Crypto Long & Short: The Trouble With Ticker Symbols

Insights, news and analysis for the professional investor

By Marc Hochstein, Executive Editor

September 5, 2021

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Remember late July when bitcoin was dipping below $30,000 and it seemed crypto had entered a bear market? At a rooftop cocktail party in New York (my first in-person event since the pandemic started), I spoke to a hedge fund manager who assured me it was not so.

He gave a very human explanation for his bullishness: The reason the market was languishing was simply because traders weren't at their desks. The newly vaccinated were going outside and enjoying themselves for the first time in nearly 18 months.

Once people got back to work, he predicted, the bull run would resume. Sure enough, bitcoin staged a fulsome rebound in August, rising almost above $50,000. The real test may come this week, after U.S. market participants return from the three-day Labor Day holiday weekend.

Go out and enjoy the sunshine while you can – after reading this newsletter, naturally.

– Marc Hochstein, executive editor

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The Briefing

Would the real USDP please stand up?

Last month, Paxos, the issuer of the seventh-largest stablecoin in the $2 trillion global cryptocurrency market, renamed the token, previously called the Paxos standard, to the Paxos dollar. As part of the rebranding, the crypto exchange changed the ticker symbol from PAX to USDP.

There was one hitch: Another stablecoin was already using the ticker.

Unit Protocol, a decentralized lending platform that went live in February, had been calling its token USDP since at least July of last year, when it published a white paper. For a hot minute it seemed the plucky team was not about to let a bigger rival use the four-letter identifier without a fight.

"We are currently disputing Paxos' trademark application for USDP," Benjamin Meredith, a representative for Unit Protocol, told CoinDesk on Aug. 27.

To show that the original USDP was a known quantity in the market, Meredith pointed to blockchain data indicating that 138 million units of the token had been minted, each worth just under $1. He also shared writeups on the market data sites CoinGecko and CoinMarketCap as further evidence this stablecoin was an established asset – even if the Paxos stablecoin's market cap was 7.5 times larger.

As of this writing, however, no formal objection was filed with the U.S. Patent and Trademark Office. In a later email, Meredith said the Unit Protocol team decided to first talk to a Paxos executive. Still later, he said the call didn't happen.

"We're just going to go along our merry way for the time being," Meredith said.

Paxos, for its part, seemed unwilling to budge when contacted by CoinDesk. "It's common for projects to share tickers in the cryptocurrency space," said Paxos spokesperson Becky McClain. "There are dozens of instances of shared tickers or tickers that share letter strings, and we feel confident these uses are distinguishable and coexist without confusion for consumers." She did not answer a follow-up question about whether Paxos checked if the ticker was already in use before choosing it.

This anticlimactic tale highlights an issue that has come up a handful of times in crypto and may do so more often in the future as the industry grows. Without a standard for exchanges to assign identifiers, investors are apt to get confused.

"Tickers are designed to make assets instantly recognizable to clients, so it's important each ticker refers to a single asset," said Kevin Beardsley, lead product manager for pro trading at the Kraken exchange. "However, two projects sometimes claim the same symbol, and the winner is mostly decided de facto by the community."

Read the full column here.

– M.H. and Nate DiCamillo

A message from Copper

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Chain Links

Tether asked the New York Supreme Court to block the release of documents to CoinDesk from the New York Attorney General's investigation, claiming they contain competitive trade secrets. TAKEAWAY: Full stablecoin transparency may suffer another setback if the USDT issuer's petition holds up. Crypto market investors have long been in the dark about the composition of Tether's reserves.

MetaMask hit 10 million users during the month of July, with growth coming from the Asian market. TAKEAWAY: New users are becoming more familiar with the crypto space and potentially interacting with a variety of blockchains. The growth in interest for the underlying technology is often followed by speculation on market assets.

FTX.US agreed to purchase LedgerX, a crypto derivatives platform. TAKEAWAY: U.S. investors have been awaiting more crypto derivative products, specifically options contracts. FTX could corner the stateside crypto derivatives business and bring further efficiency to the markets.

Billionaire investor Bill Miller bought 1.5 million shares of Grayscale's Bitcoin Trust for $44.7 million. (Disclosure: Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.) TAKEAWAY: Miller has been interested in BTC throughout 2021, expressing the view that there are no comparable assets with similar liquidity and upside potential. While Miller's fund has around $2.9 billion in assets under management, almost $50 million is no small bet from the market's perspective. Institutional interest may help narrow the current GBTC discount.

Following the largest month in NFT trading growth, Three Arrows Capital launched an NFT fund and is aiming to raise $100 million. TAKEAWAY: NFT platform OpenSea had 200,000 unique traders last month, showing the growing interest in the space. Three Arrows Capital believes there is long-term value in "owning the top pieces from the most desired sets."

Ex-hedge fund manager and precious medals advocate John Paulson called crypto "worthless." TAKEAWAY: Paulson joins Michael Burry as the second investor to amass a fortune from the 2008 housing crisis to openly speak against crypto markets. Paulson managed one of the largest hedge funds post-2008, but struggled to replicate success in the following years, losing almost $10 billion between 2011-2014.

Binance CEO Changpeng "CZ" Zhao announced that Binance.US could follow in Coinbase's steps and go public in the coming years. TAKEAWAY: While providing no timeline, the CEO described a plan for private funding rounds and an eventual IPO. Despite legal issues with many of its subsidiaries, the world's largest retail crypto exchange is looking to expand in the heavily regulated U.S. market.

– Teddy Oosterbaan