Powell have previously said the real-time payment network is needed to avoid having to depend on private sector alternatives, like the now abandoned stablecoin Diem (previously named Libra) by Marc Zuckerberg’s Meta (previously Facebook) while some have seen it as a step towards a central bank digital currency.
FTX users have until Sept. 29 to file their bankruptcy claims.
Several users of bankrupt crypto exchange FTX are being targeted by a potential phishing attack after being sent a “reset password” request from the exchange’s official customer support email.
The email, which has been reviewed and verified by CoinDesk, was sent by support@ftx.com – the official email address before the exchange collapsed in November.
The password reset link routes to the FTX claims portal that allows users to submit bankruptcy claims for assets they held on the platform before its demise.
Mossab Hussein, co-founder of cybersecurity firm Spidersilk, said the surprising emails can be attributed to one of two options: “It’s either FTX itself sending those emails [to notify them of the claims portal] and giving people a scare. Or, someone has “a list” of emails and is bruteforce resetting their credentials via the portal.”
If a hacker gained access to user’s personal email addresses, they could feasibly gain access to a claimant’s account and divert funds to their personal wallet.
FTX spokespersons didn’t respond to request for comment immediately.
On Monday, many FTX users received an email from Kroll, the restructuring administrators of FTX, explaining that the deadline for claims is set for September 29, 2023.
FTX owes roughly $8.1 billion to customers after it imploded in a pool of leverage and illiquid tokens last November in an event that ravaged the wider crypto market.
The Financial Conduct Authority will consult on rules once the government gives it the necessary powers, the regulator said in its annual report.
The U.K.’s Financial Conduct Authority (FCA) is designing prudential requirements for firms carrying out crypto activities.
The regulator, which is in charge of maintaining a registry of crypto firms approved for operations under the country’s anti-money laundering requirements, will also consult on prudential rules for companies engaged in crypto activities once the “Treasury and Parliament bring those activities under our regulation,” the regulator said in its annual report published Thursday.
The FCA did not immediately respond to a CoinDesk request for comment on the timeline for receiving regulatory powers.
The regulator already has a prudential regime for investment firms like fund managers, asset managers and trading firms that are based in the U.K. The regime requires firms to assess capital adequacy and risk to identify potential harm to investors and provide appropriate resources to mitigate harm.
Last year, the FCA put out a notice for firms with exposure to crypto companies, urging them to “have appropriate systems and controls to counter the risk of being misused for financial crime,” and review if the firms they work with are registered crypto companies.
The FCA, which was approved for a host of new powers under a recently passed financial markets bill, stands to be the U.K.’s key crypto watchdog as the country explores its ambition to be a global hub for the sector.
CoinDesk has reached out to the FCA for further comment.
The embattled Harbour Trade credit pool minted $1.5 million of DAI stablecoin secured with loans to a consumer electronics firm, which defaulted on $2.1 million of debt.
DAI stablecoin issuer MakerDAO’s community has decided to halt lending to a tokenized credit pool on the Centrifuge protocol after accruing $2.1 million of loan defaults.
In a governance vote that concluded Thursday at 12 p.m. (ET), voters unanimously favored stopping additional lending to the embattled credit pool, managed by fintech firm Harbor Trade. Maker is led by a decentralized autonomous organization (DAO), where those who hold MKR tokens can participate in governance decisions.
“While Harbor Trade has verbally committed to cease additional draws and voluntarily wind down the vault, community members have expressed concern about the existing 7 million Debt Ceiling and the risk of potentially increasing exposure to this vault,” a MakerDAO governance post said.
Maker’s $4.5 billion stablecoin DAI is backed by debt positions overcollateralized by cryptocurrencies, and increasingly, tokenized versions of loans and bonds, to earn a yield.
The Harbor Trade credit pool minted some $1.5 million of DAI stablecoins from MakerDAO and secured them with loans made to a consumer electronics firm. The borrower firm failed to pay down $2.1 million of debt matured in April.
Harbor Trade is “actively engaged in the workout process” and forecasts “a meaningful or full recovery,” according to MakerDAO, but the procedure could take six months or more.
Bitcoin investors have been unmoved by recent macroeconomic data. Muted reactions suggest that they’ve already priced in much of what has occurred
Initial jobless claims in the United States for the week ending July 15, declined to 228,000, 9,000 lower than the prior week, and below expectations for 242,000. The second, consecutive weekly decline reflects a persistently strong labor market and
It also marks the mild reaction to significant macroeconomic events over the past 10 days.
BTC prices moved less than 2% after last week’s Consumer Price Index, Non-Farm Payrolls and Quarterly GDP growth.
The knee-jerk narrative for cryptocurrencies for today’s release is that tight labor markets prolong any chance that the Federal Open Market Committee (FOMC) will halt interest rate increases. This would likely limit crypto prices.
The real-time crypto market reaction suggests that crypto investors have already included this into their investment calculus. So while a lid appears to be on bitcoin prices, its appears to be a light one, applying minimal downward pressure
BTC prices fell 0.22% during the 8 AM ET hour, following the data release. Ether by comparison sank 0.25%. Both declines occurred on lower than average volume, illustrating the muted impact of what has become a recurring theme for U.S. labor markets.
The 4-week average of jobless claims declined for the third consecutive week. If the FOMC is looking for weaker job growth before pivoting to a lower interest rate environment, this news would not support such a move.
Further exacerbating tight labor markets is higher median earnings for wage and salaried workers. According to the Bureau of Labor Statistics, second quarter median earnings for full- time wage and salary workers was 5.7% higher than a year prior, compared to a current 4% increase in Consumer Prices.
While inflation has been steadily declining, labor markets and overall earnings’ strength would likely cause prices to rise, were the FOMC to forego a rate hike. Market expectations for a 25 basis point (bps) increase on July 26 are now 99.8%, up from 98% a day prior.
Crypto investors seem unfazed with bitcoin levels almost identical to where they stood 30 days ago. The same holds true for Ether, as both assets have been trading near their respective 20-day moving averages.
Momentum for both is neutral as well. Their respective Relative Strength Index (RSI) figures sit near 50, signaling neither bullish nor bearish sentiment.
