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Coinbase’s retail trading volumes reached record highs during bitcoin’s volatile second quarter, but Tuesday’s earnings report, due out at 4 p.m. ET, will reveal how much money the company made on that volume. 

Coinbase’s take rate – or retail trading revenue divided by retail trading volumes – has been declining consistently over the past few quarters, according to Mizuho Securities’ Ryan Coyne. In Q1 2021, retail transactions yield was 1.21%, down from 1.41% in Q4 2020 and 1.46% in Q3. 

Using publicly available data, Coyne estimated that total trading volume for Coinbase in Q2 was around $458 billion, a 36.7% increase from the $335 billion in total trading volume the company reported in Q1. Whether or not Coinbase’s stock (COIN) will react positively to the Q2 results this afternoon depends on how much money Coinbase earns on those volumes, Coyne said. 

Related: PNC Bank Is Planning a Crypto Offering With Coinbase

One factor driving down yield for the U.S.’ largest cryptocurrency exchange is the mix of Coinbase Pro retail users, who benefit from lower transaction fees compared to regular Coinbase retail users, Coyne noted. Another factor is larger transactions coming from bigger crypto traders, which would also drive down yields.  

The company’s forecasts for monthly transacting users will also give investors a view into how the company expects to fare with the price of bitcoin stuck in the $30,000 to $35,000 range in June and July. 

“We believe that [average daily trading] volumes in August are tracking well above July,” Coyne said. “If they hold or raise guidance, that will be viewed positively.” In the company’s first-quarter report, Coinbase raised its annual forecast range for monthly transacting users to 5.5 million to 9 million, up from its initial predicted range of 4 million to 7 million.

Any sign that Coinbase’s trading volumes are less dependent on bitcoin or that its sources of revenue are less reliant on trading volumes overall will be a positive signal to the market, said Oppenheimer analyst Owen Lau. This could include an update on Coinbase’s acquisitions of crypto infrastructure firm Bison Trails (now called Coinbase Cloud), data analytics platform Skew or crypto data aggregator Zabo. 

Related: Coinbase Rakes In $1.9B in Transaction Revenue in Q2, Beating Estimates

“All of these initiatives could help Coinbase expand their current revenue base,” Lau said. “Many people think they focus too much on trading revenue.” 

The top line revenue numbers of the report will matter much more to the stock price than bottom line earnings numbers, DA Davidson’s Chris Brendler said. 

“Because a lot of the tech companies like Square and PayPal want to invest as much [as possible] in the growth phase, if they have extra revenue they’ll spend it,” Brendler said. 

Second-quarter estimates

While Coinbase’s stock is down on the day along with several other crypto stocks, Coyne, Lau and Brendler all expect today’s earnings to beat the consensus estimate. Coinbase shares are up about 8% from their reference price of $250, but down around 30% from their opening trading price of $381.

According to FactSet, the analyst consensus is 6.7 million monthly transacting users for Q2, a 600,000 increase from Q1 results. Analysts expect Coinbase to have as many as 62.8 million verified users on its platform, versus 56 million in the first quarter. 

Analysts estimate that transaction revenue – where Coinbase makes the bulk of its money via trading fees – reached $1.57 billion from the $1.54 billion Coinbase recorded in the first quarter. Analysts expect total revenue to have hit $1.78 billion in Q2. With costs factored in, analysts expect to see net income of $569 million, much less than the $771 million that Coinbase generated in Q1.

Analysts actually expect total assets at Coinbase to have decreased from $10.2 billion to $9.7 billion in the second quarter, likely because of how low the price of bitcoin has dropped compared to earlier this year, Mizuho’s Coyne said. 

UPDATE (August 10, 19:35 UTC): Updated with most recent FactSet estimates.

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Helium’s ascent is being rewarded with a $111 million token sale led by venture capital firm Andreessen Horowitz (a16z). Ribbit Capital, 10T Holdings, Alameda Research and Multicoin Capital also invested, the company said Tuesday.

The decentralized telecommunications network now has over 100,000 hotspots, a16z said in a blog post announcing the investment. The network uses LoRaWAN technology to connect devices (think scooters, e-bikes or environmental sensors) to the internet.

Helium is one of the few “real-world” Web 3 projects tapping token-powered incentives to fuel growth.

Related: Telecoms Giant Swisscom Launches Chainlink Node for DeFi Data

“What Helium has so far done with telecoms in the wireless space is almost like Airbnb enabling people to monetize their real estate in the form of a mini-hotel,” Helium CEO Amir Haleem told CoinDesk in April. At the time, the project had partnered with FreedomFi to stand up a decentralized alternative to 5G networks from telco giants.

Early progress on building a user-powered wireless network from the ground up was a key factor in deciding to invest, a16z General Partner Ali Yahya told CoinDesk.

“Helium’s recent progress comes at an interesting time in the broader conversation about crypto,” Yahya said. “Crypto offers a new paradigm for computation that is already reaching into verticals far beyond finance and money.”

The Silicon Valley venture capital firm announced a mammoth $2.2 billion fund for crypto investments in June.

Helium’s growth

Related: Ex-Poker Pros Raise $130M Fund for DeFi Bets

“We’re proud to double down on our investment in the Helium network in this round, and remain bullish with the launch of Helium 5G expected this fall,” said Tushar Jain, managing partner at Multicoin Capital, which first invested in Helium in 2019.

Helium hotspots, which mine HNT as a reward for expanding wireless coverage, are now in 112 countries, the company said Tuesday. “Smart infrastructure” partners ranging from fleet-tracking company Invoxia to Southern Connecticut University are using the network, Helium said.

HNT is up sharply on the news, jumping from $14.11 per token to $17.35 as of press time.

UPDATE (Aug. 10, 18:06 UTC): Adds comment from a16z.

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FalconX, an institutionally minded cryptocurrency trading desk, reached unicorn status Tuesday with a $210 million series C funding round led in part by Tiger Global.

• The three-year-old Chicago-based firm said it is now valued at $3.75 billion. It received lead backing from Tiger Global, Altimeter Capital, Sapphire Ventures and B Capital Group, and got additional funding from an array of earlier investors including Coinbase Ventures, Fidelity’s ventures fund, Accel and Avon.
• “As institutional investors continue entering the cryptocurrency market, FalconX has significantly scaled its business and product lines to meet their needs,” said Scott Shleifer, a partner at Tiger Global Management, which had led FalconX’s previous funding round, in a statement. He said the red-hot VC firm was “doubling down” on FalconX.
• The round adds fuel to FalconX’s institutional growth at a time of buzzy expansion in the crypto industry. FalconX said in a press statement that revenue has increased by 30 times, year over year. 
• The new funding will bolster FalconX product lines, which include trading services, credit and clearing; allow it to hire key executives; and help the company pursue acquisitions, the firm said.

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Circle Internet Financial, a payment infrastructure provider and principal issuer of U.S. Dollar Coin (USDC), plans to become a full-reserve national digital currency bank in the United States.

The U.S. Senate passed its bipartisan infrastructure bill to the House of Representatives Tuesday after a 69-30 vote.

The bill, which dedicates $1 trillion to infrastructure improvements over the next 10 years including roughly $550 billion in new spending, drew controversy from the crypto community due to a “pay-for” that anticipates raising $28 billion from a broadened crypto tax provision. 

The provision expands the definition of a “broker,” leading to concerns that the IRS might seek to impose broker information reporting requirements on non-broker entities such as miners. 

Related: Crypto News Roundup for Aug. 10, 2021

Advocates for the crypto industry pushed back on the provision, leading to lawmakers introducing amendments to try and modify the language. Senators Ron Wyden (D-Ore.), Pat Toomey (R-Pa.) and Cynthia Lummis (R-Wyo.) proposed explicitly defining which types of entities are brokers, while a competing amendment introduced by Senators Rob Portman (R-Ohio), Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.) proposed a more narrow modification that only exempted proof-of-work miners.

Ultimately, no amendments were considered, and the Senate voted to discuss only the base bill late on Sunday night. 

A last-ditch effort to add a compromise amendment was scuttled on Monday. Toomey, Lummis, Warner, Sinema and Portman proposed a new amendment that needed unanimous consent to pass under the Senate’s procedural rules. 

Senator Richard Shelby (R-Ala.) objected to the provision after his effort to add a military funding amendment was blocked by Senator Bernie Sanders (D-Vt.). 

Related: State of Crypto: What Just Happened in the US Senate?

The infrastructure bill will now go to the House of Representatives, which is expected to take up the issue in the fall. The crypto provision faces bipartisan opposition there as well, with Representatives Patrick McHenry (R-N.C.), Darren Soto (D-Fla.), Ro Khanna (D-Calif.), Tom Emmer (R-Minn.) and Ted Budd (R-N.C.) all expressing an interest in modifying the language.

It’s unclear how much leeway the House will have to modify the bill.

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Venmo credit card customers can now convert their monthly cash back rewards to crypto, the unit of payments giant PayPal announced Tuesday.

• Venmo’s new “Cash Back to Crypto” feature will allow users to choose between bitcoin, ether, litecoin and bitcoin cash, the same four cryptocurrencies that are currently available on the Venmo app.
• Unlike Venmo’s normal fees for cryptocurrency purchases, which can range from $.50 to 2.3% of the transaction amount, the Cash Back to Crypto program will not have a transaction fee. Instead, a conversion spread is baked into the monthly transaction. 
• Once the purchase is complete, customers will be able to either hold their crypto or sell it on the Venmo app. The program will not support transfers to external wallets.
• “We’re excited to bring this new level of feature interconnectivity on the Venmo platform, linking our Venmo Credit Card and crypto experiences to provide another way for our customers to spend and manage their money with Venmo,” Darrell Esch, a general manager at Venmo and “head of checkout” at PayPal, said in a statement. 
• The Cash Back to Crypto rollout begins Tuesday and will be available to all Venmo credit card holders in the coming weeks.

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Justin Sun’s Tron Foundation has partnered with APENFT and WINKLink to launch the $300 million Tron Arcade fund, which will invest in so-called GameFi projects over the next three years. 

• GameFi introduces financial mechanisms into games, allowing users to make money by playing. It’s also known as “play-to-earn.”
• The fund’s goal is to support developers and create GameFi projects by building decentralized finance (DeFi) content, the foundation said in a press release.
• APENFT is a Tron-based non-fungible token (NFT) marketplace and WINKLink is a data oracle running on the Tron network. Both are prototypes scheduled to be completed in the third quarter, and the joint product is estimated to be available to users in the fourth quarter.
• “GameFi is going to be the next big thing that makes the DeFi, NFT and the larger crypto space easy to understand and be involved in,” said Sun.

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Nasdaq-listed bitcoin mining company CleanSpark has acquired a second data center in the U.S. state of Georgia for $6.6 million.

• The 87,000-square-foot facility is located in Norcross, 33 miles from the company’s current operation in Atlanta, CleanSpark announced Tuesday.
• The acquisition will provide 20 megawatts of additional power, enough for the installation of 6,000 additional S19 mining machines. It is expected to produce over 650 PH/s. (PH/s stands for “peta” hashes per second, or one quadrillion hashes per second, a measure of the computational power of a mining machine.)
• “Based on current difficulty rates, this processing power would result in an additional five to six bitcoins per day,” CEO Zack Bradford said. “This, along with our other initiatives, is expected to result in 2.0 EH/s (exahashes per second, or one quintillion hashes per second) by the end of 2021, which, at current difficulty rates, would result in 17 to 18 bitcoins per day.”
• CleanSpark said it expects the center to be fully operational by late 2021.
• The facility is part of Georgia’s Simple Solar program, which allows CleanSpark to offset any carbon-based energy included in its energy mix with solar power.

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Liquality, a crypto wallet company, has raised $7 million in a funding round that was led by venture firm Hashed and financier Mike Novogratz’s Galaxy Digital. Other notable investors included venture capital firm Accomplice, Coinbase Ventures and White Star Capital.

Liquidity is a portfolio company of Brooklyn, N.Y.-based blockchain software company ConsenSys.

Liquality co-founder Simon Lapscher told CoinDesk the funding will be used to build out new functionalities and expand the concept of the wallet to a more developer-focused platform “so that developers can build integrations into the wallet and make it super powerful.”

Related: A16z Leads $20M Bet That Celo’s Valora Becomes a ‘Global Gateway to Crypto’

“The idea is that we are creating this main interface to the decentralized economy,” Lapscher added. “As dapps evolve and wallet functionality evolves, our take is that all of the functionality will live inside the wallet and interact with different applications in a super easy and seamless way.”

Creating and building out products that work on different blockchains for customers to manage crypto assets is a burgeoning market as multiple blockchains emerge with usable applications. But as they do, users’ assets can become stranded on networks that don’t talk to each other. To date, porting tokens from the Ethereum blockchain to, say, the Solana blockchain has been difficult.

Founded in 2018, Liquality is a browser extension wallet very similar to MetaMask. It allows users to manage crypto assets and swap them among dapps on Ethereum, Polygon, Binance Smart Chain, NEAR, Rootstock and other networks.

Lapscher said Liquality will have a number of other functionalities and integrations launching later this year. “We are in the works with Solana currently and with Arbitrum on layer two, and also the Cosmos and the Terra ecosystem which are starting to take off as well,” he said, referring to some blockchain technology products.

Related: Terra Attracts $150M for DeFi Ecosystem Fund

In April, Liquality released a feature for users to spend bitcoin and other coins at online crypto merchants without having to manage addresses or QR codes.

Liquality co-founder Thessy Mehrain stressed the importance of “unifying blockchain communities within one wallet,” adding that “most, if not all, crypto activity will happen directly through users’ wallets.”

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Bitcoin Core contributor Jon Atack is the latest developer to receive funding from the Human Rights Foundation’s Bitcoin Development Fund.

Atack, who is one of Bitcoin’s most prolific code authors, will receive an $80,000 one-time donation sponsored by Compass Mining. The contribution from Compass follows earlier donations from fintechs Strike and Square Crypto to fund Atack’s work. 

Many exchanges including Gemini, OKCoin and Square donate money to fund Bitcoin protocol development, but Compass is one of only three mining companies that currently support Bitcoin development, along with Marathon Digital Holdings and Braiins.

Related: Bitcoin Upside Stalls; Lower Support at $38K-$40K

“We believe it’s essential for Compass to support the development of the protocol our entire industry is built on,” Whit Gibbs, CEO of Compass, said in a press statement. “Without contributors like Jon, the speed and quality of Bitcoin’s development would noticeably suffer.”

Previous donations made through the Bitcoin Development Fund have varied in value. According to Alex Gladstein, chief strategy officer at Human Rights Foundation, the $80,000 donation was decided in collaboration with Compass Mining.

“We felt that $80,000 over a full year would be a well-deserved grant for Jon to complement his existing income streams,” Gladstein told CoinDesk.

Read more: Human Rights Foundation Gives Out $210K in Bitcoin Development Grants

Related: Bitcoin Breaks Key Resistance as Market Health Improves on Institutional Demand

HRF launched the Bitcoin Development Fund in June 2020 to support software developers working to strengthen and improve the Bitcoin network. HRF sees bitcoin and other cryptocurrencies as a financial tool for activists, civil society organizations and journalists and has been a longtime supporter of privacy-oriented projects like CoinSwap.

The next round of grants through the Bitcoin Development Fund will be announced in September and will support at least four projects, according to Gladstein.

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Over three-quarters of crypto hacks this year have occurred in decentralized finance (DeFi), according to a study by crypto intelligence firm CipherTrace.

• DeFi-related hacks made up 76% of major hack volume in the crypto arena this year as of the end of July, CipherTrace’s “Cryptocurrency Crime and Anti-Money Laundering Report” concluded.
• That works out at some $361 million, 2.7 times more than in 2020.
• According to CipherTrace’s report, DeFi-related fraud made up 54% of major crypto fraud, up from just 3% in 2020.
• An attack today on DeFi platform Poly Network that may have drained $600 million is a notable example of this trend.
• Crypto crime in general, however, is declining compared with previous years. It totaled $4.5 billion in 2019, $1.9 billion in 2020 and dropped to $681 million in the first seven months of 2021.
• Another major finding of the the report concerns the implementation of the cryptocurrency “travel rule.” The Financial Action Task Force (FATF), an intergovernmental body for preventing money laundering and terror financing, said not a single crypto service provider in any jurisdiction was fully compliant with the rule, which states that the sender and recipient of crypto funds must be properly identified.
• CipherTrace released a tool in March designed to tackle fraud in this area by scanning addresses associated with incoming crypto transactions. Binance tapped CipherTrace’s tool in July to aid its travel-rule compliance.

UPDATE (AUG. 10, 15:24 UTC): Adds attack on Poly Network

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Cross-chain decentralized finance (DeFi) platform Poly Network was attacked on Tuesday, with the alleged hacker draining roughly $600 million in crypto.

Poly Network, a protocol launched by the founder of Chinese blockchain project Neo, operates on the Binance Smart Chain, Ethereum and Polygon blockchains. Tuesday’s attack struck each chain consecutively, with the Poly team identifying three addresses where stolen assets were transferred.

At the time that Poly tweeted news of the attack, the three addresses collectively held more than $600 million in different cryptocurrencies, including USDC, wrapped bitcoin (WBTC), wrapped ether (WETH) and shiba inu (SHIB), blockchain scanning platforms show.

Related: DeFi Has Accounted for Over 75% of Crypto Hacks in 2021

“We call on miners of affected blockchain and crypto exchanges to blacklist tokens coming from the above addresses,” the Poly team tweeted.

The $600 million figure would place the Poly Network hack among the largest in crypto history.

Tether froze approximately $33 million in relation to the hack, Tether CTO Paul Adroino tweeted.

About one hour after Poly announced the hack on Twitter, the hacker tried to move assets including USDT through the Ethereum address into liquidity pool Curve.fi, records show. The transaction was rejected.

Related: State of Crypto: What Just Happened in the US Senate?

Meanwhile, close to $100 million has been moved out of the Binance Smart Chain address in the past 30 minutes and deposited into liquidity pool Ellipsis Finance.

The Poly team could not be reached for comment at the time of publication.

Poly Network was the second Chinese interoperability protocol to be featured on the government-backed Blockchain-based Service Network.

This is a developing story and will be updated.

UPDATE (Aug. 10, 14:30 UTC): Adds information about the wallet addresses and Tether’s move.

UPDATE (Aug. 10, 14:54 UTC): Adds information about funds moving out of the Binance Smart Chain address.

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Blockchain privacy firm Horizen Labs closed a $7 million seed funding round, the company disclosed Tuesday.

Kenetic Capital led the capital raise, which also included Digital Currency Group (DCG) and Liberty City, with each of the three contributing $2 million. (DCG is CoinDesk’s parent company.) Sound Ventures, Deribit, Artist Capital, Deus and LionTree also participated in the round.

New York-based Horizen said it would use the money to evolve its tools for developers and businesses to establish their own blockchains and decentralized applications (dapps). Toward that end, the company’s co-founder and CEO, Rob Viglione, told CoinDesk that he was looking “to double to triple” his current 25-person staff by adding at least 20 engineers in New York, expanding Horizen’s operations in Milan and opening a new office in Ukraine.

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“At this point, our biggest bottleneck is talent,” Viglione said.

Horizen just released a decentralized, “privacy preserving” audit blockchain called zkAudit and counts crypto lender Celsius Network and blockchain-based supply chain platform Morpheus.Network among its early users.

Separately, Horizen is banking on its Zendoo scalability protocol, still in testnet, to increase usage of its technology. Voglione said the company plans to move Zendoo to mainnet by the end of October. “Having that protocol is a necessary precursor for us,” he said.

In a statement, Viglione said that “the raise shows the faith being put into our company” and that it would “enable us to continue building out the tools and technology needed for fully programmable highly effective blockchains and decentralized applications.”

Related: Decentralized Video Protocol Livepeer Raises $20M to Take On Streaming Giants

DCG and Liberty led Horizen’s $3.75 million seed funding round in 2019, the same year as Horizen’s founding. DCG founder and CEO Barry Silbert said in a statement that he had been “consistently impressed” by the project’s development. “Horizen’s novel sidechain technology lets partners and projects harness decentralization to tackle real-world use cases,” Silbert said, adding that DCG expected demand for Horizen’s ZEN token to grow.

UPDATE (August 10 16:30): Adds information about Morpheus.Network.

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Investment firm VanEck filed a prospectus with the U.S. Securities and Exchange Commission (SEC) for a bitcoin strategy exchange-traded fund (ETF) with exposure to bitcoin futures and other investment vehicles.

• VanEck unsuccessfully attempted to list such a fund with the SEC in 2017.
• The investment firm is resubmitting the application with minor amendments in the hope that the greater maturity of the futures market will make for a different outcome this time around.
• “VanEck was first to file for a bitcoin futures ETF in 2017,” Gabor Gurbacs, the firm’s director of digital assets strategy, told CoinDesk. “We are committed to bring to market a bitcoin ETF. Futures markets have matured a significantly since 2017.”
• The fund is billed as an actively managed ETF with exposure to bitcoin futures and other investment vehicles and products that provide exposure to bitcoin, according to the prospectus filed Monday. These may include crypto ETFs listed in other jurisdictions, such as Canada.
• The SEC has yet to approve a crypto ETF despite having received well over a dozen applications. Recent comments by Chair Gary Gensler have indicated that futures products may be considered.
• The fund will not invest in bitcoin or other digital assets directly.
• Investments will be made through a Cayman Islands-based subsidiary of VanEck and managed by Gregory Krenzer.
• The prospectus is similar to one VanEck filed in June for a bitcoin futures mutual fund, also managed by Krenzer.
• It is also similar to one filed by Invesco last week, which was billed as providing exposure to bitcoin through investing in futures and other products such as ETFs listed outside the U.S.

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Sports betting site DraftKings is getting into the non-fungible token (NFT) game with an in-house NFT platform it unveiled Monday.

A collaboration with Tom Brady’s NFT side hustle, Autograph, the DraftKings Marketplace will begin “dropping” NFTs featuring the U.S. football Buccaneers quarterback on Wednesday. More athlete drops will closely follow, DraftKings said. The DraftKings-Autograph tie-up was first revealed last month.

The NFTs will be minted on an “eco-friendly Ethereum layer 2” that DraftKings declined to identify. The company said it recently acquired a Canadian NFT startup, Scarcity Labs, to assist in development. Representatives for that art-focused collective did not immediately comment. Brady’s Autograph appears to be built on Polygon.

Related: NFTs Over DeFi: OpenSea Just Overtook Uniswap on Ethereum Usage

The marketplace debut comes as the NFT craze roars back to life, sending deep-pocketed collectors and retail traders racing to trade billions of dollars of blockchain-registered images. Sports companies and athletes are also angling to get into the lucrative mix.

DraftKings is positioned to tap that energy with its 5.5 million-strong user base, said Joel Belfer, a former banking analyst for Guggenheim who writes about sports collectibles for industry newsletter Mint Condition.

“Offering NFTs on the same platform gives DraftKings an advantage: a large existing user base plugged into a platform they already trust, which can’t be overstated given how many new marketplaces are popping up,” he said.

Turning that audience on to NFTs – and keeping them engaged – is a key focus of the marketplace rollout, according to DraftKings President Matt Kalish. 

Related: Stoner Cats Chaos and the Mainstreaming of NFTs

Part of the strategy comes through offering the audience layered, long-term products. Debut NFTs from the “preseason access collection” will give buyers an early go at future drops from athletes including hockey great Wayne Gretzky, tennis star Naomi Osaka and others.

“Whether someone is well-versed or barely familiar with digital collectibles, we envision DraftKings Marketplace being a premier platform for all within a trend that is decidedly here to stay,” Kalish said in a statement.

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South Korean banks’ revenue from real-name verification services to crypto exchanges more than doubled in the second quarter to 16.97 billion won (US$14.7 million), the Yonhap News Agency reported.

• That’s up from 7.55 billion won ($6.5 million) in the first quarter, Yonhap said, citing a Korean financial watchdog.
• The increase indicates that Korean investors were still active despite a weak market, the news agency said.
• In the second quarter, Korea’s biggest crypto trading platform, Upbit, paid 12.07 billion won ($10.5 million) to online bank K-bank, Yonhap said.
• Bithumb and Coinone have contracts with agricultural bank Nonghyup Bank, and Korbit with Shinhan Bank.
• Exchanges have until Sept. 24 to register with Korea’s Financial Intelligence Unit or be shut down. In order to register, they must fulfill certain requirements, including partnerships with banks for real-name registration and approval for their “know-your-customer” processes.
• Major banks are reportedly reluctant to provide such services to crypto exchanges because of potential accountability risks.

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Bitcoin (BTC) is roughly flat over the past 24 hours as the rally near $45,000 appears exhausted. Short-term overbought signals could encourage profit-taking, although buyers will likely return around the $38,000 to $40,000 support zone.

Bitcoin is up about 20% over the past week, compared to a 25% rise in ether (ETH), the world’s second-largest cryptocurrency by market value.

• The relative strength index (RSI) on the four-hour chart registered lower highs and is declining from overbought territory. Typically, short-term overbought signals precede price declines of about 5% to 10%.
• Initial support is seen at the $40,000 breakout level, which resolved a two-month consolidation to the upside.
• Bitcoin will need to hold above the 200-day moving average, currently around $45,000, to confirm a reversal of the intermediate-term downtrend since April.

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The proportion of ether held on centralized exchanges (CEXs) dropped to 9.4% of the total supply today, the lowest in three years, according to data from crypto intelligence platform OKLink.

• Out of the 117 million ether in circulation, only 11 million were held on addresses related to CEXs, OKLink data shows. Ether is the second-largest cryptocurrency by market capitalization.
• That level is the least since February 2018, when about 9 million of 97 million ether were held in CEX addresses, according to OKLink data.
• The main factor for the outflow is decentralized finance (DeFi), Eddie Wang, senior researcher at OKLink, told CoinDesk.
• Wang pointed to wrapped ether (WETH) being the top address in the Ether Rich List, as well as deposits and liquidity pools of popular DeFi protocols to explain the outflow of ether from CEXs.
• Wrapping ether is the process of converting it to ERC-20 tokens, which renders the digital asset easy to swap and transfer. Because of these features, WETH is a key driving force for DeFi.
• WETH represents 5.7% of total ether in circulation, according to intelligence platform TokenView.
• Ethereum 2.0 might be another factor, Wang said. More than 6.5 million ether are locked into 2.0 deposit contract addressing, according to Dune Analytics.
• OKLink has built its own database of addresses, which are classified into categories like centralized exchanges, decentralized exchanges, miners and pools based on their behavior, Wang said.

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Bitcoin’s jump above a long-term moving average, posing as resistance around $45,000, has been broken for the first time in over two months.

The world’s largest cryptocurrency by market capitalization is currently changing hands for around $45,712 after peaking at $46,691 over the last 24 hours, CoinDesk data shows. Prices have continued to drive higher and are now up 59% from July 21 lows of $29,500.

“There seems to be a shift in the sentiment in the market compared to a few months back,” Ulrik Lykke, executive director at crypto hedge fund ARK36 told CoinDesk via email. “We’ve recently seen some seemingly negative news coming out about Binance facing regulatory scrutiny that did not seem to influence the price a lot.”

Related: Despite US Crypto Tax Plans, Institutional Investors Return to Bitcoin: Blockchain Data

Monday saw bitcoin break above the 200-day moving average, a long-term indicator of market health with price action being determined bearish below (red line) and bullish above. Tuesday’s daily candle marks the first time bitcoin has closed above the long-term indicator since May 20.

Daily spot volume for August is also at its highest in over two weeks given the recent flurry of trading activity backed by strong demand.

“There was buying pressure from Coinbase, and I think the demand was from institutional investors,” said Ki Young Ju, CEO of the Korea-based blockchain analytics firm CryptoQuant. Ju also noted that based on the Kimichi Premium and other on-chain indicators, retail investors were mostly absent from bitcoin’s recent run.

And while negative news has slowed, tensions over the crypto tax provision in the U.S. infrastructure bill appear to remain high.

Related: AMC to Accept Bitcoin for Tickets and Concessions Later This Year

“The bill result so far is not great, but it is going to be followed by months of united crypto lobbying,” Kyle Davies, co-founder of Three Arrows Capital, told CoinDesk on Tuesday. “The U.S. has seen prominent senior government officials fight on their behalf for crypto. I expect we’ll look back on this process as a great unifier that galvanized the industry.”

Other notable cryptos in the top 20 by market capitalization also rose over a 24-hour period with uniswap, ether, and litecoin having clocked the highest gains.

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Prominent Indian crypto exchange CoinDCX has raised 6.70 billion rupees (US$90 million) from investors in a funding round that achieved a valuation above $1 billion.

• The unicorn status is a crypto industry first for the country with a population of 1.33 billion, Bloomberg reported Monday.
• Led by Facebook co-founder Eduardo Saverin’s B Capital Group, the funding round came in $10-$20 million less than initial targets, as reported by CoinDesk in July.
• Other investors included Coinbase, Polychain, Block.one, and Jump Capital.
• Funding will go toward hiring efforts including doubling the exchange business’s team in the next six months to around 400 people.
• The move marks a major achievement in the face of regulatory uncertainty relating to Indian officials’ stance toward cryptocurrencies.
• CoinDCX said it hopes to bolster its user numbers from 3 million to 50 million over the next few years, according to the report.

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