Even with a 3-5% cost to convert [stablecoin] USDT into equities, the potential upside of 50-70% in China’s stocks makes this a strategic move, one observer said.

China’s battered stock market has experienced a resurgence since late powered by the barrage of stimulus by Beijing.

But this surge could be sucking capital out of the crypto market, capping the upside in bitcoin, the leading cryptocurrency by market value, and other Asian markets, according to observers.

“The current surge in Chinese stocks, driven by the stimulus package and investor activity during the national holiday week, represents a calculated risk-reward trade for savvy investors. Even with a 3-5% cost to convert [stablecoin] USDT into equities, the potential upside of 50-70% makes this a strategic move,” Danny Chong, co-founder of multi-staking protocol and co-founder of Digital Assets Association Singapore, told CoinDesk in an email.

Beijing Bazooka is also drawing capital from other Asian equity markets. “We are trimming our long positions across Asia to fund China purchases,” Eric Yee, senior portfolio manager at Atlantis Investment Management in Singapore, told Bloomberg.

Since Sept. 24, the Shanghai Composite Index has jumped over 20%, reaching its highest since May 2023. The Hang Seng China Enterprises Index, which constitutes Chinese stocks listed in Hong Kong, has jumped over 25%, according to data source TradingView.

The rally follows stimulus announcements that included interest rate cuts, liquidity support for stocks, banking system capital injections, and a promise to support property prices.

The enormous stimulus, estimated to be over 7.5 trillion yuan (CNY), has been widely perceived as uber-bullish for bitcoin and other risk assets. Bitcoin, however, remains flat-lined at around $64,000 in the wake of the China stimulus, extending a six-month-long consolidation between $50,000 and $70,000.

Temporary shift

According to Chong, the capital shift is likely to be temporary and investors will eventually refocus on cryptocurrencies.

“This shift is likely to be temporary. Once the peak of the recent upward move in Chinese equities stabilizes, we can expect to see a redeployment of capital back into crypto. This is a prime example of the maturing mindset of investors who are willing to move across asset classes to optimize their returns,” Chong said.

Traditional market analysts believe Bejing’s latest stimulus falls short of addressing the real economic issues and may not lead to a long-lasting rally in Chinese stocks.

“Looking beyond the near-term sentiment boost, the effectiveness of the measures could fade unless some fundamental issues are addressed. The key one is fixing damaged balance sheets – especially those of the banks. Until that happens, any attempts to boost borrowing and leveraged risk-taking are likely to fail,” TS Lombard said in a note to clients on Oct. 2.

The firm added that the latest measures are only 1.5% of China’s gross domestic product, as opposed to 32% in 2008 and 22% in 2015-16, saying the spillovers from the stimulus are unlikely to be large this time.

BCA Research voiced a similar opinion last week, saying the rally in China’s stocks may not have legs.

The post Bitcoin, Asian Equities May Be Losing Capital to China Stocks appeared first on Crypto Insider.

PLUS: AI tokens not moving despite a $6.6 billion fundraise from OpenAI.

Bitcoin (BTC) and ether (ETH) continued in the red at the start of Asian trading hours Thursday as the market withstood another sell-off.

BTC is flat, trading above $61,100, while ETH is down 4% and trading at $2,390. Crypto markets took a hit from Tuesday night after Irani airstrikes on Israel, which the latter has vowed to retaliate, in a move that has dented a rally in risk assets, including bitcoin.

However, whales continue to accumulate bitcoin at unprecedented rates despite the macro environment and market dullness, CryptoQuant founder Ki Young-Ju said in an X post.

Whales colloquially refer to influential entities that hold largest amounts of any asset – and on-chain data shows new bitcoin whales are making sizeable purchases in anticipation of a bull run ahead.

The CoinDesk 20 (CD20), a measure of the performance of the largest digital assets, was down over 3% as investors continue to sell most major cryptocurrencies.

Outflows from the BTC exchange-traded funds (ETFs) continued with $91.76 million in outflow during the Wednesday U.S. trading day. Ether ETFs experienced the opposite, with inflows of $14.45 million, breaking a two-day streak of outflow.

XRP plunged more than 10% in the past 24 hours after the U.S. SEC said on Wednesday that it is appealing a court ruling restricting its ability to regulate cryptocurrency markets. The SEC will ask the 2nd U.S. Circuit Court of Appeals to review a July 2023 decision that the XRP token sold by Ripple Labs on public exchanges did not meet the legal definition of a security.

Memecoin mog (MOG), the second-largest cat-themed token behind popcat (POPCAT), saw little price movement after getting an automated mention from Republican candidate Donald Trump’s X account. Trump’s account seems to be sending a reply to any account that liked his tweet.

A Polymarket market tracking Trump’s mention of the word “mog” – or related adjectives – before December 31 was unchanged at 13% of “yes” votes, leading to some drama among voters.

Elsewhere in the market, LDO, the native token of non-custodial staking solution Lido, is down nearly 9%, following Ether’s decline.

Artificial Intelligence tokens are also not moving, despite an announcement from OpenAI that it had raised $6.6 billion at a valuation of $157 billion.

CoinGecko data shows that the category, which includes (NEAR), {{TAO}}, and (ICP) is down 1.8%. Worldcoin, which was founded by OpenAI’s Sam Altman, but has no formal ties otherwise to OpenAI, is down 4%.

The post Bitcoin Flat Near $61K as Whales Continue to Accumulate; XRP Down 10% as SEC Appeals Case appeared first on Crypto Insider.

The Bank of Japan won’t rush to repeat hikes of the yen, which triggered a market meltdown in July.

Bitcoin (BTC) extended one-week gains to 10% after a busy few days, including rate cuts by the U.S. Federal Reserve, a pause in cuts by the Bank of England, and a decision to hold rates by the Bank of Japan (BoJ) on Friday.

BTC briefly crossed $64,000 in Asian morning hours Friday, before paring gains, as BoJ kept policy unchanged in a move that avoided a repeat of July’s market meltdown which followed its decision to hike rates.

Traders said macroeconomic data suggests optimism for riskier bets, such as bitcoin, in the coming months. “The US 2Y/10Y treasury spread, an indicator of recession, has been inverted since July 2022 but has recently steepened to +8bps,” QCP Capital traders said in a market broadcast Friday. “This reflects market optimism and a shift towards risk-on assets.”

Short-term debt instruments with higher yields than long-term ones can be a warning sign for risk assets and the economy – as it indicates that monetary and fiscal policies are restrictive and that the economy may contract in the future.

Open interest data fromCoinGlass show a nearly $5 billion jump in bitcoin bets since Tuesday, a sign of new money rapidly entering the market in expectations of volatility ahead. Traders are biased toward longs – or bets on higher prices – a ratio tracking the active buying volume to active selling volume shows.

Crypto markets jumped higher in the past 24 hours, with memes and layer-1 tokens leading gains. Solana’s SOL and ether (ETH) zoomed as much as 7% to lead major gains, while Avalanche’s AVAX, Aptos’ APT, and Immutable’s IMX jumped as much as 12%.

Memecoins led by bonk (BONK) surged as much as 10%, CoinGecko data shows, showing a return of risk-on behavior.

The broad-based CoinDesk 20 (CD20), a liquid fund tracking the largest tokens by market capitalization, rose 3.5%.

The post Bitcoin Nears $64K as BTC Futures Attract Billions; BoJ’s Hike Pause Bumps Risk Assets appeared first on Crypto Insider.

The floating yields on the bitcoin-based LBTC token are from pools that went live on Wednesday. There’s also a fixed-yield option of an annualized 10%.

eFi platform Pendle on Wednesday started offering pools with variable yields of as high as 45% on a bitcoin (BTC)-backed token in a move that expands the product’s fundamentals.

The offering, which can also provide fixed yields of an annualized 10%, allows users to deposit LBTC, a liquid-staking token issued by restaking startup Lombard, in a Pendle pool made by Ethereum layer-2 network Corn. Data shows the pool has attracted over $13 million in user deposits since going live. It matures on Dec. 26.

“We’ve seen major use cases with fixed yield for ETH, and we’re aiming to replicate the same success with BTC as well,” CEO TN Lee told CoinDesk in a Telegram message. “It’s going to be a busy few weeks for us as we roll out new pools and launches.”

Pendle’s approach is to divide investments into a decentralized finance (DeFi) protocol, such as Compound or Aave, into two: the principle put up by the investor and the yield expected to be earned on that position in the form of token rewards. The split into a principal token (PT) and a yield token (YT) that can traded on the open market creates the high yields possible on Pendle’s pools.

Users can buy YT with LBTC, giving them increased exposure to the underlying yield and points from LBTC and Corn until maturity, at which point the YT will be worth zero. If they forego those rewards, they can elect to receive either the fixed yield or the floating yield, which comprises the points that can be monetized and future tokens that will be airdropped to LBTC holders.

Lombard is a restaking service that converts wrapped bitcoin (WBTC) to a Lombard Bitcoin (LBTC) token that can be used in DeFi applications to capture yield. Corn, another startup, is a network that uses bitcoin as the main token to pay usage fees.

Unwrapping the jargon: Liquid staking is a service that allows users to stake their crypto assets and receive a new token in exchange. Layer 2s are blockchains focusing on a specific use case atop a broader service blockchain. DeFi refers to using automated smart contracts to provide financial services, such as lending and borrowing to users. A pool can be considered a digital locker to store assets and earn returns, similar to bank accounts.

Pendle’s PENDLE tokens are up 11% in the past 24 hours, CoinGecko data shows, beating a 2% rise in bitcoin.

The post Bitcoin Yields as High as 45% on Offer in Pendle’s New Pools appeared first on Crypto Insider.

The rise in crypto volatility has been accompanied by increased market participation in the bitcoin market, Kaiko said.

The bitcoin (BTC) market reached unprecedented activity in the first eight months of 2024, surpassing the record notional trading volume seen during the bull market of 2021.

The cumulative trading volume or the dollar value of the number of BTC bought and sold on centralized exchanges amounted to $2.874 trillion in the first eight months, according to Paris-based data provider Kaiko.

That’s nearly 20% higher than the volume of $2.424 billion registered in the first eight months of 2021 and the highest since 2012.

“The rise in crypto volatility has been accompanied by increased market participation, at least in the bitcoin market,” Kaiko said in the weekly report, discussing the record-setting trading volume.

Data from charting platform TradingView show bitcoin’s 10-day realized or historical volatility surged to an annualized 100% in April as strong inflows into the U.S.-listed spot exchange-traded funds (ETFs) and expectations for Fed rate cuts drove the cryptocurrency’s price to record highs above $70,000.

The volatility picked up again early last month as concerns about the U.S. economy and the unwinding of the yen carry trade destabilized risk assets, including cryptocurrencies.

The post Bitcoin Trading Volume Surged to $2.8T in January to August Period appeared first on Crypto Insider.

If Kamala Harris wins, the world’s largest cryptocurrency could drop to as low as $30K, the report said.

Bitcoin (BTC) is expected to reach new highs later this year if Donald Trump wins the U.S. election in November, and the cryptocurrency could hit $90,000 by the fourth quarter, broker Bernstein said in a research report on Monday.

If Kamala Harris wins the election, the largest crypto by market cap is expected to break its current floor around the $50,000 level and could test the $30,000-$40,000 range, the report said.

The broker noted that Trump has been very vocal about making America the “bitcoin and crypto capital of the world,” and has mentioned digital assets at every policy speech he has made.

Trump’s speech at the Bitcoin Nashville conference in July called for the U.S. to be a bitcoin mining powerhouse, for the appointment of a crypto friendly Securities and Exchange Commission (SEC) chairman, the formation of a national strategic bitcoin stockpile and a crypto advisory council to the President.

Conversely, crypto has not even been mentioned in any of Harris’s speeches, the report noted.

Bernstein said the crypto market has been faced with two significant headwinds for the past three years, macro and regulatory.

“After the last three years of regulatory purge, a positive crypto regulatory policy can spur innovation again and bring the users bank to financial products on the blockchain,” analysts led by Gautam Chhugani wrote.

“Elections remain hard to call, but if you are long crypto here, you are likely taking a Trump trade,” the report added.

The post Bitcoin Could Hit $90K by Year End if Trump Becomes President Again: Bernstein appeared first on Crypto Insider.

The Japanese company announced its plan to adopt bitcoin as a reserve asset to hedge against the volatility of the yen in May.

Japanese investment adviser Metaplanet (3350) has arranged a 1 billion-yen ($6.8 million) loan to buy more bitcoin (BTC) after adopting the largest cryptocurrency as a reserve asset earlier this year.

The Tokyo-based company said it borrowed the money from shareholder British Virgin Islands-based MMXX Ventures “with the entire amount allocated for purchasing bitcoin”, in a statement on its website. The six-month loan carries an interest rate of 0.1% a year.

In May, Metaplanet said it would adopt bitcoin as a reserve asset to hedge against the volatility of the yen. At the start of July, it held a total of 161.3 BTC ($9.2 million).

The company’s strategy mimics that of software developer MicroStrategy (MSTR), which has been acquiring bitcoin for over four years and holds in excess of 226,000 BTC, more than 1% of all the bitcoin that will ever exit.

Metplanet shares closed at 893 yen ($6.10) on Thursday, 20% higher on the day as Japanese stocks continued their recovery from last week’s sell-off following an interest-rate hike by the Bank of Japan.

The post Metaplanet Arranges Loan to Buy $6.8M of BTC appeared first on Crypto Insider.

For the moment, only bitcoin and ether can be traded, while the company works on “expanding our crypto offerings in the near future.”

Futu Securities International, an online stock broker based in Hong Kong, has introduced bitcoin (BTC) and ether (ETH) trading, offering shares of Chinese e-trading giant Alibaba Group (BABA) and AI chipmaker Nvidia (NVDA) as rewards to clients who open accounts and deposit specific amounts of money, according to the South China Morning Post.

The company, which calls itself Hong Kong’s largest tech broker, is working on “expanding our crypto offerings in the near future,” the report said. Commission fees have been waived for the time being. Futu had 22.5 million registered users as of March 31, and 1.9 million paying clients, the company says on its website.

Hong Kong investors who open accounts in August and deposit HK$10,000 ($1,280) in the next 60 days can receive either bitcoin worth HK$600, a HK$400 supermarket voucher or a single Alibaba share. Investors depositing $80,000 can choose either HK$1,000 in bitcoin or an Nvidia share, the report said.

Futu is offering the crypto trading services through a partnership with cryptocurrency exchange HashKey Exchange, one of only two licensed in Hong Kong.

It is also seeking a license to offer the same services for its subsidiary Panthertrade. The entity is currently deemed-to-be-licensed by Hong Kong’s regulator, the Securities and Futures Commission, which allows it to offer crypto services while it awaits full approval.

The move comes as Hong Kong continues to show its support for the crypto industry in an attempt to become a global crypto hub. Recently, spot crypto exchange-traded products were approved for trading.

The post Hong Kong’s Futu Launches Bitcoin, Ether Trading, Offers Alibaba, Nvidia Shares as Rewards: Report appeared first on Crypto Insider.

While BTC futures OI has dropped, open interest in BTC terms has held steady.

Notional open interest in bitcoin (BTC) futures and perpetual futures, a crucial market sentiment gauge, has declined roughly 18% from $37 billion to $30.2 billion in one month, alongside a 14% slide decline in the cryptocurrency’s spot market price, according to data source Coinglass.

At first glance, the data indicates that longs or bullish leveraged bets anticipating a price rise have been squared off over the past four weeks. In other words, BTC’s price drop is bolstered by the unwinding of bullish bets.

That interpretation could be partially correct at best and masks the bullish undercurrents in the market.

Open interest refers to the number of active or open contracts at a given time, and notional open interest is calculated by multiplying the number of units in one contract by its current spot market price. Therefore, changes in the asset price impact notional open interest even as the total number of contracts remains steady, thereby painting a misleading picture of market activity.

That seems to be the case in the BTC market.

Per Coinglass, open interest has remained steady above the 500,000 BTC mark over four weeks. Meanwhile, perpetual funding rates charged by exchanges every eight hours have consistently held positive, indicating a bias for bullish bets.

The combination of steady open interest in BTC terms and positive funding rates, coupled with the decline in notional open interest, suggests that some traders have been setting fresh long positions, offsetting other market participants’ supposed unwinding of bullish bets.

That’s a sign traders are not yet hesitating to put longs, according to Laurent Kssis, crypto ETF specialist at CEC Capital.

“This assumption is indeed correct. Also, more protection strategies are being implemented as the market remains very uncertain. Don’t forget the lat liquidity washouts were decent enough to push the market down below the $60K mark. Hesitation to position long orders is still not dominating, but hedging is a rather large part of the trading.”

Perhaps traders are hopeful that once the selling pressure from Mt. Gox reimbursements and miners is exhausted, bitcoin could resume the upward trend, keeping pace with the Nasdaq.

A similar conclusion can be drawn from the consistent positive spread between futures and spot prices, widely referred to as basis.

“The basis has dipped slightly but is still attractive, so there is still demand for long positions as part of the basis trade, and expectations of a breakout are building as macro tailwinds accumulate and as the selling pressure is likely to dissipate soon, so investors could be accumulating strategic longs while funding rates are low,” Noelle Acheson, author of the Crypto Is Macro Now newsletter told CoinDesk.

Activity in the spot and options market also suggests upside bias.

According to Griffin Ardern, head of options trading and research at crypto financial platform BloFin, crypto exchange Bitfinex has been the source of bullish pressure during the price dip.

“Bitfinex whales have been buying the dips [in the spot] since late June, but I haven’t observed similar signals in the other derivatives market,” Ardern told CoinDesk.

The margin longs on Bitfinex, which involve using borrowed funds to buy an asset in the spot market, have steadily increased since June.

Meanwhile, according to QCP Capital, traders have been buying topside bets in the options market.

“Despite the sell-off, the options market is still heavily skewed in favor of the topside, suggesting that the market is still anticipating a year-end rally. This aligns with the desk’s observation of significant buying interest in the longer-term options at the $100K/$120 strike [calls],” QCP said in a market update on Wednesday.

The post Decoding The $7B Decline in Bitcoin’s Notional Open Interest appeared first on Crypto Insider.

One trader said ether’s sell-off on positive news is typical “buy the rumors, sell the facts” behavior.

Bitcoin (BTC) and ether (ETH) prices fell in the past 24 hours even as several ether exchange-traded funds (ETFs) were approved for listing on U.S. exchanges.

Ether has dropped 4% since the approval, CoinGecko data shows. It had risen 20% over the course of a week amid indications of pending approval and updated odds of the ETFs getting approved. The broad-based CoinDesk 20, a liquid index that tracks the biggest tokens, fell 4.5% over 24 hours and the crypto market cap lost 2.9% to $2.5 trillion.

“Ethereum’s sell-off on positive news is a typical “buy the rumors, sell the facts” reaction of speculators,” Alex Kuptsikevich, a senior market analyst at FxPro, said in an email to CoinDesk. “We shouldn’t be surprised if the price pulls back to the $3000 area again, returning to an important consolidation area. From these levels, large institutional investors can start building a position in ETFs.

“We saw the same in January after the approval of the Bitcoin ETF, which took 19% off its price in the following two weeks before there was a spectacular reversal,” he said.

The U.S. Securities and Exchange Commission (SEC) on Thursday approved key regulatory filings tied to ether ETFs, a historic milestone for the second-largest cryptocurrency. They are not, however, cleared to trade. Although the SEC approved the 19B-4 form that allows for the offering and listing of ETFs, it must still green light the funds’ S-1 filings before investors can buy them.

The regulator approved documents for eight ETFs – from VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest 21Shares, Invesco Galaxy and BlackRock – for listing on the Nasdaq, NYSE Arca, and Cboe BZX exchanges.

If the ETFs are approved for trading, a significant influx of institutional capital is likely. Standard Chartered predicted inflows of as much as $45 billion in the first 12 months.

Some traders say they expect ether to rally over 60% in the coming months, with a marked increase in futures and spot buying demand for the token in the past week.

The post Bitcoin, Ether Rally Cools Following U.S. Ether ETF Listing Approval appeared first on Crypto Insider.