⚠️⚠️ THE DISRUPT TEAM IS OUT OF OFFICE UNTIL FEBRUARY 2ND — POSTING WILL BE INTERMITTENT THROUGH THIS TIME ⚠️⚠️
“Optimism has “soft launched” its solution to Ethereum’s transaction problem, the Optimistic Virtual Machine (OVM). The startup announced Friday that OVM is now live, at a time when gas fees have reached near all-time highs for decentralized finance (DeFi) traders.
First on the docket is DeFi exchange Synthetix, which has been working on an integration for some weeks now. The transition will roll out in four phases to limit risk to the platform. Staking the platform’s native token, SNX, is now possible on OVM.
We have opted for initiating the transition with the absolute minimum risk to [layer one], and then adding functionality over the course of the next few months as we build confidence in [Optimistic Ethereum].
In conjunction with other technical solutions, the expectation is Ethereum will be able to execute and settle about 100,000 transactions per second (TPS) with rollups.”
“Only one major ETF was trading at volumes slightly higher than the BTCetc ETP in the first 11 days of January. The average daily order book turnover for the BTCetc ETP (BTCE) reached €57 million ($69 million).
The most highly traded exchange-traded product on the stock exchange – the iShares Global Clean Energy Ucits ETF (INRG) – was ahead of the BTCE by only €1 million.”
“U.S. banking powerhouse Goldman Sachs has issued a request for information (RFI) to explore digital asset custody. When asked about timing, the Goldman source said the bank’s custody plans would be “evident soon.”
Like JPMorgan, we have issued an RFI looking at digital custody. We are broadly exploring digital custody and deciding what the next step is.
A tectonic shift took place in the world of crypto custody this week, as San Francisco-based Anchorage attained conditional approval from the OCC to become a national digital bank and “unequivocally” meet the definition of “qualified custodian” in the process.
Anchorage President Diogo Mónica said in an interview this regulatory approval will invite many large and risk-averse institutional players into crypto. Goldman, JPMorgan and Citi are all said to be looking at crypto custody.“
“The Chinese national blockchain project, the Blockchain Service Network, is planning to pilot integration with global central bank digital currencies. According to a Jan. 15 blog post, the BSN is looking to build a universal digital payment network, or UDPN, based on CBDCs of various countries as part of its 2021 roadmap.
With the UDPN, BSN aims to enable a standardized digital currency transfer method and payment procedure. The new system intends to bring together systems like banking, insurance, enterprise resource planning and mobile apps through APIs to provide a cost-friendly global payment solution.”
“Bitcoin’s two-day rally has stalled as the U.S. dollar gains ground in the wake of Joe Biden’s fiscal stimulus announcement. The lack of a bullish response by the bitcoin market is perhaps surprising, given that fiscal/monetary stimulus is inflationary and bitcoin is widely considered a store of value.
The strength of the U.S. dollar against foreign currencies could be playing spoilsport. The performance of USD on the Dollar Index (DXY) has affected the cryptocurrency’s price in the past, and the negative correlation between the two assets is strengthening.
Analysts, however, expect the greenback’s bounce to be short-lived.”
“Creditors of the bankrupt cryptocurrency exchange Mt. Gox will be presented with the option to claim up to 90% of the exchange’s remaining bitcoin. The deal between Mt. Gox’s bankruptcy trustee and MGIFLP, a unit of Fortress Investment Group, will be presented to creditors for a simple up or down vote.
Investors aren’t obligated to take the early payment and can wait for the lawsuits against the former exchange to settle. It was not clear at press time how many bitcoins are left for creditors to claim.”
“The crypto industry has its first federally chartered bank: Anchorage.
Crypto custodian Anchorage has secured conditional approval for a national trust charter from the U.S. Office of the Comptroller of the Currency (OCC), making it the first national “digital asset bank” in the U.S. The safekeeping, management and trading of digital assets have been regulatory stumbling blocks for large financial institutions – but those obstacles are gradually being removed.
We are a national bank. The only difference is our business line, that we’re doing crypto assets versus doing other assets. The benefit of having a federally chartered bank is that it preempts all the state laws. The clarity of being regulated by the oldest regulator for banks in the United States … sends a very clear message.
Acting OCC chief Brian Brooks, speaking at a public event earlier Wednesday, expressed his belief that banks and financial services more broadly will transition to being blockchain-based.
I think what’s necessary is the creation of crypto banks that are able to hold stablecoins that reflect value of a fiat currency, but that doesn’t change the native asset, and you need to have real cryptocurrencies over here where they interact directly with each other, with no need to ever off-ramp. Fiat will ultimately be a legacy thing of the past.
Today’s announcement is a recognition that not only can banks engage with crypto, but that crypto companies can function as banks. This is the most important step yet towards the full modernization of our financial services system.
Fellow crypto startups BitPay and Paxos have also applied for federal charters through the OCC. Kraken and Avanti are special-purpose depository institutions organized under Wyoming state law.”
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“The amount of Ether held on exchanges has plunged over the past two days. Data from Glassnode indicates that Ether reserves on centralized exchanges have not been this low since July 2018. As of this writing, only 7% of Ether’s circulating supply is held on exchanges.
Saunders interprets the data as suggesting an explosive bull-run into new all-time highs is imminent for Ether. According to crypto market data aggregator Into The Block, Ether is currently exhibiting numerous bullish signals, including a bid-to-ask volume imbalance of almost 9%.”
“The Financial Crimes Enforcement Network (FinCEN) said Thursday it would reopen its proposed rulemaking period for an additional 15 days for its reporting requirements, and another 45 days for a requirement on recordkeeping and counterparty reporting requirements.
Perhaps most important, the 15-day extension means Treasury Secretary Steven Mnuchin, who is said to be spearheading this effort, will be out of office by the time the comments period closes, perhaps allowing for FinCEN to better incorporate industry feedback.
FinCEN is providing a longer period in light of the somewhat greater complexity of those aspects of the proposed rule and various issues identified in comments received during the original comment period.”
“Biden’s bill – which amounts to $400 billion for Covid-19 management, more than $1 trillion in direct relief spending and $440 billion for communities and businesses – is more than double the $900BN bipartisan bill approved last month, and only slightly below the March 2020 Cares Act.
‘We have to act and we have to act now,’ Biden said, ahead of laying out a second, even broader economic recovery plan next month at a joint session of Congress. That initiative will include money for longer-term development goals such as infrastructure and climate change, the transition team said. So even more trillions.“
“As excessive Ethereum gas prices continue to hamper smaller transactions and operations on the network, the number of faster and cheaper options continues to expand as layer-two adoption increases.
The LeverJ decentralized exchange has seen a surge in trading volumes since it launched perpetual contracts four weeks ago. Around $75 million has been traded across 26,600 transactions, costing just under $600 in total gas fees.
Only in DeFi 2021 could you miss these monster numbers trading on an Ethereum DEX—built on L2.
Decentralized exchange Loopring is also gaining traction with new updates and layer-two liquidity mining incentives for its native token, LRC. Its latest feature is the ability to send from a Loopring L2 account to any Ethereum based L1 account without the recipient ever needing to be on L2. DeFi protocol Synthetix is also poised to launch its Optimism layer-two staking upgrade called Castor later today, Jan. 14.“
“The Winklevoss twins said in an interview they are considering taking the New York-based digital-asset firm public due to the rising interest in cryptocurrencies.
We are definitely considering it and making sure that we have that option. We are watching the market and we are also having internal discussions on whether it makes sense for us at this point in time. We are certainly open to it.”
“The U.S. is going slow on central bank digital currencies (CDBCs) considering the risks they may pose to the dollar’s dominance, the chairman of the U.S. Federal Reserve said Thursday.
Powell estimated it will take “years rather than months” before the Fed releases a CBDC, despite early studies of digital dollar–friendly blockchains at the central bank’s Boston outpost. He added the Fed is “investing heavily” in understanding the technology and looking at the policy questions CBDCs pose.”
“Cream is now allowing other protocols to borrow funds without posting collateral. For risk management purposes, the system is not permissionless. Each protocol needs to be whitelisted by Cream for a line of credit. The protocol is then able to borrow freely, until it reaches the credit limit set by Cream.
For the Yearn ecosystem, the Iron Bank can be particularly useful for increasing the effectiveness of yield farming strategies. By leveraging assets without posting collateral, Yearn vaults can effectively multiply the yield they obtain from farming SUSHI, CRV and ALPHA. At the same time, people supplying assets on Cream benefit from the higher interest-rate payouts.”
“Suarez, for his part, was interested in promoting Miami as a potential hotbed for new innovation in tech. Suarez also mentioned that he’s looking into ‘allowing people to use crypto to pay for city fees,’ from property taxes to fees associated with permits.
We want anyone who shares our vision to come here and build.”
“Internet hosting giant Cloudflare will be able to connect to domains hosted on the Ethereum Name Service (ENS) and the Interplanetary File System (IPFS) by a new indexing service.
We are proud to announce a new resolver for the Distributed Web, where IPFS content indexed by the Ethereum Name Service (ENS) can be accessed.
The primary purpose of the eth.link service is pretty straightforward: users can append ‘.link’ to the end of a .eth name to access an IPFS website at the name like a normal website, no special browsers or extensions necessary.”
“Arxnovum Investments Inc. filed documents for the “Arxnovum Bitcoin ETF” on Monday. The ETF is planned to be listed on the Toronto Stock Exchange (TSX) under the ticker “BIT.U.”
The proposed bitcoin ETF will provide investors with exposure to bitcoin and daily price movements of the U.S. dollar price of bitcoin by investing in bitcoin and/or bitcoin futures contracts, and/or other derivative instruments that provide economic exposure to bitcoin.
Winklevoss-owned Gemini Trust company will be the sub-custodian of the bitcoin held by the ETF.”
“Cryptocurrencies could grow fivefold by 2025 into a $3 trillion market, under new projections from Bakkt Holdings. In the investor presentation, Bakkt estimated its revenue, net of transaction-related expenses, could grow by an average 75% per year to $515 million by 2025.
The underlying assumptions behind the transaction show just how bullish investors, entrepreneurs and financial executives have become over the past year on the fast-paced digital-asset industry.”
“We had a really, really awful event in the United States last week. What has followed from that, however, is truly chilling. Now you’ve got payments companies saying that they will not process the payments of people who are of a certain political party who voted one way on a contested political issue.
Everything is at risk if financial technology is politicized.
Payments platforms Shopify and Stripe deplatformed Trump’s campaign after the violence. Brooks said this is an extension of the existing pressure payment companies have exerted on businesses in the past.
The OCC under Brooks is looking into creating a rule that would prohibit institutions from not providing services to certain industries, including the energy and crypto sectors.
We live in a world where not only information, but also money might be controlled by a handful of elites who might not like the way that any one of us thinks [about an issue]. Crypto is about freedom and if you didn’t believe that freedom mattered last week, you should think about it again.”
“Global payments provider PayPal has doubled its previous crypto volume record, with $242 million worth of digital assets changing hands on the platform during Jan. 11. Since Jan. 1, daily volume has increased by 950% from $22.8.
With the spike in PayPal’s volume coming amid Bitcoin’s rally into new all-time highs, the U.S.-based payments firm appears to be gathering popularity among retail traders.
PayPal is expected to offer cryptocurrency services to its 26 million merchants in the coming months, likely driving further demand for the company’s crypto services.”
“Traditional insurance cover within the crypto industry remains thin on the ground and prohibitively expensive. Nexus takes a different approach, offering cover to users themselves, rather than relying on an insurance policy held by the exchange – or not, as the case may be.
We are expanding to provide coverage for centralized exchanges, starting with the big ones like Coinbase, Binance, Kraken, Gemini.
The more secure an exchange is perceived to be, the more likely risk assessors will back it. Once sufficient staking has been established, cover purchases will go live and members of the mutual will be able to purchase cover.
The centralized exchange cover from Nexus will pay a claim if an exchange gets hacked and the user loses more than 10% of their funds, or if withdrawals are halted for more than 90 days.”
“[Gensler] has testified before Congress about cryptocurrency and blockchain on multiple occasions, pushing back against comparisons between cryptocurrencies and Ponzi schemes and declaring that the still-unlaunched libra token met the requirements of being a security under U.S. law.
At MIT’s Sloan School, Gensler taught a course on cryptocurrencies and blockchains, calling the technology ‘a catalyst for change in the world of finance and the broader economy.'”
“The government of Khyber Pakhtunkhwa (KP), one of Pakistan’s four provinces, announced the launch of two state-owned Bitcoin mining farms last week. The move marked one of the first instances of a government using its own funds to mine (and make a profit from) Bitcoin.
Countries like Pakistan and Iran have turned to Bitcoin to revive a failing economy.”
“Ledger has announced its first measures to address the data breach and ensure such a hack doesn’t happen again.
These include working with blockchain analytics firm Chainalysis to hunt the hackers, offering a 10 BTC bounty for information leading to the hacker’s arrest and creating a comprehensive review of what information the company holds onto, where it’s stored and how long it’s retained.
We are announcing changes in the way Ledger will collect and handle customer data: keeping personal data for as short a time as legally possible, minimizing the display of personal data in emails, moving needed data in a further segregated environment as soon as possible, and creating a secure channel for communicating 1:1 with our customers via Ledger Live. Our goal is to delete data such as name, address, and phone number as soon as possible, even if we would be allowed to keep them under the GDPR.
We will soon release a technical solution that will remove the 24 words as the single pillar of the security of our hardware wallets and will open the door to funds insurance as well.”
“The Yearn.finance community is introducing a proposal to reform the current token economics of YFI. Currently, Yearn.finance uses a staking and dividends model. Holders must place their tokens in the yGov contract and receive a portion of the revenue generated by its yield strategies.
An alternative method of value capture used by some, like Maker, sees the protocol buyback tokens on the open market and then “burn” or retire them. This mechanism creates buying pressure on the token’s price, ideally resulting in a tight coupling between the protocol’s success and its token’s price — and finally, stakeholders’ wealth. This kind of strategy has gained significant prominence in stock and crypto markets in recent years due to its flexibility and tax efficiency for holders.
Instead of retiring the tokens bought back on the market, they would be kept in the treasury’s balance to be redistributed for development and community initiatives.
Nonetheless, the fact that the tokens are expected to eventually make their way back into circulation limits the effectiveness of this value accrual strategy. This is largely by design — One of the motivations for activating the mechanism is to concentrate all resources on the growth of the protocol.
An informal poll shows more than 90% support among community members.”
“Metapurse recently announced that it had acquired all 20 of the 1/1 NFT artworks auctioned in December’s Beeple Everydays: The 2020 Collection. Of course, one doesn’t spend $2.2 million on NFT art without a gameplan.
On Jan. 23, it will launch the B.20 bundle. This consists of all 20 unique NFT artworks, along with prime virtual real estate in the Cryptovoxels, Decentraland and Somnium Space metaverses, and custom-designed VR galleries in each metaverse to house the art.
To celebrate the launch, Metapurse is hosting a free cultural quasi-festival called Metapalooza, featuring a live virtual performance from DJ, Producer and crypto-evangelist 3LAU.”
“Almost a decade ago, Stefan Thomas, the former CTO at blockchain company Ripple Labs, was given 7,002 bitcoins worth $2-$6 each for making a cryptocurrency explainer video.
Thomas has used eight of his most frequently used passwords in an attempt access his IronKey hard drive and his now multimillion-dollar fortune but has had no luck. Two attempts now remain before the device auto-encrypts its contents.“
“Bitcoin continues to trade in the opposite direction to the Dollar Index in a reflection of the cryptocurrency’s maturation as a macro asset like gold. Since the major markets crash in March, bitcoin and the index have trended in opposite directions, with bitcoin witnessing consolidation or correction during DXY’s temporary recovery rallies.
Bitcoin’s value increased as the money supply and inflation expectations grew. At the same time, the dollar depreciated to multi-year lows, resulting in an inverse correlation between the government-backed fiat and decentralized digital asset.
The DXY has jumped to two-week highs near 90.50, extending a two-day winning streak. The index reached a 33-month low of 89.21 on Jan. 6. The dollar’s latest bounce looks to have been fueled by a rise in U.S. Treasury yields.”
“Bitcoin exchange Bakkt has inked a business combination deal that will result in the Intercontinental Exchange subsidiary becoming a publicly traded company.
The agreement will see Bakkt merge with VPC Impact Acquisition Holdings, a special purpose acquisition company sponsored by Victory Park Capital. The combined company will be called “Bakkt Holdings” and will be listed on the New York Stock Exchange with an expected valuation of $2.1 billion.
The firm is planning a full launch of its Bakkt Cash app this spring, a year or so after Starbucks integrated it as a way for customers to top up their credits with bitcoin.”
“Over 24.6 billion tethers now circulate across Ethereum, Tron and Bitcoin’s Omni Layer, per data from Coin Metrics, up from 4.8 billion one year ago.
Among Tether customers are all the major OTC desks and high frequency trading firms in the space.
Taking the buyer’s funds, OTC desks will routinely convert to USDT and spread the buying pressure across all possible liquid venues, creating demand for more stablecoins. Growth also comes when traders start to “aggressively sell BTC into USDT” or vice versa, Trabucco noted.
Notably, trading volumes for markets quoted in USDT continue to surpass bitcoin-quoted pairs, which used to be where most trading volume concentrated.”
“AgBank, one of the “big four” Chinese banks, is allowing customers to deposit and withdraw digital yuan to or from their current or savings accounts. Other major banks in the nation are also working on apps for the People’s Bank’s digital currency initiative.
As these and other trials continue, China looks to be closing in on the launch of the digital alternative to traditional cash and would be the first major nation to do so.”
“Vocdoni combines decentralized infrastructure such as the InterPlanetary File System (IPFS) with bleeding-edge zero-knowledge proofs (zk-SNARKs) in an effort to bring democracy into the 21st century.
It’s infrastructure for digital societies. Vocdoni’s technology allows for infinitely scalable, free and anonymous voting with on-chain settlement. For us, that’s the Holy Grail of blockchain voting.
The addition of Ethereum throughput solution ZK-Rollups is expected later this year and should make the project capable of conducting elections consisting of the entire earth’s population, Arús claimed.
It’s super expensive – millions of dollars – to do a proper election. We thought we could do better than that.”
“The most common violations were anti-money laundering breaches, which are put in place to prevent criminals from disguising illegally obtained funds as legitimate income. Of all violators, US banks paid up the biggest fines.
Of all banks, US-based Goldman Sachs, a legacy bank founded in 1869 and one of the most influential financial institutions in the world, paid the biggest bank-related fine in 2020. It shelled out a $3.9 billion penalty for breaking anti-bribery laws in Malaysia and Abu Dhabi—a case now infamously known as the 1MDB scandal. Goldman paid another $2 billion to US authorities under different charges in the same case, bringing its total to nearly $6 billion.
Among other US banks, Wells Fargo paid a $3 billion fine in connection with a fake accounts scandal, while JPMorgan paid $920 million after its traders were found using “spoofing” techniques (which consists of faking market demand and supply) to manipulate the publicly-traded markets.”
“The solution supports verification of an individual’s SARS-CoV-2 status while remaining compliant with European data protection standards under the GDPR framework.
Ubrich anchors an anonymous digital fingerprint in a blockchain. This way, an individual’s certified SARS-CoV-2 status can easily be verified by the airline at the departure gate, the arrival airport, or any other entry point by scanning a QR Code. Important to know is that at no point during the process are person-specific user data or test results visible in the blockchain.”
“In the legacy financial world, yield has dried up. Yields on U.S. Treasury bonds have never been lower. The 10-year Treasury bond now offers you a less than 0.9% return. At around 2.1%-2.3%, AAA corporate bonds aren’t doing a whole lot better.
On Ethereum it’s difficult to avoid yield. Yield is the default incentive for successful decentralized finance (DeFi) applications to attract capital.
At the most basic level, borrowing and lending applications like Compound and Aave are offering 4.6% and 6.2% interest, respectively, on deposited USDC. More sophisticated yield aggregators like Yearn are generating 7.8% in their basic yield strategies, and up to 16% in more aggressive strategies.
Uniswap, averaging over $1 billion in trading volume per week, is putting its 0.3% trading fees into the hands of those that have supplied liquidity to the protocol. Those that have supplied ETH and USDC to Uniswap have received a staggering 35% APY on a hybrid 50-50 USD/ETH position in the last 30 days.
The DeFi economy is constructed fundamentally differently than its legacy counterpart. In order for DeFi to work, it requires over-collateralization. No one can borrow more than they have deposited, and so far this simple safety net has been the foundation on which DeFi has been able to stand.
It is also the reason why Ethereum and DeFi will become synonymous with “yield” in 2021. In DeFi, rates can’t go negative. There is no room for fractional-reserve lending in DeFi, because it would break the trust model that makes these applications function. In order to remove trust (and therefore centralization), you must over-collateralize.
In addition to its native store-of-value qualities, the launch of ETH staking turns ETH into a capital asset that produces cash-flow for its owner. We have seen other protocols offer proof-of-stake style returns on alternative assets, but ETH is uniquely compelling because it is also backed by the native economy of Ethereum.
When the size of the Ethereum economy increases, staking yields are designed to reflect this growth. The relationship between the Ethereum economy and ETH should be familiar to the typical bond investor: Healthy economies are highly valued, therefore the native bond typically has a premium associated with it.
Ethereum cannot default on its ETH payments to ETH bond-holders. ETH is dependably issued to ETH bond-holders for compensation for providing security to Ethereum. Ethereum doesn’t need to collect taxes or generate revenue to compensate those who are looking for ETH-denominated yield. Removing this requirement is a boon to the valuation of ETH bonds because there is no risk of default. Ethereum has no debts to pay, it is solvent by design.
In 2021, Ethereum is positioned to become the Schelling Point for yield. As bitcoin blasts the doors open on the investability of digital assets, it exposes a yield-rich world behind it in Ethereum.”
“As the threat of quantum machines looms over modern computers, the need for newer and stronger forms of cryptography has never been greater.
Finding a replacement for existing encryption methods isn’t a trivial task. For the past three years, the National Institute of Standards and Technology (NIST) has worked to research and advance alternative algorithms, or the backbone of any cryptographic system. This July, it announced a shortlist of 15 proposals in an ongoing project looking for quantum-resistant encryption standards.
Once an alternative is defined, there’s a much bigger job in ensuring that all existing applications get updated to the new standard. The scope of this is massive, covering virtually every use case on the entire internet, across all of finance and in blockchains. Given the scale of the task, plans and measures to migrate existing data must be in place long before the quantum threat becomes a reality.
The concept of blockchains is not in itself threatened by quantum computers. Blockchains are, first of all, used to securely register data (or digests of data) and we know already now how to secure the basic functionality of blockchains (immutability of registered data) with cryptographic primitives that are secure in the quantum era (hash functions and digital signature schemes).
But more work is required to handle more advanced protocols in an efficient way and more work is needed to continuously improve the security and efficiency of cryptographic primitives to make the blockchain more and more efficient.”
“This week, the federal banking regulator published an interpretive letter saying that national banks and federal savings associations can use public blockchains to store and validate payments. It effectively awards blockchains the status of “payment network.”
Do you see the picture emerging? It’s not just about expanding the range of products banks can offer clients. It’s not just about offering better payment services. It’s about the convergence between traditional and crypto markets. It’s also about the role of the dollar in the economies of tomorrow.
While there are many hurdles yet to overcome, and many more pieces of legislation and regulatory guidance needed, we are getting a glimpse of what the finance of tomorrow could look like. And blockchains and crypto assets play a meaningful role in the emerging picture, which depicts so much more than rising prices and portfolio allocations – it sketches a new way of transacting, something that eventually will affect all of us.”
“Milestone 1: January 15 — Mainnet Soft Launch. A trial run of the full mainnet experience with Synthetix. Goals: Battle-test in production with training wheels — upgrade key, withdrawal monitoring.
Milestone 2: March 15 — Community Release. A public testnet open to all, replete with documentation and tooling for projects to start integrating. Goals: Give teams the ability to deploy onto L2 as a shared staging ground for mainnet.”
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“Larimer, who co-founded the company and had served as its chief technical officer since April 2017, announced the move on Block.one’s social network Voice.com. He said he left Block.one as of Dec. 31, 2020.
Block.one confirmed the departure, saying Larimer “left to pursue new personal projects.” The price of EOS fell on the news of Larimer’s departure, dropping to as low as $3.01.
Larimer founded BitShares alongside Charles Hoskinson (a co-founder of Ethereum) in 2013. Larimer later founded the Steem blockchain in 2016.”
“SkyBridge Capital, the hedge fund run by former White House Communications Director, Anthony Scaramucci, which on Monday opened a Bitcoin fund, was on Thursday overrun by prospective customers.
Over 6,000 people attempted to join, overwhelming their system and prompting them to schedule a second launch call for Tuesday, January 12. The fund promises to be a secure middleman between high-stakes investors and a Bitcoin market that, to Skybridge, is primed to take off this year.
Bitcoin is digital gold. It is better at being gold than gold.”
“From a casual glance, it can look like DeFi is stronger than it’s ever been. Judged by the sector’s favorite metric, total value locked (TVL), the sector has been adding about a billion dollars worth of additional value per day since the new year started – from $15.67 billion to $22.35 billion as of this writing; however, a lot of that growth has been driven by the simple fact of asset prices going up across the board.
TVL isn’t the best indicator when ETH and all other crypto is green for weeks.
A good way to baseline DeFi upticks is by checking action specifically in stablecoins, since they don’t tend to get skewed wildly by price volatility.
Tether’s stablecoin has risen from a mere $91.5 million on Jan. 1 to $146 million today. Meanwhile, DAI has basically hovered a bit above $1 billion and USDC has in the area of $800 million that whole time. Nothing very exciting happening there, which probably stands as something of a bellwether for the real action in the space.”
“While a bitcoin exchange-traded fund (ETF) would be a long-term positive, in the short term it could hurt the price of the leading cryptocurrency as it would draw institutional money from the Grayscale Bitcoin Trust (GBTC), currently the only way for some on Wall Street to gain exposure to bitcoin.
A shrinking GBTC premium would also diminish the allure of a popular trade, the analysts wrote. Right now, some institutional investors buy GBTC at net asset value with the intent of selling after the mandatory six-month lockup period expires to capitalize on that premium. Should the premium drop due to the coming introduction of an ETF, it would diminish the popularity of buying GBTC at NAV for that purpose.
The JPMorgan analysts estimate the GBTC premium monetization trade could account for around 15% of outstanding GBTC stock.”
“Today Musk ended his ambivalence about Bitcoin in response to a tweet written yesterday by author Ben Mezrich that said he’s ‘never turning down getting paid in Bitcoin again.’ Musk replied: ‘me neither.’
Another major revelation came to light from Musk’s Twitter feed. When asked if he actually owns any Dogecoin, he replied ‘No, but maybe one day.'”
“So far, algorithmic assets such as algorithmic stablecoins have proven to be great ways for savvy game theoreticians to enrich themselves, but inefficient when it comes to keeping their intended pegs.
To this end, Spadafora and the rest of the team have taken inspiration from previous rebasing experiments such as Ampleforth.
We think the secret sauce is learning from what AMPL did around liquidity, and then adding the automated vaults on top.
Effectively, a DIGG vault would automatically and programmatically play the tokeneconomic ‘games’ other algorithmic asset projects expect users to play with bonds or coupons. Currently Badger’s vaults are worth $700 million — a massive pool of automated yield-generating liquidity that could be brought to bear to keep DIGG’s price tied to BTC.”
“Apple has suspended Parler, a conservative social media service, from its App Store, saying the app’s owner hasn’t done enough to deal with threats of violence on the platform. Meanwhile, Amazon dealt the service a potential death blow by kicking it off its web hosting service, citing the same reason.
Amazon’s action means that if the service can’t find another host, Parler will go offline Sunday.”
“We’ve started to see participation not just from the hedge fund segment, which we’ve long seen participation from, but now it’s recently from other institutions, pensions and endowments.
The sizes of allocations they are making are growing rapidly as well.”
“According to an Axios report, President-elect Joe Biden is considering a two-pronged stimulus effort in the form of $2,000 checks for Americans and a tax and infrastructure spending package worth $3 trillion. The new fiscal stimulus is expected to boost inflation, weaken the U.S. dollar and bring more buyers for scarce assets such as bitcoin and gold.
The U.S. central bank is unlikely to unwind or scale back its $120 billion-per-month asset-purchase program any time soon and is committed to keeping interest rates at record lows for sometime after inflation has risen above its 2% target.
The Biden stimulus may add an extra jolt to bitcoin’s price, but nothing more than pushing along a barreling freight train.”
“The shares of MicroStrategy, a relatively little known business intelligence firm prior to its massive investment in the leading cryptocurrency, have soared 330% since the company bought its first bitcoin on Aug. 11, 2020, rising from $123.80 to $539.57.
Given MicroStrategy’s shares are largely tracking the price of bitcoin, which is up more than 40% this year following a 300% gain in 2020, it’s likely Morgan Stanley views its investment as a way to benefit from bitcoin’s historic run without actually being a HODLer.”
“More people are searching for the word “Ethereum” now than ever before in its history. Google Trends data reveals that the number of Google searches currently being performed for “Ethereum” is at an all-time high, eclipsing search interest during the height of the last Ether (ETH) bull run.
The same can’t be said for searches of “Bitcoin,” which remain at just 65% of its peak popularity on Dec. 23, 2017. That said, many more people are searching for “Bitcoin” rather than “Ethereum” by a ratio of approximately five to one.”
“The UK government is seeking consultation until March 21, 2020, on a regulatory proposal that explores the scope and regulation of stablecoins.
The paper said that if appropriate standards and regulations were met, certain stablecoins could play an important role in retail and cross-border payments (including settlements).
To reflect the proposal to bring additional tokens and associated activities into regulation the government is considering whether a new category of regulated tokens may be needed – stable tokens.”
“For anyone unfamiliar with blockchain explorers in general, this guide will go over the basic details of reading an Ethereum 2.0 blockchain explorer.
Unlike Bitcoin and Ethereum, Ethereum 2.0 progresses in epochs, not blocks. An epoch is a bundle of up to 32 blocks that actors on the network (called validators) propose and attest to over a period lasting roughly 6.4 minutes. An epoch, along with all the blocks of which it is composed, is only considered finalized after the progression of two more epochs after it.
A total of 262,144 validators is needed at minimum for Eth 2.0 to advance to its next phase of development in which 64 mini-blockchains, called “shards,” will be spawned. At the current rate of 900 new validators being added to the network each day, phase 1 will occur sometime in late August or early September of this year.
A participation rate of 99% suggests the vast majority of validators on Eth 2.0 are doing their job and securing the network. Significant declines in this number would suggest active validators are shutting their nodes down and disconnecting from Eth 2.0.”
“Cryptocurrency exchange Bakkt, which is majority-owned by Intercontinental Exchange (ICE), is in advanced talks to go public via a merger with a special purpose acquisition company (SPAC).
The deal, if it’s concluded, would value the combined company at more than $2 billion.”
“India’s regional internet shutdowns in 2020 cost its economy approximately $2.8 billion, making it the country that suffered the most damage from internet manipulation by a government last year. India and Myanmar are responsible for the longest shutdowns for the second consecutive year.
Not only are [internet disruptions] an act of economic self-sabotage, they also violate citizens’ freedom of expression, the right to information and the right to peaceful assembly.”
“At its current market cap, Bitcoin has a money supply worth more than 170 different fiat currencies. The USD, EUR, CNY, and JPY are the only world currencies with a larger money supply than Bitcoin.
The M0 figure represents the total value of all the banknotes, coins, and other money substitutes that can be easily converted into cash.”
“As the public comment period for the controversial rule comes to a close, industry heavyweights are logging their opposition in a coordinated effort. They are trying to delay the rule’s implementation until after a new presidential administration takes over, as well as raise procedural and substantive concerns. The proposed rule, industry participants contend, could drive crypto innovation outside the U.S. and threaten the digital privacy rights of individuals and entities transacting with cryptocurrencies.
As of press time, well over 65,000 comments had been submitted (though less than 4,000 were available to read), with major fintech firms such as Square, traditional business groups including the U.S. Chamber of Commerce and crypto exchanges like Coinbase filing comments pushing back against the proposed rule. U.S. lawmakers have also weighed in, asking the Treasury Department to at least slow down and engage with the industry before implementing any strict Know-Your-Customer (KYC) rules on counterparties.
A number of respondents questioned whether sending name and address information to FinCEN would be safe for users. Young noted that over the past few months, the FinCEN Files were leaked and the Treasury Department’s systems were breached as part of a broader intrusion into U.S. government agencies through the use of a software vendor, SolarWinds.
If anything, the Treasury’s awful infosec proves just how essential our financial privacy is. We’re safer when we use personal wallets, privacy coins and other financial tools free from government surveillance and interference.
It will similarly increase physical security concerns for CVC holders who may be subject to physical harm or threats from bad actors should their identity become known, particularly those storing CVC in self-hosted wallets.
If the rule is finalized, it will likely be challenged in court and the shortened time period will be used as one argument.
Special counsel to the Electronic Frontier Foundation and an attorney with Ropes and Gray, told CoinDesk she believes the proposed regulation might violate the Fourth Amendment of the U.S. Constitution, which protects against “unreasonable searches and seizures” and requires probable cause for warrants to be issued.
The warrantless mass surveillance of financial records is a Fourth Amendment violation.”
“The number of Bitcoin locked on Ethereum reached an all-time high in mid-November of nearly 152,000, worth approximately $2.5 billion at a BTC price of $16,150 at the time. Since then, the number of locked BTC has actually fallen a little more than 10%, during the same period the price of Bitcoin more than doubled.
It’s possible, then, that the exodus of BTC from Ethereum is due to Bitcoin investors cashing out in search of profits on those holdings.
More value in DeFi means better borrowing rates and capacity for even more users. Even if a few thousand Bitcoin are leaving the industry, rising value may still be viewed as a positive sign for the budding DeFi industry.”
“With an open interest of $2.1 billion, the CME accounted for 19.09% of the global tally of $11 billion on Wednesday. OKEx was the second-biggest, while Binance ranked third.
Looking back a year, the size of the futures market was quite small. Global open interest stood at $3 billion on Jan. 7, 2020, of which the CME contributed just 7% or $224 million. Open interest refers to the number of contracts traded but not squared off with an offsetting position.
The exchange is considered synonymous with institutional trading.”
“Crypto exchange BTSE launched a Wrapped Monero token yesterday. A first-of-its-kind, the token is issued via the Ethereum network, and each unit is backed by an actual Monero token. BTSE will mint and redeem the Wrapped Monero and act as the custodian of the underlying Monero.
With this product, the value of XMR is further unlocked. Users don’t need to sell their Monero to buy erc20 tokens.
Meanwhile, such benefits come at the cost of privacy.“
“Twelve staffers involved in the Aragon Network have announced their resignations Thursday due to an apparent lack of financial transparency.
I no longer recognize the place that I used to love to work. I believe it no longer reflects my values, nor the values of the Aragon Manifesto.
The mass exodus of Aragon developers was preceded by some 52,000 in ether (ETH) from the project’s 2017 initial coin offering (ICO) moving onto various exchanges on Dec. 15 and Dec. 22. It’s unclear if the mass transfer of funds was a catalyst for the resignations.”
“After a troubled few months, crypto exchange Bithumb looks like it’s set on turning over a new leaf through an acquisition by one of South Korea’s top gaming firms. Nexon, a multi-billion dollar gaming conglomerate, has signed a memorandum of understanding, or MoU, to acquire the exchange at an evaluated price of 650 billion won ($460 million).
Nexon’s holding company, NXC, has previously invested in cryptocurrency and fintechs, including the well-known exchange Bitstamp.”
“Can’t get into specifics, but know we tried – and will continue to try [with] the new administration – to resolve this.
Garlinghouse, along with Ripple General Counsel Stuart Alderoty, said the San Francisco-based firm’s response to the SEC suit is on its way.”
“The total value of all cryptocurrencies passed $1 trillion Wednesday for the first time ever. At its prior peak in late 2017, the market’s total capitalization was just above $760 billion. Bitcoin represents roughly 69% of the market’s value.
The $1 trillion mark cements cryptocurrency as a investable asset class that no longer sits on the fringes of Traditional Finance as a toy for retail investors. It demonstrates that this asset class is large enough to absorb large orders like we’ve seen recently with the slew of institutions entering over the last few months.
Cryptocurrencies are now almost an institutional-grade venture bet. The market is finally liquid enough to deploy large sums of capital, but still early enough for a 10x return.
Bitcoin has already gained 25% in January, following its more than 300% gain in 2020. Ethereum has also soared over the past 12 months, reaching a total gain of roughly 860% Wednesday after trading above $1,200 for the first time since early 2018.
Crypto is in a unique position to be the most important asset class of the 21st century and still has a lot of room to grow.”
See Also: Bitcoin Sets New All-Time High, Tops $37K Hours After Roaring Past $36K
See Also: Bitcoin Is Now Among Top 10 Most Valuable Global Assets
See Also: Ethereum Enters Top 100 of World’s Largest Assets
“Newsweek, one of the largest American weekly news magazines, has taken a positive spin on Bitcoin (BTC) in a recent article that explores whether the digital asset can become the new gold standard.
Although the article presents little new information for crypto enthusiasts who have been charting Bitcoin’s meteoric rise, it provides more validation that the mainstream narrative surrounding cryptocurrency has changed.
All that glitters is not gold—but it might be Bitcoin. And in the long run, it might be more valuable.”
“A Democratic win in the Senate runoff election ushers in the “Blue Wave” scenario that cryptocurrency traders have been speculating over for months. Biden has pledged to increase government spending, which could lead to higher inflation as well as additional bond purchases (money printing) from the Federal Reserve.
Bitcoin is viewed as a potential hedge against currency debasement by a growing number of investors in both digital-asset markets and on Wall Street.”
“Voorhees said KYC implementation cost the platform 95% of its users.
We had to be the counterparty – the market maker – to provide that service at scale. The decentralized protocols are now providing a superior service, so we’re embracing this evolution and helping our customers easily connect with them.
Because ShapeShift is no longer acting as any form of financial intermediary or counterparty, this new, frictionless [user experience] frees users from having to provide personal, private information.
The exchange has now integrated with multiple decentralized exchanges (DEX) including ‘Uniswap, Balancer, Curve, Bancor, Kyber, 0x, mStable and half a dozen other DEXs.’ Bitcoin (BTC) will be available for trading via the DEX integration this quarter. Cryptocurrencies and tokens from other non-Ethereum blockchains will also be available in Q1 as well.
ShapeShift receives a portion of trading fees that each DEX charges in return for directing traffic to the DEX. ShapeShift customers also get the exchange’s native token, FOX, in return for every trade conducted on the platform to help facilitate a feeless experience.”
“Working products and beneficial use cases have propelled the crypto sub-sector from strength to strength in the past year. While $10 billion was locked in DeFi protocols at the start of November last year, use cases like lending, decentralized exchanges (DEXs), payments, and derivatives, have attracted another $10 billion in the past two months alone.
Of that, the projects with the bigger total value locked (TVL) is Maker, the governance protocol for the DAI stablecoin, with over $3.98 billion. Lending project Aave is next with $2.64 billion, while Ethereum-based DEX Uniswap comes third with $2.47 billion.
But despite the metrics, the $20 billion figure may not necessarily be an outright sign of increased DeFi adoption. Data suggests the increased value in US terms comes from the 43% price rise in ETH (and similar gains in other DeFi assets) instead of the number of the actual assets locked up increasing.”
“Institutional investors borrowed ETH to profit off the Grayscale Ethereum Trust. Now they’re having to pay it back as ETH climbs higher.
To make the trade institutional investors borrow ETH at an annual interest rate of around 8%. They use those assets to buy ETHE shares at the value of the crypto on that day, but are subject to a waiting period before they actually receive the shares. After selling the shares, that loan needs to be paid off. That leads borrowers to market buy ETH, pushing Ethereum prices higher. In the meantime, selling ETHE shares pushes those prices lower.
For retail investors and long-term holders, though, the rush to cover ETH loans (and the price increases that could result) are likely a welcome addition to the current crypto bull run.”
“Strike – the Chicago-based startup’s Bitcoin wallet and banking service – is rolling out native support for the euro, pound and Swiss franc, soon to be followed by the Australian and Canadian dollar after partnering with cryptocurrency exchange Bittrex Global.
Described by Mallers, as a “Bitcoin neo-bank,” Strike leverages the Bitcoin network and scaling technology the Lightning Network to move fiat fast from point A to point B. Zap plans on providing banking services in up to 200 countries via the international exchange.
We can move any physical value anywhere in the world for no variable cost. Transaction finality from one point to another for free.
Bittrex Global will handle the behind-the-scenes operations with the tokens, which typically are issued on the Ethereum blockchain. Strike itself does not support ether (ETH, +10.12%) or Ethereum-based tokens. Rather, each tether or USDC token is credited to an account on Bittrex and mirrored on Strike’s internal database.”
“Williams still refers to the current Mercury release as an alpha. As such, only a fraction of the 469 million governance tokens has thus far been issued. These are held by Dfinity itself.
With Genesis, which is hoped to be reached in the next two to three months, the network will transition into beta. The mainnet is currently running on nodes held in seven independent data centers across the United States, Germany and Switzerland.
The Internet Computer promises to be the first blockchain computer running at web speed with unbounded capacity. It achieves this speed through something called Chain Key Technology, which splits calls to smart contracts into two types: update calls and query calls.”
“The protocol has engaged design agency Koto to revamp its token icon, typography, messaging, and more. Key decisions will all happen “on-chain,” to maximize the input of the Polkadot community.
Brand identity and direction are crucially important elements to a growing network like Polkadot, so it was never in doubt that these efforts would need to be led, funded, and approved by the community.”
“As of Monday, 100 doctors and personnel had received their first dose of the COVID-19 vaccine. The vaccinated personnel also received a digital certificate on their E-HCert App, an electronic wallet for lab results based on the VeChain Thor blockchain.
In a Twitter post earlier this week, the VeChain Foundation said its technology provides governments and individuals assurances that the test results are valid. For all its potential use cases, VeChain has singled out healthcare as one industry primed for disruption due to blockchain technology.”
“The Italian Banking Association, or ABI, has affirmed its support for the implementation of a sovereign European digital currency by beginning pilot studies on a digital euro project.
The ABI’s digital euro study will reportedly focus on two major areas — technical feasibility analysis and central bank digital currency programmability to create a distinction from existing electronic payment methods.”
“The Tuesday order bars United States citizens or people located in the U.S. from using nine Chinese payment apps.
The executive order takes effect in 45 days, by which time Trump will already be out of office. Given that his earlier order to get ByteDance to divest from TikTok was stonewalled in court while he was still in office, there’s not a ton of reason to believe that Trump will get his way here.“
“Federally regulated banks can use stablecoins to conduct payments and other activities, the OCC said Monday.
The letter said these financial institutions can participate as nodes on a blockchain and store or validate payments. The OCC said [blockchains] ‘may be more resilient than other payment networks‘ due to the large number of nodes needed to verify transactions, which can, in turn, limit tampering.
Brian Brooks, the Acting Comptroller of the Currency, said in a statement that while other nations have built real-time payments systems, the U.S. “has relied on” the private sector to create such technologies, seemingly endorsing the use of cryptocurrencies – specifically stablecoins – as an alternative to other real-time payment systems.
The letter states that blockchains have the same status as other global financial networks, such as SWIFT, ACH and FedWire.”
See Also: Official Statement
“One River has worked with crypto exchange Coinbase to invest an undisclosed amount in cryptocurrency. According to Coinbase, which carried out the transaction, its purchase represents “one of the largest digital asset trades in history.”
Market observers have noted large amounts of Bitcoin being withdrawn from the exchange, suggesting institutional holders buying Bitcoin and withdrawing to long term storage. On January 5, Cryptoquant CEO Ki Young Ju noted that 55,000 Bitcoin left the exchange on January 2.
One River recently made its case for cryptocurrencies in a post on its website, entitled “The Case for Digital Assets.”
Owning these assets is a mere toehold to the future, a deposit on the view that everything we know about financial intermediation and its relationship to centralized policy will change in ways we cannot yet foresee.
Holding these assets over the long-term aligns yourself with the macro mega-trends of technological advance and currency debasement, both of which appear to be accelerating.”
“The “Kimchi Premium” is back, suggesting sentiment for Bitcoin is increasing in Korea. The premium usually fluctuates by 1% on average. However, on Monday, it rose to 5.5%, with the trend continuing on Tuesday morning.
Some traders consider the rising premium to be an indicator of rising sentiment—and perhaps prices—for Bitcoin in the future.
The 2017 bull run was marked by a constant kimchi premium throughout the rally, it particularly shot up during the local tops.”
“One of Ripple Labs’ big financial backers is looking to reverse its bet on the XRP issuer.
Tetragon Financial Group LTD, the multi-billion asset manager-turned-plaintiff, had led Ripple’s $200 million funding round in December 2019. On Monday night the U.K.-based firm moved to exit its position in a sealed filing in Delaware Chancery Court.
Tetragon seeks to “enforce its contractual right to require Ripple to redeem” Series C preferred stock. In the meantime, Tetragon wants the court to essentially freeze Ripple’s liquid assets until it pays.”
“In a Jan. 4 letter addressed to FinCEN, Dorsey said, if the rules are approved, cryptocurrency customers maybe pushed to use unregulated services outside of the U.S.
This creates unnecessary friction and perverse incentives for cryptocurrency customers to avoid regulated entities for cryptocurrency transactions, driving them to use non-custodial wallets or services outside the U.S. to transfer their assets more easily.
VC firm Andreesen Horowitz said Monday that ‘FinCEN has proposed at the eleventh hour of an outgoing administration a rule that has all the hallmarks of an arbitrary and capricious agency action.'”
“Back in October, the OCC laid out its “True Lender” rule, which took effect at the end of December. The rule dictates that a loan that includes a national bank as a lender can therefore rely on the OCC’s national guidance rather than that of individual states.
The controversy here is that many states have especially strong anti-usury provisions, which cap interest rates in the hope of preventing predatory lending. State regulators claim that the OCC overstepped its authority by overriding — or preempting— state law.”
“The licenses make LCX a regulated crypto exchange, digital asset custody provider, price oracle provider, digital asset compliance provider, smart-contract creator and token-offering platform, said LCX CEO Monty Metzger.
In an era where banks are not only exploring bitcoin but their own digital assets, LCX is positioning itself to be a retail exchange that can help other institutions launch their own digital assets.”