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CoinDesk Crypto

Blockstream Raises $210M, Acquires Mining Chip Manufacturer Spondoolies

CoinDesk Crypto
5 years 1 month ago

Blockstream has raised $210 million in a Series B funding round that values the bitcoin technology firm at $3.2 billion and will fund an expansion into manufacturing mining chips.  

U.K. investment management firm Baillie Gifford and iFinex, the parent company of cryptocurrency exchange Bitfinex and stablecoin issuer Tether, participated in the round, Blockstream said Tuesday. No other investors were mentioned.

Blockstream also said it had acquired the intellectual property and key employees of Israeli bitcoin mining hardware manufacturer Spondoolies for undisclosed terms.

Related: Taiwan’s XREX Blockchain Firm Raises $17M in Funding Round Led by CDIB Capital

The move paves the way for Blockstream, based in Victoria, British Columbia, to build out a business line making specialized mining chips known as ASICs, the Canadian company said.

The acquisition, together with the additional funding, will advance Blockstream’s crypto mining products and services, including its recently announced Blockstream Energy service.

The new capital will also further the firm’s Bitcoin-focused financial products as well as its Liquid sidechain network, according to the company.

ASIC ambitions

Now is a “most opportune time” to accelerate growth, Blockstream Chief Security Officer Samson Mow told CoinDesk via Telegram on Monday.

Related: A16z Leads $4.6M Investment in Yield Guild Games

“The fresh infusion of capital will allow us to launch more products under Blockstream Finance, as well as bring our new bitcoin ASIC miner to market next year,” said Mow.

Blockstream was founded in 2014 with a focus on building infrastructure and applications based upon the Bitcoin network. The firm was co-founded by CEO Adam Back (inventor of Hashcash, a system for discouraging spam emails that influenced Satoshi Nakamoto’s proof-of-work consensus mechanism design for Bitcoin) and nine others, including Bitcoin Core developer Gregory Maxwell.

The firm’s Series A round, completed in 2016, was led by AXA Strategic Ventures, the venture capital arm of French multinational insurance firm AXA Group; Digital Garage, the Tokyo-based online payments firm co-founded by Joi Ito; and Hong Kong VC firm Horizons Ventures. AME Cloud Ventures, Blockchain Capital and Future\Perfect Ventures also participated in that earlier round.

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Bitcoin Struggles at Resistance; Support Near $48K

CoinDesk Crypto
5 years 1 month ago

Bitcoin (BTC) sellers returned at the $50,000 resistance level on Monday and remained active during Asia hours. The cryptocurrency was trading around $49,300 at press time and is up about 11% over the past week. Initial support is seen around $48,000, which could stabilize the pullback.

  • Bitcoin is currently testing the 100-period moving average on the hourly chart, although the relative strength index (RSI) is not yet oversold.
  • Selling pressure could subside at lower support levels between $45,000 and $48,000.
  • The August 6 breakout above $42,000 is encouraging, especially given the return of upside momentum.
  • Buyers will need to defend support to yield the next upside target towards $55,000.  
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DeFi Adoption Is Still Far From Mainstream: Chainalysis Report

CoinDesk Crypto
5 years 1 month ago

Mainstream adoption of decentralized finance (DeFi) protocols remains at an early stage relative to the wider crypto industry, a Chainalysis report released Tuesday said.

In its “Global DeFi Adoption Index,” the blockchain data firm found that while DeFi adoption has increased significantly over the past 18 months in both emerging and developed markets, most of this growth has occurred in countries and regions with higher incomes and more professional investors and traders.

DeFi adoption “has primarily been powered by experienced cryptocurrency traders and investors looking for new sources of alpha in innovative new platforms, even when we weight our index to favor grassroots adoption,” the report said.

Related: Market Wrap: Bitcoin Stalls Near $50K Ahead of Options Expiration Date

Although DeFi has attracted larger investors, the sector will need to do better in engaging smaller retail investors, the report said.

DeFi minnows wanted

DeFi, a crypto sub-sector in which financial services use smart contracts to facilitate transactions without intermediaries, has skyrocketed over the past year, as the total value of crypto assets in the space surged from roughly $5 billion to $159.52 billion, according to cross-chain data tracker DeFi Llama.

According to Kimberly Grauer, director of research at Chainalysis, the majority of DeFi use cases are “more sophisticated” applications that have posed challenges for retail investors to embrace. 

The Chainalysis index used three metrics that emphasized grassroots DeFi activity – on-chain crypto volume received by DeFi platforms, total retail value (transactions of under $10,000) and individual deposits to DeFi platforms – to rank 154 countries.

Related: Alchemy Expands Free Tier in Bid to Attract More Blockchain Developers to Platform

The on-chain crypto volume received by DeFi platforms, for example, is adjusted by purchasing power parity (PPP) per capita, meaning that if two countries contributed the same amount of volume to DeFi, the country with lower PPP per capita would rank higher.

Developed markets, including the United States, the United Kingdom, Netherlands and Canada remain among the top-ranked countries in the index, although emerging markets such as Vietnam, Thailand, China and India have shown great DeFi adoption rates, too.

The report’s findings also differ from an earlier Chainalysis’ report on the larger crypto market, which showed higher adoption at the grassroots level.

Based on monthly web visits to DeFi platforms by geographic location, DeFi’s popularity grew most notably in North America between April 2019 and June 2020, and then in West Europe starting around September 2019. Other regions started catching up in June 2020 – the beginning of last year’s “DeFi Summer.”

A breakdown of the transaction volume based on transaction sizes also shows that institutional and professional DeFi activity has gradually increased over the past 18 months.

“Right now, DeFi is targeted towards crypto insiders,” David Gogel, growth lead at decentralized derivatives protocol dYdX, said in the report. “It’s people who have been in the industry for a while and have enough funds to experiment with new assets.”

Gogel added that once Ethereum’s gas fees drop in the long term, DeFi, which is still largely concentrated on the Ethereum blockchain, will become more accessible to ordinary people. Gas fees refer to the cost of transactions on Ethereum, which require computational power to execute. The fees are paid in Ethereum’s native currency, ether. 

“The question for the coming years is whether we’ll see DeFi follow the same pattern as the cryptocurrency services that came before it, with wider swaths of the population adopting it for tangible benefits beyond speculation and investment,” the report concluded.

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Blockchain Startup Infstones Raises $10M in Series A Round

CoinDesk Crypto
5 years 1 month ago

Blockchain infrastructure startup Infstones raised $10 million in a Series A funding round led by Shanghai-based Qiming Ventures, as well as investments from DHVC, HashKey Capital, Plug and Play, SNZ Holdings, and the family office of Liang Xinjun, former vice-chairman and CEO of Fosun International.

  • The startup’s main product is a platform where users can run validator nodes, access on-chain data, and build decentralized applications across a variety of blockchain networks such as Ethereum, Binance Smart Chain, Cardano, Polygon, Polkadot, Solana, Chainlink and others.
  • Binance, imToken and Dune Analytics use the platform.
  • Infstones is betting on proof-of-stake algorithms, such as the one used in Ethereum 2.0. POS is becoming the “go-to” consensus mechanism, the startup’s CEO Shi Zhenwu said in a statement to CoinDesk.
  • POS has been gaining ground in the last few months, and startups are entering the space.
  • Shanghai-based Qiming Ventures is an established tech VC firm in China, with investments in smartphone maker Xiaomi, NYSE-listed grocery delivery firm Dingdong Maicai, China’s Quora-style platform Zhihu, and Bitmain co-founder Wu Jihan’s Matrixport.
  • HashKey Capital is a Hong Kong-based blockchain VC with stakes in BlockFi, Animoca Brands, Cosmos, and Polkadot, according to its website and Crunchbase.
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The 3 Reasons Why Bitcoin’s Ascent May Slow

CoinDesk Crypto
5 years 1 month ago

Bitcoin has risen 70% in the past four weeks, topping the $50,000 mark for the first time in three months. While the ascent appears to have revived the broader bullish bias, further gains toward record highs may be slow to come, blockchain metrics and chart factors indicate.

Pick up in exchange inflows

The number of bitcoins held in exchange wallets is rising, departing from the recent trend of outflows and a signal of renewed investor intention to sell.

Data tracked by Glassnode show crypto exchanges received 16,606.80 BTC on Monday, the highest daily net inflow in over a month. Over the past week more than 29,000 BTC have been moved to exchanges. “[It’s] not a trend we want to see continue,” William Clemente, lead insights analyst at Blockware Solutions, tweeted.

Related: Should You Invest in Bitcoin for Retirement?

Investors typically move coins from their wallets to exchanges when they plan to sell. Assuming demand-side pressures remain unchanged, the increase in the exchange balance may put the brakes on the price rally, if only temporarily.

The exchange balance declined by more than 100,000 BTC in the three weeks to Aug. 19, reflecting a largely bullish market sentiment. Bitcoin bottomed out near $30,000 and recovered to $45,000 during that period.

Whale accumulation halts

Whales, or large investors with an ability to make or break market trends, who accumulated coins after the mid-May price crash, have begun running down their inventory.

The supply held by entities with a balance of 1,000 BTC to 10,000 BTC has declined by nearly 75,000 BTC over the past three weeks, diverging from the rising price.

Related: Bitcoin Struggles at Resistance; Support Near $48K

Entities refer to clusters of addresses held by a single network participant. These large investors began accumulating coins after bitcoin’s slide to $30,000 in mid-May, signaling a price bottom. Bitcoin held on to the support in subsequent weeks and bounced this month.

The recent price action is also reflective of weakening on the buy side. “The failure to close the day above $50,000 shows some weakness in demand,” QCP Capital noted in its Telegram channel. Bitcoin printed a high of $50,496 on Monday but closed the day (UTC) below $50,000. At press time, the cryptocurrency was changing hands near $49,400.

QCP Capital doesn’t foresee exponential upside breakouts like those at the end of 2020. The firm also mentioned the continued calmness in implied volatility, or investors’ expectation for price turbulence, and the Grayscale Bitcoin Trust discount as reasons for moderation in the bullish outlook.

The annualized one-month implied volatility is hovering near the recent low of 82% even though bitcoin rose above $50,000 on Monday. Meanwhile, GBTC shares traded at a discount of 14% to net asset value on Monday, according to data provided by Skew. “As a proxy for U.S. interest, GBTC should at least trade at par if we are to expect any strong follow-through in spot,” QCP Capital said.

“The clear trade for us here is short vols [sell call/put options] as we expect the spot to be sticky around the $48,000-$51,000 level,” the firm added.

Chart barriers

Technical studies indicate the cryptocurrency may consolidate before scaling the critical resistance at $51,110, which is the 61.8% Fibonacci retracement of the mid-April to July sell-off.

The 14-day relative strength index (RSI) is now sidelined and not showing a clear directional bias. “A consolidation triangle in the RSI also reflects the hesitancy in the market despite the positive price action,” QCP Capital said.

The DeMARK indicators are signaling short-term upside exhaustion, according to Fairlead Strategies’ weekly research note published on Monday. The weekly stochastic indicator is also signaling overbought conditions.

“Bitcoin is coming into resistance at a 61.8% Fibonacci retracement level near $51,000, which would be a natural place for a short-term pause in the rally,” Katie Stockton, founder and managing partner of Fairlead Strategies, said in the weekly research note.

Stockton, however, added that the long-term momentum has strengthened, with the 200-day moving average (MA) rising again. As such, the cryptocurrency would eventually topple resistance at $51,110.

Also read: Bitcoin on Longest Weekly Winning Run in 9 Months Ahead of Jackson Hole Symposium

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Nickel Digital Sees Growing UK Institutional Demand for Crypto Assets

CoinDesk Crypto
5 years 1 month ago

Research by Nickel Digital, a digital asset hedge fund manager founded by former Goldman Sachs and JPMorgan investment professionals, found that more than half the U.K. institutional investors in a survey plan to increase their crypto asset exposure between now and 2023.

  • Of the 23 wealth managers and other institutions asked, 11 said they will add to their exposure, with a further six saying they will “dramatically” increase their exposure.
  • The managers oversee a total of  $66.5 billion in assets and already have some exposure to digital assets.
  • The long-term appreciation prospects of crypto assets was cited as the reason.
  • Nine institutions said they have become more confident with how the asset class works, and nine cited the improving regulatory environment.
  • However, 16 also expressed concerns relating to the relative size of the crypto market, issues with liquidity and a lack of transparency.

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Ethereum’s Most Popular Software Client Issues Hotfix to High Severity Bug

CoinDesk Crypto
5 years 1 month ago

Ethereum’s most popular software client, Geth, has issued a hotfix to a high-severity security issue in its code. 

The release, titled Hades Gamma (v1.10.8) was posted to the Go Ethereum GitHub at 07:08 UTC Tuesday. Details of the attack vectors and their fixes weren’t disclosed “to give node operators and dependent downstream projects time to update their nodes and software,” according to a posting on the release page.

Ethernodes.org reports that nearly 75% of nodes on Ethereum run Geth. All these users are encouraged to upgrade immediately to the latest version of Geth, v.1.10.8. 

Related: Kraken Donates $250K to Ethereum Upgrade Efforts

Guido Vranken, a software developer who specializes in finding code vulnerabilities in open-source software, announced he discovered the bug on Aug. 18. 

The last time a fix for a bug in Geth code was released, it caused a temporary chain split on Ethereum. Due to a deliberate lack of communication from Geth developers about the bug, several computers, also called “nodes,” did not upgrade their Geth client to the fixed implementation, which resulted in a blockchain consensus failure in November 2020. 

The Geth developer team said in a post-mortem blog post at the time that not speaking publicly about the security vulnerability was aimed at delaying any potential attacks on node operators who needed more time to upgrade to the latest version.

This time around, Geth developers emphasized in advance the urgent need for all users of their software to upgrade to the latest version, but the initial announcement on Aug. 18 did not explicitly describe the nature of the vulnerability.

Related: Blockchain Startup Infstones Raises $10M in Series A Round

“Last time we did a hotfix, people were angry that we didn’t announce it. This time we decided to try it differently. Let’s see which works better,” tweeted Geth developer Péter Szilágyi about Tuesday’s code release. 

Major Ethereum-based wallets and services such as Infura have publicly announced on Twitter their support for this new Geth release.

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Stock and Crypto Investor Sign-Ups Jump 45% Year-on-Year Across Rural India: Report

CoinDesk Crypto
5 years 1 month ago

The number of young investors in non-metro areas across India looking to purchase and trade crypto as well as stocks has increased significantly in the last year, The Economic Times reported Tuesday.

  • Crypto and wealth management platforms have been able to attract new users due to strong performing markets, targeted ads and increased awareness, the report said.
  • The uptick in new user registrations is a 45% increase to 70 million when compared to the year prior, according to the report, which cites BSE stock exchange data.
  • User sign-ups in the state of Uttar Pradesh jumped by almost 60% as of August 23, while the states of Odisha, Assam, Bihar and Madhya Pradesh also saw significant increases from the year before.
  • Local crypto platform CoinSwitch Kuber is reported to have clocked a 135% increase in month-on-month growth from non-metro cities since June of last year.
  • Meanwhile, India’s first crypto unicorn, CoinDCX, saw 48.7 times growth in user sign-ups from India’s less populated cities over the past six months.
  • India’s total population is one of the largest in the world, with 1.33 billion inhabitants, second only to China’s 1.39 billion, according to U.S. Census Bureau data.
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Swiss Financial Trio to Offer Institutions Tokenized Assets on Tezos

CoinDesk Crypto
5 years 1 month ago

Three crypto-focused firms in Switzerland are using the Tezos blockchain to offer tokenized assets to institutional clients.

FINMA-authorized cryptocurrency trading firm Crypto Finance AG is teaming up with Zürich-based InCore Bank and crypto-focused IT firm Inacta to create regulated financial products using a new tokenization process based on the Tezos FA2 standard, the companies announced Tuesday.

In addition, InCore Bank announced the launch of institutional-grade storage, staking and trading services for XTZ, the native cryptocurrency of the Tezos blockchain.

Related: Deutsche Börse Moves Into Crypto Custody With $108.6M+ Buy of Crypto Finance AG Stake

Tezos, one of the first blockchains to go live with a proof-of-stake consensus system back in 2018, has close ties to Switzerland, where the Tezos Foundation – like many other public blockchain foundations – is based.

Crypto Finance is acting as an infrastructure provider on the project, while InCore Bank is carrying out tokenization using the new “DAR-1 token standard” on Tezos, developed by Inacta. Swiss regulators are close to approving the first Tezos-tokenized product, said Crypto Finance Group’s Stijn Vander Straeten.

In terms of what areas will be tokenized on Tezos, Vander Straeten told CoinDesk:

“We will probably start with more simple ones. So, basically in the private debt area and then, of course, we will move into the private equity area.”

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Digital Yuan Used in China’s Domestic Futures Market for First Time: Report

CoinDesk Crypto
5 years 1 month ago

China’s digital yuan has been used to pay storage fees to a delivery warehouse in the Chinese city of Dalian, marking the first use of its kind within the domestic futures market.

  • The China Securities Journal reported Monday the Dalian Commodity Exchange had paid the fees to Dalian Liangyun Group Storage and Transportation Co., Ltd.
  • Local branches of the Bank of Communications and the Dalian branch of the Bank of China assisted in the transaction.
  • China’s digital yuan, also known as the digital renminbi or e-CNY, is a digital version of the country’s physical notes issued by the People’s Bank of China (PBoC).
  • The interbank payment using the e-CNY afforded a zero-cost, efficient, and convenient payment option in real time, according to the report.
  • Beginning in earnest this year, several e-CNY pilots have been trialed in the country including the district of Xiong’an and the city of Shenzen.
  • During the Winter Olympics in Beijing next year, foreign visitors will be able to access and trial China’s digital currency without needing to open a local bank account.
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Digital Yuan Used in China’s Domestic Futures Market for First Time

CoinDesk Crypto
5 years 1 month ago

China’s digital yuan has been used to pay storage fees to a delivery warehouse in the Chinese city of Dalian, marking the first use of its kind within the domestic futures market.

  • The China Securities Journal reported Monday the Dalian Commodity Exchange had paid the fees to Dalian Liangyun Group Storage and Transportation Co., Ltd.
  • Local branches of the Bank of Communications and the Dalian branch of the Bank of China assisted in the transaction.
  • China’s digital yuan, digital renminbi, or e-CNY is a digital version of the country’s physical notes issued by the People’s Bank of China (PBoC).
  • The interbank payment using the e-CNY afforded a zero-cost, efficient, and convenient payment option in real time, according to the report.
  • Beginning in earnest this year, several e-CNY pilots have been trialed in the country including the district of Xiong’an and the city of Shenzen.
  • During the Winter Olympics in Beijing next year, foreign visitors will be able to access and trial China’s digital currency without needing to open a local bank account.
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CryptoPunk NFTs Break Sales Record as Visa Sparks Buying Frenzy

CoinDesk Crypto
5 years 1 month ago

Sales of CryptoPunk non-fungible tokens (NFTs) are soaring to new record levels, in another sign of just how frenzied the market has become as credit-card giant Visa jumps into the fray.

On Monday, sales volumes of CryptoPunks topped $86 million, a daily record, according to data from the industry tracking website CryptoSlam. 

And sales so far in August have already reached $332 million. Prior to August, the largest single monthly sales total was $135.2 million during July. This month’s average price for a CryptoPunk is $199,069, more than double last month’s average.  

Related: Visa Buys a Punk as Bitcoin Returns to $50K

The market is so hot that Visa apparently had to pay up for its CryptoPunk purchase, announced Monday. According to CryptoPunks creator Larva Labs, the NFT that Visa bought – CryptoPunk #7610 – was acquired for a price of 49.50 ether (ETH), which works out to about $150,000. That’s more than double the price of 21.75 ETH paid less than a month ago by a user named “gmoney.” 

“We think NFTs will play an important role in the future of retail, social media, entertainment and commerce,” said Visa’s head of crypto, Cuy Sheffield, in a blog post on Monday. 

It’s unclear if the surge in CryptoPunk sales was directly the result of Visa’s vote of confidence, but more than 300 transactions took place Monday alone, versus a range of 16 to 184 over the past month according to data from CryptoSlam. 

Visa’s move, “largely a PR exercise more than anything else, not only demonstrates how the underlying infrastructure of digital assets has improved over the years but also how quickly these assets can go mainstream,” said Denis Vinokourov, head of research at Synergia Capital. 

Related: Why Did Visa Buy a $150K NFT? Why Does Anyone?

The ability to facilitate transactions and custody assets using Anchorage (a crypto exchange platform used by institutional investors), shows the willingness of traditional finance giants to adopt, he said. 

“It will also likely further serve to boost the value of NFT marketplaces going forward as a whole,” said Vinokourov. 

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Riot Blockchain Reports Record Q2 Results

CoinDesk Crypto
5 years 1 month ago

Bitcoin mining company Riot Blockchain reported that revenues grew to a record $34.3 million in the second quarter, up from just $1.9 million in the year-ago quarter. Net income came in at 22 cents per share versus a loss of 31 cents a share in the second quarter of 2020.

  • Analysts had been expecting revenues of $32.6 million for the quarter and adjusted earnings per share of one cent.  
  • Riot shares were rising 2.4% to $36.58 in after-hours trading Monday following the release of the results. They rose over 4% during the day as bitcoin prices rose above $50,000 earlier in the day for the first time in three months. Shares are up almost 117% year to date.
  • Riot closed the acquisition of Whinstone in the quarter, helping create one of the largest hosting and mining companies in North America as measured by developed and future capacity.
  • Earlier this month, Riot forecast that its new facility in Texas will lift its total hash rate capacity to 7.7 EH/s by the fourth quarter of 2022. 
  • Recent SEC filings revealed that asset management giant Black Rock owned a 6.6% stake in Riot, as well as a 6.7% stake in rival miner Marathon Digital, as of the end of the second quarter. Together, Black Rock’s stakes in the two companies amounted to almost $400 million.

UPDATE (August 23, 20:55 UTC): Added information about Whinstone in the third bullet point.

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Market Wrap: Bitcoin Stalls Near $50K Ahead of Options Expiration Date

CoinDesk Crypto
5 years 1 month ago

Bitcoin stalled after approaching the $50,000 resistance level on Monday. The cryptocurrency was trading at about $49,500 at press time and is up about 8% over the past week. Analysts expect a period of consolidation ahead of Friday’s option expiration date and news from the Federal Reserve’s annual economic policy symposium in Jackson Hole, Wyo. 

“The trend is bullish; however, caution is to be exercised at these levels due to the decline in volume as well as resistance from April and May,” Marcus Sotiriou, a trader at GlobalBlock, wrote in an email to CoinDesk.

“$51K would be a natural place for a short-term pause in the rally,” Katie Stockton, managing director of Fairlead Strategies, wrote in a Monday newsletter. 

Related: Cuando China habló, bitcoin reaccionó. ¿Cuando lo hizo Estados Unidos? No tanto

“Long-term momentum behind bitcoin has strengthened and the 200-day (40-week) moving average is rising again, supporting a bullish long-term outlook,” she wrote.

Latest prices

Cryptocurrencies:

Traditional markets:

  • S&P 500: 4479.5, +0.85%
  • Gold: $1803, +0.57%
  • 10-year Treasury yield closed at 1.251%, compared with 1.261% on Friday

Several analysts noted that extreme overbought conditions have unwound since April, which is providing support for the crypto rally. 

Related: Tether Starts Printing Again After 2-Month Pause

“Right now, bitcoin and other cryptos have enjoyed technical support (as they were becoming mildly oversold),” Santiago Espinosa, a strategist at MRB Partners, wrote in an email to CoinDesk. “At this juncture, some cryptos can continue to do well if policymakers neglect inflationary pressures and regulatory issues don’t become a mainstream problem.”

Bitcoin options expiry

Roughly 25% of bitcoin options open interest is set to expire on Friday. The largest concentration of open interest is seen at the $50,000 strike price, which is also a key technical resistance level.

“Despite implied volatility softening over the past few weeks, $50K is a large psychological barrier and the open interest concentration could prove choppy going into expiration,” Gregoire Magadini, co-founder and CEO of Genesis Volatility, wrote in a Telegram chat. 

The bitcoin options market is placing a 45% chance of BTC trading above $50,000 by the end of September, according to options data provider, Skew. 

Bloomberg’s McGlone still bullish on bitcoin

Bloomberg Intelligence’s Mike McGlone, who won plaudits last year for being among the most prominent analysts predicting that bitcoin would go to $50,000, sees further upside now that the largest cryptocurrency has returned to the mark following a steep market correction.

“Bitcoin, gold and long bonds are top assets set to outperform” in the second half of 2021, McGlone wrote Monday in a report. “The firstborn crypto may have solved the age-old problem of a global reserve asset that’s easily transportable and transactionable, has 24/7 price discovery, is relatively scarce and is nobody’s liability or project.”

BTC holdings rise

The percentage of bitcoin profitable addresses (BTC value above the cost basis) reached a three-month high, according to Glassnode data. 

“The decline in realized losses of late could indicate that investors have found renewed conviction to hold on, or are potentially taking exits that are closer to their original cost basis, as price recovers towards the $50K range,” Glassnode wrote in a Monday blog post. 

Crypto fund inflows

Crypto funds saw $21 million of net inflows last week as digital-asset markets rallied, pushing the total assets under management (AUM) to $57.3 billion, the highest level since May, a new report shows. 

The latest data reflected a reversal after six consecutive weeks of outflows, according to the report Monday by digital-asset manager CoinShares. 

Funds focused on Solana’s SOL token saw the largest inflow among all digital assets, at $7.1 million last week, the report shows. The token hit an all-time high of $82 on Saturday, according to Messari. 

Investors redeemed $2.8 million from bitcoin-focused funds last week, the seventh consecutive week of outflows, despite the largest cryptocurrency’s price upturn. The run matched the streak of outflows recorded in early 2018, the report noted. That was just before the “crypto winter,” when cryptocurrency prices tanked and failed to return to all-time highs for more than two years.

Altcoin roundup
  • Visa buys a CryptoPunk for $150K: Visa has bought CryptoPunk 7610, a female CryptoPunk character for around $150,000, taking a step into non-fungible tokens (NFTs) as it seeks to learn more about the burgeoning market. A collection of nine rare CryptoPunks that were among the first 1,000 minted fetched almost $17 million in an auction at Christie’s in May. Cuy Sheffield, Visa’s head of crypto, said in a blog post that the main purpose behind Visa’s purchase was to learn more about the growing market. “We think NFTs will play an important role in the future of retail, social media, entertainment and commerce,” Sheffield wrote. “To help our clients and partners participate, we need a firsthand understanding of the infrastructure requirements for a global brand to purchase, store and leverage an NFT.”
  • Tether starts printing again: Tether, issuer of the world’s largest stablecoin, USDT, has started printing again after a roughly two-month halt that sparked investors’ concerns and speculation. Tether has minted at least 2.3 billion USDT since Aug. 1, pushing the token’s market cap to $65 billion, a Tether representative told CoinDesk via email. Demand for USDT has recently rebounded, according to Tether and industry experts, as crypto market sentiment has turned more positive. It’s possible, however, that the demand for USDT may not be driven by bitcoin but instead by some altcoins, such as solana (SOL) and terra (LUNA), whose trading volumes have surged, according to Noelle Acheson, head of market insights at crypto prime broker Genesis Global Trading, which shares common ownership with CoinDesk. 
  • USDC to change reserves: The world’s second-largest stablecoin, USDC, will be 100% backed by cash and short-term U.S. Treasurys by September, according to developer Centre, a consortium of crypto exchange Coinbase and payments technology company Circle. Circle revealed last month that only 61% of tokens were backed by “cash and cash equivalents,” referring to cash and money-market funds. Centre “will ensure that the USDC investments revert back to a more conservative investment profile by the end of September,” Emilie Choi, president and chief operating officer at Coinbase, wrote in a tweet.  
  • Poly Network hacker releases private key for remaining looted $141M: The attacker who hacked more than $600 million from the China-based Poly Network platform has released the private key for the remaining $141 million of the stolen cryptocurrency. In a note to the Poly Network team, the attacker or attackers referred to the saga as “one of the most wild adventures in our lives.” Poly Network subsequently tweeted its thanks to the attacker or attackers, posting a link to a transaction on the Ethereum blockchain confirming that the key worked.
Relevant news: Other markets

Most digital assets on CoinDesk 20 ended up higher on Monday. 

Notable winners of 21:00 UTC (4:00 p.m. ET):

cardano (ADA) +12.2%

filecoin (FIL) +4.71%

eos (EOS) +3.71%

Notable losers:

algorand (ALGO) -2.24%

the graph (GRT) -1.39%

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CFTC Commissioner Stump Decries ‘Oversimplification’ That Crypto Is Either a Security or Commodity

CoinDesk Crypto
5 years 1 month ago

The U.S.’ top commodities regulator primarily oversees derivatives markets, rather than spot commodity markets, Dawn Stump, a commissioner at the Commodity Futures Trading Commission’s (CFTC), said Monday.

Stump, who was appointed by then-President Donald Trump in 2018, joined a growing group of regulators debating which federal agency should regulate the booming digital asset market in the United States. 

In her statement, Stump described a “grossly inaccurate oversimplification” that digital assets are either securities or commodities that fall under the jurisdiction of the CFTC. If they are deemed to be securities, they would be regulated by the U.S. Securities and Exchange Commission.

Related: Eurex to Launch Bitcoin ETN Futures to Meet ‘Significant Demand’

Because the CFTC doesn’t regulate commodities themselves – only futures contracts or derivative products like swaps – Stump said it doesn’t matter whether digital assets are classified as securities or commodities, because they wouldn’t fall under the authority of the CFTC unless a futures or derivatives contract was involved. 

Earlier this month, SEC Chairman Gary Gensler said that his agency should regulate a broader segment of the crypto market, including possibly spot market and exchanges that list any cryptocurrencies that fall under securities law. In response, crypto-friendly CFTC Commissioner Brian Quintenz tweeted that the SEC has no authority over “pure commodities or their trading venues” – implying that responsibility belongs to the CFTC.

In her statement Monday, Stump also explained the difference between the CFTC’s regulatory authority, which Stump said doesn’t apply to digital assets, and its broader enforcement authority, which Stump suggested does. Using the CFTC’s case against crypto exchange and derivatives trading platform BitMEX as an example, Stump said the agency has historically used its anti-manipulation and anti-fraud enforcement authority to protect cash commodities.

“Because well-functioning futures contracts (and other derivatives products) rely upon a sound underlying cash market and may reference cash market indexes in their pricing. Thus, the CFTC utilizes this particular enforcement authority to protect the integrity of the derivatives markets that it regulates,” Stump wrote.

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Tether Starts Printing Again After 2-Month Pause

CoinDesk Crypto
5 years 1 month ago

Tether, issuer of the world’s largest stablecoin, USDT, has started printing again after a roughly two-month halt that sparked investors’ concerns and speculation. 

Tether has minted at least 2.3 billion USDT since Aug. 1, pushing the token’s market cap to $65 billion, a Tether representative told CoinDesk via email. USDT, which is pegged to U.S. dollars, usually trades at $1. 

In June and July, USDT’s market cap stagnated around $62 billion despite small fluctuations. Industry experts attributed the reduced demand to China’s crackdown on crypto, the rise of the competing stablecoin USDC and investor concerns over Tether’s own vulnerability. 

Related: Market Wrap: Bitcoin Stalls Near $50K Ahead of Options Expiration Date

Demand for USDT has recently rebounded, according to Tether and industry experts, as crypto market sentiment has turned increasingly positive. The largest cryptocurrency by market cap, bitcoin, has rebounded from its July low of around $29,600, trading at $49,540 as of press time, up 1.8% over the past 24 hours.

“From a supply/demand perspective, as crypto prices go up, more stablecoins and fiat are needed to buy the assets and expand the total market cap of crypto,” Gary Pike, director of sales and trading at crypto services firm B2C2, told CoinDesk. 

“We are seeing increased trading activity across venues that support Tether tokens,” a Tether representative said. 

It’s possible, however, that the increased demand for USDT recently may not be driven by bitcoin but instead by some altcoins, such as solana (SOL) and terra (LUNA), whose trading volumes surged, according to Noelle Acheson, head of market insights at crypto prime broker Genesis Global Trading. Their main trading pair is USDT. (Genesis is a subsidiary of Digital Currency Group, which also owns CoinDesk.)

Related: USDC to Be Backed 100% by Cash, US Treasurys

The average trading volume of USDT against solana for the first 22 days in August stood at 386.6 million, up from a July average of 123.4 million and a June average of 290.7 million, according to CryptoCompare. The average trading volume of USDT against terra for the first 22 days in August was 320.2 million, up from a July average of 120.5 million and a June average of 98 million. 

“BTC’s price may be up, but trading volumes haven’t changed much,” noted Acheson. 

Others cited Tether’s increased transparency as another reason for the rebounding demand. In its new attestation published on Aug. 9, Tether provided more details than ever before on the composition of its $62.8 billion of reserves, including its long-questioned reserves of commercial paper (CP) and certificates of deposit (CDs). 

Roughly 49% of Tether’s $62.8 billion reserves are invested in commercial paper (CP) – typically short-term corporate debt – and certificates of deposit (CDs), out of which roughly 93% was rated A-2 and above, 5.5% at A-3 and 1.5% below A-3 as of June 30. 

The latest disclosure “could be the reason for the resumption of printing, alongside renewed investor confidence and demand,” Sean Rooney, head of research at crypto asset manager Valkyrie Investments, wrote to CoinDesk in an email. 

But for many, there’s still a lot of fear, uncertainty, and doubt (FUD) surrounding Tether’s reserves.

It will take “multiple years for all of the critics to be convinced,” Pike said. 

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El Salvador Will Not Require Bitcoin Acceptance, President Bukele Confirms

CoinDesk Crypto
5 years 1 month ago

El Salvador President Nayib Bukele confirmed that the use of bitcoin as legal tender will not be mandatory, in a Twitter thread on Monday. 

Echoing El Salvador’s finance minister, Alejandro Zelaya, who said the same thing last week, Bukele said the government would not force any of the nation’s residents to receive bitcoin as a form of payment.

“If someone wants to continue to carry cash, not receive a sign-on bonus, not win over customers who have bitcoin, not grow their business and pay commission on remittances, they can continue to do so,” Bukele wrote. 

Related: Market Wrap: Bitcoin Stalls Near $50K Ahead of Options Expiration Date

Bukele did not refer to Article 7 of the Bitcoin Law, which stipulates that all economic agents must accept bitcoin as a form of payment when offered by the person acquiring goods or services.

Ernesto Sanabria, a spokesman for Bukele, told CoinDesk that “the president has been clear in saying that the use of bitcoin is not mandatory.” 

Asked about a possible change to Article 7, Sanabria said he had already addressed the issue in his response. He did not specify whether the article will be eliminated or otherwise modified. 

On digital wallets to use bitcoin, Bukele said El Salvador residents “will be able to accept payments in bitcoin or in dollars, open a small business and manage it from there, receive money from family or friends and send and receive remittances without paying a single cent of commission to anyone.”

Related: Cuando China habló, bitcoin reaccionó. ¿Cuando lo hizo Estados Unidos? No tanto

“If they want to. If they don’t, just don’t download anything and that’s it,” he wrote.  

If bitcoin is received, it can be converted into U.S. dollars, left in a digital wallet or converted into cash at one of the 200 ATMs that will be available in the country, Bukele said, adding that “there will also be 50 branches to withdraw or deposit money.”

On the use of bitcoin for remittances, Bukele wrote that Salvadorans abroad will be able to send money instantly to family members living in the country. “You can send bitcoin (if you want) or you can send dollars, if you want.” 

“If you don’t want to, you can always go to Western Union and pay a commission. No problem at all,” Bukele said. 

Zelaya said last Tuesday that the use of bitcoin and digital wallets in El Salvador will be “totally optional,” and businesses that do not accept the cryptocurrency will not be penalized. 

Asked whether it was necessary to eliminate Article 7 from the Bitcoin Law, Zelaya asked why and did not expand on the subject. 

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Another US Bank Joins the Small List Willing to Serve Crypto Companies

CoinDesk Crypto
5 years 1 month ago

Customers Bank, based in West Reading, Pennsylvania, is joining the small list of FDIC-insured institutions in the U.S. that are willing to work with cryptocurrency businesses. 

The bank will compete against Silvergate in California and Signature in New York in offering crypto firms basic accounts as well as a blockchain-based platform for clients to instantly send each other dollars 24/7. 

“We are well-positioned to be a great third banking option that can offer a strong offering to the digital asset space,” said Cameron Somers, Customers Bank’s head of digital assets. “The main focus is to build a low cost deposit franchise very similar to what Signature Bank and what Silvergate Bank has done.”

Related: BankProv Launches Payments Network for Crypto Customers

Because of onerous anti-money-laundering (AML) and know-your-customer (KYC) requirements, most U.S. banks have been reluctant to work with cryptocurrency firms. The exchanges and other firms that serve the digital asset market, however, process high volumes of payments and typically seek multiple banks to store and move their users’ fiat. 

“Customers continue to try to find ways to be involved, engaged, and interested in the cryptocurrency world,” said Sam Sidhu, Customers Bank’s vice chair and chief operating officer. “Some banks might offer rewards or custody services to consumers. We are focused on the businesses that may directly or indirectly service those customers.”

Tokenized dollars

Ten to 15 clients will begin testing Customers’ blockchain payments platform from a technology provider called Tassat in September before the bank opens the service up to the rest of the crypto ecosystem in October. 

“Once we have a fully functional ecosystem with a number of different types of institutions on that platform then the idea would be to continue to expand from there and then potentially build on some additional products and features within our offering,” Somers said.

Related: Silvergate Took $4.3B in Deposits From Digital Currency Customers in Q2

The Tassat Pay Network provides real-time blockchain payments by tokenizing U.S. dollar deposits and moving them between digital wallets on Tassat’s platform. Conceptually, it is similar to JPMorgan Chase’s JPM coin, which enables the megabank’s corporate customers to send each other money instantaneously using a private blockchain.

Similarly, Tassat’s blockchain can only facilitate payments between clients of the banks using it, though the platform is connected to traditional payments systems like the automated clearing house (ACH) and Fedwire.

The on-chain fiat payments will be free, in contrast to the fees for sending payments via ACH, and Customers Bank said it expects to pay little or no interest on these firms’ deposits. “So they’ll be the raw material for our bank to provide loans,” Sidhu said. 

Customers Bank also plans to offer Tassat Pay to non-crypto clients in accounting, alternative energy, commercial real estate, healthcare, hospitality, insurance and manufacturing, Sidhu said.

Main Street banking

With $19.6 billion in assets, Customers Bank is 0.52% the size of JPMorgan, and regional institutions like this are the sweet spot for Tassat.

The partnership is a first for Tassat outside powering Signature Bank’s Signet. The fintech provider is courting banks with deposits between $5 billion to $200 billion, said Tassat CEO Ron Totaro. (Similarly, digital asset management firm NYDIG is targeting payments and banking tech providers to help smaller banks compete in the crypto space). 

“The nation’s largest banks are experimenting with blockchain to launch new services and attract deposits and customers, often away from small and midsize institutions,” Totaro said. “What they have—that small and midsize institutions don’t—is an expansive budget, teams and ability to experiment. In contrast, small and midsize banks need to see ROI from every cent they spend on technology.” 

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CoinDesk

Crypto Funds Snap 6 Weeks of Outflows as Markets Rally

CoinDesk Crypto
5 years 1 month ago

Crypto funds saw $21 million of net inflows last week as digital-asset markets rallied, pushing the total assets under management (AUM) to $57.3 billion, the highest since May, a new report shows. 

The latest data reflected a reversal after six consecutive weeks of outflows, according to the report Monday by digital-asset manager CoinShares. 

Funds focused on Solana’s SOL token saw the largest inflow among all digital assets, at $7.1 million last week, the report shows. The token hit an all-time high of $82 on Saturday, according to Messari. 

Related: Market Wrap: Bitcoin Stalls Near $50K Ahead of Options Expiration Date

Investors redeemed $2.8 million from bitcoin-focused funds last week, the seventh consecutive week of outflows, despite the largest cryptocurrency’s price upturn. The run matched the streak of outflows recorded in early 2018, the report noted. That was just before the “crypto winter,” when cryptocurrency prices tanked and failed to return to all-time highs for more than two years.

Crypto funds focused on ethereum netted $3.2 million of inflows last week.  

Funds focused on Cardano’s ADA token saw net inflows of $6.4 million, while litecoin funds brought in $1.8 million and polkadot funds netted $1.1 million.

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