Cryptocurrency Daily Update

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128-Regulation makes crypto more investable

Will Canny, 10-26, 21, Citi Starts Coverage of Coinbase With $415 Price Target, Says ‘Buy Crypto’s General Store’, bank’s Coinbase target is 27% higher than Monday’s closing price. Citi initiated coverage of Coinbase (NASDAQ: COIN) Tuesday with a buy rating and $415 price target, saying the crypto exchange “offers investors direct exposure to increased retail and institutional adoption” of digital assets.. “For its position within the crypto value chain, a `networking-based’ business model and strategy, the undeniably very large opportunity set … yes, we believe COIN is investable,” analyst Peter Christiansen wrote in a report. Investors should “buy crypto’s general store,” he said. Citi sees additional potential upside for the stock as the company expands its business beyond facilitating transactions. The U.S. bank also sees the exchange’s “lean forward approach to regulatory compliance” as a prospective competitive advantage in the longer term and says that not all regulation should be seen as harmful. ”To a degree, we think rising regulations could be a positive for Coinbase’s competitive positioning, particularly versus business models that predominantly rely on markets being unregulated,” Citi said. The stock and the company’s financial performance will both “likely incur a high degree of volatility” as Coinbase’s business model is directly correlated to the price of major crypto assets, Citi cautioned. That volatility makes forecasting and budgeting the business more difficult. Citi is positive on the long-term outlook for blockchain technology and crypto markets in general and says that “the form of the so-called crypto economy will likely remain in debate for some time, though its proliferation, driven by an exceptionally large opportunity, is here to stay, in our view.” Coinbase shares closed at $325.54 on Monday, 27% below Citi’s price target.

127-SEC will regulate stablecoins

Brian Quarmby, 10-26, 21, SEC expected to head U.S. stablecoin regulation and enforcement, U.S. regulatory bodies have reportedly agreed that the Securities and Exchange Commission (SEC) will lead the United States’ efforts to regulate the stablecoin sector. According to an Oct. 26 Bloomberg report citing anonymous sources “familiar with the matter,” the SEC has reached an agreement with other U.S. agencies to take the reins on proposing legislation and overseeing the stablecoin industry. The sources add that the SEC’s newfound “significant authority” over the sector will be formally announced in the Treasury Department’s forthcoming stablecoin report that is scheduled to be published this week. The report will also clarify the regulatory jurisdiction of the Commodity Futures Trading Commission (CFTC) and Treasury Department with regard to stable tokens. The Treasury’s report was announced during a meeting of The President's Working Group for Financial Markets (PWG) in July, with the PWG stating its intention to explore creating a new type of banking charter for stablecoin issuers among other regulatory measures at the time. The PWG comprises top representatives from top U.S. regulatory agencies, including Treasury Secretary Janet Yellen, SEC Chairman Gary Gensler, Federal Reserve Chairman Jerome Powell, and acting CFTC head Rostin Behnam. Bloomberg’s sources claim that Gensler has been pushing for a further expansion in the SEC’s regulatory domain over stablecoins, including allowing the commission to pursue enforcement actions against issuers. Gensler also reportedly sought to clarify what powers the SEC has to oversee stablecoin-based investment transactions. The report is also expected to call on Congress to enact similar regulations to those overseeing bank deposits for the stablecoin sector. Related: US Treasury says it must ‘modernize and adapt’ to digital currencies Last month, Gensler called on Congress to assist the SEC and CFTC in regulating stablecoins, with Gensler likening the dollar-pegged assets to “poker chips at the casino.” The stablecoin market has seen significant growth in 2021, and the market capitalization of leading stablecoin issuer Tether (USDT) has exploded this year, with its market cap growing by 229% since the start of the year to sit at $69.5 billion. Second-ranked USD Coin has also seen meteoric growth, with its capitalization growing 706% year to-date to tag $32.52 billion as of this writing.

126-Lack of regulation causes crypto flight

Dan Primack, author of Pro Rata, 10/25, 21, FTX CEO predicts more U.S. crypto flight, FTX doesn't look much like a company valued at $25 billion. Its new headquarters, located in a sleepy part of The Bahamas, is so nondescript as to not even have a sign. But it does expect to soon have neighbors. Driving the news: Founder and CEO Sam Bankman-Fried tells "Axios on HBO" to expect "more and more crypto flight from the states" if the U.S. doesn't soon create a regulatory regime for cryptocurrencies. Bankman-Fried believes a lot of these moves will end in the Bahamas, which is seeking to become the Dubai of crypto, by offering legal operating licenses. He adds that FTX actually relocated from Hong Kong around a week before China's new crypto crackdown, even though the move outwardly appeared to come in response. The 29-year-old, who was born in Silicon Valley and educated at MIT, says that U.S. regulators now "know a fair bit" about crypto, but continue to be surprised by its big trading volumes. He also argued that America should iterate within existing regulatory regimes, rather than creating brand new rules for crypto (as favored by Coinbase, which is both an FTX rival and investor), but is open to the idea of a crypto czar (as the White House reportedly is considering via executive order). In a separate conversation with Axios after the cameras stopped rolling, Bankman-Fried mentioned that he could see FTX moving to the U.S. were amenable rules put in place. Bonus clip: Bankman-Fried admits he's a bit mystified by the appeal of visual NFTs on his platform, including a $270k sale of the word "test.". Bonus deal info: Multiple sources say that FTX recently paid just under $500 million to buy LedgerX, a Miami-based crypto derivatives company licensed by the CFTC. The deal was publicly announced, but the price-tag wasn't. No word yet on how much Cboe Global Markets paid last week for Chicago-based rival ErisX. Or why companies like Coinbase, Square and Robinhood weren't battling harder to win those deals, given how difficult it is to get such CTFC licenses.

125-Blockchain is very secure

Times of India, 10-25, 21, Cryptocurrency: An alternative economic world, The beauty of blockchain is that It is almost impossible to interfere with it. Blockchain is secured through a process known as hashing, which serves as a digital fingerprint for a certain set of data. The same data will always produce the same hashed value. Trying to tamper with a block within a blockchain causes the hash of the block to change. That change makes the following blocks, which are linked to the first block’s hash, invalid. The second method of securing blockchain is called proof-of-work (PoW), which serves to slow the creation of the blocks. In Bitcoin’s case, for example, it takes about ten minutes to calculate the required PoW and add a new block to the chain. This timeline makes tampering with a block super difficult because if one interferes with one block, they will need to interfere with all the following thousands of blocks, resulting in hundreds of hours of work, just to change one chain. A third way blockchains secure themselves is by being distributed. Blockchains don’t use a central entity to manage the chain. Instead, they rely on a peer-to-peer (P2P) network. In public blockchains like Bitcoin, there are no barriers to entry, and everyone is allowed to join. Each member of the ever-growing network is called a validator or a node. When someone joins the network, they get a full copy of the blockchain, which is shared and accessible to all within the open network. In this way, the node can verify that everything is still in order, and all transactions remain transparent.

124-Regulating mining is topical – it’s part of the transaction

Times of India, 10-25, 21, Cryptocurrency: An alternative economic world, For cryptocurrency mining, all of the work happens on a mining computer or “rig” connected to the cryptocurrency network. The work performed by miners consists of:- Verifying and validating new transactions Collecting those transactions and ordering them into a new block Adding the block to the ledger’s chain of blocks (the blockchain) Broadcasting the new block to the cryptocurrency node network Without mining, the blockchain won’t function.

123-Can’t regulate crypto because it’s borderless

Len Penzo, 10-23, 21, Should the Government Regulate Cryptocurrency? Cryptocurrencies use the blockchain technology[1] and are borderless assets. They cannot be directly controlled by a single entity like a government or a central bank. Blockchain allows anyone on the globe to freely participate in the crypto economy (as long as they have an internet connection).

122-Bans are regulations

Len Penzo, 10-23, 21, Should the Government Regulate Cryptocurrency? We have two recent examples of harsh regulations that are on the opposite sides of the spectrum: In China, the government is doing its best to completely annihilate the usage of crypto. In May 2021, the government prohibited all crypto mining operations and doubled down on this crackdown just recently. It declared that all crypto transactions would be deemed illegal in the future[2]. On the other side, we have El Salvador that adopted Bitcoin as legal tender[3], allowing citizens to use it in all financial transactions.

121-Regulation undermines the crypto markets

Len Penzo, 10-23, 21, Should the Government Regulate Cryptocurrency? The news of China banning crypto mining in May hit the markets very hard. Bitcoin fell by 30% [4]and dragged down the rest of the coins with it. We saw a short-lived bear market, where the total crypto market cap went from over 2 trillion dollars to a low of 1.25 trillion[5], in just one month. This proves that stark regulative methods, bans, or restrictions of usage can have quite a negative effect on the market.

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