The biggest crypto news and ideas of the day |
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XRP Overtakes Bitcoin Volume |
XRP, the third-largest cryptocurrency by market value, has replaced bitcoin (BTC) as the most-traded digital asset on Coinbase (COIN), the Nasdaq-listed cryptocurrency exchange that's seen as a proxy for U.S. demand. Bitcoin retained its position as most-traded crypto asset on Binance, the largest exchange by volume, which is off-limits to U.S. investors. Volume trends are consistent with the recovery in the U.S. demand for XRP, which is closely linked to blockchain-based payment network Ripple, as presaged by the Coinbase premium indicator a week ago. Interest in XRP, the biggest gainer following Donald Trump's election victory in November, increased after Ripple CEO Brad Garlinghouse met the president-elect almost two weeks ago. It's also been supported by speculation of a spot XRP exchange-traded fund (ETF) being approved in the U.S. At press time, the XRP/USD pair accounted for 25% of Coinbase's 24-hour trading volume of $6.86 billion. The BTC/USD pair ranked second, contributing 20% with ETH/USD in third place, according to data source Coingecko. On Binance, XRP was the second-most traded coin. Since November, the payments-focused cryptocurrency's price has risen over 600% to $3.33, the highest since 2017. The valuation has increased by a third this week alone, according to CoinDesk and TradingView data. The rally is backed by a record futures open interest and a spike in the number of large holders. Data tracked by TradingView and CoinMetrics show the number of unique addresses holding at least $100,000 worth of cryptocurrency has increased to 108,540. |
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First MiCA Licenses in Europe |
Boerse Stuttgart Digital, a unit of stock exchange operator Boerse Stuttgart, said it was granted a crypto asset service provider (CASP) license by the German regulator BaFin allowing it to provide services across the European Union under the bloc's Markets in Crypto Assets (MiCA) regulations. The company operates a brokerage and an exchange and intends to use the license to broaden its offerings for financial institutions across Europe, Matthias Voelkel, CEO of Boerse Stuttgart Group said in an emailed statement. Companies have been vying for MiCA licenses, which give crypto asset service providers permission to operate across the 27-nation bloc. The requirement came into force on Dec. 30, before which CASPs had to acquire licenses in each nation separately. “The issuance of the MiCAR license, just a few weeks after the adoption of the required national legislation, also enhances Germany's overall competitiveness in the European crypto market,” Oliver Vins, Boerse Stuttgart Digital's chief finance and regulatory officer, said in the email. Germany passed the legislation needed to implement MiCA days before the year-end deadline despite political turmoil that resulted in an early election being called for Feb. 23. Boerse Stuttgart Digital joins MoonPay, BitStaete, ZBD and prime brokerage and clearing company Hidden Road, who received the license from the Dutch Authority for the Financial Markets (AFM) in December. |
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Ethereum Devs Have Pectra Date |
Ethereum's developers have finally delivered a timeline for the chain's next big upgrade, Pectra, which promises to introduce an array of speed and efficiency improvements to the second-largest blockchain. At a developer meeting held virtually on Thursday, Ethereum's core team set the upgrade's target release date for March 2025. Pectra combines together eight major upgrades, or "Ethereum improvement proposals" (EIPs), into one package. Among the most anticipated upgrades is EIP-7702, aimed at improving the user-experience of wallets. The upgrade, which was reportedly sketched out by Ethereum co-founder Vitalik Buterin in a mere 22 minutes, enables user wallets to be programmed like smart contracts. It's part of a broader strategy to bring account abstraction to Ethereum — a series of features that make setting up and using wallets a lot less clunky. Another highly-anticipated upgrade, EIP-7251, increases the maximum amount validators can stake from 32 to 2,048 ETH. The change addresses a massive nuisance faced by the validators who stake ETH to keep the chain running today: Those who want to invest more than 32 ETH with the network must split their stake between dozens — or sometimes, hundreds — of separate nodes. This isn't just burdensome. It has also resulted in weeks-long lines for setting up new nodes. Pectra was originally on track to be Ethereum’s biggest hard fork to date, and it's the first major improvement to the chain since 2024's Dencun upgrade. A blockchain hard fork is a particularly major kind of software upgrade that, in essence, moves a network over to an entirely new chain. While still significant, the upgrades included in Pectra are stripped-down from some earlier plans. Developers decided in September that earlier plans for Pectra were too ambitious, and they agreed to split the original package into two. Developers plan to test Pectra on Ethereum's Sepolia and Holesky test networks throughout February. If all goes well, developers will proceed to bring Pectra to mainnet in early or mid-March. |
Trump Plans Crypto Executive Order |
Stars cannot align more positively for crypto in the U.S., the world's largest economy, if the latest media reports are anything to go by. Still, one key indicator shows a lack of excitement among U.S. investors.
Late Thursday, Bloomberg reported that President-elect Donald Trump will likely issue an executive order announcing crypto as a national imperative or priority with a voice in his administration. Trump could also announce the creation of a crypto advisory that will advocate the digital asset industry's policy goals. The report comes amid heightened expectations that Trump will announce an executive order supporting the creation of a strategic bitcoin reserve on the first day of the office.
Trump, a one-time crypto skeptic, embraced the industry in the lead-up to the November elections, raising hopes for easier regulations and widespread adoption of digital assets. On Friday, the crypto industry will host the "Inaugural Crypto Ball" in support of Trump, hoping he will live up to his promises after taking office on Jan. 20.
An executive order declaring the creation of a strategic bitcoin reserve and policy priority would starkly contrast the largely anti-crypto Biden administration, under which agencies took more than 100 enforcement actions against the industry. Even so, BTC is trading at a slight discount on the Nasdaq-listed Coinbase exchange relative to the global bourse Binance Holdings. It's a sign of muted U.S. demand for the leading cryptocurrency. The chart by CryptoQuant shows gyrations in the Coinbase premium indicator, which measures the spread between BTC's price on Coinbase and Binance.
BTC's November-December surge from $70,000 to over $108,000 was led by U.S. investors, as evident from the consistent Coinbase premium during that period.
There's yet to be comparable bullish pricing on Coinbase, despite expectations for significant positive developments in the U.S. Perhaps much of the Trump optimism was factored in during the November-December rally, and U.S. traders are now waiting to see if the incoming president will follow through on his promises.
BTC changed hands at $101,600 at press time. The prices has largely held between $90,000 and $108,000 since mid-December, CoinDesk Indices data shows. |
Takeaway: Investor Protection Still Matters |
By Nick Steegmans: Until recently, it was “green candle galore” in the crypto markets since Trump’s election win. Bitcoin momentarily broke the all-important $100,000 level, a near 500% recovery from the 2022 Crypto Winter lows, and optimism for crypto is even reaching Congress, where talks of a U.S. National Bitcoin Reserve are gaining serious steam. If stock market bull runs are marathons, crypto bull runs are breakneck sprints. But buyer beware: when crypto surges and FOMO takes hold, scammers seize the moment, turning hype into a goldmine for illicit activity. With no clear regulatory framework yet in place, the risks are amplified. As former President Trump returns to office with a more pro-crypto Congress, regulatory change feels imminent. But what risks do investors face if enforcement measures are not adequately funded? The 2024 election results could mark a pivotal chapter in crypto’s history. Can the new Trump Administration rise to the challenge to not just unlock greater innovation in crypto, but also better protect its users and investors? Crypto bull runs are often accompanied by a surge in scams and fraud. In 2023 alone, a period of rising prices, the FBI’s Crypto Fraud report showed that there was $5.6 billion in reported losses tied to crypto scams and fraud. A staggering 70% ($3.9 billion) of these losses stemmed from investment scams. While phishing scams are prevalent in a digital world, the tenfold rise in Bitcoin ATM scam losses from 2020 to midway through 2024 paints the issue in a tangible way. $65 million in just the first six months of 2024 was stolen via Bitcoin ATMs, with the average loss at about $10,000 according to the Federal Trade Commission. Collectively, these figures show the financial damage and expose gaps that must be addressed to protect consumers and deter bad actors – especially if crypto is going to continue to gain traction and popularity. The U.K. has shown how government policy can adapt to address the rise in crypto-related crime directly. In 2024, legislative updates were made to allow law enforcement to more effectively investigate, seize, and recover illicit crypto assets. Key measures include allowing asset seizures without prior arrests, confiscating investigation-related items like passwords, transferring assets to law enforcement-controlled wallets, destroying certain crypto-assets like privacy coins when necessary, and enabling victims to reclaim their funds. The challenge is finding a balance between the measures implemented in the U.K., while also ensuring the privacy and sovereignty of crypto users. To maintain its reputation as a global leader in financial regulation, the U.S. must establish frameworks that foster innovation while safeguarding market participants from bad actors, and refocus efforts on investigating criminal activity. At the heart of the problem lies regulatory ambiguity, which has plagued the crypto industry for years. In 2024, despite spot Bitcoin and Ethereum ETFs gaining approval, enforcement actions against major crypto institutions intensified, something critics cite as a contradictory approach to oversight. This uncertainty stifles innovation and leaves companies struggling to navigate an inconsistent regulatory landscape. For the incoming Trump administration, there is an obvious starting point to solving high-level compliance issues: creating a clear division of responsibilities between agencies like the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) to eliminate regulatory overlap or opaque rules. But that only partially solves the larger problem. |
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