Bitcoin price revived by 'big win' Grayscale

Grayscale last year launched a lawsuit against regulator SEC after it rejected an application to convert its fund to a bitcoin ETF. On Tuesday, the court vindicated Grayscale: the SEC's substantiation is flawed. What that means? You can read that, and more, in this Weekly.

Cryptomarket

At 4.20pm on Tuesday afternoon, the bitcoin price shot up about $1000 in less than 10 minutes. The reason was a court ruling in the case between Grayscale and the SEC. The regulator should not have rejected the request to convert Grayscale's bitcoin fund into an ETF with the arguments used.

One-liners on social media regularly went awry. This ruling does not force the SEC to approve the transformation into an ETF, but only to look at it again. Nor will it automatically approve other ETF applications, such as BlackRock's.

Still, it is an important win for the crypto sector. The judiciary explicitly mentions that the SEC cannot simply reject applications without proper justification, calling the rejection of Grayscale's application "arbitrary and unpredictable".

The judge also says something about an issue that plays a big role in other ETF filings every time, namely what the difference is between market manipulation in spot and futures markets. Grayscale argues that this difference is very small, and that spot ETFs should be approved because futures ETFs are also approved. The judge agreed, finding it unreasonable for the SEC to reject Grayscale's substantiation without explanation. So the fact that the share price jumped is understandable.

The share price jump was also linked to a report about a licence obtained by social media platform X to manage money and crypto assets. You can see from the chart below that this doesn't really fit in terms of timing. Nor is it substantive news. X has been collecting such 'money transmitter licences' in all 50 US states since mid-June. This is the seventh in a series of approvals.

A key question is how sustainable this rise is. A fortnight ago, the share price fell from $29,000 to $26,000. That decline has not yet been made up. The highest point the price reached was just above $28,000.

Between $26,000 and $29,000 lies a whole range of important dividing lines between a rising and falling trend, on different time scales. In the chart, we have drawn the 200-day, 200-week and 20-month averages. They all come from different directions, but now flow together at $27,500.

On Wednesday morning, the price swung around that price level, with its centre of gravity at $27,400. Which way does the market choose? And at what price will August close next Friday? The answer to that question could well be directional for the rest of the year. Hopefully, we will know more next week!

News

You understand: we addressed the most important news in the market update. That gives us an opportunity here to touch on another important topic, online security.

In any place where money circulates, the crime and fraud department is well-staffed. It is no different for the crypto world. It is bursting with innovation, new applications and investment opportunities. It is this novelty that also attracts hijackers. To illustrate the ways they operate, here are two examples we encountered in the wild in recent weeks.

For instance, a trader lost $900,000 via a crafty Google ad. He searched on 'Celer Bridge' and clicked on the first result. That seemed to point to the right website, but redirected him to a rogue clone. There, he signed a fake transaction that sent away the contents of his wallet.

You always carry the two most important weapons against such shenanigans: knowledge and awareness. You can sharpen both weapons by training them.

Daniël Verlaan, investigative journalist at RTL, wrote a good manual to protect yourself against online malicious people. In doing so, you provide the basic skills you need to recognise scams. For the crypto world specifically, Bitcoin Alpha is a good knowledge partner; there you learn from others who have already seen all the pitfalls. Recently, for example, they published five tips to protect your bitcoin. Finally, a maxim to help you when in doubt: Does something seem too good to be true? Then it often is!

Other news:

• Million investment for bitcoinminer generating power with landfill gas Landfill gas (methane) is created by the decomposition of organic residues in waste. Its emissions contribute to the greenhouse effect. There are therefore many environmental gains to be made by capturing and utilising landfill gas. Nodal Power has raised $13 million in capital to focus on this. The first two power plants are under construction in the western and southeastern US.
• Binance is discontinuing payment cards in Latin America and the Middle East. According to Binance, the cards were used for everyday spending. Less than 1 per cent of customers from these regions used them. The payment cards will continue to operate until September 21. The exchange did not disclose why it is discontinuing the payment cards. It may have to do with Mastercard's decision to end its partnership with Binance. In July, Visa pulled the plug on a similar European partnership.
• Bitfinex enters partnership with Turkish Vakıfbank. Through Turkey's second-largest bank, customers can deposit money on the exchange free of charge. These can then convert their lira to USDT. These digital dollars are in demand as the home currency is rapidly depreciating. Inflation has risen to just below 50 per cent in recent months. Bitfinex is remarkably active in regions where local money is failing.