CoinDesk Crypto

U.K.-based Ruffer confirmed the size of its tremendous bitcoin investment from November in an email to CoinDesk Wednesday.

• “Ruffer’s exposure to bitcoin currently totals around £550m, equivalent to around 2.7% of the firm’s assets under management,” a spokesperson told CoinDesk in an email.
• Based on current exchange rates, £550 million is worth $744.26 million or roughly 45,000 BTC based on November 2020 prices.
• The investment was “primarily a protective move for portfolios” to “act as a hedge” against “some of the risks that we see in a fragile monetary system and distorted financial markets.”
• Ambiguous wording in Ruffer’s initial shareholder memo created uncertainty whether the investment was 2.5% of the multi-strategy fund or 2.5% of the funds total more than $20 billion in managed assets.

• Bitcoin Hits Record Above $20K as Analysts Remain Confident of Future
• Bitcoin Hits 2-Week High Above $19.7K
• Market Wrap: Bitcoin Tests $19.5K; Ether Options Interest in Doldrums
• Becoming Self Sovereign: How to Set Up a Bitcoin Node, With Lightning

Fintech company EMTECH is launching a compliance platform that helps central banks tackle compliance issues or safely test their central bank digital currencies (CBDC) in partnership with Microsoft, the firm announced Monday. 

“It is a regulator-based solution that allows central banks to seamlessly introduce CBDCs,” Carmelle Cadet, EMTECH co-founder and CEO, told CoinDesk. 

According to Cadet, the goal of EMTECH’s Modern Central Bank Sandbox is to assist central banks in setting up a digital currency that is interoperable, meaning it can easily be converted to other cryptocurrencies and are compatible with payment devices and terminals across the world.  

Related: Bank of France’s Deputy Governor Discusses CBDC Progress, Regulatory Changes

With the government of China closing in on issuing its own digital yuan, a number of large economies around the world including South Korea and Sweden have begun working on their own CBDCs. But according to the Bank of International Settlements, emerging economies report stronger motivations for developing national digital currencies as they could help address systemic issues like financial exclusion and payments inefficiencies.    

Cadet said the firm is actively working with the Central Bank of Bahamas on the digital sand dollar, a project to issue a digital equivalent of the Bahamian dollar.  

U.S.-based EMTECH competed against other fintechs to work with the Bahamas’ digital currency, Cadet added. The Caribbean nation’s central bank piloted its CBDC late last year. The Bahamas launched the sand dollar in October 2020.  

The project appears to be in early stages, according to a spokesperson for the Central Bank of the Bahamas.

Related: China’s Latest Digital Currency Trial Is Its Most Important Yet

“EMTECH’s involvement in the project is limited to architecting our cross-border minimal viable product (MVP), which remains a work in progress,” a spokesperson for the Central Bank of the Bahamas told CoinDesk via an email. 

Cloud computing platform Microsoft Azure has partnered with EMTECH to deploy pilot programs as the firm continues to work on engaging central banks interested in issuing CBDCs, Cadet said. 

“We look forward to helping EMTECH on its global mission to enable accelerated central bank digital innovation, harnessed on Microsoft’s highly secure, compliant and scalable Azure platform,” said Chris Lwanga, principal director of software partnerships at Microsoft, in the announcement. 

Cadet explained her research has shown central banks are keen on introducing national digital currencies but they often work behind closed doors. 

“If they build it internally, not thinking about interoperability, is probably going to fail when it comes out,” Cadet said.

The EMTECH leadership team includes Diane R. Maurice, a finance industry regulator with an extensive portfolio of risk management duties and who served at the Federal Reserve, the U.S Treasury Department, and the Central Bank of Tunisia.

• Hong Kong in Talks With PBOC on Digital Yuan Trial for Cross-Border Payments
• Citigroup Helping World Governments Build Digital Currencies, CEO Says

Three weeks into its launch, Ethereum 2.0 is close to tripling its initial deposit threshold of 524,288 ETH. These deposits made in increments of 32 ETH represent the stake of active or soon-to-be active validators on the network. 

In order for Eth 2.0 to progress to its next phase of development, the new, recommended minimum number of validators is 262,144, which multiplied by a stake of 32 ETH would also mean a minimum deposit threshold 8,388,608 ETH. As background, the next phase will initiate the creation of 64 mini-blockchains, also called “shards,” to boost transaction throughput and network scalability. 

Thereafter, in phase 1.5, developers are expected to activate ETH transfers on the network and seamlessly merge all Ethereum users and decentralized applications (dapps) to the new proof-of-stake blockchain. 

Related: Secret Network Launches Bridge to Bring Transactional Privacy to Ethereum

There’s much work still to be done on Eth 2.0, but the highly anticipated launch of the network and the onboarding of hundreds of thousands of validators are thought to be the most difficult technical tasks in the entirety of this phased rollout. 

Danny Ryan told CoinDesk in an interview back in late September, “Phase 0 is much more complex than I believe phase 1.5 is. This merger … [phase 0] is essentially a bootstrapping phase where this new consensus mechanism and system is bootstrapped in parallel to the old system.”

As of Tuesday, Dec. 15, Eth 2.0 is 18% closer to successfully completing its bootstrapping phase. There are roughly 33,700 active validators on Eth 2.0, with close to 12,500 additional ones waiting in an activation queue for entry. 

Phase 0 is far from complete. While the first few weeks after launch have been promising, there’s still a long way to go before we can all breathe a sigh of relief at getting past the most difficult phase of the network’s live development unscathed.

Related: First Mover: Reminiscing on Pre-Pandemic Bitcoin as Rally Stalls

It’s important to remember not all Eth 2.0 staking options are equal.

Staking services come in two flavors: custodial and noncustodial. In practice that means the validator key is either held by the service provider or it’s created and held by the investor.

“Not your keys, not your coins” is a crypto rallying cry for a reason, and it’s no different with Eth 2.0. Knowing who holds your keys is the same as knowing who controls your funds, and it is the most important part of setting up your validator. 

When you deposit funds in Eth 2.0, you create a total of four keys: a public and private validator key set and a public and private withdrawal key set.

The validator key is your car key. The key “actively signs on-chain (ETH2) operations such as block proposals and attestations,” according to Ethereum Foundation researcher Carl Beekhuizen in beaconcha.in. 

It’s also called the signing key and is always online (unless you stop validating by exiting the network). A malicious party snagging the key could cause you to miss attestations and lead to a variety of penalties.

The withdrawal key is your safe key. It controls the 32 ETH deposited in Eth 2.0 deposit contract plus rewards from validating the network. While the validator key is considered “hot,” the withdrawal can be placed in cold storage for extra protection until deposits open in Phase 1.5. If you lose the withdrawal key, you’ve lost access to all your funds.

Decentralized staking allows the user to determine the future of their deposits. You never surrender control of your keys to anyone else. The trade-off comes in technical risk which falls squarely on your own shoulders. In other words, you need to know what you’re doing, technically speaking. If you deposit to the wrong contract, for example, it’s on you.

Still, you may not have the internet connectivity needed to validate the Beacon Chain or the technical know-how. Luckily, options exist: There are at least 30 providers staking providers including mainstream exchanges like Coinbase or Kraken, according to staking firm Stakefish.

Most centralized exchanges such as Coinbase and Kraken are custodial staking services. That means you deposit the minimum 32 ether to participate and let them set up a validator on your behalf. They also hold your validator key.

Custodial services have their place, but they also carry a different risk profile because of their centralized nature. Validating with a service means you are trusting them not only to run your set up correctly, but also to honor the initial staking agreements down the road.

Although staking with a custodial firm is always alluring, given the ease of use, you necessarily open yourself to a new set of risks.

In fact, a staking service was one of the first validators to be slashed following the launch of the Beacon Chain on Dec. 1. Staking service Ankr had 10 validators slashed for “surround voting,” wherein a validator publishes a “vote within the span of another of its votes,” according to Run Time Verification. The penalty for being slashed, in this case, is not only a forfeiture of a small amount of ETH, but being booted from the validator queue until deposit withdrawals are available in at least a year or more. Ouch!

A general trend worth watching is the network participation rates and penalties compared between custodial and noncustodial node services. While custodial services will likely have more stable setups, those who went through the trouble of personally setting up a device probably share higher enthusiasm for Eth 2.0 as a project, which may translate into better maintenance going forward.

• The basic slashing conditions on Ethereum 2.0 and how to stay protected (Blog post, BloxStaking)
• Ether is moving from CeFi to DeFi and here’s why (Article, CoinDesk)
• In-depth profile on Hayden Adams, King of the DeFi degens (Article, CoinDesk)
• Would the STABLE Act make running an Ethereum Node Illegal? (Op-ed, CoinDesk)
• What CBDC and stablecoins mean for the future of money (Webinar, Consensys)
• Staking on Ethereum 2.0 (Blog post, Ethereum Foundation)
• A beginners guide to setting up an Ethereum 2.0 client on MacOS for the technically-challenged (Blog post, Sigma Prime)
• Introducing the swether project by the Treum team, a fun and playful way to create holiday-spirited NFTs (Website, Treum)

• Buterin Warns Followers Not to Take Out Personal Loans to Buy Crypto
• First Mover: Horrible 2020 Economy Proved Best Thing for Bitcoin

The German government cabinet passed new legislation on Wednesday allowing all-electronic securities to be recorded using blockchain technology. 

• The new law does away with the previous requirement for a paper-based certificate and comes as part of the nation’s blockchain strategy blockchain, according to a Reuters report citing the German finance ministry.
• Previously, issuers and securities holders had to document transactions with a paper certificate, which added administrative burdens and was seen as an obstacle for security holders, the report says.
• “The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version,” said German Finance Minister Olaf Scholz.
• The ministry recommended last year that the country recognize and regulate blockchain-based securities as a legitimate form of financial instruments.

See also: One of the World’s Oldest Banks Is Issuing a Euro Stablecoin on Stellar

• Bloccelerate VC Raises $12M Fund to Bet on Enterprise Blockchain Adoption
• Microsoft, EY Expand Blockchain Platform for Gaming Rights to Include Payments
• One of the World’s Oldest Banks Is Issuing a Euro Stablecoin on Stellar
• Publishing Giant Bertelsmann Invests in Berlin-Based Crypto Fund

Bitcoin has breached the tough hurdle of $19,500 and jumped to two-week highs on Wednesday.

The leading cryptocurrency by market value reached as high as $19,874 during the European trading hours. That’s the highest level since Dec. 1, when bitcoin hit its all-time high of $19,920, according to CoinDesk 20 data.

It remains to be seen if bitcoin can hold ground above $19,500. The cryptocurrency has failed multiple times to establish a foothold above that level since Nov. 22, courtesy of profit taking by some investors. Forcing the much-anticipated breakout above the psychological hurdle of $20,000 may be an uphill task for the bulls in the short-run, as there are still large sell orders on the road to $20,000, as discussed Tuesday.

Related: Market Wrap: Bitcoin Tests $19.5K; Ether Options Interest in Doldrums

That said, the long-term bullish case for bitcoin, a widely-touted hedge against fiat currency devaluation and a store of value asset, continues to strengthen with observers predicting a deeper dollar decline in 2021 and a rising global stockpile of negative-yielding bonds.

French multinational investment bank and financial services company Societe Generale now predicts a 5% fall for the Dollar Index (DXY) in 2021 and more losses in the following year, according to efxdata.com. Other prominent investment banks such as Morgan Stanley, Goldman Sachs and JP Morgan also expect the greenback to continue losing ground next year.

The Dollar Index, which tracks the greenback’s value against major currencies, is hovering at a 32-month low of 90.20 at press time. The global reserve currency has declined by 6.5% this year, mainly due to Federal Reserve’s money-supply boosting policies aimed to counter the coronavirus-induced economic slowdown.

Bitcoin has consistently moved in the opposite direction to the dollar index this year. Prominent public-listed companies such as the business intelligence firm MicroStrategy have adopted bitcoin as a reserve asset as protection against the dropping dollar.

Related: Becoming Self Sovereign: How to Set Up a Bitcoin Node, With Lightning

“What we’re trying to do is preserve our treasury. The purchasing power of cash is debasing rapidly,” Michael Saylor, CEO of Nasdaq-listed MicroStrategy, told CoinDesk last month while explaining the rationale behind the firm’s bitcoin purchases. The cryptocurrency is a better store-of-value asset than gold, he said.

Also read: Worsening US Dollar, Inflation Metrics Bode Well for Bitcoin’s Continued Rally

• Will Wall Street Ruin Bitcoin? Featuring Ben Hunt and Alex Gladstein
• New Federal Reserve ‘Qualitative’ Approach Could Push Further Into Experimental Realm

Robert Farkas, a co-founder of the cryptocurrency firm Centra Tech, has been sentenced to one year and one day in prison for conducing an illegal initial coin offering (ICO) that fleeced investors for $25 million.

• The Miami-based company had purported to offer crypto-based financial products such as a debit card, according to a news release from the Attorney’s Office in the Southern District of New York on Tuesday.
• It had touted an impressive executive team that did not exist, as well as falsely claiming it held 38 state money transmitter licenses, prosecutors said.
• In July 2017, Farkas and his partners, Raymond Trapani and Sohrab Sharma, held an ICO, or token sale, raising the $25 million from investors who had believed Centra Tech’s claims.
• Farkas had previously pleaded guilty to conspiring to commit securities fraud and wire fraud in connection with the use of material misrepresentations and omissions to solicit investors to purchase securities in the form of the firm’s tokens.
• “Farkas and his co-conspirators created fictitious executives and fabricated business relationships with legitimate institutions to dupe investors into handing over millions of dollars for a fraudulent ICO,” said lan T. Graff, chief counsel to the acting U.S. attorney, in a statement.
• Farkas will also face three years of supervised release and must forfeit $347,062 and a Rolex watch purchased with the proceeds of the scam.
• The United States Marshals Service sold ether cryptocurrency seized from Centra Tech for approximately $33.4 million earlier this year.

See also: US Prosecutors Seek ‘Substantial’ Prison Sentence for Centra Tech Co-Founder

• Cryptocurrency Founder Charged With Avoiding Tax to Buy Yachts and Homes
• Over 13% of Bitcoin Crime Proceeds Laundered Through ‘Privacy Wallets’: Elliptic
• Ringleaders of PlusToken Scam Jailed for Up to 11 Years
• Coronavirus-Induced Poverty Will Bring More Bitcoin Crime in 2021: Kaspersky Report

Cryptocurrency businesses that have filed to register with the U.K. Financial Conduct Authority (FCA) may continue operating under a temporary licensing regime for six months as the regulator deals with a backlog of applications.

• In a notice Wednesday, the FCA said those companies which began operating after Jan. 10, 2020, will be granted temporary registration over the period from Jan. 9, 2021, until July 9, 2021.
• The watchdog warned that those cryptocurrency firms that had not applied for registration by Dec. 16, 2020, would not be eligible for the temporary regime.
• Due to the coronavirus restrictions on visits and the “complexity and standard of the applications” received, the FCA said it has not been able to assess and register all the firms that applied.
• Since July this year, the FCA has been warning cryptocurrency businesses it will need at least six months to fully process applications before the hard deadline in January 2021.
• There had been fears in the industry that crypto firms might be left in no man’s land as the deadline looked set to pass with many applications still waiting to be processed.
• In the notice, the FCA also warned that those firms that have not applied by Dec. 16 must return crypto assets to customers and stop trading by Jan. 10, 2021.
• Companies failing to do so will be breaking the law and, “are at risk of being subject to the FCA’s criminal and civil enforcement powers.”
• The FCA requires any company carrying out activity related to crypto assets in the U.K. to register and comply with anti-money laundering and counter terrorist financing requirements. 

See also: UK Crypto Derivatives Ban Seen Having Limited Effect on Small Market

• Estonia Has Withdrawn Licenses From Over 1,000 Crypto Companies This Year
• How the Incoming Administration Can Fix Crypto Regulation
• Bitcoin Exchanges Flood London’s Metro With Adverts
• FinCEN Encourages Banks to Share Customer Information With Each Other

Cryptocurrency venture capital firm Polychain Capital has led an eight-figure funding round for decentralized finance (DeFi) blockchain project Findora.

Announced Wednesday, the private funding was joined by notable investors including Allchaineed, Krypital Group, Axia8 Ventures, Cabin VC, Powerscale Capital and Jack Lee, founding partner of Foxconn’s financial platform FNConn.

The investment amount was not disclosed but was in the “tens of millions,” a spokesperson told CoinDesk via Telegram.

Related: DeFi on Bitcoin Gets a Boost as Sovryn Launches on RSK Sidechain

The project aims to flesh out DeFi infrastructure for users looking to prove a particular value without needing to disclose the exact details of a given transaction, or the identity of the parties involved. The project describes itself as a “cryptographically transparent public blockchain for building decentralized financial applications.”

The project utilizes zero-knowledge proofs, accumulators and Pederson homomorphic commitments, among other techniques, to enable “privacy-preserving transparency.”

Bank of Asia and Chinese internet giant Tencent are among the list of partners leveraged by the project to gain a wider reach within international markets. According to a press statement, the project was designed in order to fix “many of traditional finance’s pain points.”

The Findora Foundation said DeFi has been one of the “key focus areas” for the budding project and claims to solve issues such as a lack of financial inclusion around the world, overcollateralization, and a lack of interoperability and scalability.

Related: Secret Network Launches Bridge to Bring Transactional Privacy to Ethereum

Founded in 2017 by Standford University’s former CEO, the late John Powers, Findora is backed by the research of renowned academic institutions. In mid-2019, the project acquired former Coinbase CTO Balaji Srinivasan to help guide its path as a strategic adviser.

See also: KeeperDAO Raises Seven-Figure Seed Investment From Polychain, Three Arrows

• How Israeli VCs Are Doubling Down on DeFi Startups
• Market Wrap: Bitcoin Pushes Past $19.2K; Ether at 3% of BTC Price

U.S. President Donald Trump is reportedly weighing whether he should give the jailed founder of the defunct dark web marketplace Silk Road, Ross Ulbricht, a pardon.

According to a report by the Daily Beast on Tuesday, the White House counsel’s office is reviewing Ulbricht’s case documents.

The Daily Beast cites three sources familiar with the matter claiming the president has been reviewing cases ahead of his next round of pardons and commutations before the Jan. 20, 2021, inauguration of President-elect Joe Biden.

Related: Crypto Impact Unclear After Joe Biden Unseats Donald Trump as Next US President

A final decision on Ulbricht’s case is yet to be determined, according to the report, but the notorious Silk Road founder reportedly has influential backers within the president’s inner circles pushing for a pardon, the report said.

“I’ve had documents forwarded to my contacts in the White House as early as February,” said activist Weldon Angelos, a former music producer and ex-federal inmate cited in the Daily Beast article.

Weldon was quoted in the report as saying he had been contacted by Ulbricht’s family and was “hopeful” that Trump would commute his sentence in full. “This case has perhaps more support than I’ve seen in any case of this kind.”

Ulbricht was the founder and main administrator of the dark web marketplace the Silk Road back in 2011 which used bitcoin as its main payment method for dealing in illicit contraband including drugs and weapons.

Related: US Seized More Than $1B in Silk Road–Linked Bitcoins, Seeks Forfeiture

The Silk Road used Tor anonymity to hide the location of servers and drew the ire of law enforcement as the site grew in popularity and notoriety.

After a long investigation, Ulbricht’s online identity – Dread Pirate Roberts – was revealed and he was subsequently arrested, charged and convicted for money laundering, computer fraud, and various drug charges. He is currently serving a double life sentence plus forty years without chance for parole.

Ulbricht is considered a cult hero amongst some in the crypto community as well as political activists who argue that his sentence was unnecessarily harsh.

See also: No Visits, No Parole: Ross Ulbricht Is More Alone Than Ever During COVID-19

• Nearly $1B in Bitcoin Moves From Wallet Linked to Silk Road
• Bitcoin Dips as Trump Threatens to Stop Vote Counting

Sandie O’Connor, the former chief regulatory affairs officer for JPMorgan Chase,  is joining Ripple’s board of directors, the company announced Tuesday. 

O’Connor will provide counsel on “government relations and regulatory initiatives” for the company’s next phase as Ripple expands and seeks regulatory clarity in the United States, it said. 

The announcement comes as San Francisco-based Ripple is openly contemplating relocating its headquarters to another country, citing a lack of such clarity, particularly on the legal status of XRP, the cryptocurrency it owns large amounts of and has a mighty hand in developing. 

Related: What Is XRP, and How Is It Related to Ripple?

Whatever decision the firm ultimately makes, O’Connor brings considerable regulatory and risk-management chops. During her time at JPMorgan, she served on multiple firm-wide governance committees including the ones overseeing risk and capital. She joined JPMorgan in 1988, and during her over three-decade long career also “led engagement with G-20 regulators and policymakers” for the bank, Ripple said. She retired from the institution in April 2019, according to her LinkedIn profile.

O’Connor still sits on advisory committees of the Federal Deposit Insurance Corp. and the Office of Financial Research, an independent bureau created within the Treasury Department to monitor systemic risks after the 2008 global financial crisis. 

She appears to have filled the seat on Ripple’s board vacated by Ken Kurson, who was arrested on cyberstalking charges in October, according to a report by the New York Times. Reportedly a close ally of the Trump family, Kurson also founded a crypto and blockchain news website called Modern Consensus. Ripple did not immediately respond to a request for comment. 

Once a top lieutenant to JPMorgan CEO Jamie Dimon, O’Connor also appeared regularly on American Banker magazine’s annual ranking of the most powerful women in banking.

On Ripple’s board, she will serve alongside former New York regulator Ben Lawsky, architect of the state’s BitLicense regulations, former diplomat Anja Manuel, and financial services industry veterans Yoshitaka Kitao and Craig Phillips, among others. 

Related: Ripple CTO Says Majority Vote Would Force the Burning of Billions in XRP

UPDATE (Dec. 15, 00:35 UTC): Added links to GitHub contributors page for XRP Ledger and Ripple’s latest quarterly market report.

• Ripple CEO Walks Back Threat to Leave US
• XRP Led November’s Crypto Bull Run With 169% Gain

Bitcoin has been able to hold above $19,000 as it has for the past several days. Meanwhile, the ether options market on Deribit has dipped in December although a block trade strategy in the $600-$800 price range has developed.

• Bitcoin (BTC) trading around $19,510 as of 21:00 UTC (4 p.m. ET). Gaining 1.6% over the previous 24 hours.
• Bitcoin’s 24-hour range: $19,053-$19,555 (CoinDesk 20)
• BTC above its 10-hour and 50-hour moving averages on the hourly chart, a bullish signal for market technicians.

Bitcoin’s price continues to climb for the fourth consecutive day, going as high as $19,555 as of press time and breaking out of a $19,200-$19,400 range for the second time in the past 24 hours.

Read More: Bitcoin May Have Hit Wall of Profit Takers Around $19,500: Analyst

Related: Becoming Self Sovereign: How to Set Up a Bitcoin Node, With Lightning

However, some resistance in the form of sell orders around the $20,000 price level may limit the amount of upside in December. 

“It is an interesting picture: From one side it’s clear ‘buy the dip’ mood, from the other side we have $20,000 as a big resistance,” said Misha Alefirenko, co-founder of VelvetFormula, a digital asset liquidity provider. “It feels very bullish on charts.” 

According to CoinDesk 20 data, bitcoin has kept above the $19,000 price point since Dec. 13.

While bitcoin seems to be hitting bull mode after dipping below $17,800 this past Friday, Jason Lau, chief operating officer of San Francisco-based cryptocurrency exchange OKCoin, expects some selling to cap a fervent 2020 for the crypto markets.  

Related: Will Wall Street Ruin Bitcoin? Featuring Ben Hunt and Alex Gladstein

“The run-up in BTC since March has been extraordinary, so investors and portfolio managers may be seeking to take profits and offload their BTC before end of year for tax purposes,” said Lau. 

Read More: Mt. Gox Creditors’ Trustee Announces Draft Rehabilitation Plan

Lau noted concern the upcoming distribution of long-awaited bitcoin from defunct exchange Mt. Gox might introduce some sell-side dynamics at some point, but he nonetheless remains positive. “Mt. Gox’s upcoming 140,000 BTC distribution is an overhang on the horizon,” he said, “but the fundamentals are still strong as ever.” 

In the bitcoin futures market, open interest cracked $7.4 billion once again, the first time since Nov. 24 and a sign sophisticated investors are increasingly hedging positions by using crypto derivatives.

“After an almost uninterrupted bull run in just two months, the path of least resistance for bitcoin is on the downside, or at least bouncing in the $18,000-$20,000 range for a while,” said David Lifchitz, chief investment officer of quant firm ExoAlpha. Over the past nine weeks, bitcoin has appreciated over 70%, according to historical spot pricing on bellwether exchange Bitstamp.

Another analyst also sees the $20,000 mark as tough to surpass. “Bulls need a new catalyst to strongly overcome the $20,000 resistance level, else the selling pressure at that level will keep it down,” added ExoAlpha’s Lifchitz. 

That catalyst may not arrive until next year, according to Michael Gord, chief executive officer of trading firm Global Digital Assets. “Once we start 2021, when the budgets for many institutional investors and enterprises reopen I expect to see a surge of new participation in bitcoin and of demand in companies having a strategy to implement digital assets,” Gord told CoinDesk. 

The second-largest cryptocurrency by market capitalization, ether (ETH) was up Tuesday trading around $591 and climbing 0.80% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Read More: DeFi on Bitcoin Gets a Boost as Sovryn Launches on RSK Sidechain

The ether options market on top venue Deribit is in a December slump when compared to late November’s premium volume, according to data aggregator Genesis Volatility.

Of note for Tuesday is that a larger-than-normal block trade for ether options popped up, according to Greg Magadini, chief executive officer of Genesis Volatility. 

“Although the overall dollar value of options traded is still lower than November, we saw a nice pickup in block volumes today,” Magadini told CoinDesk. He sees Genesis’ data indicating that an options strategy is developing where traders buy $600 calls while simultaneously selling $800 call options. A call option gives purchasers the right, but not obligation, to buy the underlying instrument (in this case, 1 ETH).  “A big notable block trade we’ve seen today is a March $600-$800 call spread. If ETH is above $800 by March expiration, this position would be worth $350,000.”

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

• bitcoin cash (BCH) + 8.6%
• algorand (ALGO) + 5.7%
• kyber network (KNC) + 3.3%

Notable losers:

• xrp (XRP) – 2.7%
• orchid (OXT) – 1.4%
• chainlink (LINK) – 1%

Equities:

• Asia’s Nikkei 225 ended the day down 0.17% as investors worried about the impact surging coronavirus cases could have on the global economy.
• The FTSE 100 in Europe closed in the red 0.28% as increasing coronavirus restrictions in London and concerns about a Brexit deal pushed the index lower.
• The S&P 500 in the United States jumped 1.2% as optimistic investors bought stocks amid positive signs a coronavirus-related government stimulus package would materialize.

Commodities:

• Oil was up 1.2%. Price per barrel of West Texas Intermediate crude: $47.55.
• Gold was in the green 1.5% and at $1,854 as of press time.

Treasurys:

• The 10-year U.S. Treasury bond yield climbed Tuesday jumping to 0.910 and in the green 1.5%.

• New Federal Reserve ‘Qualitative’ Approach Could Push Further Into Experimental Realm
• New York’s Quontic Becomes First US Bank to Offer a Bitcoin Rewards Debit Card

Cboe Global Markets is joining the race to take cryptocurrency pricing mainstream.

The exchange owner will launch a suite of tools in 2021 in a licensing partnership with execution provider CoinRoutes. Cryptocurrency indexes, historical data and real-time ticks are all on the table, said Catherine Clay, Cboe’s information solutions chief.

The deal makes Cboe, which operates the largest options exchange in the U.S., the latest financial force to enter the cryptocurrency data business. It’s been a busy December, with service providers looking to keep up with institutions going long on bitcoin. For example, S&P unveiled its crypto index plans Dec. 3 and one week later announced a stake in Lukka, the firm facilitating the product. 

Related: Bitwise’s Crypto Index Fund Becomes Available to US Investors

Read more: S&P, State Street Back $15M Investment in Crypto Data Startup Lukka

Clay said Cboe will initially focus on providing data for “just a handful” of cryptocurrencies with high market caps – likely 10 or fewer top trading pairs to start. For example, bitcoin and ether traded against the dollar.

Rollout will come in three phases, she said. Cboe’s data shop will backfill historical price data in Q1 2021. It will then begin distributing real-time price data to clients. Once these two “foundational pieces” form, Clay said Cboe’s “index team can get busy.”

“I would guess that in Q2, you’ll start to see actual indices come from this data through our Cboe global index team,” Clay said. 

Related: Behind ‘Prime Broker’ Buzzword Lies a Complex Strategy Game for Crypto Firms

Cboe picked CoinRoutes’ data after a yearlong evaluation of partners, Clay said. The thinking was that CoinRoutes’ order-routing business provides an edge in measuring the market. Plus, she was impressed by the firm’s methodologies accounting for discrepancies in fees across different exchanges.

CoinRoutes CTO Ian Weisberger told CoinDesk his firm’s order-book business gives it a “huge advantage” over data-only crypto firms, which might solely rely on where the market’s been, instead of where it’s going. 

The deal continues a trend of crypto industry veterans courting wider audiences through alliances with mainstream names. While advanced crypto traders might already be familiar with CoinRoutes, Galaxy and Lukka for pricing data, newer crypto investors know brands like Cboe, S&P and Bloomberg far better.

“We’re attracted to [Cboe] because they’re a very large organization that has really good penetration in that space,” said CoinRoutes CEO David Weisberger.

Read more: Behind ‘Prime Broker’ Buzzword Lies a Complex Strategy Game for Crypto Firms

Clay said Cboe is rolling out this product as yet another data offering for clients demanding intelligence across asset classes of all stripes. Cboe is trying to “stay ahead” of traditional clients’ shift to digital assets. 

“We want to be of service to them as they embark on that endeavor,” she said.

The partnership marks Cboe’s first jump into the realm of cryptocurrency data. It comes more than a year after Cboe abandoned another crossroads of digital assets and traditional finance: bitcoin futures trading. Cboe put its bitcoin futures product on ice in March 2019.

However, Clay said Cboe’s corporate interest in cryptocurrencies never diminished.

• VanEck, SolidX Withdraw Bitcoin ETF Proposal From SEC Review
• Crypto Exchange Launches ‘Shitcoin Futures Index,’ Offering New Way to Short Alts

The co-founder and CEO of bitcoin mining startup Layer1 Technologies, Alex Leigl, has resigned as part of a settlement between the firm’s founders, according to a press release sent to shareholders and shared with CoinDesk.

Another co-founder, former President Jakov Dolic has rejoined the company as CEO and board chairman. The settlement includes the discontinuance of all legal proceedings and demands, the company said.

Founded in June 2019, the young company has fought controversy and legal battles for much of 2020. Dolic’s legal disputes originated when he sued Layer1 after claiming he invested millions of dollars and then was forced to leave the company, as CoinDesk previously reported.

Related: Riot to Test Immersion Cooling Bitcoin Mining Technology in Texas

Shortly after Dolic withdrew his lawsuit in November, Leigl filed a countersuit against Dolic and fellow shareholder Ivan Kirillov for malicious prosecution and shareholder misconduct. 

Under Leigl, Layer1 also reportedly misdescribed the role of Liu Xiangfu, co-founder of Chinese bitcoin miner manufacturer Canaan and supposedly a core Layer1 team member, in an investor pitch deck. 

Per the press release, Dolic and Liegl jointly stated, “Layer1 has a strong foundation for future growth, including mining operations with a capacity of 100MW, which the company will be expanding, and proprietary containerized solutions that will continue to drive Layer1’s operations.”

Leigl leaves the company just weeks after being named to Forbes 30 Under 30 list for 2021. 

• OKEx Bitcoin Mining Pool Shows Signs of Life After Precipitous Hashrate Drop
• Bitfury to Sell at Least Part of Its 38% Stake in Bitcoin Miner Hut 8
• Secondary Mining Markets Surge Amid ASIC Manufacturing Delays

Prices for privacy-focused cryptocurrency monero broke its two-year high on Tuesday. It has been rallying since March’s crypto market sell-off.

• The price of monero rose to as high as $157.64 early Tuesday, the highest level since June 2018, according to data compiled on the CoinDesk 20.
• At the time of writing, monero traded at $152.09, nearly 300% up on a year-to-date basis.
• Monero has been rallying for the most of 2020 despite regulatory concerns.
• Launched in April 2014, monero was designed as a private, secure and untraceable cryptocurrency.
• The protocol behind the cryptocurrency allows users to obfuscate their identities and hide the amounts transferred from third parties, except for those they designate.
• Analysts said the increased demand for the privacy-focused token could be due to corporates’ growing worries about needing monero to pay ransom to hackers.
• “While some corporates may have stepped up buying of bitcoin to increase their ability to achieve portfolio diversification ambitions, other corporates have equally stepped up efforts to procure digital assets such as monero, given its prevalent choice of payment by hackers,” Denis Vinokourov, head of research at the London-based prime Brokerage Bequant told CoinDesk in an email response.
• Although no monero-based ransom was demanded during the hack at the U.S. Treasury and Commerce departments or the Google outage on Monday, these events have made more companies worry about similar hacks, according to Vinokourov.
• The recent hacks “show the ever-growing sophistication of bad actors,” he said.
• Globally, crypto exchanges have been delisting many privacy coins, monero included, in order to remain compliant with know your customer/anti-money laundering (AML/KYC) requirements.
• But Justin Ehrenhofer, compliance analyst at crypto market maker DV chain, told CoinDesk that monero traders may also have become more “optimistic” the continuing growths of monero will “reopen conversations at exchanges” on how they could list privacy-focused coins again.
• Blockchain analytics firm CipherTrace recently filed two patent applications for technologies it claims will assist regulators in tracking transactions made with monero.

• Ukrainian Politician Discloses Owning $24M in Privacy Coin Monero
• Hackers Using Monero Mining Malware as Decoy, Warns Microsoft
• CipherTrace Says Homeland Security Work Gave Rise to Monero-Tracking Patent Filings
• Tor Developers Pursuing ‘Anonymous Tokens’ to Stop Hacks and DoS Attacks

Hi, all. Today we look at the global perspective: Latin America’s booming crypto sector, Israeli’s DeFi scene and how whales from around the world drive market changes. 

Capear el temporal
Argentinian crypto exchange operations are booming in a year of economic and political uncertainty, CoinDesk’s Sandali Handagama reports. (Lea el artículo en español. Es el primer trabajo de CoinDesk traducido a la segunda lengua más hablada del mundo.) It’s part of a general trend across the South American region, driven by bitcoin’s bull market, national inflation and the increasing need for digital remittances during a pandemic year. Last week, Mexico City-based Bitso raised $62 million to fund its expansion to Brazil, it certainly won’t be the last.

DeFi darlings
Israel’s crypto scene has pivoted to decentralized finance, the intrepid CoinDesk contributor Leigh Cuen concisely and conveniently considers. At an epicenter of 2017’s Ethereum-based ICO bubble, Israeli startups, and attendant venture capitalists, are now engineering ways to bring bitcoin into the emerging DeFi economy, also primarily based on Ethereum.

Related: Blockchain Bites: Google Goes Down, Nexus CEO and US Treasury Get Hacked

Carbon future
The World Economic Forum and seven major mining companies are trialing blockchain to track CO2 emissions from mine to the end of the supply chain. Maybe it’ll finally answer the question: How did oil get into everything?

• CRYPTO CAPITULATION? SEC Chairman Jay Clayton is stepping down this year. Modern Consensus provides an overview of his tenure and asks how he might be remembered.
• DRAWN DOWN: The amount of ether (ETH) on exchanges is at its lowest point in two years after some five million tokens were withdrawn since March. (Trustnodes)
• STRICT LAWS: Estonia is known as a bastion of digital experimentation. Still, about 1,000 cryptocurrency companies lost licenses to operate in the country this year. (Decrypt)
• INSTITUTIONAL FLOOD: JPMorgan analysts say MassMutual’s recent $100 million BTC buy could presage a wave of institutional demand. (CoinDesk)
• OLD MEETS NEW: SatoshiPay, a cypherpunk favorite, will be the first company to integrate a euro-backed stablecoin developed by Bankhaus von der Heydt, a bank founded in the 18th century. (CoinDesk)
• PRIVATE DEALINGS: Pornhub added monero payments after Mastercard and Visa cut ties with the adult content site. (The Block)

Sell pressure
Bitcoin’s rally above $19,500 was clipped early on Tuesday, with significant sell pressure at $20,000 ahead, according to CoinDesk markets reporter Omkar Godbole. These sell walls are no joke. In fact, one analyst told Godbole this morning’s market dip could likely be attributed to profit taking by large Asia-based investors. CryptoQuant data shows whales taking a dip around $19,500, bringing the market with them. Big picture: Pondering Durian provides four reasons a modest bitcoin allocation might make sense.

There has been a lot of hyperventilating in the press and on Twitter this week over the fact that cryptocurrency is now, by default, the only form of payment Pornhub accepts. 

Far less attention has been paid to the related news that the adult entertainment site is about to adopt its own version of know-your-customer rules, or KYC. Call it “Know Your Coomer” after the internet meme of a disheveled porn addict with poor impulse control and a hypertrophied right arm. (For those unfamiliar with online argot, it’s one of many derivatives of the epithet “boomer,” like “consoomer” for spendthrifts, “floomer” for those who insist COVID-19 is just the flu, or “coofer” for people exhibiting symptoms of the virus.)

Related: First Mover: Horrible 2020 Economy Proved Best Thing for Bitcoin

And, much like the know-your-customer policies of financial institutions including regulated crypto exchanges, Know Your Coomer raises difficult questions about privacy and data protection.

Rewinding the tape: In response to a harrowing New York Times article about the posting of child exploitation imagery on Pornhub, Visa and Mastercard booted the site from their card networks. This left crypto, which Pornhub has accepted for several years, as the sole remaining payment option for the site’s premium users.

Yes, I checked. 

No, I did not investigate further through this channel.

From the perspective of highlighting crypto’s value as a censorship-resistant form of money, this is all well and good. As disturbing as the revelations in the Times piece were, the use of financial infrastructure as an extrajudicial enforcement mechanism is creepy in its own way, just as it was in the Wikileaks banking blockade and Operation Choke Point.  

The Open Source Defense newsletter said it well:

“The second-order danger … is that you’re nearly certain to be able to find illegal content on any large platform for user-generated content. And no company at any level of technical expertise, from Google and Facebook on down, can fully prevent that. So when everybody’s guilty, getting shut down is only a matter of whether someone decides that it’s time to take a look at you. That’s not a world that’ll make anybody happy in the long run.”

An under-reported aspect of the story is the steps Pornhub is taking to prevent illegal content from being posted on this site. 

Last week, the site, owned by Canada-based MindGeek, disabled uploads by any users who were not verified through its revenue-generating programs. “In the new year, we will implement a verification process so that any user can upload content upon successful completion of identification protocol,” Pornhub said. (Content previously uploaded by unverified users was subsequently nuked.)

If this prevents monsters from using the site in abusive ways, all the better. But it will create risks for those who only post lawful content. The following remains to be seen:

• What information will be collected from users who want to upload content when the new protocol is implemented in 2021? 
• How will it be verified? 
• Will the information be stored with a third party or with MindGeek? 
• How long will the information be retained? 
• What steps will be taken to secure it? 
• Has MindGeek hired a vendor or vendors to handle ID collection, verification and/or storage? 
• Will the changes be limited to Pornhub or extended to other MindGeek adult sites as well.

I emailed these questions to MindGeek and its law firm last week but have not heard back (not surprising, given the company is managing a crisis situation). 

Five years ago, the Ashley Madison breach showed how a poorly guarded trove of data on people who do legal but embarrassing things online can easily become a blackmailer’s goldmine. Pornhub would do well to heed this lesson. Even coomers deserve privacy.

– Marc Hochstein

• Crypto Long & Short: Bitcoin’s Relationship With Gold Is More Complicated Than It Looks
• Money Reimagined: Bitcoin’s Tug of War as Wall Street Moves In

Correction (Dec. 15, 18:49 UTC): Ruffer allocated 2.5% of its multi-strategies fund to bitcoin, not 2.5% of its total AUM, as was previously reported. The total allocation is worth roughly $15 million.

Ruffer Investment Company sent a short update to shareholders notifying them of the company’s allocation to bitcoin.

• In November, Ruffer allocated what is currently worth approximately 2.5% of its multi-strategies fund to bitcoin, per the memo, or roughly $15 million. The fund manages roughly $620 million.
• “We see this as a small but potent insurance policy against the continuing devaluation of the world’s major currencies,” the London-based firm wrote.
• “Bitcoin diversifies the company’s (much larger) investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and market risks that we see.”
• The four-paragraph memo was sent to shareholders Tuesday.
• Bitcoin gained over 40% in November, closing the month by setting a new record high above $19,850.

Update (Dec. 15, 18:41 UTC): Updated to fix typographical error reflecting bitcoin gained 40% in November, not $40.

• Bitcoin Whales Buy Low, Sell High; Retail Investors Chase Rallies: Data
• Bitcoin Chart Views Soared Along With Price in November, TradingView Says
• Secondary Mining Markets Surge Amid ASIC Manufacturing Delays
• Bitcoin Miners Saw 48% Revenue Increase in November

Blockchain startup Spring Labs has put its first fraud-prevention tool into production using a permissioned version of Ethereum. The Los Angeles-based firm is now working with two lenders in the Property Assessed Clean Energy (PACE) financing space and onboarding two others, said co-founder John Sun.

Each lender now shares borrower and property data through the Spring Labs protocol, where it is either tokenized or sharded so that only the entity who contributed the data can view it. The lenders have been testing the platform since June and believe that it could save up to $10 million in fraud or 1% of the industry’s total loan transactions.

“They built a real-time database that I could ping to see if there are any other assessments on a property now or coming up,” Mike Schmidt, chief operating officer of PACE Funding, said in an interview. “None of us have done anything [with blockchain] before, but within a week it was paying dividends.” 

Related: World Economic Forum Wants to Standardize Ethical Data Collection

PACE loans are used to finance construction projects that make buildings more energy-efficient or provide new sources of renewable energy for commercial, industrial and private residential properties. Run by the U.S. Department of Energy, the residential PACE program allows local and state governments in California, Florida and Missouri to provide funding for energy improvements. 

Read more: California Agency Backs Green-Energy Pilot Using RSK’s Bitcoin Smart Contracts

Specifically, PACE loans create liens that are repaid by a homeowner’s property taxes. The consumers who seek PACE financing typically have lower-than-average FICO scores because they usually come to the program after getting denied an unsecured loan or home equity line of credit, Schmidt said.

“We are often their only hope of getting a new roof or an air conditioner,” Schmidt said. “We’re helping make solar mainstream and not just for the rich entitled people but for those in the working-class neighborhoods.” 

Related: Apple Co-Founder Wozniak’s New Venture Lists Token to Help Fund Energy Efficiency Projects

Spring Labs’ blockchain solution was an attractive one for PACE lenders who were concerned a centralized hub for data exchange might be another target for contractors who are trying to game the system, Schmidt said.

The space is dominated by four lenders because the most natural financiers have an incentive not to be PACE lenders: Mortgage lenders have the necessary skills to enter the PACE loans sector, but PACE loans have a “super lien” on the property, meaning they get paid out before mortgage payments. 

For Spring Labs, this small number of participants made PACE an attractive space to test the Spring Protocol, said Sun. Because data is either tokenized or sharded, sharing financial data is no longer a competitive disadvantage. Spring Labs’ end goal is to replace credit rating bureaus and data aggregators by making data exchanges possible without centralized data hubs, which can be hacked and which also make data sharing more expensive.

Cutting out middlemen data exchangers is also the same logic Visa’s R&D arm had when quietly developing a blockchain that would allow banks to exchange customer data without data aggregators. 

Read more: Visa R&D Arm Develops a Blockchain System That Could Replace Financial Data Aggregators

Lien-stacking isn’t the most legally fraught type of fraud the PACE program faces, but it is a problem that customers have been pushing lenders to solve, Schmidt said. 

The most immediate pay-off for Schmidt’s business will be pitching other states on the idea of PACE lending. Currently, PACE Funding is a licensed lender under California’s Department of Financial Protection and Innovation.

“Now we can go in and say, ‘California took one on the chin for you, and we’ve learned a lot of lessons the hard way, but we have a lot of consumer protection now so we never have to worry about stacked assessments in your state,’” Schmidt said. 

In the future, Spring Labs is also aiming to give PACE lenders more data on bad contractors and more data on PACE borrowers to better determine creditworthiness, Sun said. 

“This is an interesting use case for us to apply our technology,” Sun said. “We spun up a bespoke data-sharing network quickly in an industry that hasn’t shared a lot of information before. We think this is a safe technology that is better for lenders and consumers and is at much less risk for data losses.” 

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• Desperation Among Filecoin Miners Creating a Big Market for FIL Borrowing

Never underestimate American ingenuity, especially when it comes to the Federal Reserve’s ability to invent monetary policy on the fly. 

The U.S. central bank’s top officials, led by Chair Jerome Powell, are expected this week to announce new “qualitative outcome-based” guidance to specify the conditions under which they might taper their stimulus-focused bond purchases, now proceeding at $120 billion a month. Such qualitative guidance would hinge on subjective criteria, such as a promise to keep buying bonds at the current pace until the pandemic is under control – which might be open to interpretation. 

Since no changes are expected to the level of benchmark interest rates, already cut to near zero, the guidance might be the most significant outcome from the two-day, closed-door meeting that culminates Wednesday. 

Related: New York’s Quontic Becomes First US Bank to Offer a Bitcoin Rewards Debit Card

The new approach would join a growing list of unprecedented monetary strategies hatched by the Fed since the financial crisis of 2008, from former Chair Ben Bernanke’s “quantitative easing,” known as QE, to the “average inflation targeting” adopted in September. These are considered unconventional policies since they come into play once the Fed can’t cut interest rates any further without pushing into negative territory.

The upshot is that Fed officials might be using the new guidance as a way to tamp down expectations the bond purchases would continue ad infinitum, while leaving ample flexibility to continue the program as long as they see fit.  

“The most important innovation for this meeting is likely to be an enhancement to their QE guidance by adopting qualitative outcome-based language,” Deutsche Bank Chief U.S. Economist Matthew Luzzetti told clients last week in a report. 

The Fed meeting is likely to be closely tracked in cryptocurrency markets, where bitcoin has been cast by investors from both digital-asset markets and traditional finance as a potential hedge against central-bank money printing and inflation. Bitcoin prices have shot up 170% this year as the U.S. central bank expanded its total assets by more than $3 trillion to $7.3 trillion. 

Related: DeFi on Bitcoin Gets a Boost as Sovryn Launches on RSK Sidechain

With the coronavirus still taking a devastating toll on the economy, there’s little expectation that officials would move anytime soon to end the ongoing bond purchases, which are designed to provide stimulus to the economy by keeping monetary conditions ultra loose. 

And, in fact, according to Michael Feroli, chief U.S. economist for JPMorgan Chase, the Fed officials might even move at this week’s meeting to ease conditions further by extending the average maturity of the bonds it purchases. Such a move would theoretically put downward market pressure on long-term interest rates that tend to be the highest, making it cheaper for businesses and households to take out loans. 

But Feroli noted the contrast between the new “qualitative” guidance and “quantitative” policies that might be tied to hard numerical metrics like inflation or unemployment goals.

“It could be as simple as noting that purchases would taper and cease before the first rate hike, though all this would say is they expect to cease purchases sometime before 2024, which isn’t very informative,” Feroli wrote. “A reasonable evolution of the statement language would predicate purchases on the course of the public health crisis.”

One “risk,” according to Feroli, is that traders start speculating on the timeline for broad distribution of a vaccine and perhaps then conclude bond purchases might wrap up sooner than most investors are currently anticipating.

“This sets up the risk that new guidance could spark another taper tantrum,” Feroli wrote, referring to the moment in May 2013 when bonds sold off on fear the Fed was going to taper its bond purchasing program. “A possible safeguard would be to pledge to purchase assets until ‘well after’ the public health crisis passes, or some similar wording.”

According to economists at Bank of America, the second-biggest U.S. lender after JPMorgan, thresholds for tapering the bond purchases might be “open to interpretation, however, which provides flexibility but also potentially some discomfort for market participants.”

“The Fed wants to make sure that asset purchases keep interest rates low enough and financial conditions supportive enough to help drive economic growth and deliver higher inflation,” according to the report. 

Qualitatively speaking, the Fed usually gets what it wants.

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• First Mover: Reminiscing on Pre-Pandemic Bitcoin as Rally Stalls

Nasdaq-listed bitcoin mining company Riot Blockchain (RIOT) is piloting new liquid cooling technology for mining hardware in Texas to test solutions for effective mining in difficult temperature environments.

Riot is launching an 8-megawatt immersion technology testing initiative to “assess the potential for higher productivity and lower cost mining opportunities in Texas,” per a press release. Testing is scheduled to start in Q1 2021. 

If successful, CEO Jeff McGonegal told CoinDesk the company envisions “deploying immersion at a larger scale over time, particularly in warmer climates where cooling is a chief concern.”

Related: OKEx Bitcoin Mining Pool Shows Signs of Life After Precipitous Hashrate Drop

In high heat and humidity environments, cooling mining machines with liquid immersion instead of air cooling offer significant advantages for miners with razor-thin profit margins.

Not only does liquid cooling offer significant noise reduction compared with fan cooling. Immersion cooling can also increase usable hashrate per machine by up to 50% in some cases, prolong the lifespan of some machines and allow miners to install more machines per square foot than if the same facility used fan cooling. But maintenance can be difficult.

The mining industry is still standardized around air-cooled designs, which means air-cooled facilities are still the first choice for miners,” said Ethan Vera, co-founder of Seattle-based mining company Luxor Technology, in a direct message with CoinDesk. “But in areas of high temperature and low humidity, miners use evaporative cooling as a cost-effective strategy to mitigate the heat.”

In hot, humid regions like Texas, Vera said, liquid immersion is “the cooling method of choice as it eliminates heat, dust and humidity issues.”

Related: Bitfury to Sell at Least Part of Its 38% Stake in Bitcoin Miner Hut 8

In planning this pilot project, the Castle Rock, Colo.-based mining firm is “looking to observe improvements operating in difficult mining temperature environments, combined with the additional performance that can be achieved as a result,” McGonegal told CoinDesk.

Participating in Riot’s pilot program are two bitcoin mining hardware and energy software companies, Enigma and Lancium, that are providing the technology Riot plans to test.

In 2020, Riot shares have outperformed bitcoin year to date in 2020, gaining 660% since January and trading near $9.37 at last check. Over the same period, bitcoin gained 170%. The mining firm is now worth over $666 million.

• Secondary Mining Markets Surge Amid ASIC Manufacturing Delays
• Square to Support Greener Bitcoin Mining as Part of Zero-Carbon Pledge

SBI Financial Services has acquired cryptocurrency trading platform B2C2, Reuters reported Monday.

• The Japanese firm said it will leverage B2C2’s crypto rails for mainstream financial institutions.
• Reuters reports that SBI Holdings is now the first major financial firm to own a crypto desk.
• SBI acquired a $30 million minority stake in B2C2 this summer. It has been offering clients access to B2C2’s trading portal ever since.
• SBI subsidiaries have shown a penchant for crypto projects including security token offerings and digital asset exchange partnerships. The group offers shareholder payouts in XRP.

• Bitcoin News Roundup for Dec. 8, 2020
• Grayscale Sees a New Group of Ethereum-First Investors
• Institutional Bitcoin Shop NYDIG Raises $150M for Twin Crypto Funds
• Why a $631B Asset Manager Just Changed Its Mind on Bitcoin