CoinDesk Crypto

Cryptocurrency investigation firm Chainalysis said cryptocurrency-related crime fell significantly in 2020 but remains appealing for criminals due to its anonymous nature.

• Chainalysis reports in 2020, cryptocurrency criminal activity fell to 0.34%, or $10.0 billion in transaction volume, compared with 2019, when criminal activity represented 2.1% of all transaction volume or roughly $21.4 billion worth of transfers.
• One of the reasons for the decline is due to overall economic activity nearly tripling between 2019 and 2020, but the overall amount of cryptocurrency-related crime is falling and is an even smaller part of the cryptocurrency economy, said the firm.
• Chainalysis highlighted scams were much smaller in 2020 compared to the enormous PlusToken Ponzi scheme in 2019, which took in over $2 billion from millions of victims.
• The majority of the cryptocurrency-related scams, around 54%, were made up of illicit activity followed by darknet markets which was the second-largest crime category, accounting for $1.7 billion worth of activity, up from $1.3 billion in 2019.
• Chainalysis said the “big story” for cryptocurrency-based crime in 2020 is the rise of ransomware which, while only accounting for 7% of all funds received by criminal addresses at just under $350 million worth of cryptocurrency, was up 311% from 2019. The number of ransomware incidents could even be higher due to the low reporting rate, the firm said.
• The COVID-19 pandemic has forced more people to work-from-home and in turn this has opened up new vulnerabilities to ransomware attacks for many organizations, said the firm.

Read more: Alt-Right Groups Received $500K in BTC Month Before Capitol Riot: Chainalysis

Related Stories

• French Central Bank Trials Digital Currency for Interbank Settlement
• Thieves Grab $451K in Cash From Hong Kong Crypto Trader
• UK’s NHS Taps Blockchain Tech to Monitor Coronavirus Vaccine Cold Chain
• South Korea’s Dunamu Launches Bitcoin ‘Fear and Greed’ Index to Guide Traders

A recent report on the amount of bitcoin stolen through a variety of scams over the years has confirmed that theft of this digital asset is down significantly across the board, suggesting that security around the highest-performing cryptocurrency has tightened significantly.

Saddle, the latest decentralized finance (DeFi) system to come out of Silicon Valley, has raised $4.3 million in seed funding from Framework Ventures, Polychain Capital and Electric Capital. 

Announced Tuesday, the new automated market maker (AMM), which has just gone live, is focused on preventing slippage in value between different types of pegged-value assets like stablecoins and tokenized bitcoin. The startup, which now has four full-time coders, was recently spun out of Thesis, the a16z-backed firm behind projects like Fold, tBTC and Keep.

Slippage refers to the difference between the expected price of a trade and the executed price of that trade. Crypto being highly volatile and reactive, means even stablecoins and pegged tokens get hit with a large amount of slippage when traded on-chain. 

Related: Offline Travel App Maps.Me Raises $50M in Funding Round Led by Alameda Research

“If you’re trading $100 USDC for USDT, you’d expect to get pretty close to $100 USDT,” Saddle founder Sunil Srivatsa said in an interview. “For the longest time, that wasn’t possible. You would trade $100 of USDC, and maybe get out like $97 or $98 [in USDT].”

Read more: Bitcoin-on-Ethereum Token tBTC Relaunches Following Buggy Debut in May

AMMs like Uniswap and others, which pool capital together and set rules for how you trade against the pool, have tolerance settings where users can set the maximum percentage of price movement they can live with. 

“So one of the problems that we’re setting out to solve is to basically unlock deep on-chain liquidity for pegged value crypto assets,” said Srivatsa, a former Uber engineer also known as @devops199fan to those in the DeFi community. “That means you’re able to make trades and lose a very minimal amount to slippage and transaction fees.”

Related: Optimism ‘Soft Launches’ Ethereum Throughput Solution With DeFi’s Synthetix

Saddle plans to use Synthetix’s virtual synths. (Synthetix makes synthetic assets where instead of trading ETH for USD, users trade sETH for sUSD.)

Srivatsa said there is currently a limitation with the Synthetix system, since trades between “synths” come with a five-minute settlement delay before a trader gets the underlying assets (this is to prevent front running).

Read more: Optimism ‘Soft Launches’ Ethereum Throughput Solution With DeFi’s Synthetix

However, this breaks composability, said Srivatsa, such as when executing a single trade between different tokens like sBTC and wrapped bitcoin (WBTC), for example. Virtual synths fix this by introducing a new token that basically represents a claim on that unsettled trade, Srivatsa said.

“So you can use that as a placeholder, atomically, and then settle after the fact,” he said. “The reason you want to do this is because synths also have this pretty exciting property where you can trade between them with no slippage – at any size, up to the size of Synthetix’s global pool.”

Starting today, Saddle offers a choice between four tokenized bitcoin options in its first liquidity pool: renBTC, WBTC, sBTC and tBTC, Srivatsa said, and in the near term, will introduce new pools for stablecoins and ETH-based tokens.

Related Stories

• MahaDAO’s Algorithmic ‘Valuecoin’ Goes Live on Ethereum
• Lido Protocol Does Eth 2.0 Staking but With a DeFi Twist

Bitcoin (BTC) was higher for a second day, staying in the past two weeks’ range of between roughly $34,000 and $40,000.  

“This period of consolidation is building a solid base, giving those who wish to sell bitcoin plenty of time,” according to the cryptocurrency exchange firm Diginex. 

Ether (ETH), the Ethereum blockchain’s main cryptocurrency, rose Tuesday to a new all-time high of $1,439.33, reaching price levels not seen since early 2018. The LINK token from Chainlink, which provides price feeds to decentralized trading and lending systems built atop blockchain networks, also set a record price.   

Related: Market Wrap: Bitcoin Hangs at $36.4K While Ether Flies to Over $1.4K

Read More: Ethereum’s Ether Cryptocurrency Sets New Price Record on Major Exchanges

With the bitcoin market trading sideways, some investors might be rotating into so-called alternative cryptocurrencies for faster returns, Edward Moya, a senior market analyst for the foreign-exchange broker Oanda, said in emailed comments.  

“The cryptoverse is growing again, and right now many cryptocurrency traders are diversifying into other coins,” Moya said. 

In traditional markets, Asian and European shares rose and U.S. stock futures pointed to a higher open ahead of Treasury Secretary nominee Janet Yellen’s confirmation hearing. The former Federal Reserve chair is expected to call for the government to “act big” on stimulus borrowing and spending, to aid the economic recovery. 

Related: Bitcoin Is Aiding the Ransomware Industry

Gold strengthened 0.2% to $1,845 an ounce. 

CORRECTION: (17:42 UTC, Jan. 20, 2021): An earlier version of this article incorrectly stated the new all-time high price for ether. The piece has been updated to reflect the record price of $1,439.33 reached early Tuesday.)

Market moves

With bitcoin prices up 26% so far in January after quadrupling in 2020 and doubling the year before that, a trader might be forgiven for looking to take some profits. 

But based on data extracted from the underlying blockchain network, investors appear content to sit tight, apparently betting a new rally could quickly take the cryptocurrency to fresh all-time highs. 

Delphi Digital, a cryptocurrency analysis firm, noted last week in a report that bitcoin balances on cryptocurrency exchanges had decreased to about 2.3 million from 2.4 million over the past month as prices rose. Often, when prices rise the balances increase as more investors transfer bitcoins to the exchange to be liquidated. 

“The net outflow this time around is potentially indicative of the long-term focused nature of recent investors,” according to the Delphi analysts, Yan Liberman and Kevin Kelly. 

The exchange outflows dovetail with other blockchain data showing more bitcoin being held by investors for the long term, known in crypto-industry jargon as HODLing.  

Analysts for Glassnode, a blockchain-data firm, noted Monday that the number of bitcoins held in “accumulation addresses” has climbed by 17% over the past year to more than 2.7 million. These are addresses that have only ever received bitcoin and never spent them. 

“This increase highlights the massive supply restriction that is occurring in the BTC market, with almost 15% of the total supply held in these addresses,” according to the firm.

Some 14.6 million out of the 18.6 million bitcoins mined over the blockchain network’s 12-year history are “either lost or being HODLed long term,” Glassnode says. That means new buyers coming in, such as big investors or companies looking to use the cryptocurrency as a hedge against potential inflation, would have to compete for the remaining 4 million or so bitcoins still circulating. 

“When combined with the general decrease in bitcoin’s liquid supply and the number of lost coins, this leads to an even more limited supply, which is helping BTC maintain the highest prices it has ever seen,” the analysts wrote. 

– Bradley Keoun

Bitcoin watch

Bitcoin remains locked in a narrowing price range despite resurgent institutional demand.

The top cryptocurrency has charted a symmetrical triangle over the past few days, as seen on the hourly chart. It’s a sign both buyers and sellers are unwilling to lead the price action.

Grayscale Bitcoin Trust (GBTC), the biggest publicly traded crypto investment trust, purchased a total of 16,244 BTC ($607 million) on Monday, taking out 18 times more supply from the market than what miners added. This was after the trust reopened last week following a month-long pause and quickly accumulated another 4,700 BTC. (Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.)

Even so, the cryptocurrency is struggling to gather upside traction. The bulls look to be taking a hiatus, having engineered a rally of more than 200% over the past three months. 

Digital-asset traders appear to have shifted toward alternative cryptocurrencies such as ether, the second-largest cryptocurrency, which rose to a new record high early Tuesday.

The focus could move back to bitcoin if the largest cryptocurrency breaks out of its hourly chart triangle pattern. That would imply a resumption of the broader trend and put $50,000 on the map, as noted by Vinny Lingham, investor and founder of crypto wallet and identity verification firm Civic.

– Omkar Godbole

Read More: Bitcoin Becomes Most-Crowded Trade in Bank of America Survey After Passing ‘Long Tech’

Token watch

Enjin (ENJ): Enjin Coin becomes first gaming cryptocurrency whitelisted for use in Japan (CoinDesk)  

Tether (USDT): Anonymous columnist questions whether Tether’s true peg is distorted by promotional awards (Medium) 

Celsius (CEL): Alex Mashinsky, CEO of crypto lender Celsius, says in interview that company filed SEC exemption form on CEL tokens “because the regulations are not clear” (CoinDesk) 

XRP (XRP): Kraken exchange becomes latest to halt XRP trading for U.S. residents after SEC suit against Ripple Labs (CoinDesk) 

What’s Hot

Goldman Sachs reportedly planning to enter crypto market soon with custody play (CoinDesk)  

Huobi Global connects to European banking system via UK’s BCB Group (CoinDesk)

Coinbase cryptocurrency exchange, hounded by snarky social-media comments about reliability, plans improvements to infrastructure (CoinDesk)

CoinShares starts exchange-traded bitcoin product (Bloomberg) 

MetLife’s investment arm predicts “true central bank digital-currency launch among Western countries seems unlikely to occur anytime soon” (CoinDesk) 

Bitcoin takes over as “most-crowded trade” in Bank of America survey after passing “long tech” (CoinDesk) 

“No, bitcoin is not in a bubble,” CoinDesk Research Director Noelle Acheson writes in Crypto Long & Short newsletter (CoinDesk) 

JPMorgan analysts see $40,000 as a key bitcoin price threshold before bullish uptrend continues, Bloomberg reports (CoinDesk) 

Former Canadian Prime Minister Stephen Harper, in interview, lists bitcoin among U.S. dollar alternatives that could make inroads as an international reserve asset (CoinDesk) 

Wall Street chief financial officers (CFO) are more wary of putting company funds into bitcoin after last week’s 30% price plunge (CoinDesk)

Bitcoin is “two bets in one: a sound, unimpeachable monetary protocol and the reserve asset for a rapidly expanding crypto-financial network,” Castle Island Ventures’ Nic Carter writes (New York Magazine) 

South Korea’s Dunamu launches its own bitcoin “fear and greed” index (CoinDesk):

Analogs The latest on the economy and traditional finance

Biden Treasury secretary nominee (and former Federal Reserve Chair) Janet Yellen says in prepared remarks for Tuesday’s confirmation hearing that “with interest rates at historic lows, the smartest thing we can do is act big” (FT) 

Jamie Dimon says JPMorgan Chase should absolutely be “scared s—less” about threat from fintech rivals, names PayPal, Square, Stripe, Ant Financial, Amazon, Apple, Google (CNBC) 

Beleaguered U.S. bank Wells Fargo targets $8B in cost savings over three years, including job cuts, and considers options for exiting asset-management and corporate-trust businesses (Pensions & Investments) 

Foreign investors expect U.S. dollar to remain weak under Biden (WSJ) 

U.S. corporate bond spreads shrink to 0.93 percentage point, narrowest since January 2020, at least partly reflecting investor confidence in ongoing economic stimulus and easy money from the Federal Reserve (WSJ)  

Reserve Bank of Australia could shut down quantitative easing program in April (Australian Financial Review)

China’s GDP grew 2.3% in 2020, lowest lowest in 44 years (Nikkei Asia Review)

Taiwanese chip maker startup Kneron eyes global expansion, aims for 8x growth in 2021 as U.S. blacklists hit Chinese rivals (Nikkei Asia Review)

Southeast Asian ride-hailing company Grab considers U.S. IPO estimated at $2B (Reuters)

Tweet of the day

Related Stories

• Blockchain Bites: ‘Crowded’ Crypto Traders, Ether All-Time High, the Bitcoin Battery Proposal
• State of Crypto: What the Crypto World Should Watch for in the Biden Era

Happy Martin Luther King Jr. Day to our U.S. readers! A former Canadian prime minister said bitcoin could become a global reserve currency, Goldman Sachs is reportedly looking to get into the crypto custody business and MetLife is bullish on CBDCs. 

Top shelf

Goldman Sachs jumping in?
Its crypto custody plans will be “evident soon,” according to an internal source. CoinDesk’s Ian Allison reported the major investment bank has issued a request for information to explore digital asset custody, though it is not interested in becoming a prime broker. Last week crypto-native Anchorage attained conditional approval from the Office of the Comptroller of the Currency to become a national digital bank.

Updating the base
Coinbase, a bellwether for bull runs because the exchange is likely to go down during periods of heavy volatility, is updating its infrastructure to prevent outages. It will also bring on more customer support. Coinbase has sent smoke signals about going public this year, though it has not yet filed.

Related: Crypto Long & Short: No, Bitcoin Is Not in a Bubble

Digital “belt and road”
China’s Blockchain-based Service Network (BSN) – a permissioned blockchain network for building decentralized applications and tokens – will test a central bank digital currency (CBDC) as early as the second half of 2021, according to a Jan. 15 blog post. Moreover, the network looks to become a blockchain of blockchains with a total of 30 public blockchain integrations slated for this year.

Quick bites

• NFTs & DEFI: Cointelegraph’s Andrew Thurman speaks to with Aavegotchi’s Jesse Johnson. (Cointelegraph)
• BITCOIN BUBBLE? Nope! (CoinDesk opinion)
• RESERVE CURRENCY: Former Canadian prime minister lists bitcoin as possible reserve currency. (CoinDesk)
• VOLATILITY FEARS: Bloomberg reports bitcoin price swings are keeping CFOs from the market. (CoinDesk)
• WHAT’S MONEY? Not CBDCs, IMF survey respondents seem to think. (Decrypt)
• BITCOIN RESURGENCE: Nic Carter explains. (New York)

Market intel

Linked to bitcoin?
LINK, the native token of the Chainlink oracle system, has hit a fresh all-time high as bitcoin trades sideways. CoinDesk’s Omkar Godbole called LINK’s new high at $23.68 (the previous lifetime high of $19.90 was reached in August,) set in overnight trading. Link is just one of many altcoins that are benefiting from consolidation in bitcoin markets and a rotation of capital into more speculative bets, Godbole reports.

At stake

Trilemma dilemma?
MetLife is the latest legacy financial institution to take a hard look at crypto. In a primer titled “The Blockchain Blockbuster,” MetLife Investment Management (MIM), the life insurance giant’s investment wing, examined the nature of money from “Yapese stones to central bank digital currencies.”

My colleague Will Foxley reported that MIM thinks CBDCs are anything but “a passing fad,” (MIM’s words) and represent the “logical progression of money and technology” (Foxley’s words). “[J]ust as the dreams of cryptocurrency developers tend to be rather lofty, so are those of various CBDC initiatives,” the document states.

Related: Blockchain Bites: Coinbase Wants to Crowdsource Asset Listings; What’s Up With Tether’s Bank?

The 18-page report, published Jan. 8, honestly didn’t say much more than that. It argued that interest in CBDC development was spurred by the explosion of digital assets unleashed after Bitcoin came on the scene. And concluded by saying “western countries” could potentially look towards China’s digital yuan experiment as a guide. Neither points are really debatable, but debate we must!

There is one smaller point worth examining. While Alexander Villacampa and Jun Jiang, the paper’s authors, appear to think CBDCs and cryptocurrencies can (and will) exist side-by-side, there was a moment of existential conflict. I quote:

“Bitcoin and its ilk are constantly battling to maintain a balance between three key concerns known as the ‘Blockchain Trilemma.’ The trilemma, often visualized as a triangle, consists of three issues related to sustainable public blockchain development: scalability, decentralization, and security. It is assumed in the trilemma that by strengthening any one of the triangle’s vertices, at least one of the others must weaken.”

The “scalability trilemma,” attributed to Ethereum co-founder Vitalik Buterin, is a (often constructive) criticism of blockchain networks. Although it’s fallen out of “the discourse” in recent years – a quick Google search showed that the problem was often used as a marketing tool for blockchains that supposedly solved the issue in 2018 – plenty of smart people are still thinking about it.

Called the trilemma, the concept can actually be reduced even further to a sliding scale of decentralization and centralization, with pros and cons of moving between the two. It posits developers can’t have everything when it comes to efficiency and security. Optimizing for decentralization naturally makes the network slower, though more secure. Centralization reduces security, by introducing a single entity that can be attacked, but improves transaction throughput. Simple enough!

But is it right? In 2018, in the heyday of the trilemma, most people cited Bitcoin and Ethereum’s proof-of-work consensus algorithm (the networks’ security design) as prime examples of how decentralization reduces transaction throughput. Thousands of miners create a secure, but slow, network.

Bitcoin developers are looking at layer 2 solutions, like Lightning, to create a usable payments system out of a secure base, while Ethereum developers are exploring layer 2s and a network overhaul. In many of these instances the solution is moving and processing some transactions off-chain, limiting how much a decentralized blockchain can get in the way.

While it’s clear that the contours of the trilemma are real and should be addressed, the real solution is probably to ignore the framing. The tradeoff between scalability and security is a problem that exists across the payments universe. Bitcoin is cumbersome though accessible to anyone, and Visa is lightning-fast but entirely prone to “financial censorship.”

This isn’t to take the Bitcoin Maximalist view that bitcoin is a store of value and doesn’t need to be a payments system, but it is an admission that there’s room in the world for multiple types of systems that all optimize for different things.

Circling back to CBDCs, as Villacampa and Jiang note, the “expansion of electronic payment systems via blockchain technology that has captured the interest of central banks who believe they are uniquely capable of providing not only a better alternative but also able to lay the foundation for an officially-sanctioned global electronic payments regime.” If that includes researchers that think they’ve solved the “scalability trilemma,” more power to them.

Who won Crypto Twitter? Related Stories

• Money Reimagined: Bitcoin’s Warning for Central Banks
• First Mover: Biden’s $1.9T Plan Shows ‘Blue Wave’ Bitcoiners Saw Coming

Chip-making giant Nvidia could potentially restart production of dedicated graphics processing units (GPUs) for cryptocurrency miners, according to its executive vice president and chief financial officer, Colette Kress.

• Speaking at an event on Jan. 12, Kress said if demand in the cryptocurrency market picks up to a “meaningful” level, the company could again start selling the specialized cards called CMPs, according to a SeekingAlpha transcription. 
• CMPs are GPUs with the video outputs removed, allowing them to be made and sold more cheaply.
• Currently, Nvidia’s RTX 30-Series GPUs are popular with miners, though Kress said, “We don’t believe [mining demand is] a big part of our business today.”
• However, “gaming demand is very strong, and we think that’s larger than our current supply,” she said.
• With the RTX 30-Series supply to stay tight until at least the end of Q1 2021, relaunching CMPs could alleviate pressure on the consumer product line.
• While bitcoin miners use specialized and more costly processors called ASICs, other cryptocurrencies like Ethereum’s ether can be mined with GPUs.

Read more: Nvidia Accused of Trying to Discredit Ex-Employee in Crypto Mining Revenue Trial

Related Stories

• CoinShares to Launch a Bitcoin ETP on SIX Swiss Exchange
• Gary Gensler Named as Joe Biden’s SEC Chair Pick
• Livecoin Exchange Announces Closure After December Hack
• Australian Bitcoin Trader Takes Banks to Tribunal After Sudden Account Closures

President-elect Joe Biden named Gary Gensler as his pick for chairman of the U.S. Securities and Exchange Commission (SEC) on Monday.

• Gensler is the former chairman of the Commodity Futures Trading Commission (CFTC), and a Wall Street veteran who has closely studied the cryptocurrency field.
• Gensler has also been a part of Biden’s transition team, overseeing financial policy work.
• Former SEC chairman Jay Clayton left the role on Dec. 23. Elad Roisman was appointed acting SEC chairman by outgoing President Donald Trump for the remainder of his administration.
• Also on Monday, the Biden administration announced Rohit Chopra as the director of the Consumer Financial Protection Bureau. Chopra currently holds the commissioner position at the Federal Trade Commission.
• Chopra has publicly criticized Libra, the Facebook-led cryptocurrency project which has since been renamed Diem.

Read more: Gensler Said to Be Named SEC Chairman: Reuters

Related Stories

• CoinShares to Launch a Bitcoin ETP on SIX Swiss Exchange
• Nvidia May Restart Production of Crypto Mining GPUs if Demand Sufficient
• Livecoin Exchange Announces Closure After December Hack
• Australian Bitcoin Trader Takes Banks to Tribunal After Sudden Account Closures

Regulated crypto payment services firm BCB Group has partnered with Huobi Global to help the Seychelles-based exchange giant connect its trading desks to the banking system in the U.K. and Europe.

Announced Tuesday, customers of Huobi’s over-the-counter (OTC) platform will be able to settle transactions instantly in euros and pounds (GBP) via BCB’s BLINC network.

Cryptocurrency exchanges have struggled in recent years to secure banking relationships and establish an interface with the fiat currency world, with some large exchanges having massive daily volume in closed systems of crypto-to-crypto trading. Prior to partnering with BCB, Huobi did not have a European fiat gateway, said Oliver von Landsberg-Sadie, founder and CEO of BCB Group.

Related: Coinbase Joins $6M Funding Round for Licensed Middle-East Exchange Rain Financial

“We’re here to provide that robust infrastructure so that these guys can just get on with trading and know that trades are happening in a way that’s properly monitored, that’s regulatory-friendly,” Landsberg-Sadie said in an interview.

The bar is high and Huobi had to jump through a few significant hoops; the whole process took some time to complete, he added.  

“We understand the importance of both a compliant and streamlined service,” Ciara Sun, Huobi’s head of global business, said in a statement. “Partnering with BCB allows us to offer a European fiat on- and off-ramping service that we know is in line with the laws of that area, but it also allows our customers in Europe to experience a smooth and hassle-free user experience.”

BCB, which started out as an OTC desk, partnered with U.K.-based Clearbank, as well as some other European banks, to facilitate crypto-to-fiat on/off ramps. The BLINC real-time settlement system, which is a bit like SWIFT for crypto in that users are legally identifiable entities, is supported by R3’s Corda platform and the Digital Asset Shared Ledger (DASL). 

Related: Coinbase Redoing Infrastructure to Prevent Outages During Peak Times

Huobi joins Bitstamp, the other large exchange taking advantage of BCB’s BLINC payment network. BCB also works with Coinbase and Kraken, but those exchanges are not part of BLINC.

Huobi is the latest large, reputable exchange that BCB has managed to bank, with a few more “kind of in-flight” to be announced soon, said BCB Group partner Ben Sebley.

Related Stories

• Kraken to Halt XRP Trading for US Residents
• Coinbase Wants to List Your Crypto Asset

Stephen Harper, an economist and the former prime minister of Canada, said bitcoin could potentially see use as a reserve currency, but it isn’t going to supplant the U.S. dollar’s international role.

In an interview with Cambridge House’s Jay Martin on Sunday, Harper acknowledged that the dollar had been on a downtrend, but said there were few viable international alternatives, even when looking at the euro and the yuan.

“Unless the U.S. becomes a catastrophe, it’s hard to see what the alternative is to the U.S. dollar as the world’s major reserve currency. Other than you know gold, bitcoin, … a whole basket of things, right?” said Harper. “I think you’ll see that the number of things that people use as reserves will expand, but the U.S. dollar will still be the bulk of it.” 

Related: 3iQ’s Canadian Bitcoin Fund Hits C$1B in Market Cap

Harper stressed he is not an expert when it comes to digital currencies, but said it is hard to see how they operate as a store of value – something “pretty critical” for a currency.

The former Conservative prime minister explained that every currency has three purposes: as a medium of exchange, as a unit of account and as a store of value. He acknowledged a digital currency is certainly a medium of exchange and can be a unit of account, but it is difficult to see how bitcoin can act as a store of value.

That’s because “I, as an investor, have no idea what this investment represents,” he said.

Harper also addressed the trend for central banks to be considering the launch of their own digital currencies.

Related: Jerome Powell on CBDCs: ‘We Don’t Feel a Need to Be First’

“Ultimately, if you have a digital currency and the purpose of the central bank is to control inflation and create a stable currency and price stability, then digital currency is just kind of an evolution of the marketplace,” he said. “But if it is part of a series of what I think are wild experiments as to the role of central banking, then that worries me a lot.”

Related Stories

• First Mover: Forget Facebook’s Stablecoin. Now It’s $700B Bitcoin in the Crosshairs
• Bitcoin in Race for Adoption Before Central Banks Launch Digital Currencies: Australia’s Macquarie

Decentralized oracle network Chainlink’s LINK token and other prominent alternative cryptocurrencies (dubbed altcoins) are charting solid gains as the crypto market leader bitcoin takes a bull breather. 

LINK set a new record price of $23.68 overnight and is changing hands near $21.73 at press time, a 7.3% gain on a 24-hour basis. The previous lifetime high of $19.90 was reached in August, according to CoinDesk 20 data. 

The cryptocurrency has nearly doubled in the first two weeks of the year in a strong follow-through to last year’s 530% rise. Chainlink’s oracles act as a bridge between cryptocurrency smart contracts and off-chain data feeds. 

Related: Bitcoin Struggles to Recover After Biggest Weekly Price Loss Since September

Some altcoins such as OMG and OXT are up over 10% in the past 24 hours, while others including ether, litecoin and bitcoin cash have gained at least 2–8% each.

Bitcoin is currently trading near $36,900, representing a 5% gain in 24 hours, but remains trapped in a week-long tightening range of $30,000 to $40,000. The period of consolidation looks to be paving the way for the rotation of money into the relatively cheap altcoins.

The switch to alts began last week with Polkadot blockchain’s DOT token rallying sharply to become the fourth-largest cryptocurrency by market capitalization, according to Alex Melikhov, CEO and founder of cryptocurrency framework Equilibrium and the EOSDT stablecoin. “Other coins now seem to be following Polkadot higher,” he said. 

The record ether-bitcoin implied volatility spread seen earlier this month had suggested a rally in ether and alternative cryptocurrencies in general may be on the way.

Related: Bitcoin’s Massive Swings Give Pause to CFOs Mulling Reserve Investment: Bloomberg

Altcoins could continue to “pop hard” while bitcoin is held in a narrowing price range, said market analyst Lark Davis on Twitter. 

LINK may receive an additional boost from Ethereum’s impending switch to the staking model, which would allow node operators to stake their collateral in order to gain access to certain data jobs that require collateral.

The altcoin rally may pause if bitcoin’s recent narrowing price range ends with a bullish breakout, opening doors for stronger gains. “If bitcoin breaks $42,000, it’s going to run to test $50,000 pretty quickly,” Vinny Lingham,  investor and founder of crypto wallet and identity verification firm Civic, tweeted Thursday.

Also read: Bitcoin Struggles to Recover After Biggest Weekly Price Loss Since September

Related Stories

• Coinbase Redoing Infrastructure to Prevent Outages During Peak Times
• Market Wrap: Bitcoin Dips to $34.4K as Big-Name DeFi Tokens Trounce ETH

Cryptocurrency exchange Livecoin announced Saturday it will shut down after a claimed attack on the platform last month.

• The Russia-based exchange said in a website notice on an alternative domain that it had made a “hard decision to close the business” and will be refunding any remaining funds to users.
• No amount for losses arising from the breach was disclosed. The firm said: “Our service and team bear hard losses as well as our clients.”
• Livecoin said it will accept claims for refunds until March 17, after which no new requests will be accepted.
• Users will need to email the exchange and pass verification procedures before they can be awarded refunds, the post said.
• In December, Livecoin claimed to have suffered what it called a “carefully planned attack in which it had “lost control” of its servers, backend and nodes.

Read more: Crypto Exchange Livecoin Begs Users to Stop Trading After Losing Control of Servers

Related Stories

• CoinShares to Launch a Bitcoin ETP on SIX Swiss Exchange
• Nvidia May Restart Production of Crypto Mining GPUs if Demand Sufficient
• Gary Gensler Named as Joe Biden’s SEC Chair Pick
• Australian Bitcoin Trader Takes Banks to Tribunal After Sudden Account Closures

A cryptocurrency trader in Australia is seeking $250,000 AUD ($192,000 USD) in compensation from two banks claiming he was the victim of unlawful discrimination when his accounts were closed with little warning.

• Allan Flynn has started proceedings against Westpac and ANZ banks at the ACT Civil and Administrative Tribunal, which closed his accounts soon after they had been opened, reports the Australian Financial Review.
• Flynn had operated a digital currency exchange registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), but said he was unable to continue operating without banking services.
• The trader said he purchased bitcoin on behalf of 450 customers via his business, but over three years had around 20 accounts closed by banks, including CBA, NAB, ING and Bendigo Bank.
• Westpac reportedly told Flynn his account was closed because it was “under investigation for cryptocurrency fraud.”
• “How am I supposed to run a lawful business if I can’t get a bank account?” Flynn told the Australian Financial Review.
• According to the report, he also claimed an ANZ employee had informed other banks and his customers that he was involved in fraud.
• The trader said he is considering raising his compensation request above $250,000 with the recent jump in the price of cryptocurrencies.

Read more: Australian Central Bank Sees ‘No Strong Public Policy Case’ for CBDC

Related Stories

• CoinShares to Launch a Bitcoin ETP on SIX Swiss Exchange
• Nvidia May Restart Production of Crypto Mining GPUs if Demand Sufficient
• Gary Gensler Named as Joe Biden’s SEC Chair Pick
• Livecoin Exchange Announces Closure After December Hack

The publisher of the upcoming online space strategy game “Infinite Fleet” is providing a chance to buy into equity and share in future profits through the launch of a public security token offering (STO).

Announced Monday, Luxembourg-based Exordium has just launched the token-based funding round in select European countries. The tokens are priced at $0.50 per EXOeu token and are being issued by tokenization platform Blockstream AMP.

Tether International Limited, an arm of the stablecoin issuer, is leading the round, having already invested $1 million in Exordium’s tokens. The funding model is aimed to democratize venture capital by making the investment accessible to the general public, Exordium said.

Related: Blockchain Bites: Coinbase Wants to Crowdsource Asset Listings; What’s Up With Tether’s Bank?

The raise, said to be in accordance with EU capital market laws, is being conducted via digital marketplace STOKR, which provides turnkey solutions for small-to-medium-sized ventures requiring access to capital markets.

According to the announcement, investors will be able to invest via STOKR using currencies such as the euro, and digital assets including bitcoin (BTC) and tether (USDT), with a minimum investment of $100.

“Unlike Kickstarter, investors in security tokens receive real financial rights in the company in which they are investing,” said STOKR co-founder Arnab Naskar.

MMO meets STO

The humans vs. aliens massively multiplayer online (MMO) space game is being developed by a team of game designers who have worked on franchises such as Age of Empires, Homeworld, Company of Heroes and Dawn of War. The game will use a different digital token to drive its in-game economy

Related: Bitcoin ETP Trading at Levels Seen by Top European ETFs: FT

“As a former … game developer myself, I see great potential in the application of crypto assets to multiplayer online games,” said Tether CTO Paolo Ardoino.

The MMO, developed by Pixelmatic, previously raised $3.1 million through its own private STO in August last year backed by Litecoin creator Charlie Lee, Blockstream CEO Adam Back, Heisenberg Capital founder Max Keiser among others.

See also: DeFi Game Aavegotchi Preps for Jan. 4 Mainnet Launch With NFT Auctions

Related Stories

• Tether’s Bank Says It Invests Some Customer Funds in Bitcoin
• Coinbase Apologizes to UK and EU Customers Hit by Regulatory Lockouts

Bitcoin is up only slightly on Monday after seeing its biggest weekly decline in over four months. 

At press time, the cryptocurrency is trading 0.2% higher on the day near $35,838, according to CoinDesk 20 data. Prices fell by 6% in the seven days leading up to Jan. 17, a weekly fall not seen since the first week of September. 

Bitcoin took a beating a week ago, falling from $40,000 to $30,305 in a matter of few hours, mainly due to heavy selling in the spot market. The cryptocurrency spent the rest of the week trimming losses and tested $40,000 at one point before ending the week (Sunday, UTC) just under $36,000. 

Related: Chainlink Hits Record High, Altcoins Rally Amid Bitcoin Consolidation

The quick recovery from $30,305 amid the continued accumulation by whales paints a bullish longer-term picture. The options market is also biased bullish, with the Jan. 29 $52,000 call option attracting good demand in the past few days. 

However, it may be too early to call an end of the bull market correction, as the cryptocurrency is still trapped in a narrowing price range or triangle pattern on the hourly chart, according to Parick Heusser, head of trading at Swiss-based Crypto Finance AG.

A move above the top end of the triangle pattern would confirm a breakout and imply a continuation of the broader uptrend. 

However, as per Heusser, a rally to a fresh all-time high above $41,962 would offer more credible evidence of a bull revival. That hinges on the pace of institutional inflows, strategists at JPMorgan said in a note Friday. 

Related: Bitcoin’s Massive Swings Give Pause to CFOs Mulling Reserve Investment: Bloomberg

“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout [above $40,000] to occur,” the strategists wrote. 

Grayscale Bitcoin Trust (GBTC), the biggest publicly traded crypto investment trust, reopened last Tuesday after a month-long break. Since then, the trust has accumulated at least 4,700 BTC, according to the Twitter-based GBTC Bitcoin Tracker. If accurate, that’s $171 million-worth of purchases in six days – significantly less than JPMorgan’s required daily average of $100 million.

Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.

Global stock markets are trading on a weak note on Monday, while the U.S. dollar is gaining ground against major currencies. The stronger greenback could hurt bitcoin’s price, as discussed last week. 

A potential triangle breakdown could pave the way for a re-test of the last week’s low of $30,305. According to trader and analyst Nick Cote, $28,500 is key support, which, if breached, could invite intense selling pressure.

Also read: Crypto Long & Short: No, Bitcoin Is Not in a Bubble 

Related Stories

• Coinbase Redoing Infrastructure to Prevent Outages During Peak Times
• ‘America and Sound Money,’ the Most Important Bitcoin Essay of the Last Year

Bahrain-based cryptocurrency exchange Rain Financial has raised $6 million in Series A funding from Coinbase and other investors.

• Rain Financial, the first cryptocurrency exchange with a crypto-asset service provider license from the Central Bank of Bahrain, announced the funding news via Twitter on Sunday.
• The $6 million funding round was led by Middle-Eastern VC firm MEVP Capital, with Coinbase, Vision Ventures, CMT Digital, Abdul Latif Jameel Fintech Ventures and DIFC also participating.
• “We are confident that our investors, who are regional and international leaders, will support us as we continue to drive towards our vision of reaching mass adoption of crypto-assets,” the team said in a joint statement via Twitter.
• Rain received its Bahrain license in 2019 following a two-year regulatory sandbox process.
• In 2019, the exchange closed a $2.5 million funding round co-led by BitMEX Ventures and Kuwait-based cryptocurrency fund Blockwater.

Read more: Bitcoin in Emerging Markets: The Middle East

Related Stories

• CoinShares to Launch a Bitcoin ETP on SIX Swiss Exchange
• Nvidia May Restart Production of Crypto Mining GPUs if Demand Sufficient
• Gary Gensler Named as Joe Biden’s SEC Chair Pick
• Huobi Global Connects to European Banking System via UK’s BCB Group

Authorities in Iran have seized tens of thousands of bitcoin mining machines that they claim have been using illegally subsidized electricity from state-run energy provider Tavanir.

• According to a report by local media outlet Tasmin News Agency on Sunday, 45,000 mostly application-specific integrated circuit (ASIC) machines were confiscated.
• The powerful machines had purportedly been consuming 95 megawatts per hour of electricity at a reduced rate, according to Tavanir’s head Mohammad Hassan Motavalizadeh.
• Earlier this month, Iranian authorities shut down 1,620 illegal cryptocurrency mining farms said to have collectively used 250 megawatts of electricity over the past 18 months, per a different news source.
• The country’s recent blackouts across major cities have been blamed in part on cryptocurrency mining, drawing the ire of officials who have sought a temporary stay on bitcoin mining until further notice.
• Cryptocurrency researcher Ziya Sadr told the Washington Post on Sunday miners had “nothing to do with the blackouts,” claiming they only made up a “very small” percentage of overall electricity capacity in the country.
• In July of last year, Iran penned a registration directive forcing miners to disclose their identities. It also forced them to disclose the size of their mining farms and their mining equipment type to the Ministry of Industry, Mines and Trade.

See also: Iran Amends Law to Allow Imports to Be Funded With Cryptocurrency

Related Stories

• CoinShares to Launch a Bitcoin ETP on SIX Swiss Exchange
• Nvidia May Restart Production of Crypto Mining GPUs if Demand Sufficient
• Gary Gensler Named as Joe Biden’s SEC Chair Pick
• Livecoin Exchange Announces Closure After December Hack

An offline mobile map for travelers has raised $50 million in a funding round led by Alameda Research.

Announced Monday, the fresh capital will go toward the launch of a multi-currency wallet on Maps.me and enable a decentralized finance (DeFi) ecosystem on the platform.

Cryptocurrency lender Genesis Capital and institutional cryptocurrency firm CMS Holdings also participated in the round.

Related: Optimism ‘Soft Launches’ Ethereum Throughput Solution With DeFi’s Synthetix

According to a press statement shared with CoinDesk, the Maps.me wallet is expected to “unlock DeFi tools” for its 140 million users by allowing them to access a range of payment and investment tools.

“By embedding and democratizing access to yield-earning finance to millions of users via an everyday app, Maps.me has the potential to really propel DeFi mainstream adoption,” said Alameda Research CEO Sam Bankman-Fried.

The move intends to remove intermediaries and banks from the financing-of-travel equation by enabling users to store value and earn yields of up to 8%. Users will also be able to send and spend money in multiple currencies for cross-border travel, offer cashback on transactions and exchange funds without hidden costs, per the statement.

With its wallet offering, the travel platform said it’s aiming to combat high foreign exchange fees and commissions charged by banks and third-party travel booking providers. Maps.me intends to allow users to make travel bookings directly through its integrated wallet with “near-zero” fees.

Related: MahaDAO’s Algorithmic ‘Valuecoin’ Goes Live on Ethereum

The Maps.me app provides offline access to turn-by-turn routing, travel guides, hotel bookings and maps which is targeted toward travelers without cell phone reception or pre-paid phone plans.

“A seasoned developer team combined with a sharp product design has the potential to bring a huge amount of traffic to … DeFi through the Maps.me app,” Bankman-Fried told CoinDesk via Telegram.

CORRECTION (Jan 18, 3:59 UTC): A press release incorrectly referred to the funding as a seed round. Maps.me raised its seed round in 2013, according to Crunchbase.

Related Stories

• Lido Protocol Does Eth 2.0 Staking but With a DeFi Twist
• Some Asian Traders Are Using Polkadot to Predict Bitcoin’s Future

China’s Blockchain-based Service Network (BSN)  – a permissioned blockchain network for building decentralized applications and tokens – plans on releasing a beta central bank digital currency (CBDC) as early as the second half of 2021, according to a Jan. 15 blog.

• The Chinese-state sanctioned BSN is currently designing a universal digital payment network (UDPN) over the next half decade. CBDCs from different nation-states will be supported by the network, the blog claims.
• The UDPN network will be available through API connection as well for “any information system such as banking, insurance, ERP, and mobile applications. . . to enable a standardized digital currency transfer method and payment procedure.”
• The network is currently in the design stage, although public city nodes (PCN) are being rolled out through China in various states of completion, the blog states.
• As CoinDesk reported, the BSN recently incorporated connections to multiple public projects into its network such as the cloud-computing project Oasis, meta-protocol Polkadot and China-based public blockchain Bityuan.
• The BSN further expects to complete integrations with a total of 30 public blockchains this year, the blog concludes.

Related Stories

• Central Bank Digital Currencies Not a ‘Fad,’ MetLife Investment Says
• Some Asian Traders Are Using Polkadot to Predict Bitcoin’s Future
• Bitcoin in Race for Adoption Before Central Banks Launch Digital Currencies: Australia’s Macquarie
• Chinese Hospital Issues First Electronic Bill on Blockchain

Michael Sonnenshein, CEO of digital asset manager Grayscale Investments, tweeted the firm raised more than $700 million on Jan. 15 seeing increased momentum from Q4.

• In Q4 2020, the company raised $3.3 billion across its cryptocurrency investment vehicles, a record for the digital asset manager and further evidence of this rally’s institutional base.
• The Grayscale Bitcoin Trust, which is the company’s most popular product, led the pack in Q4 with an average of $217 million raised every week.
• The latest data from Grayscale shows on Jan. 15 the firm has a record $27.1 billion under management; it entered 2020 with just $2 billion.
• Eric Balchunas, senior ETF analyst at Bloomberg, compared Grayscale as the “ARK” of crypto via Twitter explaining that there are a number of similarities with both defying trends and seeing increased interest.
• “The similarities are pretty amazing. I think both hung in relative oblivion for 3-4 yrs, had like $2b 12mo ago ago and then boom, 10x increase. Both defy trends: ARK w stock picking and grayscale w very high fees and 20%+ premiums,” said Balchunas.
• ARK Investment Management, an asset-management firm led by Cathie Wood has a flagship ARK Innovation ETF (ARKK) which over the course of a year has returned more than 171%, seeing its assets under management by more than tenfold, to $21.8 billion.
• New York-based, SEC-regulated Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.

Read more: Grayscale’s Crypto Products Raised Over $3B Last Quarter, the Most Ever

Related Stories

• Grayscale Once More Accepting New Clients for Most Crypto Trusts
• Crypto Investment Firm Grayscale Names New CEO, Plans to Double Staff in 2021
• Grayscale Has $19B in Crypto Assets Under Management, Up From $16.4B Last Week
• Grayscale Has $16.4B in Crypto Assets Under Management, Up From $13B a Week Ago

Blockchain firm Ripple is hiring a new director of engineering to lead the team building its open-source developer services for its payments platform RippleX.

• In a blog post, the blockchain firm said it is looking for an engineer to expand its infrastructure that supports Ripple technologies such as XRPL as well as other developer tools and services.
• The role involves shipping products that make it easier for its developers to actualize the future of the “Internet of Value” which is a concept proposed by Ripple where value is transferred as easily as data.
• Ripple has been expanding its services, on Jan. 15 Ripple inked a deal with a Malaysian money transfer business and Bangladesh’s largest mobile financial services provider to enable a remittance corridor between the two countries.
• Malaysia’s Mobile Money and Bangladesh’s bKash will leverage Ripple’s global payments network, RippleNet, for wallet-to-wallet transactions.
• The expansion and planned new hire show Ripple does not seem deterred by the legal troubles in the U.S. The company is being sued by the U.S. Securities and Exchange Commission over the claim it violated federal securities laws by selling the XRP cryptocurrency to retail consumers.

Read more: Ex-Ripple CTO Can’t Remember Password to Access $240M in Bitcoin

Related Stories

• Russian Metals Firm Norilsk Nickel Backs IBM’s Responsible Sourcing Blockchain Pact
• 3iQ’s Canadian Bitcoin Fund Hits C$1B in Market Cap
• Kraken to Halt XRP Trading for US Residents
• Advisers Allocating Crypto in Clients’ Portfolios Rose 49% Last Year: Survey