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Breaking News: Pulsechain Ecosystem Igniting

Author

Gerry Rafferty
March 12, 2024

Crypto Funding Rates Reset After Bitcoin's Sharp Pullback From $69K

Bitcoin experienced a 10% pullback from its recent all-time high above $69,000, leading to the closure of $1 billion worth of leveraged perpetual futures bets. This correction cleared excessive leverage from the market and normalized funding rates in the crypto perpetual futures market. The CoinDesk 20 Index (CD20) reached $2,627 before retracting to $2,496, while annualized funding rates for the top 25 cryptocurrencies' perpetual futures dropped to less than 20%, significantly lower than the triple-digit figures observed days earlier.

The surge in funding rates above 100% earlier in the week reflected over-optimism as investors used leveraged products during bitcoin's bullish momentum. The funding rate mechanism, employed by exchanges, helps align perpetuals prices with spot prices. A high funding rate, such as the one seen recently, indicates increased demand for bullish bets and is often associated with market tops.

With bitcoin's overnight pullback, funding rates have normalized, creating room for a more sustained move to record highs. The chart by Velo Data illustrates funding rates for the top 25 cryptocurrencies, ranging from mildly positive to over 150% in the past week. Currently, most coins show readings below 20%.

John Glover, CIO at Ledn, suggests that the market could continue to deleverage in the coming weeks, potentially driving bitcoin's price back to $40,000. He cautions against over-leveraging and unrealistic expectations, drawing parallels to the euphoria surrounding previous BTC rallies, emphasizing the need for a more realistic outlook amidst market fluctuations.

Binance.US Axed Two-Thirds of Staff, Revenue Tanked 75% after SEC Lawsuit

Binance's US subsidiary faced a severe setback following allegations by the SEC of securities law violations, as revealed by COO Christopher Blodgett in a deposition from Dec. 15. The lawsuit had a substantial impact, described by Blodgett as a "near-mortal blow," leading to the forced layoff of more than 200 employees since June, constituting about two-thirds of the division's workforce.

The SEC filed a lawsuit against Binance in June, accusing co-founder Changpeng Zhao and BAM Trading, which operates Binance's US branch, of having unregistered securities in BNB and BUSD. The agency also classified BAM Trading's staking program as an investment contract, falling under the SEC's definition of a security. Despite a $4.3 billion settlement in November with the Department of Justice and the Commodity Futures Trading Commission, the SEC's case against Binance remains unresolved.

As part of the lawsuit, the SEC obtained a temporary restraining order (TRO) to freeze funds until Binance.US could prove that neither Binance nor its majority owner, Zhao, could access them. Post-TRO, approximately $1 billion in assets, including crypto and fiat, were withdrawn from the platform, leading to a significant erosion of institutional confidence.

Blodgett highlighted the impact on Binance.US, noting a drop of over 75% in revenue, the loss of two banking partners with no replacements secured, and a surge in operating costs. Legal expenses amounted to about $10 million. The SEC further claimed that Binance.US is not cooperating with requests for information on customer assets and other matters, pointing to discrepancies in compliance claims and changes hindering the verification process, causing delays and incomplete information in the investigation.

SEC pushes back BlackRock, Fidelity spot Ethereum ETF proposals

The United States Securities and Exchange Commission (SEC) has once again postponed its decision on BlackRock and Fidelity's proposed spot Ether exchange-traded funds (ETFs). The delay, announced in filings on March 4, affects BlackRock's iShares Ethereum Trust and Fidelity's Ethereum Fund applications. This follows an initial delay in January, shortly after the SEC approved several spot Bitcoin ETFs.

Market observers and ETF analysts anticipated the SEC's delay, expecting a decision only around the final deadline in May. The SEC can defer its decision up to three times before reaching a final verdict. Bloomberg ETF analyst James Seyffart emphasized the significance of May 23, marking the ultimate deadline for VanEck's spot ETH ETF application, considering it the pivotal date for Ethereum ETFs. As the crypto market closely watches regulatory developments, the delay aligns with expectations, and attention remains focused on the looming May deadline for potential decisions.

Movement from the Pulsechain Sacrifice wallet sparks frenzy

Pulsechain witnessed heightened activity as a sum of 24 million was transferred from the Pulsechain sacrifice wallet on February 29th. A total of $1.2 million was allocated to the acquisition of PLS, PLSX INC, and HEX, resulting in a notable surge of positive market momentum within the pulsechain ecosystem, as indicated by a proliferation of bullish candlesticks. Furthermore, notable allocations  were directed towards sDAI and Ethereum, aiming to capitalize on yield-generating opportunities. This strategic reallocation has stimulated discussions and anticipation within the community, prompting contemplation on the potential subsequent moves within the ecosystem.

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