These Alts Gained The Most After Fed’s Rate Cut as BTC Tapped 23-Day Peak (Market Watch)

Rep. Ritchie Torres (D-NY), one of the strongest pro-crypto voices within the Democratic Party, recently spoke about the legal status of Ethereum during a congressional hearing, arguing that the second-largest cryptocurrency should not be classified as a security.

"The textbook example of a security is a stock. If I invest in the Apple stock, it means that I am expecting a profit from the managerial efforts of Apple, the company. If I buy Ether, from whose managerial efforts am I expecting a profit," Torres asked.

Dan Gallager, a former commissioner of the Securities and Exchange Commission, stated that there was no Ethereum equivalent of Apple (the company).

As reported by U.Today, the SEC recently conceded that Ethereum is not a security by permitting trading platform eToro to remain on the platform alongside Bitcoin and Bitcoin Cash. However, this was part of a private settlement with eToro, meaning that this case is not precedential.

SEC Chair Gary Gensler has repeatedly refrained from publicly commenting on the legal status of Ether.

Ignoring Robinhood

Gallagher, who now serves as the chief legal officer at Robinhood, claims that his company had over a dozen meetings and calls over a year and a half. However, the SEC still ended up receiving a Wells notice.

During the hearing, the former SEC commissioner claimed that the agency's staff was non-responsive to the company's repeated requests for guidance.

Gallagher has criticized the commission's aggressive stance while also calling for establishing a basic regulatory regime for digital assets.

As more celebrities dive into memecoins, a former Hollywood executive who now works in the Web3 space expressed the flaws surrounding celebrity-backed tokens and offered a potential alternative in the form of decentralized applications (DApps).

At the Token2049 event in Singapore, Cointelegraph journalist Ciaran Lyons spoke with Andrew Saunders, the chief marketing and growth officer of the Ethereum Virtual Machine (EVM) blockchain Skale, about celebrities jumping into Web3 through memecoins.

The Skale CMO criticized the current state of celebrity memecoins and said that he would stay away from them. “I come from Hollywood, and I would never touch a celebrity memecoin,” Saunders told Cointelegraph.

The problem with celebrity memecoins

The executive explained that celebrity tokens have similar qualities to most meme-based tokens. Saunders said that these token projects tend to have key holders who have a lot of supply. The Web3 professional said that even if they distribute the tokens across 50 wallets, it’s still the same situation if they are held by a few people.

Saunders also described memecoins as some sort of a player-versus-player (PvP) game. The executive believes that if users get in early enough, they can multiply their investment. He explained:

However, the executive believes that the tides will turn as the space gets more regulatory clarity. Saunders said that as the perception of crypto becomes more positive in the United States and people begin to understand the technology, there would be more of what he describes as an “arm in” model.

Saunders said that this is when celebrities are able to realize that they can use blockchain technology to connect with their fans. In addition, they would be able to access data that they weren’t able to get using Web2 technologies.

DApps instead of celebrity tokens

As an example, the executive said that a celebrity can create a DApp that allows users to earn points for all their interactions with the celebrity’s social posts. Then, they can trade those points for benefits like meet and greets, autographed posters or even a cameo in a music video.

“I think that’s where it’s going to ultimately go. I think at the end of the day, I don’t see any reason right now for a celebrity to launch a token, whether it’s a memecoin or utility-based token, but I do think blockchain technology is going to be eventually widely used by celebrities,” Saunders said.

An analyst has explained how Bitcoin will likely continue the latest bullish swing, at least in the short-term.

Bitcoin Spot Exchange Supply Has Been On The Decline Recently

In a new post on X, analyst Willy Woo has discussed the short-term and medium-term trajectories that BTC could follow. For the former, the analyst says the bullish trend would continue, with “likely 1 week left in play.”

In the medium term, things appear to be more complicated, as Woo has pointed out the trend forming in the Bitcoin inventory sitting on centralized exchange platforms.

Below is the chart shared by the analyst that shows the trajectory in the value of this metric over the last few years.

As is visible in the above graph, the Spot Bitcoin exchange supply (the blue line) has declined recently, suggesting that investors have been withdrawing their coins into self-custodial wallets.

Generally, one of the main reasons investors keep their coins on spot platforms is for selling purposes, so the Spot BTC inventory can be viewed as an estimation of the available sell supply for the cryptocurrency. As such, the investors taking their coins out of this supply can naturally be a bullish sign for Bitcoin.

In today’s era, however, the Spot BTC isn’t the only factor affecting the asset’s price, as another form of exchange supply has gained popularity in the last few years: Paper BTC.

Paper BTC refers to the derivatives contracts related to the cryptocurrency that don’t require users to own any tokens themselves. With Paper BTC gaining more dominance, its influence on the market has become quite apparent.

In the chart, the purple line corresponds to the total BTC exchange inventory; that is, it shows the sum of the Spot and Paper BTC present on the various platforms.

It would appear that while the Spot BTC itself has declined recently, the same hasn’t been true for the combined Spot and Paper BTC supply, which has continued to move sideways. This would imply that Paper BTC is being printed at about the same rate as Spot BTC, which the investors are withdrawing.

A rise in Paper BTC is generally not a good sign for Bitcoin, so it could hinder BTC’s upward push. Woo notes, however, that things could change quickly if a short squeeze occurs in the market.

A “squeeze” refers to an event where a mass amount of liquidations occurs at once, so a short squeeze in particular, would naturally be the occurrence of a mass amount of short liquidations.

“Current demand and supply is neutral bearish, but signs of moving into a bullish structure if we get some liquidations,” says the analyst.

BTC Price

Bitcoin had recovered beyond the $61,000 mark yesterday, but it appears to have slipped up today as its price is now floating around $59,600.

The US Securities and Exchange Commission (SEC) charged Rari Capital, a decentralized finance (DeFi) protocol, and its executives, citing actions misleading investors and operating as unregistered brokers.

The Wednesday settlement includes various forms of relief, a capped ban, and a cease-and-desist order subject to court approval.

SEC Charges DeFi Protocol Rari Capital

According to the filing, the regulator’s charges against the now defunct DeFi protocol stem from its actions misleading investors and operating as unregistered brokers. It claims Rari launched earn pools and fuse pools, two investment products that operated as cryptocurrency investment funds, with investors generating returns. At their peak, the products handled upwards of $1 billion in crypto assets.

The SEC claims Rari deceived investors on earning pool returns, saying that they would automatically rebalance assets into the best yield opportunities. While this often required manual intervention, Rari Capital often failed to initiate. Further, they promoted high annual percentage yields (APY) intended to lure investors without disclosing certain fees. Resultantly, some earn pool investors lost money.

The charges extend to its co-founders, Jai Bhavnani, Jack Lipstone, and David Lucid. The regulator alleges that the three executives engaged in unregistered broker activities. Rari Capital Infrastructure LLC, which took control of the platform in 2022, is also cited for unregistered securities offerings and broker activities.

As the SEC and Rari Capital settle, terms include permanent injunctions, civil penalties, disgorgement with interest, and a five-year ban on the co-founders serving as officers or directors. Additionally, the SEC imposed a cease-and-desist order, which Rari agreed to but neither admitted nor denied the regulator’s findings. The settlements remain subject to court approval.

Rari Collapse and Implications of SEC Charges To DeFi

Following its launch in 2020 to offer automated yield farming, Rari Capital steadily ascended the ranks. The DeFi protocol achieved more than $1 billion in total value locked (TVL) by 2021,ascribed to its high-yielding liquidity pools.

However, the firm was plagued with challenges, which ultimately culminated in its collapse. In 2021, Rari was exploited for around $11 million following an integration issue with Alpha Finance.

In 2022, the firm suffered another massive exploit, this time losing upwards of $80 million from its Fuse pools with bad actors using a reentrancy bug. The effects of the reentrancy bug affected several other DeFi protocols, including Babylon Finance, which also shut down.

The SEC’s action highlights the regulator’s ongoing efforts to regulate decentralized finance platforms. Some of these platforms’ operations indicate an inadvertent assumption that their decentralized nature places them outside traditional regulatory frameworks.

Therefore, this settlement’s implications are significant for the DeFi sector. They reflect broader themes in the regulatory environment, including investor protection, operational challenges, legal and compliance considerations, and regulatory scrutiny.

Billy Markus, known on the X platform as Shibetoshi Nakamoto, who created the iconic meme cryptocurrency Dogecoin in tandem with Jackson Palmer in 2013, has shared his take on the way Bitcoin price reacted to the big interest rate loosening made by the Fed Reserve.

In his typical sarcastic manner, Markus pointed out that the world’s largest cryptocurrency defied all the bullish expectations.

DOGE creator mocks Bitcoin bulls

On Wednesday, at the scheduled FOMC meeting the US Fed Reserve announced a long-awaited interest rate cut by 50 basis points. Just a few days prior to that, experts debated whether the rate cut would comprise 25 or 50 bps, however, the latter was ultimately announced by the Fed chairman Jerome Powell.

This was the first rate cut since 2020, when the world was engulfed by the pandemic. Notably, in the same year, Bitcoin saw its third halving implemented too, so in 2021, driven by these and several other factors, the largest cryptocurrency scored two all-time highs. The latter was close to the $69,000 price level reached in the late fall.

In 2024, another Bitcoin halving took place in April now followed by a big interest rate cut. Bitcoin investors expected BTC to surge. However, the price went sharply down after a small rise immediately after Powell’s rate cut announcement took place.

WHAT IS THIS

A RALLY FOR ANTS pic.twitter.com/gPBbDUr3qM— Shibetoshi Nakamoto (@BillyM2k) September 18, 2024

Billy Markus drew his X followers army’s attention to that fact, sharing screenshots with the prices of the S&P 500 index and first rising and then going down sharply.

WTFFFFF pic.twitter.com/AnezoheIOr— Shibetoshi Nakamoto (@BillyM2k) September 18, 2024

However, by now, Bitcoin has demonstrated an impressive 4.64% surge, recovering from the aforementioned fall to $59,380 and jumping to the $62,135 price mark as BTC reacted to the interest rate decrease.

Markus slams Vitalik Buterin and crypto conferences

As reported by U.Today earlier, Ethereum co-founder Vitalik Buterin put up an eye-catching performance on stage during the TOKEN2049 crypto and blockchain conference in Singapore by singing in front of the audience.

Many notable members of the cryptocurrency community criticized him for that. In particular among them were Bitcoin maximalist Samson Mow and Billy Markus. The Dogecoin co-founder tweeted that he wished all crypto conferences were banned.

Mow tweeted that Vitalik’s performance again proved to him that Ethereum was “dead.”

Bitcoin sought to flip $62,000 to support on Sept. 19 as markets digested a rare 0.5% interest rate cut by the United States Federal Reserve.