The Breakdown First Five - Monday, October 7 , 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Tether’s New Best Friend

Tether CEO Paolo Ardoino said the stablecoin issuer is the “best friend of the US government.” That’s largely because of the $98B in US treasuries they hold, more than Germany. Ardoino also highlighted increasing cooperation with US law enforcement as Tether marks its 10-year anniversary. The EU is less friendly, with Coinbase the latest exchange to commit to delisting “non-compliant” stablecoins at the end of year. Tether says they will comply using tech. 

4. Crypto Seizures

The US Government has filed for forfeiture of frozen crypto assets from the Derebit and Stake hacks. The assets total $2.7M, so a small fraction of the amount stolen. Interestingly, the government claims to have traced the assets through mixers using a host of on-chain metadata. The DOJ linked wallets together based on common funding sources and consolidation wallets. With advanced tracing and freezing capability, crypto is getting hostile for money laundering. 

3. Coinbase Renews Appeal

Coinbase has urged the judge to consider granting their interlocutory appeal based on the Ripple case heading to the appellate court. Coinbase wants to run a narrow appeal on the question of applying the Howey test to secondary market crypto tokens sales. They say the Ripple case makes it obvious the law is unclear and the whole industry could benefit from a well informed appellate decision. Coinbase wants to ensure the appeals judge has the full context. 

2. Is Uptober Back

According to social media analytics, mentions of Uptober plummeted last week along with Bitcoin’s price. Although posters had given up, onchain metrics showed a spike in short term holders buying the dip. With a Sunday night pump, sentiment has flipped again to ‘we’re so back’. Analysts are noting previous Uptobers didn’t really get started until the second or third week, suggesting we’re all a little too zoomed in. 

1.  Labor Market Strengthens

September’s jobs report came in far above expectations, pushing down the unemployment rate. The blowout numbers have scrapped any thoughts of a 50 bp rate cut next month and some are even suggesting the Fed may need to think about hiking rates. Stocks and Bitcoin responded well to the news of fewer rate cuts, happily swapping them for stronger growth. All news is good news as long as it reduces uncertainty.