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Good morning, and welcome to First Mover. I'm Lyllah Ledesma here to take you through the latest in crypto markets, news and insights. In today's newsletter: - Price Point: Ether outperforms bitcoin as it completes its third and final testnet ahead of the Merge. Bitcoin hits a two-month high.
- Market Moves: A Georgetown Law professor sounds an alarm on how proof-of-stake makes it easier for ether to meet the Howey Test. Could it be a security post Merge?
- Chart of The Day: Ether futures open interest hits a 4-month high.
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Investors appeared more upbeat on Thursday as bitcoin (BTC) ether (ETH) were both trading up on the day, extending gains after this week's cooler-than-expected U.S. inflation reading calmed fears of a more aggressive Federal Reserve. "The inflation report has further fueled the optimism already apparent in the markets and could set the tone for the rest of the summer," said Craig Erlam, OANDA analyst, in an emailed note. ETH is outperforming BTC today, with an increase of 12% over the last 24 hours on the back of its successful third and final testnet ahead of the Merge. "Goerli" was the last of three public testnets to run through a "dress rehearsal" of the Merge. After this, the mainnet Merge is expected to occur sometime at the end of September. ETH has witnessed positive price movement since the confirmation of the Merge date. Bitcoin hit a two-month high of $24,658 on Thursday morning. Erlam wrote that he's "still not seeing the momentum I would expect and want." "That may change of course, and a break of $25,000 could bring that, but we still appear to be seeing some apprehension that may hold it back in the near term," according to Erlam. In traditional markets, stock futures rose and The Nasdaq Composite, which includes big technology companies such as Apple and Microsoft went into bull territory Wednesday. The Nasdaq rose 2.9%, ending its longest bear market since 2008. In the news, Near Protocol's native NEAR token jumped 12% to a high of $5.97 Wednesday after Coinbase added the token to its listing roadmap, which shows assets the cryptocurrency exchange plans to add. Blockchain analytics firm Elliptic said that it can now track crypto movements across and between all blockchains concurrently and in a matter of milliseconds. The firm said the offering can help thwart exploits on cross-chain bridges. From Seoul, South Korea, CoinDesk's Shaurya Malwa reported that options trading is more likely to be a key bet among institutional investors in cryptocurrencies than other niches such as DeFi or NFTs in the coming years, says prominent crypto fund QCP Capital. |
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What's at Stake: Will the Merge Turn Ether Into a Security? |
Ethereum's upcoming Merge could make the second-largest blockchain greener, faster and cheaper. But a law professor says it could also create regulatory headaches by transforming ether (ETH), the network's native asset, into a security under U.S. law. "After the Merge, there will be a strong case that ether will be a security. The token in any proof-of-stake system is likely to be a security," tweeted Georgetown Law professor Adam Levitin on July 23. If Levitin is right, and, more importantly, if the U.S. Securities and Exchange Commission (SEC) shares his view, exchanges that list ether (and that would be nearly all of them) would be subject to more onerous regulatory requirements. Like the bitcoin (BTC) cryptocurrency, ether has until now been treated as a commodity, outside the SEC's jurisdiction. Most chatter in the Ethereum ecosystem has concerned technical aspects of a post-Merge proof-of-stake network rather than such legal questions. Goerli, a software update expected to take place Wednesday, is the final test before the second-largest blockchain fully transitions from the more energy-intensive proof-of-work to proof-of-stake. The switch is expected to be complete by October. Levitin's argument is anchored in the Howey Test – detailed in a 1946 U.S. Supreme Court ruling often used to determine whether an asset is a security. To fully appreciate Levitin's perspective, it's important to understand Howey and the concept of staking in a proof-of-stake system. Read the full story here. |
Chart of The Day by Omkar Godbole: Ether Futures Open Interest At 4-Month High |
- The dollar value locked in the open ether futures contracts has risen to $7.9 billion, the highest since April 9, according to data provided by Skew.
- Increased leverage typically means greater price volatility.
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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Biggest Gainers Biggest Losers There are no losers in CoinDesk 20 today. |
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Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
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Check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. - Michael Safai, managing partner, Dexterity Capital
- David Carlisle, vice president of policy and regulatory affairs, Elliptic
- Joseph Ayoub, research analyst, Citi
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Where innovators, changemakers, investors and leaders present their best ideas for investing in the future of the Web 3, digital assets, blockchain and crypto ecosystems. Register now. |
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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