Donald Trump has unveiled a new cryptocurrency business, World Liberty Financial, during a live event on X Spaces. However, few details were provided about the company, its formation, or financing. The timing of the launch, just before the upcoming election, is unusual, but Trump aims to attract digital asset advocates.
The former president, once a critic of cryptocurrencies, has now embraced them, pledging to make the US the ‘crypto capital of the planet’. He promises minimal regulation and a national bitcoin reserve. This shift is seen as part of his strategy to appeal to tech-savvy voters.
Trump’s two sons, Eric and Donald Jr., have actively promoted the project, claiming it will revolutionise digital asset finance. Despite these bold statements, specifics about how World Liberty Financial will operate remain unclear.
Trump’s cryptocurrency move, combined with his evolving stance on digital assets, signals his focus on emerging financial technologies as a key aspect of his re-election campaign, looking to capitalise on the growing interest in the sector.
A growing number of countries, representing 98% of the global economy, are exploring digital versions of their currencies, with almost half of them at an advanced stage of development. Countries like China, the Bahamas, and Nigeria have already seen a noticeable increase in the usage of their central bank digital currencies (CBDCs).
Research by the Atlantic Council reveals that all G20 nations are now investigating CBDCs, with 44 countries currently piloting them, up from 36 last year. Authorities are accelerating these efforts in response to decreasing cash usage and the potential threat from cryptocurrencies like Bitcoin and big tech companies.
Notable growth has been observed in the CBDCs of the Bahamas, Jamaica, and Nigeria, while China’s digital yuan (e-CNY) has seen its transaction value almost quadruple to 7 trillion yuan ($987 billion). The European Central Bank has also launched a multi-year digital euro pilot, while the US, despite being slower to act, has recently joined a cross-border CBDC project with six other central banks.
Meanwhile, the United States is grappling with privacy concerns over CBDCs. Although a bill prohibiting a ‘retail’ CBDC has been passed by the US House of Representatives, the issue remains prominent in the country’s political discourse. Elsewhere, Russia’s digital rouble pilot has expanded to Moscow’s metro, and Iran is working on a digital rial.
MicroStrategy has announced plans for its third debt offering this year, aiming to raise $700 million by issuing convertible senior notes due in 2028. The company intends to use the funds to pay off $500 million in existing senior secured notes and purchase more Bitcoin, with any remaining proceeds going towards general corporate purposes. The notes will be unsecured and will begin paying interest from March 2025, available only to qualified institutional buyers.
This marks MicroStrategy’s third debt offering in 2024, following similar issuances in March and June. The company, one of the largest public holders of Bitcoin, currently holds 244,800 BTC, valued at approximately $14 billion. However, the volatility of its Bitcoin holdings has affected its financial performance, with the company posting a net loss of $102.6 million in the second quarter of 2024, largely driven by a $180.1 million digital asset impairment.
Despite concerns about its significant exposure to Bitcoin, MicroStrategy’s stock has performed well. Its share price has surged nearly 295% over the past year, with a 96% increase so far in 2024, reaching $134 as of 16 September.
Bitcoin experienced a 4.1% drop between 15th and 16th September, falling to $57,595 after failing to break through the $60,000 resistance level. This decline erased the gains made on 13 September when the price briefly surged to $60,580. While some analysts attributed Bitcoin’s earlier rise to a weakening US dollar and inflows into Bitcoin ETFs, the cryptocurrency has struggled to sustain momentum as traders remain cautious ahead of key economic events, such as the upcoming Federal Reserve interest rate decision.
Investors are closely watching the Federal Open Market Committee (FOMC) meeting on 18 September, where a 0.50% interest rate cut could potentially boost risk on markets like Bitcoin. However, if the Fed opts for a smaller 0.25% cut, it may negatively impact market sentiment, especially with lingering concerns over corporate earnings and China’s economic slowdown. In addition, regulatory pressure has intensified, with the US Securities and Exchange Commission (SEC) expanding its lawsuit against Binance, further weighing on investor confidence.
In the short term, Bitcoin’s price faces both macroeconomic and regulatory challenges. Despite ongoing demand from institutions like MicroStrategy and positive inflows into spot Bitcoin ETFs, investor sentiment has been shaken by a large, dormant Bitcoin address selling $12.7 million worth of BTC and the growing legal scrutiny of major exchanges.
Forty of the world’s top commercial banks have joined a new digital currency pilot known as the Agora project in collaboration with the New York Federal Reserve and several central banks from Europe, Korea, and Japan. The initiative aims to explore the use of tokenised bank deposits and central bank digital currencies (CBDCs) to improve cross-border payment systems. Specifically, it focuses on ‘wholesale’ CBDCs, which are used between banks.
The project will address the complexities of cross-border transactions, such as time zone differences, legal frameworks, and varying regulatory and technical systems. Major banks participating include JPMorgan, HSBC, UBS, and Japan’s MUFG.
Led by the Bank for International Settlements and the Institute of International Finance, Agora differs from another CBDC project called mBridge. It involves central banks from China, Hong Kong, Thailand, the UAE, and Saudi Arabia.
Russia is continuing its move towards becoming a major player in the crypto mining world, with the Komi Republic set to establish 15 new mining data centres. The first two centres in Mikun and Sindor will cost approximately $27.6 million. Backed by investors and a local power company, the project highlights Russia’s determination to strengthen its presence in the crypto space. While it remains unclear which cryptocurrencies will be mined, Bitcoin is expected to be the focus.
Komi’s cold winters and abundant natural resources, including oil and gas reserves, make it an ideal spot for crypto mining. This expansion follows the government’s efforts in Russia to regulate the industry, with President Vladimir Putin recently signing a law to legalise mining. Additionally, state-owned energy giant Gazprom has announced plans to build a large crypto mining centre, aiming for full capacity by 2028.
Once the hotspot for Russian miners, Siberia has seen a crackdown on illegal mining due to strain on local grids. As a result, miners are now looking to other regions like Komi to continue their operations.
A group of US Senate Democrats has called on the nation’s largest Bitcoin ATM operators to step up efforts in preventing fraud targeting elderly Americans. The Senators, led by Senate Judiciary Committee Chair Dick Durbin, addressed the growing number of scams using Bitcoin ATMs, urging companies to take immediate action to protect vulnerable populations.
Data from the Federal Trade Commission reveals that in the first half of this year alone, Bitcoin ATM-linked fraud amounted to $65 million. Older adults, particularly those aged 60 and over, were disproportionately affected, being three times more likely to report financial losses than younger users. Senators, including Elizabeth Warren, pointed to recent reports showing scammers coercing elderly individuals into sending funds through Bitcoin ATMs.
The Senators have asked major Bitcoin ATM firms to respond by early October, detailing their measures to combat fraud. This comes amid broader concerns over the rise in crypto scams, with the FBI reporting a significant increase in overall crypto-related fraud this year.
Delta Prime, a decentralised finance (DeFi) platform, was hit by a hack resulting in nearly $6 million in losses. The incident began with an initial loss of $4.5 million, but further malicious transactions pushed the total stolen to $6 million. The attack appears to have been caused by a private key exploit, allowing the hacker to take control of the platform’s wallet and drain funds from Delta Prime‘s pools on the Arbitrum chain. It follows a larger trend of increasing cyber-attacks on DeFi platforms.
The hack on Delta Prime comes just two months after WazirX, an Indian cryptocurrency exchange, suffered a $230 million theft, marking it as one of the largest crypto hacks of the year. As the DeFi space grows, so does the frequency of attacks, with hackers continually finding new ways to exploit vulnerabilities.
Experts warn that North Korean hackers may now target US Bitcoin exchange-traded funds (ETFs) due to their significant holdings. With US Bitcoin ETFs holding over $53 billion in assets, they present a highly attractive target for cybercriminals.
Circle, the company behind the USDC stablecoin, is confident that stablecoins will become a mainstream form of money. With increasing competition in the market, Circle’s chief strategy officer Dante Disparte emphasises the need for global regulatory harmony to ensure proper compliance for all stablecoin issuers, particularly in areas like financial crime prevention and conservative reserving practices.
Circle is also preparing to relocate its global headquarters to New York by 2025, as it continues to advocate for federal stablecoin regulations in the US. Disparte argues that the lack of a clear framework poses a risk to American interests, potentially allowing foreign entities to exploit trust in the US dollar without proper oversight.
Meanwhile, Europe’s new MiCA regulation has provided much-needed clarity for stablecoins, with Circle achieving compliance under this framework. As competition heats up with entrants like PayPal and Ripple, Circle remains at the forefront of regulatory discussions, pushing for clearer rules that foster innovation while safeguarding consumers.
MicroStrategy has significantly expanded its bitcoin holdings, acquiring $1.11 billion worth of the cryptocurrency between August 6 and September 12. The company now holds approximately 244,800 bitcoins, valued at $9.45 billion. The average purchase price was around $38,585 per bitcoin, including fees and expenses.
This aggressive move towards bitcoin began in 2020, as MicroStrategy sought to preserve its reserves amid declining revenue from its core software business. Its decision to prioritise cryptocurrency has drawn support from investors, linking the company’s stock performance to the fluctuating price of bitcoin.
The firm’s shares have more than doubled in 2024, while bitcoin itself has risen by nearly 31% year-to-date. The approval of spot bitcoin exchange-traded funds by the SEC, alongside backing from influential figures like Elon Musk, has contributed to the mainstream acceptance of the asset.
MicroStrategy also recently underwent a 10-for-1 stock split to increase accessibility for investors, further signalling its commitment to growth in the crypto space. Its ongoing bitcoin strategy reflects confidence in the long-term potential of the digital asset.
