Crypto traders are bracing for a short burst of volatility around Tuesday’s U.S. midterm elections, not lasting turbulence. Plus: Morgan Stanley downgrades Coinbase, and tZERO plans to go public.
Monday, November 2, 2026
Crypto traders are bracing for a short burst of volatility around Tuesday’s U.S. midterm elections, not a lasting stretch of turbulence. Bitcoin’s implied volatility term structure shows it: options expiring Nov. 4, just after Election Day, price in about 43.5% volatility, well above the roughly 36% for the expiries that follow. Futures open interest has held steady at about $58 billion for bitcoin and $23.58 billion for ether, which suggests traders aren’t taking fresh bets but buying insurance on what they already hold, and Laevitas notes that hedging demand like this tends to fade quickly once the event passes. The wider market has steadied above Friday’s Binance-hack lows, with bitcoin near $78,000 and ether near $2,290, a resilience Galaxy’s Alex Thorn calls a bullish sign as bitcoin closed above its 50-week moving average for a seventh straight week. Still, there are concerns: spot bitcoin ETFs saw about $643 million of outflows on Friday, the biggest since June. Stay alert.
Morgan Stanley downgrades Coinbase (COIN), slashes price target 53% on weak earnings outlook
Morgan Stanley downgraded Coinbase to underweight from equalweight and cut its price target to $120 from $258, with analyst Michael Cyprys writing that confidence in the earnings recovery has deteriorated. He cited weaker trading activity, a softer revenue outlook and uncertainty in crypto markets following the Binance hack. The bank cut its 2027 revenue forecast by 28% and its adjusted EBITDA estimate by 47%, and trimmed 2028 estimates by 18% and 25%, respectively. It now expects Coinbase to generate $2.4 billion in normalized EBITDA by 2028, about 14% below 2025 levels, and lowered the multiple it applies to that EBITDA to 12 times from 20 times. COIN was down 2.3% in early trading to about $140.25, adding to last week’s 10% decline. The downgrade follows Coinbase’s weak third-quarter report, with revenue of $1.22 billion, down 35% from a year earlier, and transaction revenue down 44% to $590 million as crypto trading volume fell 10% and volatility hit multiyear lows. Its fourth-quarter outlook showed little sign of a sharp rebound, with about $165 million in transaction revenue through Oct. 25.
Tokenization firm tZERO plans to go public in $350 million SPAC deal
Tokenization firm tZERO plans to go public through a merger with blank-check company FG Imperii Acquisition Corp. (FGII), in a deal that values tZERO at $350 million and could provide up to $231 million in SPAC trust cash, subject to shareholder redemptions and expenses. The combined company plans to trade on NYSE American under the ticker TZRO, with the deal expected to close in early 2027 pending shareholder and regulatory approvals, and CEO Alan Konevsky is expected to stay on. tZERO has worked in blockchain-based securities since 2014, and its regulated subsidiaries provide trading, brokerage, custody and transfer agent services for digital securities. Intercontinental Exchange, parent of the New York Stock Exchange, is among its investors and chose it as a design partner for the NYSE’s blockchain-based securities trading platform. Konevsky said the deal is intended to give tZERO greater access to capital to scale its infrastructure-as-a-service model. The company also holds more than 100 blockchain-related patents and is in a legal dispute with rival Securitize over patents.
Elliptic finds no evidence of AI use in laundering $6.4B Binance loot
Blockchain analytics firm Elliptic found no evidence that artificial intelligence directed the laundering of funds stolen in the $6.4 billion Binance hack, saying the activity resembled scripts written and supervised by people. The North Korean hackers used about 20 automated software services in less than three days, moving stolen funds through decentralized exchanges, lending protocols and cross-chain bridges. Elliptic co-founder Tom Robinson said the laundering is automated but nothing observed shows an AI agent making decisions, pointing to repeated transfers, failed transactions, reused amounts and small test transfers before larger sums, whereas an AI agent might have worked out why a transaction failed and tried something else. Elliptic has not ruled out AI involvement. The FBI confirmed that the Oct. 29 theft was carried out by North Korea’s TraderTraitor group. About $2.85 billion, or 44% of the stolen funds, has been frozen or seized, while the hackers still control about $3.28 billion across more than 950 wallets, mostly in bitcoin and ether, which a central issuer cannot freeze.
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