CoinDesk Crypto

Bitcoin took a hit Monday, only to recover as many market participants see price weakness ahead.

Bitcoin (BTC) was trading around $9,426 as of 20:00 UTC (4 p.m. ET), gaining less than a percent over the previous 24 hours. 

At 00:00 UTC on Monday (8:00 p.m. Sunday EDT), bitcoin was changing hands around $9,327 on spot exchanges such as Coinbase. It then dipped 5% to as low as $8,895 before picking back up to over $9,300. The price is now above its 10-day and 50-day moving averages, a bullish technical indicator.

Related: Sorry, Bloomberg: Here Are 6 Reasons Why 2020 Is a Great Year for Bitcoin

“Bitcoin is trading off with other asset classes, having suffered a loss of short-term momentum,” said Katie Stockton, lead analyst for Fairlead Strategies. “There is room to short-term oversold territory, but no support has been broken. The neutral consolidation phase is intact, in my work, as long as bitcoin is above the 200-day moving average, about $8,340, and below resistance near $10,055.”

Read More: Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests

Traders say traditional markets seem to be taking the lead these days. “Our actual concern at the moment is the correlation between equities and gold,” Singapore-based quantitative trading firm QCP Capital wrote in an investor note Monday. “If both start trading lower in tandem, which happened prior to Black Thursday in March and also before the Thursday sell-off last week, it could be a strong signal for BTC to trade a leg lower as well.” 

Indeed, both bitcoin and the S&P 500 saw similar movements on June 10’s drop across most markets. Gold has held its own throughout the year, with the exception of March’s decline.

Related: CME Bitcoin Options Market Grew 10x in the Past Month

That bitcoin’s performance is matching stocks of late concerns George Clayton of Cryptanalysis Capital. “The correlation with stocks is continuing,” he told CoinDesk. “That’s negative for crypto right now.”

Read More: JPMorgan Analysts: Bitcoin Is Likely to Survive (as a Speculative Asset)

The market may seem weak right now but it could be worse, said Chris Thomas, head of digital assets at Swissquote Bank. “An interesting point is that miners do not appear to be selling. Otherwise, we would have seen the market significantly lower.” 

A look at the market for options with June expiration shows where some traders see the price heading. According to data collected from aggregator Skew, bitcoin has a 90% probability of being over $7,500, yet only a 13% chance of hitting $10,500 for the month of June.

Thomas said the sweet spot for bitcoin is around the $8,000 range going forward. “I think we may drift a bit over the next few days and week, perhaps make a new leg lower into the $8,000 territory,” he said. “There are a lot of buyers and sellers sitting on the sidelines waiting.”

Digital assets on CoinDesk’s big board are mostly in the red Monday. Ether (ETH), the second-largest cryptocurrency by market capitalization, is trading around $232 and slipping 1% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Cardano’s No Ethereum Killer Yet, but It’s Winning in Crypto Markets

The number of unique addresses active in the Ethereum network either as a sender or receiver has been trending up. Activity spiked during March’s coronavirus-induced crash, at 389,114 active addresses. On June 2, the number hit 387,293, closing in on that March 21 high for the year so far. 

The biggest cryptocurrency losers on the day include decred (DCR) in the red 4.4%, qtum (QTUM) dipping 3.4% and bitcoin SV (BSV) down 3.2%. The lone winner was zcash (ZEC) in the green 2.8%. All price changes were as of 20:00 UTC (4:00 p.m. ET).

In commodities, oil gained 1.5%, with a barrel of crude priced at $37 at press time. 

Gold is trading flat, with the yellow metal slipping by less than a percent, trading at around $1,726 for the day. 

Read More: Cryptocurrency Markets May Be Decentralized but They’re Still Accountable

In Asia, the Nikkei 225 index of publicly traded companies in Japan closed in the red 3.4% on fears of the coronavirus pandemic making a comeback.I n Europe, the FTSE 100 index ended trading flat, down less than a percent as amid concerns about COVID-19 making a resurgence. 

The U.S. S&P 500 index gained less than a percent. Since the start of 2020 the tech stock Amazon.com, which is in the top five of the S&P 500, has actually outgained bitcoin, up 39% versus the world’s oldest currency’s 31% appreciation. 

U.S. Treasury bonds were mixed on the day. Yields, which move in the opposite direction as price, were down most on the t-year, in the red 5%.

• Inactive Bitcoin Supply Reaches 4-Year High, Pointing to Bullish Sentiment
• Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests

Over a recent 30-day period, the total open interest for CME bitcoin options increased more than tenfold, from $35 million on May 11 to $373 million on June 10. Moreover, open interest made a new all-time high on six consecutive days from June 5-10. 

Significant growth in CME futures points to rapidly growing interest by institutional investors in trading regulated bitcoin derivatives products. Despite this growth, however, CME Group “has no plans to introduce additional cryptocurrency products,” a spokesperson told CoinDesk. Thus for now, CME Group’s cryptocurrency products will only involve bitcoin.

CME, which launched its bitcoin options product only at the beginning of 2020, now represents over 20% of the global bitcoin options market measured by open interest, or the total number of outstanding derivative contracts. It’s now the second-largest bitcoin options market in the world behind Panama-based Deribit, according to Skew.

Related: Sorry, Bloomberg: Here Are 6 Reasons Why 2020 Is a Great Year for Bitcoin

See also: Crypto Derivatives Exchange OKEx Launches Options on Ether

Growth in CME’s bitcoin options market is “a strong signal that regulated institutions are exposing their books to bitcoin,” said Matt Kaye, managing partner at Los Angeles-based Blockhead Capital. “CME has a higher cost of capital and is closed on weekends, so anyone trading there is likely making those sacrifices because they have to.”

Much of CME’s growth appears to have come at the expense of Deribit. Market shares claimed by competing bitcoin derivatives markets LedgerX, Bakkt and OKEx have remained largely unchanged since January.

Options aren’t the only bitcoin derivatives market where CME is seeing gains. In May, CME’s bitcoin futures demonstrated similarly remarkable growth, outpacing nearly every other bitcoin derivatives platform on a real and percentage growth basis. CME bitcoin futures open interest grew 29% over the last 30 days as institutional investors continue to enter the bitcoin derivatives market.

• Inactive Bitcoin Supply Reaches 4-Year High, Pointing to Bullish Sentiment
• Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests
• Encrypted Messaging Site Privnote Cloned to Steal Bitcoin

On-chain data indicates crypto investors aren’t taking profits but are holding on despite uncertain economic conditions and bitcoin’s strong performance. 

At the time of publication, 60.63% of all bitcoins have not moved in at least a year, according to data from Glassnode. This data suggests bitcoin ownership is consolidating, and investors who bought at the cycle bottom in 2018 have been reluctant to take profits and relinquish their bitcoin holdings. It’s been over four years since a percentage of supply this large has been inactive. 

One method to analyze inactive bitcoins has been to group them by the length of time they’ve been inactive. Called “HODL Waves,” this data analysis was pioneered by Austin, Texas-based Unchained Capital to display macroscopic shifts in bitcoin ownership and use. It may also give a sense of investor preferences.

Related: Sorry, Bloomberg: Here Are 6 Reasons Why 2020 Is a Great Year for Bitcoin

Read more: Number of Bitcoins on Crypto Exchanges Hits 18-Month Low

Each wave — one day, one month, six months, two years, five years, etc. — represents the period of time in which a percentage of the issued supply has not been used in a transaction, or, in other words, has been inactive. 

The term “HODL” represents the behaviour of die-hard bitcoin investors who chose to hold bitcoins with practically no intention of using or selling those coins. Thus, each wave visualizes what percentage of the bitcoin supply has been “HODLed” and for how long.

Dhruv Bansal, co-founder and CSO at Unchained Capital, explained that this HODL Wave data suggests investors “who bought bitcoin on the way down from $6,000 to $3,000 in 2018 are still holding it despite the tremendous gains since then and the recent economic turbulence.”

Related: CME Bitcoin Options Market Grew 10x in the Past Month

Read more: Another Data Point Suggests Bitcoin Close to Prolonged Bull Market

Curiously, the two age segments that have grown the most are coins held for more than 10 years and those held for two to three years, which are up 31% and 26% year to date, respectively. In 2020, the two- to three-year band represents coins held from the 2017 market all-time high to present.

Every bitcoin investor might not intentionally HODL though. Speculating on the two- to three-year band wave’s growth, Yassine Elmandjra, cryptocurrency analyst at ARK Investment Management, told CoinDesk his “guess” is growth in this coin age group could, among other things, be a function of retail investors “who bought at the peak and lost their Trezor [wallet] or can’t log into Coinbase.” 

Despite an extremely volatile Q1 2020 and ongoing macroeconomic uncertainty, an increasing amount of dormant bitcoins confirms that buyers still believe in their investment more than ever. 

According to Bansal, “If you believe bitcoin’s price history repeats or at least rhymes, then this may be a bullish sign, the market consolidating into strong hands as macro trends highlight bitcoin’s value proposition.”

• Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests
• Encrypted Messaging Site Privnote Cloned to Steal Bitcoin

Fintech bank Revolut will give its users legal control of their cryptocurrencies on July 27, but the U.K.-based bank is tightening its hold on how they can actually wield it.

Revealing twin policy changes in an email sent to users and obtained by CoinDesk Monday, the mobile bank said it will cede its status as the “legal owner” of Revolut’s five available cryptos – bitcoin, ether, litecoin, XRP and bitcoin cash – over to its clients who purchase them next month. 

There is a catch, though: that crypto still cannot leave Revolut’s client ecosystem.

Related: Just-Launched Ziglu Wants to Make It Stupid Easy to Buy Crypto

Users “can’t transfer cryptocurrency to anyone who is not a Revolut customer,” the updated terms and conditions read, detailing that while users “have complete control” of their crypto, they “will not be able to carry out transactions” themselves.

Revolut is also ending crypto card payments, one of the few ways its users could use their crypto outside the ecosystem. 

While Revolut did not expressly allow customers to pay for goods using crypto under the old policy, they were able to do so if their accounts only held cryptocurrencies, with the bank exchanging crypto for fiat on its customers’ behalf. Revolut plans to suspend this ability on July 27.

The policy changes will let Revolut expand its crypto features, the bank said in its statement to users. A representative did not respond to CoinDesk requests for comment by press time.

Related: ‘Inherently Borderless’: Acting OCC Chief Talks Crypto, State Licenses and DeFi

Revolut has recently been expanding its crypto offerings and also its global presence: it entered the U.S. market in March. However, Revolut has kept U.S. residents from accessing many of its crypto tools. While U.S.-based clients can currently open a bank account, they cannot yet trade cryptocurrency on it.

• US Bank Regulator OCC Asks for Public Input on Cryptocurrency Use in Financial Sector
• Japan’s Biggest Banks Are Talking About Building a Digital Payments System

Nexus Mutual, an alternative insurance provider for a variety of Ethereum-based DeFi protocols, has seen its risk pool double over the past 90 days to more than $4 million.

Indeed, Nexus can barely keep up with the demand for smart-contract cover in the exploding decentralized finance (DeFi) arena. 

“We are in this position where there are lots of people that want heaps of cover, but we don’t quite have enough assets to cover everything we would like to right now,” said Nexus Mutual CEO and founder Hugh Karp. “So it’s a good problem to have and we’re working on it.”

Related: With Token Uptick and Israeli Election Work, It’s Been a Busy Year for Bancor’s Founders

The recent boost has been due to a few large covers, especially on Balancer, a newly launched protocol that is offering bonuses for people providing liquidity. Other significant deals for Nexus stem from DeFi platforms Aave and Compound.

Stepping back, the London-based Nexus may be using bleeding-edge tech but the mutual insurance model dates back to the 17th century and potentially aligns the interests of participants better than today’s profit-maximizing insurance firms.

Nexus is exploiting an unregulated pocket within the British insurance sector called a “discretionary mutual,” where members have no contractual obligations to pay claims. As a provider of insurance, the platform recently proved to be worth its salt, however, making its first payout following an exploit of the smart contract code of DeFi lender bZx.

Read more: DeFi Insurance Firm Nexus Mutual Makes Its First Payout Following bZx Attacks

Related: Sequoia-Backed Band Protocol Creeps Onto Chainlink’s Turf With Oracle Product

The way Nexus works is members of the mutual join by purchasing NXM tokens that allow them to participate in the decentralized autonomous organization (DAO). All decisions are voted on by members, who are incentivized to pay genuine claims. 

“DeFi is expanding rapidly so I’m expecting the number of yield-bearing options to increase exponentially over the next few years,” said Karp.“DeFi users want the returns available, but want to avoid the smart-contract risk. A new protocol wants liquidity, so they offer some bonus to enhance yield, and more professional users take out Nexus cover to access yield safely.”

Two areas Nexus is updating to help it scale are risk assessment and pricing. Karp said members are about to vote on the changes, and the upgrades should go live in about a week.

Risk assessors effectively choose and price the risks that Nexus Mutual covers, said Karp, which should encourage more participants and ultimately enable more cover to be provided to the wider DeFi ecosystem.

“We’re also updating the pricing mechanism to be simpler but also more flexible. It’s another step towards our vision of allowing Nexus to take on any type of risk, like a super-efficient Lloyd’s of London,” he said.

Looking ahead, Nexus sees plenty of opportunity in Ethereum’s gradual transition to Eth 2.0, which is expected to begin sometime later this year. Eth 2.0 moves the network from its more energy-hungry Proof-of-Work (PoW) consensus algorithm to Proof-of-Stake (PoS), a method of staking cryptocurrency in order to keep the network afloat.

Earning a steady yield from staking ether (ETH), is somewhat comparable to the way insurance firms in the real world invest the premiums they collect. 

Traditional insurers tend to invest the majority of their funds in relatively low-risk, yield-bearing assets – such as government bonds, high-grade corporate bonds and infrastructure investments, which ideally have a similar cash flow to future expected claim payments.

Read more: Vitalik Buterin Clarifies Remarks on Expected Launch Date of Eth 2.0

“From our point of view, [Eth 2.0 staking] will be very interesting because we want to earn investment returns from the float,” said Karp, referring to the risk pool of capital held by Nexus. “We hold a chunk of ETH so we will be able to start staking that and earning a return, which is obviously very important for insurance entities.” 

Once staking commences on Ethereum, the Nexus DAO can delegate a large portion of its assets to Eth 2.0 staking, which is “conceptually comparable to a very highly rated government bond and therefore will be very well suited to Nexus from a risk perspective,” Karp said. 

DeFi also has the ability for yield to be “stacked,” where one yield-bearing token is deposited into another protocol where it earns additional yield. This comes with additional risks, noted Karp, and must be carefully managed, but Nexus will also look to take advantage of yield stacking, which is something that is not readily available in the regular financial world.

“The medium-term goal for Nexus is to start earning something like 5% on the $4 million float,” which Karp said would likely be a few months after Ethereum’s beacon chain launch in the latter half of this year.

“We are quite likely to purchase a tokenized version of staked ETH, which we are expecting will become available soon after the beacon chain launch,” he said. “That token would earn staking returns immediately and not require Eth 1.x and Eth 2.0 being merged yet.”

• ConsenSys Muscles Into Compliance With New Regulatory Product for DeFi
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View From the Banks
In an investor note, JPMorgan Chase & Co. analysts noted bitcoin’s success in outperforming traditional assets in March on a volatility-adjusted basis, and also found liquidity on major bitcoin exchanges was more resilient than for traditional assets such as equities and gold.

Meanwhile, Mason Privatbank Liechtenstein AG is the latest private bank to offer digital asset custody through a partnership with Hong Kong-based Hex Trust.

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. 

Related: First Mover: Cardano’s No Ethereum Killer Yet, but It’s Winning in Crypto Markets

Elsewhere, payment processors like Square and PayPal are limiting access to their customers’ funds, creating reserve accounts and planning ahead for a period of increased refunds, according to The Wall Street Journal. Square, for instance, told a photography store it would start holding 30% of each of its transactions for 120 days “to protect you and Square from unexpected loss events.” (WSJ)

CBDCs
South Korea’s central bank is moving ahead with research into digital currencies and has set up a legal panel to advise on possible regulatory sticking points. “We established the advisory group to discuss legal issues surrounding a CBDC and figure out which laws need to be revised or enacted for smooth progress in the [the Bank of Korea’s] possible issuance of digital currency,” a BOK official told The Korea Times.

New Offerings
U.K.-based cryptocurrency platform Ziglu has launched, following a £5.25 million (US$6.6 million) seed round. With relationships with two exchanges, the platform routes crypto bids to find consumers the lowest price.

Meanwhile, Wilshire Phoenix, an asset manager that tried to launch a bitcoin exchange-traded fund (ETF) last year, has filed with the SEC to launch a new Bitcoin Commodity Trust. “The Shares will provide investors with exposure to bitcoin in a manner that is accessible and cost-efficient without the uncertain and often complex requirements relating to acquiring or holding bitcoin,” the filing said.

Related: Blockchain Bites: Designing Digital Dollars and Following the Quadriga Trail

Separately, crypto exchange OKEx is partnering with peer-to-peer marketplace Paxful to enable new fiat on-ramps.

On the Watch
Scammers have created a phishing site modeled on Privnote, a popular encrypted messaging platform, that can “read and/or modify all messages sent by users” and hunt out messages containing bitcoin addresses to redirect transactions, according to cybersecurity blog KrebsonSecurity.

Separately, Estonia revoked 500 crypto firms’ licenses after a $220 billion money-laundering scandal involving Danske Bank. (Bitcoin.com)

That comes as Bitfly, the company behind the Ethermine pool, decided to distribute an 10,668 ETH (~$2.4 million) transaction fee appended to a 350 ETH transaction seemingly by accident to its miners. “Given the amount involved we believe 4 days is sufficient time for the sender to get in touch with us,” Bitfly tweeted.

Uncensorable Web?
Shanghai-based Dimension built a Web 3.0 layer for Twitter and Facebook that encrypts posts called Maskbook. “Think about wrapping Ethereum, IPFS, Dapps and even CryptoKitties, on Facebook so that users can access to web3.0 information — without leaving web2.0,” founder Suji Yan told Decrypt. 

Elsewhere, the Internet Archive has closed its quarantine library project, the National Emergency Library, after publishers allege copyright infringement and filed claims in Southern District of New York. (The Block)

On Friday, The New York Times disclosed details and findings about its blockchain-based news meta-data called the News Provenance Project. (The Block)

Crypto Long & Short
One underappreciated feature of crypto markets is the relative ease with which people can change the venues on which they buy and sell their holdings. Last week bitcoin held on Coinbase plummeted after the exchange said it was trying to sell a new analytics tool to the U.S. Internal Revenue Service and the Drug Enforcement Administration. It’s unsure if this value adjustment is a referendum on the exchange. Unlike traditional markets, where traders are essentially locked into using the NYSE, crypto exchanges are “subject to public scrutiny, by a cohort with a megaphone, that cares deeply about certain issues and business practices,” Noelle Acheson, CoinDesk head of research, said. 

An Indonesian Chef and the Remittance Industry’s $554B Problem
Leah Callon-Butler, a CoinDesk columnist and director of Emfarsis, examines the problems plaguing the remittance industry during COVID-19, which is passing operating costs onto consumers, as well as the workarounds people are searching for to avoid paying a $10 fee to send $10 abroad. “It has been hard to strike a balance between empowering and protecting consumers, with strict regulations raising the cost of serving poorer populations and creating barriers to participation, but this needn’t confine remittances to the too-hard basket. Whoever cracks it will be tapping into the largest underserved segment in the world,” Callon-Butler said. 

Bear Tracks Back?
Bitcoin prices hit a three-week low of $8,910 during Monday’s early European trading hours, while futures tied to the S&P 500 are down over 2.5% and major Asian and European equity market indices are in the red. While bitcoin looks to be tracking equities lower, the top cryptocurrency’s put-call volume ratio has risen to three-month highs at 1.79. This ratio is the highest since the markets crash on March 12, and could signal a reversal in bearishness. 

A Look at ADA: A PoS Family Chronicle
Cardano’s token (ADA) is soaring this year as the network prepares for a key upgrade known as “Shelley,” scheduled to go live over the next month. Prices for ADA have climbed over 120% this year, the second-best performance among digital assets with a market value of at least $1 billion. It’s trouncing the 80% year-to-date gains for ether (ETH), the Ethereum network’s native cryptocurrency, a sign that some speculators may see Cardano’s “proof-of-stake” as a challenger to the much-larger Ethereum network. 

Stablecoins
The stablecoin supply has topped $11 billion after rising 94% from $5.7 billion in February. (The Block)

Are Porn Stars Wary of Bitcoin?
CoinDesk’s Leigh Cuen and adult content creator Allie Awesome talk about payments and money in the sex industry, the impact of the coronavirus crisis and the drive towards censorship-proof payments systems. 

• First Mover: Bitcoin Recouples With Wall Street as Stocks Tumble, Fear Trade Returns
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UPDATE (June 16. 08:50 UTC): This article has been updated with a note from Spark Pool, which has decided to distribute transaction fees to its miners.

Two mining pools have called time on waiting any longer for an ether whale to reach out after making two transactions with unusually high fees worth in the millions of dollars last week.

Bitfly, the company behind the Ethermine pool, announced Monday it had opted to distribute a total of 10,668 ETH (now worth just under $2.4 million) in transaction fee to miners that were active at the time the transaction went through last Thursday.

Related: Why This Dev Built a ‘Centralized Ethereum’ on Top of Bitcoin’s Lightning Network

“As the sender of the transaction … has not contacted us after 4 days we have made the final decision to distribute the tx fee to the miners of our pool,” Bitfly tweeted. “Given the amount involved we believe 4 days is sufficient time for the sender to get in touch with us.”

Chinese mining pool Spark Pool has also now said that it will distribute its $2.6 million transaction fee out to its members. “The legitimate sender of the transaction has not yet contacted us to provide a validating signature to prove their identity,” the company said. “We have, therefore, decided to distribute the transaction fees to Ethereum miners working on that day.”

On Wednesday, Spark Pool processed a transaction from a single address with a hefty ETH balance, who sent a minuscule 0.55 ETH (then worth $133) with a transaction fee worth $2.6 million at the time. Barely a day later, at approximately 04:00 UTC on Thursday morning, the same address sent 350 ETH with another fee, also worth $2.6 million.

When the network’s running smoothly, the average fee for an ether transaction hovers around the $0.50 mark. Two transactions would, therefore, cost about $1. But in total this single wallet holder, who has not been identified, dished out over $5.2 million in fees for just these two transactions.

Related: This Political Conversation With Vitalik Buterin Shows How Ethereum Could Change the World

Spark Pool, which has been through this before, froze the transaction to give the sender time to reach out and work on a deal to reclaim some of the transaction fees. After it happened again, less than a day later, Ethermine followed suit and gave the sender a grace period to get in touch.

See also: Bitcoin Mining Pool Poolin Partners With BlockFi to Expand Crypto Lending Service

But that hasn’t happened. Bitfly said it had instead received requests from, “multiple people [who] claimed being the sender of this transaction, [but] none of them was able to produce a valid signature of the sending account.”

Perhaps flagging from the volume of phony requests, the company has ruled out freezing transaction fees like this ever again, regardless of how much the fee might be.

“In the future, we will no longer interfere in the payout of large tx fees,” they tweeted. “Our advertised payout policy is to always distribute the full block reward and we will be sticking to that independent on the amount involved.”

Spark Pool has said it will distribute the transaction fee out to the miners who were active on that day, based on a snapshot of miner hash rate that will be taken on Wednesday at 07:30 UTC – exactly seven days after processing the mysterious transaction.

• ETH Whale Pays $5.2M in Fees for 2 Mysterious Transfers Totaling $82K [Updated]
• ConsenSys Muscles Into Compliance With New Regulatory Product for DeFi

A mining pool has called time on the wait for an ether whale to reach out after making a transaction with an unusually high fee worth in the millions of dollars last week.

Bitfly, the company behind the Ethermine pool, announced Monday it had opted to distribute a total of 10,668 ETH (now worth just under $2.4 million) in transaction fee to miners that were active at the time the transaction went through last Thursday.

“As the sender of the transaction … has not contacted us after 4 days we have made the final decision to distribute the tx fee to the miners of our pool,” Bitfly tweeted. “Given the amount involved we believe 4 days is sufficient time for the sender to get in touch with us.”

Related: Why This Dev Built a ‘Centralized Ethereum’ on Top of Bitcoin’s Lightning Network

At approximately 04:00 UTC on Thursday morning, a single address with a hefty ETH balance sent 350 ETH with the eye-popping fee worth $2.6 million at the time. That was the second such transaction in two days. The day before, the same wallet address sent a minuscule 0.55 ETH (then worth $133) with another fee, which was also worth $2.6 million, picked up by the China-based mining pool, Spark Pool.

When the network’s running smoothly, the average fee for an ether transaction hovers around the $0.50 mark. Two transactions would, therefore, cost about $1. But in total this single wallet holder, who has not been identified, dished out over $5.2 million in fees for just these two transactions.

Spark Pool, which has been through this before, froze the transaction to give the sender time to reach out and work on a deal to reclaim some of the transaction fees. After it happened again, less than a day later, Ethermine followed suit and gave the sender a grace period to get in touch.

See also: Bitcoin Mining Pool Poolin Partners With BlockFi to Expand Crypto Lending Service

Related: This Political Conversation With Vitalik Buterin Shows How Ethereum Could Change the World

But that hasn’t happened. Bitfly said it had instead received requests from, “multiple people [who] claimed being the sender of this transaction, [but] none of them was able to produce a valid signature of the sending account.”

Perhaps flagging from the volume of phony requests, the company has ruled out freezing transaction fees like this ever again, regardless of how much the fee might be.

“In the future, we will no longer interfere in the payout of large tx fees,” they tweeted. “Our advertised payout policy is to always distribute the full block reward and we will be sticking to that independent on the amount involved.”

Spark Pool still had its transaction frozen at press time and also had not heard from the sender. CoinDesk understands the pool will update miners sometime this week on how it will deal with its unusual fee.

• ETH Whale Pays $5.2M in Fees for 2 Mysterious Transfers Totaling $82K [Updated]
• ConsenSys Muscles Into Compliance With New Regulatory Product for DeFi

Crypto exchange OKEx is partnering with peer-to-peer marketplace Paxful to enable new fiat on-ramps for its customers.

Paxful said in an emailed statement Monday the move would benefit its own users by providing better liquidity and ease of access. According to the statement, Paxful would work as a fiat-to-cryptocurrency ramp for OkEx and its services will allow users to buy bitcoin with over 160 different national currencies, including the euro, pound sterling, Indian rupee and Thai baht. 

“With this partnership, we hope to make crypto more accessible as a real-world payment method,” said Ray Youssef, CEO and co-founder of Paxful, in the statement. 

Related: First Mover: Cardano’s No Ethereum Killer Yet, but It’s Winning in Crypto Markets

According to Paxful, the partnership will also make it possible for users to access a variety of trading options on the OxEx platform including option trading on OKEx’s DEX platform.

“Through this partnership, we can reach more users in developing regions using Paxful’s existing infrastructure and payment options,” said OKEx CEO Jay Hao in the emailed statement. 

See also: Peer-to-Peer Crypto Exchange Paxful Now Lets You Trade Bitcoin for Gold

Regarding Paxful’s immediate plan to push into new markets, co-founder Artur Schaback said the firm was looking at several countries in southeast Asia including Indonesia, Malaysia and Singapore. According to data gathered by analytics firm Useful Tulips, Paxful’s trading volume in the southeast Asia region has gained sharply over the last year. 

Related: Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests

Although the firm’s stated goal is to further financial inclusion using cryptocurrency, Schaback also admits that, “regulations will always be a concern in a budding industry.”

As recently as Wednesday, Paxful had also announced via Twitter that it was discontinuing all transactions made through the state-owned Bank of Venezuela due to U.S. sanctions. 

• India’s Rumored Crypto Ban May Be Overblown, Say Industry Pros
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South Korea’s central bank is moving ahead with research into digital currencies as it sets up a legal panel to advise on possible regulatory sticking points.

Per an article in The Korea Times on Monday, the Bank of Korea (BOK) said the six-person panel, comprised of legal experts in the financial and IT sectors, as well as one specializing in fintech, would provide guidance and advice to the bank as it develops and tests a central bank digital currency (CBDC).

“We established the advisory group to discuss legal issues surrounding a CBDC and figure out which laws need to be revised or enacted for smooth progress in the BOK’s possible issuance of digital currency,” a BOK official told Korea Times.

Related: Custody Provider Copper Joins Think Tank to Bridge Gap Between Traditional Finance and Crypto

See also: South Korea’s Central Bank Is Building a New Blockchain System for the Bond Market

This is the next phase in the BOK’s rapid reappraisal of CBDCs. In December, when it set up its task force to look into digital currencies, it said it was more to “keep an eye” on what other countries were doing rather than to create something themselves.

But that changed in April when other countries including Japan and the U.S. began moving faster than originally anticipated. Abandoning its wait-and-see-approach, the BOK jumped into a 22-month pilot program to develop and test a new CBDC that could be used to replace physical cash.

While the BOK is keeping its cards close to its chest, it has dropped a few hints. It appears the proposed CBDC, as it looks like now, would piggyback off the settlement systems they and other central banks use to enable high-value transfers between financial institutions.

Related: Libra Is Ready for the Digital Money ‘Space Race’: Dante Disparte

Last Friday, Bank of Korea Governor Lee Ju-yeol described it as “noteworthy” that central banks appeared to be developing digital payments systems on top of their real-time gross settlement systems (RTGS) – interbank payment networks – “to reduce settlement risk.”

See also: Central Banks Mull Creating a CBDC, but Not on a Blockchain: Survey

“Digital transformation could move beyond the private sector to the central bank’s payment and settlement system,” Lee said, in a speech marking the BOK’s 70th anniversary. “As an institution responsible for ensuring the safety and efficiency of the payment and settlement system, the central bank needs to proactively respond to these changes.”

“The currently ongoing research and development on central bank digital currency must be carried out as planned,” he added.

The BOK’s newly convened legal team is believed to have met for the first time on Monday and will continue to do so until May 2021, at least.

• Saudi Monetary Authority Pumped Some of $13B Bank Infusion Using Blockchain
• Digital Currencies Could Replace Low-Interest Bank Accounts, Says UN-Linked Expert

South Korea’s central bank is moving ahead with research into digital currencies, as it sets up a legal panel to advise on possible regulatory sticking points.

Per an article in The Korea Times Monday, the Bank of Korea (BOK) said the six-person panel, comprised of legal experts in the financial and IT sectors, as well as one specializing in fintech, would provide guidance and advice to the bank as it develops and tests a central bank digital currency (CBDC).

“We established the advisory group to discuss legal issues surrounding a CBDC and figure out which laws need to be revised or enacted for smooth progress in the BOK’s possible issuance of digital currency,” a BOK official, speaking to The Korea Times, said.

Related: Custody Provider Copper Joins Think Tank to Bridge Gap Between Traditional Finance and Crypto

See also: South Korea’s Central Bank Is Building a New Blockchain System for the Bond Market

This is the next phase in the BOK’s rapid reappraisal of CBDCs. In December, when it first set up its task force to look into digital currencies, it said it was more to “keep an eye” on what other countries were doing rather than to create something themselves.

But that changed in April when, as other countries including Japan and the U.S., turned out to be moving faster than originally anticipated. Abandoning its wait-and-see-approach, the BOK jumped into a 22-month pilot program to develop and test a new CBDC that could be used to replace physical cash.

While the BOK is keeping its cards close to its chest, it has dropped a few hints. It appears the proposed CBDC, as it looks like now, would piggyback off the settlement systems they and other central banks use to enable high-value transfers between financial institutions.

Related: Libra Is Ready for the Digital Money ‘Space Race’: Dante Disparte

Last Friday, Bank of Korea Governor Lee Ju-yeol described it as “noteworthy” that central banks appeared to be developing digital payments systems on top of their real-time gross settlement systems (RTGS) – interbank payment networks – “to reduce settlement risk.”

“Digital transformation could move beyond the private sector to the central bank’s payment and settlement system,” Lee said, in a speech marking the BOK’s 70th anniversary. “As an institution responsible for ensuring the safety and efficiency of the payment and settlement system, the central bank needs to proactively respond to these changes.”

“The currently ongoing research and development on central bank digital currency must be carried out as planned,” he added.

See also: Central Banks Mull Creating a CBDC, but Not on a Blockchain: Survey

The BOK’s newly convened legal team is believed to have met for the first time on Monday and will continue to do so until May 2021, at least.

• Saudi Monetary Authority Pumped Some of $13B Bank Infusion Using Blockchain
• Digital Currencies Could Replace Low-Interest Bank Accounts, Says UN-Linked Expert

As Ethereum pushes slowly toward a new type of blockchain technology that some cryptocurrency experts predict could represent the future of decentralized finance, the upstart competitor Cardano is getting ready to go live. 

And Cardano’s digital token, ADA, is soaring this year in digital-asset markets on speculation the project’s early embrace of a “proof-of-stake” blockchain might put it in a stronger position to challenge the much-larger Ethereum network. 

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: OKEx Taps Paxful to Provide New Fiat-to-Crypto On-Ramps

Prices for ADA have climbed over 120% this year, the second-best performance among digital assets with a market value of at least $1 billion. It’s trouncing the 80% year-to-date gains for ether (ETH), the Ethereum network’s native cryptocurrency. Bitcoin is up 31% in 2020.

The goal for Cardano, similar to Ethereum’s, is to build a massive, decentralized computing network that millions of people, businesses and governments could someday use to run financial applications from anywhere in the world. And while the Ethereum blockchain’s native token, ether, currently has a commanding lead in the competition, with a $26.3 billion market capitalization that’s 13 times the size of ADA’s, the smaller challenger might be poised to win a growing share of the fast-moving industry.

The recent catalyst for ADA’s price rally appears to be Cardano’s progress toward a key upgrade of its network known as “Shelley,” scheduled to go live over the next month. 

Cardano launched its token in early 2017, but that version was “federated,” or managed more centrally. The Shelley upgrade aims to make Cardano “50 to 100 times more decentralized than other large blockchain networks,” according to the supporting foundation’s website, using proof-of-stake blockchain technology that is seen as more efficient than the electricity-hungry proof-of-work system used by the Bitcoin blockchain. A testnet of Shelley launched on June 9.

Related: Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests

Ethereum is moving to shift to proof-of-stake from proof-of-work as part of a “2.0” upgrade, but backers of that project have only stipulated that the transition will begin by September and then be phased in over stages. 

“We believe Cardano’s recent price appreciation is partially related to the anticipation of their mainnet launch,” Guy Hirsch, managing director of multi-asset brokerage eToro, told CoinDesk. “If the team working on the project fails to deliver what was proposed, then the market might react negatively.” 

Cryptocurrencies tied to staking have been among the hottest this year in digital-asset markets, partly because holders can earn rewards akin to interest – especially prized as the world’s biggest central banks have slashed interest rates to accommodate economies racked by the coronavirus and related lockdowns. Another staking token, Tezos (XTZ), is up 93% this year. 

According to the Cardano website, investors can receive 10% a year in “delegation rewards” from staking ADA. 

Some cryptocurrency investors see the Shelley upgrade as little more than an opportunity for Cardano to hype itself. The giant U.S. digital-asset exchange Coinbase already offers Tezos staking, and custodian Staked lists eight different digital assets allowing users to earn a return simply for holding them.

“I’m personally short on ADA currently,” Mostafa Al-Mashita, vice president of digital liquidity firm Secure Digital Markets, said via a Telegram chat. “We do trade it for our clients. I think the Shelley upgrade will be another case of, ‘Buy the rumor, sell the news.’”

Cardano’s charismatic leader is Charles Hoskinson, who marshals the project as co-founder of his own five-year-old engineering company, IOHK. And he might be perfectly equipped, based on his prior work experience, to take on Ethereum: He was an Ethereum co-founder before leaving in 2014.

Hoskinson posted a roadmap on Twitter showing that full staking via the Shelley upgrade would be available by August 18.

“Cardano has very high potential in my opinion,” Michael Gord, CEO of GDA Capital, a firm that trades various cryptocurrencies, including ADA and ether. In the race to build a computing platform for applications designed to run on decentralized networks, he said, “it’s the only blockchain that is challenging ether as the potential No. 1 operating layer.” 

Yet, in crucial ways, Cardano lags far behind Ethereum. 

Cardano doesn’t plan to add smart contract programming – the key to building decentralized applications, known as dapps – until a subsequent phase; Ethereum already offers the functionality. According to the website DeFi Pulse, 19 of the top 20 dapps by volume are using the Ethereum network, and the remaining dapp is on the Lightning Network, which is associated with the Bitcoin blockchain. 

Among open-source software developers, Ethereum garners far more attention. Some 28 people are active on the IOHK GitHub, where the Cardano node and wallet open source software is hosted, versus 61 people working on open-source repositories on Ethereum’s GitHub. 

In digital-asset markets, Cardano registers little more than a blip compared with the Ethereum network, already used as the backbone for dollar-linked stablecoins like tether and USDC, as well as early-generation decentralized exchanges and lending platforms.    

Ether’s liquidity at $594 million per day is about 10 times ADA’s, according to Messari, a provider of data on digital assets. 

“Replicating Ethereum’s developer footprint and network effects is nearly impossible for a smaller network today, and probably value destructive for the crypto ecosystem,” Lex Sokolin, global fintech co-head at the Ethereum-focused software-engineering firm ConsenSys, told CoinDesk in an email. 

One thing the competing projects have in common is high-profile leaders: Where Ethereum has Vitalik Buterin, Hoskinson provides the charismatic presence for Cardano’s development.   

He frequently conducts live “ask me anything” sessions on YouTube, interspersing discussions of the Shelley release with musings on meditation, fasting and picking radishes in his garden.

He can be brusque with questioners he feels are unprepared or less informed. In a surprise AMA session on June 9, Hoskinson told one community member, “I will answer your questions if your questions are new, but if your questions have been answered previously, you need to pay attention.”

Admirers say he’s merely doing his job of taking Cardano to the next level. 

“Thanks to Charles Hoskinson, Cardano enjoys some of the same audience and hype that has carried Ethereum into the upper echelons of the industry,” said Edward DeLeon Hickman, founder of Anatha, a startup building its own blockchain. 

In a recent interview with Hoskinson, he acknowledged how little control he has over the market for ADA tokens. 

“Sometimes the market just values something differently, and you just accept that as reality, because you can’t really fight the market, and then you just do your best to try to work within the constraints of a broken system,” Hoskinson told CoinDesk in a recent interview.

Traders seem more willing than ever to take a view on Cardano as a cryptocurrency. And gains this year in the ADA token may represent a bet on the ability of network’s leader to execute the project roadmap.

BTC: Price: $9,107 (BPI) | 24-Hr High: $9,441 | 24-Hr Low: $8,910

Trend: Bitcoin fell to three-week lows below $9,000 earlier on Monday and may be looking at further losses as technical charts have turned bearish.

To start with, the 14-day relative strength index has dipped below 50, confirming a head-and-shoulders breakdown – a bearish reversal pattern. Meanwhile, the MACD histogram, an indicator used to identify trend changes and trend strength, is beginning to produce deeper bars below the zero line. That implies that the downward move may be about to pick up the pace. 

On the downside, key support is located at $8,630 (May 25 low). A breach there would invalidate the bullish higher-lows pattern and may invite stronger chart driven selling. Below $8,630, the focus would shift to the 200-day moving average (MA) at $8,000. 

So far, however, downside has been restricted near $8,900. At press time, the cryptocurrency is trading near $9,089, representing a 2.7% decline on the day. 

While the daily chart indicators are biased bearish, the longer duration charts are still calling a move to the higher side. Notably, the weekly chart RSI is hovering in bullish territory above 50 and the 10-week MA is still trending north in favor of the bulls.

As a result, a fresh move to $10,000 cannot be ruled out. The probability of a move higher would improve if prices hold above $9,000 through the U.S. trading hours. 

The options market is also suggesting losses may be limited, with the put-call volume ratio having risen to three-month highs.

• First Mover: Bitcoin Recouples With Wall Street as Stocks Tumble, Fear Trade Returns
• Why Bitcoin Suddenly Dropped 6% on Thursday

As Ethereum pushes slowly toward a new type of blockchain technology that some cryptocurrency experts predict could represent the future of decentralized finance, the upstart competitor Cardano is getting ready to go live. 

And Cardano’s digital token, ADA, is soaring this year in digital-asset markets on speculation that the project’s early embrace of a “proof-of-stake” blockchain might put it in a stronger position to challenge the much-larger Ethereum network. 

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: OKEx Taps Paxful to Provide New Fiat-to-Crypto Onramps

Prices for ADA have climbed over 120% this year, the second-best performance among digital assets with a market value of at least $1 billion. It’s trouncing the 80% year-to-date gains for ether (ETH), the Ethereum network’s native cryptocurrency. Bitcoin is up 31% in 2020.

The goal for Cardano, similar to Ethereum’s, is to build a massive, decentralized computing network that millions of people, businesses and governments could someday use to run financial applications from anywhere in the world. And while the Ethereum blockchain’s native token, ether, currently has a commanding lead in the competition, with a $26.3 billion market capitalization that’s 13 times the size of ADA’s, the smaller challenger might be poised to win a growing share of the fast-moving industry.

The recent catalyst for ADA’s price rally appears to be Cardano’s progress toward a key upgrade of its network known as “Shelley,” scheduled to go live over the next month. 

Cardano launched its token in early 2017, but that version was “federated,” or managed more centrally. The Shelley upgrade aims to make Cardano “50 to 100 times more decentralized than other large blockchain networks,” according to the supporting foundation’s website, using proof-of-stake blockchain technology that is seen as more efficient than the electricity-hungry proof-of-work system used by the Bitcoin blockchain. A testnet of Shelley launched on June 9.

Related: Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests

Ethereum is moving to shift to proof-of-stake from proof-of-work as part of a “2.0” upgrade, but backers of that project have only stipulated that the transition will begin by September and then be phased in over stages. 

“We believe Cardano’s recent price appreciation is partially related to the anticipation of their mainnet launch,” Guy Hirsch, managing Director of multi-asset brokerage eToro, told CoinDesk. “If the team working on the project fails to deliver what was proposed, then the market might react negatively.” 

Cryptocurrencies tied to staking have been among the hottest this year in digital-asset markets, partly because holders can earn rewards akin to interest – especially prized as the world’s biggest central banks have slashed interest rates to accommodate economies racked by the coronavirus and related lockdowns. Another staking token, Tezos (XTZ), is up 93% this year. 

According to the Cardano website, investors can receive 10% a year in “delegation rewards” from staking ADA. 

Some cryptocurrency investors see the Shelley upgrade as little more than an opportunity for Cardano to hype itself. The giant U.S. digital-asset exchange Coinbase already offers Tezos staking, and custodian Staked lists eight different digital assets allowing users to earn a return simply for holding them.

“I’m personally short on ADA currently,” Mostafa Al-Mashita, vice president of digital liquidity firm Secure Digital Markets, said via a Telegram chat. “We do trade it for our clients. I think the Shelley upgrade will be another case of, ‘Buy the rumor, sell the news.’”

Cardano’s charismatic leader is Charles Hoskinson, who marshals the project as co-founder of his own five-year-old engineering company, IOHK. And he might be perfectly equipped, based on his prior work experience, to take on Ethereum: He was an Ethereum co-founder before leaving in 2014.

Hoskinson posted a roadmap on Twitter showing that full staking via the Shelley upgrade would be available by August 18.

“Cardano has very high potential in my opinion,” Michael Gord, CEO of GDA Capital, a firm that trades various cryptocurrencies, including ADA and ether. In the race to build a computing platform for applications designed to run on decentralized networks, he said, “it’s the only blockchain that is challenging ether as the potential No. 1 operating layer.” 

Yet in crucial ways, Cardano lags far behind Ethereum. 

Cardano doesn’t plan to add smart contract programming – the key to building decentralized applications, known as dapps – until a subsequent phase; Ethereum already offers the functionality. According to the website DeFi Pulse, 19 of the top 20 dapps by volume are using the Ethereum network, and the remaining dapp is on the Lightning Network, which is associated with the Bitcoin blockchain. 

And among open-source software developers, Ethereum garners far more attention. Some 28 people are active on the IOHK GitHub, where the Cardano node and wallet open source software is hosted, versus 61 people working on open-source repositories on Ethereum’s GitHub. 

In digital-asset markets, Cardano registers little more than a blip compared with the Ethereum network, already used as the backbone for dollar-linked stablecoins like Tether and USDC, as well as early-generation decentralized exchanges and lending platforms.    

Ether’s liquidity at $594 million per day is about 10 times ADA’s, according to Messari, a provider of data on digital assets. 

“Replicating Ethereum’s developer footprint and network effects is nearly impossible for a smaller network today, and probably value destructive for the crypto ecosystem,” Lex Sokolin, global fintech co-head at the Ethereum-focused software-engineering firm ConsenSys, told CoinDesk in an email. 

One thing that the competing projects have in common is high-profile leaders: Where Ethereum has Vitalik Buterin, Hoskinson provides the charismatic presence for Cardano’s development.   

He frequently conducts live ‘ask me anything’ sessions on YouTube, interspersing discussions of the Shelley release with musings on meditation, fasting and picking radishes in his garden.

He can be brusque with questioners he feels are unprepared or less informed. In a surprise AMA session on June 9, Hoskinson  told one community member, “I will answer your questions if your questions are new, but if your questions have been answered previously, you need to pay attention.”

Admirers say he’s merely doing his job of taking Cardano to the next level. 

“Thanks to Charles Hoskinson, Cardano enjoys some of the same audience and hype that has carried Ethereum into the upper echelons of the industry,” said Edward DeLeon Hickman, founder of Anatha, a startup building its own blockchain. 

In a recent interview with Hoskinson, he acknowledged how little control he has over the market for ADA tokens. 

“Sometimes the market just values something differently, and you just accept that as reality, because you can’t really fight the market, and then you just do your best to try to work within the constraints of a broken system,” Hoskinson told CoinDesk in a recent interview.

Traders seem more willing than ever to take a view on Cardano as a cryptocurrency. And gains this year in the ADA token may represent a bet on the ability of network’s leader to execute the project roadmap.

BTC: Price: $9,107 (BPI) | 24-Hr High: $9,441 | 24-Hr Low: $8,910

Trend: Bitcoin fell to three-week lows below $9,000 earlier on Monday and may be looking at further losses as technical charts have turned bearish.

To start with, the 14-day relative strength index has dipped below 50, confirming a head-and-shoulders breakdown – a bearish reversal pattern. Meanwhile, the MACD histogram, an indicator used to identify trend changes and trend strength, is beginning to produce deeper bars below the zero line. That implies that the downward move may be about to pick up the pace. 

On the downside, key support is located at $8,630 (May 25 low). A breach there would invalidate the bullish higher-lows pattern and may invite stronger chart driven selling. Below $8,630, the focus would shift to the 200-day moving average (MA) at $8,000. 

So far, however, downside has been restricted near $8,900. At press time, the cryptocurrency is trading near $9,089, representing a 2.7% decline on the day. 

While the daily chart indicators are biased bearish, the longer duration charts are still calling a move to the higher side. Notably, the weekly chart RSI is hovering in bullish territory above 50 and the 10-week MA is still trending north in favor of the bulls.

As a result, a fresh move to $10,000 cannot be ruled out. The probability of a move higher would improve if prices hold above $9,000 through the U.S. trading hours. 

The options market is also suggesting losses may be limited, with the put-call volume ratio having risen to three-month highs.

• First Mover: Bitcoin Recouples With Wall Street as Stocks Tumble, Fear Trade Returns
• Why Bitcoin Suddenly Dropped 6% on Thursday

View:

• Bitcoin’s options market suggests Monday’s price drop could be short-lived.
• However, the cryptocurrency remains vulnerable to a sell-off in stocks and increased miner hoarding is a sign the market lacks strength.

Bitcoin is feeling the pull of gravity on Monday alongside losses in the traditional markets. 

At press time, bitcoin is changing hands near $9,080, representing a 2.7% decline on the day. Prices hit a three-week low of $8,910 during the early European trading hours, according to CoinDesk’s Bitcoin Price Index. 

Related: OKEx Taps Paxful to Provide New Fiat-to-Crypto Onramps

Meanwhile, futures tied to the S&P 500 are down over 2.5% and major Asian and European equity market indices are in the red red, apparently over fears of a second wave of coronavirus infections in China. 

The decline in bitcoin prices, however, could be short-lived, options market data suggests. 

While bitcoin looks to be tracking equities lower, the top cryptocurrency’s put-call volume ratio has risen to three-month highs. At 1.79, the ratio currently stands at the highest value since the markets crash on March 12, according to data provided by crypto derivatives research firm Skew. 

The put-call volume ratio is an indicator of relative trading volumes of put options (bearish bets) to call options (bullish bets). To put it another way, trading volume in put options has been significantly higher than that in calls. 

Related: First Mover: Cardano’s No Ethereum Killer Yet, But It’s Winning in Crypto Markets

“A put-call ratio above 1 is considered to be an indicator of a selloff while a put-call ratio below 1 is an opportunity to buy,” as per Investopedia. 

However, when the ratio gets too high (extreme bearishness), the market is considered to be ready for a reversal higher, and when the ratio is too low, the market is considered close to topping out. 

In bitcoin’s case, a reading above 1.7 could be considered too high. In the past, the ratio has breached that level only two times. Further, on both occasions, prices bottomed out on the same day or the following day. 

The put-call volume ratio rose to a high of 1.89 on March 12, when the cryptocurrency fell by nearly 40%. On the following day, prices bottomed out at $3,867. 

Similarly, the cryptocurrency bottomed out near $6,500 in mid-December with the put-call ratio rising to levels around 2.00.

As such, the latest reading of 1.79 could be considered an advance warning of an impending bear trap – more so, as the put-call open interest ratio, which measures the number of open put options relative to open call options, recently hit a 14-month low of 0.40. 

“The divergence between the put-call volume and the decreasing put-call open interest implies that a lot of the put positions have been closed out on profit-taking,” according to Chris Thomas, head of digital assets at Swissquote Bank.

Validating Thomas’ argument is the recent decline in the one-month put-call skew from 9.4% to 6.3%. The put-call skew measures the price of puts relative to that of calls. The decline, therefore, represents a recovery in demand for (bullish) call options. 

Meanwhile, the three-and six-month skews are also hovering in the negative territory, implying stronger demand for call options expiring in the September and December expiry contracts. 

That said, options market positioning is known to change quickly and the cryptocurrency remains vulnerable to potential deeper sell-off in the equity markets.

“The key thing to watch over the next few weeks is the Covid related equities sell off. If markets react very negatively towards the increased Covid cases, we may see more panic which could also pull bitcoin lower,” said Thomas. 

In addition, bitcoin’s network statistics are painting a bearish picture and the cryptocurrency’s “fair value” looks to be below $7,000, according to Atlantic House fund manager and ByteTree founder Charlie Morris.

Miners, in particular, have accumulated inventory over the past seven days, selling less coins than they generated.

Miners often hoard coins when they feel the market lacks the strength to absorb further sales, as discussed earlier this month.

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

• Encrypted Messaging Site Privnote Cloned to Steal Bitcoin
• JPMorgan Analysts: Bitcoin Is Likely to Survive (as a Speculative Asset)

Privnote, a free web service that which lets users send encrypted messages that self-destruct once read, has been copied with the reported aim of redirecting users’ bitcoin to criminals.

In a Sunday post on cybersecurity blog KrebsonSecurity, journalist Brian Krebs warned users of a phishing scam that lures unsuspecting victims to a near-identical version of the privnote.com website known as privnotes.com.

However, the fake site doesn’t fully encrypt messages, as Krebs discovered in tests, and can “read and/or modify all messages sent by users.”

Related: Bitcoin Price Drop May Be a Bear Trap, Options Market Suggests

Just as worrying, it contains a script that hunts out messages containing bitcoin addresses and changes the original address into the bad actor’s own address in the sent message. This would mean any funds sent would arrive at the bitcoin address owned by the criminal, not the one intended by the message sender.

“Any messages containing bitcoin addresses will be automatically altered to include a different bitcoin address, as long as the Internet addresses of the sender and receiver of the message are not the same,” Krebs said in the post.

“Until recently, I couldn’t quite work out what Privnotes was up to, but today it became crystal clear,” he said.

Krebs explained that he’d been notified by the owners of privnote.com that someone had built a clone version of their site and that it was tricking users of the legitimate site.

Related: JPMorgan Analysts: Bitcoin Is Likely to Survive (as a Speculative Asset)

See also: Crypto Scams Targeting Pacific Communities on the Rise, Say New Zealand Regulators

“It’s not hard to see why: Privnotes.com is confusingly similar in name and appearance to the real thing, and comes up second in Google search results for the term “privnote.” Also, anyone who mistakenly types “privnotes” into Google search may see at the top of the results a misleading paid ad for “Privnote” that actually leads to privnotes.com,” Krebs wrote.

A quick Google search by CoinDesk verified this finding.

Making the scam harder to spot, the self-destructing nature of these messages means victims are unable to go back and check on the bitcoin addresses the script alters: they are sent, read and deleted. According to Allison Nixon, chief research officer at Unit 221B, who helped identify and test the phishing scam, said the script appears to only alter the first instance of a bitcoin address if it’s repeated within a message.

“The type of people using privnote aren’t the type of people who are going to send that bitcoin wallet any other way for verification purposes,” Nixon said in the post. “It’s a pretty smart scam.”

Bitcoin-related scams have been on the rise in recent months, particularly with concerns relating the coronavirus pandemic. U.K residents were warned in late March that scams were being used to exploit fear and uncertainty through text messages and emails posing as an official health organization.

See also: FBI Warns COVID-19 Scammers Are Targeting Crypto Holders

“Even if you never use or plan to use the legitimate encrypted message service Privnote.com, this scam is a great reminder of why it pays to be extra careful about using search engines to find sites that you plan to entrust with sensitive data,” Krebs said.

• Bootstrapping Mobile Mesh Networks With Bitcoin Lightning
• How the Porn Industry Changed During Coronavirus, With Performers Wary of Bitcoin

Rumors that India might be considering a new ban on crypto may be premature, exchange founders and startup CEOs working in the sector believe.

Indian news site The Economic Times created a stir Friday by suggesting that lawmakers in India, where the Supreme Court only overturned a punitive banking ban from the Reserve Bank of India (RBI) four months ago, were planning on slapping a new ban on crypto companies.

The story, titled “With a law, India plans lasting ban on crypto,” cited one unnamed “senior government official” who told The Economic Times that, “A note [presumably on crypto] has been moved (by the finance ministry) for inter-ministerial consultations.”

Related: Just-Launched Ziglu Wants to Make It Stupid Easy to Buy Crypto

The article doesn’t provide any information on what the note could be but says that it was spurred on by the Supreme Court ruling, which allowed crypto exchanges to finally access banking services after nearly two years stuck in the wilderness.

They then claim that it could well lean on a previous government draft law, from July 2019, which proposed that all forms of cryptocurrency be banned, with anyone caught holding them facing up a fine and up to 10 years imprisonment.

But is there any substance to this?

Well, the report in question relates to one published by a government panel, chaired by former Economic Affairs Secretary Subhash Chandra Garg. While the report recognizes blockchain technology is an “important new and innovative technology,” it notes, “with serious concern,” that the use of cryptocurrencies in India is “mushrooming” at an alarming rate.

Related: Crypto Long & Short: Cryptocurrency Markets May Be Decentralized, but They’re Still Accountable

Highlighting that many crypto assets don’t have any intrinsic value and supporting the RBI ban, the report concludes: “the Committee has recommended a law banning the cryptocurrencies in India and criminalising carrying on of any activities connected with cryptocurrencies in India.”

The only exception, they say, would be a digital currency issued by the state itself.

See also: India’s Central Bank Plans to Fight Supreme Court Crypto Ruling

Speaking to CoinDesk, Nischal Shetty, the founder and CEO of WazirX, a local exchange acquired by Binance late last year, said a blanket ban on crypto wasn’t what he was seeing.

“This is all leaked information,” Shetty said. “There is movement for sure, but no one has been able to get clarity on whether it specifically talks about a ban, or whether it talks about just moving forward with regulation. There are a lot of assumptions.”

Based on his own government sources, Shetty said he believes that the Finance Ministry is consulting with other government departments to determine what the next regulatory step should be.

“I’ve personally met people in government, right, ministers in Parliament, and what I’ve seen is they’ve been very positive about regulating,” Shetty said. “Some of them have been very vocal that a ban is not the solution because they understand technology … they understand that banning a technology is not a solution.”

The original draft bill from the Garg committee – which has long since been wound up – is still floating in the Finance Ministry and Shetty agrees it could form part of the “default content” when determining how to move forward with crypto regulation.

“Someone from the Finance Ministry has proposed that they should consider looking into cryptocurrencies and figuring out what to do, either to ban it, or to regulate it,” Shetty said, as the lifting of the RBI ban has made this a priority for officials. “[The government] wants to see progress and regulations,” he added.

But, he points out, the idea of reaching out to other departments is in order to take in other viewpoints. Citing Bloomberg Quint’s appraisal of the note, Shetty highlighted: “if in any way, they [the Finance Ministry] get pushback that a ban is not the right way approach, then they would set up another committee, which would explore [crypto] regulation.”

“I see this as a positive step,” he continued, “there is no clarity in India today. It’s a good thing that someone is taking the initiative.”

See also: Indian Crypto Exchange Adds Bank Transfers Hours After RBI Ban Lifted

Shetty’s thoughts have been echoed elsewhere.

A spokesperson for the Bangalore-based exchange CoinSwitch said, “the report has no mention of the particular government body responsible for such actions or contains quotes from reliable sources. As such there is a lack of clarity and until further details reveal we would carefully monitor the situation.”

Similarly, Sumit Gupta, the co-founder and CEO of CoinDCX, one of the country’s largest exchanges, told CoinDesk in an email that, “reconsidering past bills is likely part of the process of forming clearer regulations around the use of cryptocurrencies within India.”

Gupta noted the lifting of the RBI ban has led to record trading volumes and user adoption, calling recent growth in the sector “unprecedented.”

CoinTelegraph reported earlier this week that there has been a flurry of new exchanges launching in India, as well as a wave of outside investment from global players, including OKEx and Binance.

“Given the previous open-mindedness of government officials and regulators in the Supreme Court case, where they were willing to engage with cryptocurrency sector leaders in dialogue about the future of the industry – we are confident that a similarly communicative approach will be taken in making this decision,” Gupta said .

See also: India’s Central Bank Removes Lingering Confusion Over Banking for Crypto Firms

Among some of the existing industry players in India’s crypto scene, a consensus is building around starting more formal dialogues with officials. There’s already an active crypto-related trade body within the Internet and Mobile Association of India, which helped challenge the RBI ban.

Shetty said WazirX was looking at creating a self-regulatory framework.

“We have to show our government on why we are already practicing KYC [know-your-customer verification] and all the standard practices in India as exchanges,” he said. “I think a formal regulatory note from us would be helpful in going in the right direction.”

CoinDesk reached out to the India’s Finance Ministry for comment, but did not receive a response by press time.

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U.K.-based cryptocurrency platform Ziglu has launched, following a £5.25 million (US$6.6 million) seed round. As a starting point, the platform aims to painlessly put crypto in the hands of consumers.

Announced Monday, Ziglu allows users to exchange GBP for bitcoin (BTC), ether (ETH), litecoin (LTC) and bitcoin cash (BCH), with more fiat currencies to be added and a debit card coming in July or August.

Ziglu is the brainchild of Mark Hipperson, co-founder and CTO of U.K.-based Starling Bank, one of a crop of so-called “challenger banks” that took on the incumbents with sleeker, more intuitive and transparent services.

Related: India’s Rumored Crypto Ban May Be Overblown, Say Industry Pros

Things have changed since 2015 when all the challengers entered the market, though, said Hipperson. 

“In 2020, we think the 25-45 [age] demographic will want easy, safe access to crypto,” he said. “Only about 1% of people go to the large platforms to buy crypto and we think we can do better, and perhaps get them better prices as well.”

The marketplace for apps that offer crypto is heating up. For instance, Square, the fintech unicorn launched by Twitter CEO Jack Dorsey, rolled out bitcoin purchases in mid-2018 and recently reported bitcoin revenues of $306 million on its Cash App service.

Read more: Bitcoin Revenue in Square’s Cash App Tops Fiat Revenue for First Time in Q1

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In Europe, London-based Revolut, which recently raised $500 million, valuing the platform at $5.5 billion, allows users to buy cryptocurrencies sourced from the Luxembourg-based BitStamp exchange.  

Ziglu’s original plan was to launch with five major exchanges, but for now it’s connecting to two, both of which Hipperson declined to name. The startup has had to adapt its go-to-market plans in light of COVID-19, he said. More exchanges will be added in the coming weeks, he added.

Part of Ziglu’s secret sauce involves routing requests to find consumers the best deal. For example, if the best price for bitcoin happens to be in dollars on Kraken, the service converts fiat and sources the deal on that exchange.

The forthcoming debit card has Mastercard as a scheme partner and Global Processing Services is Ziglu’s payment processor. The seed round was sourced from high-net-worth individuals and friends, but no VCs, Hipperson said.

In terms of fiat, Ziglu plans to add currencies based upon customer demand. 

“I’d expect we would be at 15 currencies” by the end of the year, said Hipperson.

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Bitcoin proved itself a resilient asset, if not a stable or useful currency, during March’s global financial meltdown, according to analysts at one of the world’s largest investment banks.

In a note to investor clients circulated June 11 and obtained by CoinDesk, JPMorgan Chase & Co. analysts described how bitcoin has shifted from a fairly uncorrelated asset to one whose price more closely tracks traditional stocks.

“Though correlations were modest and mostly mean-reverting around zero for much of the past couple of years, in recent months they have moved sharply higher in some cases (equities) and lower in others (U.S. dollar, gold),” wrote the team of strategists led by Joshua Younger.

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The analysts, who normally cover bonds, noted bitcoin’s success in outperforming traditional assets in March on a volatility-adjusted basis. The report also found that liquidity on major bitcoin exchanges was, surprisingly, more resilient than for traditional assets such as equities, gold, U.S. Treasury bonds and foreign exchange.

The results of their analysis “suggest that bitcoin saw among the most severe drops in liquidity around the peak of the crisis in March, but that disruption was cured much faster than other asset classes,” the researchers wrote. “At this point, bitcoin market depth is above its 1-year trailing average, while liquidity in more traditional asset classes has yet to recover.”

Stablecoins, whose values are generally pegged to government currencies, got a brief mention and were described as relatively “unscathed” by the March turbulence.

From March 2-23, the S&P 500 plunged 29% as investors looked to cash out amid increasing concerns about the coronavirus.

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The JPMorgan analysts reckoned that cryptocurrencies successfully passed their first stress test during this period despite volatile price action. During the March panic, crypto valuations did not diverge all that much from their intrinsic values, showing little flight to liquidity within the asset class, the analysts wrote.

While the market structure for crypto during this period was more resilient than its traditional counterparts, according to the report, bitcoin did not quite live up to its reputation in some corners as a port in a storm.

“There is little evidence that bitcoin and others served as a safe haven (i.e., ‘digital gold’)—rather, its value appears to have been highly correlated with risky assets like equities,” the report concluded. “This all likely points to the continued survival of the asset class, but likely still more as a vehicle for speculation than as a medium of exchange or store of value.”

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Wilshire Phoenix, an asset manager which tried to launch a bitcoin exchange-traded fund (ETF) last year, has filed to launch a new Bitcoin Commodity Trust.

According to a Securities and Exchange Commission (SEC) filing published Friday, the New York-based Wilshire Phoenix intends to offer bitcoin to certain investors through the new trust, with a maximum proposed aggregate offering price of $2 million, or 80,000 shares.

“The Shares will provide investors with exposure to bitcoin in a manner that is accessible and cost-efficient without the uncertain and often complex requirements relating to acquiring or holding bitcoin,” the filing said.

Related: Market Wrap: Bitcoin Is Still Up 30% in 2020 After a Bumpy Week

The trust may be looking to compete with Grayscale Investments’ $3.6 billion bitcoin trust, which the company launched in 2013. Grayscale (which is a subsidiary of Digital Currency Group, CoinDesk’s parent firm) filed to turn its bitcoin trust into an SEC reporting company last year.

According to the Wilshire Phoenix filing, Fidelity Digital Asset Services will serve as the trust’s bitcoin custodian, while UMB Bank will serve as the cash custodian.

While the cash holdings will have FDIC insurance, the bitcoin held will only be insured against theft in excess of $100 million, according to the filing.

The trust’s value will be calculated each business day at 4:00 p.m. Eastern by its administrator, according to the document. The value will be derived by just multiplying bitcoin’s price (based on CME’s bitcoin index) at that time with the number of coins held.

Related: Bitcoin News Roundup for June 12, 2020

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Wilshire is perhaps best known in the crypto space for trying to launch a bitcoin ETF, hoping to succeed where several other companies have not. The SEC rejected the proposal earlier this year. The idea behind a crypto ETF is it could make bitcoin more accessible to a broader range of investors who might not be comfortable investing directly in bitcoin.

A spokesperson for Wilshire Phoenix did not immediately return a request for comment.

Update (June 13, 2020, 07:00 UTC): This article has been updated to clarify the the proposed maximum offering.

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A blockchain-centric art project is pushing the boundaries of modern art with a controversial digital display.

The DADA Art Collective, a loosely affiliated group of roughly a dozen visual artists across the globe, teamed up with the non-fungible token (NFT) marketplaces OpenSea and Mintbase plus the file-storage blockchain Arweave to publish the names and faces of American police officers accused of killing unarmed black people.

The project, No Justice No Peace, was published June 6 in collaboration with crypto veteran Dennison Bertram, founder of the DappHero project.

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“The collective got in touch with me,” Bertram said. “Social justice is something that I’ve always been interested in. They’d already minted and created these tokens. … It’s a fascinating demonstration of how to do social protests using blockchain technology.” 

The DADA Collective’s Judy Mam said 10 artists contributed to this piece to support Black Lives Matter and police reform, with pictures of 30 officers along with their alleged crimes and case statuses. 

The artists leveraged Arweave’s blockchain to create a wallet associated with each person killed, holding tokens that have data for the corresponding officers’ information. 

“The private keys of the wallets that control these tokens have been destroyed. No one controls these tokens. These tokens can’t be censored, modified or taken down,” the project’s website says. 

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“Blockchain is itself a political statement, the ability to organize outside of government control,” Bertam said. “What about decentralizing justice or human rights or other aspects of society that are critical to the ways people live?”

And yet, this project raises tricky questions about the ethics of immutable digital records. In Europe, lawmakers have introduced a “right to be forgotten” with the General Data Protection Regulation (GDPR). Even in the United States, Mam said the artists behind this project prefer to stay anonymous because some jurisdictions limit access to evidence that might incriminate police officers.

“The police do take action against [outspoken] people,” Mam said. “These [visual pieces] are tokenized but they’re not for sale. … It was about making a statement.” 

With simple text beneath black and white photos, the message is clear. There’s scant artistic flourish in this piece. 

“We don’t forget. We find out who you are,” Mam said. “Maybe someday some of these men will get a [prison] sentence. … But at least now there’s a record that is there forever, immutably, of these people and their crimes.”

The criminal justice system failed to proceed with formal charges in most of these cases, despite community efforts, according to research from Bowling Green State University. This piece is just one of many activist projects already curating public lists with such information. Howard University student and crypto aficionado Gerald Nash, who was not affiliated with the “No Justice No Peace,” said he thinks the project is interesting. 

“People should take into account this isn’t an organization doing unbiased research,” Nash said of the art collective. “As a black person and someone who wants to see justice. … I see no difference between this and holding up a sign.” 

Of course, “censorship resistance” is a relative term. Governments could make it difficult to access affiliated websites and keyword searches, even if the blockchain data remains unaltered. Some experts would also argue a blockchain’s immutability depends on its incentive structure and participants, which likely are not infallible. The Arweave blockchain’s distribution is still nascent, with less than 3,000 members in the project’s Discord group.

Even with these limitations, University of New Hampshire law professor Tonya Evans agreed this art project is an interesting use case – memorializing information.

“I would compare it to what news reporters do … [but] reporters have to be very thoughtful about ways to correct the record, even if that’s to add to and not take away from,” Evans said, describing American freedom of speech laws. “Code is also speech. It will be interesting to see what type of innovation emerges during this period with regards to protecting free speech.”

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