CoinDesk Crypto

A former employee of the now-defunct New Zealand-based cryptocurrency exchange Cryptopia has pled guilty to charges of stealing $245,000 (US$171,969) in crypto.

A district court has afforded an interim name suppression to the ex-employee who admitted to two charges including theft by a person in a special relationship and theft over $1,000, local news outlet Stuff reported Monday.

During his time at the exchange, the unnamed employee created copies of Cryptopia’s private keys, saving them to a USB storage drive before taking it home and uploading the data to his personal computer.

Related: UK Court Orders Bitcoin.org to Remove White Paper Following Craig Wright Lawsuit

At its height, the New Zealand-based exchange, now in liquidation following a disastrous hack in 2019, employed more than 80 staff while servicing 1.4 million customers globally.

Following the hack, all customer accounts, totaling more than $100 million in today’s prices, were frozen after more than $17 million in ether and other crypto were stolen. Liquidation proceedings were then established in an attempt to recover affected former users of the exchange.

The man, whose charges are unrelated to the 2019 hack, then told Cryptopia’s liquidators, Grant Thornton, in September that he had deposited bitcoin into an old Cryptopia wallet and requested they be returned, Stuff reported. The man also admitted to having returned a portion of the stolen funds, offering to pay the remainder over time.

Grant Thornton, upon reviewing a number of transactions, found that 13 bitcoin had been siphoned off from a number of wallets. The liquidator also discovered two of those bitcoin had been put through a crypto mixer in attempt to conceal their provenance.

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The total amount of bitcoin was worth about $235,000 ($US164,950) at the time of the transactions. It was later revealed a further $10,000 (US$ 7,019) in various other crypto had also been taken. Upon hearing that Grant Thornton was reviewing the exchange’s old deposit wallets the man confessed.

The former employee then told the liquidators he intended to return all of the stolen funds provided he was granted assurance he would not be prosecuted and did so the following day telling his partner he’d “given it all back.”

“The defendant admitted that he was frustrated with Cryptopia but also motivated by the belief that he could get away with the theft as he thought nobody would ever check the old deposit wallets,” a summary of the facts, as reported by Stuff, reads.

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Tranchess Protocol, a chess-themed DeFi asset management platform, has raised $1.5 million in a seed round led by Three Arrows Capital and Spartan Group.

Other notable investors include Binance Labs, Longhash Ventures, IMO Ventures, and key opinion leaders wishing to remain anonymous, according to a press release on Monday.

Money raised will go towards furthering the project’s expansion and aspirations of becoming a multi-chain solution while completing the development of its decentralized autonomous organization (DAO).

Related: Aave, Fireblocks and Galaxy Explore Next Steps Toward Permissioned DeFi

Tranchess, which has been under development for nearly a year, launched June 24 via Binance’s Smart Chain — an ecosystem designed for budding DeFi apps running smart contracts.

In essence, the protocol seeks to provide a risk/return matrix from a single main fund, known as Queen, that tracks a specific underlying crypto asset.

The protocol has begun by tracing bitcoin‘s movements, with intentions of adding more assets further down the line. The fund will attempt to service a variety of clients with varying risk appetites because a user may split their fund into two sub-funds, Rook and Bishop, per the release.

Bishop, being a yielding tranche, has no exposure to bitcoin’s price while the Rook fund, being a leveraged tranche, has twice the exposure to price movements in the underlying crypto.

Related: BaFin-Licensed DeFi Firm Swarm Starts Onboarding $15M of Pledged Liquidity

Once a user splits up their Queen fund into these sub-funds, users can then sell one fund instantaneously leaving them with either a fixed income or leveraged exposure to bitcoin, a spokesperson for the project told CoinDesk via Telegram.

“The main fund, Queen, currently tracks bitcoin and can be split into 0.5 Bishop tokens and 0.5 Rook tokens,” said the spokesperson.”Bishop tokens purely earn more yield and does not track bitcoin at all, while Rook tokens earn smaller yield but are essentially a 2x leverage token for bitcoin.”

Its chess-inspired theme borrows from some concepts of the game including the implementation of game theory of the Bishop interest voting system allowing users to vote on how much interest is generated in the fund. Meanwhile, the governance token — used to cast votes and make decisions regarding the protocol — is named Chess.

“We believe the yields offered to both bitcoin and stablecoin-denominated investors via this unique way of matching will find tremendous product-market fit,” said Su Zhu, co-founder of Three Arrows Capital.

The project said it was aiming to hand over management of the protocol to the DAO by Q4, 2021 along with accompanying 2.0 apps.

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Wealthy investors look to be making a comeback into the bitcoin market, a blockchain metric that warned of a price drop in early May shows.

• The number of coins held by whale entities – clusters of addresses controlled by a single network participant holding 1,000 to 10,000 BTC – rose by over 80,000 to 4.216 million BTC on Friday, hitting the highest level since May.
• The tally remained largely unchanged on Saturday, according to data provided by Glassnode.
• The number of whale entities has also jumped to a three-week high of 1,922.
• The renewed accumulation by whale entities is good news for the market, as these wealthy investors played a significant role in powering bitcoin higher from $10,000 to nearly $60,000 during the five months to February 2021.
• The balance held by whale entities rose in tandem with the price during the bull run, hitting a record high of 4.542 million on Feb. 8.

• Whales became sellers in the subsequent months, taking the wind out of the bull run, and by early May, their bitcoin stash had dropped by 8% to 4.17 million BTC.
• Bitcoin mostly remained coiled in the range of $50,000 to $60,000 during that period, barring a brief spike to a record high of $64,801 in mid-April.
• The price action highlighted the inability of smaller investors to do the heavy lifting and signaled the potential for a notable price correction. Bitcoin fell by 35% in May, hitting lows near $30,000, and dipped further to $29,031 in June, per CoinDesk 20 data.
• The latest uptick in the whale balance suggests the bottom may have been reached.
• The cryptocurrency is trading near $35,500 at press time, representing a 2.3% gain on the day.

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The Philippine Stock Exchange (PSE) wants to be the platform for trading crypto assets when the country’s regulators issue long-awaited rules governing the practice, according to a report from CNN Philippines. 

PSE President and CEO Ramon Monzon told CNN that management first discussed the idea of setting up a domestic crypto exchange two weeks ago. The PSE has both the trading infrastructure and investor protection safeguards that Monzon said are necessary to trade cryptocurrencies.

Monzon told CNN that mounting interest in cryptocurrencies means the Philippines cannot ignore them anymore. The PSE is currently awaiting guidelines from the Philippine Securities and Exchange Commission (SEC), which began seeking comments from banks, investors, and the public in 2019 on whether the country should begin building a domestic crypto exchange.

Related: Are We on the Verge of a New Regulatory Era in Crypto?

The country’s government has historically been friendly toward digital assets. The Philippine Central Bank, though it has been outspoken about not considering the development of a central bank digital currency (CBDC) anytime soon, has licensed over a dozen crypto exchanges to operate in the country. And many Filipinos have become interested in crypto as a way to make money in the country’s struggling economy, with play-to-earn crypto mobile games like Axie Infinity becoming a popular way to earn extra income. 

Monzon told CNN that he believes the volatility of cryptocurrencies is what makes them attractive, which is why trading should happen under the watch of the PSE. 

“Instant riches could be instant poverty too,” said Monzon.

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Vietnam’s Prime Minister has asked the State Bank of Vietnam (SBV) to pilot cryptocurrency implementation from 2021 until 2023, according to a Viet Nam News report.

• Prime Minister Pham Minh Chinh signed the “Decision No.942/QD-TTg” approving the country’s e-government development strategy, which involves assessing artificial intelligence, big data, augmented reality, virtual reality and blockchain technology.
• The cryptocurrency pilot program is expected to help the government discover the pros and cons while developing an appropriate management mechanism, Huynh Phuoc Nghia, deputy director of the Institute of Innovation under the University of Economics HCM City, told the publication. 
• Cashless payments are increasing in Vietnam and the recognition of digital currencies by the central bank would help accelerate this process, the deputy director said. “Digital money is an inevitable trend,” he said.
• Previously, the SBV has stressed that cryptocurrencies are not legally recognized in Vietnam.
• In 2018, the SBV banned commercial banks and payment service providers from making transactions with crypto, arguing that such activities could increase the risk of money laundering, terrorism financing and tax evasion.

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U.K.-based digital bank Revolut is in “detailed talks” with SoftBank about a fundraising round that could value the firm between $30 billion and $40 billion, according to a Sky News report. 

• Revolut and its advisers have asked investors at SoftBank’s Vision Fund 2 to submit proposals for an investment of between $750 million to $1 billion with a deal expected to be “some weeks” away.
• Last month, Bloomberg reported that the firm was in the early stages of talks with investors about a deal that could see the 6-year-old digital bank valued at more than $20 billion.
• While it was unknown who else Revolut was in talks with, the size of the proposed Softbank investment would seem to indicate that only Tiger Global Management and Dragoneer Investment Group would have the wherewithal to make similar proposals, Sky News said.
• The SoftBank Vision Fund 2 has backed firms such as Uber Technologies as well as the buy-now-pay-later platform Klarna.
• Last week, Mercado Bitcoin, the largest bitcoin exchange in Brazil, raised $200 million in a Series B round from the SoftBank Latin America Fund. 
• Revolut first began offering crypto trading back in 2017.

Read more: Revolut Adds Dogecoin to Crypto Offering

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Marathon Digital Holdings generated 265.6 bitcoins during June, a 17% increase over the previous month, the company said in a press release Friday. That total brought the publicly traded bitcoin mining company’s Q2 haul to 654.3 bitcoins, more than three times the nearly 191.7 bitcoins it produced over the first three months of 2021.

Las Vegas-based Marathon said that it now holds approximately 5,784 bitcoins at a value of $201.6 million based on a July 1 price of $34,855 per bitcoin, including 4,182 bitcoins that it bought in January as part of its effort to become what former CEO Merrick Okamoto called a “pure-play bitcoin investment option.” Marathon is scheduled to report earnings on Aug. 13.

The company said that it had installed 1,740 miners in June bringing its fleet to 19,395 miners. Earlier this year, the company promised to reach a goal of installing more than 100,000 miners by the end of Q1 2022 that will boost its hash rate power to 10.37 exahashes per second (EH/s). The company’s current miners generate 2.09 EH/s).

Related: Reinvent Money to Reward Virtue

Marathon also said that it had received 18,702 S-19 Pro ASIC miners from Bitmain this year with an additional 1,056 Pro ASIC miners in transit, and that it had completed construction of containers for mining rigs at its Hardin, Montana, facility.

The company will install 12,000 miners at the Hardin location by the end of September and then begin placing 73,000 miners at a 300-megawatt facility in Texas hosted by Compute North.

Marathon’s current CEO Fred Thiel said in the press release that Marathon had performed “maintenance and upgrades” on systems before deliveries of miners accelerated, and in anticipation of a decline in global hashrate. “We are now better prepared to receive the large upcoming shipments and take advantage of expected favorable mining conditions,” Thiel said.

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The Bitcoin blockchain has undergone its biggest-ever drop in mining difficulty, as the network’s automatic stabilizing mechanism kicked in following a strict crackdown by China on the country’s cryptocurrency industry.

At 6:25 UTC Saturday, mining difficulty plunged by nearly 28% at block 689,471.

The steep decline in difficulty led to corresponding plunge in transaction fees, which in turn may have contributed to a $1,000 surge in the price of the leading cryptocurrency on anticipation of a spurt in transactions, according to one observer. In recent trading, the price of BTC was at $34,738, up 3.58% in the last 24 hours. Before the reduction in mining difficulty, BTC was about $33,700.

Related: Reinvent Money to Reward Virtue

Charlie Morris, CIO of ByteTree Asset Management, tweeted hours after the difficulty cut that fees had dropped to $6 from $10 yesterday.

The adjustment marks the third straight decline in mining difficulty, the first time such a trend has happened since December 2018. On May 29 and June 13, the mining difficulty dropped by 16% and 5%, respectively, according to mining service provider BTC.com.  

What is Bitcoin mining difficulty?

Bitcoin’s difficulty is measured using an internal score that began at 1 (when Satoshi started mining at the easiest level). It is programmed to increase or decrease incrementally depending on how many miners are competing on the network. It is currently scored at 14,363,025,673,659, down from 19,932,791,027,262.

Blocks are added to the Bitcoin blockchain at a regular and predictable rate: one block every 10 minutes or so. Block time measures how long it takes to create a new block, but that pace can vary, depending on the number of miners on the network and the speed of their computers. When there are more miners competing to “find” the next block, and earn the 6.125 BTC reward, then those blocks tend to be solved more quickly. However, when miners drop off the network, leaving fewer miners to compete, block times can slow down.

Related: Marathon Digital Reports 17% Increase in Bitcoin Production for June

That’s what happened as Chinese authorities pushed to tamp down cryptocurrency trading and mining, since the country has historically hosted such a large portion of the Bitcoin network’s hashpower. Local authorities in China’s Xinjiang Uygur Autonomous Region, the Inner Mongolia Autonomous Region, Qinghai province and Sichuan province followed the top-down initiative by announcing plans to shut down some or all bitcoin mines.

During this most recent difficulty period, the mean hashrate, a measure of total computational power contributed to the blockchain through mining, stood at 87.7 exahashes per second, the lowest since December 2019. That’s down from about a peak of about 180 exahashes per second in mid-May.

As a result, Bitcoin’s mean block time slowed significantly, with some blocks taking as long as 23 minutes on Sunday, June 27, though the network appears to have sped up slightly since then.

The Bitcoin algorithm is programmed to self-adjust the difficulty level every 2,016 blocks, or roughly every two weeks, in order to maintain a target block time of 10 minutes.

So that’s what happened overnight, as the blockchain’s automatic stabilizer mechanism kicked in to incentivize more miners to join the network.

Today’s difficulty drop will make it easier for the remaining miners to find blocks at a rate closer to the 10-minute target.

Though a decline in Bitcoin’s hashrate means it is slightly less resilient against attacks, the news bodes well for active miners.

“Difficulty adjustment has a few interesting properties in the real world too, particularly for miners,” said Will Foxley of Compass Mining. “When difficulty adjusts downwards, you make more bitcoin if you can stay online. When it goes up, you make less as more miners are participating.”

“Miners who remain operational are likely to become even more profitable over the coming weeks, unless price corrects further or migrating hashpower comes back online,” Glassnode wrote in a report. 

UPDATED (July 3, 14:44 UTC): Adds price reaction, Morris comment on fees.

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The United States is the world’s most “crypto-ready” country, according to new research published by crypto education platform Crypto Head.

Crypto Head’s 2021 Crypto Ready Index considered the number of crypto ATMs in each country and their accessibility, the legality of crypto and whether banks can use it, and the number of online searches for crypto-related terms in calculating a “crypto-ready” index for 200 countries and territories.

The United States ranked first, with a crypto-ready score of 7.13 out of 10. Cyprus ranked second and Singapore third, both scoring under 6.50. To be sure, the study is limited in scope, failing to touch on a number of factors that could shape a country’s readiness for wider-spread usage of cryptocurrencies, including its tax laws and wider regulatory environment.

Related: Network to Undergo Biggest Difficulty Adjustment Ever; BMC Says 67.6% of North American Bitcoin Mining Is Sustainable

According to data collected by Crypto Head, the U.S. has 17,436 crypto ATMs – nearly 16,000 more than the second-ranked country in this category, Canada. That number is growing rapidly in the U.S. as bitcoin ATM companies like Coin Cloud rapidly expand installations nationwide. The rise underscores bitcoin’s increasing popularity as a means of payment.

Alongside the number of ATMs, Crypto Head also looked at the number of people per ATM. The United States placed first here as well, with a crypto ATM for every 19,023 people, compared to Canada’s second-place ratio of one ATM for every 26,265 people. Japan ranked last with a single bitcoin ATM for its 126 million people, although 24 countries did not have a crypto ATM.

Crypto Head also awarded the U.S. and 39 other countries with particularly favorable legal environments for crypto a maximum two points – one point if crypto was legal to own and one point if it was allowed to be used in banks.

Lastly, Crypto Head also examined the number of cryptocurrency online searches compared to the previous year’s data to indicate rising interest among each country’s population.

Related: Investors Cashing Out of Grayscale Bitcoin Trust Might Bring Market Boost

Cyprus ranked first with nearly 34,000 crypto searches for every 100,000 people – an almost 137 percent increase from the year before. In many countries, interest in crypto is also growing rapidly. Romania saw the largest year-on-year increase in crypto searches at 331 percent, with countries like Greece, Canada, the United Kingdom and Saudi Arabia not far behind.

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Bitcoin was mostly flat on Friday as buyers and sellers appear to be in a stalemate. The world’s largest cryptocurrency is up about 6% over the past week and is expected to hold support above $30,000 into the weekend. 

In traditional markets, the S&P 500 and Nasdaq reached all-time highs after a better-than-expected U.S. jobs report on Friday. For now, sentiment for risky assets appears to be alive as well as volatility declines in both traditional markets and bitcoin. 

Latest prices

Cryptocurrencies:

• Bitcoin (BTC) $33228, -0.1%
• Ether (ETH) $2091, -0.59%

Related: Fed’s Powell May Have Met With Coinbase CEO in May

Traditional markets:

• S&P 500: 4352.4 +0.75%
• Gold: $1786.97, 0.58%
• 10-year Treasury yield closed at 1.437%, compared with 1.463% on Thursday

Options volatility

Bitcoin’s implied volatility remains elevated despite rangebound trading since mid-May, according to options data provider Skew. This suggests traders are not complacent given the recent stabilization in price. There is still some uncertainty present in the options market at the beginning of July. 

“$34,000 is a key level for accelerated moves to the up or downside with highest gamma exposure for both puts and calls,” Pankaj Balani, CEO of Delta Exchange, wrote in an email to CoinDesk.

“As spot trades lower, the market has yet to find its footing,” Balani wrote. “As long as players write upside exposure in size, a rangebound play with more downside risk seems likely.”

Bitcoin lags crypto stocks

Related: USDC on Tron Blockchain Surpasses $100M 2 Days After Public Unveiling

Crypto related stocks such as Coinbase (NASDAQ: COIN) and Riot Blockchain (NASDAQ: RIOT) have outperformed bitcoin over the past few months, albeit within a tight range. Some traders are looking for a breakout or breakdown in stocks as a leading signal for bitcoin in the coming weeks. 

COIN registered a downside exhaustion signal in June, confirmed by DeMark indicators. The stock will need to see a break above $260 to shift the downtrend since its April debut.

Cashing out of Grayscale Bitcoin Trust

The bitcoin market could get a boost this month from the expiration of investor restrictions on the sale of shares in the Grayscale Bitcoin Trust (GBTC), the world’s largest cryptocurrency fund. Grayscale is owned by the Digital Currency Group, which is also the parent company of CoinDesk.

Some digital asset analysts and investors say it’s possible some of these investors might need to enter the market to buy bitcoin in order to repay cryptocurrency loans they used to finance their original purchases of the GBTC shares.

Altcoin roundup

• USDC on Tron: The circulating supply of USD coin (USDC) on the Tron blockchain has surpassed 108 million in less than a month, according to blockchain data. This could be another sign that crypto traders are increasingly turning to blockchains that provide cheaper transaction fees with faster speed than what’s found on Ethereum.
• Grayscale buys ADA: Grayscale Investments added ADA, the native token of the Cardano blockchain, to its Digital Large Cap Fund. The digital asset manager has sold some existing constituents of the fund and used the proceeds to purchase ADA.

Relevant news

• Fed’s Powell May Have Met With Coinbase CEO in May
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Other markets

Most digital assets on the CoinDesk 20 ended up lower on Friday.

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

the graph (GRT) +7.39%

cardano (ADA) +3.61%

nuCypher (NU) +3.35%

Notable losers: 

eos (EOS) -1.73%

yearn Finance (YFI) -1.36%

stellar (XLM) -1.32%

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The circulating supply of USD coin (USDC) on the Tron blockchain has surpassed 108 million in less than a month, according to blockchain data. This could be another sign that crypto traders are increasingly turning to blockchains that provide cheaper transaction fees with faster speed than what’s found on Ethereum.

The achievement came just a day after Circle, the crypto-native financial service firm behind the dollar-pegged stablecoin, said it added support for USDC on Tron. One of the stated goals of doing so is “enabling [USDC] growth in Asia and around the globe,” according to Circle’s website.

Blockchain data shows that the first transfer of USDC on Tron was on June 11.

Related: Market Wrap: Bitcoin Rangebound Into the Weekend, Lags Crypto Stocks

A stablecoin, USDC is pegged 1-to-1 to the U.S. dollar, with each token redeemable for an equal number of greenbacks.

Crypto influencer Justin Sun’s Tron blockchain has already gained traction for the rapid growth of the largest stablecoin by asset cap, tether (USDT), on the network. As CoinDesk reported, there are more tether on Tron than on Ethereum, the blockchain of ether (ETH), as traders favor blockchains that provide faster and cheaper transactions.

While tether is the most traded crypto asset, there’s been a fast growing adoption of USDC on decentralized finance (DeFi), according to data from CoinGecko. Meanwhile, data from Glassnode indicates that nearly half of USDC supply is currently used in smart contracts.

The big difference from how USDC is used on Ethereum is that on Tron it’s mostly used for inter-exchange transfers, said Ryan Watkins, research analyst at Messari. He noted that nearly all of the USDC supply on Tron is concentrated in the top 10 addresses.

Related: Market Wrap: Bitcoin Under Pressure Despite Improving Sentiment

Tether’s and now USDC’s growth on Tron could be an indicator that “a lot of exchanges just move stablecoins over to Tron instead of Ethereum to avoid fees,” Watkins said.

By press time, Justin Sun and Circle did not immediately respond to requests for comments about USDC’s development on Tron. The article will be updated when a response is received.

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Institutional investors are diving deeper into the crypto markets. This is a welcome sign for the industry as China’s clampdown on crypto mining continues.

The bitcoin market could get a boost this month from the expiration of investor restrictions on the sale of shares in the Grayscale Bitcoin Trust (GBTC), the world’s largest cryptocurrency fund.

Some digital-asset analysts and investors say it’s possible some of these investors might need to enter the market to buy bitcoin – to repay cryptocurrency loans they used to finance their original purchases of the GBTC shares.

“Lots of bearish chatter around GBTC unlocks whilst conveniently ignoring that in-kind subscriptions funded by debt will ultimately translate into spot buying,” crypto services provider Amber Group tweeted. 

Related: New Report Places United States at Top of ‘Crypto-Ready’ Countries

The view contrasts with a forecast published last month by analysts at JPMorgan, the largest U.S. bank, who argued the end of the lockup period would weigh on the GBTC shares and bitcoin.

“Selling of GBTC shares exiting the six-month lockup period during June and July has emerged as an additional headwind for bitcoin,” the JPMorgan strategists, led by Nikolaos Panigirtzoglou, wrote on June 24. The dynamic would lead to “downward pressure on GBTC prices and on bitcoin markets more generally.”

But with the pace of unlockings now poised to increase, crypto-native analysts are pushing back against the narrative. While the selling of GBTC shares could lead to a deeper discount and drive away fresh capital, its negative impact is likely to be mitigated by the repurchases of bitcoin in the spot market. (Grayscale is a unit of Digital Currency Group, of which CoinDesk is an independent subsidiary.)

“The biggest unlocks are happening over the next two months, which could lead to heavy selling of GBTC on the open market,” Jeff Dorman, chief investment officer at the cryptocurrency-focused asset manager Arca, wrote this week in a newsletter.

Related: Market Wrap: Bitcoin Rangebound Into the Weekend, Lags Crypto Stocks

“As funds unwind this trade,” he wrote, “it could actually put BUY pressure on bitcoin, not sell pressure, as those who sell GBTC will have to buy back bitcoin to cover the short leg of the trade.”

The unwind could be a significant event partly because the trade itself has been so popular in recent years and into early 2021. According to JPMorgan, the trust saw record inflows of $2 billion in December, followed by $1.7 billion in January. 

Here’s how it worked: Accredited investors (mostly institutions and wealthy traders) could subscribe to GBTC shares directly at the fund’s net asset value (NAV), which is linked closely to the spot price of bitcoin. They did so in daily private placements by depositing owned or borrowed bitcoin or U.S. dollars. After a six-month lockup, those shares could be sold in the secondary market – including to retail investors.

For a long time, and due to a variety of reasons, the GBTC shares traded at a premium of 40% or more to the spot bitcoin price. So for the big investors, it looked like a surefire way to profit – especially with market sentiment quite bullish. There was little fear of the premium falling sharply or flipping to a discount, reducing the net yield on the carry trade.

But the bitcoin market has soured in recent months and in February the GBTC premium flipped to a discount, leaving scant motivation for new investors to attempt the once-popular trade. As of Thursday, GBTC shares traded at a discount of 10.5%, per data provided by Skew.  

But it’s now been almost six months since the trade stopped being popular, so the unlocks are coming into play.

Investors who entered the trade by locking in borrowed coins might now need to repurchase those to repay the loan. Similarly, those who deposit their bitcoin holdings need to buy back coins to return to their base portfolio. 

So assuming supply-side factors remain constant, the repurchases associated with Grayscale unlockings could end up putting upward pressure on bitcoin prices. 

The January tranche of GBTC share unlocks is scheduled for this month and is likely to release nearly 40,000 GBTC shares, according to data source bybt.com.

The biggest single-day unlock is slated to happen on July 18, with the release of shares worth 16,000 BTC. Upon unlockings, carry traders could snap up bitcoin from the spot market to repay loans or return to the original portfolio position, lifting bitcoin higher. 

The cryptocurrency is currently trading near $33,000, down 4.5% for the week. 

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Before banks and financial institutions can get involved in automatic anonymous lending, permissioned versions of decentralized finance (DeFi) will have to emerge – and with it, a system of whitelisted and blacklisted wallet addresses, according to Aave founder Stani Kulechov.

Financial institutions, including banking majors, see the power of DeFi and the potential threat to existing business models. What they don’t see is the ability to carry out know-your-customer (KYC) checks in the realm of pseudonymous lending pools and automated market making. 

“We believe that creating this kind of ability of whitelisting and blacklisting addresses regarding this institutional market makes it easier to scale in institutions, because it lowers the risk in general,” Kulechov said this week in a webinar called “Next Steps for Institutional DeFi.” 

Related: BaFin-Licensed DeFi Firm Swarm Starts Onboarding $15M of Pledged Liquidity

Also on the panel with Kulechov were Fireblocks CEO Michael Shaulov and Galaxy Digital CEO Michael Novogratz. 

Kulechov said permissionless DeFi will always exist, but there will also be “layered and tailored” DeFi made up of private pools and whitelisted markets. Fireblocks is assisting Aave to explore how such markets can be deployed.

“We are able to basically operate within a network where we already know the participants,” said Shaulov. “We are able to basically validate and vet them into the network and essentially create this sort of gated community.”

This would be “phase one,” Shaulov said, leveraging the multi-party computation (MPC) used by Fireblocks. “We can basically then sort of whitelist them essentially, into those pools and allow them to interact with one another, while guaranteeing that they’re sort of isolated from the general pools,” he said.

Related: Cream Finance Announces Integration With Polygon

Novogratz of Galaxy pointed to two options going forward: the “walled garden” approach being explored by Fireblocks and Aave, and what he called the “chain surveillance option” where enough work can be done to figure where transactions are coming from.  

“I think both of those are going to work to give a prophylactic to the user,” Novogratz said, adding: 

“The $64,000 question for anyone who’s running protocols is, are the regulators going to say, ‘Hey, we love you for being at 82% or 46% regulatory compliant, with your good customers, with your white labels. But we really don’t like the blacklist customers.’ So will businesses like Aave have to say, ‘We’re not going to be open and permissionless like we were. We’re going to have some form of KYC.’”

Watch the full conversation:

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Before banks and financial institutions can get involved in automatic anonymous lending, permissioned versions of decentralized finance (DeFi) will have to emerge – and with it, a system of whitelisted and blacklisted wallet addresses, according to Aave founder Stani Kulechov.

Financial institutions, including banking majors, see the power of DeFi and the potential threat to existing business models. What they don’t see is the ability to carry out know-your-customer (KYC) checks in the realm of pseudonymous lending pools and automated market making. 

“We believe that creating this kind of ability of whitelisting and blacklisting addresses regarding this institutional market makes it easier to scale in institutions, because it lowers the risk in general,” Kulechov said this week in a webinar called “Next Steps for Institutional DeFi.” 

Related: BaFin-Licensed DeFi Firm Swarm Starts Onboarding $15M of Pledged Liquidity

Also on the panel with Kulechov were Fireblocks CEO Michael Shaulov and Galaxy Digital CEO Michael Novogratz. 

Kulechov said permissionless DeFi will always exist, but there will also be “layered and tailored” DeFi made up of private pools and whitelisted markets. Fireblocks is assisting Aave to explore how such markets can be deployed.

“We are able to basically operate within a network where we already know the participants,” said Shaulov. “We are able to basically validate and vet them into the network and essentially create this sort of gated community.”

This would be “phase one,” Shaulov said, leveraging the multi-party computation (MPC) used by Fireblocks. “We can basically then sort of whitelist them essentially, into those pools and allow them to interact with one another, while guaranteeing that they’re sort of isolated from the general pools,” he said.

Related: Cream Finance Announces Integration With Polygon

Novogratz of Galaxy pointed to two options going forward: the “walled garden” approach being explored by Fireblocks and Aave, and what he called the “chain surveillance option” where enough work can be done to figure where transactions are coming from.  

“I think both of those are going to work to give a prophylactic to the user,” Novogratz said, adding: 

“The $64,000 question for anyone who’s running protocols is, are the regulators going to say, ‘Hey, we love you for being at 82% or 46% regulatory compliant, with your good customers, with your white labels. But we really don’t like the blacklist customers.’ So will businesses like Aave have to say, ‘We’re not going to be open and permissionless like we were. We’re going to have some form of KYC.’”

Watch the full conversation:

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Greenidge Generation said it plans to expand its bitcoin mining operations by adding a facility in Spartanburg, South Carolina. It already has an operation in New York.

• Mining at the site, previously a printing plant, will start later this year or early 2022.  
• Greenidge Generation said it is committed to  “environmental leadership” in cryptocurrency operations, and two-thirds of the electricity at the site is sourced from zero-carbon sources such as nuclear power.
• It plans to lease the site for 10 years from LSC Communications, an Atlas Holdings company.
• “This is an important step in Greenidge’s strategy to build upon our unique expertise in environmentally sound bitcoin mining at additional locations across the country,” CEO Jeff Kirt said.

Read more: Greenidge to Merge, Becoming First Publicly Traded Bitcoin Miner With a Power Plant

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Hedge fund Nickel Digital Asset Management put its flagship arbitrage-strategy fund largely into cash during the crypto market downturn, Bloomberg reported.

• The Digital Asset Arbitrage Fund, which launched in 2019, focuses on crypto assets. It has seen positive monthly returns since its inception and has gained about 13% this year, Bloomberg said.
• The May sell-off in crypto saw a number of leveraged positions, especially those of retail investors, with losses.
• Anatoly Crachilov, co-founder of the hedge fund, said he expects the doldrums will end soon because institutional investors are increasingly interested in the assets.
• “The sideways market conditions throughout the month led us to exercise financial discipline and keep powder dry until risk/reward of re-emerging market opportunities warrant efficient deployment of capital,” Crachilov said.

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Grayscale Investments added ADA, the native token of the Cardano blockchain, to its Digital Large Cap Fund.

• The digital-asset manager has sold some existing constituents of the fund and used the proceeds to purchase ADA, an announcement Friday said.
• The addition comes as part of Grayscale’s quarterly rebalancing of the fund. In April, Grayscale added Chainlink’s LINK token.
• Cardano is a proof-of-stake blockchain that aims to surpass the scalability and efficiency of Ethereum.
• ADA has risen more than 600% year to date, and is sitting at $1.36, up 1.81% in the last 24 hours at press time.
• Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.

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Bling, a mobile-game platform that enables bitcoin rewards, announced on Friday that it closed a seed funding round with participation from Coinbase Ventures. 

Bling’s platform currently consists of six games, as well as a software development kit (SDK) it will begin offering to other mobile game developers that includes a bitcoin rewards system, fraud detection and user value detection. Bling’s bitcoin rewards system uses Coinbase as a cash-out mechanism, and users must create a Coinbase wallet before they can earn any bitcoin rewards. 

Amy Wan, Bling’s co-founder and CEO, told CoinDesk the strategic investment from Coinbase Ventures was less about money and more about formalizing the partnership between the two companies and ensuring an “open line of communication” between them. 

Gaming on-ramp

Related: CoinFund Leads $2.3M Investment in Esports Startup Trying to Bring Crypto to Gamers

Coinbase Ventures’ participation in Bling’s seed round is part of a growing trend of investment into companies that have a user base that is crypto-curious but not yet crypto-savvy. 

As crypto exchanges compete for market share, newcomers to the space are a hot commodity. And for Coinbase, which derives most of its revenue through comparatively high trading fees, it needs to win the loyalty of new users to keep shareholders happy.

Bling growth plans

Bling will use the money generated from the seed round to grow its team and make more games.

Wan also told CoinDesk that Bling, which currently has over 5 million registered users, will also begin advertising its games for the first time. 

Related: Animoca Completes Funding Round, Gets an Extra $50M From Coinbase, Samsung

In January 2020, Bling’s first game, Bitcoin Blast, was removed from the Google Play Store but reinstated after Wan and fans of the game took to Twitter. 

“The third-party platforms continue to exercise a lot of influence in how crypto startups can or cannot take off,” Wan told CoinDesk. “With third-party platforms, there’s a lot of enclosed space, and there’s always risk. But so far we’ve been pretty much able to manage all that.”

Correction (July 2, 13:51 UTC): Coinbase Ventures invested in the round but did not lead it, as was previously reported. The headline has been modified.

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Jobs in the U.S. rose by 850,000 in June, above the consensus estimate for a gain of 706,000, the Labor Department reported Friday. 

The main question now for markets and economists is whether the positive June report could encourage the Federal Reserve to taper its monthly asset purchases – a form of monetary stimulus – more quickly. There’s a raging debate over the matter currently ongoing within the central bank over whether the U.S. central bank needs to throttle back from the stimulus as the economy accelerates out of the pandemic, to keep inflation from getting too hot.

Bitcoin prices have risen over the past year as many investors bet that the cryptocurrency could work as a hedge against inflation. Assuming the tapering starts sooner, bitcoiners would no longer be able to count on the Fed bringing more liquidity to the markets through quantitative easing and giving investors the liquidity to invest more in riskier assets.

Related: Bitcoin Set for Record Second-Quarter Price Drop

The early take was that the jobs report wasn’t strong enough to change the Fed’s trajectory.

“In short, these data shouldn’t change anyone’s mind,” Ian Shepherdson, chief U.S. economist for the forecasting firm Pantheon, wrote Friday in a note to clients.

Bitcoin was changing hands Friday around $33,373, down 1% in the past 24 hours and little changed in the hours after the jobs report was published at 8:30 a.m. ET.

According to the Labor Department’s jobs report on Friday, the U.S. unemployment rate rose slightly to 5.9% from 5.8% in May.

Related: Stablecoins and CBDCs: Private Vs. Public Monetary Innovation

The government revised the May jobs number to 583,000, up from the initially reported 559,000 jobs (which had missed the then estimate of 671,000 jobs). 

On average, since January 2021 the U.S. has added about 500,000 jobs per month, and the employment trend has been strengthening but somewhat unpredictable, making it difficult for economists to use any one month’s data to extrapolate what the future might look like. 

The labor force participation rate – the percentage of the American population that is either working or actively looking for work – was unchanged in June from 61.6% in May.

The employment-to-population ratio, or the number of people employed versus the total working-age population, changed little month to month at 58%.

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