Stand With Crypto, a bipartisan advocacy group, has moved Democratic nominee Kamala Harris' rating to 'NA' from B.

The democrats do not have a comprehensive crypto policy, unlike the Republican campaign.

Democratic nominee Kama Harris is now ranked 'NA' by Political Action Committee Stand With Crypto, a downgrade from her previous rating of 'B.'

Harris' prior rating of B was based on a quote from a recent speech she gave to donors, in which she said she would "invest in America's future" and encourage "innovative technologies like AI and digital assets while protecting consumers and investors."

However, aside from that, her campaign lacks a crypto policy.

In contrast, the Republican campaign has a specific crypto policy, which says it will "end Democrats' unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency". Also, it promises to "defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets."

CoinDesk recently reported, citing campaign sources, that Harris' campaign isn't likely to include a deep dive into her crypto views.

Sources that spoke to CoinDesk said her campaign is keeping digital assets policy broad and high-level, with crypto as one of several economic innovations she plans to highlight.

The campaign is maintaining high-level discussions with crypto insiders, including executives from Ripple Labs and Coinbase.

Speaking earlier with CoinDesk, Coinbase's Chief Legal Officer Grewal expressed optimism about the Harris campaign's growing understanding of crypto industry needs, noting progress in both her and Republican candidate Donald Trump's positions.

"All we want are sensible rules, and we'll follow them," he told CoinDesk.

Grewal also told CoinDesk that he hoped crypto would remain a non-partisan issue, with Circle's Jeremy Allaire later echoing the sentiment during an interview with CNBC, calling it a "purple" issue.

Bettors on PolyMarket are giving Harris an edge, assigning her a 50-48% chance over Republican candidate Trump.

Sky, the decentralized finance lender previously known as MakerDAO, might be ready to pause its plan to offboard wrapped bitcoin (WBTC) as collateral, following a fresh recommendation from an influential advisor.

The development came after a lengthy discussion on the Sky discussion forum with Mike Belshe, CEO of BitGo, which was the sole custodian of the bitcoin backing WBTC until August, when a deal was cut to transfer custody to a strategic partnership with Tron founder Justin Sun.

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.

The influential Sky adviser, BA Labs, had expressed concerns about Sun's involvement with the project – a crucial consideration given that some $200 million of loans on the platform were in some way linked to WBTC collateral. Last week, Sky community members overwhelmingly voted to proceed with the adviser's recommendation to offboard WBTC as collateral, in a five-step process starting in early October.

But discussions over the matter continued even after the vote, with Belshe posting extensively in the forum in recent days that the new custody arrangement was misunderstood, and that Sun would not have the ability to singlehandedly make changes to the structure.

"They will not 'have the ability to direct changes to key management practices' at BitGo or BitGo Singapore," two of the entities overseeing the multi-signature keys controlling the new custodian, Belshe wrote on Sept. 20.

Then on Tuesday, BA Labs wrote that "the additional details and clarity put us in a more comfortable position with the current state of WBTC operations and key management."

The advisor noted that collateral exposure to WBTC had "fallen somewhat to current levels around $170 million of total borrowing," reducing the risk to a "more acceptable range."

"While we continue to have concerns about BitGlobal serving as a signer for WBTC, we find it is no longer at a level requiring immediate collateral offboarding," BA Labs wrote. "Therefore, we recommend indefinitely pausing the collateral offboarding procedures."

Wrapped bitcoin alternatives

Sun, in response to some of the concerns raised about his involvement with the project, had told CoinDesk that WBTC has a "sterling track record that is unmatched by any competing offers recently floated by the skeptics."

The drama around wrapped bitcoin has energized competitors offering alternative versions of the token, including dlcBTC, Threshold's tBTC and FBTC, which has the support of Mantle Network. And on Sept. 12, Coinbase, the biggest U.S. crypto exchange and a custodian in its own right, debuted its own wrapped bitcoin competitor, cbBTC.

China overnight joined in what's now a near global monetary easing campaign by the major economies.

Bitcoin took aim at rising past $65,000 for the first time since early August.

A breakout above the $65,000 level is likely necessary to confirm a bull move, said one analyst.

The price of bitcoin {{BTC}} took aim at more than a one-month high during U.S. afternoon trading hours on Tuesday as the tailwind of what's shaping up to be a near global monetary easing cycle continued to push crypto markets higher.

Bitcoin at press time was ahead nearly 2% over the past 24 hours at $64,300. The price hasn't been above $65,000 since the first week in August.

China overnight joined nearly all other major global economies in easing monetary policy to combat a slowdown in the economy. The news sent the Shanghai Composite higher by more than 4%, but provided only a small and brief bump in the price of bitcoin.

Prices actually dipped under $63,000 in the U.S. morning hours after the Conference Board reported a sharp decline in consumer confidence in September, its headline index tumbling to 98.7 from 105.6 – the steepest monthly fall since August 2021. "Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further," said the Conference Board's Dana Peterson. "Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income."

The news though, sent expectations of the U.S. Federal Reserve cutting its benchmark interest rate by another 50 basis points at its November meeting to 61% from 50% a day earlier, according to CME FedWatch.

Shortly after, the latest figures showed a sizable jump in the U.S. M2 money supply in August. The combination of easier China and U.S. monetary policies and rising money supply appeared to be the catalyst for bitcoin's sustained rise throughout afternoon trading. Gold too, liked the news, jumping 1.4% to yet another record high of $2,690 per ounce.

With today's advance, bitcoin is now higher by more than 10% from week-ago levels, but it's hard to say there's been an upside breakout when the price remains below the level of just a few weeks ago.

"Very psychologically difficult to flip from looking to trim on pops during chop to letting your winners ride," wrote well-followed analyst Will Clemente. "A confirmed change in market structure above $65,000 on BTC is the threshold for risk on and switching this bias in my opinion."

New York – Former Alameda Research CEO Caroline Ellison was sentenced to 24 months – or two years – in prison by a federal judge on Tuesday.

The judge said Ellison, who will also have to forfeit about $11 billion, could serve the sentence at a minimum-security facility.

Ellison testified against Bankman-Fried during his criminal trial last year, alleging he tried to bribe foreign officials and deliberately shared misleading financial data with lenders.

Her testimony was a "cornerstone" in Bankman-Fried's conviction, prosecutors said in a sentencing memorandum ahead of Tuesday's hearing. Bankman-Fried was convicted on all seven counts of fraud and conspiracy he faced, and was sentenced to 25 years in prison earlier this year. He's now appealing the conviction.

Ellison's own attorneys argued ahead of the hearing that she provided "extraordinary cooperation" and did not pose any recidivism risk.

Read all of CoinDesk's coverage here.

The U.S. Securities and Exchange Commission has settled fraud accusations with firms associated with Archblock and the TrueUSD stablecoin.

The related companies were also said to offer and sell securities tied to TUSD without registering with the SEC.

TrustToken and TrueCoin – now rebranded and under the umbrella of Archbock – settled accusations that they knowingly misrepresented the backing of the TrueUSD {{TUSD}} stablecoin and offered securities tied to it without properly registering, the U.S. Securities and Exchange Commission said in a Tuesday statement.

The California-based firms, which didn't admit or deny wrongdoing in settling with the SEC, had claimed TUSD enjoyed one-to-one dollar reserves when the stablecoin's issuer was instead investing in "a speculative and risky offshore commodity fund," the agency said.

The companies agreed to pay $163,766 each in fines, and TrueCoin will return nearly $400,000 in profits and interest, assuming a federal court approves the settlement. They've also agreed not to violate the relevant securities law, the SEC said.

TrueCoin was the original issuer of TUSD, which later ended up in the hands of offshore firm Techteryx and has a current market cap of nearly half a billion dollars. TrustToken operated a "so-called lending protocol," TrueFi, the SEC said. The entities in Tuesday's settlement are accused of engaging in unregistered offers and sales of securities involving TUSD through TrueFi, and the agency said they remained closely tied to the asset after unloading the stablecoin to the other issuer.

Read More: TrueFi’s TRU Token Rallies Over 200% After Binance’s TUSD Mint Sparks Speculation

"TrueCoin was also at least partly responsible for the design and content of theTrustToken website, which included links to buy TUSD and invest in TrueFi," according to the SEC's complaint.

Both companies were said to be aware of redemption problems in 2022 with the popular stablecoin, the SEC said. Archblock didn't immediately respond to an email requesting comment.

“TrueCoin and TrustToken sought profits for themselves by exposing investors to substantial, undisclosed risks through misrepresentations about the safety of the investment,” said Jorge G. Tenreiro, acting chief of the SEC’s Crypto Assets & Cyber Unit, in a statement. “This case is a prime example of why registration matters, as investors in these products continue to be deprived of the key information needed to make fully informed decisions.”

At one point, more than 13% of TUSD were tied to profit-seeking opportunities on the TrueFi platform, according to the complaint.

TUSD slipped from its $1 dollar peg earlier this year.

Bridges have consistently posed serious security risks, especially in connecting Bitcoin and Ethereum, the two largest blockchains. These ecosystems remain largely isolated from each other, and cross-chain bridges have repeatedly been vulnerable to hacks, resulting in billions of dollars in losses. What’s needed is a new approach — one that leverages Bitcoin's robust security to create non-custodial asset transfers between chains.

Current bridges often rely on centralized components and cryptographic systems that introduce single points of failure. When these bridges are compromised, user funds are immediately at risk. Instead of addressing the root causes, the industry has focused on increasingly complex solutions that only add more attack vectors. This approach has not solved the fundamental security flaws.

Bitcoin's proof-of-work consensus has a decade-long track record of reliability. Rather than trying to reinvent the wheel, we should be looking to Bitcoin as the foundation for secure cross-chain infrastructure. While some argue that Ethereum’s programmability makes it better suited for cross-chain activity, its complexity has led to numerous vulnerabilities, particularly in Ethereum-based bridges and Layer 2 solutions.

That said, Ethereum's flexibility is valuable for innovation, and its role shouldn’t be diminished. But when securing billions in cross-chain assets, Bitcoin’s proven security model is essential. By anchoring cross-chain tunnels to Bitcoin's blockchain through mechanisms like Proof-of-Proof (PoP), we can create a system that inherits Bitcoin’s resistance to attacks without modifying its core protocol.

This approach could enable secure, trustless asset transfers by using Bitcoin scripts and covenants for locking and unlocking assets across chains. While Bitcoin’s scripting language may be limited, it has been rigorously tested and remains a reliable foundation. Innovations like BitVM further demonstrate how Bitcoin's security can be extended to support complex cross-chain interactions.

Some argue that Bitcoin is too slow or inflexible for cross-chain infrastructure. However, in blockchain systems, speed and complexity often come at the cost of security. Bitcoin’s simplicity is a feature, not a drawback, making it an ideal trust anchor for cross-chain tunnels.

By periodically publishing state roots to Bitcoin, other chains could inherit Bitcoin’s security robustness, creating a scalable and secure foundation for cross-chain interoperability. This would allow other networks to benefit from Bitcoin's security without requiring changes to Bitcoin itself.

Building secure cross-chain infrastructure will take collaboration between developers from different ecosystems, along with new standards and practices. But the reward — achieving secure, trustless interoperability between Bitcoin and Ethereum — makes the effort worthwhile.

It’s time to stop viewing Bitcoin and Ethereum as competitors and recognize them as complementary parts of a broader ecosystem. By combining Bitcoin’s security with Ethereum’s programmability, we can build a more secure and functional blockchain network, with cross-chain tunnels offering a better alternative to the fragile bridges of the past.

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.

Former Alameda Research CEO Caroline Ellison will learn her fate in a few hours. She may spend the next several months or years behind bars, but her attorneys, the Department of Justice and the Probation Office all seem to think she should remain a free woman after the amount of cooperation she provided.

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To jail, or not to jail

The narrative

Attorneys for former FTX group executive Caroline Ellison argue she shouldn't spend any time in prison after cooperating with prosecutors, FTX's bankruptcy estate and FTX's creditors. Prosecutors did not provide a specific recommendation, but moved for a below-guidelines sentence.

Why it matters

Caroline Ellison was the CEO of Alameda Research who, in her own words, doctored balance sheets that the FTX group sent to companies that loaned FTX money as part of an effort to hide its actual financial status. On Tuesday, a federal judge will decide if she goes to prison and how much time she'll spend behind bars, if any.

Breaking it down

Caroline Ellison ran Alameda Research under Sam Bankman-Fried, who was also briefly her romantic partner. Alongside other FTX executives, she was arrested shortly after the company's collapse, and pled guilty to fraud and conspiracy charges in December 2022.

Bankman-Fried, who was convicted on identical charges late last year, was sentenced to 25 years in prison after the government's probation office recommended over 100 years based on sentencing guidelines. Ellison's pre-sentence investigation report recommended three years of probation and time served – meaning no prison time – her attorneys said earlier this month.

Ellison's attorneys also argued that she shouldn't spend any time in prison, citing her cooperation with the Department of Justice – including her testimony against Bankman-Fried – and her work to help creditors and FTX's bankruptcy estate recover funds. As part of their sentencing memorandum, Ellison's attorneys included letters from John J. Ray III, the current CEO of FTX and attorneys for FTX's creditors (alongside the usual selection of supportive notes from friends and family).

The DOJ did not provide a specific sentencing recommendation, unlike with Bankman-Fried (who prosecutors said should spend 40 or 50 years behind bars, below the probation office's 100-year recommendation). Instead, prosecutors said they would make a motion under Section 5K1.1 of the sentencing guidelines, which means they recommend a sentence below the guidelines calculation.

"What is particularly unusual about the speed of Ellison’s cooperation is how many times she met with the Government in a short span of time, and how quickly she pleaded guilty to the full slate of misconduct related to her participation in a complex financial fraud," the DOJ filing said. "That required numerous lengthy meetings with the Government in short succession, as well as a mindset that she was prepared to be fully candid with the Government from the outset of her cooperation, and accept complete responsibility for her crimes without minimization or evasion."

The remaining wild card is Judge Lewis Kaplan, who oversaw last year's trial and was a firsthand witness to Ellison's testimony.

Kaplan sentenced Ryan Salame, the former CEO of FTX Digital Markets, to more than seven years in prison earlier this year. Like Ellison, Salame pled guilty to criminal charges, but unlike her, he did not testify or provide the same cooperation. He also faced different charges, but his sentence suggests the extreme upper bound for Ellison, if she does go to prison, will be a few years.

Following Ellison, former FTX executives Nishad Singh and Gary Wang are the remaining two executives who will be sentenced. Ellison's sentence will likely be a strong signal for how much time they may actually face, given the similar circumstances for all three individuals.

Stories you may have missed

Mango Markets Mulls CFTC Settlement Over Crypto Trading Violations: Mango DAO is voting on whether to agree to a $500,000 settlement with the CFTC, after the regulator apparently alleged it failed to register as a commodities exchange, run know-your-customer processes and offered illegal services to U.S. customers.

U.S. Election Betting: CFTC, Kalshi Both Grilled by Judges in Appeals Court: Attorneys for both Kalshi and the CFTC argued in front of an appeals court, which frankly seemed unimpressed by either party.

Telegram to Provide More User Data to Governments After CEO’s Arrest: Telegram will now be more cooperative with law enforcement entities after CEO Pavel Durov's arrest in France last month, Durov said in a post on the messaging platform.

Coinbase v. SEC

A few years ago, Coinbase filed a petition to try and force the U.S. Securities and Exchange Commission to engage in rulemaking around digital assets. The regulator pushed back, saying no bespoke rulemaking was necessary at the time.

On Monday, a federal appeals court heard arguments from both the SEC and Coinbase in this ongoing effort. Eugene Scalia, a partner with Gibson Dunn, argued that the appeals court should compel the SEC to explain how they define digital assets (or transactions with digital assets) as securities and explain how those rules might be workable.

"The SEC, having made registration a priority itself, needs to address immediately the fact that registration is not possible," Scalia said.

Ezekiel Hill, an SEC attorney, pushed back, saying that Coinbase's filing before the court doesn't rise to the "rare circumstances" that would allow the court to force the regulatory agency to conduct a rulemaking process.

Hill argued that the SEC wasn't obligated to create a specific framework for cryptocurrencies, and there are already companies that comply with federal securities laws. For crypto, the SEC has looked to the Howey Test, he said.

"The securities framework is not premised on compliance being possible," Hill said. "It balances a number of interests, including investor protection, fair and efficient markets, capital formation, and not everybody who comes and wants to participate in a securities marketplace is able to do what they want to do. That's not a unique issue to digital asset securities."

The judges grilled Hill more than Scalia over the course of the hearing, but it's unclear how they might rule.

One interesting note: Hill repeatedly referred to "digital asset securities" – a term the SEC told a D.C. judge it would stop using a few weeks ago – though he did say later in the hearing that "the digital asset is not the security," but it "can be the subject of an investment contract."

This week

Monday

19:00 UTC (3:00 p.m. EDT) The Third Circuit Court of Appeals heard arguments from Coinbase and the U.S. SEC over Coinbase's petition to force rulemaking.

Tuesday

14:00 UTC (10:00 a.m. EDT) The five SEC commissioners will testify before the House Financial Services Committee.

19:00 UTC (3:00 p.m. EDT) Former Alameda Research CEO Caroline Ellison will be sentenced.

Wednesday

14:00 UTC (10:00 a.m. EDT) SEC Chair Gary Gensler was supposed to testify before the Senate Banking Committee, but this hearing was postponed early Tuesday. A new time and date have yet to be announced.

Elsewhere:

(The Wall Street Journal) The Journal took a look at Vice President Kamala Harris' engagement with business leaders in her bid for president.

(The Air Current) Boeing, on top of concerns about its internal processes and whether its aircraft are safe, is now dealing with a strike from more than 30,000 employees hoping for a restoration of pension benefits and other benefits (disclosure: I have Boeing stock and Airbus ADRs in my portfolio).

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See ya’ll next week!

Turkey has decided not to move forward with an additional tax package that would have resulted in a levy on profits from stocks trading and crypto, Vice President Cevdet Yilmaz said.

In June Turkeys government had decided to postpone plans to tax stocks.

Turkey has decided not to move forward with an additional tax package that would have resulted in a levy on profits from stocks trading and crypto, the country's Vice President Cevdet Yilmaz told Bloomberg on Monday.

“We don’t have a stocks tax on our agenda. It was discussed previously and fell from our agenda,” Yilmaz told Bloomberg, adding that officials’ focus in the coming period is going to be on “narrowing” tax exemptions.

In June, Turkey's government decided to postpone plans to tax stocks following a decline in the country's equity market due to news of additional taxes.

"We are postponing the draft tax study for the stock exchange for a while to re-evaluate in line with feedback from all relevant parties," Turkish Finance Minister Mehmet Simsek said on X at the time.

Nations around the world, like the U.K. and Japan, have been considering how best to tax crypto and whether any reforms are necessary.

Turkish Presidency didn't immediately respond to CoinDesk request for comment.

A key Democrat on the House Financial Services Committee used a hearing on Tuesday as a chance to push for an 11th-hour compromise on stablecoin legislation.

The hearing also saw Republican members hammering Securities and Exchange Commission Chair Gary Gensler on his crypto oversight record and the agency's reliance on enforcement actions to steer the industry.

U.S. Rep. Maxine Waters (D-Calif.), the House Financial Services Committee's ranking Democrat, suggested in a Securities and Exchange Commission oversight hearing on Tuesday that she and the Republican chairman should finish a bill this year to regulate U.S. stablecoin issuers.

"I want us to strike a grand bargain on stablecoins and other long overdue bills," Waters said to the committee's chairman, Rep. Patrick McHenry (R-N.C.). "I strongly believe we can reach a deal that prioritizes strong protections for our nation's consumers and strong federal oversight."

McHenry, who is set to retire at the end of the year, responded that it's his hope "that we can come to terms on stablecoin legislation this Congress," though he noted, "the nature of how we do that is where things get a little tougher and the votes are a little tougher."

"We're running out of time to pass this," Waters said. She and McHenry had previously worked for months on a compromise bill on stablecoin regulation, but a bipartisan effort hasn't yet crossed the finish line. With the congressional session waning, the opportunity to shepherd legislation is dwindling.

The SEC hearing – unusual in its inclusion of all five commissioners testifying at once – quickly became a crypto debate as McHenry and others criticized the agency's "reckless agenda" regarding the industry. Republicans specifically targeted Chair Gary Gensler's track record.

"Under Chair Gensler, the SEC has become a rogue agency," McHenry said. He lamented aggressive SEC crypto enforcement even as the House approved a widely bipartisan bill, the Financial Innovation and Technology for the 21st Century Act (FIT21), that showed that most of Congress disagreed with the agency's approach to digital assets.

When questioned about the regulator using inconsistent phrases when addressing what makes a crypto security under SEC jurisdiction, Gensler responded that "it's less about the terms; it's more about the economics."

"Words have meaning," McHenry responded, arguing the agency is causing "a lack of clarity."

Republican Commissioner Hester Peirce said that's been a deliberate choice, against her will.

"We're trying to be ambiguous, because the legal precision carries with it real implications," she said, and the intentional murkiness has left uncertainty about how the agency is defining what qualifies a token transaction as a security. "We've fallen down on our duty as a regulator."

Earlier this week, Republican lawmakers also demanded in a letter that the agency throw out its crypto accounting policy approach, known as Staff Accounting Bulletin No. 121 (SAB 121). The policy has left U.S. banks uncertain about taking custody of crypto assets because the policy suggests they'd need to maintain unusual levels of capital.

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.

As an ETF, BlackRock's Bitcoin Trust incurs an expense ratio of 0.25%, while MicroStrategy charges no such fee to shareholders.

MicroStrategy benefits from revenue generated by its analytics business, providing financial stability beyond its bitcoin holdings.

MSTR has the ability to raise capital via debt and equity offerings, while IBIT is reliant on direct investor inflows.

Disclosure: The writer owns shares in MicroStrategy.

The launch of U.S. bitcoin exchange-traded funds on Jan. 11, 2024, has become one of the year's most significant financial events. These ETFs, including the BlackRock iShares Bitcoin Trust (IBIT), have collectively attracted $17.7 billion in net inflows since their debut, according to Farside data. IBIT, to some, has emerged as a competitor to MicroStrategy (MSTR), a company renowned for its substantial bitcoin holdings and dual business model. Led by Executive Chairman Michael Saylor, MicroStrategy currently holds 252,220 bitcoins, valued at approximately $16 billion. Year-to-date, MicroStrategy's stock has risen 119% compared to IBIT's 35%, reflecting a more than threefold outperformance.

Profit-taking

From the opening of the ETFs until around Feb. 23, IBIT outperformed MicroStrategy as investors either shifted capital to the new funds or took profits on what had been a large run higher in MSTR's stock in the weeks prior to Jan. 11.

This trend of profit-taking spread to bitcoin as well, as long-term holders (those holding bitcoin for 155 days or more) sold approximately one million bitcoin from December 2023 through the first quarter of 2024, according to Glassnode data.

MSTR versus IBIT

There are several key reasons for MicroStrategy's impressive returns and its ability to outperform IBIT. One of the first factors is fees. ETFs come with an expense ratio—currently 0.25% for IBIT—which acts as a drag on returns. In contrast, MicroStrategy does not charge such a fee to shareholders, making it more attractive over time in terms of cost efficiency.

Furthermore, MicroStrategy operates as a business that generates revenue beyond its bitcoin thesis, primarily through its analytics operations. This diversification allows the company to produce free cash flow and could provide some cushioning during bitcoin's drawdowns even as the stock outperforms during the token's rallies. Since bitcoin's all-time high in March, bitcoin has decreased by 13% and IBIT is down 14%, while MicroStrategy has declined by 15%.

Additionally, MicroStrategy has the flexibility to increase its bitcoin per share through debt or equity offerings. For example, it recently upsized a convertible note offering from $700 million to $1.01 billion, using the proceeds to acquire more bitcoin—something IBIT cannot do directly, unless it sees more inflows from investors.

Marketing

In terms of marketing and visibility, MicroStrategy has also maintained a higher ranking in Google search trend than IBIT, signaling better recognition and interest. This gap has, however narrowed of late, as options trading on IBIT have now been approved by the U.S. Securities and Exchange Commission's (SEC).

Cega's vault token market (VTM) eliminates the protocol's 27-day lock-up period, allowing users to withdraw their vault token deposits when required.

The new feature is available to market makers and yield farmers.

On Tuesday, decentralized exotic-derivatives protocol Cega announced a new feature that gives users more flexibility in managing their investments and responding to changing market conditions.

The Vault Token Market (VTM) will boost liquidity, utility and flexibility of users' investments, Cega said in a press release shared with CoinDesk.

With a total value locked (TVL) of over $10 million, Cega is the world's third-largest decentralized exotic-derivatives protocol. It allows holders of dollar-pegged stablecoin USDC to earn yields while bypassing the need for active management of positions. Users deposit USDC or other assets like ether {{ETH}} and wstETH into the vaults, which then employ strategies centered around packaged exotic derivatives such as fixed-coupon notes and put spreads to generate attractive returns. Vault participants receive Cega vault tokens representing their financial position in the strategy.

Each vault runs the strategy for 27 days, beginning every Wednesday at 1:00 UTC, simplifying the investment process. For issuers, however, that means their USDC is locked into the vault for 27 days, keeping them from accessing their funds. The liquidity barrier limits users' ability to react to changing market conditions and meet financial needs.

The VTM addresses this issue, allowing users an early exit.

"With the VTM, users can exit from their trading positions early, without waiting for 27 days. They can exit 100% of their position, or half, or any amount they choose, providing maximum flexibility," Cega's co-founder Winston Zhang said in an interview.

VTM is open to everyone, including market makers and yield farmers, allowing market participants to buy and sell the Cega vault tokens in the open market. VTM's benchmark price feature ensures fair value for vault tokens and the best execution when selling them or looking to snap up coins at discounted positions.

"VTM opens the door to a wide range of strategic use cases, from liquid staking and restaking to collateralized lending/borrowing. Off-ramping is just the first step in creating robust ecosystem opportunities for Cega vault tokens," the press release said.

14:21 UTC: Updates third para to say users can deposits USDC and other assets like ETH and wstETH to vaults.

Zero-knowledge rollup Citrea has deployed its BitVM bridge on the Bitcoin testnet.

Clementine harnesses BitVM, a computing paradigm designed to allow Ethereum-style smart contracts on Bitcoin and which could also pave the way for zero-knowledge computations.

Bitcoin zero-knowledge rollup Citrea has deployed its BitVM-based bridge Clementine to the Bitcoin testnet.

Citrea, which raised $2.7 million in seed funding led by Galaxy in February, aim is to use Bitcoin as a settlement layer to make it "the foundation for the world's finance," according to an emailed announcement on Tuesday.

In a blog post in March, the Citrea team described Clementine as a "trust-minimized two-way peg program," essentially a way of locking up bitcoin on the main chain and then minting an equivalent bitcoin token for use on Citrea; to reverse the process, that token is burned and the bitcoin can then be withdrawn on the Bitcoin blockchain.

Clementine harnesses BitVM, a computing paradigm introduced last year by the Bitcoin developer Robin Linus, ultimately designed to allow Ethereum-style smart contracts on Bitcoin, and which could also pave the way for zero-knowledge computations.

Citrea is compatible with the Ethereum Virtual Machine (EVM), the smart-contracts-executing software that powers the Ethereum protocol, similar to an operating system on a computer.

"Citrea is an EVM-compatible layer, meaning all the applications on Ethereum can simply deploy on Citrea without having to change anything," Orkun Mahir Kılıç, CEO of Citrea builder Chainway Labs, told CoinDesk in an interview.

BitVM is a conduit that can connect rollups to the Bitcoin network, allowing transactions to be settled away from the main blockchain to mitigate congestion and fees. The basic setup of BitVM involves using cryptography to compress programs into sub-programs that can then be executed within Bitcoin transactions, according to a white paper published by Linus along with five co-authors.

Read More: Bitcoin Layer 2 Rootstock Verifies Zero-Knowledge SNARK

There’s nothing quite like a political convention. The pageantry of patriotic songs and speeches. The cavalcade of speeches by party leaders. And, of course, the thousands of balloons dropping like snow on the newly nominated presidential candidate.

Yet, for crypto, August’s Democratic National Convention was an especially auspicious one. Despite the open hostility of parts of the Biden Administration, crypto was for the first time a welcomed participant. It makes sense: crypto owners now comprise about 20 percent of all registered Democratic voters, according to a Paradigm poll of Democratic voters a few days before the convention. There is severe electoral risk if some of these Democrats deflect to the Republican ticket in a race that could be won in the margins. Considering that the Republicans have openly and aggressively courted crypto, crypto’s coming out at the DNC signaled that the industry was, finally, beginning to have a truly bipartisan hue. Those on the ground in Chicago got to see this blossoming of Democratic interest first hand.

While most of the crypto-focused conversations were offstage, there was a hint of crypto’s growing importance in the main convention hall too. Young pro-crypto members of Congress and candidates for Congress like Rep. Jasmine Crockett (D.-TX) and congressional candidate Shomari Figures of Alabama both received significant speaking slots. Some crypto companies also hosted policymakers for discussions off the convention floor, as other companies and organizations have done for decades. Vice President Harris herself stressed the importance of building an “Opportunity Economy” in her keynote, with a special grace note praising the role of Founders in making America prosperous.

This was just the proverbial tip of the political iceberg, though. It’s easy to forget when you’re watching convention programming during primetime, but political conventions are much more than a few hours of short speeches and slick videos. Conventions are, at base, about letting members of a political party agglomerate in one physical space every few years, both for socialization and for strategizing.

As part of this communal process, the week was filled with panels, meetings, and even press interviews, all of which are designed to help the party build consensus on its policy views, goals, and even beliefs. These are the interstitial material that truly comprises our decentralized political parties. And it’s here that crypto really got to make its voice heard.

Over the week, there were panels on the basics of how crypto works and how Democrats can work to rectify the party’s strained relationship with crypto. There were discussions about the importance of maintaining the hegemony of the dollar and the role of stablecoins. And there were frequent coffee and water cooler discussions with dozens of policymakers about how they can appeal to crypto owners.

During chats that week with a host of different policymakers and opinion leaders, we were most struck not by the statements of crypto supportive policymakers, but the skeptics. Even some ardent crypto skeptics said the current enforcement-only approach at the SEC wasn’t working, and that there was a need for legislation. As two people who have been calling for reasonable legislation for years, this was music to our ears.

The other part that was especially notable was just how normal it was. Policymakers were curious about crypto, both how it worked and its involvement in this year’s elections. But this curiosity was not hedged with the upturned nose that accompanied some discussions about crypto in DC even last year. Instead, we were seen as just another young and novel industry, one that policymakers were trying to grok.

The Harris campaign underscored this banal normality when it made news of its “support” for crypto’s growth in a press interview with the campaign’s policy director, Brian Nelson. Despite some anxiety about Nelson’s view of crypto given his recent role as Undersecretary of the Treasury for Terrorism and Financial Intelligence, Nelson announced on the third day of the DNC that a Harris Administration would “support” the growth of crypto in America. The statement was remarkable given how much a political war has been waged on crypto, and unremarkable for how basic it was. Why wouldn’t an American president want an industry to stay headquartered in America?

The Harris campaign has since released its platform, which has emphasis on entrepreneurs, small businesses, and American innovators. While crypto and other technologies are not mentioned by name, the rhetoric and tone used in the platform differs significantly from that of the Biden administration. Since the DNC, both of us have continued to meet with policymakers and candidates from across the political spectrum, and what is remarkable is how similar most conversations are, whether with Democrats or Republicans down the ballot.

Policymakers are tired of (and in some cases, shocked by) the SEC’s approach under Chair Gensler. They want to preserve and promote American national security and economic interests. And, by and large, they are deeply concerned about inadvertently ceding technological advantages to other jurisdictions, as happened with semiconductors.

More than anything else, an overarching feeling of simple acceptance for crypto pervaded Chicago. There are still many miles to go for the Democrats to actually find workable solutions for how they want to regulate crypto, but the first step to building something is to commit to doing it. We were pleased to see Vice President Harris acknowledge recently that digital assets technologies need to be encouraged; while we may not have a schematic for how Democrats will execute a reset with crypto, both the DNC and recent Crypto4Harris event showed that Democrats across the ticket no longer question as a default whether crypto has a right to exist. That’s progress worth celebrating with a balloon drop.

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.

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 2015.13, up 0.6% (+12.15) since yesterday's close.

Fifteen of 20 assets are trading higher.

Leaders: ICP (+4.4%) and DOT (+4.0%).

Laggards: ETH (-1.5%) and LTC (-0.8%).

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

An early Bitcoin miner from 2009 three weeks ago ended a decade of inactivity and earlier Tuesday sent an additional 5 bitcoin to crypto exchange Kraken.

There has been notable activity from Bitcoin wallets dating back to the Satoshi era in the past year, including a wallet that moved $16 million worth of BTC after 15 years of dormancy.

An early bitcoin {{BTC}} whale who mined the asset in its infancy in 2009 has transferred a portion of its holdings to crypto exchange Kraken after a decade of dormancy, data from on-chain tool Arkham shows.

The whale, a colloquial term for entities holding a large amount of bitcoin, holds bitcoin mined just one month after the network first went live. It sent 5 BTC to Kraken earlier Tuesday, worth just over $300,000 at current prices.

Arkham said the whale moved bitcoin several times from 2011 to 2014 to other wallets or exchanges, after which there was no activity on the wallet for nearly ten years. Its bitcoin holdings increased in value from $474,000 to over $80 million in that period.

The wallet first started moving bitcoin to Kraken three weeks ago and has moved 10 BTC so far in three separate transactions. Moving a high value of tokens to an exchange is typically seen as an indication of selling for cash, stablecoins or other tokens.

Late last week, another “Satoshi Era” bitcoin wallet showed activity for the first time in 15 years, sending $16 million worth of BTC to several different wallets.

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

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. Then, 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.

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: 2,014.90 +1%Bitcoin (BTC): $63,558.29 +0.07%Ether (ETH): $2,642.62 -0.1% S&P 500: 5,718.57 +0.28%Gold: $2,632.34 +0.23%Nikkei 225: 37,940.59 +0.57%

Top Stories

Bitcoin is little changed in the past 24 hours after recovering from a dip to $62,750 during the Asian morning to hold above $63,500. Ether was similarly unmoved at $2,645. Other leading altcoins showed a bit more life, with SOL and DOGE higher by 1.8% and 1.2%, respectively. The crypto market at large has risen by 0.9%, as measured by the CoinDesk 20 Index. Muted activity following a rally is quite common in the cryptocurrency market, as traders take profits and prices consolidate at new footholds.

The People's Bank of China took steps to stimulate the economy, including cutting the reserve requirement ratio for mainland banks by 50 basis points. The move drew little response from crypto prices. Asian stocks, on the other hand, rallied, with Hong Kong's Hang Seng index climbing 3.2% and the Shanghai Composite index adding 2.3%. "Bitcoin's lack of response to this news, juxtaposed against rallying Chinese indices, highlights that its current beta appears more tightly linked to Fed policy and U.S. markets, as evidenced by near two-year high correlations with US stocks, particularly following last week's FOMC meeting," Rick Maeda, a Singapore-based research analyst at Presto Research, wrote to CoinDesk in a note.

Ether ETFs recorded their highest outflows since July on Monday, with over $79 million exiting the funds. The figures are the highest since July 29, when ETH ETHs recorded a cumulative $98 million, and the fourth-highest since they first went live on July 23. The outflows were almost entirely concentrated in Grayscale's ETHE, which lost $80 million. Bitwise's ETHW recorded around $1.3 million in inflows while all the others showed no activity either way. This suggests a distinct lack of institutional demand for ETH, especially as the world's second-largest cryptocurrency has enjoyed a rally of over 10% in the last week.

Chart of the Day

The chart shows the ratio of copper's per pound market price to the per ounce price of gold.

The ratio has jumped 2.3% today, offering positive cues to risk assets, including cryptocurrencies, in the wake of China's large stimulus announcement.

The ratio dropped sharply in July, signaling an impending risk aversion, which materialized in early August.

Source: TradingView

- Omkar Godbole

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Bitcoin defies the odds with a 22% surge from the month's low, challenging September's bearish reputation.

All eyes are on the $65,200 mark as bitcoin approaches a pivotal point in its trading channel.

A 10% price increment analysis reveals bitcoin's potential for unexpected, significant moves.

Bitcoin {{BTC}} has shown remarkable resilience this September, a typically bearish month, surging 22% from its monthly low of about $52,500. All eyes are now on the critical $65,200 mark, with market participants watching closely to see if it can break out of the current downtrend. Since climbing to a record high back in March, the largest cryptocurrency has been trading in a prolonged downward channel, creating a sense of ennui for many investors.

To gain insights into bitcoin’s trading behavior, consider an analysis using a 10% price increment system. This provides a fairer comparison than using fixed dollar amounts, which can distort analysis as the price increases. By focusing on percentage changes, it's possible to better understand how bitcoin moves relative to its own value, rather than being skewed by absolute price changes.

The analysis reveals that the longest trading range occurred between $8,865 and $9,752, lasting for 155 days. That's not surprising as it coincided with the 2018-2019 market cycle. During this time, bitcoin was consolidating after the post-2017 bull-market peak and before the recovery that started in mid-2019. Notably, this excludes the depths of the bear market from November 2018 to May 2019, when bitcoin was trading below $5,000.

More recently, bitcoin spent 111 days between $54,271 and $59,699. And it has so far spent 126 trading days in its current range of $59,700 to $65,670, a period that could extend if history repeats itself. These prolonged periods of consolidation aren't unprecedented, as seen during the $8,000 to $12,000 range, where bitcoin traded for hundreds of days.

This historical perspective suggests that bitcoin can continue to trade in its current range until the end of October without breaking out, based on past behavior. It’s a stark reminder that bitcoin often moves in extended cycles of consolidation, only to make significant moves when least expected.

As bitcoin approaches critical levels, it’s essential to remain patient and consider these long-term trends. The market’s cyclic nature implies that while this downtrend may seem never-ending, breakouts, when they do come, often bring significant opportunities. Whether or not bitcoin breaks through $65,200 soon, understanding these trading ranges provides invaluable insight into the potential future direction of the market.

Muted drawdowns in the current cycle

These periods of consolidation and reduced volatility can be seen in a positive light. In the current cycle, drawdowns are the most muted compared to previous cycles, with the largest decline being just under 30%. This stability is crucial for new institutional investors, who may be unable to handle extreme volatility swings.

Bitcoin is currently up by less than 1% in the third quarter, with only five trading days remaining. It's been a challenging period for bitcoin, with headwinds such as a sale by the German government and Mt. Gox redemptions. Moreover, the third quarter is typically the weakest for bitcoin, according to Coinglass.

Natasha Powell is to join Kraken as head of U.K. compliance in November.

She joins from BCB Group, where she was employed as chief compliance officer.

Crypto exchange Kraken has hired Natasha Powell as U.K. head of compliance, according to two people familiar with the matter.

Powell will be starting in November, said the people, who spoke on condition of anonymity because the matter is private.

"We're always exploring new opportunities to enhance our offering with talent from the industry," a Kraken spokesperson said in emailed comments.

Powell declined to comment.

Powell joins from crypto payments firm BCB Group, where she was employed as chief compliance officer.

She started her career with the Financial Conduct Authority (FCA), the U.K. regulator responsible for overseeing the financial services industry, and later held positions at RBS and Barclays Capital, according to her LinkedIn profile.

Read more: BCB Group's Chief Compliance Officer to Exit in Latest Senior Management Departure

A move above the August high of $65,200 will invalidate the bearish lower highs pattern, analyst at Bitfinex said.

Weakening spot market buying pressure points to short-term consolidation, analysts added.

Bitcoin {{BTC}}, the leading cryptocurrency by market value, has rallied 16% since testing lows under $54,000 early this month. A bullish revival, however, is not yet confirmed, according to analysts at cryptocurrency exchange Bitfinex.

In a note shared with CoinDesk Tuesday, analysts said the cryptocurrency needs to smash the August high of $65,200 to confirm the end of a prolonged downtrend, characterized by lower price highs since March.

"BTC is now within touching distance of the Aug. 25 top of $65,200. The reason this level is important is because since the all-time high of $73,666 was reached on March 14th, BTC has still not managed to eclipse a single high before a local/new bottom was formed. This qualifies for the technical definition of a downtrend," analysts said, explaining why $65,200 is the level to beat for the bulls.

The record high of over $73,000 reached on March 14, followed by the March 20 high of $60,780 and the subsequent lower highs and lower lows are represented by the falling trendline on the chart above.

"This implies that the August 25th local high at $65,200 before our September 6th local bottom holds a lot of significance from a higher time frame perspective," analysts at Bitfinex noted.

In other words, a convincing move above the August high would confirm the end of the interim downtrend and a resumption of the broader uptrend from the October 2023 lows under $30,000.

The recent Fed rate cut, large stimulus announcement by China and the return of risk appetite to broader financial markets favor a move above $65,200.

One reason to be cautious is the flattening of the cumulative volume delta indicator since prices rose past $63,500 over the weekend, per data tracked by Coinalyze. It's a sign of a slowdown in the spot market buying. The global cumulative volume delta indicator measures the difference between buying and selling volumes across centralized cryptocurrency exchanges over time.

"It is now entirely possible that the price could form a new range near current prices and consolidate for a period, as we have seen following similar previous price rallies which have been initially prompted by spot buying, but then is followed by perpetual and futures markets activity. Another cause for caution is that spot market buying has slowed. This is evident in the Figure below where we can see the spot cumulative volume delta indicator flattening out once the price moved past $63,500," analysts told CoinDesk.

Ether ETFs experienced the largest outflows since July, with over $79 million exiting on Monday.

The outflows were predominantly from Grayscale’s Ethereum Trust (ETHE), while other ETFs like Bitwise's ETHW saw minor inflows, highlighting Grayscale's significant influence on the market dynamics.

Despite an 11% rise in ether prices due to favorable macroeconomic conditions like Fed rate cuts, the ETF outflows indicate a disconnect where price increases do not align with investor sentiment towards Ethereum's future.

Ethereum may not resonate with traditional finance investors compared to Bitcoin's 'digital gold' narrative, some say.

Ether exchange-traded funds (ETFs) recorded their largest outflows since July with over $79 million exiting on Monday in a sign of waning institutional demand for the world’s second-largest token.

Those figures are the highest since July 29, when ETH ETHs recorded a cumulative $98 million, and the four-highest since they first went live on July 23, data from SoSoValue shows.

Nearly all of Monday’s outflows came from Grayscale’s ETHE product, with Bitwise’s ETHW recording just over $1.3 million in inflows. Other products showed no inflow or outflow activity.

The outflow came despite a broader crypto market rally fueled by recent Federal Reserve rate cuts, which helped lift ether prices by 11% over the past week. However, the disconnect between ETH’s price momentum and ETF outflows suggests that investors remain uncertain about the asset’s long-term growth prospects.

A closely watched ratio tracking the relative price strength of ether (ETH) against bitcoin (BTC) has dropped to its lowest level since April 2021, as CoinDesk previously reported, indicating the broader market favoring bitcoin's perceived stability over ether's riskier, high-yield potential.

According to Peter Chung, Head of Research at Presto Labs, Ethereum’s “world computer” narrative does not resonate as easily with traditional finance (TradFi) investors compared to Bitcoin’s widely accepted “digital gold” story.

“TradFi investors may not respond as enthusiastically to ETH’s investment thesis than to BTC’s. Gold’s investment thesis as an inflation hedge is well-known, and therefore, it is not a leap for TradFi investors to wrap their heads around the idea of ‘digital gold,” Chung said in a message to CoinDesk, referring to an August report by the firm on the topic. “On the other hand, ETH’s ‘world computer’ narrative is much more difficult for non-technicals to grasp.

“Even if they manage to come around, their conviction level would need to be high enough to justify adding a second digital asset exposure after a BTC ETF. This could be challenging because, for those who have already allocated to a BTC ETF in their portfolio, adding another digital asset exposure provides substantially less incremental diversification benefit than the first exposure,” Chung added.

Bitcoin set fresh lifetime highs in April in U.S. dollars (before tumbling 20%), while ether is yet to break its highs from 2021 and is down 52% from its 2021 peak. Year-to-date, bitcoin has returned over 50% to investors, while ether holders have gained just under 15%.

Augustine Fan, Head of Insights at SOFA.org, noted that while ETH has gained on the back of the Fed’s dovish turn, the heavy ETF outflows indicate a fragile sentiment.

“Will a continued price rally rescue ETH ETF inflows from their current doldrums? The answer likely depends on whether we see another blow-off top in equity markets before November,” Fan said. “Ethereum has gained 11% over the past week on no new developments. However, the latest heavy outflow from Ether ETFs indicates uncertain sentiment among investors on its future growth momentum.”

Independent market analyst Nick Ruck pointed out that the recent outflows could be linked to broader pessimism about Ethereum’s growth narrative.

“The surge in ETH ETF outflows may stem from investors allocating capital elsewhere due to the ongoing pessimistic outlook for ETH, and the current increase in the price of ETH is a good opportunity to exit the market,” Ruck said in a Tuesday message to CoinDesk. “Ethereum has been criticized recently for failing to push any narratives that could help attract more inflows. However, the new Pectra upgrade set to launch in Feb 2025 aims to enable users to pay gas fees with altcoins, among other benefits.”

“Institutional investors may feel there are better opportunities elsewhere for the time being,” Ruck added.