Trusts Holding Steady, Miners Moving Lower
Market Update
- Today has been another interesting day of price action across crypto and crypto-equities markets. $BTC has mostly undone its previous rally, now fluctuating just below the $26k mark after peaking at $26.5k yesterday. $ETH mirrors this trend, currently trading around $1,630. Altcoins have generally followed suit, albeit with a less significant upswing initially. Notably, $SNX and $DYDX are today's most significant underperformers, likely due to recent CFTC settlements against DeFi derivatives operators (more on this below). In contrast, COIN, ETHE, and GBTC are displaying further resilience, maintaining price levels similar to those seen yesterday. On the macro front, rates continue trending upward, and the DXY appears poised to end the day in positive territory. Consistent with recent patterns, gold is declining in value, moving in tandem with the broader crypto asset market.
- In August, Riot Platforms (RIOT), one of our preferred mining companies due to its scale, received $31.6 million in credits, comprising $24.2 million in power credits and $7.4 million in Demand Response credits from ERCOT, the Texas grid manager. When calculated using the average Bitcoin price for that month, these credits equate to approximately 1,136 Bitcoin mined. ERCOT typically forms these win-win relationships with Bitcoin miners who have a flexible energy load, unlike data centers that require 100% uptime. This flexibility allows miners like Riot to power down during high-demand periods, such as heatwaves, and receive credits that exceed their potential mining earnings, ultimately strengthening ERCOT's energy grid. This arrangement underscores the advantages of hosting Bitcoin miners, which contribute to a more robust and likely greener energy grid. We anticipate that such dynamics will increasingly mitigate the (misplaced) Environmental, Social, and Governance (ESG) concerns that currently surround the Bitcoin mining industry.
- Marathon Digital Holdings (MARA), another one of our preferred mining companies, has entered into an agreement to exchange approximately $417 million of its 1.00% Convertible Senior Notes for about 26.2 million newly issued shares. This leaves roughly $331 million of the Notes still outstanding. Following the announcement, MARA's stock price declined by 10%, reflecting the approximate level of dilution from the conversion. Although concerning in the short term, it's important to note that the conversion does not generate immediate cash for the company and is priced at nearly $16 per share—a 50% premium to the current share price. Additionally, MARA has an existing at-the-market offering for common stock up to $750 million, with around $160 million still available. Had the company wished to raise immediate cash and dilute shareholders, it could have utilized this facility. We should certainly respect the dilutive effects of this transaction but think it more closely reflects the lender's appetite for upside as opposed to the Company's immediate need to improve its margins or cash profile.
- The Commodity Futures Trading Commission (CFTC) issued enforcement actions against decentralized finance (DeFi) platforms Opyn, ZeroEx, and Deridex, settling various regulatory violation charges against them. These platforms were accused of failing to register as swap execution facilities or designated contract markets, among other offenses. In response, the CFTC has ordered these companies to pay civil penalties ranging from $100,000 to $250,000 and to cease further violations. The regulator stressed that smart contracts cannot legitimize unlawful transactions and vowed to continue cracking down on platforms that enable U.S. persons to trade digital asset derivatives without proper registration. This development is noteworthy for a couple of reasons. First, it dispels the perception that the crypto industry prefers CFTC oversight to that of the SEC because the former is considered less stringent. Second, this action contrasts sharply with last week's significant Uniswap case, which concluded that neither smart contracts nor liquidity providers were at fault for enabling the trading of fraudulent tokens; instead, the blame was placed on the token issuers.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Despite Render Network's big 5% gain yesterday, more is needed to expect this is breaking out of its ongoing downtrend which intersects right near $1.50. Daily $RNDR charts highlight the recent selloff from May and its bottoming attempt in recent weeks. This lines up with a 61.8% Fibonacci retracement of this year's rally and the area near $1.34 should continue to have importance in the days/weeks to come. Initially, a breakout above $1.53 would be seen as bullish, surpassing the four-month downtrend and likely leading price up to $1.70-$1.80. However, more strength will be needed to help jumpstart its intermediate-term momentum which turned down given the extent of the decline from May peaks. The ability to climb over $2.10 would help RNDR exceed its 50% retracement area, and this would be a constructive technical development that would suggest a rally back to challenge highs could be underway. For now, it's important to see RNDR start to make headway sooner than later in showing some strength which could help its technical pattern. Any violation of $1.30, while not immediately expected, would be a technical negative that results in a brief move down to challenge the $1.00 area before starting to turn back higher.
Daily Important Metrics
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All metrics as of September 8, 2023 1:37 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $503B | $25,827 | ↓ -0.21% | ↑ 56% | |
 ETH | $196B | $1,629 | ↓ -0.38% | ↑ 36% | ↓ -20% |
 ADA | $8.9B | $0.2540 | ↓ -0.47% | ↑ 2.90% | ↓ -53% |
 DOGE | $8.9B | $0.0630 | ↓ -0.43% | ↓ -10% | ↓ -66% |
 SOL | $8.0B | $19.50 | ↓ -0.94% | ↑ 97% | ↑ 41% |
 DOT | $5.4B | $4.24 | ↓ -0.37% | ↓ -2.38% | ↓ -58% |
 MATIC | $5.1B | $0.5429 | ↓ -1.90% | ↓ -29% | ↓ -85% |
 LINK | $3.4B | $6.23 | ↓ -0.77% | ↑ 12% | ↓ -44% |
| $1.1B | $1.14 | ↑ 0.55% | ↓ -10% | ↓ -66% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -18% | $19.35 | ↑ 0.26% | ↑ 133% | ↑ 78% |
| BITW | ↓ -43% | $12.24 | ↓ -0.89% | ↑ 128% | ↑ 72% |
| ETHE | ↓ -27% | $11.57 | ↑ 0.09% | ↑ 143% | ↑ 87% |
| BTCC | ↑ 0.07% | $4.72 | ↓ -0.42% | ↑ 56% | ↓ -0.13% |
News
QUICK BITS
Coin Telegraph JPMorgan moves into deposit tokens for settlements: Report JPMorgan is reportedly developing the infrastructure to run a new deposit token, allowing settlements between banks fo... |
REGULATION
CoinDesk Crypto Firm LBRY to Challenge Ruling It Violated U.S. Securities Law The blockchain-based file-sharing network had indicated it would be winding down after a New Hampshire court ruled in favor of the SEC last November. |
Decrypt.co CFTC Charges Three DeFi Protocols With Violating AML Rules, Operating Without Licenses Decentralized exchanges Opyn, ZeroEx and Deridex settled with the CFTC on charges that included failing to geoblock U.S. users. |
Coin Telegraph CFTC fines Mirror Trading $1.7B for Bitcoin-related forex fraud The CFTC has brought or resolved ten fraud cases involving digital assets or forex since June 2023, Commissioner Krist... |
CoinDesk CFTC Commissioner Pitches Pilot Program for U.S. Crypto Regulation The U.S. watchdog for derivatives markets should create a limited pilot program for regulating cryptocurrencies, said Caroline Pham, one of the members of the C... |
WEB 3.0
Coin Telegraph Ant Group launches a new blockchain brand for Web3 developers The new entity, ZAN, will help the mother company shake off its affiliations with Web3 and proceed to the IPO. ... |
HACKS, EXPLOITS, AND SCAMS
Decrypt.co Binance CEO Brushes Off 'Negative News' Amid Executive Departures In a Twitter post, Changpeng ‘CZ’ Zhao confronted “FUD” surrounding employee turnover at the crypto exchange. |
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