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First Mover Americas: BTC Jumps Above $71K, DOGE Leads Market Surge

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This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

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Bitcoin rose to over $71,200 early European morning on Tuesday amid a significant uptick in trading activity. BTC broke through the $70,000 barrier for the first time since June on Monday, prompting $48 billion in trading volume and over $143 million in shorts being liquidated across the crypto market. Bitcoin is around 4% higher in the last 24 hours, while the broader digital asset market, as measured by the CoinDesk 20 Index, is up by over 3.2%. DOGE led the gains, jumping over 14% to around $0.165, while ETH rose above $2,600 on the back of a 3.9% rise.

DOGE futures interest is nearing record levels, thanks to increasing confidence of Donald Trump winning next week’s presidential election. Traders view DOGE as an election play thanks to Elon Musk’s endorsement of the Republican candidate, and by extension the possibility of Musk running a “Department of Government Efficiency,” abbreviated as D.O.G.E. DOGE-denominated futures have risen 33% since Sunday to 8 billion tokens as of European morning hours Tuesday. “Elon is memeing the idea of a ‘Department of Government Efficiency’ into reality and is able to tie it to DOGE somehow,” influential X account @theunipcs told CoinDesk. A Trump victory next week would bring “an even more parabolic move in dogecoin,” @theunipcs added.

Trading on Crypto.com has exploded this year, pushing the crypto exchange’s volumes in North America ahead of Coinbase. Crypto.com’s monthly spot trading volume soared to $134 billion in September from $34 billion in July, according to data from The Block. Overall trading volumes on North American crypto exchanges was $183 billion in September, in which Coinbase handled $46 billion. Kraken, the third-largest exchange, was way behind in October with just under $10 billion in trading activity. A key reason for its popularity could be the wide range of tokens on offer. Crypto.com lists over 378, compared to Coinbase and Kraken which offer fewer than 290 tokens each.

Chart of the Day

– Jamie Crawley

Stacks, Prominent Bitcoin Layer-2 Project, Activates Long-Awaited ‘Nakamoto’ Upgrade

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Stacks, a layer-2 blockchain project atop Bitcoin, confirmed on Tuesday the activation of its Nakamoto upgrade, designed to make transactions faster.

The project’s official account on X posted that “Stacks transactions once confirmed are now at least as irreversible as Bitcoin’s,” and that there is a “significant reduction in transaction times.”

The upgrade also will provide a “technical foundation for sBTC launching later this year,” according to the post.

Stacks, co-founded by Muneeb Ali, a Princeton-educated computer scientist who also serves as CEO of the Bitcoin-focused development firm Trust Machines, is seen as one of the oldest and most credible efforts building layer-2 networks atop the Bitcoin blockchain – no small claim given that more than 80 such projects have sprung up over the past couple years.

Ali told CoinDesk earlier this year that he saw Bitcoin as the “apex predator” in the blockchain industry – despite the far-greater success of so-called smart-contract blockchains like Ethereum and Solana that are designed for greater programmability, and have attracted entire ecosystems of applications devoted to things like decentralized finance (DeFi) and gaming.

The upgrade has been the centerpiece of Stack’s roadmap, with initial phases of the implementation began earlier this year, and then several delays before full activation.

Binance Unveils ‘Binance Wealth’ for Elite Customers

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Binance, the biggest cryptocurrency exchange by trading volume, has unveiled Binance Wealth, a white glove service that allows private client managers to easily onboard high-net-worth individuals and offer them a wide range of digital assets.

Wealth managers will handle the onboarding of clients by submitting know-your-customer (KYC) documentation and creating individual sub-accounts on Binance for each client, allowing them to trade or stake a wide range of cryptos with the feel of traditional wealth management framework, exchange said on Tuesday. Support from Binance VIP key account client managers is also available.

Crypto assets are widely accepted as portfolio diversification spice among institutional investors with the arrival of bitcoin (BTC) and ether (ETH) exchange-traded funds (ETFs) earlier this year, which had probably meant further validation for the asset class among high-net-worth individuals (HNWIs).

“Despite appearances, Binance Wealth is not a financial advisory service but a technological solution designed to meet the needs of wealth managers, with the necessary infrastructure allowing them to oversee and support their clients’ exposure to crypto, “explained Catherine Chen, head of Binance VIP & Institutional, in an email.

The service is offered through the global Binance.com platform meaning there are restrictions for some jurisdictions; Binance Wealth will not be available in the U.S., for instance. The initial focus will be on Asia and Latin America, according to a Binance spokesperson.

“Wealth managers can help onboard and support their clients who are eligible to use Binance.com – residing in jurisdictions where Binance.com is available,” Chen said. “This of course is still subject to who the wealth managers can service in the first place, based on their respective license/exemption.”

In terms of custody, the assets belonging to each end-client are held in the clients’ own allocated sub-account.

“The client will retain full control of their assets which are held in the respective wallets under their account on the Binance platform. User assets are viewable in our Proof of Reserves page,” a Binance spokesperson said.

The VIP wealth offering will not come with cheaper fees, like the exchange’s prime broker Link service, which was designed for enterprises.

“Standard trading fees apply. Binance offers a highly-competitive fee structure, and users who qualify for our VIP Program receive attractive fee rebates,” Chen said.

Consensys Cuts 20% Workforce, Blames SEC’s ‘Abuse Of Power’

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Consensys, one of the main supporters of the Ethereum network, is laying off 20% of its workforce, blaming broader macroeconomic conditions and ongoing regulatory uncertainty, including the Securities and Exchange Commission’s (SEC) “abuse of power” in the space.

“Multiple cases with the SEC, including ours, represent meaningful jobs and productive investment lost due to the SEC’s abuse of power and Congress’s inability to rectify the problem,” founder and CEO Joe Lubin said in a blog post. “Such attacks from the US government will end up costing many companies…many millions of dollars.”

Consensys, the maker of the MetaMask wallet, has been in an ongoing battle with the financial regulator after it alleged the firm of operating as an unregistered broker that “engaged in the offer and sale of securities” in June through its MetaMask services. Other Ethereum staking services, which functioned as third-party platforms for the wallet, had also been sued.

Many crypto companies have laid off part of its workforce in the past years as high interest rates have left marks on many balance sheets and came at a time when the SEC was doubling down its enforcements on crypto-native firms, leading to increased spending on legal fees.

In an attempt to fight back against the regulator, Consensys earlier this year sued the SEC for regulatory overreach, arguing that it is attempting a power grab over Ethereum. The effort was part of a bigger trend seen in the crypto space of large companies willing to turn tables. Coinbase and Grayscale have both sued the SEC previously while Kraken and Uniswap have vowed to do the same.

Bitcoin Miner HIVE Poised to Double Its Hashrate by Next Year, Cantor Says Initiating Stock at ‘Overweight’

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Bitcoin (BTC) miner HIVE Digital (HIVE) is expected to more than double its hashrate in the next 12 months, broker Cantor said in a research report Tuesday, initiating coverage of the stock.

Cantor assumed coverage of HIVE with an overweight rating and a $9 price target. The shares rose about 3.6% on Tuesday, trading around $4.26.

The broker said it expects the miner to “more than double its hashrate over the next year.” Hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain and is a proxy for competition in the industry and mining difficulty.

HIVE is expected to grow its hashrate from 5.5 exahashes per second (EH/s) to 13 EH/s by the end of next year, Cantor said, and this “upcoming growth inflection” has not been priced in by the shares.

The company’s plans in artificial intelligence (AI) and high performance computing (HPC) are potentially more enticing to investors, the report said.

“Its eyes are set on its GPU cloud model named HIVE Cloud,” analysts Brett Knoblauch and Thomas Shinske wrote, noting that the miner is targeting $100 million of annual recurring revenue (ARR) by the end of next year.

The market is under valuing the miner’s coming hashrate growth inflection as well as the company’s GPU ambitions, the report added.

Optimism Foundation Agreed to Give Kraken $42.5M of OP Tokens in Layer-2 Deal

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Kraken, a major U.S. crypto exchange, shared last week that it would launch a layer-2 called Ink, relying upon the Optimism’s blockchain ecosystem’s OP Stack framework – and become part of the fast-growing “Superchain” that also includes layer-2 networks from the crypto exchange Coinbase along with the electronics giant Sony and decentralized exchange Uniswap.

But there was a price: Both projects have confirmed to CoinDesk that the Optimism Foundation agreed to provide grants to Kraken in the amount of 25 million OP tokens – worth roughly $100 million earlier this year, when the deal was struck, and now valued at about $42.5 million.

The deal, which was finalized around January or February, paved the way for Kraken to use Optimism’s OP Stack, a customizable toolkit that lets users create their own layer-2 rollups based on Optimism’s technology.

Kraken clarified with CoinDesk that under the deal, the token allocation would be paid to Kraken in grants over a time period. On Jan. 1 , the OP token was worth $3.99, according to CoinGecko, reaching a high of $4.06 on Feb. 20 during that time period. It now trades around $1.70.

The Optimism Foundation confirmed the number of tokens involved in the deal and declined to comment further.”

According to Andrew Koller, founder of Ink, the number is similar to various other deals that are part of the Superchain ecosystem.

“And it was actually Optimism that proposed that number first, and it was very in line with what other Superchain participants have gotten,” Koller told CoinDesk in an interview.

Optimism’s growth

Layer-2 networks have been popping up all over the Ethereum ecosystem over the past year. Crypto exchange Coinbase famously launched their Base layer-2 network in August of 2023 with OP Stack. Since then, decentralized exchange Uniswap shared that it would launch a layer-2 on OP Stack called Unichain, and electronics giant Sony shared it was also coming out with a layer-2 called Soneium based on Optimism’s technology.

AI pioneer Sam Altman’s blockchain project, World, known for its controversial iris-scanning orbs, went live with its layer-2 Worldchain in August, also built on OP Stack.

“I think for some of the big partners that really sign in and do this, this massive commitment that, again, we are spending our money and resources to be able to contribute to the Superchain, of which is not something that, you know, we built, and we’re technically making money on, you know, like the actual open source repos,” Kroller added.

According to Koller, the grant with OP Labs is based on transactions per month, “each time you achieve one, then there’s different tranches that get unlocked, and there’s an initial unlock, and then the rest gets unlocked at each month.”

Base has a slightly different setup, being one of the first in the space under this program. Base disclosed in a blog post in August 2023 that it would receive up to 2.75% of the OP token supply over a six-year period. The total supply of OP tokens is currently close to 4.3 billion, which makes Base eligible to receive up to 118 million OP tokens.

For newer layer-2s in the Superchain, “it’s just like a time-lock thing. And after them [Base], I think all Superchain participants are really driving that around activity,” Koller said.

Paid deals

Deals between layer-2 projects and big firms are not unheard of in the blockchain industry. In 2022, Polygon paid Starbucks $4 million in grants to build an NFT-powered loyalty program. The program was shuttered 18 months later.

At the time of the Starbucks deal, Polygon was led by Ryan Wyatt, who was ousted in 2023, according to a CoinDesk report. Wyatt joined the Optimism Foundation in November 2023, where he is the chief growth officer, in charge of onboarding more developers to build across the Optimism ecosystem.

“There’s no blueprints of this stuff, so you’re gonna make good decisions and bad decisions in this space. There’s not a lot you can lend at,” Wyatt told CoinDesk in an interview this week, conducted before CoinDesk learned about the Kraken deal.

Read more: Kraken Picks Optimism for New Layer-2 Network, Joining Coinbase’s Base on ‘Superchain’

Crypto Stocks MicroStrategy, Coinbase and Marathon Post Just Modest Gains as Bitcoin Eyes Record High

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Bitcoin’s (BTC) rise to new multi-month highs near the $72,000 level and within short range of its March record of $73,700 is providing just a modest boost to most of the crypto-related stocks during U.S. morning trading hours on Tuesday.

The top cryptocurrency was trading at $71,700 at press time, up 4.3% over the last 24 hours.

Bitcoin’s performance was buoyed by the U.S.-based spot ETFs taking in $417 million in inflows on Monday, per Farside Investors data. BlackRock’s iShares Bitcoin Trust (IBIT) was responsible for $315 million of these inflows, bringing its total assets under management to $28 billion. IBIT is up 3.1% today.

Perhaps having discounted some of the bitcoin rally with strong gains over recent days, crypto stocks for the most part aren’t posting major advances thus far on Tuesday. Most notably, MicroStrategy (MSTR) – which has vastly outperformed bitcoin prices in recent months – is up just 0.9% for the session. Crypto exchange Coinbase (COIN) is up 1.2%. Checking miners, MARA Holdings (MARA) is ahead 1.4%, Riot Platforms (RIOT) 3% and Hut 8 (HUT) 3%.

Outperforming in the miner sector is Bitfarms (BITF) with a 5.3% advance, perhaps boosted on news that the firm nominated Andrew Chang, a former chief operating officer of stablecoin issuer Paxos, for election to its board of directors. The nomination could have an impact on the resolution of a hostile takeover bid from Riot Platforms, per TheMinerMag.

Solana-Based RWA Platform AgriDex Taps Stripe’s Bridge to Lower Cost for Agricultural Trade Settlements

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AgriDex, a Solana-based (SOL) real-world asset (RWA) marketplace that aims to bring agricultural goods to blockchain rails, has tapped stablecoin platform Bridge to make transactions cheaper and faster for agriculture businesses, the company told CoinDesk in an exclusive interview.

Integrating Bridge allows lower-cost onramp and offramp for buyers and sellers of agricultural commodities and products to use AgriDex as a cross-border payment and settlement venue using Circle’s USDC (USDC) stablecoin on the Solana (SOL) network, said Henry Duckworth, co-founder and CEO of AgriDex.

Buyers and sellers don’t need to hold crypto, they can initiate and receive transactions in their local currencies, using blockchain tech and USDC as an intermediary.

The integration offers an example for Striple’s playbook to acquire Bridge for $1.1 billion earlier this month to expand the payments processor giant’s capabilities to stablecoins. Stablecoins are being increasingly used as a payment vehicle in emerging regions as a cheaper alternative for traditional banking rails.

“This collaboration highlights the power of stablecoins to solve real-world challenges in global markets,” said Zach Abrams, co-founder and CEO of Bridge.

Henry Duckworth, co-founder and CEO of AgriDex, said that growing up in Zimbabwe where waves of currency devaluation has plagued the country’s economy and his experience as a commodities trader at trading behemoth Trafigura inspired him to build AgriDex to streamline cross-border payments for agricultural goods producers.

On AgriDex, agricultural producers can list, execute and settle trades tracking the whole process within the platform. Trades are secured with non-fungible tokens (NFT) containing details of the transaction.

While traditional banking payment rails usually cost 2%-4% in fees when producers export their goods and can take multiple business days to settle, AgriDex lowers fees to around fifty basis points, Duckworth explained.

The company raised $5 million in venture capital from Endeavour Ventures, sub-Saharan African agricultural group African Crops and South African vineyard group Oldenburg Vineyard earlier this year.

Crypto Ghosted in U.S. Treasury Department’s New Strategy on Financial Inclusion

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The U.S. Treasury Department has a new strategy for financial inclusion to help people get access to the financial system, but the 35-page report references cryptocurrency only once – to tout Treasury’s work on flagging the industry’s hazards.

While Vice President Kamala Harris has said on the campaign trail she’ll encourage crypto as a part of her economic agenda, the administration she’s currently working for is keeping digital assets at arm’s length in what may be the Treasury’s final mention of cryptocurrency before next week’s election.

The Biden administration’s Treasury Department noted in the Tuesday report that it “cultivates financial inclusion by developing and promoting research,” and — to that end — it had issued a report in 2022 on the “risks related to digital assets.”

“Access to safe, affordable financial products and unbiased information can help all Americans pursue financial security,” Treasury Secretary Janet Yellen is set to say at a banking event in New York on Tuesday, according to her prepared remarks in which she’ll call for the bankers’ “active partnership” in the new strategy.

From its start, the crypto sector has made a case for itself as a low-barrier entree into finance. That’s been among the core selling points, for instance, from industry lobbyists as they explain digital assets to lawmakers and regulators. But while international remittances have been an obvious little-guy use case for crypto, Treasury doesn’t seem to have been moved by the industry’s inclusion arguments.

Liberal-leaning groups such as the Center for American Progress have argued that the claim from crypto advocates about its benefits for financial inclusion “does not hold up to scrutiny,” and the Brookings Institution also sought to debunk that narrative.

It’s unclear whether the vice president’s office would have had any say in the Treasury’s latest strategy, though it would seem to contrast with the crypto openness her campaign has been signaling. While Harris’ election opponent, former President Donald Trump, has made his recent crypto enthusiasm a prominent part of his 2024 campaign, his own administration’s Securities and Exchange Commission was the first to bring a major case that attacked the legal foundation of Ripple.

Coinbase Revenue May be Hurt by Lower Trading Volumes, Regulatory Uncertainty, Analysts Say

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Wall Street analysts expect a further slowdown in spot trading volume for Coinbase (COIN) in the third quarter, partly triggered by a lack of catalysts for crypto and an uncertain regulatory environment heading into the presidential election.

The crypto exchange, when it reports its earnings post-market on Wednesday, is expected to experience a revenue decline of about 13% in the third quarter, to $1.26 billion from $1.45 billion in the last quarter, according to estimates on FactSet. Meanwhile, the earnings per share (EPS) are forecasted to be $0.46, up from $0.14 in the second quarter.

“Volumes continued to soften through the quarter and we shake out quite a bit below the Street, largely on weaker retail transaction revenues,” Barclays analyst Benjamin Buddish wrote in a note. He has an equal weight rating on the stock and raised its price target to $175 from $169 while cutting the EPS estimate to $1.05 from $1.62 in the third quarter.

The third-quarter slowdown in trading volume is not just Coinbase-specific but an industry-wide phenomenon. Data from The Block shows that roughly $3.3 trillion was traded on all crypto exchanges, compared to $3.92 trillion in the second quarter. Coinbase competitor Robinhood (HOOD) is also set to report third quarter earnings after-market on Wednesday.

Additionally, the data revealed that crypto exchange Crypto.com has been the most popular trading venue for investors in the North American region since July when it first overtook Coinbase as the exchange with the highest trading volume. One of the reasons why Coinbase might have fallen short in volume is due to Crypto.com’s offering of a wider range of tokens.

Analysts also believe that regulatory uncertainty due to the upcoming presidential election results was one of the main drivers behind lower trading volumes on U.S. exchanges. According to Oppenheimer, the spot volume outside of North America increased 61% from the previous quarter. “We believe lack of catalysts and US election overhang have negatively impacted bitcoin,” Oppenheimer analyst Owen Lau wrote. “International volume was a bright spot.”

The investment bank estimates that third-quarter revenue will be $1.29 billion and EPS will be $0.40. It has an outperform rating on Coinbase and a price target of $282 over the next 12 to 18 months.

Lower staking revenue

In addition to lower revenue from trading fees, which continues to be Coinbase’s main stream of income, J.P. Morgan’s Kenneth Worthington expects lower revenue from the exchange’s staking services. This is largely driven by ether (ETH) underperforming in the third quarter, down roughly 24% from Q2, according to the bank.

Ether, the second-largest cryptocurrency by market cap, has been trading in the rough range of $2,330 to $2760 since August, with the current price at $2624 as of press time. In the months from April to June, that range was much higher, at $3,503 to $3,368.

“Ether [has] particularly underperformed [during the quarter] despite seeing the launch of its spot ether ETPs intra-quarter,” Worthington wrote. “We see this market cap contraction particularly weighing on Coinbase’s staking revenue in 3Q and subscriptions and services revenue overall.”

Subscription and services revenue was one of the bright spots in the second quarter, growing 17% from Q1. The main catalysts for the uptick were higher average USDC on-platform balances and USDC market capitalization.

J.P. Morgan, which rates the stock neutral, raised its price target to $196 from $180. However, it sees EPS landing anywhere between $0.42 and $0.54 for the third quarter.

Shares of the exchange are up nearly 30% year-to-date, but they are currently 21% down from their peak of $279.71 in March. As of press time, the stock was trading at $221.97.