Crypto Biz: Treasury’s ‘Not-QE’ playbook sends Bitcoin higher

The broader digital asset market, led by Bitcoin (BTC), experienced a significant uplift this week, buoyed by what some are terming "not-QE" liquidity injections from the US Treasury. This unconventional approach to supporting financial markets, without formally enacting quantitative easing, has injected a surge of optimism, driving Bitcoin’s price upwards by over 23% towards the $79,000 mark, and pushing Ether’s price past $2,400. This development has amplified a critical question for the digital asset space: could ongoing, albeit indirect, liquidity support from Washington become a sustained tailwind for Bitcoin and other risk assets? The implications are already resonating across the crypto industry, influencing major business decisions and market outlooks.

Standard Chartered, a prominent financial institution, has revised its Bitcoin price forecast upwards, now anticipating the cryptocurrency could reach $100,000 by the end of the year. This projection is directly linked to the US Treasury’s recent decision to double its buyback operations for certain long-dated bonds. Geoff Kendrick, an analyst at Standard Chartered, described this move as "exactly the type of thing Bitcoin loves," highlighting the asset’s perceived benefit from government liquidity interventions, especially given its fixed supply which inherently resists monetary debasement. In a client note, Kendrick identified $65,500 as a key technical level for Bitcoin, asserting that a sustained break above this point would confirm the cycle low. The Treasury’s plan, which aims to at least double buyback operations for bonds with 10- to 20-year and 20- to 30-year maturities, is set to run from September 9th through November 4th. The immediate market reaction to this announcement saw long-dated yields fall, while Bitcoin’s price saw a sharp increase of over 6%, climbing to nearly $69,000, its highest level since early June, according to CoinMarketCap data. However, the optimistic outlook remains contingent on Bitcoin holding its ground above the $65,500 threshold.

In a significant strategic move, Metaplanet, a Tokyo-based firm with a strong commitment to a Bitcoin treasury strategy, is expanding its operations to the United States. The company plans to take a controlling stake in the Nasdaq-listed Super League Enterprise, which will subsequently be renamed Superplanet. As part of this transaction, Metaplanet will contribute 2,100 BTC, valued at approximately $145 million, along with $2.5 million in cash to the newly formed entity. This allocation represents less than 5% of Metaplanet’s existing 43,000 Bitcoin holdings, and importantly, these coins are drawn from its current treasury reserves rather than constituting new purchases. Simon Gerovich, CEO of Metaplanet, articulated that this dual-listing structure will provide two distinct capital-raising avenues: Superplanet will access US markets, while Metaplanet will continue to engage with Japanese markets. The announcement had an immediate positive impact on Super League’s stock, which surged by over 50%. The deal is anticipated to be finalized in the fourth quarter, pending shareholder approval and the satisfaction of customary closing conditions.

Further expanding its presence in the digital asset mining sector, Cypherpunk Technologies has announced its entry into Zcash (ZEC) mining. This expansion follows the acquisition of a Zcash mining fleet from Winklevoss Capital through a $33.33 million equity deal. This strategic acquisition positions Cypherpunk Technologies, a publicly traded firm, to control approximately 18% of the Zcash network’s total hashrate. The newly acquired mining operation is already active at US-based facilities, generating an estimated 4.2 GSol/s, which represents roughly 18% of Zcash’s current hashrate. Beyond its mining endeavors, Cypherpunk Technologies also holds a substantial amount of ZEC, with 323,394 coins in its possession, equating to about 1.9% of the circulating supply. The company has set an ambitious target of increasing its ZEC ownership to 5%. Cypherpunk has presented Zcash mining as an avenue with potentially more attractive economic prospects compared to Bitcoin mining or the demanding computational requirements of AI data centers. However, the financial viability of these operations is intrinsically linked to the price of ZEC, the network’s overall hashrate, mining difficulty, and ongoing operational costs. This strategic push into Zcash mining occurs in the wake of a significant rally for ZEC, which saw its price increase by over 1,300% in the preceding 12 months, although it has experienced a subsequent correction. The Zcash network recently underwent its "Ironwood" upgrade on July 28th, which replaced the Orchard pool. This upgrade was implemented to address a potential flaw that could have theoretically allowed for the creation of counterfeit ZEC, though no instances of exploitation were ever detected.

In parallel developments impacting the broader technological and financial landscape, the US Commodity Futures Trading Commission (CFTC) is soliciting public feedback on proposed futures contracts tied to Artificial Intelligence (AI) computing capacity. This initiative by the CFTC could be instrumental in shaping an emerging market for the trading and hedging of computing power costs. Bloomberg reported that the regulator has submitted a request for comment to the White House Office of Management and Budget. This follows an announcement from CME Group last week, indicating its intention to launch two compute futures contracts on October 5th, subject to regulatory approval, with Silicon Data set to provide the underlying benchmarks. Market analysts from firms such as TD Lombard, Goldman Sachs, and Bridgewater Associates have estimated that AI infrastructure spending could account for approximately 2% to 2.5% of the US Gross Domestic Product this year. The CFTC’s review process could potentially influence the launch timelines for similar compute products planned by other exchanges, including Intercontinental Exchange, which also await regulatory clearance. Once the White House review is concluded, the CFTC is expected to initiate a public comment period, typically lasting between 30 and 60 days, according to Bloomberg.

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