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Bitcoiners, already rocked by this year’s coronavirus-inflicted turbulence, face a fresh source of volatility as the market heads into the second half of 2020: the U.S. presidential elections. 

According to Deutsche Bank, Germany’s biggest lender, a reelection victory by President Donald Trump could threaten the U.S. dollar’s century-long reign as the world’s de facto reserve currency. 

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Related: Bitcoin Rises in Line With Stocks After Dip Below $9K

In a July 1 report, Deutsche Bank foreign-exchange analysts wrote that Trump, a Republican, has shaken up “policy orthodoxies and institutions” during this first term. In contrast, former Vice President Joe Biden, the presumptive Democratic nominee, would likely pursue “policies that are more predictable and mainstream, with traditional U.S. alliances valued.”

A Biden win could “help support the post-World-War-II financial architecture,” including multilateral organizations like the Group of Seven, International Monetary Fund, World Bank, World Trade Organization and North Atlantic Treaty Organization, according to Deutsche Bank.

That system propelled the U.S. tender to a dominant role in global foreign-exchange markets. The dollar is the primary currency for international payments, a staple of central-bank reserves and the price denomination for commodities from gold to oil as well as cryptocurrencies like bitcoin.

“It is plausible that President Trump can do a great deal more damage to the U.S. reserve status in a second term, and as long as Biden is prudent with his choice of Treasury Secretary and provides multilateral global leadership, the USD’s reserve status is in a safer pair of hands,” the analysts wrote. 

Related: Bitcoin’s Price Correlation With S&P 500 Hits Record Highs

The dollar’s reserve status is a crucial factor in the bitcoin market, since the cryptocurrency is seen by many investors as “portfolio insurance on broad-based currency debasement,” as Delphi Digital analyst Kevin Kelly phrased it in a report last week. And dollar-linked tokens known as stablecoins have become an increasingly common means of moving money around in fast-growing digital-asset markets. 

The dollar has seen little erosion of its dominance so far in 2020, even as the Federal Reserve has injected about $3 trillion of freshly created money into global financial markets. That figure represents a 67% increase since Jan. 1 in the total amount of money previously created by the U.S. central bank. The U.S. Dollar Index, which tracks its value against a basket of major currencies like the euro, yen and British pound, is up 0.7% on the year.  

While a Trump win might be negative for the dollar in the long term, it’s probably positive in the short term, according to Deutsche Bank. That’s partly because Biden would be more likely to reverse the tax cuts that Trump pushed for during his first term, and “fiscal flexibility in the short-term is more constructive for the USD, in so much as fiscal capacity relieves some of the burden from monetary policy,” the analysts wrote. 

Trump, who has made the economy a centerpiece of his presidency, has consistently pushed for stimulus over the past four years. He campaigned in 2016 on a promise of tax cuts and delivered in late 2017 with a $1.5 trillion fiscal package, pledging that the deal would produce annual increases in gross domestic product of 3%. As the promised growth failed to appear for two straight years, he pressed the Federal Reserve for interest-rate cuts, and the U.S. central bank obliged. 

This year, as the coronavirus ushered in a recession, Trump signed a $2 trillion relief bill into law, and his administration has applauded the economic benefits of the Fed’s trillions of dollars of emergency loans and monetary stimulus.

“I’m getting more and more happy with him,” Trump said of Fed Chair Jerome Powell, during an interview last week with Fox Business Network. “He’s had to liquefy a little bit. Let us liquefy. Let the economy, I mean – put out that money that you need.”

Patrick Tan, CEO of Novum Alpha, which offers digital-asset investment products, wrote last week in a Medium post that there is currently “limited risk of the dollar losing its gravitational pull, but in the long run this becomes less clear.” 

Trump has often stated his general preference for a weaker dollar, which tends to improve the competitiveness of U.S. exports, though often at the expense of higher domestic consumer prices. 

If the Deutsche Bank analysts are right, a Trump victory in November could mean the world eventually gets the weaker dollar he says he wants.

BTC: Price: $9,200 (BPI) | 24-Hr High: $9,239 | 24-Hr Low: $8,919

Trend: Bitcoin is trading in the green near $9,200 on Monday. However, the immediate bias remains neutral with prices trapped in a narrow range of $8,800 to $9,300 for the tenth day running. 

The consolidation could end with a price breakout as bullish signs have emerged on technical charts. To start with, multiple daily candles with long lower wicks created over the last 10 days indicate bearish pressures are waning. 

A similar sentiment is being echoed by the higher lows on the daily chart MACD histogram, an indicator used to identify trend strength and trend changes. Meanwhile, the 14-day relative strength index (RSI) is looking to breach a two-month descending trendline in favor of the bulls. 

What’s more, the overall bullish structure of higher lows and higher highs created in the two months to mid-May is still valid. 

A range breakout, if confirmed, would open the doors for a rally to $10,000. Acceptance above that level would signal a resumption of the broader uptrend from lows under $4,000 observed in March. 

Alternatively, a break below $8,800 would expose the higher low support at $8,630 created on May 27. A close (midnight, UTC) below that level would invalidate the overall bullish trend and shift risk in favor of deeper losses. 

• Market Wrap: Bitcoin Briefly Breaks Below $9K, but Markets Remain Comatose
• Blockchain Bites: BlockFi’s Revenue, DEX Volume and a Wallet Bug

Bitcoin’s positive correlation with stocks continues Monday, with the cryptocurrency drawing bids alongside gains in global equities. 

As of 09:35 UTC, the leading cryptocurrency by market value is trading at $9,190, representing a 1.4% gain on a 24-hour basis, according to CoinDesk’s Bitcoin Price Index. 

Meanwhile, major European equity indices are up at least 1.5% each, following a 4% rise in mainland Chinese stocks seen during the Asian trading hours. Futures tied to the S&P 500 are also up over 1%, according to data source Investing.com. 

Related: First Mover: As Bitcoiners Watch Dollar, Deutsche Sees Trump Win Hurting Reserve Status

Equities are flashing green despite a worrying increase in coronavirus cases in the U.S. and other parts of the world. According to CNBC, investors are cheering the progress of potential coronavirus drugs. On Friday, the European Commission moved to grant conditional approval for U.S.-based Gilead’s antiviral drug remedesivir to be used in the European Union. 

Bitcoin fell below the psychological support of $9,000 on Sunday, validating bearish lower highs at $10,000 and $9,800 created on June 10 and June 23, respectively.

In addition, momentum indicators like on-balance volume (OBV) were signaling weakness, as noted by popular trader NebraskanGooner Sunday. As such, the cryptocurrency looked set for a deeper loss. 

However, selling pressure ran out of steam near $8,900 around 06:15 a.m. Tokyo time, as U.S. stock futures rose and bitcoin prices charted a quick move back above $9,000. The cryptocurrency would have faced stronger chart-driven selling had prices established a foothold below that psychological support. 

Related: Search for Yield Drives Ether’s Put-Call Ratio to One-Year High

So, the uptick in stocks looks to have saved the day for the bitcoin bulls. The cryptocurrency’s positive correlation with stocks reached record highs last week.

Also read: Bitcoin’s Price Correlation With S&P 500 Hits Record Highs

Bitcoin’s positive correlation with stocks makes it vulnerable to bouts of risk aversion in traditional markets. The equity markets could soon come under pressure, dragging bitcoin lower, if the U.S. Federal Reserve fails to appease equity markets with additional stimulus. 

According to analysts at JPMorgan, the U.S. money markets are signaling the need for further monetary and/or fiscal policy. “If the additional stimulus is not delivered, then the money market curve inversion could worsen, eventually becoming a more problematic signal for equity and risky markets going forward,” said the bank’s analysts. 

The Fed seldom disappoints markets. The central bank has already expanded its balance sheet by over $3 trillion in the past 3.5 months and will likely add more, if deemed necessary. 

Bitcoin has witnessed minimal movement over the past nine days, with upside capped around $9,300 and downside restricted near $8,830. 

Notably, the trading range narrowed to $395 last week. That’s the smallest weekly trading range since the last week of March 2019.

A prolonged period of consolidation often ends with a big move to either side. For instance, the cryptocurrency jumped 26% in the first week of April 2019, having witnessed low-volatility consolidation in the preceding five weeks. 

Disclosure: The author holds no crypto assets currently.

• Bitcoin’s Price Correlation With S&P 500 Hits Record Highs
• Market Wrap: Bitcoin Briefly Breaks Below $9K, but Markets Remain Comatose

Blockchain startup Fantom has been given the green light to start tracking medicinal drugs in Afghanistan to help stem the country’s counterfeiting problem.

• After a signing ceremony with the Afghan Ministry of Health and several pharmaceutical distributors last month, the startup has unveiled details of its Smart Medicine pilot project.
• The project aims to keep track of pharmaceutical drugs traveling along the supply chain in order to stem the distribution of fake products caused by a lack of appropriate checks.
• Being able to verify the authenticity of medicines is vital in preventing counterfeit products, Michael Kong, CIO of Fantom, said in a Telegram interview with CoinDesk.
• Several pharmaceutical companies are involved in the project including Mumbai-listed Indian company Bliss GVS, Afghanistan-based Royal Star and Indian manufacturer Nabros Pharma.
• Fantom will supply labels to trace 80,000 products created by Nabros and Bliss GVS over Fantom’s smart contract platform and Opera blockchain network.
• The products will cover four areas of pharmaceuticals including 50,000 hand sanitizers, 10,000 joint creams, 10,000 Kofol chewable tablets and 10,000 Diacare foot creams.
• The pilot will demonstrate how scanning product data to a blockchain can create an immutable record, Kong said.
• The startup will design shipping labels that are to be scanned by Royal Star at every stage of the distribution process.
• Labels can be checked on Fantom’s platform and will contain a unique hash code that can be publicly verified on-chain and includes 11 data points.
• These data points will be able to verify the product name, batch number, barcode number, expiry date, production date, a U.S. Food and Drug Administration (FDA) number, producer’s name, location of scan, the status of the scan, and time and date of a scan. 
• The project is also collaborating with Nigeria-based blockchain startup Chekkit which is providing a QR code scanning system in the audit trail to guarantee products are not tampered with.
• Counterfeit drugs are responsible for the deaths of thousands of people every year, with inferior or useless products ranging from cancer treatment to antimalarial pills.
• One in 10 medical products in developing countries is substandard or falsified, according to the World Health Organization (WHO).
• The announcement of the pilot follows on from a formal partnership agreed between Fantom and the Afghan government to establish a blockchain initiative for public health last November.
• The startup was given a mandate to invent a solution for detecting counterfeit drugs, Kong confirmed.

See also: VeChain to Develop Drug-Tracing Platform for Pharma Giant Bayer

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Cardano developer house IOHK has made a six-figure investment into Wave Financial – its partner for a new $20 million Cardano fund.

• Jenny Corlett, an external spokesperson for IOHK, confirmed the investment had just been made, but declined to comment on the equity arrangement and any plans to make further commits into Wave.
• CoinDesk understands the sum isn’t big enough for IOHK, a Hong Kong-based company, to have significant sway over Wave’s corporate governance.
• Charles Hoskinson, IOHK’s CEO, will become an advisor to Wave Financial as part of the deal.
• IOHK invested $10 million into a joint “cFund” to support startups and early-stage businesses working on Cardano and other IOHK tech initiatives last week.
• Wave Financial, a private company based in Los Angeles and London, said it would raise the other $10 million from external investors.

See also: Coinbase Custody to Support Secure Cardano Staking This Year

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Willie Breedt, CEO of cryptocurrency investment firm VaultAge Solutions, has been officially declared bankrupt while on the run from angry investors.

• As reported by News24 on Monday, Breedt – who is suspected of defrauding over 2,000 investors – was handed a sequestration order by the Gauteng High Court in Pretoria, on Friday.
• A sequestration order is an order delivered by a court which forces a debtor into bankruptcy.
• The order comes after Breedt went into hiding from upset investors who were seeking the return of around 277 million South African rand ($16.3 million) they had placed with VaultAge for investment in cryptocurrencies.
• Investors assigned debt collectors to try and recover their losses.
• Breedt had told police he was being intimidated before he disappeared.
• He was discovered by investigators hiding at a guest house in the Silver Lakes Estate in Pretoria.
• After the court order was granted, a raid was conducted on the Silver Lakes premises by the sheriff of the court, South African police, an organized crime unit called the Hawks, and a team of forensic investigators specializing in crypto crime.
• A number of electronic devices were seized including a laptop and a Ledger Nano hardware wallet – a device for storing cryptocurrencies.
• The South African Reserve Bank, the country’s central bank, has now assigned PricewaterhouseCoopers to investigate VaultAge Solutions and agents involved in selling cryptocurrencies for the now-defunct company.
• The sequestration order resulted from a court application from one of the firm’s biggest investors, Simon Dix, who said he is owed 7.5 million rand (almost half a million U.S. dollars) by the firm.

See also: Singapore Man Fined $72K for Promoting Crypto Ponzi OneCoin

• IOHK Invests Six-Figure Sum Into Crypto Asset Manager Wave Financial
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• Swiss Equity Firm Makes First Crypto Investment With SPiCE VC Stake
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Travala.com, a Binance-backed online travel agency (OTA), is adding support for Expedia bookings in a partnership that brings bitcoin payments back to the travel giant’s properties for the first time since 2018.

• The Australia-based booking platform plugged into Expedia Group Partner Services’ “Rapid API” and its 700,000 listed hotels on Monday.
• Travala.com users can pay for Expedia listings in over 30 cryptocurrencies including bitcoin, which Expedia had accepted before shelving the option in June 2018.
• “Their booking flow isn’t built for [crypto] like ours” is, Travala.com CEO Juan Otero told CoinDesk. “It was a bit of a nightmare for them to accept bitcoin payments.”
• Expedia Partner Services’ Senior Vice President Alfonso Paredes said in a press statement that Expedia recognizes that “payment choice continues to evolve.” He said the partnership will help Travala.com scale.
• The partnership marks a rare alliance between a crypto-focused firm and its widely-known, juggernaut competitor: Expedia is the world’s second-largest OTA. “Travala is one of the very few projects in the crypto space that is bridging the gap to traditional multinationals in a huge way,” Otero said.
• Otero said the partnership comes as his travel business rebounds from its COVID-19 lows. In June, Travala.com’s month-over month booking revenue surged 170% (to $184,000) and room night bookings jumped 81%. Additionally 13% of bookings were paid in Travala.com’s AVA token, a crypto equivalent of loyalty points and airline miles.
• “Working with Expedia means we can drive traveler loyalty throughout the recovery period,” he said.

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Unidentified attackers exploited a Ravencoin vulnerability to mint extra RVN “beyond the coinbase of 5000 RVN per block,” Ravencoin lead developer Tron Black wrote in a Medium post on Thursday.

According to Black, members of Ravencoin’s CryptoScope team, who developed Solus Explorer, reached out to the Ravencoin developer team recently with their findings. 

The vulnerability was caused by a community code submission. “Law enforcement has been notified and is working with us,” Black said. 

Related: New Tool Will Find Secrets – Including Crypto Keys – in Your Public Code

The extra coins increase the total supply of 21 billion RVN by 1.5% or the equivalent of 44 days worth of mining.

Ravencoin is an open-source fork of bitcoin that launched in 2018. It’s designed to facilitate the transfer of assets from one party to another, and users can create assets on the protocol that adhere to rules independent of those on the platform. The project’s website specifically calls out the Game of Thrones’ reference to Ravens as messengers of truth, which parallels the concept of blockchains as a technology for ultimate truth. 

Read more: Rappers, Ravens and Lord of the Rings: The Race for ‘Dope’ Coin Names Is On

Black suggested the Ravencoin community either absorb the economic cost of extra RVN or shift the halving of the coins 44 days sooner. Black did not return a request for comment by press time.

Related: Overstock’s Medici Acquires Digital Tokens Representing Startup Equity Shares

“The vulnerability does not allow the stealing of RVN or assets that you own and control, but the minting did create RVN that should not exist,” Black said. “Because those RVN were transferred to an exchange and traded, they are mixed with other RVN and therefore any programmatic attempt at burning them, with miner and community backing, would cause irreparable harm to innocent victims. As it stands, the burden has been shared across all RVN holders in proportion to their RVN holdings in the form of inflation.”

Black urged users to keep trading to a minimum until a fix is issued. He also said that Ravencoin would not publish the details of the vulnerability until the fix could be implemented. As of yet, there is no timeline for when the chain will be updated.

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Oxfam Ireland, a Belfast-based charity fighting global poverty, has received a €1 million ($1.1 million) grant to fund the next phase of a blockchain aid distribution project.

• Oxfam is piloting the Ethereum-based platform with Ethereum venture studio ConsenSys and Australian tech firm Sempo in the South Pacific Ocean nation of Vanuatu, according to an Irish Times report. 
• The project, UnBlocked Cash, was awarded the grant from the European Innovation Council in a competition called Blockchains for Social Good to run the second phase of the pilot.
• In June 2019, Oxfam announced that it had spent a month completing phase one of the  pilot, using MakerDAO’s stablecoin DAI as a vehicle for helping disaster victims. The project aims to deliver aid in the form of “smart vouchers” to disaster areas and uses stablecoins like MakerDAO’s DAI to enable cheap cross border transactions.
• In the first phase of the pilot, 200 residents in the villages of Pango and Mele Maat on the island of Efate received tap-and-pay cards, each loaded with about 4,000 vatu ($50) in DAI, according to Australian news outlet Mickey. The cards were used for payments across a network of local stores and schools, with 32 vendors in total.
• The second phase of the pilot will include more than 5,000 participants and 100 vendors, according to the Times. Oxfam pitched the project to a jury in Brussels and was one of 24 projects picked from 178 applications, the charity said.
• Oxfam claims the project has cut delivery times for aid by 96% and cut transaction costs by 60%.
• The grant will also allow Oxfam to scale the project across the Pacific region and explore its potential in sub-Saharan Africa and the Caribbean, the Times report said.
• “Future plans seek to address the needs of over 2.7 million disaster-exposed and vulnerable people across the Pacific Region, as well as expanding use across the Oxfam Confederation, which reached 22.3 million people, across 90 countries, in 2018 alone,” Oxfam Ireland’s Director of Programme Niamh Carty said in a written statement.

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Oxfam Ireland, a Belfast-based charity fighting global poverty, has received a €1 million ($1.1 million) grant to fund the next phase of a blockchain aid distribution project.

• Oxfam is piloting the Ethereum-based platform with Ethereum venture studio ConsenSys and Australian tech firm Sempo in the South Pacific Ocean nation of Vanuatu, according to an Irish Times report. 
• The project, UnBlocked Cash, was awarded the grant from the European Innovation Council in a competition called Blockchains for Social Good to run the second phase of the pilot.
• In June 2019, Oxfam announced that it had spent a month completing phase one of the  pilot, using MakerDAO’s stablecoin DAI as a vehicle for helping disaster victims. The project aims to deliver aid in the form of “smart vouchers” to disaster areas and uses stablecoins like MakerDAO’s DAI to enable cheap cross border transactions.
• In the first phase of the pilot, 200 residents in the villages of Pango and Mele Maat on the island of Efate received tap-and-pay cards, each loaded with about 4,000 vatu ($50) in DAI, according to Australian news outlet Mickey. The cards were used for payments across a network of local stores and schools, with 32 vendors in total.
• The second phase of the pilot will include more than 5,000 participants and 100 vendors, according to the Times. Oxfam pitched the project to a jury in Brussels and was one of 24 projects picked from 178 applications, the charity said.
• Oxfam claims the project has cut delivery times for aid by 96% and cut transaction costs by 60%.
• The grant will also allow Oxfam to scale the project across the Pacific region and explore its potential in sub-Saharan Africa and the Caribbean, the Times report said.
• “Future plans seek to address the needs of over 2.7 million disaster-exposed and vulnerable people across the Pacific Region, as well as expanding use across the Oxfam Confederation, which reached 22.3 million people, across 90 countries, in 2018 alone,” Oxfam Ireland’s Director of Programme Niamh Carty said in a written statement.

• DeFi Insurer Nexus Mutual Maxed Out by Yield-Farming Boom
• Why Bitcoin Bulls Are Betting on Explosive Growth in India
• Market Wrap: As Traditional Markets Rally, Bitcoin Gets Boring
• Blockchain Tech Vendor Bison Trails Adds Ethereum 2.0 Support

Former U.S. Treasury Secretary Lawrence Summers praised stablecoins, but said he would be surprised if a global digital currency became a reality in his lifetime.

During a special episode of Circle co-founder and CEO Jeremy Allaire’s podcast, “The Money Movement” last week, Summers said he foresees more innovation in the blockchain space but a global digital currency is still at a nascent stage. The comments came as part of a broader discussion on the current state of the global economy, the future of a global digital currency and the role of stablecoins in cross-border transactions.

“I’m sure there’ll be a variety of kinds of innovation, but I’d be kind of surprised and – you know, I’ve been surprised many times before – if we got to some kind of global digital currency … in my lifetime,” he said. “I could be wrong, I think … [W]e’ll see a ton of innovation that will work through stablecoins, and that will permit cross-border exchange with more with more ease.”

Related: Coinbase Custody to Support Secure Cardano Staking This Year

In Summers’ view, the case for cryptocurrency rests on three pillars, but two fail to make strong arguments in favor of the technology. 

For one, it is unlikely that governments around the world will debauch traditional currencies to the point where people will no longer want to put money in them. He said he doesn’t “read existing currencies as being on their way to being demolished” just because central banks are finding it difficult to meet their inflation targets, under pressure from rising debts and the crisis caused by the pandemic. 

“Second thing, I think, is that I don’t think crypto is going to be accepted as some kind of libertarian paradise,” Summers said. 

Summers doesn’t think there are people who believe that financial privacy, in terms of the ability to transfer money, is a fundamental human right. Conversely, governments will want less financial privacy over time and they will get what they want, he said. 

Related: US Appeals Court Allows Warrantless Search of Blockchain, Exchange Data

See more: Money Reimagined: No, Secretary Summers, Financial Privacy Is a Vital Freedom

The strongest case for crypto is that digital currencies have a substantial capability to serve a wide range of uses, particularly because traditional transactions are cumbersome and cost a lot of money, Summers said. The hefty fees for cross-border transfers or the fees involved in card payments and ATM withdrawals reveal the excessive friction and inefficiencies of the current payments system. Stablecoins in particular can permit cross-border exchange with more ease, he said.  

Just a week after Summers’ remarks, the dollar-pegged cryptocurrency issued by the CENTRE Consortium, USDC, crossed $1 billion in market capitalization.

The stablecoin backed by U.S. dollars held by CENTRE, which in turn was created by Circle and Coinbase, achieved the milestone less than two years after launching, though it trails the Tether stablecoin by some $8 billion, Circle announced Thursday.

Demand for stablecoins has grown, Circle said. It does not appear, however, that this growth was influenced by Summers’ comments.

In CENTRE’s announcement Thursday, the growth of global stablecoins was attributed to currency volatility caused by the current financial crisis and a rising demand for “digital dollars that are fast, global, secure, and inexpensive”.

“Secondly, businesses around the world are beginning to seek the advantages of payments made via an entirely new, digital, global and interoperable infrastructure that enables low-cost transfers anywhere nearly instantly,” the announcement said. 

During last week’s discussion, Allaire said stablecoins can pose a threat to governments because it can potentially be “accessed with any digital wallet on any smartphone by anyone, anywhere.”

Read more: Millions in Crypto Is Crossing the Russia-China Border Daily. There, Tether Is King

In the same discussion, Allaire said he believes the push for a digital yuan reflects China’s desire to play an even greater role in the world economy. There is also a desire to have a financial system that’s not controlled by the West or the Brussels-based global financial messaging system SWIFT, he said.

“With the development of the Chinese digital currency, effectively, they’ve created a model where a household, a firm, a nation state can kind of directly transact and settle with China over the internet and you don’t need SWIFT, you don’t need any of the regulations that control that. You can just bilaterally, over the internet, start to achieve that,” Allaire said. 

Secretary Summers agreed, saying China wants to control the lives of their citizens, including their financial lives. In his view, a system that lets citizens freely move wealth and resources out of a country is going to be a system that makes the government “deeply nervous”. 

“And I think a system that is so restricted that it isn’t possible to do that isn’t going to be much of a global digital currency,” he said.

 

• Coinbase Lists Compound’s COMP Token for Retail Crypto Traders
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Former U.S. Treasury Secretary Lawrence Summers praised stablecoins, but said he would be surprised if a global digital currency became a reality in his lifetime.

During a special episode of Circle co-founder and CEO Jeremy Allaire’s podcast, “The Money Movement” last week, Summers said he foresees more innovation in the blockchain space but a global digital currency is still at a nascent stage. The comments came as part of a broader discussion on the current state of the global economy, the future of a global digital currency and the role of stablecoins in cross-border transactions.

“I’m sure there’ll be a variety of kinds of innovation, but I’d be kind of surprised, and, you know, I’ve been surprised many times before, if we got to some kind of global digital currency … in my lifetime,” he said. “I could be wrong, I think … we’ll see a ton of innovation that will work through stablecoins, and that will permit cross-border exchange with more with more ease.”

Related: Coinbase Custody to Support Secure Cardano Staking This Year

In Summers’ view, the case for cryptocurrency rests on three pillars, but two fail to make strong arguments in favor of the technology. 

For one, it is unlikely that governments around the world will debauch traditional currencies to the point where people will no longer want to put money in them. He said he doesn’t “read existing currencies as being on their way to being demolished” just because central banks are finding it difficult to meet their inflation targets, under pressure from rising debts and the crisis caused by the pandemic. 

“Second thing I think is that I don’t think crypto is going to be accepted as some kind of libertarian paradise,” Summers said. 

Summers doesn’t think that there are people who believe that financial privacy, in terms of the ability to transfer money, is a fundamental human right. Conversely, governments will want less financial privacy over time and they will get what they want, he said. 

Related: US Appeals Court Allows Warrantless Search of Blockchain, Exchange Data

See more: Money Reimagined: No, Secretary Summers, Financial Privacy Is a Vital Freedom

The strongest case for crypto is that digital currencies have a substantial capability to serve a wide range of uses, particularly because traditional transactions are cumbersome and cost a lot of money, Summers said. The hefty fees for cross-border transfers or the fees involved in card payments and ATM withdrawals reveal the excessive friction and inefficiencies of the current payments system. Stablecoins in particular can permit cross-border exchange with more ease, he said.  

Just a week after Summers’ remarks, the dollar-pegged cryptocurrency issued by the CENTRE Consortium, USDC, crossed $1 billion in market capitalization.

The stablecoin backed by U.S. dollars held by CENTRE, which in turn was created by Circle and Coinbase, achieved the milestone less than two years after launching, though it trails the Tether stablecoin by some $8 billion, Circle announced Thursday.

Demand for stablecoins has grown, Circle said. It does not appear, however, that this growth was influenced by Summers’ comments.

In CENTRE’s announcement Thursday, the growth of global stablecoins was attributed to currency volatility caused by the current financial crisis and a rising demand for “digital dollars that are fast, global, secure, and inexpensive”.

“Secondly, businesses around the world are beginning to seek the advantages of payments made via an entirely new, digital, global and interoperable infrastructure that enables low-cost transfers anywhere nearly instantly,” the announcement said. 

During last week’s discussion, Allaire said stablecoins can pose a threat to governments because it can potentially be “accessed with any digital wallet on any smartphone by anyone, anywhere.”

In the same discussion, Allaire said he believes the push for a digital yuan reflects China’s desire to play an even greater role in the world economy. There is also a desire to have a financial system that’s not controlled by the West or the Brussels-based global financial messaging system SWIFT, he said.

Read more: Millions in Crypto Is Crossing the Russia-China Border Daily. There, Tether Is King

“With the development of the Chinese digital currency, effectively, they’ve created a model where a household, a firm, a nation state can kind of directly transact and settle with China over the internet and you don’t need SWIFT, you don’t need any of the regulations that control that. You can just bilaterally, over the internet, start to achieve that,” Allaire said. 

Secretary Summers agreed, saying China wants to control the lives of their citizens, including their financial lives. In his view, a system that lets citizens freely move wealth and resources out of a country is going to be a system that makes the government “deeply nervous”. 

“And I think a system that is so restricted that it isn’t possible to do that isn’t going to be much of a global digital currency,” he said.

 

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Investors’ search for yield has pushed a widely tracked ether options market metric to its highest level in 12 months. 

The put-call open interest ratio, which measures the number of put options open relative to call options, rose to 1.04 on Thursday, a level last seen in July 2019, according to data provider Skew, a crypto derivatives research firm. 

A put option gives the holder the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date. Meanwhile, a call option represents a right to buy.  Open interest refers to the number of contracts open at a specific time. 

Related: Bitcoin’s Price Correlation With S&P 500 Hits Record Highs

The metric has nearly tripled in value over the last 3.5 months and has witnessed a near 90-degree rise from 0.84 to 1.04 in the last two weeks. 

“Typically this implies the market is more bearish as investors are buying puts to protect their portfolios from a fall in the underlying,” said Luuk Strijers, COO at cryptocurrency exchange Deribit, the biggest crypto options exchange by trading volumes. 

Ether, the second-largest cryptocurrency by market value, is flashing signs of uptrend exhaustion. Prices have failed multiple times in the last few weeks to keep gains above $240. As such, some investors may have bought puts. 

However, in this case, the put-call open interest ratio has risen mainly due to increased selling in the put options. “In this case, market makers have long options positions while the clients are net sellers of puts,” said Strijers told CoinDesk, and added that, “clients, in this case, are generating additional yields using their ETH holdings.”

Related: Market Wrap: Bitcoin Briefly Breaks Below $9K, but Markets Remain Comatose

Traders sell (or write) put options when the market is expected to consolidate or rally. A seller receives a premium (option price) for selling insurance against the downside move. If the market remains comatose or rallies, the value of the put option sold drops, yielding a profit for the seller. 

It’s quite likely that investors holding long positions in the spot market are writing put options to generate extra yield, given the market sentiment is bullish. 

“There’s a lot of excitement around new DeFi tokens and most of the collateral locked up across those platforms is in Ethereum. As that outstanding ether supply comes down and demand from Defi platforms hits escape velocity, ether will rally hard,” tweeted John Todaro, head of research at TradeBlock. 

Also read: Ethereum Logged Its Busiest Week on Record

Validating Strijers’ argument are negative readings on three-month and six-month skews, a sign call options are costlier than puts. Skew measures the price of puts relative to that of calls. 

Three and six-month skews would have been positive had investors been buying put options. 

One-month skew, too, was hovering at -4% on Thursday. While it has bounced up to 4.7% on Friday, the metric still remains well below highs around 10% seen on June 28. 

Volatility metrics also suggest that the market in general is dominated by option writers. “There seem to be more sellers in the market which is also visible in especially the shorter-dated implied volatility dropping to lowest levels since more than 1 year,” said Strijers. 

Ether’s one-month implied volatility or investors’ expectations of how volatile or risky ether would be over the next four weeks is seen at 47% at press time, the lowest since Skew began tracking data in April 2019. 

Option implied volatilities are driven by the net buying pressure for options and historical volatility. Stronger the buying pressure, greater is the implied volatility. 

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

• Market Wrap: As Traditional Markets Rally, Bitcoin Gets Boring
• Market Wrap: Crypto Market Eerily Quiet as Bitcoin Stuck Near $9K

Investors’ search for yield has pushed a widely tracked ether options market metric to its highest level in 12 months. 

The put-call open interest ratio, which measures the number of put options open relative to call options, rose to 1.04 on Thursday, a level last seen in July 2019, according to data provider Skew, a crypto derivatives research firm. 

A put option gives the holder the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date. Meanwhile, a call option represents a right to buy.  Open interest refers to the number of contracts open at a specific time. 

Related: Bitcoin’s Price Correlation With S&P 500 Hits Record Highs

The metric has nearly tripled in value over the last 3.5 months and has witnessed a near 90-degree rise from 0.84 to 1.04 in the last two weeks. 

“Typically this implies the market is more bearish as investors are buying puts to protect their portfolios from a fall in the underlying,” said Luuk Strijers, COO at cryptocurrency exchange Deribit, the biggest crypto options exchange by trading volumes. 

Ether, the second-largest cryptocurrency by market value, is flashing signs of uptrend exhaustion. Prices have failed multiple times in the last few weeks to keep gains above $240. As such, some investors may have bought puts. 

However, in this case, the put-call open interest ratio has risen mainly due to increased selling in the put options. “In this case, market makers have long options positions while the clients are net sellers of puts,” said Strijers told CoinDesk, and added that, “clients, in this case, are generating additional yields using their ETH holdings.”

Related: Market Wrap: Bitcoin Briefly Breaks Below $9K, but Markets Remain Comatose

Traders sell (or write) put options when the market is expected to consolidate or rally. A seller receives a premium (option price) for selling insurance against the downside move. If the market remains comatose or rallies, the value of the put option sold drops, yielding a profit for the seller. 

It’s quite likely that investors holding long positions in the spot market are writing put options to generate extra yield, given the market sentiment is bullish. 

“There’s a lot of excitement around new DeFi tokens and most of the collateral locked up across those platforms is in Ethereum. As that outstanding ether supply comes down and demand from Defi platforms hits escape velocity, ether will rally hard,” tweeted John Todaro, head of research at TradeBlock. 

Also read: Ethereum Logged Its Busiest Week on Record

Validating Strijers’ argument are negative readings on three-month and six-month skews, a sign call options are costlier than puts. Skew measures the price of puts relative to that of calls. 

Three and six-month skews would have been positive had investors been buying put options. 

One-month skew, too, was hovering at -4% on Thursday. While it has bounced up to 4.7% on Friday, the metric still remains well below highs around 10% seen on June 28. 

Volatility metrics also suggest that the market in general is dominated by option writers. “There seem to be more sellers in the market which is also visible in especially the shorter-dated implied volatility dropping to lowest levels since more than 1 year,” said Strijers. 

Ether’s one-month implied volatility or investors’ expectations of how volatile or risky ether would be over the next four weeks is seen at 47% at press time, the lowest since Skew began tracking data in April 2019. 

Option implied volatilities are driven by the net buying pressure for options and historical volatility. Stronger the buying pressure, greater is the implied volatility. 

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

• Market Wrap: As Traditional Markets Rally, Bitcoin Gets Boring
• Market Wrap: Crypto Market Eerily Quiet as Bitcoin Stuck Near $9K

Russian courts are making conflicting rulings on whether bitcoin and other cryptocurrencies count as property.

In one new case, Saint Petersburg’s district court has refused to force bogus law enforcement officers to return cryptocurrencies extorted from a victim on the basis that digital assets are not legitimate assets.

According to the press office Telegram channel for the Saint Petersburg courts, the district court convicted two men for extorting money from an unnamed cryptocurrency OTC trader on June 30. 

Related: German Regulator Had Just 1 Person Checking Wirecard’s $3.1B Books: Report

The criminals had pretended to be officers of Russia’s law enforcement and counter-terrorism agency, the Federal Security Service (FSB) – the successor of the KGB.

Threatening to beat and torture the victim, as well as faking that they’d opened a felony case against him, Petr Piron and Eugeny Prigozhin forced the victim to pay them 5 million rubles (over $70,000) in cash and transfer 99.7035 in bitcoin and some DigiByte and BitShares tokens to their digital wallets. The bitcoin alone is worth over $900,000 at current prices.

According to the court press release, the victim has been handed back the cash that was stolen. However, the court did not rule that the cryptocurrencies should also be transferred back. The court’s website confirms the convictions, although it does not provide the text of the ruling. 

The press release, however, points out that, under the Russian Civil Code, cryptocurrencies have no legal status and therefore cannot be deemed property for the purpose of a criminal case.

Related: E-Gold Claims US Officials Buried Key Report in 2008 Landmark Crypto Ruling

The decision is nothing more than a mistake, believes crypto-savvy lawyer and deputy head of the Chamber of Tax Consultants in Russia, Mikhail Uspenskiy. “The stance that cryptocurrency is some kind of a dummy and has no legal significance, is deeply flawed and erroneous,” Uspenskiy told CoinDesk. 

He pointed out that, previously, the Russian courts have recognized crypto as a form of property. Uspenskiy cited the case of Ilya Tsarkov, who filed for bankruptcy in 2017 and was forced to reveal his crypto holdings so that they can be included in his estate for bankruptcy proceedings. 

There have been also criminal cases in which the courts treated crypto assets like a form of property, such as when bitcoin was extorted during blackmail or fake banknotes exchanged for crypto, Uspenskiy said. 

And in another case, after a Russian court refused to recognize crypto losses claimed by ICO investors who used an online investment platform called ICOadm.in, a Moscow court of appeals backed the original ruling, but did define cryptocurrency as “other kind of property.”

The appeals court further said that, under Russian law, crypto is not defined either as property, an asset, a money surrogate or information.

That may soon change. In June, a package of draft bills was introduced in the country’s parliament, the State Duma, suggesting that cryptocurrencies should be treated as property. The bills would also, however, prohibit any operations with crypto using Russia-based infrastructure.

The initiative has been criticized by Russia’s Mininstry of Economic Development and Ministry of Justice, as well as by the crypto community advocates in the country.

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• DC Lawyers Can Now Accept Crypto for Legal Fees

Cardano holders will soon be able to stake tokens securely at Coinbase Custody.

• At the Cardano Virtual Summit Friday, chief developer house IOHK announced it had signed an agreement with Coinbase Custody.
• From Q4 2020, users will be able to stake their ADA tokens from inside Coinbase’s cold storage.
• In proof-of-stake blockchains, like Cardano, blocks are verified by token holders (rather than miners as with blockchains like Bitcoin), who receive rewards in return.
• Cardano’s staking protocol, Shelley, is expected to come online later this month with staking rewards beginning in mid-August.
• Sam McIngvale, Coinbase Custody’s head of product said their regulated product would help projects, like Cardano, find more mainstream acceptance.
• Tezos inked a similar staking agreement with Coinbase Custody in November 2019.

• Former US Treasury Secretary Larry Summers Expects ‘A Ton of Innovation’ Around Stablecoins
• Cardano Developer IOHK Launches $20M Fund for Ecosystem Startups
• US Appeals Court Allows Warrantless Search of Blockchain, Exchange Data
• Coinbase Takes Over Servicing for 21Shares’ Bitcoin ETP, Displaces Kingdom Trust

Germany’s accounting watchdog reportedly had only one person checking Wirecard’s books in the months before the company admitted to the massive accounting irregularities that led to its insolvency.

• Sources speaking to Reuters on Thursday said Germany’s chief financial regulator, BaFin, had assigned only one staff member at the Financial Reporting Enforcement Panel (FREP) to report on Wirecard’s books in 2019.
• FREP is a privately owned agency with a contract with BaFin.
• Wirecard claimed in February that it had earned revenue upwards of €2.8 billion (~$3.1 billion) in 2019.
• On June 18, the Munich-based company admitted that some of its employees had purposefully inflated revenue, resulting in an estimated $2.1 billion black hole.
• FREP’s report had not been published by that point and has still not been made public.
• The private agency had previously assured BaFin that it had investigated Wirecard as far as it could, Reuters said.
• A spokesperson said Wednesday that it was not FREP’s responsibility to investigate accounting fraud.
• BaFin has since confirmed it will be canceling its contract with FREP.
• On June 23, Wirecard’s former CEO Markus Braun was arrested on suspicion of accounting fraud and market manipulation.
• The collapse of Wirecard meant cryptocurrency firms TenX and Crypto.com cards temporarily stopped working; they were reactivated earlier this week.

• E-Gold Claims US Officials Buried Key Report in 2008 Landmark Crypto Ruling
• Swiss Government Makes Moves to Encourage Crypto Businesses
• Wirecard Fallout: Auditor EY Accused of Not Flagging $2.1B Black Hole Sooner
• Mapping the Future of the SEC (There’s a Nonzero Chance Hester Peirce Takes Over)

Ever since its inception, bitcoin has been dubbed “digital gold,” given it is durable, fungible, divisible and scarce like the precious metal. 

However, while gold has a strong track record of rallying in times of stress in the global equity markets, bitcoin is yet to build a similar reputation as a safe-haven asset.

In fact, in recent months, the cryptocurrency has been increasingly correlated with the S&P 500, Wall Street’s equity index and benchmark for global stock markets. Now, data suggests that relationship is stronger than ever, likely denting its appeal as digital gold. 

Related: Market Wrap: Bitcoin Briefly Breaks Below $9K, but Markets Remain Comatose

The one-month bitcoin-S&P 500 realized correlation rose to a record high of 66.2% on June 30 and stood at 65.8% on Thursday, according to crypto derivatives research firm Skew, which began tracking the data in April 2018.

“While bitcoin and S&P 500 correlation is always a very good indicator of market movement, it never really maintains a consistent position. Bitcoin behaves more like a highly leveraged position and follows the market trends in a more volatile, dramatic up and down swings,” said Wayne Chen, CEO and director of Interlapse Technologies, a fintech firm. 

The one-month metric oscillated largely in the range of -30% to 50% for 12 months before rising to record highs above 60% on June 30. The data indeed shows that bitcoin’s correlation with the S&P 500 is somewhat inconsistent. 

The one-year correlation has also risen to lifetime highs above 37%, according to Skew. One should note, though, that readings between 30% to 50% imply a relatively weak correlation between variables. 

Related: Bitcoin Miners Saw 23% Revenue Drop in June

“Bitcoin, by all accounts, is still a risk asset. Despite those who may tout its fundamental similarities to gold, it has not yet proven to be a sufficient hedge or a flight to safety in times of risk-off sentiment,” said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds. 

Risk assets are the those with fortunes tied to the state of the global economy. For instance, prices of stocks and industrial metals like copper tend to rise when the global economic growth rate is expected to pick up pace and falter during an economic slowdown.

Bitcoin has more or less behaved like a risk asset this year. The cryptocurrency’s price fell from $10,000 to $3,867 in the first half of March, as global equities cratered on coronavirus fears. It then rose back toward $10,000 in the following two months as the S&P 500 saw its fastest bear market recovery on record. 

However, being treated as a risk asset may be a blessing in disguise for bitcoin.

“Given that the correlation between BTC and equities is still so high, our expectation is that this is only bullish for bitcoin price in the short term, as global markets benefit from an unprecedented amount of monetary stimulus,” said Dibb. 

Indeed, the U.S. Federal Reserve (Fed) and other major central banks are injecting massive amounts of fiat liquidity into their respective economies to counter the COVID-19 slowdown. As of last week, Fed’s balance sheet size was $7.01 trillion – up 67% from $4.24 trillion in early March, according to data provided by the St. Louis Federal Reserve. 

While bitcoin is struggling to establish itself as a haven asset, some investors remain undeterred. 

“HODLers” or long-term holders of bitcoin, as gauged by the number of addresses storing bitcoin for at least 12 months, rose to a lifetime high of 20.3 million in June. That surpassed the previous high of 19.52 million reached in May, as per IntoTheBlock, a blockchain intelligence company. 

“With the halving just recently complete, many holders believe that Bitcoin’s median price should be a lot higher than the current value. This creates more of a hodl type of behaviour until the market starts building steam again,” said Chen.

The metric set a new record high for the 12th straight month in June. Notably, the number of holders is up 22% year-on-year, even though bitcoin’s price is down 25% over the same period. 

At press time, the cryptocurrency is trading at $9,110, having dipped to lows near $8,930 during the U.S. trading hours on Thursday. 

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

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A defunct  digital currency project that was a precursor to bitcoin has claimed the U.S. government suppressed crucial evidence in a 2008 landmark case that has since shaped the cryptocurrency industry.

• E-Gold’s former directors filed a petition Tuesday for a writ of coram nobis – in which the court changes the original judgment upon discovery of a fundamental error – at the District of Columbia court.
• Founded in 1996, E-Gold allowed users to trade digital units backed by precious metals – at its peak, the company held around $85 million in gold.
• The U.S. government charged E-Gold with being an unlicensed money transmitter in 2007; the project’s directors pleaded guilty in 2008.
• The ex-directors now claim in court that the federal government unlawfully concealed a 2006 review from Florida’s Office for Financial Regulation (OFR) so they “could make an example” out of E-Gold.
• Per the filing, the OFR review said E-Gold did not count as a money transmitter, as the gold-based asset was closer to a commodity than a fiat currency under state law.
• E-Gold’s former directors claim the court’s judgment would have been substantially different had they been allowed access to the OFR review
• The E-Gold case effectively extended the definition of “money transmitter” in the U.S. to include any system that stored and transferred value.
• Many crypto businesses subsequently have had to be regulated as money transmitters in individual states if they want to operate legally in the U.S.

See the full filing below:

See also: Lessons From the First Digital Gold Boom

• German Regulator Had Just 1 Person Checking Wirecard’s $3.1B Books: Report
• Swiss Government Makes Moves to Encourage Crypto Businesses
• Mapping the Future of the SEC (There’s a Nonzero Chance Hester Peirce Takes Over)
• New York Regulator Adds 3-Strike Rule for BitLicense Applicants

B21, a recently launched mobile app aimed at first-time cryptocurrency investors, has expanded its service to the India market.

• The Gibraltar-based company said the move was prompted by rising consumer interest and trading volumes in the nation after India’s Supreme Court recently overturned the central bank’s order banning banking services for cryptocurrency firms such as exchanges.
• B21 users can fund their investments using Indian rupees through payment methods such as the Unified Payments Interface, debit cards and bank transfers. 
• The app allows investments in cryptocurrencies like bitcoin, ether and EOS starting with a $25 (2,000 INR) minimum, and is available in 65 nations including the U.S.
• B21 crypto assets are secured by Prime Trust, the app provider says.
• The app launched earlier this year, targeting newcomers to crypto investing.
• The Reserve Bank of India’s (RBI) de facto crypto ban was lifted in March, with the central bank later confirming there is no restriction on banking for digital asset firms.
• Since then, the local cryptocurrency industry has seen something of a renaissance, however, the regulatory situation is still uncertain.
• Rumors that India’s government might be considering a new ban on crypto were reported in mid June.
• One of the top crypto exchanges by trading volume, Binance, recently joined the Indian tech industry association that fought the RBI ban in court.

• Why Bitcoin Bulls Are Betting on Explosive Growth in India
• Swiss Equity Firm Makes First Crypto Investment With SPiCE VC Stake
• The Big Thing Holding Back India’s Crypto Boom
• ParaFi Invests in Kyber Network as Buzz Grows Around DeFi Projects

Cardano developer house IOHK has set up a $20 million “cFund” alongside Los Angeles-based Wave Financial.

• The fund has a broad remit to invest in startups and early-stage businesses that use Cardano and other IOHK tech initiatives – such as enterprise blockchain ATALA.
• Commits will range between $250,000 and $500,000 for either equity or token stakes.
• The cFund is a 50/50 venture: IOHK has already put in the “anchor” $10 million, and Wave plans to raise the other half from external investors.
• Nathan Kaiser, IOHK’s general counsel, will become cFund’s chief investment officer.
• An IOHK spokesperson said cFund did not overlap with EMURGO – Cardano’s commercial arm – which has also supported new ventures.
• Californiaregulated Wave Financial tokenized a year's supply of Kentucky Bourbon whiskey worth $20 million earlier this year.
• Both sides had been in talks for many months; the fund’s launch was delayed due to the coronavirus outbreak.
• Both Hong Kong-based IOHK and Wave declined to comment on whether the fund had already started selecting projects to invest in.

Edit (10:30 UTC): This article previously indicated that Wave Financial was based in Canada, based on information on its website. It is, in fact, based in Los Angeles and London.

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