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Wednesday’s Twitter hack would seem to  spell regulatory doom for Bitcoin, which is widely distrusted in Washington. Some lawmakers – and U.S. President Donald Trump himself – associate it with crime.

In 2019 Trump tweeted he is not a fan of bitcoin and that “unregulated crypto assets can facilitate unlawful behavior.” He also reportedly told Treasury Secretary Steven Mnuchin to “go after Bitcoin.”

But immediately following the hack, lawmakers seemed more focused on Twitter’s security problems rather than cryptocurrency’s role in the hack.

Related: What Does the Twitter Hack Mean for Bitcoin? Crypto Reacts

On Wednesday, high-profile accounts belonging to Elon Musk, Kanye West, Barack Obama, Joe Biden, cryptocurrency exchanges and many others were co-opted into a bitcoin scam that netted the hackers at least $100,000. Twitter struggled to resolve the issue, even temporarily blocking verified accounts’ abilities to tweet and reset their passwords. Security experts said the hack was likely deep in Twitter’s system, and therefore is not a quick fix. 

Lawmakers were quick to respond.

See also: CoinDesk’s full coverage of the Twitter hack

Sen. Josh Hawley (R-Mo.), a vocal critic of tech platforms, fired off an open letter to Twitter CEO Jack Dorsey soon after the hack went mainstream. The event, he said, “may represent not merely a coordinated set of separate hacking incidents but rather a successful attack on the security of Twitter itself.”

Related: Market Wrap: What Twitter Hack? Traders Stay Busy Buying Bitcoin at $9,000

Hawley also asked whether there was a risk that President Trump’s account could have been hacked and how many users might have had their data stolen. 

Sen. Ron Wyden (D-Ore.) revealed he had met with Dorsey privately in 2018 and discussed implementing end-to-end encryption of users’ direct messages, which could contain sensitive information and may have been vulnerable during the hack. Wyden says Dorsey told him at the time that Twitter was working on encrypted DMs, but two years later it hadn’t delivered. 

Read more: Twitter Hack 2020 Was Probably Done by a Bitcoiner – But Not a Savvy One

“This is a vulnerability that has lasted for far too long, and one that is not present in other, competing platforms. If hackers gained access to users’ DMs, this breach could have a breathtaking impact for years to come,” Wyden said in a statement. 

Focusing blame

Meanwhile, some crypto supporters in Washington, D.C., aren’t worried the hack will cause lasting damage to the industry.

Coin Center Director of Communications Neeraj Agrawal noted that while Twitter was compromised, Bitcoin (or crypto) was not. And if the hackers’ goal was to make money, they failed miserably: Only a scant $123,200 in bitcoin flowed through the wallet listed, and it’s likely some of those funds were recycled through by the attackers.

The incident shines a spotlight on centralized points of failure, such as one individual on a single platform being able to compromise numerous accounts. 

“Somebody who has limited access to the admin panel on Twitter was able to do so much damage because Twitter is a centralized server,” Agrawal said.

Agrawal doesn’t think the incident will have a huge impact on how lawmakers approach crypto.

“Even though maybe it’s been broadcast to more people than ever before, the kind of people who are watching it closely, like policymakers for example, see this and … they’re not surprised by the capability for this,” he said. “I hope that they see this, and they know that there’s nothing new here, there’s nothing to react to when it comes to Bitcoin policy.”

It remains to be seen whether the White House or senior administration officials decide to weigh in, but so far the response from lawmakers has been promising, said Kristin Smith, executive director of the Blockchain Association.

See also: After the Twitter Hack, We Need a User-Owned Internet More Than Ever

She pointed to a tweet from Rep. Tom Emmer (R-Minn.) as one example, noting he explicitly said centralized control was the issue behind Twitter’s hack.

“I would say 99% of policymakers are not thinking about blockchain or cryptocurrency. And so anytime that you have national headlines that deal with a hack of this size and magnitude, and Bitcoin is sort of involved in the process, for the uneducated it’s a bad association because they then think that Bitcoin is sort of a preferred tool of criminals. Those of us that work in the industry and know it, study it, the policymakers who spent the time to learn about it, know that that’s not the case,” Smith said.

Wednesday’s hack may prove to be a teachable moment for the crypto-skeptics, she said. Blockchain analytic firms are already watching the address the scammer used, and exchanges have begun blacklisting it, preventing potential victims from sending any funds to the account. 

Agrawal said he hopes there is a conversation about the potential benefits of using crypto, such as by Russian political activists or in trying to avoid currency freezes. 

Read more: Russian Activists Use Bitcoin, and the Kremlin Doesn’t Like It

“We got lucky, because hackers have unprecedented access to a massively important system where so much damage [could have happened]. I mean, it’s mind numbing the amount of payoffs they could have caused in a few minutes. But instead they went for bitcoin,” he said. 

Criminal opportunities

James Comer (R-Ky.), head of the House Committee on Oversight and Reform, also sent a letter to Dorsey demanding the committee be briefed on everything from how quickly Twitter alerted the FBI to whether the hack was conducted by a foreign adversary. Comer, too, expressed concern over where direct messages were vulnerable. 

“Twitter’s failure not only created an opportunity for criminals to perpetrate a crime broadcasted to millions of Twitter’s users, but the hackers’ potential breach of Twitter’s security poses broader risks regarding hackers’ access to private direct messages,” he said in the letter. 

Senate Commerce Chair Roger Wicker (R-Miss.) also sent Dorsey a letter, though it was less strident than Hawley’s. He said he was concerned about the potential for disinformation to be spread through such a hack, especially via high-profile accounts. 

Rep. Frank Pallone (D-N.J.) said in a statement shared with CoinDesk the hack could have had “major consequences” on elections, calling on Twitter to “get to the bottom of the hack and implement necessary safeguards” to prevent a repeat.

Read more: Twitter Hack: Chainalysis and CipherTrace Confirm FBI Investigation

On a local level, New York Gov. Andrew Cuomo directed the state to conduct a full investigation into the hack. 

“With more than 300 million users, Twitter is a primary source of news for many, making it a target for bad actors. This type of hack by con artists for financial gain can also be a tool of foreign actors and others to spread disinformation and – as we’ve witnessed – disrupt our elections,” said Cuomo in a statement.

The hack is likely to continue to ratchet up pressure on social media companies, which are already facing scrutiny over content moderation, disinformation and foreign interference. 

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Custody startup Curv is using the leading lending protocol in decentralized finance (DeFi) to help institutions that want to earn money on idle crypto.

By way of the Compound protocol, Curv is offering its service to asset managers, exchanges and other institutional clients. Only deposits will be supported for now, though Curv says there are plans to enable clients to borrow crypto assets through Compound in the near future.

“We got requests for it maybe about two, two-and-a-half months ago,” said Curv Chief Operating Officer Josh Schwartz. “Compound is the first DeFi integration. They’ve seen a lot of growth lately, and they lead the way with 40% of DeFi value locked up in their protocol.”

Related: Three Arrows, Framework Invest in DeFi Site Aave With $3M LEND Token Sale

Read more: Compound Tops $1B in Crypto Loans as DeFi Farmers Keep Digging for Yield

Schwartz wouldn’t comment on what Curv’s next DeFi integration would be, but to make Compound happen the company had to build a separate “policy engine” that matched up with Compound’s Ethereum-based smart contracts.

“[Compound] has a long list of institutions who would love to interact with them but need a secure stack to do so,” Schwartz said.

Read more: Coinbase Ventures Joins $23M Funding Round for Crypto Custody Firm

Related: This a16z Alum Is Launching a VC Fund Focused on Platforms You Can ‘Own’

Curv is a custody startup that specializes in multi-party computation. In April, the company expanded into Asia with an office in Hong Kong and a partnership with Japan-based Crypto Garage. Earlier this month, Curv announced a $23 million Series A funding round with backing from the likes of Coinbase Ventures and the investment arm of Germany’s Commerzbank.

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The Internal Revenue Service has become the second U.S. government agency to license Coinbase’s cryptocurrency tracing software, Coinbase Analytics.

• On Wednesday, the tax agency agreed to pay the cryptocurrency exchange up to $237,405 over the next two years for use of its newcomer blockchain analytics program, as per publicly available records found by the Block.
• The pair have been working toward a deal since at least April. At the time the IRS said Coinbase’s offering had “capabilities that are not currently found in other tools on the market.” Coinbase’s blockchain tracing rivals Chainalysis and Elliptic have both worked with the IRS in the past. 
• Coinbase CEO Brian Armstrong has attempted to downplay the significance of his firm’s government ties. On July 11, in response to community pushback, he argued on Twitter that blockchains are traceable whether his firm does the job or not. 
• CoinDesk revealed on July 7 that Coinbase closed its first government contract (worth nearly $50,000) with the U.S. Secret Service in May.

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A crypto-related Twitter hack didn’t deter traders from snatching up $9,000 bitcoin.

• Bitcoin (BTC) trading around $9,109 as of 20:00 UTC (4 p.m. ET). slipping 0.66% over the previous 24 hours.
• Bitcoin’s 24-hour range: $9,005-$9,229
• BTC above 10-day moving average but below the 50-day, a sideways signal for market technicians.

Read More: Twitter Says ‘Coordinated Social Engineering’ Attack Caused Bitcoin Scam

Wednesday’s Twitter hack didn’t seem to bother traders very much. 

Related: What Does the Twitter Hack Mean for Bitcoin? Crypto Reacts

“The attack may have harmed bitcoin’s public perception, but the fact that the market has hardly reacted is a positive sign,” said Rich Rosenblum, co-founder of New York-based trading firm GSR. Investors continued to buy in when bitcoin dipped to $9,000. The price headed that low in early Thursday action before traders scooped up more of the world’s oldest cryptocurrency. 

Read More: Twitter Hacker Is a BitMEX Trader, On-Chain Data Suggests

“I can see some traders considering the Twitter hack to be a negative. But we all know that given the transparency of the bitcoin ledger, there are safer ways for scammers to scam,” said George Clayton, managing partner for New York-based Cryptanalysis Capital. “I don’t see anything about this hack changing the value proposition of bitcoin or any other cryptocurrency.” 

Even Twitter’s stock (NYSE:TWTR) has recovered Thursday from a brief spate of selling late Wednesday before the U.S. stock markets closed. 

Related: In the Aftermath of Hack, Lawmakers Blame Twitter, Not Bitcoin

Traders are more concerned about the broader equities markets affecting bitcoin than anything else. “Bitcoin’s price at this moment seems highly correlated with the stock market,” said Alessandro Andreotti, an Italy-based bitcoin over-the-counter trader. “It will probably see some pressure if the stock market enters a correction phase.”

Read More: Correlation – Crypto’s Most Enigmatic Metric

Ethereum fees at one-month high

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Thursday, trading around $232 and slipping 2.3% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Fees on the Ethereum network are now higher than they have been in a month, as the price per transaction crept up to 0.003691 ether Thursday, according to data from aggregator Blockchair. Ethereum is the backbone behind most DeFi platforms, and the rise in fee price means increased demand for the network as well as the possibility of constraints in the near future. 

“Due to the hype around DeFi, the gas fees on the Ethereum network are in the higher range in the past month, reflecting a strong network demand,” said Johnson Xu, head of research and analytics at TokenInsight. “Further strong growth of DeFi could be restricted by the Ethereum blockchain network bottleneck.”

Johnson is optimistic that scaling solutions will allow DeFi to continue growing, however. “Multiple solutions to scale the Ethereum network, the slow but progressive ETH 2.0 development, the layer-2 proposals, will add significant value to the Ethereum ecosystem, lifting the limit on how the DeFi ecosystem can grow in the future.”

Read More: OKCoin Joins Coinbase in Supplying Oracle Feed for Compound

Other markets

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

• tezos (XTZ) + 2.7%
• basic attention token (BAT) + 2.2%
• stellar (XLM) + 2.1%

Read More: $1.4B in ‘High-Risk’ Crypto Flowed Onto Exchanges in H1 2020

Notable losers as of 20:00 UTC (4:00 p.m. ET): 

• dogecoin (DOGE) – 5.2%
• zcash (ZEC) – 3.6%
• lisk – (LSK) – 3.4%

Read More: Zcash Latest Hard Fork ‘Heartwood’ Makes Mining Private

Equities:

• The Nikkei 225 in Japan ended the day down 0.76% as increasing coronavirus infections and decreasing retail sales in Asia dragged the index lower. 
• Europe’s FTSE 100 in London closed in the red 0.56% as the European Central Bank held off any new actions at its scheduled rate-setting meeting.
• The U.S. S&P 500 index fell 0.30% amid losses by tech stocks and data on joblessness more dismal than expected.

Read More: ‘Boring’ Bitcoin Shrugs Off Twitter Hack 

Commodities: 

• Oil is slipping 0.67%. Price per barrel of West Texas Intermediate crude: $40.71
• Gold is down Thursday at $1,795 per ounce

Read More: CoinDesk Quarterly Review, Q2 2020

Treasurys:

• U.S. Treasury bonds all slipped Thursday. Yields, which move in the opposite direction as price, were down most on the two-year, in the red 6.5%.

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Lightning startup Zap Inc., maker of both the namesake, non-custodial bitcoin wallet and the payments app Strike, raised its first round in April, led by Green Oaks Capital and including veteran bitcoin investor Anthony Pompliano.

The funding was first reported by Forbes on Wednesday.

• Founder Jack Mallers’ previously bootstrapped startup is now the latest jewel in the Green Oaks Capital crown, as the firm previously invested in fintech unicorns Robinhood and Stripe. 
• Zap Inc., founded in 2017, is run by a staff of 13 people spread out from Chicago to Barcelona to Berlin. 
• The team plans to issue a Visa card in 2020, making it one of the smallest startups to offer exchange services with mainstream liquidity in dollars. 
• Zap Inc. investor Colleen Sullivan of CMT Digital said, “We believe that Zap/Strike will bring the use of the Bitcoin protocol and the Lightning Network to the masses, resulting in a much more efficient and cost-effective way for users to send and receive money while abstracting away the complexities of the underlying technology.” CMT Digital is also invested in Lightning Labs.

Read more: Bitcoin Startup Zap Is Working With Visa

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The U.S. Federal Bureau of Investigations (FBI) is looking into Wednesday’s massive Twitter hack, which saw dozens of accounts belonging to prominent figures and crypto exchanges compromised to shill a sketchy crypto scam.

The takeover saw some $120,000 in bitcoin flow through the address in question, though it remains unclear if that is the total figure sent by victims or if the perpetrator(s) laundered funds through the address themselves. What is clear is that Twitter suffered an unprecedented security breach, one that impacted a former U.S. president, multiple billionaires and the foremost crypto news organization. 

Click here for CoinDesk’s full coverage of the Twitter hack.

Related: What Does the Twitter Hack Mean for Bitcoin? Crypto Reacts

CipherTrace and Chainalysis, two blockchain forensics firms, both confirmed the FBI contacted them. Neither firm was able to disclose additional information; Chainalysis said it had “been contacted by several agencies,” while CipherTrace could only confirm the FBI had reached out.

Read more: Twitter Hack 2020 Was Probably Done by a Bitcoiner – But Not a Savvy One

Elliptic, another firm, told CoinDesk it does not disclose its law enforcement interactions. Neither the FBI nor the Federal Trade Commission (FTC) returned requests for comment by press time.

U.S. anti-money laundering watchdog Financial Crimes Enforcement Network (FinCEN) warned financial institutions to watch out for Twitter scams in the wake of the hack. 

Related: In the Aftermath of Hack, Lawmakers Blame Twitter, Not Bitcoin

“FinCEN is working closely with law enforcement agencies to identify the source of these scams and disrupt them,” it said Thursday.

The Wall Street Journal first reported the FBI’s interest in the case.

Chainalysis and Elliptic both told CoinDesk the stolen funds are already “on the move.” Chainalysis also disclosed the hackers sloshed their funds between wallets to inflate the scam’s apparent success.

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Bitcoin cash is the only forked cryptocurrency underperforming bitcoin in 2020, according to data from Messari. The inaugural fork is only up 9% year to date. 

Although most alternate cryptocurrencies (or “altcoins”) have rallied over the past few months, bitcoin cash – the only fork around today that traded throughout the 2017 cryptocurrency bull market – has been left behind. Bitcoin cash only started underperforming bitcoin in May, but two months was enough time for the forked cryptocurrency to underperform bitcoin by 18 percentage points so far this year.

It’s common for altcoins to outperform bitcoin during bullish market cycles. Altcoins with low or medium market capitalizations often experience higher volatility than bitcoin, which may yield higher returns should bitcoin’s price also appreciate.

Related: Maybe It Wasn’t About the Money – Few People Fell for Twitter Hack, Data Indicates

Bitcoin cash, on the other hand, has simply experienced more of a volatility compression compared to the other forks, especially bitcoin sv, which has a market capitalization closest to bitcoin cash, said Dan Koehler, liquidity manager at OKCoin.

“Bitcoin gold and bitcoin diamond remain in a much smaller market cap bucket and thus could be experiencing higher volatility and returns as a result,” he added.

See also: With Bitcoin Stuck in the Doldrums, Altcoins Continue to Rally

Another, more fundamental possible explanation for bitcoin cash’s lackluster performance is that the protocol’s ecosystem – including developers, investors and entrepreneurs – has “unraveled,” according to Zach Resnick, managing partner at Unbounded Capital, a BSV-long fund. Bitcoin underperforming other forks like bitcoin gold and bitcoin diamond is not surprising due to their characteristically high volatility, he told CoinDesk. 

Related: Twitter Hack 2020 Was Probably Done by a Bitcoiner – But Not a Savvy One

Regardless of the reason, bitcoin sv, bitcoin gold and bitcoin diamond have all outperformed bitcoin by more than 40 percentage points in 2020.

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Even though Wednesday’s Twitter hack grabbed the world’s attention by taking over a host of prominent accounts including those belonging to Elon Musk, Uber, Apple and Barack Obama, transaction data for crypto wallets associated with the attacks shows the hackers didn’t make out like bandits. It raises the question: Why not?

With the attacks, millions of people saw the same scam-type message shared on their feeds, soliciting bitcoin with the promise it would be doubled and sent to a group called “Crypto for Health.”

Crypto-analytics firm Chainalysis told CoinDesk that it had identified and was monitoring four crypto wallets associated with the attack, three of which received bitcoin and one was for XRP but hadn’t received anything by press time. 

• The most prominent bitcoin address registered 372 incoming bitcoin transactions, and nine withdrawals from the wallet had been made by press time, according to data reviewed by CoinDesk. 
  
• The secondary BTC addresses registered a total of 100 transactions and received about $6,700 in bitcoin, Chainalysis said. While over 400 transactions were registered on the wallets in total, the attacks appear to have yielded a relatively marginal amount of $123,200.
  
• According to Chainalysis, part of the scam relied on the hackers moving their own crypto between the wallets to create the impression that many people were participating in the offer. While 156 wallets appear to have given away more than a $1, it’s difficult to parse which one of the transactions could belong to the hackers.
  
• Some people were clearly duped, however, with 17 wallets having given away more than $1000, including a Japanese wallet that gave $40,000 away, to a Twitter scam that rivaled in sophistication to an email solicitation from a “Nigerian prince.”
  
• So considering the hackers had access to the Twitter accounts of some of the most influential business people in the world, the lack of sophistication of the bitcoin solicitation may indicate the perpetrators had other goals besides money.
  
• For instance, the profit from yesterday’s massive attack contrasts sharply with the more than $240,000 yielded in 2000 from a hack on just one mid-sized tech company. 
  
• In that instance, a former employee of a press release distribution company accessed that company’s system to issue a false release on behalf of Emulex Corp., a networking firm, the shares of which he was short. That release, which purported to disclose financial irregularities at Emulex, cost shareholders about $110 million after the fake news disclosure initially wiped out more than $2 billion off Emulex’s market cap.
  
• So clearly the effects of Wednesday’s hacks could have been significantly worse, perhaps even catastrophic.
  
• It’s possible yesterday’s attack was more about the vanity of the hackers rather than any serious attempt to get rich. Or perhaps Michael Caine was right when talking about Heath Ledger’s character in The Dark Knight; maybe some people do just want to watch the world burn.
  

Related: Twitter Hack: Chainalysis and CipherTrace Confirm FBI Investigation

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A cyberattack against Twitter has sparked widespread debate about tech industry regulations and borderless money. 

So far the scam has garnered $120,000 worth of bitcoin by tweeting about a fake giveaway campaign. Verified Twitter accounts briefly lost the ability to post Wednesday, which inspired one New York magazine columnist to tweet that making cryptocurrency “illegal” would “prevent this sort of thing.” 

Click here for CoinDesk’s full coverage of the Twitter hack.

Related: Twitter Hack: Chainalysis and CipherTrace Confirm FBI Investigation

Missouri Republican U.S. Sen. Josh Hawley promptly published a public letter to CEO Jack Dorsey, saying Twitter should work with the Justice Department and the Federal Bureau of Investigation to address security issues. By Thursday morning, many authentic Twitter accounts were no longer able to tweet bitcoin addresses at all, although QR codes still worked. 

“As much as I can tell by the evidence I see right now, the attackers did not understand the value of the information that they had,” ClearSky CEO Boaz Dolev told CoinDesk. “We need to find a way to build a more resilient audience that won’t believe anything they see in a certain format is true. It’s a new era where we need new tools to understand what is true.”

That said, with an audience reach of over 375 million followers, the hacked accounts only ensnared 421 bitcoin transactions, with only 17 of those transactions valued above $1,000. Roughly half of the transactions hailed from North American exchange accounts.

Whoever is behind the Twitter Hack of 2020, which collected bitcoin by hijacking the accounts of everyone from Barack Obama to Elon Musk, Dolev said it doesn’t appear to be a state actor or a terror group. 

Related: Bitcoin Cash Is the Only Fork Underperforming Bitcoin This Year

So far the evidence suggests the attackers were well-versed in crypto culture, using inside jokes like spending up to 6.15 bitcoin, a popular meme reference, and tweeting about paid Telegram groups. 

“Based on the history of the first destination address of the CryptoForHealth scam addresses, the scammers have a history of gambling on BitMEX and Coinbase usage,” said the privacy-centric team behind Samourai Wallet. 

Misinformation

And yet, despite clearly being a crypto veteran, the attackers didn’t use some of the best bitcoin privacy tech available. 

Samourai Wallet said so far none of the 12.8 BTC appear to have been mixed with the firm’s WhirlPool tool nor any other non-custodial CoinJoin software. Instead, the evidence suggests the hackers have used centralized exchange accounts, like BitMEX, in the past.

The crypto startup CryptoQuant tweeted “4.8 BTC went into the mixer.” But evidence from the analytics firm Quantstamp shows the illicit funds have not been used with any non-custodial mixing or CoinJoins. To Quantstamp CEO Richard Ma, this suggests an unsophisticated attacker because it will be hard to liquidate these funds.

“The hacker used a single address, which likely reduced the hacker’s earnings by making it easier to trace,” Ma said. “Many exchanges including Coinbase, Kraken and Gemini have already blacklisted the address as well as the derivative addresses as the hacker seeks to exit with the funds.”

CryptoQuant CEO Ki Young Ju promptly responded to a direct message from CoinDesk clarifying this blockchain data may suggest use of a “centralized mixing wallet.” 

“The transaction patterns look like mixing because this wallet has multiple unknown tx inputs from one-time used wallets,” he said. But after further investigation, he replied again that it was a mistake.

“I sincerely apologize for giving the wrong info,” Young Ju said in a message.

Only a sophisticated user would notice this data about “the mixer” was described incorrectly and that the hack was not affiliated with any popular mixing wallets or software projects. Bálint Harmat, co-CEO of the Wasabi Wallet maker zkSNACKs, said, “We took a quick look at the addresses. They are not related to Wasabi CoinJoins as of now.” 

Even using the same bitcoin addresses, experts may incorrectly interpret the data. Both Ma and the Samourai Wallet team described the bitcoin transactions as simple, sometimes even a single hop. In the end, all parties agreed there is no evidence of mixing.

Broader implications

As Twitter users struggle to regain full access to the platform and protect their data, there’s no way for the social media company to prioritize millions of issues at once. Legacy brands and celebrities may have the resources to manage public broadcasts but few citizen journalists do. 

ClearSky’s Dolev said the most interesting implications of the attack won’t be related to bitcoin itself. It will be how this impacts the communications infrastructure on which so many markets, including crypto markets, rely.

“We can learn a lot about what banks are doing to protect themselves from fraud, and there’s a lot of similarity between fraud and this type of action,” Dolev said. “We’ll have to see what Twitter is going to do to secure accounts and also what Facebook and other social networks will do as well.” 

Will Foxley contributed reporting. 

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Blockchain infrastructure firm Alchemy announced the launch of its new product, Alchemy Monitor, on Thursday.

In an email to CoinDesk, the firm said the tool would help blockchain developers easily access information associated with user behavior and app performance.

• Alchemy Monitor is already being used by crypto firms such as 0x, MyEtherWallet, Lucid Sight and Zerion, according to Alchemy.
• “Developers are used to this kind of tooling in the Web2 world (think New Relic) but are left to fend for themselves in Web3,” Alchemy software engineer Mike Garland said in an email. There aren’t really any alternatives for the firm’s product in the current market, he said, “which is why a product like this is so crucial to the success of the industry.”
• According to Alex Bashlykov, CTO of Zerion, a fintech firm based in Moscow, Alchemy’s product has helped better identify errors on the Zerion platform and has provided “new insights into the health and performance” of its products.
• Last month, Alchemy also announced the launch of a notification system for blockchain developers that provides push alerts for transactions and events on the blockchain. 

Read more: Alchemy Notify Wants to Simplify Blockchain UX With a Single Push

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Bitcoin miners curtailed their supply to exchanges to the lowest level in 12 months during the second quarter, revealing their long-term bias on the cryptocurrency. 

The daily miner selling activity, as measured by the percentage of bitcoin sent to exchanges, fell to a 365-day low of 15% on May 20, according to data provided by Chainalysis. The metric remained in a declining trend throughout the April to June period.

Bitcoin miners operate on cash and are constant sellers in the market, liquidating at least some part of their holdings every day in order to cover their operational costs. 

Related: Bitcoin Cash Is the Only Fork Underperforming Bitcoin This Year

“It seems miners, at least, expect to be able to sell bitcoin higher in the coming months,” research analysts at CoinDesk noted in their quarterly report while discussing implications of the drop in the daily miner selling. 

Indeed, bitcoin miners, like any other seller, are governed by the law of supply, which states that other factors being constant, price and quantity supplied of a good are directly related to each other. 

See also: Bitcoin Miner Maker Canaan Drops 3 Directors in Possible Boardroom Coup 

They tend to hoard coins when prices are expected to rise and are willing to sell more at higher prices. This is because mining profitability is heavily influenced by the gyrations in bitcoin’s price. 

Related: Maybe It Wasn’t About the Money – Few People Fell for Twitter Hack, Data Indicates

As such, the decline in daily miner selling observed in the second quarter could be considered a sign of bullish price expectations among those responsible for making coins. 

It should be noted that miners reduced supply even though bitcoin’s price rally stalled following the May 11 halving. The cryptocurrency bounced back from $3,867 to $10,000 in the two months leading up to the event and has struggled to establish a strong foothold above $10,000 ever since. 

The data appears to validate bullish price forecasts made by prominent analysts over the past few months. Bloomberg analysts predicted in May the cryptocurrency could challenge the record high of $20,000 by the end of December. 

See also: Bitcoin Mining Difficulty Sets New Record High 2 Months After Halving

However, not all analysts consider miner hoarding a bullish sign. Charlie Morris, founder of data source ByteTree, told CoinDesk in March that miners tend to build inventory when they think the market lacks strength to absorb extra supply. After all, mining pools account for the lion’s share of bitcoin mining and account for the highest percentage of total bitcoin flowing into exchanges. Hence, they have to be extra careful while boosting supply because their actions can lead to exaggerated sell-offs. 

So far, bitcoin has failed to capitalize on decreased miner selling. The cryptocurrency continues to trade in the multi-week range of $9,000 to $10,000, according to CoinDesk’s Bitcoin Price Index. Meanwhile, the derivatives market isn’t so optimistic. Options market data suggests traders are anticipating a price pullback in the short term. 

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None of the roughly 13 bitcoin (BTC) acquired through Wednesday’s Twitter hack have been laundered, according to chain analysis conducted by Samourai Wallet. 

But whoever it was is deep into the cryptocurrency space, with the BitMEX receipts to prove it, according to preliminary analysis from Samourai Wallet’s research arm, OXT Research. (A pastebin can be found here.)

“Confirmed, no signs of mixing. Majority of funds spent 1 or two hops and [are] now parked,” Samourai said in a Twitter DM to CoinDesk. “Really curious what their cash-out plan is.”

Related: Twitter Hack: Chainalysis and CipherTrace Confirm FBI Investigation

As of 14:00 UTC, the funds in at least one address are already under the control of Coinbase, Samourai added. 

Read more: Full coverage of Twitter Hack 2020

“Based on the history of the first destination address of the cryptoforhealth scam addresses, the scammers have a history of gambling on Bitmex and Coinbase usage,” Samourai researcher Ergo said in a Tweet. 

“This is peak crypto,” Ergo added.

No coin-mixing involvement (yet)

Related: Maybe It Wasn’t About the Money – Few People Fell for Twitter Hack, Data Indicates

Overall, Samourai says the hacker only used three Bitcoin addresses and has not sent any funds through a mixing service, as data provider CryptoQuant had previously tweeted. (CryptoQuant has since told CoinDesk it no longer believes the funds have been mixed.)

“Always a possibility the address is an unlabeled mixer, but I don’t see any hints, and one-time use addresses are very common in general and not a definitive pattern for mixers,” Ergo told CoinDesk.

Those addresses, however, linked to other addresses that Samourai tracked to the popular crypto derivatives platform BitMEX.

“Everything from the first address is being spent to this address 1Ai52Uw6usjhpcDrwSmkUvjuqLpcznUuyF, which looks to have been first funded via BitMex,” Samourai said.

Read more: Samourai Wallet Releases Privacy-Enhancing CoinJoin Feature

Tracking the Twitter hack funds through Bitcoin exchanges

On-chain data allows services to track where funds are moving. In this case, the address had previously been used by a BitMEX trader for moving funds on and off the platform. However, BitMEX has less stringent ID policies, also known as Know Your Customer (KYC), for trading on its domain. So BitMEX may not be so helpful in finding the perpetrator. 

BitMEX did not return requests for comment by press time.

“At best investigators can subpoena any relevant account info including IP addresses[;] from there, they can glean some additional info from on-chain data including source of funds,” Ergo said in a private message.

Coinbase, on the other hand, has very strict KYC policies. Ergo said the best chance of identifying the hacker comes from Coinbase.

“OXT Reasearch has also noted a small spend of scammed coins to Binance. Other than the history of 1Ai52Uw6usjhpcDrwSmkUvjuqLpcznUuyF, the links to exchanges and known entities remain minimal,” Ergo said.

Related Stories

• Twitter Hack 2020 Was Probably Done by a Bitcoiner – But Not a Savvy One
• No, the Twitter Hack Wasn’t About Bitcoin

A Twitter hack, a new way to “yield farm” digital collectibles and why stablecoin use is on the rise in Hong Kong.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top shelf

Dissent & Stablecoins
Stablecoin usage has spiked in Hong Kong following the imposition of the national security law, which aims to quell opposition to China’s ruling class by giving the Communist Party power to freeze and confiscate assets from people or organizations. Crypto assets and encrypted communication tools are a way to resist financial surveillance and internet censorship. “Many people don’t believe they can trust the government or banks to keep their assets safe anymore,” said Brian Yim, a university student in the U.K. whose family is still in Hong Kong. 

Related: Twitter Hack: Chainalysis and CipherTrace Confirm FBI Investigation

A Billion in Crime
Over $1.4 billion worth of cryptocurrency thought to be tied to Ponzi schemes, dark web transactions and hacks have moved onto global exchanges from January to June, according to blockchain analysis firm PeckShield. Huobi, Binance, OKEx, ZB, Gate.io, BitMEX, Bithumb and Coinbase were among the exchanges analyzed. “The problem of the inflow of tainted cryptos has not been entirely put under regulation with strict enforcement,” the firm wrote in the report. “So anti-money laundering is considered as an important issue and then there’s no real follow-up. … But it’s a matter of time, not if, [until] the regulatory hammer will come [down].”

Hurricane-Proof Currency 
The Bahamas’ central bank said it is “progressing” toward the full launch of a mobile phone-based digital currency (CBDC) it’s betting can withstand the battering of a Category 5 hurricane. The move comes in the wake of Hurricane Dorian last September, which devastated the island’s banking and financial infrastructure, according to the report. “Mobile phone coverage, by contrast, was generally restored within a few days after Dorian,” it said. The central bank’s CBDC effort, known as Project Sand Dollar, is currently in the testing phase on the island of Abaco.

Not a LEND, a Raise
Framework Ventures and Three Arrows Capital announced Wednesday a $3 million investment in Aave, the firm behind the third-largest lending platform in decentralized finance (DeFi). The two funds purchased Aave’s native LEND tokens directly from the company. LEND has appreciated 1,200% on a year-to-date basis. “We believe there will be a significant market shift of private borrow/lend activity moving to decentralized money market protocols,” Framework Ventures’ Michael Anderson said.

Farming Digital Collectibles
Rarible, a dapp that enables users to create and market non-fungible tokens (NFTs), will begin keeping track of all transactions on the site in order to reward users each week with its new governance token: RARI. Approximately 60% of the total supply will go to Rarible users who make trades, and anyone who holds NFTs now will be able to claim some. This move opens the door to yield farming digital collectibles on the Ethereum blockchain. “Yield farming has turned decentralized finance (DeFi) into the juggernaut of crypto earnings here in mid-2020, but one non-DeFi startup believes its users will also be interested in earning a new governance token for making trades,” CoinDesk’s Brady Dale reports. 

Quick bites

• Microsoft partners with Waves to tokenize industrial assets, which might include anything from heavy machinery to basic office equipment.
• Man charged with defrauding $4.5 million in crypto to fund gambling habit.

The big read

Related: Maybe It Wasn’t About the Money – Few People Fell for Twitter Hack, Data Indicates

All that for 12.9 BTC.

Wednesday, a coordinated hack hit Twitter, compromising the primary bullhorn of political, cultural and economic thought. Beginning with an assault on known crypto trader @AngeloBTC asking for bitcoin to join a private Telegram channel, the attack spread to other prominent crypto institutions. 

More prominent crypto accounts followed. Binance, Gemini. Coinbase, CoinDesk and Justin Sun, among others, were hit, CoinDesk’s Danny Nelson reported. Emboldened, the crypto scam, went mainstream, affecting a litany of high-profile Twitter users, including some who wield tremendous political power and others who are responsible for our exuberant stock market. 

The attack sowed the seeds of confusion, even if it wasn’t financially successful. As of Thursday morning, a Bitcoin address associated with the hack has only brought in less than $120,000 from 378 transactions, many of which are believed to be sent from the hacker itself, in an obvious attempt to create the illusion of activity. 

Not much is known about the hacker, who reportedly goes by the handle “Kirk,” or his access point to Twitter. Vice reported the attacker gained access to an internal Twitter tool, which enabled him to send tweets and reset the associated email addresses of affected accounts.

Twitter, in a message broadcasted two hours after the initial hit, called it “a coordinated social engineering attack by people who successfully targeted some of our employees with access to internal systems and tools.”

That much is known. What’s unclear is the hacker’s motivations. Nic Carter, a prominent crypto personality, said over a Telegram DM, “There’s so much we don’t know yet, but I’m inclined to apply Hanlon’s Razor and assume they were just trying to make some dough.”

“The delta between the damage wrought and the apparent financial gain is shockingly large though,” he continued. 

From at least one known address, only 87 transactions were larger than $1. Only 69 were larger than $10. Only 24 were larger than $100. Only eight were larger than $1000, according to CoinDesk’s Adam B. Levine. He crunched the numbers and found if you compare the number of addresses that sent more than a dollar against President Obama’s 120 million followers alone, the success rate was a piddling 0.0000000725.

With numbers like that, many are asking, What was the point? At this point, it can be safely assumed the attacker was familiar with the crypto community. The use of a new SegWit address, repeated transactions to empty the wallet down to 6.15 Bitcoin – a known meme – as well as several renamed wallet addresses with cryptic messages like “1BitcoinisTraceabLe…, 1YouTakeRiskWhenUseBitcoin and 1WhyNotMonero…” point to the possibility of this being an elaborate troll. 

Alex Stamos, director of the Stanford Internet Observatory and the former chief security officer at Facebook, told the New York Times the hacker “made rookie mistakes.” The biggest was that by sending identical messages it was easy to identify and neutralize the scam posts. 

Stamos also noted that in choosing Bitcoin, which creates a public record of all transactions, the attacker basically nullified its ability to cash out. 

So what does this mean for Bitcoin? Well. It’s part of the public conversation again, for one. Prominent New York Magazine reporter Josh Barro tweeted, “You know, we wouldn’t have to worry about this sort of thing if cryptocurrency was illegal.” 

While this take reinforces existing biases against crypto being associated with criminals, it is shared by other mainstream publications and a swath of the public. Stephen Colbert, tweeted, “Thankfully, my Twitter was not hacked, because of the rock-solid cyber-security I recently purchased for just $12,000 in bitcoin and my social security number. Thanks @cyberscambelarus!”

Within the crypto industry, some say this could be neutral to good for crypto. Joe DiPasquale, CEO of BitBull Capital, told First Mover: “Even if there is a small percentage of bitcoin that is used for illicit activity, investors now understand this is no different than cash, except that digital currencies are much more traceable.” 

And the strong measures taken by exchanges like Coinbase to blacklist the address early, does show how far the industry has come to meet the basic demands of the traditional financial system. 

The larger question is less about crypto itself and whether Bitcoin is mainstreamed as a payment or reserve system than about its ideological underpinnings. This hack, like the Equifax one before it, is one movement in a leitmotif running through the public consciousness: Why do we trust centralized, near-immovable authorities to shape our lives? 

“A hack like this demonstrates how desperately needed privacy and data security legislation is needed in the U.S. Securing one’s network is not a profit maker, it’s a loss leader, and companies won’t do it right until there is some liability attached to not doing so,” Gigi Sohn, a former counselor at the Federal Communications Commission, said via email to CoinDesk.

As Coin Center’s Neeraj Agrawal put it: “If this happened because someone got access to Twitter’s admin tools, that means it’s not a cryptocurrency incident. It’s a centralized point of failure incident.”

Market intel

Volatility or Bust
Bitcoin’s characteristically high volatility could return soon, giving exhausted traders an end to months of abnormally calm price action. A new metric for on-chain activity makes this prediction by measuring exchange volumes and on-chain transaction volume together to derive a signal for inflection points in bitcoin volatility. Published to popular charting interface TradingView on Tuesday, the volume ratio aims to derive market sentiment as a function of both types of volume. When overlaid with price data, high on-chain transaction volume dominance over exchange volume frequently corresponds with imminent, significant price movements, or volatility.

Options: Grim
Still, short-term sentiment in the options market has flipped bearish. Bitcoin fell to $9,070 this morning, reversing the 2.5% rise to $9,450 seen last week, according to CoinDesk’s Bitcoin Price Index. Reflecting the downward trend, the one-month put-call skew for bitcoin options, a metric that measures the price of (bearish) put options relative to (bullish) call options, has risen to 4.9%, according to data provided by crypto derivatives research firm Skew. 

Tech pod

DeFi Oracle
OKCoin has launched a new API feed for the decentralized finance (DeFi) space that has already been picked up by lender Compound. The San Francisco-based exchange said Wednesday that OKCoin Oracle would provide on-chain data for DeFi products and features. Rival oracle system ChainLink works broadly along the same lines, although it rewards third-party entities with LINK tokens for providing accurate data, and takes them away again when they don’t. San Francisco-based exchange Coinbase unveiled its own price feed plugin for the DeFi space in April.

Privacy Fork
Privacy coin Zcash has successfully hard forked in the planned network update “Heartwood.” With the update, miners can receive coinbase transactions right to a private address, effectively adding privacy to the blockchain’s security protocol. The hard fork occurred on July 16 at 10:58 UTC at block height 903,000, according to the Electric Coin Company (ECC), the for-profit development house behind the project, which was also supported by the Zcash Foundation. The fork also adds support for lightweight clients that verify transactions.

Opinion

Democratizing Digital Dollars
Transparent Systems’ Chief Legal Officer Patrick Murck and Global Head of Policy Linda Jeng reflect on the democratic possibilities a digital dollar can open by reducing economic inequality. “Beyond governance, community-based ownership would allow the economic gains of the network to be equitably shared among all participants and not reserved for those who have access to capital and connections,” they write. 

Podcasts

Dangerous, Downward Spiral
The latest episode of The Breakdown offers a primer on the U.S. and China’s “New Cold War.” From the virus to the trade war, and from TikTok to the South China Sea fissures are opening between the leading global economic powerhouses.

Who won #CryptoTwitter? Related Stories

• Twitter Hack 2020 Was Probably Done by a Bitcoiner – But Not a Savvy One
• No, the Twitter Hack Wasn’t About Bitcoin

An Ethereum-based payments project claims in a new lawsuit that ConsenSys abused its position of trust as an investor to access trade secrets and create a rival offering.

• BlockCrushr filed a complaint Tuesday alleging ConsenSys misappropriated its intellectual property to create a rival version of its payments system that allows recurring transactions, such as monthly payments, on the Ethereum blockchain.
• CoinDesk reached out to ConsenSys for comment but hadn’t received a response at press time.
• Per the filing, ConsenSys Ventures invested $100,000 into BlockCrushr and invited the firm to participate in that year’s Tachyon Accelerator program.
• As part of the agreement, BlockCrushr said it shared its intellectual property, including 120,000 lines of source code, to help ConsenSys guide and support it.
• Between October 2018 and February 2019, BlockCrushr said, ConsenSys had requested over 20 meetings to talk in depth about the payments system.
• BlockCrushr, which is based in Canada, shared information because it was promised further investment, the filing states.
• The startup said Vincente Hernandez, a developer with Token Foundry, another ConsenSys project, was present at many meetings.
• The complaint alleges Hernandez put some of BlockCrushr’s publicly available code in his own GitHub.
• He is said to have became a founding member of Daisy Payments (now CodeFi), another recurring payment system, a few weeks later.
• In February 2019, ConsenSys allegedly ceased communications with BlockCrushr and didn’t return its calls.
• As ConsenSys was still an investor, BlockCrushr says it informed the company privately that its payments system would launch on Aug. 23, 2019.
• On Aug. 22, ConsenSys launched Daisy Payments, which BlockCrushr claims is a near-identical offering to its own.
• BlockCrushr claims it was forced to cancel its own launch as a result.
• CodeFi is now used as the foundation for ConsenSys’ new staking service.
• According to the filing, ConsenSys employees, including CEO Joe Lubin, said there was a firewall issue and that some of BlockCrushr’s proprietary information may have been used by other teams.
• However, BlockCrushr said no action was taken and communications stopped soon after.
• The startup is now formally accusing ConsenSys of two counts of misappropriating trade secrets and one count of a breach of contract, and is suing for damages.

See also: ConsenSys Muscles Into Compliance With New Regulatory Product for DeFi

Read the full filing below:

Related Stories

• Microsoft Partners With Waves Enterprise to Tokenize Industrial Assets
• OKCoin Joins Coinbase in Supplying Oracle Feed for DeFi Project Compound
• Man Charged With Defrauding $4.5M in Crypto to Fund Gambling Habit
• Binance CEO Criticizes Twitter Security After Coordinated Attack on Prominent Accounts

Blockchain enabled fantasy soccer platform Sorare announced Thursday it has raised $4 million in a seed funding round led by e.ventures. 

In an announcement emailed to CoinDesk, the firm said besides venture capital investors including e.ventures and Fabric Ventures, a former member of German national soccer team, Andre Schurrle, has also invested in the firm. 

Using the Ethereum blockchain, Sorare generates unique digital trading cards representing professional soccer players that can be traded by users. A user plays as the team manager and can use their five cards to compete in the weekly league competitions. 

Related: US Soccer Players Can Be Collected, Traded in Tokenized Fantasy Game

Recently, Sorare announced licensing partnerships with the U.S. soccer league, MLS, and the South Korean K-League, bringing both leagues onto its platform. According to the firm’s CEO, Nicolas Julia, the two agreements helped the firm add about 3500 new users to its platform. 

“We’ve had major traction, essentially targeting the ‘crypto-enthusiast’ potential users,” said Julia, noting that over the next few months the firm would focus on building a better free-to-play experience and also improve the platform for fiat users. “It’s important for us that they can play without needing to install metamask and buying ether,” he added. 

Users on Sorare’s platform can also buy tokens representing other soccer players to improve their team and – depending on how the players perform in real life – they might receive rewards in ether or more trading cards.

“When COVID sort of hit, we thought that it would be the end of something like Sorare,” said Max Mersch, Co-founder of Fabric Ventures, pointing out how the platform largely depends on live soccer games which were suspended as different countries went into lockdown. Fabric Ventures has also previously invested in Ethereum-enabled virtual reality game Decentraland. 

Related: South Korean Soccer League Tokenizes Players for Fantasy Football Game

Introduced to the platform first as a player himself, Mersch said the firm’s replay model, allowing players to reenact matches from past seasons, helped players keep gaming. He added that it was also quite impressive to see the amount of money people were willing to spend to get these digital cards. According to Sorare, sales on its platform touched $350,000 in June of this year. 

“I was immediately impressed with the vision for the future of football collectibles: digital cards of football players,” said Schurrle in the emailed statement. Part of Germany’s World Cup winning team in 2014, Schurrle was removed from the German soccer club Dortmund’s squad recently, according to a report by The Sun. 

According to Sorare, the scarcity of its tokens is what makes the tokens valuable, and they are likely to appreciate in value if a player performs well. Counting on the growing traction blockchain-enabled games have been receiving recently, Julia said the firm would use the money raised to expand its team and get closer to its ambition of getting “the top 20 leagues with all their clubs licensed” onto its platform. 

Related Stories

• Enjin’s New Minecraft Plug-in Lets Players Spawn Blockchain Assets
• Kathleen Breitman’s ‘Blaze of Glory’

In a paradoxical twist, bitcoin’s price, which is denominated in dollars, has become unusually stable in recent weeks, prompting some Twitter users to joke that it’s trading like a stablecoin.

“It’s surprising to see bitcoin be so boring given everything happening both within and outside the crypto industry,” the digital-asset analysis firm Messari wrote in its daily email to subscribers. 

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Related: After the Twitter Hack, We Need a User-Owned Internet More Than Ever

On Wednesday, the cryptocurrency slid 0.5% to about $9,200, even as reports emerged that a bitcoin “giveaway” scam was at the heart of a coordinated hack targeting accounts of prominent Twitter users, including former U.S. President Barack Obama and Microsoft founder Bill Gates.

“Even if there is a small percentage of bitcoin that is used for illicit activity, investors now understand this is no different than cash, except that digital currencies are much more traceable,” Joe DiPasquale, CEO of BitBull Capital, told First Mover in an email. 

Bitcoin was designed by Satoshi Nakamoto as a peer-to-peer payment method, a version of electronic cash that would “allow online payments to be sent directly from one party to another,” according to the white paper. 

But a new report suggests bitcoin’s original core payments function might be increasingly fulfilled by a competing faction of digital tokens – so-called stablecoins like tether and USD coin, which have values linked to the price of the U.S. dollar.

Related: Bitcoin Option Traders Now Betting on Short-Term Price Drop

Stablecoins, invented five years ago, have expanded rapidly this year, doubling in the past four months to an outstanding supply of about $12 billion.

Cryptocurrency traders use them as the de facto form of liquidity in digital-asset markets, to move money between exchanges and park cash on the sidelines. Investors can lend out the dollar-linked tokens for yields up to 13%, more than 20 times the level on 10-year U.S. Treasury notes. Some holders might simply want U.S. dollars as a safe haven as the coronavirus roils the global economy. 

Recently, though, more people might be using stablecoins to send each other payments, according to a report this week published jointly by cryptocurrency exchange Bitstamp and research firm Coin Metrics. 

The analysts noted that the daily transfer value of stablecoins recently surged past $2 billion, while bitcoin’s slid to just below $2 billion. Global remittances and cross-border payments are a “natural use case for stablecoins given their ease of international transfer,” they wrote. 

“It feels like a little bit of a paradigm shift, especially now that stablecoins are exploding,” Nate Maddrey, a senior research analyst at Coin Metrics, said in a phone interview. 

The sudden popularity of stablecoins could raise knotty questions over the utility of bitcoin, which is the oldest cryptocurrency, at 11 years, and the biggest by far, at a market capitalization of $170 billion. 

Maddrey believes bitcoin’s value proposition has changed over the years: Many investors are buying it because they see the cryptocurrency as a store of value, similar to gold, and as the linchpin of the world’s most secure blockchain network. Because of its capped supply, bitcoin is often posited as a hedge against inflation and central-bank money printing. 

“I don’t really see a path where bitcoin becomes a true medium of exchange,” Maddrey said. 

The rise of stablecoins marks a new chapter in fast-moving and ever-evolving cryptocurrency markets. A thousand flowers are blooming as entrepreneurs unveil semi-autonomous “decentralized finance” projects, financial firms prepare to tokenize traditional assets like U.S. Treasury bonds and foreign-exchange contracts, and Facebook pushes forward with its own digital token, Libra. PayPal, the payments company, has told the European Commission it’s developing cryptocurrency capabilities. 

Countries around the world are developing their own tokens, known as central bank digital currencies, or CDBCs, which could eventually provide another option for peer-to-peer payments. Just this week, reports have emerged that both Japan and the U.K.are considering digital versions of their currencies. 

While the Federal Reserve has yet to unveil its own version, some countries with exchange rates pegged or closely linked to the dollar might be able to create CBDCs that work like proxies for the U.S. tender. 

That might curb the appetite for stablecoins, many of them issued by upstart companies with scant corporate transparency and untested creditworthiness.     

“Would you rather I sent you a stablecoin or a CBDC backed by a sovereign nation whose currency is pegged to the dollar?” Matt Blom, head of sales and trading for the digital-asset firm Diginex, said in a video interview. “I’d rather receive a sovereign-backed CBDC.” 

Blockforce Capital, a cryptocurrency investment firm based in San Diego, wrote Wednesday in a monthly investor update that, at least for now, there’s good money to be made from lending out or depositing stablecoins. 

“Stablecoins are proving their utility in the digital-asset ecosystem,” according to the email. “Our traditional finance friends are often shocked to hear that as interest rates sink lower and even negative in some cases, we manage to earn close to 8% as we lend out stablecoins to high-quality counterparties.”

On the other hand, holding stablecoins is essentially the reverse of betting on assets that are denominated in dollars, from stocks to bonds to oil and bitcoin. The Federal Reserve this year has pumped nearly $3 trillion of freshly created dollars into financial markets, propping up asset prices. 

“Holding dollars is no fun when assets are mooning,” Mati Greenspan, founder of the analysis firm Quantum Economics, wrote in an email. 

But, hey, maybe some people might just want to send stablecoins to a pal.  

Tweet of the day Bitcoin watch

BTC: Price: $9,085 (BPI) | 24-Hr High: $9,253 | 24-Hr Low: $9,048

Trend: Bitcoin is edging lower on Thursday, with the four-hour chart indicating a failed breakout and fresh bearish lower-highs setup. 

The number one cryptocurrency by market value is currently trading near $9,080, representing a 1.3% decline on the day. 

A falling channel represented by trendlines connecting June 1 and 22 highs and June 2 and 15 lows was breached to the higher side on July 8. As such, the cryptocurrency was expected to chart a minor rally toward resistance at $9,800 (June 22 high). 

Instead, the cryptocurrency has ended up charting fresh bearish lower highs, as represented by the trendline connecting July 8 and 13 highs (yellow line). In addition, prices fell back inside the bearish channel early on Thursday – a sign of failed breakout. Chart analysts consider failed breakouts as strong bearish signals. 

Indicators, too, are beginning to realign in favor of the bears. The MACD histogram, an indicator used to identify trend strength and trend changes, is producing deeper bars below the zero line. It indicates the downward move may gather pace. Meanwhile, on the daily chart, the histogram has crossed into bearish territory below zero. 

Bitcoin may dive below $9,000 and test support at $8,830 (June 28 high). On the higher side, a high-volume move above $9,350 is needed to revive the case for a rally to $9,800.

Related Stories

• Binance CEO Criticizes Twitter Security After Coordinated Attack on Prominent Accounts
• Twitter Hack Used Bitcoin to Cash In: Here’s Why

With bitcoin looking heavy this week, short-term sentiment in the options market has flipped bearish.

• The leading cryptocurrency by market value fell to $9,070 soon before press time, reversing the 2.5% rise to $9,450 seen last week, according to CoinDesk’s Bitcoin Price Index.
• Prices are now closing on the lower end of the multi-week-long trading range of $9,000–$10,000.
• Reflecting the downward trend, the one-month put-call skew for bitcoin options, a metric that measures the price of (bearish) put options relative to (bullish) call options, has risen to 4.9%, according to data provided by crypto derivatives research firm Skew.
• The positive number indicates short-term put options are drawing higher prices than calls.
• Traders, the data suggests, are making speculative bets to the downside or are hedging against a potential bearish move (that is, buying puts against long positions in the spot market), Shaun Phoon, senior trader at QCP Capital, told CoinDesk.

• The one-month skew was hovering at lows below -7% a week ago, indicating stronger demand for call options – a sign of bullish bias in the options market.
• While the one-month skew is now more bearish, the six-month skew remains below zero or bullish.
• Demand for call options expiring in December is still higher than that for puts.
• The three-month skew is hovering in the neutral zone near 0%.

Also read: Bitcoin Option Traders Bet on Bullish Move Following Volatility Squeeze

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Related Stories

• First Mover: ‘Boring’ Bitcoin Shrugs Off Twitter Hack as Stablecoins Co-Opt Satoshi’s Dream
• Market Wrap: Bitcoin Sticks Around $9,200 as Traders Eye Other Markets for Action
• New Metric Suggests Imminent Volatility for Bitcoin
• Bitcoin Has American Mindshare but Few Users

Waves’ corporate arm is planning on working with Microsoft’s Russian subsidiary, in part to create an asset tokenization platform for company equipment.

• Waves Enterprise said Wednesday it had signed a five-year memorandum with Microsoft Russia to work jointly on corporate blockchain solutions.
• Waves Platform is a Moscow-based tokenization project; Waves Enterprise was founded in July of last year to offer services to corporate clients on private blockchains.
• Although nothing has been confirmed, Waves said both sides wanted to use blockchain for new supply chain solutions as well as for the “tokenization of industrial assets.”
• An industrial asset is a catch-all term that can refer to anything from heavy machinery to basic office equipment.
• Microsoft Russia CEO Kristina Tikhonova said the partnership was a push towards the country’s business sector getting to grips with blockchain technology.
• Future solutions could be made available in Russia and internationally, Waves said.
• The tie-in will look at the interplay between blockchain and cloud technologies; Waves Enterprise said it will also build a data analytics solution based on Microsoft Azure, the company’s cloud computing service.
• In April, Russia’s Ministry of Communications officially recognized Waves as a potential technology provider for future government initiatives.

See also: Microsoft Files Patent Application for Crypto Mining System Powered by Human Activity

UPDATE: (July 16, 16:00 UTC): This article has been updated to better distinguish Waves Platform from Waves Enterprise.

Related Stories

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• OKCoin Joins Coinbase in Supplying Oracle Feed for DeFi Project Compound
• Man Charged With Defrauding $4.5M in Crypto to Fund Gambling Habit
• Binance CEO Criticizes Twitter Security After Coordinated Attack on Prominent Accounts

Waves’ corporate arm is planning on working with Microsoft’s Russian subsidiary, in part to create an asset tokenization platform for company equipment.

• Waves Enterprise said Wednesday it had signed a five-year memorandum with Microsoft Russia to work jointly on corporate blockchain solutions.
• Waves is a Moscow-based tokenization platform; Waves Enterprise was founded in July of last year to offer services to corporate clients on private blockchains.
• Although nothing has been confirmed, Waves said both sides wanted to use blockchain for new supply chain solutions as well as for the “tokenization of industrial assets.”
• An industrial asset is a catch-all term that can refer to anything from heavy machinery to basic office equipment.
• Microsoft Russia CEO Kristina Tikhonova said the partnership was a push towards the country’s business sector getting to grips with blockchain technology.
• Future solutions could be made available in Russia and internationally, Waves said.
• The tie-in will look at the interplay between blockchain and cloud technologies; Waves Enterprise said it will also build a data analytics solution based on Microsoft Azure, the company’s cloud computing service.
• In April, Russia’s Ministry of Communications officially recognized Waves as a potential technology provider for future government initiatives.

See also: Microsoft Files Patent Application for Crypto Mining System Powered by Human Activity

Related Stories

• OKCoin Joins Coinbase in Supplying Oracle Feed for DeFi Project Compound
• Man Charged With Defrauding $4.5M in Crypto to Fund Gambling Habit
• Binance CEO Criticizes Twitter Security After Coordinated Attack on Prominent Accounts
• Chainalysis Says Bitcoin Scammed From Twitter Users Is ‘On the Move’

Waves’ corporate arm is planning on working with Microsoft’s Russian subsidiary in part to create an asset tokenization platform for company equipment.

• Waves Enterprise said Wednesday they had signed a five-year memorandum with Microsoft Russia to work jointly on corporate blockchain solutions.
• Waves is a Moscow-based tokenization platform; Waves Enterprise was founded in July last year to offer services to corporate clients on private blockchains.
• Although nothing has been confirmed, Waves said both sides wanted to use blockchain for new supply chain solutions as well as for the “tokenization of industrial assets.”
• An industrial asset is a catch-all term that can refer to anything from heavy machinery to basic office equipment.
• Microsoft Russia CEO Christina Tikhonova said the partnership was a push towards the country’s business sector getting to grips with blockchain technology.
• Future solutions could be made available in Russia and internationally, Waves said.
• The tie-in will look at the interplay between blockchain and cloud technologies; Waves Enterprise said it will also build a data analytics solution based on Microsoft Azure – the company’s cloud computing service.
• In April, Russia’s Ministry of Communications officially recognized Waves as a potential technology provider for future government initiatives.

See also: Microsoft Files Patent Application for Crypto Mining System Powered by Human Activity

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