CoinDesk Crypto

Bitcoin (BTC) buyers defended support around $54,000 yesterday, but the upside has stalled just shy of the $60,000 resistance level. The short-term trend is improving, which should keep traders active at lower support levels.

• Oversold signals on the hourly relative strength index (RSI) identified in yesterday’s post triggered a near 10% rally.
• Bitcoin is now overbought on the hourly chart, which was previously seen around $61,000 – the all-time-high that was short-lived.
• Support is around $56,000, defined by the 50-period volume weighted moving average on the hourly chart.
• The daily chart still shows slowing upside momentum, but trend support remains intact.

• Meet the Woman Behind Cambodia’s Moonshot Blockchain Project
• Bottlepay Brings Real-Time Bitcoin Payments to Twitter
• Maple Finance Raises $1.4M for Its Reputation-Based DeFi Lending Platform
• Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts

At a time when its competitors are being acquired, crypto custody provider Fireblocks is raising $133 million to stay the course.

“We became sort of a big piece of the market infrastructure,” Fireblocks CEO Michael Shaulov told CoinDesk in an interview. “We now have over 230 clients, all the big institutions, and we need to guarantee to them our financial stability and the fact that we will remain independent.”

Among those clients is BNY Mellon, the world’s largest custodial bank, which participated in the Series C funding round. Shaulov confirmed what CoinDesk first reported late last month, that Fireblocks is working with BNY Mellon to build the bank’s bitcoin custody product.

Related: Meet the Woman Behind Cambodia’s Moonshot Blockchain Project

The $133 million raise was led by Coatue, Ribbit Capital and Stripes. Previous investors Paradigm, Galaxy Digital, Swisscom Ventures, Tenaya Capital and Cyberstarts Ventures also participated, bringing Fireblocks’ total funding to $179 million since launching in July 2018.

When PayPal confirmed its acquisition of custody tech provider Curv earlier this month, observers noted that fintech firms acquiring crypto natives might become the norm in 2021. Custody – the secure storage and transfer of digital assets on behalf of large investors – is an increasingly valuable niche as Wall Street stalwarts rush to provide crypto products to their customers.

“If we would have been acquired by someone, the value of Fireblocks would be significantly less than the value of Fireblocks as an independent player,” Shaulov said, pointing to the firm’s crypto transfer network as a differentiating factor.

While Curv will work under PayPal’s remit, Fireblocks, BitGo, Anchorage and others will now compete for what Shaulov called a rapidly expanding market of institutional clients.

Related: Bottlepay Brings Real-Time Bitcoin Payments to Twitter

“We are here for them for the long run,” he said.

• Maple Finance Raises $1.4M for Its Reputation-Based DeFi Lending Platform
• Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts

The “only bubble” respondents of an Investopedia survey said they were concerned about was one involving bitcoin, according to the U.S. financial website’s editor-in-chief.

Appearing on the business segment of Fox News on Wednesday, Caleb Silver said that while as much as 20% of the respondents had added bitcoin to their portfolio over the past year, it didn’t stop many from fearing a potential bubble pop.

Of those surveyed, 62% believe bitcoin is in bubble territory.

Related: Meet the Woman Behind Cambodia’s Moonshot Blockchain Project

“They are not fearing a bubble in equities, they are not fearing a bubble in SPACs as much as they are fearing one in bitcoin and other cryptocurrencies,” said Silver.

Special purpose acquisition companies (SPACs) are listed firms with no operational capacity that are sought after by companies – like with eTroro this week – seeking to go public and raise capital through so-called back-door listings.

Silver said respondents’ concerns were founded on “good reason,” because the cryptocurrency market is up substantially higher despite no specific catalyst outside of increased institutional investment.

Bitcoin broke new ground on March 13, rising to an all-time high of around $61,556. The world’s largest cryptocurrency by market cap is changing hands for around $58,340 at press time, up 100% year-to-date.

Related: Bottlepay Brings Real-Time Bitcoin Payments to Twitter

See also: Blockchain Mortgage Platform Figure Launches SPAC to Raise $250M

• Maple Finance Raises $1.4M for Its Reputation-Based DeFi Lending Platform
• Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts

Payments platform Wirex has won a High Court trademark infringement claim in the U.K. against several businesses for the unauthorized use of the name of a cryptocurrency rewards scheme.

According to a press release on Wednesday from law firm Brown Rudnick LLP, Wirex has been successful in its legal bid against Cryptocarbon Global Ltd., Cryptocarbon UK Ltd. and Bee-One UK Ltd.

The infringement case was brought to trial in January against the defendants for their use of the registered trademark “Cryptoback.” Wirex was the “world’s first company” to use the term in its cryptocurrency rewards scheme, the law firm says.

Related: Meet the Woman Behind Cambodia’s Moonshot Blockchain Project

Wirex has also been successful in seeing the defendant’s counterclaims, including an attempt to invalidate Wirex’s trademark, dismissed

The Cryptoback scheme offers a small percentage of the transaction value back to Wirex customers in bitcoin when using its card for in-store purchases.

The case highlights the importance for Wirex and other companies to protect and enforce their trademarks, according to Steven James, partner at Brown Rudnick. “This is especially true in the case of the crypto industry, which has seen rapid growth but also a large number of copycat or otherwise infringing offerings,” he said.

See also: Payments Firm Wirex Becomes Visa Principal Member Ahead of Crypto Card Launch

• Bottlepay Brings Real-Time Bitcoin Payments to Twitter
• Maple Finance Raises $1.4M for Its Reputation-Based DeFi Lending Platform
• Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts

The Bank of Thailand (BOT) has issued a warning against the use of Thai baht-denominated stablecoins labeling them a threat to the stability of the national currency system.

In a press release on Wednesday, the central bank took specific aim against the baht stablecoin THT created on the Korean stablecoin platform Terra.

“[THT] could cause fragmentation to the Thai currency system should THT or other similar stablecoins come to replace, substitute or compete with Baht issued by the BOT,” the release reads.

Related: Payments Firm Wirex Wins Trademark Infringement Case in UK High Court

The central bank now deems any activity involving THT “illegal,” on the basis the creation, issuance and usage or circulation of any material or token for money violates Section 9 of the country’s Currency Act (1958).

Any person is able to issue a proposal on Terra’s algorithmically-governed platform in order to mint new cryptocurrency that is later voted on by stakers holding the platform’s native luna token.

Do Kwon, head of Terraform Labs told CoinDesk in a Twitter direct message that Terra does not initiate proposals nor does it ever vote on them. “I think it’s a very interesting development and quite amused we were able to catch the attention of a central bank,” said Kwon. “Great free public relations, right?”

Asked by a user on Twitter whether he believed the central bank could “hurt” the THT ecosystem within Terra, Kwon responded, “lol no,” on Thursday.

Related: SEC Publishes VanEck’s Bitcoin ETF Application, Kicking Off Decision Clock

BOT said the general public needs to exercise caution and refrain from participating in any activity involving THT alleging users could be at risk of cyber theft and money laundering without the necessary legal protections.

Stablecoins linked to national currencies have been received with great trepidation by governments and regulators around the world.

Most notably, the announcement of the Diem (formerly Libra) Facebook-backed stablecoin caused a wave of pushback, with the U.S., France, Germany and other nations saying it posed a threat to financial stability and even fiscal sovereignty and should be heavily regulated, if allowed to launch at all. Diem has since been reduced in scope for a reported plan for launch this year.

In China, the central bank proposed a change of the banking law last October, pushing to outlaw any yuan-pegged stablecoin bar its own digital currency.

Bank of Thailand did not immediately respond to a request for comment by CoinDesk.

See also: Thai SEC Backtracks on Unpopular Proposal for New Crypto Investor Qualifications

• Lessons From the Nifty Gateway NFT Heist: Not Your Keys, Not Your Art
• Ethermine Adds Front-Running Software to Help Miners Offset EIP 1559 Revenue Losses

The U.S. Securities and Exchange Commission (SEC) acknowledged VanEck’s 19b-4 Form for its bitcoin exchange-traded fund (ETF) application on Monday, formally kicking off its 45-day window to make an initial decision on the proposal.

If approved, the ETF would be the first open bitcoin exchange-traded product in the U.S., though there has long been demand for such a product from the crypto community. Historically, the SEC has rejected every bitcoin ETF application, including VanEck’s past efforts, citing potential for market manipulation and a host of other concerns.

However, industry pundits believe that the agency may finally be ready to approve one under incoming Chair Gary Gensler, a former Commodity Futures Trading Commission (CFTC) who has been fairly bullish on crypto and blockchain, teaching courses on the technology at MIT in recent years.

Related: Payments Firm Wirex Wins Trademark Infringement Case in UK High Court

VanEck filed for the ETF with Cboe BZX Exchange earlier this year, with Cboe publishing the 19b-4 at the beginning of March. Once the document is published in the Federal Register (the nation’s logbook), the general public will have 21 days to submit comments on the SEC’s portal.

The SEC can extend the review period up to 240 days before it has to make a final decision. When evaluating past applications, it has always extended these decisions to their full time limit.

A number of other companies have filed for bitcoin ETFs in recent months, after several applications were rejected in late 2019 and early 2020, including Valkyrie and WisdomTree. Grayscale, a subsidiary of CoinDesk’s parent firm Digital Currency Group, recently posted a number of job listings for ETF specialists as well.

Recent ETF approvals in Canada may also hint that one is on its way in the U.S. Three have already begun trading, marking the first North American bitcoin ETFs, with one seeing nearly $500 million in assets under management within its first few days.

• Thai Central Bank Warns Against ‘Illegal’ Use of Baht-Denominated Stablecoin
• Lessons From the Nifty Gateway NFT Heist: Not Your Keys, Not Your Art
• Ethermine Adds Front-Running Software to Help Miners Offset EIP 1559 Revenue Losses

Ethereum mining pool Ethermine introduced new software that could mollify miners upset by a coming steep cut in mining fees by allowing them to eke out greater profit from each block mined.

The Austria-based pool – which comprises some 20% of the Ethereum network’s hash power – became the first majority pool to introduce a Maximal Extracted Value (MEV) software strategy in order to compensate the “upcoming mining reward reduction caused by the adoption of EIP-1559,” according to a tweet Wednesday. MEV automates transaction sequencing in blockchains based on possible arbitrage opportunities, which Ethermine expects to increase mining rewards between 1%-10%. Ethermine plans to distribute 80% of MEV profits to the pool.

That EIP is slated for inclusion in the Ethereum network in July with the London hard fork. The proposal burns network transaction fees instead of giving them to miners, who process transactions. Miners are not very pleased with the proposal – even going as far as to threaten a 51% attack against Ethereum – but have few options on the table given Ethereum’s governance structure. So, many mining pools are adding MEV to supplement lost income, such as Flexpool.

Related: Lessons From the Nifty Gateway NFT Heist: Not Your Keys, Not Your Art

In Ethereum, MEV is a general term relating to numerous strategies for front running or back running transactions in order to secure an arbitrage profit. The strategy has garnered wide attention in the trading community over the past year as decentralized finance (DeFi) protocols rose in popularity. Indeed, MEV research group Flashbots shows some $1.7 million in MEV-based profits were made in the last 24 hours alone.

Developers and miners alike have begun turning to MEV as a way to supplement miners who are certain to face steep revenue declines with fee burnings. 

Ethermine did not return questions for comment by press time.

• The Fed’s Easy-Money Policies Are Here to Stay; What Does That Mean for Bitcoin?
• Are We Entering the Season of Altcoins?
• Market Wrap: Bitcoin Near $58K on Fed Pledge to Keep Loose Policy

• Bitcoin (BTC) trading around $57,745.58 as of 20:00 UTC (4 p.m. ET). Climbing 3.68% over the previous 24 hours.
• Bitcoin’s 24-hour range: $54,201.70-$58,078.51 (CoinDesk 20)
• BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.

Bitcoin’s price flipped to green after Federal Reserve officials on Wednesday reaffirmed their expectations to keep interest rates close to zero at least through 2023, potentially bolstering the cryptocurrency’s appeal as a hedge against faster inflation. 

As of press time, bitcoin was changing hands around $58,000, up from about $55,500 just before the Fed announced its decision around 18:00 coordinated universal time (2 p.m. ET). 

The price has doubled this year, partly because of demand from institutional investors who are looking for an asset that might hold its worth if the dollar’s purchasing power declines. Central banks around the world have pumped trillions of dollars of freshly created money into global financial markets to stimulate their coronavirus-wrecked economies.

Related: Lessons From the Nifty Gateway NFT Heist: Not Your Keys, Not Your Art

Wall Street firm Morgan Stanley’s wealth management unit on Wednesday published a research report arguing the “threshold is being reached” for cryptocurrency to become an investable asset class. On the same day, Morgan Stanley said it will offer its clients exposure to three bitcoin funds, while Hong Kong-listed software firm Meitu made additional investments in bitcoin and ether.

“This is a bullish step to further awareness and acceptance of bitcoin, and shows the organic underlying demand as investors look to seek alternatives to existing investment classes,” said Jason Lau, chief operating officer at San Francisco-based crypto exchange OKCoin. 

Read More: Morgan Stanley Sees Cryptocurrencies on Path to Investable Asset Class

Ether (ETH) was up on Wednesday, trading around $1,824.79 and climbing 2.24% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

Related: Ethermine Adds Front-Running Software to Help Miners Offset EIP 1559 Revenue Losses

“Ether and bitcoin are still moving tightly together,” OKCoin’s Lau said.

At the same time, the number of BTC locked in the Ethereum blockchain saw a sharp rise on Wednesday after dropping for more than a month, according to data from DeFi Pulse.

“The hypergrowth that markets exhibited earlier in the year, especially with ether, appears on the surface to have subsided, but the reality could not be any different,” Denis Vinokourov, head of research at trading sentiment data provider Trade the Chain, said. “Specifically, the number of bitcoin locked on Ethereum continues to rise and much of this capital eventually lands across the DeFi ecosystem.”

A handful of lesser digital assets rose sharply Wednesday after Grayscale announced plans for new trusts linked to Chainlink’s LINK, Decentraland’s MANA and a handful of others. (Digital Currency Group is the parent of Grayscale and CoinDesk and an investor in Decentraland.)

Bitcoin’s temporary failure to move higher since Saturday’s all-time high may have also pushed some investors and traders to alternative cryptocurrencies.

“While this might be unexciting for bitcoin traders, it has ether traders licking their lips at the prospect of the leading altcoin regaining some market share,” Adam James, senior editor at OKEx Insights, said. “Likewise, traders will also be looking for altcoins and DeFi governance tokens to capitalize on a bitcoin consolidation.”

Read More: LINK, MANA Token Prices Spike as Grayscale Unveils New Trusts

Digital assets on the CoinDesk 20 are mostly in green Wednesday. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

• kyber network (KNC) + 27.23%
• chainlink (LINK) + 12.43%
• tezos (XTZ) + 10.67%
• omg network (OMG) + 8.56%
• orchid (OXT) + 4.23%

Notable losers:

• cosmos (ATOM) – 3.1%

Equities:

• Asia’s Nikkei 225 closed lower by 0.023%.
• The FTSE 100 in Europe closed in the red 0.60%.
• The S&P 500 in the United States went up by 0.29%.

Commodities:

• Oil was down 0.26%. Price per barrel of West Texas Intermediate crude: $64.63.
• Gold was in the green 0.79% and at $1745.03 as of press time.

Treasurys:

• The 10-year U.S. Treasury bond yield climbed Wednesday in the green 1.64%.

• The Fed’s Easy-Money Policies Are Here to Stay; What Does That Mean for Bitcoin?
• Are We Entering the Season of Altcoins?

The first thing to understand about leveraged investing is this: It loses money faster.

It also makes money faster. That’s the second thing to understand. 

A new decentralized finance (DeFi) product should drive this point home, for better or for worse. The brainchild of Index Coop, which aims to do for DeFi what S&P and Dow Jones did for stocks, it allows an investor to easily take a leveraged position on ether (ETH) with just one transaction.

Related: Lessons From the Nifty Gateway NFT Heist: Not Your Keys, Not Your Art

The cooperative is releasing its first product using its Flexible Leverage Index (FLI), a token called ETH2x-FLI. It will target a value that goes up twice as fast as the second-largest cryptocurrency (and down the same way).

Leverage has been a killer use case for decentralized finance, starting all the way back with the money market Compound. But rarely has making such big bets required so little work.

“There really isn’t anything like this in terms of getting DeFi leverage in a single token,” an Index Coop member who goes by the handle Lemonade Alpha told CoinDesk in a phone call.

The ETH price has climbed from $400 in late November to touching $2,000 in recent days. For users who believe it has further to go, FLI would be a way to double down on such gains.

Related: Ethermine Adds Front-Running Software to Help Miners Offset EIP 1559 Revenue Losses

Previously, to go extra long on ETH, a user would have to do the following: Deposit a bunch of ETH into Compound. Borrow a bunch of USDC, a stablecoin engineered to hold its value to the U.S. dollar, and swap all that for more ETH.

To go even further, he could deposit the fresh ETH and do the same loop again. We saw lots of that during the wildest parts of 2020’s “DeFi summer.”

Not only does that take much manual effort and require lots of transactions, it also puts the user in the position of stewarding the loan to make sure it doesn’t fall below collateral requirements (if it needs more, that’s more transactions).

With ETH2x-FLI, a user can get roughly the same exposure with a single transaction, said Lemonade. The leveraged position is simply tokenized and traded like any other ERC-20 token running on top of the Ethereum blockchain.

As a result, an investor’s downside risk is easy to quantify: He can’t lose more than the price he bought at – but he can lose it faster.

“A lot of people, when they think about leverage, they think about this BitMEX kind of casino, 25 times margin position,” Lemonade said. “We think about this as completely opposite.”

ETH2x-FLI targets two times leverage, which means the holder should get twice the gains when ETH goes up and twice the losses when it goes down, but not always.

“Sometimes the leverage itself is going to be [diminished] because the token is trying to be a safeguard for you,” Lemonade said.

With FLI, robots have your back.

On the back end, ETH2x-FLI has done all the same transactions laid out in the examples above, which means there’s a bunch of collateral backing a bunch of loans. If the loans become undercollateralized the collateral gets slashed, and that hurts all holders of ETH2x-FLI. So it bears repeating that 2X is a target.

FLI uses an algorithm to protect the collateral. When necessary, the algorithm will increase its collateral position, which will decrease the leverage. By leaving flexibility around the amount of leverage, FLI can manage risk.

It’s very expensive in DeFi for a loan to fall below its collateral requirement, which can happen quickly when a collateral asset is volatile (like ETH). When that happens, the collateral will be sold off to close the loan. The borrower will get his collateral returned but only after a hefty liquidation fee has been taken out.

Obviously if this happened to FLI it would hit a lot of users, which is why it’s built for flexibility in terms of its collateralization buffer.

Though liquidations won’t be able to hit too many users at first. FLI is intended to put a limit on its assets under management initially to $5 million. As the system proves to be safe, it can raise the cap.

Buying ETH2x-FLI on the open market won’t be the only way to get it. Users can mint it directly, but that’s probably going to be more appropriate for advanced users with deeper pockets. It works best when there’s a dislocation between the market price of the token and the price Index at which Coop will mint, Lemonade Alpha explained.

Index Coop won’t stop with ETH, but it expects this product to be its flagship leveraged offering.

“The FLI is a general index structure. It can be adapted for other tokens outside of ETH,” Lemonade Alpha explained. 

There’s no immediate plans around which ones or when. INDEX token holders will decide what else to make and when.Index Coop previously created the DeFi Pulse Index (DPI), which uses the Set Protocol under the hood just as FLI does. DPI packages together the top governance tokens in DeFi into one token.

• The Fed’s Easy-Money Policies Are Here to Stay; What Does That Mean for Bitcoin?
• Are We Entering the Season of Altcoins?

Top Federal Reserve officials see inflation rising above 2% this year, but their median expectation is still for interest rates to stay close to zero at least through 2023, based on the “Summary of Economic Projections” released Wednesday.

Bitcoin prices pared earlier losses as Fed Chair Jerome Powell said during a televised press conference that the U.S. central bank expects to keep monetary policy loose “for as long as it takes” to heal the coronavirus-wounded economy. The largest cryptocurrency is seen by many investors as a hedge against inflation, and a dovish monetary policy stance could allow faster price increases.

Prices for bitcoin rose to about $56,500 after the meeting, from about $55,500 just prior to the 18:00 UTC (2 p.m. ET) release.

Related: Lessons From the Nifty Gateway NFT Heist: Not Your Keys, Not Your Art

The Federal Open Market Committee (FOMC), the U.S. central bank’s monetary policy panel, will keep the target rate for federal funds in a range of 0% to 0.25%, according to a statement released after a two-day meeting. The Fed plans to keep buying $80 billion of U.S. Treasury bonds and $40 billion of agency mortgage-backed securities every month.

U.S. stocks rose after the report.

According to the summary of economic projections:

• Federal officials’ median expectation for growth this year in gross domestic product jumped to 6.5% from 4.2% in December, when they last disclosed projections.
• The unemployment rate is seen at 4.5% this year, down from a previously projected 5%.
• Inflation is now seen by Fed officials as averaging 2.2%, up from a 1.8% projection in December. 
• The Fed funds rate is expected to stay at close to zero through at least 2023, though four officials now see an initial rate increase as soon as next year. At the December meeting, no Fed officials were expecting a liftoff that soon.

.

Related: Ethermine Adds Front-Running Software to Help Miners Offset EIP 1559 Revenue Losses

• The Fed’s Easy-Money Policies Are Here to Stay; What Does That Mean for Bitcoin?
• Are We Entering the Season of Altcoins?

Top Federal Reserve officials see inflation rising above 2% this year, but their median expectation is still for interest rates to stay close to zero at least through 2023, based on the “Summary of Economic Projections” released Wednesday.

Bitcoin prices pared earlier losses as Fed Chair Jerome Powell said during a televised press conference that the U.S. central bank expects to keep monetary policy loose “for as long as it takes” to heal the coronavirus-wounded economy. The largest cryptocurrency is seen by many investors as a hedge against inflation, and a dovish monetary policy stance could allow faster price increases.

Prices for bitcoin rose to about $56,500 after the meeting, from about $55,500 just prior to the 18:00 UTC (2 p.m. ET) release.

Related: Crypto Events to Watch: Fed’s Presser, Another GameStop Hearing and More

The Federal Open Market Committee (FOMC), the U.S. central bank’s monetary policy panel, will keep the target rate for federal funds in a range of 0% to 0.25%, according to a statement released after a two-day meeting. The Fed plans to keep buying $80 billion of U.S. Treasury bonds and $40 billion of agency mortgage-backed securities every month.

U.S. stocks rose after the report.

According to the summary of economic projections:

• Federal officials’ median expectation for growth this year in gross domestic product jumped to 6.5% from 4.2% in December, when they last disclosed projections.
• The unemployment rate is seen at 4.5% this year, down from a previously projected 5%.
• Inflation is now seen by Fed officials as averaging 2.2%, up from a 1.8% projection in December. 
• The Fed funds rate is expected to stay at close to zero through at least 2023, though four officials now see an initial rate increase as soon as next year. At the December meeting, no Fed officials were expecting a liftoff that soon.

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Related: Valkyrie Co-Founder on the Race for a Bitcoin ETF in US

• Are Hyperinflation Fears Exaggerated and Misplaced?
• What Crypto Markets Will Be Watching at Fed Chair Powell’s Press Conference

Investment platform Republic has raised $36 million in a Series A funding round led by Galaxy Interactive, a division of Mike Novogratz’s Galaxy Digital.

Republic is a crowd-equity platform aiming to provide greater access to sought-after investment opportunities in startups, real estate, gaming and crypto. According to an announcement Wednesday, Republic’s funding now totals more than $70 million since its founding in 2016.

The latest round included participation from Tribe Capital, Motley Fool Ventures and Broadhaven Ventures in what amounts to a long-term bet on democratizing access to private investments.

Related: Crypto Events to Watch: Fed’s Presser, Another GameStop Hearing and More

The company raised $16 million last year through the sale of its Republic Note security token, which is secured on the Algorand blockchain. The AngelList spin-off also raised $12 million back in 2018.

On Tuesday, Republic announced it would be hosting a token sale later this month for Cere Network, a “decentralized Salesforce” platform utilizing the CERE token. The CERE offering will be the “first in a series of anticipated token sales,” according to a blog post.

The move puts Republic closer to CoinList and other platforms for accredited and non-U.S. investors to get early access to nascent crypto projects.

• Valkyrie Co-Founder on the Race for a Bitcoin ETF in US
• Are Hyperinflation Fears Exaggerated and Misplaced?
• What Crypto Markets Will Be Watching at Fed Chair Powell’s Press Conference

A new bitcoin (BTC) “fear gauge” began trading last week. The T3i BitVol Index from T3 Index, a financial indexing firm, measures the 30-day implied volatility of bitcoin.

The index offers cryptocurrency investors the ability to “trade volatility as a distinct asset class,” said Simon Ho, CEO of T3 Index.

• The BitVol index has settled around an annualized 100% after reaching a high near 170% on January 15, which preceded a roughly 20% price correction in bitcoin.
• Elevated volatility could be a signal of investor fear or uncertainty, while low levels of volatility signal investor complacency.
• The first options trade off the BitVol Index was initiated on March 10, consisting of a March expiry 1-by-2 call spread that was bought for zero cost, Bloomberg reported.

The BitVol Index uses strike prices from tradable bitcoin options across various exchanges, a similar methodology applied by the Chicago Board of Trade’s (CBOE) VIX Index, which investors use to track volatility in the stock market.

Related: Crypto Events to Watch: Fed’s Presser, Another GameStop Hearing and More

Other cryptocurrency volatility indices are widely tracked, such as the BitMEX Daily Historical Bitcoin Volatility Index (.BVOL24H).

• Valkyrie Co-Founder on the Race for a Bitcoin ETF in US
• Are Hyperinflation Fears Exaggerated and Misplaced?
• What Crypto Markets Will Be Watching at Fed Chair Powell’s Press Conference

Russian President Vladimir Putin called for closer attention to the illicit use of digital assets during his meeting with the attorney general’s office on Wednesday.

Putin said Russia needs to “take additional measures to prevent illegal cross-border transfers of digital assets,” according to the transcript published on the president’s official website.

“Criminal elements are using digital assets more and more often, and this what you should pay closer attention to, together with your colleagues from other law enforcement agencies, including Rosfinmonitoring,” Russia’s anti-money laundering agency, Putin said.

Related: Crypto Events to Watch: Fed’s Presser, Another GameStop Hearing and More

Russia’s law on digital assets was signed in July and took effect in January 2021. It describes how digital tokens run by centralized entities must be issued. It also designates decentralized cryptocurrencies as property, which must be reported for tax purposes.

Russian civil servants have been explicitly banned from owning crypto, according to the order issued by the country’s Ministry of Labour in January.

The legal guidelines regarding crypto-related services has proven inconsistent in Russia, with the courts occasionally banning crypto-related websites, including the popular cryptocurrency exchange Binance.

Russia’s central bank, in the meantime, has been actively exploring the prospect of launching a CBDC.

Related: Valkyrie Co-Founder on the Race for a Bitcoin ETF in US

Russia’s civil activists, including the prominent opposition leader Alexey Navalny. have been using cryptocurrencies to function as a way of circumventing assets being held in frozen bank accounts.

• Are Hyperinflation Fears Exaggerated and Misplaced?
• What Crypto Markets Will Be Watching at Fed Chair Powell’s Press Conference

Traders and analysts in digital asset markets are getting better all the time at learning how to monitor activity on the Bitcoin blockchain, scouring the network for clues on where the largest cryptocurrency’s price might head next. 

But a recent alert sent by the South Korean blockchain analysis firm CryptoQuant involving an apparent transfer of $1.1 billion in bitcoin on the Winklevoss twins’ New York-based Gemini exchange stirred up much confusion – and backlash on Twitter. That’s why the company’s chief said today he is changing procedures to avoid future snafus. 

It’s a reminder of just how powerful a role these blockchain data alerts play in cryptocurrency markets, and what can happen when they are what can happen when they’re mislabeled or interpreted incorrectly. It also highlights the power struggle between the retail-investing masses and a smaller number of deep-pocketed institutional players.

Related: Crypto Events to Watch: Fed’s Presser, Another GameStop Hearing and More

Read more: Bitcoin Transfers Worth Billions Could Mean More Selling Pressure 

Bitcoin prices tumbled after the CryptoQuant alert on March 14, and some traders accused the firm of sending a false alarm filled with panic-inducing “FUD,” or fear, uncertainty and doubt.  

“I think it’s dumb, but we had to” change the labeling on the alerts, CryptoQuant CEO Ki Young Ju told CoinDesk in a Telegram message. “Some people think we manipulate the market by making FUD.” 

The latest kerfuffle started on Sunday, March 14, when CryptoQuant’s free Telegram-based service “CryptoQuant Alerts [Beta]” blasted out a message about the big bitcoin transfer:

Related: Valkyrie Co-Founder on the Race for a Bitcoin ETF in US

“18,961 #BTC ($1,145,210,023) aggregated inflow to #Gemini: be careful downside risk from whale dumping,” the message read. A “whale,” in the jargon of crypto markets as well as on Wall Street, refers to a large investor whose buying or in this case selling might make big waves in the market.

As a result of this message, bitcoin prices dropped like an anchor as traders tried to get out of the leviathan’s way. 

“Inflows up, price down,” as the digital-asset exchange firm EQUOS summarized the episode Tuesday in a note to clients.

Some angry traders and rival blockchain analysis firms called CryptoQuant’s alert off-base and especially galling after a similar episode that took place in late February.  

The German analysis firm Glassnode tweeted March 15 that the inflow was an “internal” transfer on Gemini, meaning the funds were moved between wallets on the exchange, as opposed to moving onto the exchange from a wallet somewhere else. An internal transfer might represent a harmless administrative maneuver, not a lurking whale. 

“Markets selling off due to ‘bogus’ data saying $1 billion of BTC flowing into Gemini,” bitcoin analyst Willy Woo tweeted March 15. “It’s the second time it’s happened in the last 30 days.”

Woo posted a chart showing how prices started falling after CryptoQuant’s alerts on March 14 and Feb. 21.

Two red dots on the chart signaled when CryptoQuant’s alerts were fired off, and they do appear to coincide with market tops. Leverage positions started getting liquidated as traders sold off. 

During February’s sell-off, more than $2 billion worth of long traders were liquidated, while another about $1.6 billion long liquidation were triggered by this week’s correction.

Read More: Bitcoin Eyes Bull Revival as Dip Below $54K Wipes Out Millions More in Leverage

CryptoQuant “was very careless in their quality assurance over their data and alert service,” Woo told CoinDesk in a direct message on Twitter. “I wasn’t even on their service and it was forwarded everywhere beyond the 28,300 traders who that group viewed.”

As of March 16, CryptoQuant’s March 14 alert on Telegram had been viewed more than 48,000 times.

Ju later acknowledged in a public post on Twitter the transfer probably wasn’t a bitcoin dump by a large holder. Instead, he wrote, the inflow appeared to come  from a wallet belonging to the crypto lending platform BlockFi, which uses Gemini’s crypto custody service. Several other blockchain data analysts from companies including Chainalysis and Coin Metrics agreed with that conclusion.

“The wallet activity is part of our day-to-day operations for clients,” BlockFi’s director of business development, Rishi Ramchandani, told CoinDesk. “BlockFi is actively buying bitcoin, not selling.”

Gemini is BlockFi’s primary custodian, Ramchandani said, adding, “Seems like some people on Twitter are confused about this.”

On Wednesday, CryptoQuant Alerts Telegram group put out an update: “We removed words talking about possibilities in our public alert. It will only deliver facts. For the ‘dumping’ and ‘pumping’ possibilities based on our analysis, we’ll include those in our preset alerts for paid users. It will launch shortly.”

Ju insists that implications weren’t so clear-cut: Though some of the messaging got twisted, the bitcoin transfer still might have provided an early warning of potential selling. 

“It’s a fact that BlockFi uses Gemini Custody, but Gemini provides instant trading services for institutions [that] use Gemini Custody,” Ju said in a Telegram message with CoinDesk. “Whales using Gemini Custody can dump bitcoin instantly without making any on-chain transactions.”

“Most whales are using Custody services, so it’s hard to figure out dumping risks for retail investors if we don’t alert this kind of data,” he added.

In other words, the blockchain data alert was spot-on, even if the interpretation might have been off.  

Ju sent CoinDesk a screenshot of an email exchange with a Gemini customer support representative, confirming the addresses responsible for the bitcoin inflows didn’t belong to Gemini.

While the episode highlights the crucial of role of blockchain data in cryptocurrency price predictions, it also points to a theme that keeps coming up throughout markets from digital assets to Wall Street: the never-ending power struggle between the retail-investing masses and a smaller number of deep-pocketed institutional players who often seem to have an unfair advantage. 

Retail investors, who might be more susceptible to rash emotional decisions during market downturns, often view themselves as having less power and information while institutions appear to possess more sophisticated trading strategies, with better market access and privileged knowledge.

That’s partly why blockchain data is so valuable. Ideally, the extra information and the alerts enhance market transparency, ostensibly leveling the playing field. 

While many may find it hard to read or analyze the blockchain data, the theory is that messaging services like CryptoQuant’s should help retail traders avoid outsize losses.

“When the people miss the boat they just miss it,” Twitter user @AncientMedicin3 wrote in a response to Glassnode’s statement. “When institutions miss the boat they bring it back! Read: intentional manipulation for the big boys to buy back in at a lower price.”

Other commenters had a more cynical take.

“All this data now just is abused anyway,” Twitter user @Dynamic_One_ wrote. “No need to even sell yourself, just move a few things around and people panic and sell. Bogus data or not, all it now takes is moving from people wanting to manipulate and all the people watching things like Glassnode suddenly sell. Or am I wrong?”

• Are Hyperinflation Fears Exaggerated and Misplaced?
• What Crypto Markets Will Be Watching at Fed Chair Powell’s Press Conference

Morgan Stanley’s wealth management unit on Wednesday published a research report arguing the “threshold is being reached” for cryptocurrency to become an investable asset class.

The document was published as CNBC reported the Wall Street firm is also launching access to three funds that enable bitcoin (BTC) ownership.

• “A firming regulatory framework, deepening liquidity, availability of products and growing investor interest ­– especially among institutional investors – have coalesced … at a time when the challenges to conventional cash/stock/bond diversification are rising,” according to the Morgan Stanley report.
• “Our approach to cryptocurrency as an asset class should not be misconstrued for endorsement of any particular coin ownership. To the contrary, we see direct coin ownership, whether through private closed brokerages or cash app services, as still being in its infancy, with many questions yet to be answered about the achievability of low-cost best execution, central clearing, accurate and timely market data, and transparent and integrated custodial services.”
• “It was not until the 2020 COVID-19 pandemic that cryptocurrency’s viability as a financial investment option for qualified investors was cemented,” according to the report.
• Morgan Stanley published a simulation of adding a 2.5% allocation to bitcoin in a traditional portfolio consisting of 60% equities and 40% bonds, with monthly rebalancing. Results showed improved annualized returns by 164 basis points (1.64 percentage points) in five of the past seven years, without significantly increasing volatility.

• Crypto Events to Watch: Fed’s Presser, Another GameStop Hearing and More
• Valkyrie Co-Founder on the Race for a Bitcoin ETF in US
• Are Hyperinflation Fears Exaggerated and Misplaced?
• What Crypto Markets Will Be Watching at Fed Chair Powell’s Press Conference

Cryptocurrency companies in the Republic of Ireland will have to comply with anti-money laundering rules, the country’s central bank has warned.

• Cryptocurrency traders in Ireland will no longer be able to buy and sell anonymously, the Irish Independent reported Tuesday.
• Companies offering buying and selling services for cryptocurrency will have to complete due diligence on their customers to account for provenance and destination of their funds.
• This will bring cryptocurrency organisations on to the same plain as mainstream financial services providers.
• The new requirements will effect in April when the European Union’s 6th Anti-Money Laundering Directive enters into Irish law.
• Coinbase Custody International calls Ireland home while Facebook’s Diem project is also likely to have a presence there.

See also: Philippines Issues Crypto Industry Guidelines to Guard Against Money Laundering

• Crypto Events to Watch: Fed’s Presser, Another GameStop Hearing and More
• Valkyrie Co-Founder on the Race for a Bitcoin ETF in US
• Are Hyperinflation Fears Exaggerated and Misplaced?
• What Crypto Markets Will Be Watching at Fed Chair Powell’s Press Conference

Hong Kong-listed software firm Meitu has announced new crypto currency investments, having already splurged $39.9 million on bitcoin and ether earlier this month.

• The company said Wednesday it has, through its subsidiary Miracle Vision, bought another 16,000 ETH valued at around $28.4 million and 386.086 BTC valued at approximately $21.6 million.
• All told, the company now has $50.4 million in ether and $39.5 million in bitcoin, bringing its combined crypto holdings to the equivalent of a little over $90 million.
• Meitu said the crypto assets had been bought for cash on the open market in transactions completed Wednesday.
• The bitcoin and ether are being held in secure custody with “renowned” cryptocurrency trading platforms, the firm said.
• The purchases were made under the terms of a board-approved investment plan that allows the company to invest in up to $100 million in cryptocurrencies.
• Cayman Islands-incorporated Meitu is a provider of image and video processing software.

See also: Grayscale Offers New Trusts to Invest in 5 More Cryptos Including Filecoin, Chainlink

• Central Bank of Ireland Expands Anti-Money Laundering Regime
• Is Coinbase Worth $100B?
• Does the US Need Bitcoin ETFs?
• When DeFi Becomes Intelligent

Morgan Stanley is accelerating its involvement in the cryptocurrency industry.

According to a CNBC report, the $4 trillion wealth management firm is providing high-end clients with access to three funds that enable bitcoin ownership. The report cites an internal memo and unnamed sources with knowledge of the matter.

Morgan Stanley has inched into the crypto markets in recent months, becoming a major shareholder in MicroStrategy, the publicly traded business intelligence firm known for buying billions in bitcoin. Morgan Stanley also joined a $200 million investment in bitcoin firm NYDIG earlier this month.

Related: Central Bank of Ireland Expands Anti-Money Laundering Regime

CNBC reports the latest move is a direct response to Morgan Stanley clients demanding bitcoin exposure.

Two of the funds are from Galaxy Digital and the other is joint effort by FS Investments and NYDIG, according to the report.

This is a developing story and will be updated.

• Is Coinbase Worth $100B?
• Does the US Need Bitcoin ETFs?
• Meitu Buys More Bitcoin and Ether, Bringing Total Holdings to $90M

Prices for Chainlink’s LINK token and Decentraland’s MANA shot up after the conglomerate Grayscale on disclosed plans Wednesday for new investment trusts linked to the digital assets.

Grayscale CEO Michael Sonnenshein announced the trusts on Twitter at around 13:00 UTC (9 a.m. ET), and soon afterward LINK rose 7% to above $30. Grayscale is known for its bitcoin trust, ticker GBTC, which has become one of the most common ways for new investors to bet on the cryptocurrency’s price, since the vehicle can be bought and sold in stock markets, somewhat like an exchange-traded fund. (Grayscale is a unit of Digital Currency Group, which also owns CoinDesk.)

MANA, the native token of virtual reality platform Decentraland, jumped nearly 20% to above $1. Grayscale also launched products dedicated to basic attention token (BAT), filecoin (FIL), and livepeer, powering gains in these lesser-known coins.

Related: Central Bank of Ireland Expands Anti-Money Laundering Regime

The new trusts could unlock the exotic digital tokens for a new breed of well-capitalized investors because Grayscale’s trusts are seen as a way of gaining exposure to cryptocurrency prices without taking on the extra procedures and risks of owning them directly.

Chainlink provides price feeds to automated, blockchain-based lending and trading platforms built using blockchain technology, collectively known as decentralized finance, or DeFi. These data “oracles” are used by smart contracts – mini computer programs running atop blockchain networks, primarily Ethereum.

Price chart analysis, however, shows LINK has yet to cross above a descending trendline, a key hurdle for traders looking for predictive patterns.

Also read: Grayscale Offers New Trusts to Invest in 5 More Cryptos Including Filecoin, Chainlink

• Is Coinbase Worth $100B?
• Does the US Need Bitcoin ETFs?
• Meitu Buys More Bitcoin and Ether, Bringing Total Holdings to $90M