Author: Michelle Lazo

Jump Crypto has added $10 million to a U.S. political action committee focused on promoting pro-crypto candidates in Congress. This brings the total contributions from Jump, a Chicago-based investment firm, to $15 million, and raises the PAC’s total funds to nearly $169 million as of Wednesday, according to spokesman Josh Vlasto.

The significant fundraising effort by Fairshake and its affiliated PACs has positioned the crypto industry with one of the most influential campaign-finance operations for the 2024 elections. These super PACs have been heavily investing in primary campaigns, helping their preferred candidates advance toward likely general-election victories in November.

“The crypto and blockchain communities have united to form a sustainable bipartisan coalition and an effective long-term operation,” Vlasto stated. “We will continue to support candidates committed to responsible regulation that drives innovation, creates jobs, and maintains America’s global leadership.”

A spokeswoman for Jump Crypto declined to comment on the donation. This substantial contribution follows recent matching $25-million donations from major crypto firms Coinbase Inc. (NASDAQ:COIN), Ripple, and Andreessen Horowitz.

As of the May 31 Federal Election Commission filing, Fairshake and its related PACs—Defend American Jobs and Protect Progress—held $109 million. With less than five months until the final voting, Vlasto confirmed the PACs do not plan to support presidential candidates, instead focusing on proven congressional incumbents and crypto-friendly candidates.

Recent votes in Congress have provided clearer indicators of lawmakers’ stances on crypto. In May, the House passed the Financial Innovation and Technology for the 21st Century Act, the first comprehensive crypto oversight legislation to clear either chamber. Its future in the Senate remains uncertain, but the vote revealed which House members support crypto regulations.

Additionally, both chambers voted to overturn the Securities and Exchange Commission’s crypto account policy, Staff Accounting Bulletin No. 12. Although President Joe Biden vetoed this effort, it showed 11 Senate Democrats joining Republicans against the SEC policy and the White House’s stance.

These votes demonstrated unexpected support from Democrats and are being used to evaluate lawmakers. Stand With Crypto, an advocacy group started by Coinbase, uses a grading system to rate politicians. For example, Sen. Mark Warner received a “D” grade for his no vote on the SAB 121 resolution, while Sen. Chuck Grassley earned a “B” grade for supporting it.

“Recent votes have helped us educate our advocates on politicians’ positions on crypto,” said Sabrina Siddiqui, a spokesman for Stand With Crypto. She noted that the group reached over a million online members earlier than expected due to strong interest in these key votes.

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Crypto investment firm Pantera Capital aims to raise $1 billion for a new fund dedicated to revitalizing the crypto industry. Cosmo Jiang, Pantera Capital’s portfolio manager, revealed that over $200 million of this fund is allocated for investments in artificial intelligence projects.

In a recent interview with DL News, Jiang expressed his belief that AI will become integral to every crypto company, likening it to the necessity of a website for modern businesses. “Investing in AI firms will soon be as standard as investing in companies with websites,” Jiang stated.

Pantera Capital is therefore on the lookout for projects that leverage AI to enhance blockchain technology and vice versa.

Pantera Capital, which counts major companies like Coinbase (NASDAQ:COIN), Circle, and Bitstamp in its portfolio, plans to significantly increase its investment in AI-related blockchain projects with the new fund. Jiang noted that their previous fund allocated around 15% to 20% of its capital to such projects, and expects the new fund to allocate even more.

If this trend continues, Pantera Capital could potentially invest over $200 million in AI-adjacent crypto projects over the next decade. Although Jiang did not confirm an exact figure, he acknowledged it as a reasonable estimate.

The fusion of AI and blockchain technologies has captured significant interest, with predictions suggesting it could contribute about $20 trillion to the global economy by 2030. Investors have already funneled over $98.8 million into this sector since the start of 2024. The market value of AI tokens has reached $26 billion, and Bitcoin miners are exploring ways to supply processing power for training AI tools used by Silicon Valley giants.

Pantera Capital is not the only entity recognizing the potential of AI and blockchain convergence. Hedge fund manager Brevan Howard is also actively exploring opportunities in this space.

In a related development, three major AI blockchain firms—SingularityNET, Fetch.ai, and Ocean Protocol—are planning to merge their crypto tokens to create a decentralized AI platform. The proposed ASI token is expected to have a fully diluted value of approximately $7.5 billion. While the merger plans require community approval, an official announcement could come as early as Wednesday. The merged entity, the Superintelligence Collective, will guide their collaborative efforts while allowing the companies to maintain their individual operations.

However, there is some skepticism regarding AI-related crypto tokens. A recent research report by leading crypto exchange Coinbase (NASDAQ:COIN) suggested that the surge in the AI token market might be driven more by hype than by genuine utility. The report indicated that the value of many AI tokens could be overstated due to the prevailing focus on the AI industry and that these tokens might lack sustainable demand-side drivers in the near to medium term.

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Long-term bitcoin holders and miners have been significant sellers in the past two weeks, with little sign of renewed demand, according to on-chain analysis firm CryptoQuant in a report shared with CoinDesk.

CryptoQuant’s data shows that whales—large holders of bitcoin—sold over $1.2 billion worth of BTC recently, likely through brokers rather than on the open market.

“Traders are not increasing their Bitcoin holdings, and large holders’ (whales) demand growth is still lacking strength,” analysts noted. “Stablecoin liquidity has continued to slow, growing at its slowest pace since November 2023.”

These traders have been reducing their holdings since BTC prices peaked over $70,000 in late May, as indicated by declining UTXO age bands tracked by CryptoQuant.

Unspent Transaction Outputs are created in every Bitcoin transaction and are used by traders to analyze buying and selling patterns. A decrease in UTXO age usually signals increased Bitcoin activity and selling, while an increase suggests more holding.

Market observers suggest that miners are shifting focus to the booming artificial intelligence sector, leading to the sale of their bitcoin rewards. Both the AI and cryptocurrency sectors rely heavily on powerful computing chips.

“One of the biggest trends since Bitcoin halving this year is that miners are increasingly moving towards the AI business,” shared Lucy Hu, senior analyst at Metalpha, a crypto fund, in a Telegram message. “The reduction in mining rewards has pushed miners to explore other revenue streams. With AI firms needing energy-intensive data centers, Bitcoin miners are boosting revenue through sales to AI companies.”

Since June 5, BTC prices have dropped from $71,000 to just over $65,000 as of Wednesday, influenced by a strong dollar, a shift away from riskier assets, and growth in traditional stock indices. Additionally, U.S.-listed exchange-traded funds tracking Bitcoin recorded net outflows of over $600 million last week, marking their worst performance since late April.

Some traders have warned that BTC could fall to as low as $60,000 without new growth catalysts.

Currently, BTC is down 0.6% in the past 24 hours, according to CoinDesk data. Meanwhile, the CoinDesk 20, an index of the largest tokens, is up 1.2%.

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Bullish bets on Dogecoin futures suffered significantly on Monday, with liquidations totaling $60 million as the meme token’s price dropped over 10% before a brief recovery. This decline occurred alongside a sell-off in major tokens, including Bitcoin, during Asian trading hours. The CoinDesk 20 Index, which tracks the broader crypto market, fell by 3.4% in the past 24 hours.

Bitcoin long positions lost $47 million, while Ether bullish bets were the hardest hit, losing $76 million. In total, crypto long positions saw liquidations exceeding $440 million due to profit-taking and a strengthening dollar, according to traders on Tuesday.

“The meme coin market has generally pulled back this month as Bitcoin prices come under pressure,” stated Lucy Hu, a senior analyst at Metalpha. “The expectation of a rate cut by the Fed has led investors to shift from risky assets to safer ones, impacting DOGE as one of the largest meme coins in the market.”

Data from Coinanlyze reveals that nearly all DOGE liquidation activity over the past 24 hours came from long positions, with only about $600,000 worth of short positions being liquidated. These figures represent the highest for DOGE futures since May 2021, with over $44 million of the liquidations occurring on Huobi, a crypto exchange favored by Asia-based traders.

Open interest, or the total number of unsettled futures bets, dropped 16% to $600 million. Additionally, a long-short ratio tracking DOGE futures indicated a bearish sentiment, standing at 0.94, suggesting traders are positioning for further declines.

Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to partial or total loss of the trader’s initial margin. This happens when a trader cannot meet the margin requirements for a leveraged position, meaning they lack sufficient funds to keep the trade open.

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Recent spikes in Google search queries related to cryptocurrencies have often signaled major market peaks, aligning with Warren Buffett’s advice to buy in doom and sell in boom. This pattern now appears in the market for AI-related tokens.

Tokens like FET, RNDR, TAO, and GRT have seen their market value drop by up to 30% over the past week, according to data from Coingecko. Concurrently, Google Trends indicates that search interest in artificial intelligence has likely peaked.

FET ranks as the fourth-worst performing among the top 100 cryptocurrencies in the past seven days. In contrast, Bitcoin fell just 2.8% during the same period, while the broader CoinDesk 20 Index declined by 6%.

Google Trends, often used to gauge retail investor interest in trending topics, shows that the search query “AI” reached its highest value of 100 last week—the peak in the past five years. This score represents the maximum search volume for the query within a given timeframe.

This surge in AI interest suggests that public excitement has reached a new high, drawing more retail investors into the market. Nvidia (NASDAQ:NVDA), a leading AI chipmaker, has also seen increased attention alongside AI trends.

Although indicative, Google Trends can serve as a valuable tool to watch, as retail investors often act based on emotions and are usually the last to enter bull markets and the first to exit bear markets. For instance, spikes in searches for Bitcoin and Solana coincided with their respective price peaks in May 2021 and November 2021.

It’s important to note that Bitcoin, which has a strong positive correlation with Nvidia, bottomed out with tech stocks in late 2022 following the launch of ChatGPT, which heightened general awareness of artificial intelligence. GMO’s Chief Investment Strategist Jeremy Grantham has noted that the AI rally might be a bubble within a bubble, potentially on the verge of bursting.

This insight may encourage investors to exercise caution when making investment decisions.

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