July 3, 2024

The biggest crypto news and ideas of the day

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Welcome to The Node! This is Marc Hochstein to take you through the latest crypto news.

In today's news: Biden's odds of staying in the race are rapidly deteriorating, according to crypto bettors on Polymarket; his veep's chances of being nominated for POTUS are rising; cause for crypto optimism (just don't look at today's charts).

The takeaway: On the eve of July 4, senior analyst George Kaloudis (welcome back George!) reflects on Bitcoin and the American dream.

Holiday notice: We're off the rest of the week for Independence Day. The Node will return Monday, July 8.

Bye Bye Biden?

A New York Times report (denied by the White House) that President Joe Biden is weighing his future in the 2024 race prompted traders on Polymarket to boost the odds the Democrat will drop out nearly 80% on Wednesday.

That's up from 55% earlier. The wild upswing caps a week of mayhem in Polymarket's "Biden drops out of presidential race?" market, which has garnered nearly $10 million in bets. Before last week's debate with Donald Trump, the same question gave 20% odds.

Plenty of Washington talking heads have talked down Biden's ability to prevail in the 2024 election against Trump after a faltering debate performance put a spotlight on his age. But The New York Times is now reporting that Biden thinks he has a short and slimming window to salvage his prospects.

Her Time – or Polymarket's

Sensing that this would be the path of least resistance, the market pushed up Vice President Kamala Harris' odds of becoming the Democratic nominee to 31% late Tuesday.

As of midday Wednesday on the East Coast, Polymarket bettors give an 18% chance of Harris winning the presidential election, and an 8% chance to Joe Biden. Trump remains the clear favorite with 62%.

More than $216 million has been bet on the general presidential election contract on Polymarket, while $10 million has been bet on Biden dropping out. The four-year-old platform, which uses smart contracts on the Polygon blockchain and settles bets in the USDC stablecoin, is enjoying a breakout year in terms of volume. It's also winning accolades for the signaling service it provides the public, a corrective to mainstream media groupthink.

Cause for Optimism...

The digital asset industry is beginning a major growth phase and is in a far better place than it was two years ago, investment bank Architect Partners said in a quarterly report published last week.

The value of the crypto industry climbed more than $750 billion in the first half, the company said. Growth was driven by a surge in the value of crypto tokens equating to more than $700 billion, the successful launch of spot bitcoin (BTC) exchange-traded funds (ETFs) in the U.S., which drew in more than $15 billion, and the appreciation of publicly listed crypto companies, which added a further $11 billion.

Crypto and the internet, both of which are disruptive technologies, have very similar characteristics, the report said, noting that the cryptocurrency market is recovering from the so-called crypto winter much faster than the internet recovered after the dot-com bubble burst in 2000.

... Just Don't Dwell on Today's Charts

Cryptocurrencies in the decentralized finance (DeFi) sector were hit harder than the broader crypto market this week, with the CoinDesk DeFi Index losing 9% from its Monday high versus the CoinDesk 20 benchmark's 5% decline during the same time.

Leading the plunge was the governance token of Pendle – a DeFi protocol that offers crypto yields in the form of tradable tokens – falling more than 20% during the Tuesday and Wednesday trading sessions, with short positions piling up to bet on further declines.

The Takeaway: BTC and the American Dream

By George Kaloudis, senior analyst at CoinDesk

It might seem trite to compare Bitcoin to the American Dream, but from my vantage point the commonalities are painfully obvious.

The American Dream means different things to different people. I am a first-generation Greek-American, so to me, the American Dream means taking advantage of the opportunities I had because of a sacrifice my grandparents made by leaving their home country with their children.

Does the American Dream mean the same thing to those whose families came from England ten generations ago? Or five generations ago from Ireland? Or Italy? What about those whose ancestors came here on slave ships? Probably not.

At the surface level Bitcoin and the American Dream are a decent match. Success through “hard work”? That’s exactly how bitcoin mining works: the more work you put in, the more you’re rewarded.

We can ask more questions.

Is bitcoin peer-to-peer, electronic cash? Is bitcoin digital gold? Is bitcoin a store of value? Will Bitcoin enable a clean energy transition? Will Bitcoin use all our water? Can the Bitcoin protocol supercharge ransomware? Can Bitcoin empower the individual in oppressive regimes? Will Bitcoin cripple the Federal Reserve? Will Bitcoin bankrupt you? Will Bitcoin make you rich? Is Bitcoin Resistance Money? Is Bitcoin a Ponzi scheme?

The answers to these questions depend on whom you ask. For this reason, Bitcoin and the American Dream are even more alike that they appear.

Bitcoin means something different to me, a fully banked American citizen with access to basically any financial product I can dream up and to a relatively stable local currency, than it does to Roya Mahboob, an Afghani woman who uses Bitcoin (among other technologies) to help girls in Afghanistan overcome gender inequality and get an education. It means something different yet to Argentinians and Venezuelans facing hyperinflation.

Bitcoiners can agree that Bitcoin can be many things in the same way that Americans can agree that the American Dream (and America, for that matter) can be many things. One thing is for sure: as Americans are tied together by the American Dream, there is an ethos of Bitcoin, the freedom to transact, which ties bitcoiners together.

Read the full op-ed here.

Off-Chain Signals

Lido Takes Initial Step to Decentralize Ethereum Node Operator Set Amid SEC Allegations – Unchained
Did NASDAQ buy Barry Silbert’s Silk Road bitcoin? – Protos
Data Contradicts Narrative: Ethereum Continues to Dominate Layer 1 Sector – The Defiant
Beware shadow banks gobbling up more risk – Financial Times
Inside a16z’s Boot Camp for Crypto Startups – Wired

SOL Searching