CoinDesk Crypto

Bitcoin has often traded like a risky asset over the past few weeks – selling off along with U.S. stocks as bond yields rose, typically in response to nagging worries the Federal Reserve might step in to tighten monetary policy sooner than previously signaled.

But a new analysis of data extracted from the Bitcoin blockchain suggests the risk of a steep sell-off might be capped on the downside by buyers who appear to enter the market whenever prices fall to about $48,000.

There are no signs that such a sell-off is brewing, with bitcoin’s price rising Wednesday for a sixth straight day to a two-week high around $57,000. But the new analysis, by the South Korean blockchain-tracking firm CryptoQuant, might give traders comfort that prices aren’t likely to revisit the end-of-2020 level of around $29,000 anytime soon.

Related: Market Wrap: Bitcoin Nears All-Time High As US House Passes $1.9T COVID-19 Relief

“Speculative guess, but institutions would buy more if the price is falling,” Ki Young Ju, CryptoQuant’s CEO, told CoinDesk,

According to CryptoQuant, dips in bitcoin prices to about $48,000 over the past month coincided with unusually large withdrawals from wallet addresses linked to the cryptocurrency exchange Coinbase’s Coinbase Pro segment:

Those outflows “might be institutional deals through Coinbase’s over-the-counter (OTC) service or Coinbase prime,” Ki said. The implication is that the institutional investors might be moving their bitcoins off Coinbase Pro into so-called “cold wallets,” typically because they have little intention of selling anytime soon.

So far, $48,000 appears to be an attractive purchase price. Based on a price of $56,000, investors are sitting on returns of roughly 16%.

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Digital assets management firm Grayscale has halted inflows to the Grayscale Bitcoin Trust (GBTC) after the fund traded at a 15% discount to the price of the bitcoin the trust holds.

Rocked by the number of alternative bitcoin trusts and Canadian bitcoin exchange-traded funds, Grayscale Bitcoin Trust has been trading below the price of bitcoin for several weeks. Its sibling, Grayscale Ethereum Trust, has also flipped into negative territory. Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.

DCG announced earlier today that it would buy up to $250 million in GBTC shares. Repurchasing shares is a common tool used by companies seeking to increase the price of those shares by simultaneously creating demand while decreasing the number of shares outstanding. 

Yesterday, CoinDesk revealed Grayscale is hiring nine specialists in the ETF space, possibly signaling a pivot in its fund’s business model.

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Legislation recognizing decentralized autonomous organizations (DAOs) was approved by Senate Committee members in the U.S. state of Wyoming on Tuesday.

• The bill now proceeds to a vote in the Wyoming House of Representatives, where it will become law if it is successful.
• Wyoming would be the first U.S. state to pass such legislation into law.
• DAOs are companies whose governance is built on smart contracts and where decision making is shared around the organization rather being centralized under a boss or executive.
• This legislation would allow DAOs to set up in Wyoming, adding greater legitimacy to cryptocurrency projects and further enhancing the state’s reputation as a blockchain-friendly jurisdiction for new companies.
• The state also introduced a bill in February to build a blockchain-based system for companies to file reports, data and other information required by law.

See also: Why Wyoming’s Governor Supports the State’s Crypto Banking Law

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Crypto.com has launched a free service it says reduces the complexity of filing cryptocurrency tax returns.

• In a blog post Wednesday, the Hong Kong-headquartered exchange said its new tool provides “an estimation of taxable gains/losses on relevant crypto transactions,” which can be downloaded for tax filing.
• Users can import transaction records from supported exchanges and wallets via CSV files or using API synchronization where supported.
• Initially, the service is only available in Canada but will later be rolled out to other jurisdictions. 
• When that happens, the tool will use country-specific tax calculation formulas.
• “We worked with professional tax advisers to ensure that the calculation logic is consistent with available guidance and laws for filing crypto taxes in Canada,” said Crypto.com.

Read more: Crypto.com Launches $200M Fund for Crypto Startups

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Shinhan Bank has built a pilot platform for a potential South Korean central bank digital currency (CBDC) with assistance from LG CNS.

• The Seoul-headquartered bank built the blockchain-based platform in preparation for the issuance of a CBDC by the Bank of Korea (BOK), the Yonhap News Agency reported Monday.
• According to a Shinhan Bank official, should the central bank decide to move forward with the issuance, it would require an intermediary agency to distribute and encourage use of the digital won.
• The platform divides the CBDC’s issuance into general funds for individuals and disaster support funds issued to support businesses and local government.
• The BOK has conducted research into the issuance of a CBDC, results for which were published in February.
• The central bank has yet to decide whether the digital won would be distributed directly to consumers or via an intermediary such as Shinhan Bank.

See also: Bank of Korea Chief on CBDC: Better Right Than Fast

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South Korea’s Financial Services Commission (FSC) said Wednesday it will issue financial penalties to exchanges that fail to follow rules designed to curb illicit cryptocurrency activity.  

• In an announcement, the regulator said it will fine exchanges that fail to follow three regulations covering internal controls, information and data retention, and identity verification of virtual asset traders.
• Exchange operators are must retain information and data connected to any suspicious transactions, including those made using large amounts of fiat currency, as first reported by Korea JoongAng Daily.
• Fines for breaches range from 30 million to 100 million won (roughly $26,000–$88,000).
• Penalties may be reduced by up to 50% under some circumstances such as erroneous breaches, the FSC said.
• South Korea is also planning to bring in a cryptocurrency tax of 20% if gains exceed 2.5 million won (US$2,200).

Read more: Bank of Korea Chief on CBDC: Better Right Than Fast

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A new multi-chain primitive from Zaki Manian, a leading engineer in the Cosmos ecosystem, could solve a sore spot for smaller decentralized finance (DeFi) investors.

Startup Sommelier Finance released a mainnet version of its “Ethereum Coprocessor” Wednesday, a tool for automating coins’ rotations in-and-out of DeFi positions.

“What we’re really talking about is taking a bunch of pieces – a Cosmos blockchain, a bridge technology called Gravity, the concept of an oracle between the Cosmos chain and the Ethereum chain – and saying we can leverage the power of a validator set to give Ethereum DeFi users new capabilities,” Manian said in an interview with CoinDesk.

Related: Bitcoin News Roundup for March 10, 2021

To that end, Sommelier raised $3.5 million in a seed round joined by Standard Crypto, Multicoin Capital and Alameda Research in return for an undisclosed amount of SOMM tokens. Manian said the funds will be used for additional staffing and implementation of the protocol.

Manian said his newest venture is looking at how liquidity providers (LP) function in the $42 billion DeFi industry, with the intention of enabling DeFi minnows to swim with the whales.  

“What is it like to be a liquidity provider in these DEXs? How do we provide wider access to the liquidity provider functionality? The first use case of the protocol is impermanent loss stop-losses on constant-function market makers like Uniswap and SushiSwap,” Manian said.

Impermanent loss

In certain conditions, DeFi coins placed in automated market maker (AMM) pools to earn yield can actually return negative values when compared with merely holding the underlying tokens separately. This is because, more or less, AMMs rebalance portfolios whenever a token is withdrawn from a pool during a trade. 

Related: South Korea’s Shinhan Bank Builds Pilot Platform for Central Bank Digital Currency

For example, take the ETH/USDC pool on Uniswap. If you buy ETH from the pool with USDC, the pool becomes momentarily imbalanced until someone else swaps ETH for USDC. In certain smaller pools with less liquidity, assets lose yield over time instead of gaining it for providing liquidity.

Sommelier tackles that problem with automation. Protocol users allow the tech to yank funds out of pools suffering impermanent loss. Impermanent loss is detected by a grouping of oracle networks while custody is provided by Cosmos’ validator set where funds are ported over too. A batching function between LP positions and the Cosmos should enable cheap transfers as well, Manian said.

“Liquidity Providers (LPs) will be able to use Sommelier to author and execute complex, automated financial transactions, such as portfolio rebalancing, limit orders, as well as a host of other features that token holders have come to expect from centralized finance (CeFi), but that are not currently available in DeFi,” Sommelier said in a blog post shared with CoinDesk in advance.

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Related: Bitcoin News Roundup for March 10, 2021

“We are surprised by the softness of the core. Some of the components where we expected solid increases did deliver; owners’ equivalent rent, for example, rose 0.27%, the biggest increase since January last year and a further clear sign that the downward pressure on rents – 40% of the core – is fading. Physicians’ services prices jumped 2.0% month-to-month, completing the adjustment implied by the 3.75% increase in Medicare reimbursement rates, effective January 1. But airline fares plunged 5.1%, despite soaring jet fuel prices, and hotel room rates dropped 2.3%, in contrast to the increase in room rates reported by STR, Inc., which tracks key hotel performance metrics. These declines can’t last. Finally, used auto prices fell by 0.9%, the fourth-straight big decline, widening the gap between the CPI measure and auction prices still further. Again, this does not seem sustainable.”

Ian Sheperdson, chief U.S. economist at Pantheon Related Stories

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Cryptocurrency and blockchain-focused investment firm Digital Currency Group (DCG) is to put as much as $250 million into shares of the Grayscale Bitcoin Trust (OTCQX: GBTC), its subsidiary’s flagship product. 

• In an announcement Wednesday, DCG – which is also the parent company of CoinDesk – said it will be buying GBTC shares on the open market.
• The firm plans to use cash on hand to fund the purchases, which it said will be made in compliance with Rule 10b-18 of the Securities Exchange Act of 1934.
• “The actual timing, amount, and value of share purchases will depend entirely upon a number of factors, including the levels of cash available, price, and prevailing market conditions,” said the company.
• The Grayscale Bitcoin Trust launched in 2013 is the world’s largest bitcoin fund, offering investors the opportunity to gain exposure to the leading cryptocurrency.
• According to its latest figures, Grayscale currently has $42.1 billion in net assets under management across all its cryptocurrency trusts and funds.

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Blockchain machine-learning platform Fetch.ai is getting a funding injection from GDA Group, a Toronto-based digital asset firm planning to invest $5 million in the Fetch ecosystem over an undisclosed period of time.

The funding will be used for the research and development of Fetch’s existing and future applications, which focus on autonomous artificial intelligence (AI) agents deployed on behalf of large firms like Bosch and others.

“While blockchain has been a revolutionary phenomenon in its own right, a lot of people have been conveniently ignoring the disruptive potential autonomous technologies pose to our industry,” Karl Samsen, GDA’s executive vice-president of Capital Markets, said in a statement.

Related: Bitcoin News Roundup for March 10, 2021

FET is the token that undergirds the Fetch.ai system. As the primary medium of exchange across the protocol, FET enables AI agents to perform specific tasks.

Also announced Wednesday, crypto custody firm Fireblocks will add support for FET in a bid to provide additional security for those institutional stakeholders Fetch.ai is seeking to attract.

“With the Fireblocks integration, Fetch now has the necessary infrastructure to bring on institutional capital and strategic support,” said Fetch CEO Humayun Sheikh. “We look forward to working with both teams to take the Fetch ecosystem to its next stage of growth and development.”

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A New Zealand-based firm says it has created the country’s first legal stablecoin, one backed by the country’s dollar.

According to a press release shared with CoinDesk on Wednesday, the New Zealand dollar stablecoin ($NZDs) is issued by Techemynt, a regulated company with ties to crypto hedge fund Techemy Capital.

Launching today, the cryptocurrency is backed one-to-one by the New Zealand dollar and deployed on the Ethereum blockchain by Blockchain Labs. $NZDs’ code utilizes a framework developed by Coinbase and Circle-founded Centre group.

Related: Bitcoin News Roundup for March 10, 2021

“$NZDs combines the stability and value of the New Zealand Dollar with the intrinsic utility of cryptocurrency to allow arbitrage, remittance, and digital payments, while positioning the New Zealand Dollar as a prominent participant in the global digital asset economy,” the company said.

To ensure transparency, reserves of the New Zealand dollar backing the stablecoin are to be confirmed by a “leading accounting firm” with reports delivered on a quarterly basis, according to the firm’s website.

Techemynt is registered as a Financial Service Provider in New Zealand, according to a listing by Companies Office, a governmental department within the Ministry of Business, Innovation and Employment.

See also: What Happens if All Stablecoin Users Have to Be Identified?

Related: South Korea’s Shinhan Bank Builds Pilot Platform for Central Bank Digital Currency

The company shares ties with asset investment firm Techemy Capital via its co-founder Fran Strajnar, who told CoinDesk via email that Techemynt had spent nine months with law firm MinterEllisonRuddWatts to “ensure” NZDs was up to regulatory standard.

“I would think that any observer would see [a] material difference in the quality and approach of NZDs compared to other efforts which never took off,” said Strajnar.

New Zealand has seen several attempts at the creation of a stablecoin backed by the dollar. In May 2017, the now-defunct cryptocurrency exchange Cryptopia issued the first unregulated stablecoin, NZDT.

After the exchange’s bank got cold feet citing regulatory concerns, Cryptopia was forced to delist the token. Another attempt at creating the stablecoin was slated for the first quarter of 2019, but not before the exchange suffered a hack that ultimately ended in its liquidation.

See also: Coinbase, Naval, Framework Ventures Back $19M Raise for a Capital-Efficient Stablecoin

“We have spent a significant amount of time ensuring that we have a compliant structure that creates trust for parties looking to utilize the token,” Techemynt’s managing director, Adam Dodds, told CoinDesk via email. “Techemynt has a good understanding of legal nuances of NZ legislation and will work with the appropriate regulators in terms of aligning to future regulation.”

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Cryptocurrency compliance platform Shyft Network has completed a funding round with participation from Bitfury, CoinFund, BlockTower, GSR and others. The token sale netted over $6 million, according to Shyft co-founder Juan Aja Aguinaco.

Bringing the brave new world of crypto in line with the rest of the financial system, particularly regarding anti-money laundering (AML) rules, is a complex problem that Shyft is set on solving – in a decentralized fashion.

The Shyft Network, which goes live later this month, is a public blockchain based on Ethereum, which also has its version of “gas” in the form of the shyft native token, which participants must purchase to use the network. 

Related: Bitcoin News Roundup for March 10, 2021

As such, Shyft’s latest token sale is not so much an “investment” in the speculative sense, said Shyft co-founder Joseph Weinberg, but rather a sale for strategic purchasers.

“After building this thing for three years, this is the pre-launch strategic token sale,” Weinberg said in an interview. “Shyft is a utility token that’s used on the shared decentralized database in order for VASPs [virtual asset service providers] to discover each other, and to meet the costs of security and operations for the Shyft core protocol.”

June of this year will see the global AML watchdog, the Financial Action Task Force (FATF), review progress made by the crypto industry to meet obligatory data-sharing requirements accompanying transactions. The regulation is colloquially known as the “travel rule.”

“We have been working really hard to get everything out, and have been really fortunate to work with a lot of the big global exchanges,” Weinberg said, mentioning Bitfinex, Huobi and Binance. “They are saying they need to start implementing and get this moving across all of these smaller exchanges.”

Related: South Korea’s Shinhan Bank Builds Pilot Platform for Central Bank Digital Currency

Oleg Golubov, a partner at CoinFund, said Shyft’s decentralized approach to the travel rule problem was a natural fit for the crypto industry. 

“Shyft’s early traction powerfully showcases the advantages of this approach for identity data management and transfer solutions,” Golubov said in a statement.

Above and beyond applying the FATF’s recommendations to digital asset firms, Shyft is also working on ways to make the growing world of decentralized finance (DeFi) a better fit for institutional players.

“The Shyft platform can bring some of the fastest-growing and creative segments of crypto to institutional audiences,” GSR Markets co-founder Cristian Gil said in a statement, adding:

“We are looking forward to providing strategic backing, and building compliant infrastructure for the DeFi ecosystem. We believe it’s likely that DeFi will need scalable KYC solutions if it is to disrupt financial services on a global scale.”

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The outperformance of ether (ETH) over the past year relative to bitcoin (BTC) appears to have reversed since the Chicago-based commodities exchange CME launched its new ether futures contract in early February, an analysis of chart patterns shows.

ETH put in a relative bottom versus BTC around the end of 2019. The near 700% increase in ETH versus BTC’s 500% rise over the past year could reflect investor enthusiasm for decentralized finance (DeFi), which seeks to transform traditional financial products in a decentralized manner and largely sits atop the Ethereum blockchain.

• ETH has underperformed BTC over the past month, after the launch of CME ETH futures in early February of this year.
• A similar situation occurred in BTC, which underperformed ETH after its CME futures launch in late 2017. (Former Commodity Futures Trading Commission Chair Christopher Giancarlo even said in October 2019 that top U.S. officials believed at the time the CME bitcoin futures would help pop a perceived bubble in the cryptocurrency’s price, “and it worked.”)
• ETH put in a relative bottom versus BTC around the end of 2019 as investors took notice of the booming DeFi space.
• ETH is currently at resistance relative to BTC, while the downtrend from 2018 to 2020 is consolidating.
• Over the short term, BTC should continue to outshine ETH. Longer-term, the downtrend of ETH/BTC is consolidating (process of reversing).

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A dogecoin-focused platform has launched to enable peer-to-peer exchanges, or “atomic swaps,” of the resurgent cryptocurrency

In an announcement Wednesday, open-source cryptocurrency and blockchain solutions provider Komodo said its “DogeDEX” went live on March 1, and has already seen over 3,000 downloads. The service is powered by the AtomicDEX engine and is available through both desktop and mobile apps. 

Atomic swaps are a way for users to directly exchange cryptocurrencies without need for a third party such as a centralized exchange.

Related: Bitcoin News Roundup for March 10, 2021

The DEX also acts as a non-custodial wallet allowing users to store their holding on the platform. Komodo said its engineers are also in the process of building a fiat on-ramp in the next month, so cryptocurrency purchases can be made directly on DogeDEX. 

“Crypto, like the internet, is so much about community and dogecoin is the currency of the internet. Decentralized exchanges and non-custodial wallets are a few of our specialties and we want to enable [dogecoin’s] considerable fanbase to trade crypto with the very latest technology – Atomic Swaps,” said Kadan Stadelmann, CTO at Komodo.

Dogecoin has seen a resurgence in popularity after celebrities including Elon Musk, Snoop Dogg and Gene Simmons tweeted about the cryptocurrency and as prices surged during the WallStreetBets trading mania.

Read more: Nyan Dogecoin NFT Fetches $69K in ETH

Related: South Korea’s Shinhan Bank Builds Pilot Platform for Central Bank Digital Currency

The Dallas Mavericks pro basketball team owned by Mark Cuban recently announced it will soon be accepting the meme-based cryptocurrency through crypto payment services provider BitPay.

DogeDEX will provide a new way for fans to got hold of the cryptocurrency because trading venues are not universally supporting the coin.

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Dapper Labs, the blockchain game developer responsible for CryptoKitties, has persuaded a federal court to bar a token project from using the name “flow.”

• The U.S. District Court for the Southern District of New York’s order filed Monday prohibits the Flow Protocol from using the word “flow” in connection with the sale and marketing of its native token.
• The order includes the use of FLOW as the token’s ticker symbol or in its domain name , authority for which transfers to Dapper Labs.
• Flow is also the name of the blockchain Dapper Labs launched in 2020.
• The court had previously issued a temporary restraining order restricting the defendants use of the word, which expired March 5.
• Along with CryptoKitties, Dapper Labs is also behind the digital collectibles platform NBA Top Shot, which allows user to collect and trade in-game “moments.”

See also: Dapper Labs Raises $18M in Token Sale for NFT-Centric Flow Blockchain

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A common misperception about crypto assets is that all coins without a hard supply limit are inflationary currencies, meaning they are assets that decline in market value over time. 

Bitcoin, with its 21 million BTC supply cap, is often touted as the ultimate “hedge against inflation.” This is because increasing demand for the crypto asset will never cause its total supply to expand beyond 21 million coins. No matter the BTC market price over time, issuance of new bitcoins is programmed to decrease every four years through events called “halvings.”

This is a comforting characteristic of bitcoin for individuals and businesses who distrust the management of fiat currencies at the hand of state actors. Countries with a history of rampant inflation are case studies in how the purchasing power of an asset can wither away through sudden and exorbitant increases to money supply. 

Related: Bitcoin News Roundup for March 10, 2021

While setting a finite supply is one way to protect against inflationary market forces, it’s not the only way. There are other crypto assets such as ether, the native cryptocurrency of the Ethereum, with monetary policies aimed at curbing inflation over time without relying on a hard supply cap. 

How a fixed issuance schedule affects ether supply

Like bitcoin, ether has a fixed issuance schedule. For every block produced on the network, Ethereum issues two new coins into circulation. No matter the number of active users, number of transactions or the market price of ether, the total supply is programmed to increase gradually.

So long as demand for ether outpaces its steady supply growth, it will not be an inflationary currency whose value depreciates over time. 

A caveat to this statement is that, unlike Bitcoin, Ethereum’s monetary policy is in flux. Ethereum does have an issuance schedule of 2 ETH/block today. However, this wasn’t always the case. 

Related: South Korea’s Shinhan Bank Builds Pilot Platform for Central Bank Digital Currency

Two years ago, the fixed issuance schedule of ether was 3 ETH/block. Two years before that the schedule was 5 ETH/block. 

While the block reward issuance schedule is subject to change, an important takeaway from these updates is that Ethereum developers have never increased the ether supply issuance. They’ve consistently aimed to reduce it and, in fact, plan to do so even further through Ethereum Improvement Proposal (EIP) 1559 and Ethereum 2.0.

Ether’s supply, EIP 1559 and Ethereum 2.0

While ether does not have a fixed supply cap, it may potentially have a fee-burning mechanism that takes a portion of coin supply out of circulation. 

EIP 1559 was originally proposed to make transaction fees on Ethereum more predictable for users. The proposal introduces a base fee for all transactions that is automatically calculated based on network activity and once paid, immediately burned. 

Depending on the activity of the network, EIP 1559 could burn more ether through base fees than the amount of new ether issued into circulation through miner block rewards. While this is not a guaranteed outcome, it is a highly likely one, judging by the rise of transaction activity on Ethereum. 

What’s more, Ethereum is transitioning to a more cost-effective and energy-efficient model for blockchain security known as proof-of-stake (PoS). This transition to PoS, dubbed Ethereum 2.0, is expected to reduce the issuance rate of ether from roughly 5% to less than 1% per annum. 

With a near-zero percent increase in the total supply of ether under PoS, there is even greater potential for asset demand to outstrip its growth in supply. In this case, the value of ether would increase over time. 

These disinflationary forces on the supply schedule of ether – a fixed issuance schedule, EIP 1559 and Ethereum 2.0 – both current and projected, suggest that, like bitcoin, there could be a case made for its potential as a store-of-value asset. 

Pulse check: Eth 2.0 milestones

If you’re new to Valid Points and the topic of Ethereum 2.0 in general, be sure to check out our 101 explainer on Eth 2.0 metrics to get up to speed about terminology used throughout this newsletter. 

Multiple milestones were reached this past week on Ethereum 2.0. 

For the first time since launch, the queue of pending validators reached zero. As of Tuesday, March 9, this metric still trends below 900 which means that any new validators that join the network will be activated within 24 hours. 

In addition, the amount of ETH staked on Eth 2.0 has crossed the 3% threshold of total circulating coin supply. This means that 3% of all ether in existence will not be available for use on decentralized applications, for trading or any other purpose other than staking on Eth 2.0 until a future point in time. 

Last but not least, Zelda proposed her first Ethereum 2.0 block on Monday, March 8. Block proposals are becoming increasingly rare occurrences for validators on the network because the probability of being assigned this responsibility declines as the number of active validators increases.

As one out of 107,277 validators, Zelda had a miniscule probability of proposing a block but after over 4,500 block attestations, Zelda made her first proposal at Epoch 21,846 Slot 699,082. 

Zelda is now ranked in the top 15% of Eth 2.0 validators by rewards earned and averages a daily income of roughly 0.0075 ETH, or $13.76. 

Validated takes

• A DeFi divorce? Yearn cancels tie-up with Cover (Article, CoinDesk)
• Dapps don’t care about your feelings (Article, CoinDesk)
• Ethereum’s fee market overhaul, EIP 1559, is greenlit for July (Article, CoinDesk)
• Ethereum 2.0 staking protocol Stakewise raises $2 million ahead of mainnet launch (Article, CoinDesk) Founder of Aave joins cryptocurrency investing firm Variant as venture partner (Article, CoinDesk)
• Is ETH coming to corporate balance sheets? (Article, CoinDesk)
• Kava halted after yield farming bug discovered in latest code release (Article, CoinDesk)
• Nyan Dogecoin NFT fetches $69,000 in ETH (Article, CoinDesk)
• The problem of authenticity in NFT art (Article, CoinDesk)
• Vitalik’s proposals to remove gas token minting (Podcast, EthHub)
• An Ethereum 2.0 emulator for local testing of Eth 2.0 applications (Blog post, Mousse)

Factoid of the week Open comms

Feel free to reply any time and email research@coindesk.com with your thoughts, comments or queries about today’s newsletter. Between reads, chat with us on Twitter.

Valid Points incorporates information and data directly from CoinDesk’s own Eth 2.0 validator node in weekly analysis. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post. 

You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is: 

0xad7fef3b2350d220de3ae360c70d7f488926b6117e5f785a8995487c46d323ddad0f574fdcc50eeefec34ed9d2039ecb. 

Search for it on any Eth 2.0 block explorer site!

Will Foxley and I will be continuing the conversation on Ethereum 2.0 with Consensys’ Ben Edgington in a CoinDesk podcast series called “Mapping Out Eth 2.0.”  New episodes air every Thursday. Listen and subscribe through the CoinDesk podcast feed on Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica, IHeartRadio or RSS.

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Youtube is said to have settled a court case brought by Ripple that alleged the video platform failed to enforce its own policies and allowed fake accounts to impersonate the blockchain payments company and its CEO Brad Garlinghouse.

In a series of tweets Tuesday, Garlinghouse said the companies have now opted to “work together” with YouTube to “prevent, detect and take down these scams.”

In April, Ripple sued the video streaming giant for failing to effectively police against scams involving the cryptocurrency XRP, resulting in monetary damage to users and reputational harm to Ripple. The lawsuit focused on the “XRP Giveaway” frauds, which aim to trick victims into believing that if they send some amount of XRP they will receive a greater amount in return.

Related: Bitcoin News Roundup for March 10, 2021

In his tweets, Garlinghouse went on to add, “Social platforms are starting to acknowledge their role in allowing crypto scams to persist and recognize the need to be part of the solution.”

Read more: Ripple, MoneyGram to ‘Wind Down’ Partnership

Details of the agreement between Ripple and YouTube were not disclosed.

“While specific settlement terms are confidential here, it’s clear to all that without accountability and action, trust erodes in this industry, at a crucial time when [governments] around the world are looking closely at crypto,” Garlinghouse said.

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Bitcoin continues to trade higher Wednesday, shrugging off impending U.S. inflation data that could amplify fears of an early unwinding of monetary stimulus by the Federal Reserve.

The top cryptocurrency by market value reached a two-week high of $55,822 earlier today, after a five-day winning streak that saw prices claw their way back from below $47,000.

Scheduled for release at 08:30 EST today, the U.S. Consumer Price Index (CPI) is expected to show the cost of living in the world’s largest economy rose 0.4% in February from 0.3% in January. In annualized terms, the CPI is forecast to have risen to 1.7% from 1.4% in January.

Related: Ripple CEO Says Legal Dispute With YouTube Over XRP Scams Now Resolved

The data could influence bitcoin’s price, given the cryptocurrency is considered a hedge against inflation and monetary and fiscal policy imprudence. While a bigger-than-expected jump in inflation would strengthen bitcoin’s long-term bullish case, the cryptocurrency’s immediate reaction could be bearish.

That’s because an above-forecast CPI would validate the narrative that the cocktail of monetary and fiscal stimulus, alongside an economic rebound, is stoking inflation. That could lead to an early tightening of stimulus by the Fed and another leg higher in Treasury yields and the U.S. dollar.

Treasury yields spiked in the last week of February, lifting the dollar and pushing bitcoin and stocks lower, as investors priced in the likelihood of the Fed’s first interest rate hike occurring at the end of 2022 rather than 2024 in the wake of rising inflation expectations and signs of economic recovery.

In other words, the markets were expecting some pickup in inflation two weeks ago. As such, bitcoin and other assets may not see much price action if the growth in the CPI matches estimates.

Related: Bankrupt Crypto Lending Platform Cred Had UK Fugitive in Charge of Funds

From a technical analysis standpoint, the cryptocurrency is looking bullish, having cleared a key price hurdle.

Bitcoin has flipped resistance at $52,666 (March 3 high) into support.

The MACD histogram, an indicator used to gauge trend strength and trend changes, has risen back above zero, indicating a bull revival. The 5- and 10-day price averages are again trending north, indicating a bullish setup.

The immediate resistance is seen at $58,332 (record high), followed by the psychological level of $60,000.

Support at $50,000 may come into play if the CPI beats estimates by a big margin, unsettling traditional markets.

At press time, bitcoin is changing hands near $54,790, representing a 1.6% gain on a 24-hour basis. The 10-year yield is seen at 1.56%, having risen by more than 50 basis points to above 1.6% in the past five weeks. Elsewhere, the S&P 500 futures are up 0.30%.

Also read: JPMorgan to Launch ‘Cryptocurrency Exposure Basket’ of Bitcoin Proxy Stocks

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Cred, a cryptocurrency platform being investigated by the bankruptcy court in Delaware, had a U.K. fugitive as its chief capital officer (CCO).

James Alexander was employed as the CCO of Cred,  the crypto lender which filed for bankruptcy in November 2020 with liabilities of between $100 million and $500 million.

Alexander had been convicted of crimes relating to illegal money transfers in the U.K. in Dec. 2007 and sentenced to over three years in prison.

Related: Ripple CEO Says Legal Dispute With YouTube Over XRP Scams Now Resolved

According to the court examiner’s report filed Monday (see below), there was a prison break at the facility where Alexander was incarcerated and he was identified by the U.K. government as a fugitive.

The examination describes Alexander’s “participation/involvement in poor decision-making” as a “recurring theme,” and “an important figure in the story of Cred’s demise.”

Alexander is said to have had “free reign” to choose how capital was raised and deployed with scant oversight from Cred’s board.

Cred’s troubles started in March 2020 when the price of bitcoin crashed to around $3,500 which the company’s hedged positions were not insulated against, the examiner said.

Related: Bitcoin Hits Two-Week High Above $55K Ahead of US Inflation Data

When CEO Dan Schatt became concerned about how his CCO had arranged Cred’s finances, Alexander allegedly transferred over $2.3 million in U.S. dollars and bitcoin to his personal accounts.

See also: Crypto Crime Siphoned Off Nearly $10.5B in 2020: Research

See the full report below:

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The Internet and Mobile Association of India (IAMAI) appealed to the Indian government Wednesday not to ban cryptocurrencies.

The IAMAI is proposing the government introduce “robust mechanisms” to regulate the cryptocurrency sector as the country could see considerable benefits from digital assets such as job creation, according to a report from The Hindu Business Line.

“Given the scale and diversity, the good governance and regulation of the cryptocurrency ecosystem in India is critical and will give impetus to the government of India’s Digital India vision,” said the IAMAI.

Related: Ripple CEO Says Legal Dispute With YouTube Over XRP Scams Now Resolved

The Indian government is planning to introduce a bill into the parliament’s ongoing budget session which could see a ban on “private cryptocurrencies” – the scope of which is unclear

However, India’s Minister of State for Finance, Anurag Thakur, said Friday that the government needs to study national security risks posed by virtual currencies before making any decision on their legality.

The IAMAI previously helped the successful challenge of the central bank’s ban on banking services for crypto firms that was overturned last March.

Read more: India’s Central Bank Sees Pros and Cons With National Digital Currency

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