Category: Cryptocurrency

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Risks of Celebrity Crypto Endorsements

Pop icon Jason Derulo finds himself at the center of controversy after promoting a meme coin named JASON, which plummeted in value shortly after its release. Known for his musical performances, Derulo’s involvement in the volatile meme coin market has initiated a broader debate about the ethical concerns and potential risks of celebrity crypto endorsements. This incident has led to significant monetary losses for investors and reputational damage for the celebrities involved.

The Fallout: Derulo and Sahil Arora

Recently, Jason Derulo took to X to announce the launch of the meme coin JASON to his 3.5 million followers. Unfortunately, the coin’s value dipped by more than 72% minutes after its release, causing widespread dismay among investors and fans. In reaction to the fallout, Derulo pointed palms at Sahil Arora, a parent formerly connected to cryptocurrency scandals. Attempting to rectify the situation, Derulo tweeted:

“Damn Sahil got me! That’s ok, that’s motivation to take this all the way! I just bought $20,000 worth. In this for my enthusiasts for the lengthy haul, going to do the whole thing in my energy to ship this sh*t to the moon.”

Derulo then addressed the issue in an apology video, expressing his commitment to making the coin’s recovery his “life’s goal.” Despite his proactive stance, skepticism surrounds Jason Derulo’s involvement with the JASON meme coin. Influential crypto figures, along with SlumDOGE Millionaire and on-chain detective ZachXBT, have solid doubt on Derulo’s claims.

Criticism from the Crypto Community

SlumDOGE Millionaire criticized Derulo, stating, “Bro made SlumDOGE Millionaire criticized Derulo, stating, “Bro made $1 million off his rug and put $20,000 again withinside the chart lol. million off his rug and put ,000 again withinside the chart lol. You’re not stupid or new to crypto, Jason; you know exactly what was happening. Don’t play dumb now.” The liquidity of the JASON meme coin is alarmingly low, at approximately 1,000, with around 3,190 holders. This situation mirrors other high-profile crypto scams where initial excitement leads to significant financial losses for ordinary investors.

The crypto community’s reaction has been overwhelmingly critical. ZachXBT, known for exposing crypto scams, responded to Derulo’s apology video, saying, “You are not sorry at all. You have promoted so many crypto scams over the years I have lost track.” He further added, “Projects will throw them high 5 fig – low 6 fig for Ongoing Celebrity Meme Coin Promotions.”

Repeated Offenses by Sahil Arora

This incident related to Derulo isn’t the primary of its kind. The accused developer, Sahil Arora, has launched several other celebrity-associated meme coins. Notably, Arora has been connected to latest meme coin scams regarding celebrities Caitlyn Jenner and Rich The Kid. Arora’s handle, “@Habibi_Comm,” turned into suspended following information of his involvement in pump-and-unload and rug-pull schemes thru movie star crypto tokens.

Both Jenner and Rich The Kid have publicly condemned Arora, with Jenner pronouncing plans to pursue prison movement towards him each criminally and civilly. The pattern of these scams highlights the need for greater awareness and caution among both celebrities and their followers when engaging with cryptocurrency investments.

Broader Implications and Future Outlook

The Jason Derulo meme coin controversy underscores the broader implications of celebrity crypto endorsements in the cryptocurrency market. As celebrities leverage their influence to promote financial products, the potential for both positive and negative impacts becomes evident. While endorsements can bring attention and legitimacy to certain projects, they also carry the risk of misleading fans and investors, especially in a highly volatile and unregulated market like cryptocurrency.

Moving forward, there is a growing call for more stringent regulations and guidelines governing celebrity crypto endorsements of financial products. These regulations would aim to protect investors from potential scams and ensure that endorsements are transparent and based on thorough due diligence. In conclusion, the ongoing debate around celebrity crypto endorsements highlights the need for a balanced approach that safeguards investor interests while allowing for the legitimate promotion of innovative financial products.

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The insatiable demand for power by artificial intelligence firms is benefiting Bitcoin miners. Hut 8 (NASDAQ:HUT) shares outperformed most peers on Monday after the Miami-based company received a $150 million investment from Coatue Management to develop AI infrastructure.

This investment will be provided through convertible notes with an 8% annual interest rate and a conversion rate of $16.395 per share, as stated by the company. Following the announcement, Hut 8 shares rose nearly 4% during Monday morning trading, even as most of its peers followed Bitcoin (BTC) lower.

The investment also positively impacted other Bitcoin mining-related data centers involved in AI and high-performance computing. Soluna Holdings (NASDAQ:SLNH) surged almost 17%, and Applied Digital (NASDAQ:APLD) gained about 10%.

AI and HPC firms are increasingly turning to the Bitcoin mining industry to fulfill their computing power needs. These miners often already possess the required computing capacity and established deals with power suppliers. JPMorgan highlighted that the demand for power by large-scale data centers and AI firms might spark a new era of mergers and acquisitions for Bitcoin miners with favorable power contracts.

Recently, cloud computing provider CoreWeave signed a 200-megawatt deal with miner Core Scientific (NASDAQ:CORZ) for AI-related services and offered to purchase the entire company for over $1 billion. Core Scientific rejected the offer, citing that it undervalued the company.

Coatue Management, an investor in CoreWeave, underscores the high level of interest in utilizing Bitcoin miners’ existing infrastructure for AI services.

Hut 8 emphasized this need for power in their press release, stating, “Many traditional data center operators are failing to meet the surging demand for AI compute capacity due to power shortages, long lead times to bring new capacity online, and the extensive upgrades required for existing data centers to support the latest generation of high-density compute.” Hut 8 aims to help bridge this gap.

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Japanese Institutional Crypto Investment Trends

Japan’s largest investment bank, Nomura Holdings (TYO:8604), and its crypto subsidiary, Laser Digital, released findings from a recent survey on Monday. The survey targeted over 500 investment managers in Japan, revealing that 54% plan to allocate funds to crypto assets within the next three years.

Motivations and Barriers for Japanese Institutional Crypto Investment

More than half of the respondents indicated a future interest in digital assets, motivated by recent developments such as the launch of crypto products like exchange-traded funds (ETFs), investment trusts, staking, and lending. These factors, along with the increasing mainstream adoption of cryptocurrencies, are seen as significant drivers in the growth and development of cryptocurrencies. 

However, some institutions currently hesitant to invest in crypto assets cited counterparty risks, high volatility, regulatory requirements, and concerns about security as significant barriers to entry.

Positive Sentiment Towards Japanese Institutional Crypto Investment

Additionally, 25% of survey respondents have a positive impression of the asset class, and 62% view cryptos as an opportunity for investment diversification. The survey indicated that when investing in crypto assets, the preferred allocation is 2-5% of assets under management (AUM).

Interest in Web3 and Venture Capital Investments

Respondents also expressed interest in investing in Web3 projects, either directly or through venture capital (VC) funds. This interest reflects a broader trend towards integrating advanced blockchain technologies and decentralized applications into traditional investment strategies.

Japan’s Crypto Policy Developments

Japan is rapidly developing an economic reform bill with notable implications for Japanese institutional crypto investment. Early this year, the government published a legislative proposal allowing venture capital firms and other investment funds to hold digital assets directly. This inclusion of digital assets in the legal framework not only legitimizes their use in institutional investments but also positions Japan as a crypto-friendly jurisdiction globally.

Independent finance news outlet FinanceFeeds released a report in February, highlighting that Japan is a global leader in compliant crypto payments. In March, Japan’s $1.5 trillion pension fund was actively exploring the potential addition of Bitcoin to its investment portfolio.

Stablecoin Regulation in Japan

Japan has also heavily regulated stablecoins, noting that only banks, money transmission services, and trust firms can issue stablecoins. Additionally, all reserves underpinning the value of these tokens must be held in Japanese trusts and invested only in domestic bank accounts, ensuring the highest levels of security and compliance.

This stringent regulation aims to protect investors and maintain the stability of the financial system. Furthermore, these measures help to prevent fraudulent activities and enhance the overall trustworthiness of the cryptocurrency market in Japan, making it a safer environment for both institutional and individual investors.

Conclusion

The findings from Nomura Holdings’ survey indicate a growing interest and potential for significant Japanese institutional crypto investment. With progressive regulatory frameworks and an increasing number of investment managers showing interest in digital assets, Japan is poised to become a key player in the global crypto market. 

As traditional financial institutions recognize the benefits of digital assets, the integration of these assets into investment portfolios is expected to accelerate. This shift not only enhances portfolio diversification but also opens up new avenues for growth and innovation in the financial sector. Japan’s proactive stance on crypto regulation plays a crucial role in fostering a secure and stable environment for digital asset investments. 

By implementing stringent regulations on stablecoins and ensuring that reserves are held in domestic banks, Japan is setting a high standard for other nations to follow. This approach not only protects investors but also enhances the credibility and legitimacy of the crypto market. In summary, the increasing Japanese institutional crypto investment underscores Japan’s potential as a leading player in the global crypto industry. 

As more institutions allocate funds to crypto assets, the Japanese market is likely to see substantial growth, innovation, and diversification in the coming years. This trend not only benefits the institutions themselves but also contributes to the overall advancement and maturity of the global crypto market.

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If you’re optimistic about crypto following Bitcoin’s (BTC-USD) recent surge in popularity, you might be wondering which cryptocurrencies are the best to buy now for potential long-term gains. Which projects might see widespread adoption in the next decade, leading to substantial returns?

Investing in crypto is quite different from investing in stocks. The first American stock exchange began in 1792, while Bitcoin became publicly available only in 2009. Therefore, the concept of cryptocurrency investment remains unclear to many people. Are you investing in Bitcoin because you believe it will become future legal tender, or are you simply looking to grow your money?

Regardless of your motivation, the best cryptos to buy and hold for the next decade are the most legitimate ones—those that have already shown signs of adoption and integration into financial systems.

Bitcoin (BTC-USD)

Bitcoin is the most likely cryptocurrency to endure into the future. It has been around the longest, essentially started the industry, boasts the highest trading volume and market cap, and is the most widely accepted as tender globally. Some governments, like El Salvador, have even experimented with integrating it into their currency systems. Additionally, Bitcoin’s success has inspired an entire industry of Bitcoin mining companies, which operate computer farms to decrypt algorithms and further the coin’s circulation.

Investing in Bitcoin is different from investing in stocks. It’s not about a company’s future value but rather the adoption of a highly technical technology. Timing the market with Bitcoin is unlikely to be successful. Instead, view the money invested as a long-term gamble and aim to buy when Bitcoin’s price is well below its all-time high—not like right now.

Ethereum (ETH-USD)

If Bitcoin seems too expensive, Ethereum (ETH-USD) is a more moderately priced investment option. Dubbed the “world’s largest altcoin,” Ethereum aims to offer a more ecosystem-based alternative to Bitcoin.

Long-term investors in ETH believe in the prospects of blockchain technology. ETH’s value proposition is not as an alternative to fiat currency but as an open-source blockchain. Developers seeking to advance blockchain technology earn ETH coins, which can increase in value over time.

ETH is also a major player in decentralized finance, aiming to bypass traditional banking and facilitate large-scale transactions directly between individuals via a blockchain. If you’re bullish on blockchains and decentralized finance, ETH could be a solid investment to hold for the next decade.

Binance (BNB-USD)

Binance (BNB-USD) is tied directly to the performance of the largest cryptocurrency exchange in the world. Investing in Binance for the next decade means believing in its value as an intermediary currency and having confidence in the longevity of the Binance exchange.

As the Binance exchange grows in popularity, the use and trading frequency of BNB could increase, boosting its value and purchasing power. For investors, this means either using BNB to store valuable cash or trading it efficiently for other cryptos on the Binance platform.

Ultimately, BNB’s high market cap is due to the general popularity and trust Binance has earned within the crypto community.

These three cryptocurrencies—Bitcoin, Ethereum, and Binance—represent some of the best long-term investment options in the crypto space, with the potential for significant growth over the next decade.

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In the volatile world of cryptocurrency, investor confidence is often gauged by the willingness to hold assets through market fluctuations. Recently, Ethereum has seen a strong vote of confidence from its community, marked by a record number of long-term holders. These HODLers are crucial to Ethereum’s future.

Long-Term Holders on the Rise

According to Glassnode data, a significant portion of Ethereum is held for periods ranging from one to three years. This indicates that much of the Ethereum acquired during the 2021-2022 period is still being held. This trend is further supported by the decrease in the proportion of crypto held for less than six months, while the share held for more than seven years has increased. This reflects the stability and faith in Ethereum’s fundamental value and its potential for future growth.

The Ethereum HODL Waves chart illustrates the distribution of Ethereum held over various periods, revealing changing trends in investor behavior. The recent surge in long-term holders suggests strong conviction in Ethereum’s long-term value, with many investors choosing to hold their assets rather than sell during market fluctuations.

The Influence of Long-Term Holders

Long-term Ethereum holders play a crucial role in stabilizing and growing the cryptocurrency. By holding their assets, they reduce volatility and create a sense of confidence that attracts new investors. Their long-term vision also encourages the development of innovative projects on the Ethereum blockchain, fostering a richer and more diverse ecosystem.

This HODLing strategy can positively influence Ethereum’s future, positioning it as a leading digital currency with increased global adoption and usage. However, it is important to note that cryptocurrencies remain high-risk investments, and market conditions can change rapidly.

The behavior of long-term Ethereum holders indicates a strong belief in the crypto’s potential. Their strategy suggests Ethereum is maturing as an investment asset, with promising prospects for future growth.

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The U.S. Securities and Exchange Commission has concluded its investigation into Ethereum 2.0, according to a late Tuesday announcement by cryptocurrency firm ConsenSys on social media platform X. ConsenSys had previously filed a lawsuit seeking an injunction against the SEC’s regulation of the Ethereum blockchain.

ConsenSys founder Joseph Lubin hailed the SEC’s decision as “a significant victory” for Ethereum. “While we welcome this development, it’s not enough. We must remain vigilant and continue advocating for clear and fair regulations that enable innovation to flourish,” Lubin, who also co-founded the cryptocurrency Ether, stated on X.

Despite the SEC’s decision, ConsenSys plans to continue its lawsuit to seek a court ruling that the SEC lacks legal authority to regulate the user-controlled software interfaces built on Ethereum or the Ethereum blockchain itself.

An SEC spokesperson declined to comment on the existence or nonexistence of a possible investigation.

Last month, the SEC approved applications from Nasdaq, CBOE, and NYSE to list spot Ether ETFs, a surprising win for the cryptocurrency industry, which had anticipated rejections.

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Marathon Digital Holdings (NASDAQ:MARA) has integrated its multi-chain layer-2 network, Anduro, with the decentralized exchange network Portal to Bitcoin. This integration aims to enhance the utility of the Bitcoin network by enabling atomic swaps, which allow for peer-to-peer transactions of cryptocurrencies across different blockchains.

Marathon, a publicly-traded bitcoin miner, began incubating Anduro in February, describing it as “a platform built on the Bitcoin network that allows for the creation of multiple sidechains.” The integration with the San Francisco-based fintech provider and subsequent renaming to Portal to Bitcoin was announced in an email shared with CoinDesk on Wednesday.

Previously known as Portal, the company raised $34 million in a seed round in March. It leverages the Bitcoin layer-2 network Lightning to facilitate atomic swaps, enabling users to convert assets like Ethereum (ETH) into Bitcoin (BTC).

This development brings greater utility to Bitcoin, a feature common among Ethereum-based assets and other blockchains but relatively new to Bitcoin. Anduro’s integration with Portal to Bitcoin may also offer new revenue streams for miners. By using merge-mining, participating miners can earn Bitcoin-denominated revenue from transactions on these sidechains while continuing to mine Bitcoin on the base layer.

“Integrating Portal to Bitcoin enhances the utility of Bitcoin and presents new opportunities for revenue generation for miners,” said a Marathon spokesperson.

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Hashdex has submitted a proposal to the Securities and Exchange Commission to create an exchange-traded fund that would include both Bitcoin (BTC) and Ethereum (ETH). The proposed ETF, named Hashdex Nasdaq Crypto Index US ETF, aims to offer investors exposure to the two leading cryptocurrencies, reflecting their distribution in the Nasdaq Crypto Index.

The ETF would be composed of approximately 70.54% Bitcoin and 29.46% Ethereum, adhering to a market-cap-weighted strategy that mirrors the broader cryptocurrency market as represented by the Nasdaq Crypto Index.

This initiative marks a significant advancement in integrating digital assets into conventional financial instruments, potentially broadening the accessibility of cryptocurrencies to a wider range of investors. The fund will be backed by custodians Coinbase (NASDAQ:COIN) Custody Trust Company and BitGo Trust Company and will maintain cash reserves.

While initially focusing on Bitcoin and Ethereum, the ETF may consider including additional digital assets in the future, pending SEC approval. This proposal arrives during a favorable regulatory climate, following the SEC’s approval of Bitcoin spot ETFs and the anticipated introduction of Ethereum ETFs in the U.S. market.

SEC Chair Gary Gensler recently indicated to a Senate committee that Ethereum ETFs might begin trading by this summer.

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Jump Crypto has added $10 million to a U.S. political action committee focused on promoting pro-crypto candidates in Congress. This brings the total contributions from Jump, a Chicago-based investment firm, to $15 million, and raises the PAC’s total funds to nearly $169 million as of Wednesday, according to spokesman Josh Vlasto.

The significant fundraising effort by Fairshake and its affiliated PACs has positioned the crypto industry with one of the most influential campaign-finance operations for the 2024 elections. These super PACs have been heavily investing in primary campaigns, helping their preferred candidates advance toward likely general-election victories in November.

“The crypto and blockchain communities have united to form a sustainable bipartisan coalition and an effective long-term operation,” Vlasto stated. “We will continue to support candidates committed to responsible regulation that drives innovation, creates jobs, and maintains America’s global leadership.”

A spokeswoman for Jump Crypto declined to comment on the donation. This substantial contribution follows recent matching $25-million donations from major crypto firms Coinbase Inc. (NASDAQ:COIN), Ripple, and Andreessen Horowitz.

As of the May 31 Federal Election Commission filing, Fairshake and its related PACs—Defend American Jobs and Protect Progress—held $109 million. With less than five months until the final voting, Vlasto confirmed the PACs do not plan to support presidential candidates, instead focusing on proven congressional incumbents and crypto-friendly candidates.

Recent votes in Congress have provided clearer indicators of lawmakers’ stances on crypto. In May, the House passed the Financial Innovation and Technology for the 21st Century Act, the first comprehensive crypto oversight legislation to clear either chamber. Its future in the Senate remains uncertain, but the vote revealed which House members support crypto regulations.

Additionally, both chambers voted to overturn the Securities and Exchange Commission’s crypto account policy, Staff Accounting Bulletin No. 12. Although President Joe Biden vetoed this effort, it showed 11 Senate Democrats joining Republicans against the SEC policy and the White House’s stance.

These votes demonstrated unexpected support from Democrats and are being used to evaluate lawmakers. Stand With Crypto, an advocacy group started by Coinbase, uses a grading system to rate politicians. For example, Sen. Mark Warner received a “D” grade for his no vote on the SAB 121 resolution, while Sen. Chuck Grassley earned a “B” grade for supporting it.

“Recent votes have helped us educate our advocates on politicians’ positions on crypto,” said Sabrina Siddiqui, a spokesman for Stand With Crypto. She noted that the group reached over a million online members earlier than expected due to strong interest in these key votes.

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Crypto investment firm Pantera Capital aims to raise $1 billion for a new fund dedicated to revitalizing the crypto industry. Cosmo Jiang, Pantera Capital’s portfolio manager, revealed that over $200 million of this fund is allocated for investments in artificial intelligence projects.

In a recent interview with DL News, Jiang expressed his belief that AI will become integral to every crypto company, likening it to the necessity of a website for modern businesses. “Investing in AI firms will soon be as standard as investing in companies with websites,” Jiang stated.

Pantera Capital is therefore on the lookout for projects that leverage AI to enhance blockchain technology and vice versa.

Pantera Capital, which counts major companies like Coinbase (NASDAQ:COIN), Circle, and Bitstamp in its portfolio, plans to significantly increase its investment in AI-related blockchain projects with the new fund. Jiang noted that their previous fund allocated around 15% to 20% of its capital to such projects, and expects the new fund to allocate even more.

If this trend continues, Pantera Capital could potentially invest over $200 million in AI-adjacent crypto projects over the next decade. Although Jiang did not confirm an exact figure, he acknowledged it as a reasonable estimate.

The fusion of AI and blockchain technologies has captured significant interest, with predictions suggesting it could contribute about $20 trillion to the global economy by 2030. Investors have already funneled over $98.8 million into this sector since the start of 2024. The market value of AI tokens has reached $26 billion, and Bitcoin miners are exploring ways to supply processing power for training AI tools used by Silicon Valley giants.

Pantera Capital is not the only entity recognizing the potential of AI and blockchain convergence. Hedge fund manager Brevan Howard is also actively exploring opportunities in this space.

In a related development, three major AI blockchain firms—SingularityNET, Fetch.ai, and Ocean Protocol—are planning to merge their crypto tokens to create a decentralized AI platform. The proposed ASI token is expected to have a fully diluted value of approximately $7.5 billion. While the merger plans require community approval, an official announcement could come as early as Wednesday. The merged entity, the Superintelligence Collective, will guide their collaborative efforts while allowing the companies to maintain their individual operations.

However, there is some skepticism regarding AI-related crypto tokens. A recent research report by leading crypto exchange Coinbase (NASDAQ:COIN) suggested that the surge in the AI token market might be driven more by hype than by genuine utility. The report indicated that the value of many AI tokens could be overstated due to the prevailing focus on the AI industry and that these tokens might lack sustainable demand-side drivers in the near to medium term.

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