September 16, 2024

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Circle Partners with Sony Blockchain Lab to Expand USDC Adoption

Circle has partnered with Sony Block Solutions Labs to promote the adoption of its stablecoin, USDC, on Sony's new layer-2 blockchain, Soneium. Launched in August 2024, Soneium is a public Ethereum layer-2 network aimed at supporting Web3 creators. Through this collaboration, Circle aims to make USDC a standard token for value exchange on the platform, leveraging its Bridged USDC Standard for Ethereum-compatible blockchains. The partnership aligns with Sony’s goal to build an interconnected digital ecosystem and reflects Circle's push for broader stablecoin adoption. Circle's USDC supply has grown 47% in 2023, despite being down from its 2022 peak.

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North Carolina Pushes Back Against CBDCs with New Payments Ban

North Carolina has passed a law banning central bank digital currencies (CBDCs) as a form of payment, reflecting concerns over privacy and government control. The law also blocks the Federal Reserve from testing a digital dollar in the state. This move, following similar proposals in other U.S. states like Texas, comes as the U.S. lags behind other major economies in exploring CBDCs. Critics argue the law may be unconstitutional, as monetary policy is federally regulated. While largely symbolic due to the early stage of U.S. CBDC development, the law highlights growing opposition to digital currencies, particularly among those wary of government surveillance.

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Bitfarms Accelerates 2.2 EH/s Hosting Agreement with Stronghold

Bitfarms has entered a hosting agreement with Stronghold Digital Mining, bringing an additional 2.2 EH/s of computing power online two months ahead of schedule in October 2024. The agreement involves deploying 10,000 Bitmain T21 miners at Bitfarms' Panther Creek facility in Pennsylvania, with Bitfarms paying Stronghold 50% of the profits from the hosting deal, renewable annually. This move is part of Bitfarms' strategy to diversify beyond Bitcoin mining. However, the acquisition of Stronghold has been criticized by Riot Platforms, Bitfarms' largest shareholder, which claims the deal dilutes shareholder value and is aimed at entrenching the current board. Bitfarms has defended the acquisition, emphasizing its benefits for expanding U.S.-based operations.

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Trading Desk Insights

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Technical Analysis:

‍The descending price channel on Bitcoin's daily chart has once again demonstrated its reliability. The brief break above $60,000 over the weekend quickly lost momentum, with BTC slipping back into the middle of the channel, unable to maintain the $60K level. As downward price action continues, short-term technical indicators on the 1-hour and 4-hour charts suggest a potential bottom may be forming. However, it's more likely that Bitcoin will retest the lower end of the channel, with a possible dip to the $50,000-$52,000 range in the near term.

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Crypto Market News:

According to well-known market analyst Michaël van de Poppe, a surge in global liquidity driven by debt refinancing could be the catalyst for the next major Bitcoin bull run. Van de Poppe believes both cryptocurrency and commodity markets are on the verge of a parabolic rally, as both sectors remain "extremely undervalued." In a September 15 post on X, he pointed out that commodities are currently priced at levels last seen in 2000 and 1971.

The current commodity index shows that these assets are trading at significantly lower levels compared to the 2000 bubble, just before the markets surged into the 2008 financial crisis. As more analysts start to call for a Bitcoin breakout in October, the upcoming Federal Reserve meeting on September 18 could be a key event. Many expect a rate cut, which could provide the spark needed for Bitcoin’s next leg higher.

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Regulations:

‍Former President Trump is set to announce the launch of a new cryptocurrency platform, World Liberty Financial, on Monday, September 16, at 8 p.m. ET from his Mar-a-Lago estate. The platform will be run by his sons, Donald Trump Jr. and Eric Trump, with Trump promoting it as "the future of crypto." This announcement aligns with Trump's broader campaign promise to make the U.S. the "crypto capital of the planet." Interestingly, the project also involves Barron Trump, Donald Trump’s 18-year-old son, who is being described as the "DeFi visionary" behind the platform.

Trump further emphasized in a video posted on X that the platform is a step toward embracing the future of finance, while moving away from "slow and outdated big banks."
However, concerns are emerging about the potential conflict between Trump’s personal business ventures and his possible use of federal resources to promote them, should he win the presidency again. This development has raised questions about the intersection of politics and personal financial interests

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Crypto Charts

Disclaimer

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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.

Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.

The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.

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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.

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