CoinDesk Crypto

High spot bitcoin volume not seen since June is helping price while Ethereum’s DeFi expansion continues to include costly network fees.

• Bitcoin (BTC) trading around $10,829 as of 20:00 UTC (4 p.m. ET). Gaining 9.7% over the previous 24 hours.
• Bitcoin’s 24-hour range: $9,849-$10,964
• BTC above 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin hit $10,964 on spot exchange Coinbase Monday, a price level not seen since August 2019. “The bitcoin breakout seemed to finally have happened as we lifted off from $9,800,” said Jack Tan, of Taiwan-based quantitative trading firm Kronos Research. “The trend is clear and we are headed higher.” 

Read More: Odds of Bitcoin Hitting Record High in 2020 Are (Slightly) Up

Related: Leading Austrian Telecom Provider Adds Cryptocurrencies to Its Cashless Payment Network

Bitcoin trading volume on Coinbase Monday was at $292 million. This was the highest since June 11, when volumes hit $255 million. 

Traders have long discussed the $10,500 price range as a level to stay above to fuel a lengthy bull run, said Neil Van Huis, director of institutional trading at Chicago-based crypto liquidity provider Blockfills. “We need to stay over $10,500, so I would probably want to see a sharp interest in demand above that and to stay over it for more than 24 hours to see if the bullishness has legs,” Van Huis said.  

Despite the excitement Monday, bitcoin’s jump might compel selling in the alternative cryptocurrency, or altcoin, market, said Kronos’ Tan. “Unfortunately, this might actually suck the energy out of the altcoins and high-flying DeFi tokens.” 

One dynamic to watch: The ETH/BTC pair Monday is down 4% on Coinbase as traders are selling ether for bitcoin on the spot market.

Related: Silvergate’s Bitcoin-Backed Lending Product Grew 80% in the Last Quarter

Regardless of the rebalancing, Chris Thomas, head of digital assets for broker Swissquote, says DeFi is the main reason for the cryptocurrency markets’ move up overall. “It’s purely DeFi driven,” said Chris Thomas. “We will likely see a lot more of this, resulting in ether driving higher and pulling everything else with it.”

Ethereum fees jump 550% in 2020

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday trading around $323 and climbing 5.6% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Ethereum Miners’ Income Soars by 60% in a Month

In January, the average fee on the Ethereum network was 0.000542 ETH. So far in July, average fees on Ethereum are at 0.003532 ETH, a 550% increase in the cost to conduct transactions on the second-largest blockchain by market cap, according to data aggregator Blockchair. 

“The recent rise of ether’s price could be explained by the fact that large users and investors in the DeFi ecosystem are buying ETH now in order to pay less gas fees for each transaction,” said Jean-Baptiste Pavageau partner at Paris-based quant firm ExoAlpha. 

Some traders may be taking advantage of this rise in fees, stockpiling ether as the situation may only exacerbate as 2020 continues. “Speculators are actively monitoring the DeFi ecosystem and are anticipating growth of the Ethereum network over the coming months, increasing the demand in ether to pay for the gas fee of each transaction,” added Pavageau. 

Read More: MakerDAO Passes $1B Milestone in DeFi First

Other markets

Digital assets on the CoinDesk 20 are mixed Monday. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

• ethereum classic (ETC) + 9.5%
• bitcoin sv (BSV) + 9%
• bitcoin cash (BCH) + 8.9%

Read More: FTX to Launch ‘Scalable’ Decentralized Exchange in Weeks

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

• tezos (XTZ) – 4%
• basic attention token (BAT) – 3.8%
• stellar (XLM) – 3.3%

Read More: You Can Now Buy Hedera Hashgraph’s HBAR Token via Simplex

Equities:

• The Nikkei 225 in Asia ended the day in the red 0.16% after a four-day weekend, dragged lower by anxiety in U.S.-China relations.
• The FTSE 100 in Europe slipped 0.31% Monday as travel stocks took a beating on fresh quarantine rules in Spain.
• The U.S. S&P 500 index gained 0.60%, with positive sentiment supported by the U.S. government's $472 million allocation to coronavirus vaccine research.

Read More: Silvergate’s Bitcoin-Backed Lending Product Grew 80% in the Last Quarter

Commodities: 

• Gold is up 2% at $1,938.40 as of press time. The yellow metal’s price hit an all-time high of $1,945.72 Monday. Its previous high of $1,921.18 occurred in 2011.
• Oil is up 0.86%. Price per barrel of West Texas Intermediate crude: $41.60

Read More: 85% of Italian Banks Are Exchanging Interbank Transfer Data on Corda

Treasurys:

• U.S. Treasury bonds were mixed Monday. Yields, which move in the opposite direction as price, were up most on the 10-year, in the green 3.2%.

Related Stories

• Odds of Bitcoin Hitting Record High in 2020 Are (Slightly) Up, Options Data Suggests
• First Mover: Bitcoin at Last Passes $10K, but Why Has It Struggled While Gold Shone?

China’s Blockchain Service Network (BSN), the government’s ambitious state-backed blockchain infrastructure project, has continued to show substantial growth despite significant internal friction between private and state contributors.

Crypto services provider Matrixport has launched its own derivatives exchange to go after surging activity in the options space.

• The Singapore-based company said the new derivatives exchange, dubbed Bit.com, would first list a BTC/USD perpetual swap on Aug. 3, before adding a series of options contracts on Aug. 17, according to a report by The Block.
• Monthly options volumes have increased sharply from $1 billion in January to $2.5 billion by June; it spiked to over $3 billion in May’s halving event.
• Bit.com said it wants to rival Deribit, the Panama-based exchange that constitutes 88% of market share, according to data site Skew.
• That Matrixport opted to launch a bitcoin/U.S. dollar perpetual swap could be seen as a bid to challenge market leader BitMEX – its “perp” has nearly $800 million in open interest at press time.
• Matrixport also provides over-the-counter trading, lending and custodial services; it was spun out of Bitmain in 2019 and both the chipmaker and co-founder Jihan Wu remain major shareholders.
• Earlier this year, Bloomberg said Matrixport was seeking to nearly triple its valuation to $300 million in a capital raise; COO Daniel Yan said the $300 million valuation was misreported.

See also: Odds of Bitcoin Hitting Record High in 2020 Are (Slightly) Up, Options Data Suggests

Related Stories

• Private Sector Could Bring Value to Future CBDC Launches, Says IMF Official
• US Government Files Fresh Charges Against PlexCoin ICO Organizers
• FTX to Launch ‘Scalable’ Decentralized Exchange in Weeks
• MakerDAO Passes $1B Milestone in DeFi First

Twitch is offering discounts to subscribers paying in crypto, a federal court ruled bitcoin is money and R3 Corda’s blockchain is a big thing in Italy’s banking system.

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. 

It’s Settled
R3’s Corda blockchain is used by 55 (~85%) Italian banks for interbank reconciliation, speeding up the process of double-checking transaction logs. The country’s Interbank Agreement was updated in May 2019 to include data standardization opening a window for blockchain processes to be implemented. Using the old system, the average time for reconciliation was between 30 and 50 days. On Corda, reconciliation is completed within a day. Separately, BCB Group is launching a SWIFT alternative for instant cash-crypto settlements for several European currencies. 

Related: First Mover: Bitcoin at Last Passes $10K, but Why Has It Struggled While Gold Shone?

XRP Purchases?
Payburner is a new, non-custodial payments platform based on XRP that will work on the Chrome and Brave web browsers. Built as a labor of love by Ripple executive Craig DeWitt, the platform leverages Xpring, a Ripple project that provides tools and funding for developers and startups working with XRP. Released in beta, Payburner can be used to purchase goods online using the XRP cryptocurrency.

Twitch Hitches With
Twitch is giving subscribers a 10% discount if they pay in bitcoin, ether, bitcoin cash or litecoin. The Amazon-owned company, with around 3.8 million broadcasters in Q1 2020 and around 1.44 million concurrent users as of March 2020, announced the deal on Saturday. Twitch first introduced a cryptocurrency payment option in 2014, removed it in early 2019 and brought it back a few months later. The company uses the U.S.-based BitPay to process its crypto payments.

Decentralized Derivatives 
FTX will launch an exchange for the growing DeFi space on top of the Solana blockchain. Called Serum, the decentralized exchange will be geared towards derivatives, and aims to solve some of the structural vulnerabilities and limitations in the existing DeFi space. Solana claims it can process 50,000 transactions per second, compared to Ethereum’s 15. The new dex will be fully interoperable with Ethereum so it can tap into the existing DeFi space, which saw its market cap break the $4 billion boundary over the weekend.

Bitcoin Is Money 
Bitcoin is a form of “money” in Washington, D.C., a federal court said Friday. The ruling came as part of the United States v. Harmon, where Chief Judge Beryl A. Howell wrote that money “commonly means a medium of exchange, method of payment, or store of value… Bitcoin is these things.” The court’s decision to define bitcoin as money was in the context of a case alleging money laundering under federal law. Neeraj Agrawal, director of communications at Coin Center, said the court’s comments mean that bitcoin “is treated as money in the context of money transmission licensing in D.C., nothing more.”

Quick bites

• China’s BSN “has attracted more than 6,000 enterprise, government and individual users” (Bloomberg)
• Cardano’s latest upgrade is primed for launch (Decrypt)
• Bitmain spin-off Matrixport is launching a crypto derivatives exchange (The Block)
• How billion-dollar crypto scams lure victims (Bitcoin.com)
• Leading Austrian telecom provider adds crypto to a cashless payment network

At stake

Related: Blockchain Bites: Ghosn’s Crypto Payments, Russia’s Red Line and Why Banks Won’t Bite

The decentralized finance (DeFi) space crossed a milestone: MakerDAO’s total value locked-in is now over $1 billion. $1.1 billion, to be exact.

Built primarily on the Ethereum blockchain, DeFi has become crypto’s most vibrant sector. Nearly $3.6 billion is currently flowing through its interlinked protocols and applications, up from $1 billion in early February, according to DeFi Pulse.

It’s the latest emergent industry that the “world’s computer” has unlocked. In just five years, Ethereum has given rise to crypto’s most promising use cases – and some of its biggest regrets.

From ICOs to stablecoins, and dapps to DAOs, Ethereum’s programmable, decentralized network has grown into a platform for real financial and technological experimentation. Plus, as CoinDesk’s Leigh Cuen reporters, Ethereans know how to have fun while disrupting everything.

CoinDesk is marking Ethereum’s five-year anniversary this week with a special package of reported stories, live streamed conversations and a pop-up newsletter, all celebrating Ethereum at Five. You can subscribe to the special Substack newsletter here.

Market intel

The Golden Context
Bitcoin finally passed the $10,000 mark over the weekend. First Mover asks why this hadn’t happened sooner. In the past month, fears of stagflation have settled in due to the greenback’s devaluation and an underutilized labor market in the U.S. This has pushed gold’s prices – seen as a hedge against inflation – to all-time highs of $1,940 (passing the previous ceiling of $1,921 an ounce in 2011). Bitcoin, meanwhile, has been stuck in a narrow trading range since April and only recently passed the $10,000 threshold, approximately half of its 2017 all-time-high of $20,000. “Bitcoin has its own microeconomics very unique to crypto, including mining difficulty cycles, the changing regulatory environment and other factors that have little to do with inflation,” Richard Rosenblum, co-founder of GSR, said. Subscribe here to get First Mover directly in your inbox.

Mining Profits
Ethereum miners’ daily income has soared over 60% in a month, according to Sparkpool. The profitability is tied to soaring transaction fees and relatively slow growth in competition from other miners. Daily income was around $1.85 per 100 megahashes second (MH/s) on the network on June 27, rising as high as $3.27 on July 25. This surge has outpaced ether’s (ETH) price jump of 40% over the same period.

Opinion

Crypto’s Outthinking Fintech’s Box
Crypto is so much more than fintech. In the latest Crypto Long & Short newsletter, CoinDesk’s head of research, Noelle Acheson, argues fintech is a tired word to describe financial innovation. While crypto creates new pathways for moving money around and generating returns, it’s also a data innovation and an innovation of authority, leading to new and revised ideas of what money is and can be. “Given the impact of crypto-based innovation on our understanding and application of financial concepts, surely we can come up with something better. Using a tired catch-all for something so significant is like trying to put a formidable force into a tidy bucket. 

Podcast

Known Unknowns
What is the future of decentralized exchanges in a regulatory environment shifting towards greater transaction monitoring and know-your-customer (KYC) constraints. CoinDesk’s Anna Baydakova sits down with executives and contributors to Hodl Hodl and Bisq – which eschew centralized custody – to discuss the responsibilities, risks and rewards of dealing in crypto without revealing your identity. 

Who won #CryptoTwitter? Related Stories

• First Mover: Crypto’s $35T Moment Could Come From Analog-World Stock Listings
• Blockchain Bites: OCC’s Crypto Letter, Eth 2.0’s ‘Official’ Testnet and Dinwiddie’s Tokenized Airball

Industrial-scale bitcoin mining is an extremely capital-intensive business. Debt financing can be an attractive way to raise the funds needed to purchase equipment without diluting ownership through equity issuance. But the mining industry is volatile and loans generally carry high interest rates and strict collateral requirements, making it a double-edged sword for those that borrow to expand. Case in point: Canadian bitcoin miner Bitfarms.

CoinDesk Research presents an in-depth look into Bitfarms. With over 29,000 ASIC miners spread across five facilities, Bitfarms is one of Canada’s largest bitcoin mining companies. Throughout 2019, the company quickly grew its overall hashrate, which was financed primarily through a $20 million loan from Dominion Capital. In this report, we examine Bitfarms’ financial position and evaluate its ability to pay down debt coming due in 2021.

Some takeaways:

• At its core, Bitfarms operates decent equipment at a respectable cost of electricity, resulting in positive operating cash flows.
• However, the company used high-interest-rate debt with large balloon payments to expand operations. Now, with over $20 million in financial obligations coming due by the end of 2021 coupled with declining revenue output per terahash, Bitfarms may struggle to pay off its debt.

Related: First Mover: Bitcoin Miners Find Upgrade Financing Aplenty, Even as Prices Languish

Read more: In Canada They’re ‘Essential,’ In Argentina They’re Shut Down: Bitcoin Miners Reckon With COVID-19

• Assuming there’s no significant jump in bitcoin prices, the Toronto-based Bitfarms will likely need to expand operations with efficient mining equipment within the next 12 months, which will require the company to raise additional capital.
• A list of covenants and restrictions from its loan, however, hampers the company’s ability to raise capital through equity and debt, leaving Bitfarms with very few options.

Read the full report here.

Related Stories

• Binance Pool Poised to Grab More Bitcoin Hashrate in Russia and Central Asia
• Bitcoin Mining Difficulty Sets New Record High 2 Months After Halving
• Bitcoin Miner Maker Canaan Drops 3 Directors in Possible Boardroom Coup

A director at the International Monetary Fund (IMF) thinks the private sector could bring value to the technology supporting central bank digital currencies (CBDCs), should they be adopted by nations.

• Tobias Adrian, a financial counselor and director of the IMF’s Monetary and Capital Markets Department, gave a keynote address last week at the “Building CBDC: A Race To Reality” conference, sponsored by blockchain software firm R3.
• Adrian offered two models for the provision of a CBDC, varying in how they would pair the private sector with central banks.
• The first model looked at synthetic CBDCs (sCBDC), which are backed by the liabilities of a central bank but issued with the aid of a private entity, such as a commercial bank.
• Adrian noted the private sector should be left to deal with customer due diligence, wallet design and currency distribution, while the central bank would be in charge of regulation and supervision.
• The second, “two-tiered,” model puts central banks in charge of the issuance of a CBDC and transaction settlement, with technology likely to be occasionally updated.
• As such, the sCBDC model would spur private sector-led innovation at a more “fundamental level,” he said.
• Such innovation “could be extremely valuable, given the pace of technological change, and given many central banks’ limited experience in providing retail services,” according to Adrian.
• However, there are several potential challenges to central banks partnering with private firms, including interoperability, unfair competition and payment system stability.
• Overall, Adrian said both models could offer an “especially liquid and safe payment instrument.”
• Adrian spoke at a time when central banks are more widely expressing a willingness to examine CBDCs, with the Bank of England, Bank of Japan and Sweden's Riksbank among those already exploring, if cautiously, the possibility of a future launch.
• The People’s Bank of China (PBOC) is currently taking center stage with its two-tier model, and already has its digital yuan moving to testing with commercial enterprises.

See also: Private Firms Can Boost Central Bank Digital Currencies, IMF Official Says

Related Stories

• Bitmain Spin-Off Launches Crypto Exchange to Go After Booming Options Market
• US Government Files Fresh Charges Against PlexCoin ICO Organizers
• FTX to Launch ‘Scalable’ Decentralized Exchange in Weeks
• MakerDAO Passes $1B Milestone in DeFi First

A1 Payment, a subsidiary of A1 Telekom Austria, said Monday users can now make payments using cryptocurrencies including bitcoin, ether and dash on its cashless payments app. 

• On its website, the firm said that regardless of the cryptocurrency used, payments would be converted to euros in real time so retailers would receive payment in fiat. 
  
• The addition of cryptocurrencies to A1’s payment platform will enable about 2,500 merchants to accept digital currencies. The moves follows A1’s decision last year to integrate services WeChat Pay and AliPay onto its platform. 
  
• Partly controlled by the Austrian state, A1 Telekom had announced a trial of cryptocurrency payments in a pilot program last year. That announcement noted that industries with close contact with tourists and business travelers were hurt by a backlog in the acceptance of digital currencies as travelers couldn’t pay with BTC, AliPay or WeChat Pay. 
  
• According to Reuters, A1 Telekom’s revenue declined by  2.4% to 1.1 billion euros in Q2. The report also said the firm plans to cut some of its planned investments for the year, including investment in 5G. 
  
• A1 Payments did not respond to a request seeking more information about cryptocurrencies on its digital payments network by press time. 

Related Stories

• Silvergate’s Bitcoin-Backed Lending Product Grew 80% in the Last Quarter
• Odds of Bitcoin Hitting Record High in 2020 Are (Slightly) Up, Options Data Suggests
• You Can Now Buy Hedera Hashgraph’s HBAR Token via Simplex
• First Mover: Bitcoin at Last Passes $10K, but Why Has It Struggled While Gold Shone?

Silvergate Bank continued to add a steady drip of crypto customers in the second quarter of 2020 but its issuance of bitcoin-collateralized loans grew by $10 million, outperforming the growth of its real estate loan book by 10x. 

According to its latest earnings report, released Monday morning, the bank’s traditional loan portfolio – a real estate–heavy loan book of about $1.1 billion – only increased by $1 million from the first quarter. Bitcoin-collateralized loans through the bank’s SEN Leverage product surged by $10 million in the first quarter.

The uptick from $12.5 million to $22.5 million represents 80% quarter-over-quarter growth for the product, which is part of the Silvergate Exchange Network (SEN).

Related: Odds of Bitcoin Hitting Record High in 2020 Are (Slightly) Up, Options Data Suggests

The publicly traded La Jolla, Calif.-based bank is one of the few U.S. banks willing to openly serve crypto-related businesses and has most of its deposits from the crypto sector. The bank went public on the New York Stock Exchange under the trading symbol SI in November. With $2.34 billion in total assets, Silvergate is less than 1% the size of JPMorgan Chase, a $3.1 trillion behemoth.

Key stats from the earnings report include:

• Activity on the SEN increased by 28% since last quarter to more than 40,000 transactions.
• The volume running over the SEN increased by 29% quarter-over-quarter to $22.4 billion.
• Silvergate reaped $2.4 million in total fee income from digital currency customers.
• The bank’s risk-based capital ratio – total capital to risk-based assets – fell by half a percentage point to 25.54% from 26.05% in the first quarter.

The bank continues to have a steady pipeline of more than 200 customers waiting to be onboarded, Silvergate CEO Alan Lane said in a press release.

Read more: Institutional Trading House ErisX Joins Silvergate Exchange Network

Related Stories

• First Mover: Bitcoin at Last Passes $10K, but Why Has It Struggled While Gold Shone?
• 85% of Italian Banks Are Exchanging Interbank Transfer Data on Corda
• Bitcoin Price Logs Two-Month High Above $10,000

The founders of PlexCoin have been hit with charges from the U.S. Department of Justice (DOJ), just a year after settling with the Securities and Exchange Commission (SEC).

• The DOJ said last week an Ohio grand jury indicted three figures in the PlexCoin initial coin offering (ICO) on conspiracy to commit both securities and wire fraud, as well as money laundering and one count of wire fraud.
• The DOJ alleges founder Dominic Lacroix, Yan Ouellet and Sabrina Paradis-Royer, from Quebec, Canada, made false statements including promising returns of over 1,345%.
• PlexCoin raised a total of $15 million from investors in 2017; the SEC stopped the sale with an emergency asset freeze in December of that year.
• Lacroix, Paradis-Royer and PlexCorp were all sued by the SEC for securities fraud in late 2017 and Lacroix had his assets frozen again in June 2018.
• Last August, the defendants agreed to each pay $1 million in penalties and not participate in a securities sale again; PlexCorp would also disgorge $4.56 million plus $350,000 in interest to the SEC.
• Lacroix served a two-month prison sentence in Canada for contempt of court in 2017.
• If found guilty, the DOJ’s indictment may well take PlexCoin’s remaining ICO funds.

See also: BitClave Search Engine Agrees to Pay Back $25M ICO in Settlement With SEC

Related Stories

• FTX to Launch ‘Scalable’ Decentralized Exchange in Weeks
• MakerDAO Passes $1B Milestone in DeFi First
• Ripple Exec Unveils P2P Payments Platform Using XRP
• Twitch Doubles Down on Crypto, Gives Subscribers 10% Discount

The likelihood of bitcoin challenging record highs by the end of the year may have have increased with the cryptocurrency’s violation of major price resistance – but don’t raise your hopes too high just yet.

• Bitcoin jumped above $10,300 on Sunday, breaching the resistance of a trendline falling from the December 2017 to June 2019 highs. 
• Following the bullish move, the options market now shows a 7% probability of bitcoin rising to the historical 2017 all-time high of $20,000 before year’s end, according to data from crypto derivatives analytics firm Skew. 
• The number had dropped to 4% a week ago with short-term implied volatility, a gauge of the market’s expectations for bitcoin’s future volatility, falling to record lows.
• “Options market is repricing quickly the probability of [new highs] by the end of the year, from 4 to 7% over the last week,” Skew CEO Emmanuel Goh told CoinDesk in a Telegram Chat.

• However, the odds remain below 10%, meaning traders believe a rally to $20,000 is unlikely to happen this year.
• That’s because market participants “as yet remain unconvinced that this short-term rise in volatility will extend into year-end,” said Shaun Phoon, a trader at QCP Capital.
• The one-month implied volatility metric – the market’s expectation of how volatile bitcoin will be over the next 30 days – has risen from 48% to 64% with Sunday’s price breakout.
• However, longer-term price volatility expectations remain depressed.
• Six-month implied volatility has registered a meager rise from 65% to 68% over the past three days and remains below the lifetime average of 76%.
• Implied volatility has a positive impact on option probabilities: that is, when implied volatility rises, bitcoin is more likely to reach a certain level before a specific date.
• Bitcoin’s price is currently trading at $10,290, representing over 3% gains on the day.

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

Related Stories

• Silvergate’s Bitcoin-Backed Lending Product Grew 80% in the Last Quarter
• First Mover: Bitcoin at Last Passes $10K, but Why Has It Struggled While Gold Shone?
• Bitcoin Price Logs Two-Month High Above $10,000
• Market Wrap: Bitcoin Near $9,600 as Gold Hits High, Uniswap Liquidity Over $100M

Distributed public ledger Hedera Hashgraph’s native cryptocurrency HBAR is now available for purchase through Israel-based global fiat payment processor Simplex, the companies announced Monday. 

• In a statement, Simplex said the integration will enable users to buy and sell HBAR with a credit or debit card using its global platform. 
• Simplex is an European Union-licensed financial institution that provides global fiat infrastructure to enable secure credit card processing for the crypto industry. It already supports a host of cryptocurrencies on its platform including bitcoin (BTC), ether (ETH), bitcoin cash (BCH), XRP and litecoin (LTC). 
• Hedera Hashgraph launched its network in September and has since processed over 200 million transactions worldwide, the companies said.
• Hedera had a shaky start; the HBAR token crashed a month following its launch, and the company had to withhold tokens from investors in an effort to stabilize price.  
• HBAR spiked earlier this year when Google announced it will be joining Hedera’s governing council, which includes other high-profile multinational firms including Boeing, Avery Dennison, IBM and Tata Communications. 
• Earlier this year, Binance integrated Simplex into its platform to expand the range of fiat currencies users can use to purchase crypto. 

Also read: Australian Payment Card Company to Trial Micropayments Using Hedera Hashgraph

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BCB Group, which provides payments services in Europe to institutional players such as Bitstamp, Coinbase, Galaxy and Kraken, is launching an instant settlement network for cash and crypto.

Announced Monday, the BCB Liquidity Interchange Network Consortium (BLINC) is a real-time gross settlement system that aims to do for euros, British pounds and Swiss francs what the likes of the Silvergate Exchange Network (SEN) does in the U.S. for big crypto clients transacting in U.S. dollars.

BLINC is now emerging from a pilot stage, going live with Luxembourg-based exchange Bitstamp as its founding partner alongside some 15 other BCB clients. More exchanges are expected to be added in the coming weeks. 

Related: PayPal, Venmo to Roll Out Crypto Buying and Selling: Sources

“BLINC is a real-time, 24/7, fiat settlement network, made possible because the reach of BCB’s client network is now very wide in the U.K. and Europe,” said Oliver von Landsberg Sadie, CEO of BCB Group. 

As a non-stop clearing and settlement ecosystem, BLINC members no longer need to use conventional payment schemes such as SWIFT and SEPA, the Single Euro Payments Area for the European Union, which can be slow moving and only operate during office hours.

Sophisticated crypto traders and market makers looking for arbitrage opportunities can be stymied because it takes a day to load their account with euros, said Landsberg Sadie. And while the U.K. has an efficient Faster Payments Scheme, it’s limited to payments of $250,000, which is quite small when it comes to institutional crypto, he said. 

“If you’re a market trader in crypto and need to settle half a million pounds quickly, you’re stuck. If it’s at night, or even during the day, you’re not going to get that kind of instant settlement,” said Landsberg Sadie.

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

“BLINC is an appealing proposition for Bitstamp as it enables us to offer our clients a frictionless mechanism to fund their trading accounts,” said Chris Aruliah, VP of Banking relations, of Bitstamp in a statement. “The ability to move money instantly in the fast-moving crypto markets is crucial and gives our clients an edge when trading on the Bitstamp platform.”

BLINC is also integrated with a token issuance and settlement system called the Digital Asset Shared Ledger (DASL), built on top of R3’s public Corda Network by a team of ex-RBS blockchain coders known as LAB577.

Behind the scenes, BCB has a banking relationship in the U.K. with ClearBank, which also stepped in to take over banking for Coinbase when Barclays chose to end that relationship around this time last year.

Without naming names, Landsberg Sadie said BCB has a number of other partner banks in Europe and Switzerland. 

The barriers stopping banks coming close to dealing in crypto are gradually being removed, with some regulatory clarity emerging last week in the form of a letter from Office of the Comptroller of the Currency (OCC) allowing nationally chartered banks in the U.S. to provide custody services for cryptocurrencies.

“I think it may take a little while for this to materialize,” said Landsberg Sadie, discussing the OCC’s letter, “but it’s very encouraging, particularly when paired with the news we saw a couple of months ago that JPMorgan would be providing banking services to some U.S. exchanges.” 

Related Stories

• Bitstamp
• Market Wrap: Bitcoin Rebounds to $9,500 After Scary Sell-Off

Bitcoin has at last broken convincingly above the all-important $10,000 mark, but why has it struggled so much in recent months when gold has soared to an all-time high?

Earlier this year, digital-asset investors were aflutter over the trillions of dollars of central bank money injections in response to the coronavirus-induced global recession. The bet was the flood of liquidity would eventually lead to inflation, in turn driving up prices for both gold, historically seen as a hedge against currency debasement, and bitcoin, sometimes referred to as “digital gold” or “Gold 2.0” due to its scarce supply. 

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: Odds of Bitcoin Hitting Record High in 2020 Are (Slightly) Up, Options Data Suggests

Yet, since the end of April, when the coronavirus-related market gyrations subsided, bitcoin has lagged behind gold, frustrating the cryptocurrency’s investment narrative.

Gold prices have surged during the period, last week topping the all-time closing high of $1,891.90 an ounce reached in 2011, and are now trading at a record intraday high of $1,940 per ounce. The previous lifetime high of $1,921 was reached in September 2011.

Bitcoin, meanwhile, has been stuck in a narrow trading range since April and only just last night clambered to $10,200, a level not far off half of its all-time-high of $20,000 reached in 2017. 

According to a handful of investors and analysts interviewed by CoinDesk, bitcoin is far less mature than gold and thus may lack a credible history as an inflation hedge. So it’s struggled to draw hedging bids despite a recent uptick in inflation expectations.

Related: Bitcoin Price Logs Two-Month High Above $10,000

“Bitcoin’s inflation sensitivity hasn’t been tested in the last 10 years as there hasn’t been a sustained rise in price pressures.” Charlie Morris, founder of the investment firm ByteTree Asset Management, said in an audio interview via WhatsApp. 

It’s a shift in tone from a few months ago, when the bullish hype over bitcoin was so ubiquitous it crowded out any reservations about bitcoin’s limited trading history or market size. Suddenly, there’s no shortage of caveats to explain why bitcoin hasn’t reflected the inflation expectations that seem to be buoying gold.

To add insult to injury, other corners of cryptocurrency markets are white-hot: ether, the second-largest cryptocurrency after bitcoin, has gained some 150% this year. Bitcoin is up 42% in 2020. 

“Bitcoin has its own microeconomics very unique to crypto, including mining difficulty cycles, the changing regulatory environment and other factors that have little to do with inflation,” Richard Rosenblum, co-founder of GSR, told First Mover in a Telegram chat.

U.S. inflation expectations, as implied in the market for the U.S. 10-year breakeven inflation rate, have risen to 1.51%, the highest since February. They’ve climbed from 0.5% on March 19, as the Federal Reserve’s balance sheet expanded by more than $3 trillion.

Bitcoin initially rose alongside the uptick in inflation expectations. The move from $3,867 to $10,000 seen in the two months to mid-May was likely fueled by the bullish narrative surrounding the May 12 halving. Since then, the cryptocurrency was locked in the range of $9,000 to $10,000 up until July 26, while inflation expectations continued to rise.

Gold, however, has drawn a consistent bid over the past four months, given its long history of serving as an inflation hedge, according to Joseph Trevisani, an analyst at FXStreet and former proprietary trader at Credit Suisse.

The yellow metal rose by an average 15% in real or inflation adjusted terms in the eight years between 1974 to 2008 when annual U.S. inflation, as measured by the consumer price index, was above 5%, according to the Journal of Wealth Management. Gold more than doubled to about $1,920 from $850 in the three years following the mid-2008 crash, as the Fed’s emergency liquidity injections pushed inflation expectations higher.

“Gold’s history as an inflation hedge is well known,” Trevisani told First Mover in a Slack chat. “Gold is a long-standing hedge against catastrophe. Bitcoin is not, or at least it is unproven.”

Indeed, bitcoin’s entire existence, since it was launched in early 2009, has taken place in a low inflation environment. The 10-year breakeven inflation rate fell from 1.6% to -0.62% in the two years through 2013, and it remained stuck in a range between 0% and 0.8% from 2014 to January 2020. That’s well below the Fed’s 2% target for annual inflation.

The gold market, at around $10 trillion, has sufficient depth and liquidity to absorb large hedging-related or haven inflows. Bitcoin’s market capitalization is comparatively paltry, at $189 billion.

“Gold is like a tanker, while bitcoin is much more like a speedboat,” Gavin Smith, CEO of the cryptocurrency hedge fund Panxora, told First Mover in a telephone interview. “However, looking out three to five years, you’ll see the trajectory of both, and you’ll say both were an inflation play.”

Another factor stopping institutions and other traditional investors from making big portfolio allocations to bitcoin is a belief that its price action and network fundamentals aren’t as intimately connected as gold to the fate of the global economy.

“Bitcoin is interesting but I think that it tells us little about anything in the real world,” Marc Chandler, a former chief currency strategist for the giant British bank HSBC, told First Mover in a LinkedIn chat.

Central banks, which don’t invest in bitcoin, often buy gold in times of stress, and they were net buyers during the virus-stricken first quarter, according to the data source Gold Hub.

“Nothing is up quite as much as gold,” Mati Greenspan, founder of the cryptocurrency and foreign-exchange analysis firm Quantum Economics, wrote Friday in an email to subscribers. “The absence of a major bitcoin rally is also a bit puzzling, especially as one of the leading narratives for the current action in gold is the lack of confidence in central banks. Possibly it will join in later on. I guess we’ll see.”

After bitcoin’s rise on Sunday, only time will tell if that process has just started.

Tweet of the day Bitcoin watch

BTC: Price: $10,241 (BPI) | 24-Hr High: $10,334 | 24-Hr Low: $9,829

Trend: Bitcoin may be on the cusp of major bull run, having cleared a major resistance at the weekend, according to one analyst. 

The cryptocurrency jumped over 8% in the seven days to July 26, violating a trendline connecting the December 2017 and July 2019 highs. “This could be the real deal, we could be on the first serious step towards a bull run of epic magnitude,” popular analyst Lark Davis tweeted early on Monday. 

Some traders are now betting on a move to $20,000 over the next four months. Indeed, the breakout above the 2.5-year-long falling trendline is a major bullish development. However, BTC is yet to cross above resistance at $10,400 – a horizontal resistance line drawn linking the February and June highs. 

The cryptocurrency has failed multiple times to keep gains above $10,000 over the last 12 months. As such, the bulls would be better off observing caution as long as prices are held below $10,400. 

A break above that level, if confirmed, would open the doors to $11,000. On the other hand, a failure to establish a strong foothold above $10,000 could invite stronger selling pressure. 

At press time, bitcoin is changing hands near $10,241, representing a 3% gain on the day. 

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Established derivatives player FTX is building an alternative exchange for the growing decentralized finance (DeFi) space on top of highly-scalable chain Solana

• Dubbed Serum, the initiative claims to offer a scalable and liquid decentralized exchange (DEX) for derivatives, solving some of the structural vulnerabilities and limitations in the existing DeFi space.
• Solana is said to be able to process 50,000 transactions per second, compared to Ethereum, which can currently handle 15.
• Being highly scalable means Serum can run an orderbook onchain – improving the exchange’s liquidity, according to the white paper.
• Serum will be fully interoperable with Ethereum so it can tap into the existing DeFi space, which saw its market cap break the $4 billion boundary over the weekend.
• The exchange will also offer a bitcoin proxy token, allowing users to trade the largest cryptocurrency’s value on the Solana blockchain.
• Other projects like Kin, which started out on Ethereum, have looked at migrating over to Solana because of the better scaling potential.
• Since Saturday, the price of Solana’s native “SOL” token has almost doubled from $0.99 to $1.90, according to CoinGecko.
• Parallel to Serum, FTX announced it had listed SOL on its centralized exchange.
• An FTX spokesperson told CoinDesk it’ll be the users who decide the products traded on Serum.
• They added that Serum could go live sometime in the next couple of weeks.

See also: FTX Is Building Lots of Sophisticated Markets Few Traders Use

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The total value of cryptocurrency locked in decentralized finance’s (DeFi) oldest project has surpassed $1 billion for the first time.

• MakerDAO, which is also the sector’s largest protocol by a margin of $271 million locked in, crossed above $1 billion at around 18:00 UTC on Sunday, according to analytics aggregator DeFi Pulse.
• The milestone, which represents how much money has been committed and not earned, demonstrates a rising interest in MakerDao and DeFi projects alike.
• Collateral, locked up in the form of ether (ETH) or basic attention token (BAT), is used on Maker’s protocol to undertake lending and generate DAI as debt against collateral.
• Saying the news marked a “big day” for MakerDAO, David Freuden, co-author of “DAO: A Decentralized Governance Layer for the Internet of Value,” told CoinDesk that innovation in DeFi will increasingly challenge the premise of centralized finance.   
• Maker’s dominance over other projects in the sector stands at 27.1%, with the highly valued Compound protocol coming in second place at around $729 million total value locked up.
• The DeFi industry has seen a significant rise in total value locked up with the sector’s $1 billion milestone in all protocols having been surpassed on Feb. 7, now up by more than $3.3 billion at time of writing.

See also: Mempool Manipulation Enabled Theft of $8M in MakerDAO Collateral on Black Thursday: Report

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The total value of cryptocurrency locked in decentralized finance’s (DeFi) oldest project has surpassed $1 billion for the first time.

• MakerDAO, which is also the sector’s largest protocol by a margin of $271 million locked in, crossed above $1 billion at around 18:00 UTC on Sunday, according to analytics aggregator DeFi Pulse.
• The milestone, which represents how much money has been committed and not earned, demonstrates a rising interest in MakerDao and DeFi projects alike.
• Collateral, locked up in the form of ether (ETH) or basic attention token (BAT), is used on Maker’s protocol to undertake lending and generate DAI as debt against collateral.
• Saying the news marked a “big day” for MakerDAO, David Freuden, co-author of “DAO: A Decentralized Governance Layer for the Internet of Value,” told CoinDesk that innovation in DeFi will increasingly challenge the premise of centralized finance.   
• Maker’s dominance over other projects in the sector stands at 27.1%, with the highly valued Compound protocol coming in second place at around $729 million total value locked up.
• The DeFi industry has seen a significant rise in total value locked up with the sector’s $1 billion milestone in all protocols having been surpassed on February 7, now up by more than $3.3 billion at time of writing.

See also: Mempool Manipulation Enabled Theft of $8M in MakerDAO Collateral on Black Thursday: Report

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• FTX to Launch ‘Scalable’ Decentralized Exchange in Weeks
• Ripple Exec Unveils P2P Payments Platform Using XRP
• Twitch Doubles Down on Crypto, Gives Subscribers 10% Discount
• Ethereum as Lifestyle Brand: What Unicorns and Rainbows Are Really About

A Ripple executive has unveiled a payments platform based on XRP that will work in popular web browsers.

• Craig DeWitt, the blockchain payment infrastructure firm’s director of product, made the announcement via Twitter on Sunday claiming “anyone can use it” to purchase physical goods online using the XRP cryptocurrency.
• Payburner, a personal project of Dewitt’s, is a non-custodial XRP wallet designed to operate as a plug-in within the Chrome and Brave web browsers.
• DeWitt told CoinDesk in direct messages that the plug-in is an example of a “growing XRP ecosystem” that leverages Xpring.
• Xpring is a Ripple project that provides tools and funding for developers and startups working with XRP.
• Payburner, currently in beta release, allows users to send and receive payments worldwide and instantaneously, Dewitt said.
• The beta version builds on an earlier Payburner plug-in by integrating PayID, an identifier for payments used by entities such as banks.
• Payment requests with encrypted peer-to-peer (P2P) messaging and PayID network searches are some of the new features in the beta release.
• DeWitt said Payburner is expected to make a profit by charging a 1% merchant fee on XRP e-commerce sales.

See also: Ripple Engineers Publish Design for Private Transactions on XRP Ledger

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Twitch is giving subscribers a 10% discount if they pay using cryptocurrencies.

• The Amazon-owned company announced the deal on Saturday; users can pay in bitcoin, ether, bitcoin cash, or litecoin.
• A live streaming platform popular with video gamers, Twitch had around 3.8 million broadcasters in Q1 2020 and around 1.44 million concurrent users as of March 2020.
• Twitch first introduced a cryptocurrency payment option in 2014 but quietly removed it in Q1 2019; it brought it back again a few months later in June.
• Offering a discount suggests the platform is encouraging its subscribers to use cryptocurrencies for goods and services, rather than just as a speculative investment.
• The company uses U.S.-based BitPay to process its crypto payments.

See also: YouTube Seeks to Dismiss Ripple Lawsuit Over XRP Giveaway Scams

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• Ripple Exec Unveils P2P Payments Platform Using XRP
• Ukraine’s Digital Ministry to Trace Suspicious Crypto Using Crystal Blockchain Software
• Malaysian Watchdog Plans to Extend Crypto Regulations to Wallet Providers

The daily income earned by Ethereum miners has soared by over 60% in a month, according to data tracked by Ethereum mining pool Sparkpool.

The surge in daily profit from Ethereum mining surge has also outpaced ether‘s (ETH) price jump of 40% over the same period.

The profitability rise comes thanks to soaring transaction fees on the network, as well as relatively slow growth in competition from other miners.

Related: Ethereum Developers Consider New Fee Model as Gas Costs Climb

Sparkpool’s data shows Ethereum miners’ daily income was around $1.85 per 100 megahashes second (MH/s) on the network on June 27. Over the past month, and the last two weeks in particular, this has jumped by 60% and reached as high as $3.27 on July 25. The metric has since dropped back to around $3.

During the same period, ether’s price has gone up by nearly 40%, from $229 on June 27 to $327 at time of writing, the highest price point for over a year.

Transaction fees on the network, which form part of a miner’s daily revenue, have reached a two-year high as the hype around decentralized finance (DeFi) brought a spike in network activities.

However, the total computing power competing on the world’s second largest blockchain network by market capitalization has remained steady around 190 petahashes per second, blockchain explorer Etherscan shows.

Related: Thousands of These Computers Were Mining Cryptocurrency. Now They’re Working on Coronavirus Research

Read more: DeFi Hype Has Sent Ethereum Fees Soaring to 2-Year High: Coin Metrics

In fact, data from Bitinfocharts indicates daily mining revenue on Ethereum had remained below $2 per 100 MH/s during the first quarter of the year and dropped to $1 per 100 MH/s following the crypto market crash on March 12. But in the four months since, daily mining revenue has tripled.

Currently, some state-of-art Ethereum mining equipment, such as InnoSilicon’s A10 Pro with a computing power of 485 megahashes per second (MH/s), can generate $12.92 in daily revenue at Ethereum’s current price and mining difficulty.

With an electricity of cost of $0.03 per kilowatt-hour (kWh), one A10 Pro machine is able to bring home a daily net profit of nearly $12, according to mining pool F2Pool’s miner profitability tracker.

Profit at that level exceeds some top-of-the-line Bitcoin miners by almost 100%, although bitcoin’s price has jumped above $10,000 over the weekend for the first time since early June. The sudden increase came after weeks of low price volatility that kept the cryptocurrency stuck between $9,000 and $9,500.

However, Bitcoin’s mining difficulty is still around its all-time-high. As such, even the most efficient Bitcoin miners, like MicroBT’s WhatsMiner M30S++ and Bitmain’s AntMiner S19 Pro, are generating a daily revenue of $9 per unit.

At an electricity cost of $0.03 per kWh, that would provide a daily profit of around $6.50 at bitcoin’s current price and difficulty, data from mining pool PoolIn shows. In general, industrial electricity cost for crypto mining can range between $0.03 to $0.06 per kWh.

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The daily income earned by Ethereum miners has soared by over 60% in a month, shows data tracked by Ethereum mining pool Sparkpool.

The surge in daily profit from Ethereum mining surge has also outpaced ether’s (ETH) price jump of 40% over the same period.

The profitability rise comes thanks to soaring transaction fees on the network, as well as relatively slow growth in competition from other miners.

Related: Ethereum Developers Consider New Fee Model as Gas Costs Climb

Sparkpool’s data shows that Ethereum miners’ daily income was around $1.85 per 100 megahashes second (MH/s) on the network on June 27. Over the past month, and the last two weeks in particular, this has jumped by 60% and reached as high as $3.27 on July 25. The metric has since dropped back to around $3.

During the same period, ether’s price has gone up by nearly 40%, from $229 on June 27 to $327 at time of writing – the highest price point for over a year.

Transaction fees on the network, which form part of a miner’s daily revenue, have reached a two-year high as the hype around decentralized finance (DeFi) brought a spike in network activities.

However, the total computing power competing on the world’s second largest blockchain network by market capitalization has remained steady around 190 petahashes per second, blockchain explorer Etherscan shows.

Related: Thousands of These Computers Were Mining Cryptocurrency. Now They’re Working on Coronavirus Research

Read more: DeFi Hype Has Sent Ethereum Fees Soaring to 2-Year High: Coin Metrics

In fact, data from Bitinfocharts indicates that daily mining revenue on Ethereum had remained below $2 per 100 MH/s during the first quarter of the year and dropped to $1 per 100 MH/s following the crypto market crash on March 12. But in the four months since, daily mining revenue has tripled.

Currently, some state-of-art Ethereum mining equipment, such as InnoSilicon’s A10 Pro with a computing power of 485 megahashes per second (MH/s), can generate $12.92 in daily revenue at Ethereum’s current price and mining difficulty.

With an electricity of cost of $0.03 per kilowatt-hour (kWh), one A10 Pro machine is able to bring home a daily net profit of nearly $12, according to mining pool F2Pool’s miner profitability tracker.

Profit at that level exceeds some top-of-the-line Bitcoin miners by almost 100%, although bitcoin’s price has jumped above $10,000 over the weekend for the first time since early June. The sudden increase came after weeks of low price volatility that kept the cryptocurrency stuck between $9,000 and $9,500.

However, Bitcoin’s mining difficulty is still around its all-time-high. As such, even the most efficient Bitcoin miners, like MicroBT’s WhatsMiner M30S++ and Bitmain’s AntMiner S19 Pro, are generating a daily revenue of $9 per unit.

At an electricity cost of $0.03 per kWh, that would provide a daily profit of around $6.50 at bitcoin’s current price and difficulty, data from mining pool PoolIn shows. In general, industrial electricity cost for crypto mining can range between $0.03 to $0.06 per kWh.

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• Ethereum Miners’ ETH Holdings Near Record Highs
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