Hawkish Fed Hits Bitcoin | Grayscale’s Crypto Fund Discounts

Despite price decline, bitcoin again accounts for half the crypto market’s value.

START INVESTING • Newsletters • MyForbes

Nina Bambysheva Senior Reporter, Forbes Money & Markets
Follow me on Twitter and Forbes.com

Steven Ehrlich Director, Forbes Digital Assets
Follow me on Twitter and Forbes.com

BITCOIN FALLS ON FED NEWS

The original cryptocurrency rose 3% at the start of the week but gave up the gains on hawkish comments from Federal Reserve Chair Jerome Powell Wednesday that followed the central bank’s widely expected decision to hold interest rates steady. Bitcoin has been gaining on virtually every major asset this year except Solana’s sol, writes Steven Ehrlich, director of research for Forbes Digital Assets. The token’s relatively steady climb throughout the year was recently punctuated by MakerDAO founder Rune Christensen’s proposal to use Solana’s codebase for Maker’s new blockchain.

Still, bitcoin remains the star attraction among digital assets, even with the monetary policy setback. It has reattained a 50% share of the cryptocurrency market, according to TradingView, the highest since May 2021. [Premium Content]

GRAYSCALE’S CRYPTO FUND DISCOUNTS

Asset manager Grayscale won a significant court victory in its fight to turn the Grayscale Bitcoin Trust into an exchange-traded fund, presenting investors with a chance to buy the $16 billion investment vehicle at a 19% discount before the change occurs. The ETF structure would erase the difference between net-asset value, giving investors a one-time windfall when the shift occurs.

GBTC is getting all the attention, but it is not the only product offered by Grayscale that is trading far away from net-asset value. The firm offers similar trusts that provide exposure to assets such as ether, ether classic, zcash, horizen, etc. that are trading at ranges from premiums above 600% to discounts as large as 47%, which could be interesting to investors. Read more.

CURRENT PRICE OF TOP 5 COINS (7-Day % Change)

Coin

Price

Percent Change

Bitcoin (BTC)

$26,522

0.4%

Ether (ETH)

$1,590

1.9%

Tether (USDT)

$1

0%

Binance Coin (BNB)

$210

1%

XRP (XRP)

$0.5

2%

Source: Forbes Digital Assets. Prices as of 4:45 p.m. on September 22, 2023.

Learn How To Invest Like A Pro In 10 Days: Free Email Course

Whether you're looking for strategies to make your hard-earned cash work harder, make up for lost ground in saving for retirement or simply want to know if Nvdia is a good stock to buy, you can acquire the knowledge you need with Forbes' new 10-day free investment email course.

Sign Up Here

BINANCE, CZ ASK COURT TO DISMISS SEC LAWSUIT

The crypto exchange and its CEO Changpeng Zhao have asked a federal court to dismiss the U.S. Securities and Exchange Commission’s lawsuit against them. In a 60-page motion filed Thursday with the District Court for the District of Columbia, lawyers for Binance and Zhao accused the SEC of exceeding its authority and pursuing novel legal theories.

American affiliate, Binance.US, has also filed to have charges against it dismissed. Last week, the SEC accused the exchange of not sufficiently cooperating in its investigation of the unit.

The agency’s charges against Binance entities and Zhao include operating unregistered exchanges, broker-dealers and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities.

FTX GOES AFTER BANKMAN-FRIED’S PARENTS

The bankrupt crypto exchange’s estate is suing its ex-CEO’s parents to recover “millions of dollars in fraudulently transferred and misappropriated funds.” Court papers filed Monday allege that Joseph Bankman and Barbara Fried, both tenured Stanford law professors, “exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars.”

Notable examples in the filing include Joseph Bankman’s complaint that his annual salary was $200,000, when he was “supposed to be getting $1M/yr.” and Fried’s demands for donations to her political action committee, Mind the Gap, while trying to obscure the source of the funds. Attorneys for Bankman and Fried issued a statement denying the allegations.

BLOCKCHAIN CAPITAL RAISED $580 MILLION FOR TWO FUNDS

The crypto-focused VC firm Blockchain Capital announced it had closed two new funds totaling $580 million Monday. One of them, Fund VI, is dedicated to new and early-stage companies; the other, the Opportunity Fund, will be used for later-stage investments. The firm is using fresh capital to back startups in the infrastructure, gaming and decentralized finance sectors.

Blockchain Capital’s portfolio includes Sam Altman’s Worldcoin, crypto exchange Kraken and NFT marketplace OpenSea.

VENMO TO OFFER PAYPAL USD STABLECOIN

PayPal is making its recently launched stablecoin PYUSD available to Venmo users, the company announced Wednesday. Users will be able to purchase PYUSD and send it between PayPal, Venmo and compatible external wallets. The functionality is already available to select users and will be fully rolled out in the coming weeks.

ELSEWHERE

SEC’s Crypto Enforcement Chief Warns More Charges Coming To Exchanges, DeFi

CoinDesk