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Mexico’s Second Richest Man Reveals 10% of His Liquid Assets Are in Bitcoin

5 years 10 months ago

Mexican billionaire Ricardo Salinas Pliego just declared 10% of his portfolio is now tied up in bitcoin.

Announced in a tweet on Wednesday, Mexico’s second-wealthiest man responded to questions that “many people” ask him about bitcoin, saying: “YES. I have 10% of my liquid portfolio invested.”

“Bitcoin protects the citizen from government expropriation,” Pliego added as he recommended “El Patron Bitcoin” – a book that is “the best and most important to understand #Bitcoin.”

Related: Bitcoin Indicator Suggests Bull Market Is Still in Early Phase

The other 90% of Pliego’s investments are tied up “in precious metals miners,” the billionaire explained in a reply to Dan Held, the Kraken crypto exchange’s growth lead.

Latin American countries, namely Venezuela, have been plagued by hyperinflation in recent years leading to a situation reminiscent of Germany’s 1920’s hyperinflation in the Weimar Republic.

Investors looking to protect themselves from “government expropriation” and inflation have historically turned to alternative assets like gold to hedge against fiat currency devaluation. Now bitcoin looks to be increasingly finding a place as a digital alternative.

Hours before posting his bitcoin tweet, the Mexican billionaire had posted another tweet decrying government-issued fiat as being “worth nothing” and noting that it is always “good to diversify” ones investments.

Related: Crypto Exchange Liquid Says User Data Possibly Exposed in Security Breach

Pliego is the founder and chairman of Grupo Salinas, a collection of companies with stakes in telecommunications, media, financial services, and retail stores, per Wikipedia.

See also: ‘Bitcoin Rich List’ Reaches All-Time High

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Bitcoin Closes In on All-Time High as It Hits $18K

5 years 10 months ago

(Updated): Bitcoin’s price broke through $18,000 in what some experts are attributing to global events and bullish fundamentals in crypto.

The world’s top cryptocurrency by market capitalization reached a high of $18,062 at 03:01 UTC, a price point not seen since Dec. 16, 2017. After topping out at almost $18,500, prices dropped back below $18,000 for around two hours before crossing the level again.

Over the past 24 hours, bitcoin has ranged between $16,560 and $18,464.

Related: Bitcoin Indicator Suggests Bull Market Is Still in Early Phase

Bitcoin is now up 146% on a year-to-date basis and has gained nearly 70% so far this quarter, according to CoinDesk 20 data.

“A few recent events have undoubtedly had an impact,” said Antoni Trenchev, co-founder and managing partner at crypto lender Nexo. “Institutional investment by the likes of MicroStrategy and Square, PayPal actively shilling crypto, and the bitcoin halving in May” were likely causes for bitcoin’s continual rise, he said.

Others see global events such as COVID-19 and negative interest rates in traditional markets, such as Germany, as the outliers for bitcoin’s meteoric rise this year.

“Interest rates are the most important factor in people’s decisions on where to deposit money,” said Ki Young Ju, CEO at analytics firm CryptoQuant. “I’m sure negative interest rates will drive adoption in crypto whether it’s direct purchasing crypto/index funds or using staking services.”

Related: Mexico’s Second Richest Man Reveals 10% of His Liquid Assets Are in Bitcoin

While bitcoin is fast approaching its Dec. 17, 2017 all-time high of $19,666, ether also broke new 2020 heights above $488 to stand at $489 by press time.

See also: Traders Brace for Major Volatility as Bitcoin Price Nears Record Highs

Another factor could be attributed to the easy money policies of central banks and increased government spending from some of the world’s largest economies including Europe and the U.S in recent months.

“I think it basically comes down to monetary and fiscal policy,” said Kyle Davies, co-founder of Three Arrows Capital.  “Central banks can lower rates until they get to slightly negative, and then they have to print money.”

At that point, Davies maintains, central banks’ dependency on newly printed money will make “BTC attractive.”

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Bitcoin Closes in on All-Time High as It Hits $18K

5 years 10 months ago

[Updated] Bitcoin’s price broke through $18,000 in what some experts are attributing to global events and bullish fundamentals in crypto.

The world’s top cryptocurrency by market capitalization reached a high of $18,062 at 03:01 UTC, a price point not seen since Dec. 16, 2017. After topping out at almost $18,500, prices dropped back below $18,000 for around two hours before crossing the level again.

Over the past 24-hours, bitcoin has ranged between $16,560 and $18,464.

Related: Mexico’s Second Richest Man Reveals 10% of His Liquid Assets Are in Bitcoin

Bitcoin is now up 146% on a year-to-date basis and has gained nearly 70% so far this quarter, according to CoinDesk 20 data.

“A few recent events have undoubtedly had an impact,” said Antoni Trenchev, co-founder and managing partner at crypto lender Nexo. “Institutional investment by the likes of MicroStrategy and Square, PayPal actively shilling crypto, and the bitcoin halving in May,” were likely causes for bitcoin’s continual rise.

Others see global events such as COVID-19 and negative interest rates in traditional markets, such as Germany, as the outliers for bitcoin’s meteoric rise this year.

“Interest rates are the most important factor in people’s decisions on where to deposit money,” said Ki Young Ju, CEO at analytics firm CryptoQuant. “I’m sure negative interest rates will drive adoption in crypto whether it’s direct purchasing crypto/index funds or using staking services.”

Related: Grayscale’s Crypto Assets Under Management Break $10B

While bitcoin is fast approaching its Dec. 17, 2017 all-time high of $19,666, ether also broke new 2020 heights above $488 to stand at $489 by press time.

See also: Traders Brace for Major Volatility as Bitcoin Price Nears Record Highs

Another factor could be attributed to the easy money policies of central banks and increased government spending from some of the world’s largest economies including Europe and the U.S in recent months.

“I think it basically comes down to monetary and fiscal policy,” said Kyle Davies, co-founder of Three Arrows Capital.  “Central banks can lower rates until they get to slightly negative, and then they have to print money.”

At that point, Davies maintains, central banks’ dependency on newly printed money will make “BTC attractive.”

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Grayscale’s Crypto Assets Under Management Break $10B

5 years 10 months ago

In another sign of renewed exuberance in cryptocurrency markets, Grayscale Investments has broken above $10 billion in digital assets under management for the first time.

  • Disclosed Tuesday evening, the New York-based firm now oversees $10.4 billion in assets including bitcoin, bitcoin cash, ether, horizen, ether classic, litecoin, stellar, XRP and zcash.
  • That’s up from $7.6 billion on Oct. 30, according to the firm’s November report.
  • Price appreciation in all cryptocurrencies this month is a factor behind the growth, but so are inflows: Grayscale took in $262.3 million last week alone, Managing Director Michael Sonnenshein tweeted Friday.
  • The assets are held across nine single-asset investment trusts and a diversified fund. Shares in these vehicles are offered directly only to accredited investors, but most of them can be publicly traded on the over-the-counter markets.
  • Grayscale is owned by Digital Currency Group, which is also the parent company of CoinDesk.

See also: Galaxy Digital Gets Initial Approval for New Bitcoin Fund in Canada

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Bridgewater’s Dalio: ‘I’d Love to Be Corrected’ on Bitcoin. Twitter Obliges

5 years 10 months ago

Bridgewater Associates founder Ray Dalio asked for and received a heaping dose of “radical candor” Tuesday when he said he’d “love to be corrected” on the negative views about bitcoin he expressed last week. 

In a Twitter thread, the chairman of the world’s largest hedge fund said, “I might be missing something about Bitcoin so I’d love to be corrected.” 

From arguments of privacy to bitcoin’s use as a hedge against inflation, Dalio’s invitation brought out bitcoin bulls in droves along with a smattering of naysayers. Unusual for Crypto Twitter, the responses were largely respectful, informative and, in many cases, amusing and worth your time. 

Related: Dalio Says Governments Will Kill Bitcoin. Is He Right?

Dalio was clearly responding to the firestorm he created last week when he laid out a case in an interview with Yahoo Finance for why he thinks bitcoin and other cryptocurrencies have a limited role to play in the future. 

“I today can’t take my bitcoin and buy things easily with it,” he said at the time.

As of press time, bitcoin’s price was $17,587, up from $15,752 at the time of his Nov. 11 pronouncement.

Read more: Bridgewater’s Dalio Sees Governments Banning Bitcoin Should It Become ‘Material’

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Crypto-Friendly Brooks Gets Nod to Serve 5-Year Term Leading Bank Regulator

5 years 10 months ago

Outgoing U.S. President Donald Trump has nominated Acting Comptroller of the Currency Brian Brooks, an advocate for crypto-friendly reforms, to lead the national bank regulator on a permanent basis.

Brooks, a former bank executive who joined the Office of the Comptroller of the Currency in March after a stint as general counsel at Coinbase, has headed the federal agency since May. One of his first actions at the agency was to propose a federal licensing regime for fintech startups, which would spare them from obtaining state-by-state money transmitter licenses that all crypto exchanges currently need to do business.

Since being named Acting Comptroller by Treasury Secretary Steven Mnuchin, Brooks has made a number of moves to integrate crypto with the historically gun-shy banking sector. In July, his office published a letter telling nationally-regulated banks they could offer crypto custody services, while announcing in September that these same banks can provide services to stablecoin issuers. 

Related: US Representatives Rip OCC, Brooks for ‘Excessive Focus’ on Crypto

Brooks has been serving as Acting Comptroller after his predecessor, Joseph Otting, announced his decision to step down in early May. The U.S. Senate Banking Committee oversees the OCC, and will likely hold a confirmation hearing before the entire Senate votes to confirm or reject Brooks’ nomination.

This means that timing could be a deciding factor. Trump lost November’s election to Democratic challenger Joe Biden, meaning Biden can nominate someone else to the position if Brooks isn’t confirmed before Jan. 20, 2021. 

It’s unclear whether the Democratic Senators on the committee would vote for Brooks. He has received criticism from Democratic Representatives for his focus on crypto, with several members of the House Financial Services Committee asking him a series of questions about his work on crypto and arguing he should spend more time addressing financial inclusion and minority banking issues, especially given the ongoing pandemic. 

In addition, the Democrats in the Senate may wish to let President-elect Biden name his own choice to the OCC to serve a five-year term, rather than let Trump confirm another regulator.

Related: Blockchain-Based Lender Figure Technologies Applies for US National Bank Charter

Brooks’ nomination comes on the same day a vote to confirm Federal Reserve Board of Governors nominee Judy Shelton failed. The former Trump adviser has been a controversial pick, with three Republican senators saying they would vote against her, citing concerns about her views on the gold standard and the independence of the Fed board. A new vote is expected to occur at a later date.

In a statement, Brooks said it was “a great honor” to be nominated, adding:

It is a great honor to have President Donald J. Trump announce his intent to nominate me to serve our nation as the 32nd Comptroller of the Currency.

The mission of the Comptroller of the Currency benefits each American by ensuring our national banks and federal savings associations operate in a safe, sound, and fair manner. The OCC aims to promote fair access to capital and credit for the hundreds of millions of customers the federal banking system serves. We strive to make sure banks remain capable of providing the financial services that businesses and communities depend on to conduct their important activities each day. The more than 3,500 men and women of the OCC tirelessly work to keep the U.S. banking system the most respected in the world and a powerful source of strength for our economy and the nation.

As Acting Comptroller of the Currency, I am proud to contribute to this 157-year-old mission. If confirmed, I will work ceaselessly to ensure the agency continues to fulfill its critical mission and the men and women of this agency have the resources, training, and leadership they need to succeed in their duties.

A tall order

The hurdles to confirmation appear to be high for Brooks.

For starters, the Senate is in a lame-duck session, the Banking Committee would need to schedule a hearing and hold a vote, and Congress is about to go on Thanksgiving break, not to return until December.

While the confirmation of Supreme Court Justice Amy Coney Barrett showed the Senate majority can push something through if they are committed, “Republicans have to really want it,” said a longtime analyst of financial policymaking, noting that Shelton’s nomination failed to advance.

Further, even if Brooks were confirmed, incoming President Biden could take the unusual but statutorily permitted step of firing the comptroller, which members of his party would likely encourage if not insist upon. All he would be required to do is notify the Senate of the rationale for firing.

Brooks’ nomination “is a last-minute move to install someone at the OCC for five years,” said the Washington analyst, who requested anonymity because his employer does not want to be caught up in controversy. “The Democrats are likely to view it as a shady trick.”

UPDATE (Nov. 17, 23:20): Added background on hurdles facing nomination.

CORRECTION (Nov. 17, 23:40): A previous version of this article stated Sen.-elect Mark Kelly would replace Martha McSally on the Senate Banking Committee. While McSally is losing her seat, it’s unclear whether Kelly would take her committee spot when he is sworn in next month.

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Cynthia Lummis, Wyoming’s Incoming Senator, Wants to Explain Bitcoin to Congress

5 years 10 months ago

Cynthia Lummis, Wyoming’s incoming U.S. senator, said in an interview Tuesday the key items on her agenda include working to reduce government debt and explaining bitcoin (BTC) to her colleagues when she is sworn in early next year.  

Speaking to Fox News, Lummis, a Republican and a former member of the House of Representatives, said she believes bitcoin is a great store of value, and she plans on making that point in the Senate. She will succeed Republican Sen. Mike Enzi, who is retiring after four terms.

  • “I know there isn’t much known about bitcoin, especially in the Congress,” Lummis said in the Fox News interview, adding that she wants to ensure everyone understands the cryptocurrency’s importance as a great store of value. 
  • According to the Lummis campaign website, her agenda includes building a wall at the U.S. southern border and opposing the “Green New Deal.” Described as a “fossil fuel champion” by E&E news, Lummis’ website also advertises an “A+ Rating” from the National Rifle Association (NRA). 
  • Lummis was also previously a member of the Wyoming state House of Representatives between 1979 to 1983 and a member of the Wyoming state Senate from 1993 to 1995. She served as the state’s treasurer from 1999 to 2007. 
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Market Wrap: Bitcoin Breaks $17.8K, Outperforming Ether in November So Far

5 years 10 months ago

Spot volumes and futures open interest pushed bitcoin’s price up Tuesday, beating ether’s performance so far this month.

  • Bitcoin (BTC) trading around $17,688 as of 21:00 UTC (4 p.m. ET). Gaining 5.3% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $16,560-$17,862
  • BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin’s bull mode continued Tuesday after opening the week hitting highs not seen since early 2018. The world’s oldest cryptocurrency traded as high as $17,862 as of press time, according to CoinDesk 20 data. 

Read More: Bitcoin Slices Through $17,000 as Market Cap Nears All-Time High

Related: HODL FOMO vs. Speculative FOMO: Why This Bitcoin Bull Market Will Be Different

The last time bitcoin was at this level was back on Dec. 19, 2017, a volatile day that saw the price per 1 BTC range between $16,862 and $18,984.

Promising news Monday of a second possible coronavirus vaccine lifted most markets, and bitcoin simply continued its run with very positive trading fundamentals, noted Jason Lau, chief operating officer for San Francisco-based exchange OKCoin. “Bitcoin had already gained Monday prior to the vaccine news, reflecting its recent strength,” said Lau. “This rally versus 2017 is different because it is more institutional-driven.” 

Bitcoin futures open interest on institutional investor venue CME is at a record high Tuesday, hitting $976 million, according to data aggregator Skew.

“Bitcoin has continued to power on, but behind the raging bull there is a growing level of sophistication and capital allocation techniques,” said Denis Vinokourov, head of research for crypto brokerage Bequant.

Related: Bitcoin News Roundup for Nov. 17, 2020

Read More: Traders Brace for Major Volatility as Bitcoin Price Nears Record Highs

“Bitcoin has gone parabolic, with traders piling in from all sides – retail, institutional, Main Street and Wall Street,” said Guy Hirsch, U.S. managing director for multi-asset brokerage eToro. “FOMO is back and it feels like 2017 again, only this time the market is backed by real fundamentals rather than the [initial coin offering] mania of three years ago.” 

Spot volumes on major USD/BTC exchanges were booming Tuesday, at over $1.1 billion daily volume as of press time and much higher than the $413 million daily average the past month. 

Aside from major trading platforms that exchange dollars for bitcoin, Hirsch also noted that many retail investors now have another venue in the form of PayPal (PYPL), which opened crypto purchases up to $20,000 for all U.S. residents this past week and could increase the potential for the price to hit new records.

“Given the increased exposure to mom and pop investors through platforms like PayPal, we may be at a crescendo, with bitcoin surging into entirely new territory as it potentially pushes past the all-time high,” said Hirsch. 

Another factor to consider: The slumping value of the U.S. dollar. The U.S. Dollar Index is down 0.25% Tuesday and continues to be in the doldrums versus a basket of other fiat currencies.

“Another big variable is the devaluing of the U.S. dollar,” noted Ilia Maksimenka, chief executive officer of decentralized finance startup PlasmaPay. “This causes people to be less confident in the dollar, so people rely on other investment vehicles.”

Ether lagging bitcoin in November

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Tuesday trading around $482 and climbing 4.5% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Read More: As DeFi Grows, Investors Look to Polkadot to Be the Next Ethereum

Bitcoin’s price performance is actually beating ether in November as of press time, up 28% versus 24%.

However, ether is still killing it in 2020, up 270% versus bitcoin’s 146% year-to-date gain. 

Brian Mosoff, chief executive officer of investment firm Ether Capital, said that in this bull run bitcoin has name recognition that ether doesn’t – at least not yet. “It’s easy to understand why bitcoin is leading the month in the digital asset space. To traditional investors it has by far the biggest brand,” Mosoff told CoinDesk. “That said, I believe both bitcoin and ether will perform well in the upcoming months and years. Ethereum’s programmable flexibility is technically an order of magnitude improvement over [the Bitcoin blockchain] and has by far the largest and most diverse group of developers.”

Other markets

Digital assets on the CoinDesk 20 are mostly green Tuesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

One notable loser:

Equities:

Commodities:

  • Oil was down 0.13%. Price per barrel of West Texas Intermediate crude: $41.39.
  • Gold was in the red 0.35% and at $1,881 as of press time.

Treasurys:

  • The 10-year U.S. Treasury bond yield fell Tuesday, dipping to 0.872 and in the red 4%.
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CME Sees Record High Open Interest for Bitcoin Futures on Wave of Institutional Inflows

5 years 10 months ago

Open interest for bitcoin futures traded on CME Group’s exchange reached a record high of $976 million Monday amid a surge of institutional capital inflows to the leading cryptocurrency and its derivative markets.

  • Open interest, or the total number of outstanding derivative contracts, on CME Group’s bitcoin futures market reached its highest level since mid-August as iconic players in traditional markets, like Stanley Druckenmiller and Bill Miller, expressed optimistic opinions about bitcoin.
  • The previous record high of $948 million came shortly after another famed investor, Paul Tudor Jones, said he owns bitcoin and planned to take positions in bitcoin futures.
  • So far in 2020, bitcoin has rallied 144%, according to Messari market data.
  • Expanding on the growth craze in CME’s bitcoin market, a spokesperson for the firm told CoinDesk, “The number of large open interest holders (LOIH) is once again at a record 102 holders and we are averaging 101 holders so far in November.”
  • CME’s surge in bitcoin futures positions also comes as incumbent, crypto-only exchanges including BitMEX and Huobi face ongoing regulatory challenges and flat or declining open interest through Q3 and Q4.
  • CME’s growth relative to other exchanges is “indicative of institutional investors wanting exposure to bitcoin,” said Phillip Gradwell, chief economist for the blockchain surveillance software firm Chainalysis, in an email to CoinDesk. It also demonstrates “the increasing separation of fiat and pure crypto markets,” he said.

Update (November 17, 21:08 UTC): This article has been updated with additional data from CME Group.

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ConsenSys Acquires Blockchain Developer Toolmaker Truffle Suite

5 years 10 months ago

ConsenSys is adding dapp development platform Truffle Suite back to its lineup of Ethereum tools.

ConsenSys Chief Strategy Officer Simon Morris said Tuesday the Ethereum-focused firm has acquired the team and technology behind Truffle.

The acquisition represents a reunion of sorts. Truffle originated within ConsenSys in 2015 but spun out in 2019 to amass $3 million in an equity sale. Terms of the ConsenSys reintegration were not disclosed.

Related: First Mover: Bitcoin Tops $17K as Scaramucci Makes Entrée, Ethereum Meets Rival

“As the most popular Ethereum development framework, it is a natural fit for Truffle to be part of the ConsenSys product stack,” Truffle founder Tim Coulter said in a statement.

Notably, ConsenSys said the Truffle deal concludes the firm’s strategic restructuring that kicked off in February and led to a 14% reduction in headcount.

Read more: Australia’s Central Bank Kicks Off CBDC Research Project With ConsenSys as Partner

Truffle’s dev tooling now rounds out ConsenSys’ portfolio of wholly owned tech products: DeFi-focused Codefi, audit provider Diligence, Ethereum wallet extension MetaMask, node farm Infura and enterprise-focused Quorum.

Related: As DeFi Grows, Investors Look to Polkadot to Be the Next Ethereum

The Brooklyn, N.Y.-based conglomerate also maintains a venture arm called ConsenSys Labs.

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Robinhood Gearing Up for Potential IPO in Early 2021: Report

5 years 10 months ago

Trading platform Robinhood Markets has begin searching for bank partners to assist it in an initial public offering that could be held in early 2021, according to Bloomberg.

Bloomberg’s sources indicated Robinhood has not yet committed to an IPO. It is, however, shopping for banks that could serve as advisers.

An IPO would seek to capitalize on Robinhood’s lucrative audience of first-time investors who flock to the firm’s popular stock trading platform. At last check the firm had a valuation of $11.7 billion.

Related: Custodian Anchorage Seeks Charter From Crypto-Friendly US Bank Regulator OCC

Robinhood’s interest in an IPO comes as U.S stock indices soar to new heights. The bitcoin markets, to which Robinhood gives its users access, is also rallying of late.

Robinhood declined to comment.

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This $29B Asset Advisory Is Giving Wealth Managers and Clients a Bitcoin On-Ramp

5 years 10 months ago

Somewhere between the Coinbase hawk and the institutional bitcoin whale lies a growing class of high-end retail investors pushing their money managers to join the bull run.

Their calls grew loud enough for Mariner Wealth Advisors to take action. Now, the registered investment advisory (RIA) whose network of independent financial advisors (FA) manage $29 billion, is giving its 23,000 clients a way to jump in.

On Tuesday, Mariner Wealth announced its 346 FAs will soon have access to the bitcoin markets through a separately managed account (SMA) set up by crypto firm Eaglebrook Advisors. The bitcoin SMA will let Mariner FAs trade bitcoin, custody it and calculate tax burdens on their clients’ behalf when fully rolled out later this year.

Related: Cathie Wood: Secrets of the World’s Best Innovation Investor

Eaglebrook CEO Christopher King told CoinDesk the partnership is a first step in tapping a huge potential class of investors worth between $5 million and $10 million that he said did not participate in the record-setting bull run of 2017. These high-end retail types route their trades on stocks, bonds and funds through FAs, but more often than not, the traditional firms behind those FAs lacked the infrastructure to execute on bitcoin, King said.

Read more: This Crypto Custody Breakthrough Will Bring Banks Closer to Digital Assets

“No one was building for the independent registered investment advisor market that I know manages trillions of dollars,” he said. (TD Ameritrade estimates that RIAs manage more than $4.7 trillion in client assets).

King created an SMA for FAs to enter the bitcoin markets, buy, hold, custody, sell and calculate tax burdens just as they do for other asset classes. He spent 12 months integrating the SMA with Mariner Wealth’s existing portfolio reporting systems. The idea was to make bitcoin allocations a seamless part of FAs’ wealth management strategy, he said.

Related: 10 Popular Investing Beliefs We Should Be Questioning

“It’s really important for including bitcoin in [clients’] wealth plan and estate plan, as well as allowing advisers to bill on the assets, the same way they would for an Apple stock or Tesla stock or Amazon,” he said.

Eaglebrook is offering bitcoin custody services through Gemini Trust Company at launch. As of Tuesday, Mariner is Eaglebrook SMA’s only customer.

King said he’s hopeful more investment advisories will sign up.

“It’s a custom solution, but almost every RIA is structured like Mariner,” King said. “If it works for them, it’s gonna work for basically the top hundred, top thousand” RIAs in the country.

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Traders Brace for Major Volatility as Bitcoin Price Nears Record Highs

5 years 10 months ago

Bitcoin traders expect a significant increase in volatility as the leading cryptocurrency continues to recoup nearly all its losses since topping out just below $20,000 in late 2017. Whether the volatility comes from increased buying or selling is a matter of disagreement. 

Through bitcoin’s current rally, volatility has remained low. Since late August, 30-day volatility has remained below 0.03 and 180-day volatility has steadily decreased from 0.05, according to data from Coin Metrics. 

Over the same period, bitcoin has gained nearly 80% after a brief dip to $10,000 at the beginning of September. 

Related: Spot Markets, Not Leverage, Fuel Bitcoin’s Price Rally Amid Mild Derivative Liquidations

As bitcoin closes in on the much-anticipated all-time-high mark, some responsive selling should be expected, said Mike McGlone, senior commodity strategist for Bloomberg Intelligence, in an email to CoinDesk. 

But a “wave of institutional flows appears to be just getting started and offsetting the relative youth of bitcoin’s past, keeping its upward trajectory intact,” McGlone added. Any selling at record highs should only “act as a speed bump” to bitcoin’s long-term trajectory, he said. 

Regardless of which side of the market investors choose to pile onto, “elevated” volatility in the very near future seems likely, according to Sam Trabucco, quantitative trader at Alameda Research. 

Some selling could come from investors looking to realize some paper gains after reaching a historic price level as the number of bitcoin addresses in profit surpassed 98% Monday, according to Glassnode. Not since early December 2017 were there this many addresses in profit on paper. 

Related: Razor Network Raises $3.7M to Prove There’s Room for More Oracles in DeFi

To Joseph Todaro, partner at Greymatter Capital, reaching a new all-time high will probably trigger significant selling as the market is likely to repeat its reaction to previous all-time highs given that “traders lean heavily on historical price action,” he told CoinDesk in an email. 

In 2016, for example, bitcoin’s approach to the then-all-time high was “met with significant sell-side pressure,” Todaro explained. He expects the same response as bitcoin nears $20,000, followed by consolidation and then renewed upward momentum.

The previous all-time high represents a significant inflection point in mainstream interest for bitcoin, said Kyle Davies, co-founder of Three Arrows Capital, in a direct message with CoinDesk. At that point, he expects mainstream interest to accelerate. 

Mainstream attention should trigger significant upside volatility, now downward, according to Davies. “We will not see resistance. We will see price discovery,” he said.

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Blockchain Bites: Bitcoin’s Run, Uniswap’s Hemorrhaging Value, Anchorage’s Banking Bid

5 years 10 months ago

Bitcoin is nearing all-time highs in price and market cap last set three years ago. Anchorage has applied with the OCC for a national bank charter. Community members have proposed a vote to reinstate Unsiwap’s liquidity mining program.

Top shelf

15% below
Bitcoin traded above $17,000 Tuesday at 12:00 UTC for the first time since Jan. 7, 2018, according to the CoinDesk 20 price index. This move puts the cryptocurrency 15% below its all-time high of $20,000 set in December 2017, and up nearly 130% on the year. The rise also pushes bitcoin’s total market capitalization to over $315 billion, just short of its $335 billion record. Despite BTC’s strong performance, exchange trading volumes remain relatively unimpressive. Take Coinbase’s BTC/USD trading pair for instance, which has seen flat monthly volumes since June.

Origin unknown
Stablecoin project Origin Dollar (OUSD) lost nearly $7 million worth of crypto in the latest sophisticated exploit of a decentralized finance (DeFi) protocol. At 00:47 UTC Tuesday, an unknown attacker utilized a flash loan and flaws in OUSD contracts to initiate what is known as a “rebase,” according to the protocol’s team. The attack artificially inflated the supply of OUSD tokens within the protocol before swapping the newly printed tokens on SushiSwap and Uniswap for USDT. The team has since disabled deposits and the price of the project’s native token was down 85% on the news.

Related: First Mover: Bitcoin Tops $17K as Scaramucci Makes Entrée, Ethereum Meets Rival

Crypto-native bank
Crypto custodian Anchorage is looking to convert a part of its business into a nationally chartered bank. In a notice dated Nov. 9, Anchorage applied to the U.S. Office of the Comptroller of the Currency for a national charter to become, if approved, the first crypto-native bank regulated at the federal level. Nathan McCauley, Anchorage’s co-founder and CEO, told CoinDesk the company is looking to “serve the emerging needs of large banks looking to integrate crypto” with the license, which would give Anchorage the clear authority to act as a “qualified custodian” for institutional investors in all 50 states.

Galaxy’s fund
Crypto merchant bank Galaxy Digital will launch a bitcoin fund in Canada, called the CI Galaxy Bitcoin Fund. According to a Monday press release, the fund’s preliminary prospectus has been approved by the nation’s securities regulator for a public offering. Designed in collaboration with CI Global Asset Management, the “closed-end” investment fund will invest directly in BTC and be targeted towards institutional investors. Last week, Galaxy disclosed it had acquired two crypto businesses in a bid to become the “go-to” firm for such investors.

Chump change?
Providing insight into a proposed rule change that would lower the threshold to report crypto transactions to the international regulatory body, a Financial Crimes Enforcement Network (FinCEN) policy specialist said criminals are conducting cross-border payments using smaller amounts of cryptocurrency. Last month, authorities submitted a proposal to amend the “Travel Rule” requiring banks and digital asset service providers to collect and store information related to crypto or fiat transfers of at least $250 that go outside the U.S. (down from $3,000). That said, FinCEN is seeking comment “from the industry as we are examining all the different technologies and business models operating in this space, whether it’s decentralized exchanges or related applications,” the agency expert said.

Quick bites
  • As DeFi grows, investors look to Polkadot as the next Ethereum. (CoinDesk)
  • Mask Network allows users to send encrypted messages, cryptocurrencies and even dapps over Twitter and Facebook. It just raised $2 million from Balaji Srinivasan, Alameda Research and others. (CoinDesk)
  • Tether’s blacklistings on Ethereum grew by 130% this quarter. (The Block – paywalled)
  • Crypto execs need liability insurance, thinks McLeod Law’s Matthew Burgoyne. (CoinDesk – op-ed)
  • In a reminder of crypto’s core value proposition of censorship resistance, Western Union will suspend U.S. dollar transfers to Cuba. (CoinDesk)
Market intel

Outshining gold
Bitcoin is outshining gold by a significant margin. While the top cryptocurrency by market value has risen 22% to cross $17,000 this month, the precious metal is up just 0.5% at the current price of $1,890 per ounce.

Related: Blockchain Bites: Data Unions. Hard Forks. And One Citi Analyst’s Case for $300K BTC.

‘Digital silver’ flips
Litecoin jumped to nine-month highs early on Tuesday, replacing bitcoin cash as the seventh-largest cryptocurrency by market value. The cryptocurrency, sometimes called “digital silver,” rose approximately 10% to $75.77 during the Asian trading hours, a level last seen on Feb. 24, according to the CoinDesk 20. With the jump, Litecoin now has a market capitalization of $4.90 billion, higher than bitcoin cash – which underwent a hard fork on Sunday – at $4.67 billion.

At stake

Governance vote
Uniswap, the decentralized market maker at the center of this year’s DeFi boom, has ended its liquidity mining subsidy.

Instituted in September in a bid to regain market share from the upstart protocol SushiSwap, Uniswap allocated approximately 20 million UNI to four mining pools – ETH/USDT, ETH/USDC, ETH/DAI, and ETH/WBT.

SushiSwap, a genetic clone of Uni, burst on the scene as a fully decentralized (read: not venture-backed) market maker, offering the one thing Uniswap lacked: a governance token.

Sushi planned to attract Uniswap users by offering steep rewards for those that migrated to its platform. Uniswap responded to the threat by airdropping some 1 billion UNI governance tokens to community members, team members and investors, and instituting the liquidity mining program.

Since launch, Uniswap’s token has been an experiment in community governance. Recently, a proposal with popular support to further disseminated UNI tokens to those kept out of the initial airdrop fell short by less than 2.5 million “votes.”

Now, the community is facing another vote to reinstate the liquidity mining program. On Monday, Audius strategy lead Cooper Turley and pseudonymous “monet supply” Monday presented a proposal to reinstate the program at a diminished scale.

The proposal will have to pass a series of governance polls before farming restarts Dec. 4. Uniswap’s total value under lock (TVL) first broke $1 billion in September after introducing UNI rewards. The AMM peaked at just over $3 billion in TVL on Nov. 13.

Now, facing a tough governance vote, total value on the platform tanked nearly 55% to $1.4 billion at press time, according to DeFi Pulse.

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CoinDesk

Blockchain Startup Raises $12M Series A to Turn Brands Into Cellular Networks

5 years 10 months ago

OXIO wants to use blockchain to make “Telecom-as-a-Service” as common as SaaS.

To that end, the New York-based startup is announcing Tuesday a $12 million Series A funding round, led by Brazilian VC monashees and Atlantico Capital, with participation from FinTech Collective and Multicoin Capital. It takes the firm’s total fundraising to $20 million since late 2019.

OXIO allows big brands to offer telco-type services by turning mobile data into a tradeable digital asset using tokens on blockchains. Tokenized data packages will be particularly useful in emerging markets like Mexico where mobile internet is relatively expensive, the company says.

Related: Balaji Srinivasan, HashKey Back $2M Round in Twitter Privacy Tool Mask Network

The big picture for OXIO is a reboot of the mobile virtual network operator (MVNO) model (U.K.-based Virgin was a well-known exponent of this original trend). It’s not an entirely novel idea: Hong Kong-based DENT Wireless, which is backed by Samsung Blockchain, also offers a token to foster mobile data trading. 

OXIO allows firms to piggyback on the best local telecom or satellite infrastructure via an API. It also opens the door to much more in the way of differentiation of services rather than simply offering a branded version of the host’s internet or WiFi, according to OXIO co-founder and CEO Nicolas Girard.

“It’s less about becoming a telco and just providing exactly what Verizon and others have been doing, and more about brands adding their own spin while getting closer to their customers,” said Girard. “So if a brand becomes a mobile operator, it can differentiate and offer plans that tie into what it does as a business, whether it’s e-commerce, or retail, or the gig economy.”

Mobile data tokens

Wireless data is a $2.5 trillion industry and yet there’s no obvious way to trade it, Girard said. This is where blockchain comes in; it’s just one component, but an important part of the vision, he said.

Related: DeFi Dashboard Zapper Snags New Funding From Delphi and Coinbase Ventures

OXIO has been running trials using the Stellar blockchain and, most recently, is testing out Solana and Andreessen Horowitz-backed Near Protocol, Girard added.

“The best way to think about the role of the blockchain is around a wireless data token, so harnessing wireless as an asset class,” said Girard. “You’ve never traded wireless because there’s no instrument to address it.”

Read more: Ocean v3 Brings Wave of Data Monetization Tools to Ethereum

Wireless data varies in terms of cost and coverage depending on which country and also on the technology, such as hotel room WiFi or on a plane. In Mexico, for example, where mobile users consume just over 2GB a month (the average U.S. user consumes 2.5x that), that mobile data costs about $4.77 for 1 gigabyte. This places Mexico 158th in the world in terms of affordability. 

This is why OXIO embarked on pilot programs with some of Mexico’s largest companies across retail, convenience stores, food and beverage, and drugstores, Girard said.

“The big picture is we are trying to build the first global network as a resource,” said Girard. “So we are saying wireless can be a tradable asset, and in order to get mainstream global adoption of that network there can be a token that represents that fungible wireless data.”

As in classic crypto-economic theory, tokenizing mobile data could help align the interests of different stakeholders, said Girard. 

Looking ahead, blockchain can also play a part in how the “gold mine” of accumulated user data can be handled in such a way as to protect customer privacy while mining the value of that data, he said. (The Ocean project has taken this idea of monetizing data furthest in the blockchain world, using the concept of decentralized data marketplaces.) 

“If you’re creating new business models to subsidize connectivity, basically that means the user can pay with money or pay with data. And that’s also where the blockchain comes into play,” said Girard.

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CoinDesk

Airbnb’s IPO Prospectus Says Firm May Consider Crypto and Blockchain

5 years 10 months ago

Airbnb may have had a change of heart on cryptocurrencies, according to the prospectus for its planned initial public offering (IPO).

Filed with the U.S. Securities and Exchange Commission Monday, the prospectus says the company’s “future success will … depend on our ability to adapt to emerging technologies such as tokenization, cryptocurrencies [and] new authentication technologies.”

It further lists distributed ledger and blockchain technologies, as well as biometrics, artificial intelligence, virtual and augmented reality and cloud technologies, as being possibly key at a future time.

Related: Shanghai, Hong Kong Stock Exchanges Pause Ant Group IPO Over Regulatory Concerns

While the information is provided in the “Risk Factors” section of the document, it also says that:

“As a result, we intend to continue to spend significant resources maintaining, developing, and enhancing our technologies and platform. However, these efforts may be more costly than expected and may not be successful.”

Airbnb has previously said it has no plans to start accepting bitcoin as a means of payment, though that came after the company acquired the team at crypto-tipping service ChangeTip back in 2016.

Read more: Airbnb: No Bitcoin Plans After Industry Startup Acqui-Hire

Related: Ant Unveils Blockchain Product as Group Approved for World’s Biggest IPO

If the housing rentals giant should make an announcement about cryptocurrencies, it would send a new shockwave through the industry and further afield. That happened when PayPal, after years of speculation, announced a cryptocurrency buying service last month.

See also: PayPal Removes Waitlist for New Crypto Service, Boosts Weekly Purchase Limit to $20K

For the IPO, Airbnb is planning trade on the Nasdaq Global Select Market with the ticker symbol “ABNB.” Reuters has indicated it plans to raise around $3 billion in the offering, valuing the company at over $30 billion.

The firm disclosed in the prospectus that it managed to turn a profit in Q3 2020, despite being hit by restrictions brought by the coronavirus pandemic.

Some decentralized projects have set out with aims of rivaling Airbnb using blockchain technology, but none have seen a major success to date.

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CoinDesk

First Mover: Bitcoin Tops $17K as Scaramucci Makes Entrée, Ethereum Meets Rival

5 years 10 months ago

Bitcoin climbed above topped $17,000 early Tuesday for the first time since January 2018, pushing this year’s remarkable rally to 137% on a year-to-date basis. That’s 10 times more than the Standard & Poor’s 500 Index of large U.S. stocks. 


“Bears are in disbelief,” the digital-asset market analysis firm Arcane Research wrote early Tuesday in a report, noting that the cryptocurrency is on track to post its sixth straight weekly gain. “It seems like there is nothing stopping bitcoin at the moment.” 


In traditional markets, European shares slid and U.S. stock futures pointed to a lower open as investors worried that the potentially economic scarring from a resurgence in the coronavirus. Gold weakened 0.1% to $1,888 an ounce. 

Related: Gold Lags Far Behind Bitcoin as Vaccine Optimism Buoys Markets

Read More: Bitcoin Slices Through $17,000 as Market Cap Nears All-Time High

Market moves

Look no further than the rapid growth this year in the white-hot arena of decentralized finance, or DeFi, and it’s clear why the Ethereum blockchain is dominating so many conversations right now in the digital-asset industry. 

The second-largest blockchain’s native cryptocurrency, ether (ETH), is up 266% this year – twice as much as mooning bitcoin (BTC). 

But a lot of savvy digital-asset investors are hedging their bets, buying tokens associated with upstart blockchains that could potentially grab market share from the Ethereum network, often referred to as a “world computer” due to its versatility and programmability.

Related: Bitcoin Slices Through $17,000 as Market Cap Nears All-Time High

One such token is dot (DOT), of the Polkadot blockchain, whose co-founder Gavin Wood was a co-founder of Ethereum. Wood wrote the original project white paper for Polkadot in 2016, just a year after the Ethereum network launched.

Since going live in mid-August on exchanges after the Polkadot network performed a 100:1 split, the dot token is up over 44%. Over the same period, Ethereum’s ether has only climbed a bit over 8%.

“The market and investor appetite has been really strong for Polkadot’s dot token,” said Keld van Schreven, managing director of the investment firm KR1, which includes Polkadot in its portfolio. An initial valuation from a pre-network launch fundraising was priced around $3, he said. “So to consistently trade above $4 since then has been really encouraging.”

– Daniel Cawrey

Read More: As DeFi Grows, Investors Look to Polkadot to Be the Next Ethereum

Bitcoin watch

Bitcoin’s strong rally continues with demand outstripping supply amid the heightened expectations of swift global economic recovery on potential coronavirus vaccines.

The top cryptocurrency by market value rose to fresh 33-month highs above $17,000 during the early U.S. trading hours. Prices are up 20% this month alone. 

Bitcoin has been characterized by some investors as “digital gold” due to a belief the cryptocurrency can serve as an effective hedge against inflation. But in recent weeks, bitcoin prices have gained as gold has struggled, following the news that two drugmakers, Pfizer and Moderna, had announced promising results in developing coronavirus vaccines.

The possibility that a vaccine might arrive early next year, helping the global economy to return toward pre-pandemic output levels sooner than expected, has triggered a rotation of money out of defensive assets and into risk assets, according to Ole Hansen, head of the commodity strategy at Saxo Bank.

Bitcoin, however, has stayed bid on strong holding sentiment and the supply shortage. “Since bitcoin was at $11,400 a month ago, miners have been selling an average of 11 bitcoins per hour on exchanges. In comparison, 214 coins per hour have been scooped off exchanges,” Willy Woo, an on-chain analyst and the author of The Bitcoin Forecast newsletter, tweeted early Tuesday.

With the global stockpile of negative yielding bonds at record highs and the U.S. dollar expected to depreciate on coronavirus vaccine optimism and continued money printing by the Federal Reserve, the odds appear stacked in favor of a rally to record highs above $20,000.

Token watch

Litecoin (LTC): Also-ran cryptocurrency flips bitcoin cash (BCH) in crypto rankings with rally to nine-month high.

Uniswap (UNI): Uniswap may re-up rewards as SushiSwap angles to catch itinerant yield farmers. 

Origin Dollar (OUSD): Stablecoin project suffers “re-entrancy attack” early Tuesday, resulting in loss of $7M, including $1M deposited by company, founders and employees. 

What’s hot

Anthony Scaramucci’s $9.2B fund-of-hedge-funds SkyBridge Capital seeks exposure to digital assets including altcoins (CoinDesk) 

Coinbase goes down as bitcoin nears $17K (CoinDesk) 

Galaxy Digital gets initial approval for new bitcoin fund in Canada (CoinDesk) 

China’s crypto miners struggle to pay power bills as regulators clamp down on OTC desks (CoinDesk) 

Cryptocurrency custodian Anchorage applies to U.S. regulator OCC to convert to national bank charter from South Dakota-based trust company (CoinDesk) 

Israeli startup discovers loophole in DeFi lending platform MakerDAO’s collateralized debt positions market (CoinDesk) 

Binance discontinues U.K. pound-linked stablecoin, calling it just an “experiment” (CoinDesk) 

Decentralized exchange Uniswap and stablecoin tether (USDT) dominate the Ethereum network, taking up over 35% of transactions (CoinDesk):

Analogs The latest on the economy and traditional finance

Citigroup says U.S. dollar could tumble 20% in 2021 (Bloomberg) 

America’s zombie companies have racked up $1.4T of debt (Bloomberg) 

Some 13M U.S. workers enrolled in emergency benefit programs that expire Jan. 1; Deutsche Bank estimates income could drop by $150B in first quarter, causing weaker consumer spending that would shave 1 percentage point off economic output (WSJ) 

Ultra-low U.S. mortgage rates, thanks to easy Federal Reserve monetary policy, has allowed homeowners to refinance, reducing monthly payments and freeing up cash (Bloomberg)   

Austerity nowhere in view as European Bank of Reconstruction and Development’s chief economist predicts a half-century repayment schedule for coronavirus debt (WSJ)   

Japan now offering 0.1 percentage-point interest-rate sweeteners to incentivize consolidation in barely profitable banking sector (WSJ) 

U.S. consumers flush with cash after paying down debt, helped in part by stimulus from the government (Bloomberg) 

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CoinDesk

Balaji Srinivasan, HashKey Back $2M Round in Twitter Privacy Tool Mask Network

5 years 10 months ago

Mask Network, the protocol that allows users to send encrypted messages, cryptocurrencies and even dapps over Twitter and Facebook, announced a $2 million funding round Tuesday co-led by HashKey and Hash Global. 

Other participants included Alameda Research, Sino Global and personal investors including Balaji Srinivasan, who touted the network back in September.

“Yes, you’re using Twitter, Facebook or eventually Reddit, but you’ll realize your picture and your file never existed on those platforms,” Mask Network founder Suji Yan told CoinDesk in an interview, translated from Mandarin. 

Related: Twitter Hires Noted Hacker as Head of Security Months After Bitcoin Scam

The company recently engaged its Twitter community with random draws of 538 election-themed non-fungible tokens (NFTs). (The number of Trump and Biden cards issued mirrors the number of Electoral College votes each U.S. presidential candidate ended up winning.)

“We got into this election NFT game to prove to more users that Web 3.0 can be used on Web 2.0,” Yan told CoinDesk.

The protocol currently has over 800,000 downloads across its product suite but only 30,000 active users. Yan says that’s because only crypto-native experts really understand the product. 

Mask Network currently partners with companies such as Arweave to send encrypted files and MakerDAO for users to send DAI via Twitter “red envelopes,” which founder Ethereum founder Vitalik Buterin took advantage of this Chinese New Year.

Growth plans

Related: DeFi Dashboard Zapper Snags New Funding From Delphi and Coinbase Ventures

Yan told CoinDesk the funding round will help the company to decentralize and partner with other companies to add more functions over the next two quarters.

“Imagine how powerful it would be if Square built their function on Twitter through MetaMask,” Yan said. “When we’re fully decentralized, they won’t need us to build that.”

Becoming a fully decentralized company would also enable the Shanghai-based startup to attract more Chinese users, by building MetaMask’s current features onto Chinese social media apps like WeChat or Weibo. 

Read more: MetaMask Gets Into the Decentralized Exchange Aggregation Business With Token Swaps

“Our current centralized operating model is very dangerous in China,” Yan told CoinDesk. Through a future launch of a governance token, the Mask team hopes to ease the risk of being deplatformed.

“They can kill us but they can’t kill a DAO or a file on Arweave,” Yan said.

This current funding round also included many Chinese investors. Yan said the reason for that may be because “U.S. VCs seem to be afraid that Facebook is involved.” 

The company also has plans to launch “Initial Twitter Offerings” before the end of this year. It will allow users to discover new token launches and purchase the tokens – all without leaving Twitter.

Lead investor HashKey said via Telegram, “We firmly believe that the Mask team will keep this amazing world by pursuing liberty of encryption and privacy.” 

Indeed, Yan said the company’s ultimate goal is to achieve a declaration of independence in cyberspace. 

“Today in 2020, we finally saw an awakened need for independence of governance on social media,” Yan said. “The only thing that’s missing is a portal to a new, open internet.”

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CoinDesk

New Mac Update Leaves Users No Room to Escape Data Collection

5 years 10 months ago
  • Apple’s most recent update, Big Sur, makes a feature that logs device activity for offline (and online) applications practically impossible for privacy solutions to bypass. 
  • The monitoring is yet another example of Apple’s privacy-compromising design choices, despite the company’s efforts to present itself as a privacy ally.
  • VPNs and other firewalls cannot circumvent the feature. 
  • Security researchers suggest that users who care about their digital privacy explore other, open-source alternatives. 

On Nov. 12, Mac users complained their computers were acting sluggish. This sluggishness coincided with the release of Big Sur, the latest Mac update fro Apple. 

After the update was released, a technical error disrupted the servers Apple uses for OCSP requests, the packets of data that verify a computer’s SSL certificate when it accesses online applications. Apple devices were shutting down because these OCSP requests weren’t reaching Apple servers

As some users looked closer, it became very clear why the devices failed when the OCSP servers were failing: Every time a user opens an application (even an offline one), that action is being tagged and traced by Apple’s OCSP servers.

Related: My Data, My Money: Data Dividends and the Digital Economy

This feature was introduced in Apple’s Catalina update, but certain tools (like Little Snitch) could be used to bypass it. Now, with Big Sur, there’s no practical way for average Mac users to thwart the feature. 

Apple has touted itself as pushing privacy as the core of its mission, perhaps most publicly by rebuffing law enforcement demands to unlock one of the San Bernardino, Calif., shooter’s iPhones after the December 2015 attack.

But these new revelations demonstrate some of the inherent flaws in centralized data collection – you have to trust Apple not to share this information (or trust them to not be coerced into revealing it to a government agency). In this case, though, Apple’s siloing of data through Big Sur may not even be the primary issue because these OCSP requests are transmitted unencrypted, meaning the contents can be read by any surveilling party that intercepts them.

Thus, if Mac users want out from under Apple’s eye, they’re going to need to explore alternatives.

Mac update enables offline activity logging

Related: Data Is Labor: Why We Need Data Unions

“On modern versions of macOS, you simply can’t power on your computer, launch a text editor or eBook reader, and write or read without a log of your activity being transmitted and stored,” hacker and security researcher Jeffrey Paul writes in a blog post.

Paul told CoinDesk in an email he doesn’t think “Apple has ill intent here,” but that its goal is to monitor malware and other illicit software on its devices. 

The problem, though, is these OCSP requests are unencrypted and so “vulnerable to passive monitoring.” This leaves the data open to collection and parsing at the hands of “large-scale passive monitoring organizations” such as the U.S. National Security Agency (NSA). 

“This is, of course, terrible practice, and despite being the industry standard, Apple should know better, as they are cryptography experts (who run their own certificate authority and regularly use relatively advanced cryptographic tools like client certificates and cert pinning),” Paul wrote over email.

Telemetry is a diagnostic process by which servers track how a device is used. Paul said the problem with Apple’s system here is that because this data is not encrypted, third parties can read it. Any entity tapping into these lines of communication can see what applications someone is using and when they use them.

“The real privacy risk here is not that Apple might be collecting this data. They’re likely not, as I believe that this is an attempt by Apple to prevent malware from being able to execute on their platform. The problem is that it serves as *inadvertent* telemetry to anyone who’s listening on the wire, which, in the United States, is every major ISP and the national military,” he continued.

These kinds of concerns have led to arguments against centralized servers for contact tracing in the European Union. They’ve also encouraged recent pushes for mixnets, which mix network traffic specifically to avoid passive metadata observation. 

Apple’s devices have always been a walled garden of sorts. Applications and software from unverified publishers, for instance, must be manually approved by users. The ostensible aim of such controls is to protect the user, but as Cory Doctorow recently emphasized to CoinDesk over email, these controls can override agency in certain scenarios (for example, when Apple removed thousands of apps from its Chinese app store). 

“I think this is a great example of what Bruce Schneier calls “feudal security,” Doctorow told CoinDesk, commenting on the activity logging feature. “The idea that our systems no longer give us the power to protect ourselves, but rather require us to surrender our destiny to one of the great techno-warlords of the age (Facebook, Google, Apple, Msft, etc.), who will protect us … from everyone except [t]hemselves.”

Data privacy solutions

For any Mac users hoping to escape the surveillance, solutions are going to have to come from outside Apple’s locus of influence. 

Before the Big Sur Mac update, VPNs or firewalls like Little Snitch would have kept your computer from leaking information. But Big Sur trumps this, said Valdas Petrulis, co-founder and lead software engineer at Mysterium Network, a decentralized VPN protocol..

“MacOS Big Sur (version 11.0) allows traffic to bypass usual routing and firewall rules. Which simply means Little Snitch won’t be able to monitor and block this, and neither can a VPN be able to help or hide you. MacOS has now simply forbidden that.”

Sean O’Brien, the principal researcher at ExpressVPN’s Digital Security Lab, said that ultimately a VPN will not “prevent Apple from being able to collect this data, but [it] “would at least protect it from other network intermediaries as it travels over the internet.”

There is a way to disable the feature, though Paul said only MacOS experts should try this. Apple changes which system services you can disable with each update, Paul said, so this may be changed in the future. 

“Really, though, the #1 thing that consumers can do to protect their privacy when using Apple devices is to *never* use iCloud, and to not use iMessage,” Paul continued. iCloud data is unencrypted, he said, allowing “the FBI or U.S. military to read pretty much everyone’s complete iMessage history without ever touching the device.”

Alternatives?

The only way to escape Apple’s panopticon, according to Paul? “Open-source software that doesn’t spy on you.” This used to mean tools like Little Snitch, Tor and VPNs, but now that Apple has a tighter grip on personal privacy, those seriously worried about their privacy can only change hardware and software providers.

Perhaps as testament to users making a change, Mysterium CMO Sharmini Ravindran said the service has experienced “8 to 10 times as much interest” in its Windows application versus its Mac version.

Of course, Microsoft is no privacy saint either, meaning the free and open-source Linux software, long the choice of most privacy advocates, could be the safest bet.

But that’s only going to work if your typical Mac user cares enough about the privacy-leaking feature. And if he or she does care, there’s also the matter of knowing enough about computers to boot and maintain Linux. One of Apple’s key selling points is that it’s user friendly for even the most tech-averse individuals, which can be appealing given privacy tech is sometimes full of friction for people who are used to logging into everything using Face ID. 

Then again, Apple has also been praised as a privacy-conscious company, and public perception is always changing. 

“Not only is Apple exposing its customers to risk from the company’s own executives and corporate decisions, but it’s also creating a moral hazard for governments, inviting them to coerce Apple into (ab)using this facility to harm – not help – its users,” said Doctorow.

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CoinDesk

Gold Lags Far Behind Bitcoin as Vaccine Optimism Buoys Markets

5 years 10 months ago

Bitcoin is outshining gold by a significant margin in price terms as expectations soar of a swift global economic recovery enabled by promising coronavirus vaccines.

While the top cryptocurrency by market value has risen 22% to cross $17,000 this month, the precious metal is up just 0.5% at the current price of $1,890 per ounce.

The demand for traditional haven assets such as gold has declined this month as two Big Pharma firms, Pfizer and Moderna, announced positive results for their experimental coronavirus vaccines.

Related: First Mover: Bitcoin Tops $17K as Scaramucci Makes Entrée, Ethereum Meets Rival

The resulting speculation that the global economy may well return to normality as soon as the second half of 2021 has triggered a rotation of money out of defensive assets and into risk assets, according to an outlook from Ole Hansen, head of commodity strategy at Saxo Bank.

Bitcoin, too, is considered “digital gold” by many. However, the increased risk appetite in traditional markets and the record high in U.S. stocks have so far failed to put the brakes on bitcoin’s rally.

The cryptocurrency managed to keep gains above $15,000 last Monday despite the Pfizer news, and jumped nearly 5% to $15,885 yesterday, even as Moderna’s announcement bolstered the stock markets. On both days, gold suffered notable losses.

Bitcoin’s resilience may be associated with strong holding sentiment and a supply shortage. “Since bitcoin was at $11,400 a month ago, miners have been selling an average of 11 bitcoins per hour on exchanges. In comparison, 214 coins per hour have been scooped off exchanges,” Willy Woo, an on-chain analyst and author of “The Bitcoin Forecast” newsletter, tweeted early on Tuesday.

Related: Bitcoin Slices Through $17,000 as Market Cap Nears All-Time High

The market has been buoyed by increased institutional participation and technical charts showing little resistance ahead of the 2017 record high of $20,000.

Moving forward, the odds look stacked in favor of rallies for both bitcoin and gold because the U.S. dollar is expected to weaken on the vaccine optimism and other factors.

Also read: Why Bitcoin Thrives (and Why It Won’t Replace the Dollar)

Analysts at Citigroup and Goldman Sachs foresee vaccine-led dollar (USD) weakness in 2021, with the former projecting a 20% decline in the greenback. The Dollar Index, which tracks the value of USD against major currencies, is currently hovering near 92.30, representing a 4% year-to-date drop.

Further, Goldman’s economics team forecasts a temporary bounce in inflation, which could draw hedging bids for scarce assets such as bitcoin and gold.

At press time, bitcoin is trading near $17,000, representing a 1.63% gain on the day.

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