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Welcome to The Node! This is Marc Hochstein to take you through the latest crypto news. In today's news: Founder's gambling "demons" spur crippling loss at crypto casino backed by Galaxy; Trump's odds of victory hit all-time high on Polymarket after shooting; BlackRock's Larry Fink calls bitcoin legit; a crypto trading clampdown spreads from Binance to OKX. The Takeaway: CoinDesk senior analyst George Kaloudis explains the significance of Trump's upcoming bitcoin conference appearance. Read below👇 |
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It's a tale as old as crypto, and maybe finance itself: One little money mistake leads to another, and suddenly a company founder is down a deep hole, with investors clamoring for their funds back. In this case one of the investors is Galaxy, the prominent crypto firm headed by former Goldman Sachs and Fortress Investment Group executive Mike Novogratz. The company founder, Richard Kim, was previously a general partner at Galaxy Interactive, a gaming-focused venture fund under Galaxy. He also worked at the Wall Street banks JPMorgan and Goldman Sachs, following a stint at the prestigious law firm Cleary Gottlieb in the late 2000s, according to a bio. In an interview with CoinDesk, he said his cascading losses were fueled by a decades-long struggle with gambling. Galaxy is one of several investors who have accused Kim of misappropriating at least $3.67 million of company funds belonging to Zero Edge, Kim's new blockchain startup. "The downfall began with a careless mistake - a phishing site that cost $80k," Kim said in his own recollection of what went wrong, which he shared with CoinDesk. "This triggered my old demons, the need to 'make it back' to preserve my reputation." According to Kim, he "started down a negative spiral of leverage trading, raising more capital, and hiding the truth." Read the full scoop by CoinDesk's Sam Kessler. |
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Eye on Prediction Markets |
Former U.S. president Donald Trump's probability of retaking the White House jumped to an all-time high Saturday after he was injured from a shooting at a rally in Pennsylvania, according to traders on Polymarket. Photos and video footage of a defiant Trump with blood on his face pumping his fist in the air circulated on social media, following two weeks in which the national conversation had focused on the frailty and gaffes of his opponent, incumbent President Joe Biden. "Yes" shares in Polymarket's contract on whether Trump will win the presidency have climbed 11 cents after the incident, to 71 cents, meaning the market now sees a 71% chance he will prevail in November. Each share pays $1 if the prediction turns out to be correct, and zero if not. The bets are settled in USDC, a stablecoin, and programmed into a smart contract on the Polygon blockchain. Will proverbial heads roll after the security lapse in Pennsylvania? Probably not, says a separate Polymarket contract asking if the director of the U.S. Secret Service will be fired. "Yes" shares are trading at 29 cents, meaning the market sees a 29% chance that Kimberly Cheatle will no longer be in her job on Sept. 1, when the contract expires. |
BlackRock's Fink: Bitcoin Is Legit |
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BlackRock (BLK) CEO Larry Fink reiterated his belief that Bitcoin (BTC) is an asset that everybody should consider holding as part of their portfolio. “My opinion five years ago was wrong,” Fink said in an interview with CNBC. “I believe bitcoin is a legitimate financial instrument.” Fink's appearance Monday morning came following BlackRock's second-quarter results, which topped analyst estimates as assets under management increased 13% year-over-year to $10.6 trillion. A minor contributor to the company's AUM figure is its iShares Bitcoin Trust (IBIT), which launched in January and has accumulated more than $18 billion since, including $4 billion in the second quarter. |
Crypto Trading Clampdown Spreads |
Cryptocurrency exchanges are cracking down on brokerages that bundle clients' orders to enjoy lower, VIP trading fees. In a letter reviewed by CoinDesk, OKX, the second-largest exchange by volume, recently asked prime brokers for details of subaccounts including the names of the entities or individuals that control each subaccount and the jurisdiction in which they are located. OKX said it needs the information by July 17. "A failure to do so may result in undisclosed subaccounts being restricted from trading and/or subaccount closure," the letter said. Earlier this month, OKX's larger rival Binance changed its Link Plus interface, effectively closing a loophole that let prime brokers use a multitiered fee system to offer rebates to clients. Binance said the measure was "to uphold compliance and ensure a level-playing field for all users, whether they access Binance directly or via an intermediary." That news was first reported by Bloomberg. Read the full scoop on OKX by CoinDesk's Ian Allison. |
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The Takeaway: Trump Courts Crypto Voters |
By George Kaloudis, senior analyst, CoinDesk Former U.S. President Donald Trump is still scheduled to speak, in person, at a Bitcoin conference in Nashville later this month, despite injuries he sustained from a failed assassination attempt Saturday. For crypto, this is huge. Crypto is now on the campaign trail in an official capacity, extending beyond throwaway lines to appease whichever voting demographic and fundraising PAC is to be appeased that day. The shred of legitimacy the industry has been begging for since its inception has arrived, embodied in an orange man at a conference about an orange coin. I’m no political strategist, but I always found it strange when presidential candidates spend time campaigning in states they have no risk of losing. Trump, or any Republican candidate for that matter, is not going to lose Tennessee in the 2024 presidential election (let’s face it, folks: Joe Biden is no Bill Clinton). And yet, Trump is stopping by a Bitcoin conference in the Volunteer State, during the immensely busy campaign season, in the same way a candidate makes stump speeches in airplane hangars for the military vote and in front of factories in the name of the American blue collar, with Teamsters in tow, for the union vote. Even though the polls and data suggest that most people don’t use or own crypto — 7% of American adults used or held crypto in 2023 (according to the Federal Reserve), 28% of Republicans hold or had once bought crypto (according to crypto investment firm Paradigm), 52 million Americans own it (according to crypto exchange Coinbase) — it’s still part of Trump’s reelection strategy. The GOP has even added crypto to its official platform marketing materials (in the unabridged, pdf-downloadable version) under the “Champion Innovation” subpoint, just above “Artificial Intelligence” and “Expanding Freedom, Prosperity, and Safety in Space.” Trump’s appearance in Nashville has a clear message: The content of the conference is more important than the location. There are enough single-issue crypto voters out there to make a difference for Trump. (At least, enough if you factor in prospective donations from the crypto rich: A Trump fundraiser at the event costs more than $800,000 a seat.) Read the rest here. |
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Stranger Things Have Happened |
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