Blockchains
The Crypto Report 30-Sep-2024
Top 3 Company Headlines
eToro shuts all US crypto trading in SEC settlement (Reuters 12-Sep)
Siemens issues €300m bond on the blockchain (PR 04-Sep)
MicroStrategy buys additional $1.11bn of BTC (Reuters 13-Sep)
Top 3 Macro and Risk Headlines
DTCC blockchain project Ion still quietly active (TheInformation.com 27-Sep)
India leads crypto adoption for 2nd year (Reuters 12-Sep)
Miners in Russia's Dagestan hide underground (Reuters 24-Sep)
The Crypto’s View
India has led the world in crypto adoption for the second year running despite its govt's restrictions. These have been getting rolled back as confidence has improved. So much so that Binance is trying to restart after its regulator penalties last year. Further setbacks in G7 countries like United Texas Bank SEC “Cease and Desist” notice reinforce the pattern the Crypto has observed. The asset class is getting boxed in while global mass adoption remains stagnant.
Fun Fact: Donald Trump was buying burgers with BTC at a NYC fundraiser with Anthony ‘’Pomp“ Pompliano (Cointelegraph 18-Sep)
The Crypto Report 31-Aug-2024
Top 3 Company Headlines
Xapo Bank UK debuts interest-bearing BTC, fiat accounts (Cointelegraph 05-Aug)
Celsius repays $2.53bn to creditors (PR 26-Aug)
TON Down 14% as Telegram CEO Pavel Durov Arrested (CoinDesk 25-Aug)
Top 3 Macro and Risk Headlines
Kamala may adopt Biden crypto crackdown policy (Cointelegraph 13-Aug)
India claims $86m tax from Binance (Technopedia 07-Aug)
XRP token gains on $125m penalty decision (Bloomberg 07-Aug)
The Crypto’s View
Politics was this month a feature in quite a few crypto headlines in the otherwise relatively quiet summer news season. Incumbents are usually advised to avoid commenting on asset prices and especially anything that might undermine the strength of the national currency so the Crypto is not surprised that the most aggressive comments about Bitcoin have come from candidates. Governments themselves have generally restrained their influence other than in the name of law enforcement or tax collection. The Crypto does not expect that to change soon if at all.
Fun Fact: Pastor Blake Bush of Colorado House of Prayer reported “I heard the Lord say ‘tokenize the building” in what may be the world’s first tokenized church building (Cointelegraph 18-Aug)
The Crypto Report 31-Jul-2024
Top 3 Company Headlines
Italian state-owned bank €25m blockchain bond issuance (PR 18-Jul)
41.5% of Mt Gox Bitcoin paid out but aren’t active (Cointelegraph 31-Jul)
State Street mulls own stablecoin for settlements (Bloomberg 17-Jul)
Top 3 Macro and Risk Headlines
Trump speaks at Bitcoin conference (Reuters 27-Jul)
California puts 42m cars on blockchain to fight fraud (Reuters 31-Jul)
Palau hires Japan’s Soramitsu for DLT bond issuance (PR 16-Jul)
The Crypto’s View
Trump promised in Nashville to commute Dread Pirate Robert’s sentence, fire SEC chair Gary Gensler, and provide the world’s cheapest power for bitcoin mining. He’s also announced a 4th sale of NFTs in his image. Senator Lummis has introduced a bill committing to the US Treasury buying 5% of all outstanding BTC. These news items failed to bring crypto asset prices back to their March, May, or even June highs. This is consistent with the Crypto’s view of DLT technology being useful but still struggling to find a commercial use case with economics that support valuations. Trump image NFTs may sell out but the NFT market overall is raising half the money it once did and most NFT buyers are yet to realise a profit.
Fun Fact: Pudgy Penguins character to be added to Telegram mini games alongside Doge and Mew (Cointelegraph 16-Jul)
The Crypto Report 30-Jun-2024
Top 3 Company Headlines
Shrekli claims Barron Trump behind DJT token (Cointelegraph 20-Jun)
SEC drops Ethereum investigation (Cointelegraph 20-Jun)
MicroStrategy plans $500m stock sale to buy more BTC (PR 13-Jun)
Top 3 Macro and Risk Headlines
Thiel says BTC isn't as cypherpunk as he expected (CNBC 29-Jun)
SEC reply to ETH ETF S-1s suggests July launch (Cointelegraph 29-Jun)
Greenpeace wants Wall St on hook for BTC emissions (Cointelegraph 14-Jun)
The Crypto’s View
Early crypto adopter and famed tech investor Peter Thiel has lost much enthusiasm for BTC as it has strayed further away from his early optimism for its promise to challenge incumbent financial systems. Crypto media are increasingly focussing stories about AI or meme stocks and associating traders of those assets with tech investors generally. This is consistent with The Crypto’s observations on DLT becoming a more mainstream technology asset.
Fun Fact: GameStop rally brings "Roaring Kitty" stake close to $1bn (Cointelegraph 07-Jun)
The Crypto Report 31-May-2024
Top 3 Company Headlines
Vodafone plans to turn phone SIM card into a crypto wallet (Yahoo 03-May)
Pantera invests in TON (Cointelegraph 02-May)
Binance boss CZ sentenced to 4 months in prison (BBC 01-May)
Top 3 Macro and Risk Headlines
Buterin proposes gas model update (Cointelegraph 02-May)
CME plans to launch spot futures trading (FT 16-May)
SEC approves spot ETH ETF application (Reuters 20-May)
The Crypto’s View
The approval of more ETF products may please some crypto enthusiasts yet it is happening as incumbent exchanges, telecom providers, and social media giants are becoming more active in crypto. E-money was already in mass-market use before the arrival of DLT primarily for transport payments and services like M-PESA. Adoption was accelerated by COVID popularising contactless payments worldwide. Whilst Facebook’s attempt to enter this arena failed fast, other TMT firms have persisted and appear to be gaining market share from the newer crypto based start-ups. The Crypto expects this trend to continue.
Fun Fact: Australian rapper Iggy Azalea endorsed a meme coin that insiders purchased prior to its X promotion making a $2m profit (Bubblemaps 29-May)
The Crypto Report 31-Mar-2024
Top 3 Company Headlines
BTC renews all-time-high (Reuters 05-Mar)
HK FSA warns Bybit and MEXC exchanges (PR 15-Mar)
MicroStrategy seeks another $500m to buy more crypto (PR 13-Mar)
Top 3 Macro and Risk Headlines
Nigeria orders Binance to pay $10bn penalty (BBC 01-Mar)
Celsius liquidator seeks $2bn clawback (Bloomberg 20-Mar)
UK judge rules Craig Wright is not Satoshi (Reuters 14-Mar)
The Crypto’s View
Since spot BTC ETFs were approved, the market has watched the net flows out from Grayscale’s GBTC and into other ETFs. Early data suggest that positive flows have mostly correlated with rising crypto prices. The magnitude of the moves suggest there’s been nothing like the flood of retail investor interest some had expected with most of the new funds appearing to attract switchers from the higher fee GBTC. The BTC price has moved only a few % after it broke its all-time-high and much larger moves have been seen in “meme” tokens. The Crypto has been intrigued by a Bloomberg theory that suggests the US meme stock phenomenon and crypto prices are reminiscent of how stocks were valued a century ago before methods like DCF and computing power to calculate “value” became widely used. Trump’s Truth Social is the latest example, yet DOGE is over x4 its market cap.
Fun Fact: UK Justice Sir James Mellor ruled Craig Wright is not Satoshi and has ordered an asset freeze to pay legal costs - the Crypto and Mellor were trainees at a UK engineering firm before he switched to law (Reuters 14-Mar)
The Crypto Report 29-Feb-2024
Top 3 Company Headlines
BlackRock's BTC ETF $673m net inflow (CoinDesk 29-Feb)
FTX liquidator allows AI share sale (WSJ 23-Feb)
UBS launch HK’s first tokenised warrant on Ethereum (PR 07-Feb)
Top 3 Macro and Risk Headlines
Trump says “I can live with it. It’s taken a life of its own” (CoinDesk 23-Feb)
FSB proposes to standardise reporting (PR 20-Feb)
First ICO on Bitcoin, $3.1m raised in under 6 days (Invezz 21-Feb)
The Crypto’s View
Since the approval of spot bitcoin ETFs the discount on GBTC is no longer a useful valuation measure unlike its flows relative to other ETFs. As previously written crypto is an asset class that central banks have decided they can safely ignore. That’s congruent with President Trump’s remarks. He added “ You probably have to do some regulation”. The Crypto notes that while governments can tolerate traders they will act to minimise tax or sanctions evasion and crime like any other asset class.
Fun Fact: Whisky Glenlivet, is marking its 200th anniversary by selling a very limited edition collection on blockchain (Dram 12-Feb)
The Crypto Report 31-Dec-2023
Top 3 Company Headlines
Daiwa to trial security tokens on blockchain (Lifetime Cryptos 01-Dec)
Itau Unibanco launches crypto trading (Reuters 04-Dec)
ARK switches remaining GBTC to Bitcoin futures ETF (Cointelegraph 28-Dec)
Top 3 Macro and Risk Headlines
El Salvador's BTC 'in the black,' says President (CoinDesk 04-Dec)
SEC delays ETH ETF decisions to May (Cointelegraph 19-Dec)
Argentine minister says contracts can be settled in Bitcoin (X 21-Dec)
The Crypto’s View
The discount to NAV for GBTC, the world’s largest and best known crypto fund, was a little under 6% on the same day parent company DCG’s CEO Barry Silbert left its board of directors. Both facts have attracted market comment to the effect that spot Bitcoin ETF issuance (and implicitly the conversion of GBTC to an ETF) is likely. In the past market consensus was that permission would attract significant inflows to crypto assets. The Crypto notes the irony of the bitcoin price rise since the GBTC discount being at its widest (implying unlikely ETF permission) to the calm now accompanying the near certainty of that event.
Fun Fact: Famous cryptographer David Chaum says "Money is not the kind of thing you want to hold... it keeps the global poor poor” (Cointelegraph 27-Dec)
The Crypto Report 30-Nov-2023
Top 3 Company Headlines
Blackrock files for spot ETH ETF (CoinDesk 16-Nov)
SEC sues Kraken's unregistered exchange (PR 20-Nov)
CME grabs BTC futures market lead from Binance (Cointelegraph 10-Nov)
Top 3 Macro and Risk Headlines
Binance shutting Ruble based operations (PR 10-Nov)
UK Govt confirms digital sandbox approach (PR 22-Nov)
Australian taxes for wrapped crypto (PR 09-Nov)
The Crypto’s View
Binance dominated the news this month with even mainstream media picking up that Ronaldo is facing a $1bn class action suit for NFT sales through them. The Binance Ruble story recognises that some of CZ activities were different from illegal money laundering (where he has pleaded guilty and the company was fined over $4bn) but politically influenced problems from the Russia-Ukraine situation. The Crypto views the closure as part of their broader attempt to clean up their beleaguered business. This is part of the trend for crypto to move further towards being a regulated asset class as are more high-profile ETF plans. The GBTC discount narrowing to 8% implies its conversion to an ETF may be only months away.
Fun Fact: The Chinese state controlled Southwest University of Political Science and Law issued an article that upholds the legal status of NFTs as assets - the Crypto notes the Chinese are not generally known for respecting Intellectual Property rights (PR 09-Nov)
The Crypto Report 31-Oct-2023
Top 3 Company Headlines
GBTC discount narrows to 11% (Ycharts 20-Oct)
Musk's “WeChat style Paypal" vision for X leaked (Verge 26-Oct)
FTX trial wrap focused on SBF failings (CBS 31-Oct)
Top 3 Macro and Risk Headlines
SEC not planning Bitcoin appeal (Reuters 13-Oct)
Biggest weekly fund flows to crypto since Jul-2022 (Coinshares 31-Oct)
CFTC whistleblower pay YTD mostly to crypto (PR 31-Oct)
The Crypto’s View
It’s been a positive month in crypto both for news and price action. FTX’s SBF was on trial yet many clearly thought it might have been a venue to bash crypto as an asset class. That’s not what criminal trials do. The SEC declining to appeal cleared the way both for bitcoin to rise and the discount on the GBTC to narrow, closing the month at 14%. Others planning crypto ETFs must be wondering if its NAV implies lack of interest. Musk on an in-house call enthused about dreams to compete with the social media, internet and finance giants with their “Everything App”. The Crypto remains convinced that the biggest threats to legacy finance firms come from enterprises that can combine internet, media and finance. It’s too soon to know what the winning team will look like or what currencies and technologies it will prefer. It does look clear that they will be regulated or risk isolation as Hamas discovered.
Fun Fact: Israeli police seized Hamas related crypto wallets after their surprise rocket attack- local news says these seizures were with help from Binance and have been happening for at least 2 years (Techround.co.uk 11-Oct)
The Crypto Report 30-Sep-2023
Top 3 Company Headlines
LSE Group draws up plans for DLT business (FT 04-Sep)
Binance debanked by Paysafe in EU (Cointelegraph 28-Sep)
eToro gets registered in Cyprus to access EU (PR 21-Sep)
Top 3 Macro and Risk Headlines
Gensler testifies of "wideranging noncompliance" (PR 27-Sep)
Latvia opens crypto "Innovation Hub" (Cointelegraph 19-Sep)
BIS Carstens says "CBDC issuance should increase the choices for society” (Coindesk 27-Sep)
The Crypto’s View
It should surprise nobody that Gensler’s testimony to the US Financial Services Committee focussed on existing law. Like it or not, the Howie Test remains, so enforcement actions have been just a matter of time. The BIS attitude to CBDC issuance is similarly consistent with its mandate. Tim Draper on X flippantly blamed government for handling crypto differently to the internet for his $250,000 in 2022 Bitcoin price guess fail. This shows a serious misunderstanding of how financial systems interact with economies very differently to social media or digital messaging.
Fun Fact: The Crypto once helped Carstens when he was Chile’s economics minister. At the end of a day in Geneva he hand-wrote and sent a two dozen page fax in time to reach Santiago. People like this are hardworking, intellectually rigorous and dedicated to their analysis.
The Crypto Report 31-Aug-2023
Top 3 Company Headlines
PayPal introduces stablecoin (CoinDesk 09-Aug)
First EU spot Bitcoin ETF hits Euronext (Cointelegraph 15-Aug)
SpaceX wrote down $373m worth of BTC (Cointelegraph 17-Aug)
Top 3 Macro and Risk Headlines
Appeals court rules in favour of Grayscale ETF application (Reuters 29-Aug)
MAS finalises stablecoin regulations (PR 15-Aug)
Bored Apes buyers sue Sotheby’s, Paris Hilton, et al. (CNN 17-Aug)
The Crypto’s View
Only two days after the SEC block on Grayscale’s Bitcoin ETF application was overturned by a D.C. appeals court, BTC has returned to its pre-news price. The GBTC discount to NAV has narrowed from 25% to 21%. The Crypto observes that both moves are surprisingly feeble given that news headlines claimed a major positive for mass market crypto adoption. The GBTC 20% discount to NAV equates to about $3bn that could be realised either if the trust is wound up or converted to an ETF. The market reaction implies persistent pessimism that GBTC conversion or liquidation will happen any time soon, or that either might prompt positive net fund flows.
Fun Fact: AI artist Botto (created by German Mario Klingemann) not only generates original art works but also funds them by creating and selling its own NFTs (Coindesk 22-Aug)
The Crypto Report 31-Jul-2023
Top 3 Company Headlines
Twitter to be rebranded as X (Twitter 24-Jul)
GBTC discount touches one year low of 25% (YCharts 13-Jul)
Binance withdraws German licence application (Reuters 26-Jul)
Top 3 Macro and Risk Headlines
Celsius court case details fake DeFi yields (PR 13-Jul)
Namibia enacts VASP law (Cointelegraph 26-Jul)
Congressman Santos promotes crypto scheme (NYT 26-Jul)
The Crypto’s View
The rebranding of Twitter emphasises Musk’s plan to make X an app like WeChat. The news reminds the Crypto of four years ago when Facebook launched Libra. It was soon renamed Diem and Facebook became Meta. Last January Diem was written down to zero by new owner Silvergate which shut in March. E-money is continuing to gain market share globally. Given Musk’s achievements in the auto and space industries it will be interesting to see if X marks the spot in finance.
Fun Fact: DOGE co-creator Billy Markus referred to the newly launched OpenAI created Worldcoin as “creepy and weird” on learning of its retina reading ID confirmation (Benzinga.com 25-Jul)
The Crypto Report 30-Jun-2023
Top 3 Company Headlines
SEC sues Binance for operating unregistered exchange (Cointelegraph 05-Jun)
SEC sues Coinbase for trading unregistered securities (Reuters 07-Jun)
Blackrock files ETF application (SEC 15-Jun)
Top 3 Macro and Risk Headlines
Israeli govt bond issued on blockchain (PR 06-Jun)
BTC miners send record $128m to exchanges (Cointelegraph 28-Jun)
Slovakia lowers tax on crypto asset income (Bitcoin.com 28-Jun)
The Crypto’s View
SEC news dominated the month. Its view that most tokens are securities while BTC and a few others are commodities was backed by enforcement actions. Token prices dropped near to recent lows. Bitcoin rallied to end up 9% on the month on news of ETF filings by giant investors such as Blackrock and Fidelity. While the GBTC price gained 34% over the month, it remains on a 30% discount to NAV, suggesting the market is only modestly more optimistic that ETFs will soon be allowed. This is consistent with the meagre single-digit monthly move for the asset class and The Crypto’s view that Bitcoin is settling in among minor assets like gold, art and collectibles.
Fun Fact: Binance took legal action against Binance Nigeria Limited which it says is not an affiliate. This came 10 days after the Nigerian SEC warned citizens that the firm was not registered. (Cointelegraph 18-Jun)
The Crypto Report 31-May-2023
Top 3 Company Headlines
TD Bank closes crypto unit (Bloomberg 31-May)
Ripple acquires Metaco for $250m (PR 17-May)
Gemini to apply for UAE licence (Twitter 31-May)
Top 3 Macro and Risk Headlines
Zimbabwe sells $40m of gold-backed tokens despite IMF warning (Cointelegraph 15-May)
Texas votes to add crypto to their state bill of rights (PR 10-May)
Florida’s DeSantis signs anti-CBDC bill into law (Cointelegraph 12-May)
The Crypto’s View
Crypto asset prices closed May weaker after some modest mid month movement. Sentiment slumped as indicated by a widening of the GBTC discount to 43%. Ripple’s estimate of $200m for the cost of fighting the SEC and the high price for its acquisition of a Swiss custody firm show the costs of doing business in the financial sector that early crypto proponents probably assumed would not apply to them. The Crypto is saddened to see Zimbabwe exposing its economy to the risks of a gold-backed currency instead of tackling its deeper economic problems. It is not a good idea for emerging economies to peg themselves (even in a small way) to foreign asset prices.
Fun Fact: Shaquille O'Neal was served with Astrals NFT and FTX lawsuits while broadcasting at a Miami game - he had been evading for 6 months, even dodging documents thrown at his car which was ruled an improper procedure (Decrypt 25-May)
The Crypto Report 30-Apr-2023
Top 3 Company Headlines
Winklevoss Twins Lend $100m to Gemini (Bloomberg 10-Apr)
Bakkt completes $200m acquisition of Apex (PR 03-Apr)
Genesis settlement disrupted by new creditor demands (Twitter 25-Apr)
Top 3 Macro and Risk Headlines
Bhutan SWF held millions of USD in crypto (Forbes 15-Apr)
BTC futures to be offered by LSEG (Proactive Investors 14-Apr)
2 Texas Senators propose gold-backed state digital currency (Cointelegraph 22-Apr)
The Crypto’s View
Crypto asset prices closed April almost unchanged after some modest mid month movement. Two years ago the Bhutan SWF buying crypto or the Grayscale Solana Trust listing at over 140% to its NAV might have been price-sensitive news, but not now. This is consistent with the Crypto’s view that crypto assets are becoming more and more decoupled from mainstream finance as on-ramps are reducing.
Fun Fact: Elon Musk joked about replacing the Twitter logo with the Doge image triggering a price spike (Twitter 03-Apr)
The Crypto Report 31-Mar-2023
Top 3 Company Headlines
Silvergate Bank liquidates (Guardian 09-Mar)
CFTC accuses Binance (BBC 29-Mar)
Coinbase issued with Wells Notice (Reuters 22-Mar)
Top 3 Macro and Risk Headlines
Ethereum staking withdrawals imminent (Lido 15-Mar)
BTC poised to blow up Africa’s bank system (CNBC 26-Mar)
BTC hash rate hits all time high (Cointelegraph 22-Mar)
The Crypto’s View
Regulators had a busy month again taking more steps to isolate the crypto system from bigger problems. The SVB failure has ironically been blamed on technology it was investing in. Social media chat and fast online transfers outpaced the ability of the Fed to fulfil its role as lender of last resort. The rapid contagion to other banks (even in Europe) is likely to strengthen pressure to slow the adoption of technologies like crypto. These by their decentralised nature are difficult to monitor and stabilise in a crisis.
Fun Fact: Elon Musk is asking a judge to dismiss a $258bn DOGE suit accusing him of running a pyramid scheme (Reuters 31-Mar)
The Crypto Report 28-Feb-2023
Top 3 Company Headlines
Court reverses Wormhole hack Jump trades (MollyWhite.net 26-Feb)
tZERO closing crypto biz to focus on securities (PR 03-Feb)
Revolut offers UK/EEA crypto staking (PR 06-Feb)
Top 3 Macro and Risk Headlines
SEC warns RIAs of ‘09 rule on client assets and custody (PR 15-Feb)
Canada bans VRCA (stablecoin) trading (PR 22-Feb)
NY DFS orders Paxos BUSD cessation (PR 13-Feb)
The Crypto’s View
Regulators keep enforcing the law. Offering investments as “low risk”, which are not, is not good. The Crypto wonders how Grayscale ended up with “a million clients” and FTX with about 10x that? Existing US SEC rules are for RIAs to place client assets only into schemes with independent custodians. Coinbase may do well from this, but loosening their Binance connection suggests a widening chasm between crypto markets in regulated counties and ROTW. Crypto purists will be deeply unhappy that a court could order the Jump chain reversal. The Crypto wonders if that’s a sign of compromises being made by “the community” to remain in business in regulated countries?
2 Fun Facts: What’s funny about these 2 stories is the contradiction in their own narrative:
1) DCG selling holdings of subsidiary Grayscale’s trusts at a huge discount (FT 08-Feb)
2) Grayscale’s CEO blames SEC for trusts huge discount (Cointelegraph 26-Feb)
The Crypto Report 31-Jan-2023
Top 3 Company Headlines
Genesis files for Chapter 11 (PR 20-Jan)
Celsius examiner found problems dating back to its founding (Cointelegraph 30-Jan)
Samsung to launch BTC Futures ETF (Cointelegraph 12-Jan)
Top 3 Macro and Risk Headlines
Hong Kong will not allow algorithmic stablecoins (PR 31-Jan)
California DMV to digitise car title system via Tezos (PR 25-Jan)
ATM limits drive BTC premium to 60% in Nigeria (Cointelegraph 30-Jan)
The Crypto’s View
This month has again been dominated by legal news such as the SEC bringing charges against both the Winklevoss’ Gemini and DCG’s Genesis for unregistered securities sales and more class action suits. Whilst Coinbase had planned a similar offering to the “Earn” program they decided to scrap it exactly because they were warned it would be a “securities offering”. The Crypto is puzzled why other firms seemed to interpret the law so differently. Celsius’ court appointed examiner reported that from the earliest days customer payments could not be met with actual interest earned but had to be topped up from other sources. The Crypto has observed before that the current network value of many crypto ecosystems far exceeds real economic activity using them and remains concerned at how soon more real use cases will emerge to pay the bills.
Fun Fact: AI ChatGPT has been coached to view Bitcoin as an way to end centralised banking (Twitter 26-Jan)
The Crypto Report 31-Dec-2022
Top 3 Company Headlines
Winklevii sued for $900m fraud (NY Post 29-Dec)
Valkyrie bids to take over Grayscale Bitcoin Trust (Bitcoin Magazine 30-Dec)
Binance withdrawals hit $1.9bn in 24 hours (Reuters 13-Dec)
Top 3 Macro and Risk Headlines
Fiji's Lord Fusitu’a says ‘definitely pro-Bitcoin’ (Cointelegraph 29-Dec)
BlackRock CEO: ‘next generation for markets’ is tokenisation (Decrypt 01-Dec)
Algorand chosen as Italian guarantees platform (PR 13-Dec)
The Crypto’s View
This month has been dominated by legal news. Lehman Brothers market cap at the time of its failure was a bit larger than FTX. Based on costs so far for the Lehman UK subsidiary alone (announced this week at £1.1bn) the Crypto estimates that the daily fiat legal fee drain across the crypto world compares to that of the BTC mining community. Naturally litigants are going for firms which still have cash, such as the Winklevii. Legal fees will also be boosted by Valkyrie trying to take over the Grayscale Bitcoin Trust where current management has presided over a decline to a staggering 50% to NAV, or even less for some of their other trusts. In early 2021 their GBTC was onboarding the equivalent of all bitcoin mined week after week. The Crypto wonders how the market will absorb a reversal of that should Valkyrie be successful or even cope with the daily fiat legal fee drain.
Fun Fact: Trump put his brand on an NFT collection raising about $4.5m. His promo video says "Each card comes with an automatic chance to win amazing prizes like dinner with me. I don't know if it's an amazing prize but it's what we have." (CoinDesk 16-Dec)
The Crypto Report 30-Nov-2022
Top 3 Company Headlines
Binance hopes Polygon and GSR will join bailout fund (Yahoo! 26-Nov)
BlockFi sues FTX for pledged HOOD stock (Yahoo! 29-Nov)
Bakkt set to acquire Apex Crypto for $200m (PR 03-Nov)
Top 3 Macro and Risk Headlines
ECB says BTC on road to irrelevance (PR 30-Nov)
Dubai MCC to issue gold tokens on Xinfin (PR 21-Nov)
El Salvador govt seeks BTC bond approval (Reuters 24-Nov)
The Crypto’s View
The collapse of FTX had little impact on other assets but has provoked calls both for increased regulation and from those like Stephen Cecchetti and Kim Schoenholtz to “just let crypto burn.” The Crypto favours free markets and concurs with the ECB view that crypto can be left to carry on in its own world. It’s probably just coincidence but the amount Binance pledged to Twitter was about the same as their hack last month, the FTX tokens owed them, and that FTX also had pledged to rescue BlockFi. The fiat that could be extracted from crypto was a lot less even for such industry giants.
Fun Fact: Subway Berlin is accepting bitcoin via Lightning Network incentivised by a 50% discount this week and 10% thereafter. It follows on from the Subway Moscow experiment 13 years ago. The owner complains about the cost of other payment methods but the Crypto wonders if they will end up with any more net revenue after their discount, staking, and network costs? (Cointelegraph 09-Nov)
The Crypto Report 31-Oct-2022
Top 3 Company Headlines
Binance blockchain suffers $570m hack (FT 07-Oct)
Argo warns financing round incomplete (PR 31-Oct)
Celestia Labs raise $55m for modular blockchain network (CoinDesk 20-Oct)
Top 3 Macro and Risk Headlines
Binance chips in $500m to help Musk buy Twitter (Reuters 28-Oct)
a16z largest crypto fund lost over 40% in 1H 2022 (WSJ 26-Oct)
Israel eyes government bond issuance via DLT (Reuters 19-Oct)
The Crypto’s View
The Musk deal to take Twitter private attracted a lot of coverage in financial media but dominated the crypto segment. The Crypto views this merely as a minor macro indicator since neither Musk nor Twitter have crypto as mainstay of their current business interests. It’s reminiscent of the misplaced optimism about Facebook’s entry into crypto that quickly fade. Whilst prices of most crypto assets have been firm over the month, they’ve not significantly broken away from the being associated by market traders as strongly correlated with risk assets such as equities. That only DOGE and BNB apparently reacted much to the news underscores how the broader crypto markets appear to be trading as a subset of the tech sector.
Fun Fact: DOGE triples in 7 days as Twitter deal nears completion (CoinDesk 24-Oct)
The Crypto Report 30-Sep-2022
Top 3 Company Headlines
SBF planned to join Twitter deal (Business Insider 29-Sep)
GBTC at record 35% discount (Cointelegraph 24-Sep)
Moscow Exchange to issue digital assets receipts (Vedomosti 22-Sep)
Top 3 Macro and Risk Headlines
Ethereum merge complete (PR 15-Sep)
Gilts crash sparks BoE intervention (Telegraph 28-Sep)
TX and VT object to Celsius selling stablecoins (NFT UNICORN 29-Sep)
The Crypto’s View
Bitcoin was birthed at a time of unhappiness with central banks’ response to the “Lehman shock”. To put crypto markets in context, the UK just intervened in the gilts market to lower systematic risk in the wake of the “KamiKwasi” budget. The proximate cause of this were margin calls in the $1.5tn LDI segment of the UK pension fund industry.
ETH (market cap $163bn) completed its merge this month. There was surprisingly little impact on prices or activity. The Crypto is reminded of the AOL purchase by Time Warner at the height of the TMT bubble . The Crypto wrote at the time that its internet business suddenly would be evaluated by conventional metrics like revenue, cash flow and profits rather than “eyeballs”. The ETH network was previously valued like BTC as a kind of “digital gold” and their market caps have been comparable for several years. ETH has morphed into something else which logically should now be valued entirely differently based on revenue it generates and growth. The Crypto thinks ETH needs to do a lot better than “staking” (mostly lending to other crypto traders) or NFT settlements to justify its value for what is now just another network. Its own users are already competing with each other such as Sturdy’s founder Sam Forman calling ETH “obsolete” and promoting other DeFi protocols.
Fun Fact: The Craig Wright defamation court case drags on with him refusing to provide cryptographic proof he is Satoshi (CoinDesk 14-Sep)
The Crypto Report 31-Aug-2022
Top 3 Company Headlines
BlackRock launches BTC trust for US institutions (FT 11-Aug)
Coinbase reports $1.1bn Q2 loss (SEC 23-Aug)
Samsung plans crypto exchange (NewsPIM.com 22-Aug)
Top 3 Macro and Risk Headlines
Korea warns 16 foreign crypto exchanges (PR 18-Aug)
Jackson Hole Fed speech spooks risk assets (PR 26-Aug)
El Salvador’s BTC bond delayed (Fortune 30-Aug)
The Crypto’s View
For Coinbase to post a quarterly loss of $1.1bn is a remarkable achievement. Their main business appears to be operating an exchange and providing custodial services for its clients' assets. Both of those activities are usually large scale but low margin businesses with little risk. It may mean their other activities such as own-account investments are both large and have experienced substantial damage to their value. It may also mean that they expanded capacity well beyond operating levels they now encounter. The Crypto observes that in general retail activity (their main customer base) remains subdued.
Evidence of that is that news of behemoth BlackRock starting a BTC fund would in the past have been greeted with much excitement. The premium on the well established Grayscale BTC Trust slipped back to a 33% discount to NAV, the bottom of its historic range and that of closed-end funds in general. The Crypto wonders how BlackRock's salesforce would answer investors asking why they shouldn't get their exposure to BTC from that vehicle instead?
Fun Fact: AVA’s Emin Gun Sirer’s law team has been caught on video boasting of using frivolous lawsuits to discredit rivals, the same tactics he criticised Craig Wright of using (Cryptoleaks 26-Aug)
The Crypto Report 30-Jun-2022
Top 3 Company Headlines
Grayscale sues SEC over ETF refusal (Twitter 30-Jun)
Tether CTO blames hedge funds' FUD (Twitter 27-Jun)
Roger Ver denies $47m Coinflex default (Twitter 29-Jun)
Top 3 Macro and Risk Headlines
EU agrees MiCA regulation for crypto (Twitter 30-Jun)
DPRK Suspected in $100m Harmony Heist (Bloomberg 29-Jun)
C.A.R. to tokenize its natural resources (Twitter 02-Jun)
The Crypto’s View
The Crypto observes that early-adopters are turning on each other as well as outsiders to explain recent stress in the system. Better known than any of them is football’s Christiano Ronaldo who (at 459m followers) is the world’s most followed Instagram account. His deal with Binance to issue NFTs reinforces the Crypto’s view that DLT has become mostly something that central banks and legacy financial firms can safely understand as just financial plumbing. Ronaldo is just promoting another kind of loyalty points scheme. Gensler is correct to deign only BTC with the moniker “commodity”.
Fun Fact: Immortal Cat’s fundraising material says its social media presence includes “The Sandbox” - the Crypto hopes it respects sandpits more than most cats (Cointelegraph 27-Jun)
The Crypto Report 31-May-2022
Top 3 Company Headlines
Buterin's "thought experiment" finds Terra "doomed to collapse" (Twitter 26-May)
Nvidia forecasts "nominal" sales of mining chips next Q (SEC filing 25-May)
Leading NFT prices halve in a month (DappRadar.com 31-May)
Top 3 Macro and Risk Headlines
Russia reconsiders using crypto for global trade (Reuters 31-May)
Bitcoin mining difficulty hits all-time high (Cointelegraph 14-May)
Govt of India consults with IMF on crypto stance (NDTV 30-May)
The Crypto’s View
There’s irony in mining difficulty hitting new highs just before Nvidia’s forecast of tiny chip sales led to its stock collapsing. The hash rate must eventually crater if no investment in replacement processor power. What does this show us about the confidence of the mining community? Irony too in wise-after-the-event guru Buterin explaining in a few word tweet why the algorithm behind Terra was obviously flawed. (Many other DeFi projects are similarly reliant on ever-rising token prices to keep them afloat). Pantera and other early investors cashed out. As so often “Joe-retail” suffered the most. How convenient for Do Kwon that he liquidated his home-town operations a week before the collapse and that Korea is loathe to extradite its citizens to face foreign charges.
Fun Fact: Stable coin USDtea was launched backed by cans of Arizona Iced Tea which has sold for 99c for 30 years (Bitcoinist.com 24-May)
The Crypto Report 30-Apr-2022
Top 3 Company Headlines
FTX US to invest in IEX to launch digital securities (Cointelegraph 05-Apr)
Japan’s top social app Line adds NFT marketplace (Twitter 13-Apr)
Commerzbank applies for crypto licence (Börsen-Zeitung 14-Apr)
Top 3 Macro and Risk Headlines
Central African Republic makes BTC legal tender (CoinDesk 27-Apr)
ETH Dev Virgil Griffith gets 5+ years DPRK trip sentence (CoinDesk 12-Apr)
Saudi govt exploring blockchain uses (Bitcoin.com 23-Apr)
The Crypto’s View
The Central African Republic is an even weaker economy than El Salvador so its motives puzzle the Crypto. Only 14% of its people have electricity and far fewer have the internet. It’s an odd choice if “mass inclusion” is the actual aim. It will sadly probably just make corruption easier. Global Banks banned such customers decades ago, preferring to focus on the mass affluent of G7 type countries. From a G7 viewpoint cryptocurrencies this month performed not as “currency” but as high-tech “risk assets” losing like them double-digit value vs the $. The “maturity signal” given by the GBTC premium collapse a year ago and the market share gained by NFTs suggests that, despite the CAR, cryptocurrencies are not seen by “Mr Market” as “currencies”.
Fun Fact: The Russian PM says that russians collectively hold $130bn in cryptocurrencies (Cointelegraph 09-Apr)
The Crypto Report 31-Mar-2022
Top 3 Company Headlines
Ronin hit by $615 million crypto hack (Reuters 29-Mar)
Blockchain.com new funding, $14bn valuation (Bloomberg 30-Mar)
HKEX to build digital trading platform (SCMP 29-Mar)
Top 3 Macro and Risk Headlines
EU parliament passes crippling cryptocurrency bill (CoinDesk 31-Mar)
SEC scrutinises NFT market over illegal crypto token offerings (Bloomberg 02-Mar)
El Salvador delays “bitcoin volcano” bond (Reuters 22-Mar)
The Crypto’s View
MicroStrategy Incorporated's market cap is close to the value of the BTC it holds. Since he has borrowed money to buy some of them and it's not clear the rest of the company has assets worth much it's likely that its NAV is lower and it trades at a premium. With GBTC persistently at around a 30% discount that's nuts. Saylor's shareholders can probably get more exposure at lower risk by buying GBTC or even BTC directly from a cryptocurrency exchange.
If someone like Joel Greenblatt cannot find a way to properly price BTC (and instead treats it like art) it is likely that lots of other market participants have similar views. When investors lack a compelling logic to buy or sell prices stagnate. This explains the last 2 years. That's also consistent with the lack of premium movement on GBTC. The consensus view seems to be that BTC is irrelevant to mainstream asset markets and can be left alone to do its thing. Like the price of a Picasso it may go up or down but people's lives aren't much better or worse just a tad more fun.
Fun Fact: Everyone’s getting in NFTs, even the Ukrainian govt is selling NFTs to fund war effort (Twitter 03-Mar)
The Crypto Report 28-Feb-2022
Top 3 Company Headlines
Man U £20m per year Tezos kit deal (The Athletic 04-Feb)
ICE tZERO stake (PR 22-Feb)
Marketplace NFT "rampant' fakes" (Reuters 12-Feb)
Top 3 Macro and Risk Headlines
BTC pouring into Ukraine (BBC 26-Feb)
$4.5bn crypto laundering arrests (DOJ 08-Feb)
Marshall Isles recognizes DAOs (Cointelegraph 15-Feb)
The Crypto's View
Headlines have gushed about the Ukraine war driving Russia’s money supply below BTC market cap but this first happened a year ago. The Crypto just tested cross-border transfer costs but found little reduction in end-to-end costs since a decade ago. Then crypto looked like it might improve on a service billions of people rely on to remit hard earned cash home. While it’s nice NFTs for memes are making money for some, the Crypto is disappointed that we are doing so little to help the masses.
Fun Fact: Bill Ackman tweeted about wanting the BitLicense fixed. His core business is activist value realisation. In that field the “elephant in the room” is the multi-billion discount on the GBTC trust. Could it be that his tweet reveals his interest in that low-hanging fruit? (Twitter 09-Feb)
The Crypto Report 31-Jan-2022
Top 3 Company Headlines
Diem sells out to Silvergate (PR 26-Jan)
Google hiring blockchain team for cloud apps (Bloomberg 19-Jan)
Series C raise values OpenSea at $13.3bn (PR 04-Jan)
Top 3 Macro and Risk Headlines
Moody's warns on El Salvador credit risk (Bloomberg 14-Jan)
Wikipedia votes against classifying NFTs as art (Cointelegraph 13-Jan)
SEC approves BSTX for blockchain settlement (PR 29-Jan)
The Crypto's View
The Facebook entry into crypto was fatally flawed at the outset as the Crypto wrote at the time. Just one of its problems is confirmed by Moody’s alert to El Salvador: a mismatch of assets and liabilities adds to risk. Markets at the time enthused that Facebook heralded the arrival of “mass adoption”. The OpenSea valuation and media excitement about Lennon’s coat NFT and Keith Richards’ guitar shows that the masses are now betting on crypto as a collectable not a currency.
Digital technology is very good at replicating itself so the prospects for its salerooms may indeed be bright. NFT sales may be booming, the SEC has approved the use of DLT for stock settlements, and Google may be hiring more DLT engineers, but these validations of DLT have not stopped the slide in the price of crypto currencies. The discount on the vast GBTC trust collapsed to 30% during the month in contrast to the optimism indicated by its 30-40% premium when Facebook tried out crypto. The masses may have arrived but they were spending their money on art this month.
Fun Fact: Julian Lennon has announced the auction of his father’s iconic Afghan coat and other Beatles memorabilia. The Items themselves are not for sale, just their NFTs. Keith Richards (whose second hit with The Rolling Stones was co-written by John Lennon) announced the week before a charity auction for an NFT guitar but the black instrument will also be available. The Crypto observes that these NFTs are in limited supply as they’re their first yet wonders how many more will follow? (Twitter 24-Jan)
The Crypto Report 31-Dec-2021
Top 3 Company Headlines
Deutsche Börse takes majority stake in Crypto Finance (PR 16-Dec)
KKR led Anchorage Digital $350m raise (Cointelegraph 15-Dec)
Jasmine Technology Solution $2bn mkt cap after mining 8 BTC (Business Insider 27-Dec)
Top 3 Macro and Risk Headlines
Another ETH education event cancelled over sanctions fears (CoinDesk 20-Dec)
UK watchdog bans Coinbase & Kraken ads (Cointelegraph 15-Dec)
Investor Ray Dalio says "Bitcoin has proved itself" (YouTube 25-Dec)
The Crypto's View
The premium on Grayscale’s Bitcoin Trust just hit an all time low of 21.36%. It suggests that investors have little hope that ETF conversion will happen soon. The trust was up 7% in 2021. BTC went up 61%. An even more dramatic premium collapse happened to the Litecoin Trust. Underlying assets were up 15% in 2021 to $232m but the market price of the trust imploded 97% to just $149m from $5.6bn a year ago. That’s a $83m discount of the market value to it’s locked-in holdings. The Crypto suggests that Welsh IT worker James Howells (see below) should compare this to his 7300 Bitcoin on a hard-drive he is hoping to dig out from a landfill and expects those Litecoin will be released sooner. For closed-end trusts the question is “when” not “if”.
Fun Fact: An Ex-NASA team was hired to find £340m of BTC lost in a landfill (WalesOnline 16-Dec)
The Crypto Report 30-Nov-2021
Top 3 Company Headlines
Gemini raises $400m valuing it at $7.1bn (PR 18-Nov)
Japanese consortium to issue digital yen by end 2022 (CoinDesk 24-Nov)
CBA to offer crypto services to 6.5m Australians (PR 03-Nov)
Top 3 Macro and Risk Headlines
El Salvador Bitcoin City to be backed by $1bn bonds (Cointelegraph 21-Nov)
Miami to give “Bitcoin Yield” from MiamiCoin (CoinDesk 11-Nov)
China’s PRC proposes to monitor metaverse and NFTs (Cointelegraph 16-Nov)
The Crypto's View
El Salvador is a small country heavily reliant on expat remittances with a USD pegged currency. They plan to borrow $1bn USD using “Bitcoin Bonds” and invest the proceeds into infrastructure to focus on crypto projects. Their Bitcoin Trust has bought 400 BTC (worth just $23m), cash from which will fund a $4m animal hospital. The Crypto notes a mismatch between the grand political rhetoric and the tiny risk exposure they’ve taken. Likewise Miami “returning a BTC yield” to citizens is misleading. For gold, artworks, NFTs and similar assets the main way long term owners generate a “yield” is by lending those assets for a fee, usually to traders who want to take short positions. That ignores the risk exposure of those assets or the question of how to value them. The Crypto wonders if the politicians making these statements understand how these financial trades work and are misleading voters or are truly ignorant?
Fun Fact: Binance's CZ and Elon Musk swap Twitter insults after 2 week DOGE withdrawal freeze with one spotlighting hardware recalls and the other calling for sackings over software glitches (Bloomberg 28-Nov)
The Crypto Report 31-Oct-2021
Top 3 Company Headlines
Grayscale applies to convert GBTC to an ETF (PR 19-Oct)
Bakkt lists on NYSE (PR 18-Oct)
CDPQ joins $3bn Celsius funding round (FT 12-Oct)
Top 3 Macro and Risk Headlines
Almost 1.1m signed up for Coinbase NFT waitlist (Cointelegraph 14-Oct)
FATF urges AML rules for DeFi controllers (FT 28-Oct)
10 month French govt bonds crypto trading test (FT 18-Oct)
The Crypto's View
The surge in crypto asset prices to new highs is widely ascribed a) to enthusiasm for NFTs and b) optimism that a Bitcoin ETF will finally be permitted in the USA by the conversion of the Grayscale Bitcoin Trust. As there has been no material change in the wide GBTC discount, the Crypto infers that institutional traders (who might be expected to arbitrage away the discount) are not the main price driver. Probably they do not expect it to get permission. Bitcoin professionals may not believe it either since the prospect of so much Bitcoin becoming unlocked might have the effect of similar magnitude to the supply shortage created months ago as GBTC assets grew dramatically.
Fun Fact: Elon Musk-named meme token 'Dogelon Mars' gains nearly 4000% in October (Cointelegraph 30-Oct)
The Crypto Report 30-Sep-2021
Top 3 Company Headlines
Robinhood testing cryptocurrency wallet (Bloomberg 22-Sep)
First Japanese retail crypto fund (Bloomberg 02-Sep)
Dapper Labs $250m raise at $7.6bn valuation (CoinDesk 22-Sep)
Top 3 Macro and Risk Headlines
Cuba´s BCC issues cryptocurrency framework (Prensa Latina 16-Sep)
Third of US swing state voters want crypto as legal payment (Newsweek 20-Sep)
Virgil Griffith changes plea to "guilty" (CoinDesk 29-Sep)
The Crypto's View
Retail participation continues to show strong growth in crypto adoption. Dapper Labs may be attracting institutional VC funds but its product line (sports collectibles NFTs) is niche compared to mainstream financial markets. Morgan Stanley doubling exposure to Grayscale’s GBTC boosted its total to just $2m. For context that is less than 1% of the bitcoin holdings at specialist manager Ark Invest which is itself only 0.69% of their portfolio. DLT may be getting used increasingly for applications like NFTs or Archax’s Montis securities ecosystem but the Crypto observes that adoption as an alternative to financial assets themselves is being outgrown by collectibles. The Virgil Griffith trial is a further warning that prosecutors will not tolerate anything that even hints at making it easier to evade supervision of financial assets.
Fun Fact: Meme stock AMC will accept crypto for movie tickets (NY Post 16-Sep)
The Crypto Report 31-Aug-2021
Top 3 Company Headlines
Helium raises $111m in A16Z led raise for 5G network (Bloomberg 10-Aug)
Matrixport in $100m Series C round (PR 02-Aug)
Bitmex to pay $100m CFTC penalty (PR 10-Aug)
Top 3 Macro and Risk Headlines
SEC's Gensler views all ICOs as securities (PR 03-Aug)
Fitch raises El Salvador’s risk profile (PR 16-Aug)
SARB views crypto currencies as assets (Moneyweb 28-Aug)
The Crypto's View
Protests from El Salvador’s labour unions fearing conversion of pensions into BTC, Fitch Ratings’ volatility concerns, and Donald Trump backing the USD vs crypto are not parties the Crypto would have expected to see on the same side of many debates. The Crypto has commented before on the risk to an economy adopting a currency that differs from the one where the bulk of its assets and income are denominated. El Salvador has extremely high dependency on expat remittances (mostly earned in USD) and a local economy pegged to the USD for decades. Reducing bank charges is desirable goal but cryptocurrencies are yet to demonstrate much cost reduction as often fiat must be converted at both ends of the transfer. Its use introduces a huge volatility risk which adds to the true cost. While a saver who bought BTC a decade ago might be happy, what if your home loan had been denominated in it?
Fun Fact: Osaka-born tennis star Naomi Osaka has followed up her $600,000 NFT sale in April by talking to her agent about Japanese Shiba-inu inspired DOGE (Bloomberg 30-Aug)
The Crypto Report 31-Jul-2021
Top 3 Company Headlines
Fireblocks raises $310m, valuation at $2bn (Reuters 27-Jul)
Genesis raises $125m to expand BTC mining (PR 28-Jul)
Mercado crypto exchange raises $200m from Softbank (PR 01-Jul)
Top 3 Macro and Risk Headlines
UK Chancellor Rishi Sunak plans CBDC (Daily Mail 25-Jul)
Germany permits institutions to invest in crypto (Investing.com 08-Jul)
Elon Musk's Dogecoin tweets ineffective (Cointelegraph 01-Jul)
The Crypto's View
This month the assets held by the Grayscale Litecoin Trust fell from $13.03 to $12.81. It’s market price fell from $83.47 to $13.29 bringing its YTD drop to 95.43%. The assets it owns are up 9.11% YTD. The premium to NAV is still well above the discount of 10-20% that the much larger Bitcoin Trust (ticker GBTC) has been on since February. The Crypto disagrees with media comments that institutional demand has waned and observes that it is mass market “pink sheets” traders who have lost their enthusiasm for paying huge premiums to NAV for trusts that were set up to “track” the performance of crypto assets. The supply shortage that happened from HODLers who moved crypto into these huge trusts in the hope they could exit at a premium is unlikely to recur.
Fun Fact: Burger King Brazil will accept Dogecoin (Twitter 27-Jul)
The Crypto Report 30-Jun-2021
Top 3 Company Headlines
Japan FCA warns Binance again (PR 25-Jun)
A16Z raises $2.2bn for Crypto Fund III (PR 24-Jun)
MicroStrategy borrows more to buy crypto (WSJ 07-Jun)
Top 3 Macro and Risk Headlines
Banque de France tests DLT securities settlement (PR 21-Jun)
El Salvador to make Bitcoin legal currency (BBC 06-Jun)
Of 111 firms warned by UK FCA half drop applications (Reuters 29-Jun)
The Crypto's View
Regulatory issues in several countries have continued to cause many participants to step back when faced with the need to put in place adequate money-laundering prevention measures and other requirements. A third of El Salvador’s 6m population relies on money sent in from expat workers. If Bitcoin helps reduce costs and makes voters happy their politicians and regulators who work for them have a much bigger incentive to than typical wealthy countries to change things or to experiment with new technologies such as DLT.
Fun Fact: The originator of the 2013 "Lambo" meme has been traced to a gated community in SE Asia (Cointelegraph 04-Jun)
The Crypto Report 31-May-2021
Top 3 Company Headlines
Tesla drops crypto payments over ESG concerns (CNBC 12-May)
DIEM retreats to the USA (PR 12-May)
Circle raises $440m (Fortune 28-May)
Top 3 Macro and Risk Headlines
PRC cracks down on crypto again (WSJ 21-May)
DLT art was active long before Beeple (WSJ 22-May)
Germany permissions digital securities (Bundestag 05-May)
The Crypto's View
Anything that (it is said by the media) goes up or down 50% on the tweeting of any individual is clearly not a “currency”. The Crypto concurs with the views of Druckenmiller and Krugman that mainstream finance can safely put crypto in same basket as gold: it has arrived but is an afterthought as a driver of mainstream asset prices.
Fun Fact: None this month. Is there anything more fun than Musk’s tweets?
The Crypto Report 30-Apr-2021
Top 3 Company Headlines
EIB issues €100m bonds on Ethereum (Bloomberg 27-Apr)
Musk says Tesla sold BTC to prove liquidity (Bloomberg 27-Apr)
Nexon (3659:TO) buys $100m of BTC (PR 28-Apr)
Top 3 Macro and Risk Headlines
Congress passes digital asset innovation act (PR 20-Apr)
Dallas Fed: BTC is "store of value" (Yahoo!Finance 16-Apr)
BTC’s dominance lowest since Aug-2018 (Cointelegraph 30-Apr)
The Crypto's View
DLT is finding its place in the world: Musk banked $ after his pump, the Dallas Fed has a view (that BTC is NOT a currency) and 2% of online gamer firm Nexon moved into BTC. The Crypto remembers the rise of the internet and that NONE of the early pioneers building protocols made money. Those that did came later like Amazon or Facebook who built businesses using the internet. The multi-billion Coinbase cash-out this month is a wake-up call. ETH has risen more this month than BTC. The Crypto recall earlier bull markets when secondary names performed well after the papa bull had died…
Fun Fact: Mark Cuban tried to convince Ellen DeGeneres to accept Dogecoin (Cointelegraph 27-Apr)
The Crypto Report 31-Mar-2021
Top 3 Company Headlines
Visa to allow USDC settlement (Reuters 29-Mar)
Bitpanda is first Austrian Unicorn (Decrypt 16-Mar)
MS Wealth allows crypto fund units (CNBC 17-Mar)
Top 3 Macro and Risk Headlines
NY Excelsior Covid status DLT Pass launch (PR 26-Mar)
Christie's auctions its first NFT (PR 11-Mar)
CPA Aus says 3 chains have capacity for CBDCs (PR 08-Mar)
The Crypto's View
Covid-19 is already a humanitarian and economic disaster of historic proportions. Vaccines have been developed fast. Both a mass uptake of those and a way to authenticate covid status seem needed to allow life to return to near normal quickly. The NY Excelsior Pass is the best shot the Crypto has seen as a “killer app” for DLT. Cypherpunks may despair that it has come from IBM, a government, and needs a smartphone, but will the masses care? The Crypto observes that the NFT craze is another example of DLT polarizing toward elitist assets like art/gold versus mass adoption for eMoney (like Visa using USDC) or covid data validation. The latter could help save millions of dollars or millions of lives but the former are just whale playthings.
Fun Fact: An NFT of a Brooklyn Bridge sketch by John Cleese is bid at $36,000 with auction closing on 01-Apr (NYT 24-Mar)
The Crypto Report 28-Feb-2021
Top 3 Company Headlines
Grayscale Trusts drop below NAV (PR 25-Feb)
Japan’s SBI invests in Sygnum Bank (CoinDesk 18-Feb)
Bitfinex settles Tether suit with NY AG (PR 23-Feb)
Top 3 Macro and Risk Headlines
Logica estimates China could shut bitcoin for $7bn (Real Vision 03-Feb)
Sweden extends e-Krona pilot to 2022 (PR 20-Feb)
Crypto users grow to 100m (Crypto.com 24-Feb)
The Crypto's View
For the first time the Grayscale Bitcoin is trading below NAV. The Crypto has compared the premium to that enjoyed for its first decade by the Korea Fund Inc when the underlying emerging market was immature and difficult to access. The FT quoted Nickel Digital’s David Fauchier describing Grayscale as “Hotel California” where bitcoin can flow in but not out. The Korea Fund dropped below NAV over 20 years ago and has stayed at a discount almost all the time since so those who arrived recently may have a long wait for check-out. The Ethereum Trust also crashed to a discount but perhaps the Litecoin Trust which closed at $305 vs an NAV of $16.41 may give them hope or is it just a “warm smell of colitas”?
Fun Fact: In a 10K filing Tesla disclosed a $1.5bn buy of digital assets. The Tweet by CEO Musk in last month’s Fun Fact must have been sent around the same time as that purchase… (SEC 08-Feb)
The Crypto Report 31-Jan-2021
Top 3 Company Headlines
Ripple asks SEC to disclose ETH decision info (PR 29-Jan)
Coinbase announced proposed direct listing (PR 28-Jan)
Digital Currency Group firm is top 10 BTC miner (Twitter 26-Jan)
Top 3 Macro and Risk Headlines
Asia trades over 50% of crypto globally (Twitter 25-Jan)
Bitcoin node count reaches all-time high (Bitnodes 31-Jan)
Bahrain licences Sharia DLT exchange (PR 24-Jan)
The Crypto's View
Last month the Crypto puzzled over the huge premium the Grayscale Ethereum trust ETHE traded at to its NAV but now it is down to just a few %. Pink-sheets punters may be wondering why their price is down despite a nearly 100% gain over the month for the underlying. With both ETHE and GBTC premiums trading at the bottom of their recent range the arbitrage, inflows of 2020 must have dried to a drip. DCG may need another outlet for what they mine. While resting from the recent social media frenzy the Crypto plans to study the 24 pages by Bridgewater which characterises Bitcoin not as a world-disrupting currency but just as a possible alternative to gold for a % of savings.
Fun Fact: DOGE becomes a top 10 crypto coin after Reddit pump. The Crypto wonders if Elon Musk is disappointed his Bitcoin tweet resulted in a far smaller price move? (Cointelegraph 29-Jan)
The Crypto Report 31-Dec-2020
Top 3 Company Headlines
Grayscale adds multiple of monthly BTC mined (PR 31-Dec)
SEC files case against Ripple (PR 22-Dec)
Paypal buying more than 100% of newly mined BTC (Pantera 19-Dec)
Top 3 Macro and Risk Headlines
FinCEN publishes rules for crypto exchanges (PR 18-Dec)
9 congressmen ask FinCEN not to rush new rules (Coincenter 31-Dec)
SEC establishes crypto office (PR 03-Dec)
The Crypto's View
No experienced commodities trader would be surprised if two buyers each bought more than the whole daily supply for weeks and the price moved a lot. Paypal and Grayscale appear to have been doing that again this month with the GBTC Bitcoin Trust topping the OTC markets (known as "Pink Sheets") activity lists. The Crypto notes that the GBTC premium to has eroded to just a few % (though their ETH Trust is still near a baffling 100%) and is surprised that such heavy buying has not moved prices even more. GBTC is yet to match the price it reached 2 years ago suggesting the Pink Sheets punters are less excited or some have realised they can buy Bitcoin direct. The real test will come when recent GBTC buyers’ lockups expire.
Fun Fact: The new brand name for Facebook’s cryptocurrency will be Diem, an ancient Latin word pronounced like DM as the German currency was known (PR 01-Dec)
The Crypto Report 30-Nov-2020
Top 3 Company Headlines
China seizes $4.2bn in crypto from PlusToken (The Block Crypto 27-Nov)
Guggenheim files for GBTC purchase leeway (Nasdaq 28-Nov)
Libra to launch Jan 2021 as a USD stablecoin (FT 28-Nov)
Top 3 Macro and Risk Headlines
Buterin says BTC fees stymie mass adoption (Cointelegraph 26-Nov)
Japanese financiers pilot CBDCs (Reuters 19-Nov)
Xi promotes ASEAN “digital Silk Road” (SCMP 27-Nov)
The Crypto's View
Data confirmed that BTC continues its decade-long trend towards concentration into a tiny % of traders. The Crypto concurs with Ethereum’s architect that BTC mass-adoption is not happening. Dominant fiat-to-crypto flow has been those able to buy Grayscale’s GBTC at NAV and to sell into the retail premium after a lock-up. Though less than the 100% 24 months ago, it is easy money for hedgers able to lay-off risk while waiting for the lock-up to end. These amounts are chunky. However, The Crypto notes that the vast e-money volumes that Facebook, Xi and the Japanese are building for are much bigger forces on the way. Bitcoin may be rare and marvelous like a Monet but e-money is where the Crypto sees mounting mass-market momentum.
Fun Fact: Satoshi likely lived in London (Chain Bulletin 23-Nov)
The Crypto Report 31-Oct-2020
Top 3 Company Headlines
Nomura/SBI’s Boostry issues first STO under new law (Tokyo Fintech 11-Oct)
Toyota Finance DLT pilot with DeCurret exchange (PR 26-Oct)
PayPal to allow crypto deposits (Reuters 21-Oct)
Top 3 Macro and Risk Headlines
Macau checks 23m tourists’ health using DLT (Cointelegraph 21-Oct)
Cambodia launches DLT payment system (PR 16-Oct)
The Bahamas launches world’s first CBDC, the ‘Sand Dollar’ (PR 20-Oct)
The Crypto's View
The PayPal news moved asset prices up. However, it will not allow external payments, so this is just another example of a stored-value account allowing crypto as an option. The rise in average BTC transaction size suggests another move further away from mass adoption and toward it being more like a Monet than money. Adjusting for Moore’s Law, the BTC hash rate falling below its YTD average suggests a lot less capital is at work to support the network. In contrast the Crypto is impressed at the innovative use of DLT to allow 23m COVID-19 checked Chinese tourists into Macau, to issue micro bonds in Japan, and to improve payments in frontier economies. None of these are “decentralised” but they and projects like them look likely to have an impact on many more millions of people soon.
Fun Fact: The daily average BTC transaction reached a new high of $154k and the monthly average is now over $100k (BitInfoCharts.com 22-Oct)
The Crypto Report 30-Sep-2020
Top 3 Company Headlines
Kucoin hacked for $150m (PR 26-Sep)
MyPatricia app thrives in Nigeria (Cointelegraph 16-Sep)
LINE points platform released (CoinDesk 27-Sep)
Top 3 Macro and Risk Headlines
China filed half of global crypto patents in 2019 (Xinhua 29-Sep)
Blockchain laws move up to Senate (Cointelegraph 29-Sep)
Ethereum daily trades new high 1.4m (Etherscan 18-Sep)
The Crypto's View
Japan's LINE making loyalty points easy to trade for fiat between its 84m local users and for devs to create apps is a smart strategy. Points are a Japanese obsession and a strong competitor with other eMoney such as the Suica/Pasmo stored value card that began just for trains but is widely accepted in shops. Users are unlikely to know what kind of encrypted tech is behind it and probably trust their railway or phone company.
The Crypto is yet more convinced that the eMoney battle to eat the banks' lunch (often a bento in Japan) is between these kind of large firms until DLT makes vast improvements to its abilities.
Fun Fact: Facebook’s Libra co-creator is returning to a (non DLT focused) VC - what surprises the Crypto is that it has taken so long for towel to be thrown in on “Zuck Bucks” (TechCrunch 22-Sep)
The Crypto Report 31-Aug-2020
Top 3 Company Headlines
Ant Financial plans $200bn IPO (FT 27-Aug)
JP Morgan sells Quorum to Consensys (Business Wire 25-Aug)
LINE launches wallet and DLT platform (CoinDesk 27-Aug)
Top 3 Macro and Risk Headlines
POSA tells IRS staking should not be taxed (Cointelegraph 21-Aug)
ETH daily fees at record $7m (Cointelegraph 14-Aug)
Singapore approves crypto code of conduct (PR 13-Aug)
The Crypto's View
LINE’s 164m users and Ant’s record sized IPO show the scale of the threat to incumbent firms from fintech. Ex-JP Morgan Will Martino’s comment that Quorum was unable to scale from 200-1000 trades a second shows that DLT has a long way to go to be part of that threat. POS (Proof of Stake) may help. Lobbyist POSA argues that rewards should not be taxed because dilution can weaken the total return to zero. The Crypto suggests POS economics must be stronger to run networks able to challenge incumbents and their Ant sized e-money competitors.
Fun Fact: Journalist Leah McGrath Goodman insists that Dorian Nakamoto really is Satoshi (Pomp Podcast 25-Aug)
The Crypto Report 31-Jul-2020
Top 3 Company Headlines
Grayscale AUM hits $5.1bn (PR 29-Jul)
MUFG to launch Yen stablecoin (Mainichi 13-Jul)
Socios gets Estonian licence for sports tokens (PR 30-Jul)
Top 3 Macro and Risk Headlines
US banks get OK for crypto custody services (PR 22-Jul)
Ethereum network catches up with Bitcoin (CoinGape 30-Jul)
Report from PwC and CV VC on art and crypto (PR 22-Jul)
The Crypto's View
Buterin poured cold water on boiling hot DeFi projects that offer so-called "yield farming". These remind the Crypto of real estate sales pitches offering a short term "yield". That usually comes out of the scheme organiser’s profit margin. If explained honestly it would be called a customer acquisition cost. A "yield" should be a share of some hoped-for underlying business revenue.
Fun Fact: JM Smucker will be tracking coffee beans using DLT. The Crypto notes that daily global coffee bean production and Bitcoin mining production are nearly the same. On mass adoption and $ total coffee is still ahead (Cointelegraph 15-Jul)
The Crypto Report 30-Jun-2020
Top 3 Company Headlines
Grayscale buys more BTC and ETH (Cointelegraph 26-Jun)
Wirecard files for bankruptcy (FT 18-Jun)
COMP debuts as largest defi token over MKR (defimarket 29-Jun)
Top 3 Macro and Risk Headlines
Fidelity surveys finds 36% of institutions own crypto (Cointelegraph 27-Jun)
Huge crypto growth in India (bit2buzz 30-Jun)
ETH volatility drops below BTC and both to a 2yr low (Cointelegraph 30-Jun)
The Crypto's View
The “Pink Sheets” premium for the Grayscale Ethereum Trust fell from a high of 10x its NAV and the premium for their Bitcoin Trust was steady. News of its continued buying of a multiple of all BTC mined this month should have an impact on premium one day as lock-ups expire. The halving in BTC and ETH volatility in just a month (reaching comparable levels to gold) and huge interest in income-producing COMP suggests that many in the crypto industry are looking to lock in price levels and/or generate extra income from existing holdings or future mining flows. For this to happen with crypto prices at record low volatility suggests that the Grayscale buying is by arrangement like an offtake agreement or direct from long-term holders. There may also be heavy options writing. These are strategies that will be familiar to many of the 36% of institutions that Fidelity says have become active in the crypto markets.
Fun Fact: Uber and Robinhood angel investor Jason Calacanis says “99% of crypto projects are garbage” (Cointelegraph 29-Jun)
The Crypto Report 31-May-2020
Top 3 Company Headlines
GBTC buys 33% of BTC mined in Q3 (Reddit 18-May)
FINMA authorises Zurich’s InCore Bank (PR 29-May)
Tencent unveils $70bn capex plan (Reuters 26-May)
Top 3 Macro and Risk Headlines
Bank of France and SocGen test digital euro (PR 14-May)
Lopp says no proof who moved 2009 mined BTC (Twitter 21-May)
$80m pizza’s Haneycz says GPU mining set up early on (Cointelegraph 30-May)
The Crypto's View
TradeBlock’s Feb estimate of $6,851 pre-halving break-even for BTC miners implies most are losing money today. If correct, a16z’s “fourth crypto bull cycle” means more projects will need fiat for rent and staff etc. It is logical that Grayscale is attracting qualified investor (QI) money locked for a few months into crypto if QIs expect to exit at a persistent “pink-sheet” premium (which non-QI buyers must pay) of 20% for the bitcoin trust and a mind-boggling 5x for the ETH trust. Most research available to non-QI investors (even market-leader Messari) does not mention this QI-only arbitrage. The Crypto observes that global macro scene for inflation hedges (which some like Tudor hope BTC will be) has been great yet the BTC price is steady. Perhaps that is due to these cash calls?
Fun Fact: Tyler Winklevoss: “How are you going to pay for things on Mars?” in response to hearing Elon Musk telling JK Rowling he owns only 0.25 BTC (Twitter 16-May)
The Crypto Report 30-Apr-2020
Top 3 Company Headlines
Libra publishes revised white paper (PR 17-Apr)
a16z raises $515m DLT fund (Fortune 30-Apr)
dForce $25m hack reversed (BBC 21-Apr)
Top 3 Macro and Risk Headlines
G20 warns stablecoins pose systemic risk (PR 14-Apr)
26% of crypto users buy drugs or weapons (Visual Objects 20-Apr)
China set to launch national blockchain platform (BSN 25-Apr)
The Crypto's View
The gulf between government or “big tech” permissioned projects and early-stage/decentralised projects was on display again this month. The dForce hack and its reversal reminds the Crypto how many DLT start-ups have suffered losses but even huge firms like Facebook can stumble. The drastic re-write for Libra does not surprise the Crypto but abandoning its focus on the “un-banked” is pathetic. Those 1.7bn souls are more in need of help than ever as they confront the pandemic. Libra has “unfriended” the planet’s most vulnerable as it tries to patch up rich country relationships.
Fun Fact: Italian town issues crypto coin to counter Covid-19 impact (euronews 26-Apr)
The Crypto Report 31-Mar-2020
Top 3 Company Headlines
TON Network launch may defy SEC GRAM injunction (Cointelegraph 26-Mar)
Bakkt raises $300mn (PR 16-Mar)
Steem re-launches as Hive (PR 17-Mar)
Top 3 Macro and Risk Headlines
India overturns bank crypto ban (Bloomberg 08-Mar)
IBM and MiPasa launch WHO COVID-19 DLT project (Forbes 28-Mar)
Buterin proposes Bitcoin–Ethereum bridge (Twitter 25-Mar)
The Crypto's View
Polychain (one of the oldest crypto funds) for the year to Nov 2019 gained 56% after a drop of 60% in 2018 while Bitcoin dropped 73% and rose 105%. The portfolio has shifted to half in illiquid tokens said to be in parallel with a VC fund they also manage. This may explain the feeble rebound from a dive that shadowed the 2018 loss. The Crypto observes that while the fund manager talks about the upside potential of crypto assets his actions to switch into VC in effect reduced the exposure to crypto as VCs must spend fiat to “buidl” projects. The Crypto suspects others have been making similar moves into VCs which outflow to fiat while in public talking up asset class.
Fun Fact: Maaaaaaass adoption? Czech sheep fed via crypto gift webcam (Cointelegraph 12-Mar)
The Crypto Report 29-Feb-2020
Top 3 Company Headlines
JP Morgan may merge Consensys and Quorum (Reuters 11-Feb)
Nexus insurance payout following bZx attacks (Blog 20-Feb)
40 German banks apply to offer crypto services (Trustnodes 08-Feb)
Top 3 Macro and Risk Headlines
Japan lawmakers ask for G7 talks on digital yen (Reuters 07-Feb)
France pushes EU to remove obstacles on crypto (Trustnodes 12-Feb)
Trump adds crypto to Secret Service role (Coinrivet 11-Feb)
The Crypto's View
Consolidation by regulated firms continues as ConsenSys buys into the trillion-$ muni market with a broker-dealer and mulls a merger, Bank von der Heydt prepares to offer STOs competing in the crypto arena with 40 other German banks and iSTOX gets MAS approval for capital markets business. Among smaller firms the bZx arbitrage attack using its own “smart-contracts” reminds the Crypto of the astonishing proportion of hacks that crypto projects have endured. Criminals are unlikely to “HODL” so the outflow to fiat could at times exceed that needed to fund mining or start-ups unless (like below) they just lose the keys or delay the risk of cashing out and getting caught.
Fun Fact: Drug dealer's paper keys to $56m burned with fishing kit (Irish Times 21-Feb)
The Crypto Report 31-Jan-2020
Top 3 Company Headlines
Vodafone quits Libra to focus on M-Pesa (CoinDesk 21-Jan)
Binance partners with Japan’s Z-Holdings (PR 20-Jan)
Gold-backed stablecoin issued by Tether (PR 23-Jan)
Top 3 Macro and Risk Headlines
SEC says GRAMs are not commodities like donuts (Cointelegraph 29-Jan)
Six central banks to collaborate on DLT research (PR 21-Jan)
BSV volatile as Satoshi case progresses (Cointelegraph 20-Jan)
The Crypto's View
Central banks researching digital currency or Saudi Aramco trading oil on-chain show the scale of DLT projects, yet even the behemoth Facebook has been unable to hold Libra together. Vodafone will use its Kenyan e-money success M-Pesa as its solution for the 1.7bn unbanked. Stablecoins like Libra, CBDCs, or now Tether’s gold-backed token, are becoming a dominant topic. The Crypto thinks these are a natural way for institutions to adopt DLT since assets like fiat, the oil price or gold are risks they have to live with already. New ways of managing those risks will be welcomed. Unless they introduce new risks (e.g. Tether’s legal case) stablecoin issuers have a serious chance of becoming the “killer app” for DLT like email was for corporate use of the internet.
Fun Fact: Rapper given land in Senegal for crypto-only AKON City (Union Journal 14-Jan)
The Crypto Report 31-Dec-2019
Top 3 Company Headlines
Libra updates white paper (Fintech Policy 10-Dec)
Ripple Raises $200m from VCs (Elevenews 21-Dec)
Great North Data files for bankruptcy (CBC 05-Dec)
Top 3 Macro and Risk Headlines
YouTube cracks down on crypto (Bitcoinist 24-Dec)
China’s BTC miners control 66% of hash rate (Asia Times 12-Dec)
Less VC funding for crypto (Cointelegraph 31- Dec)
The Crypto's View
Ethereum co-founder Jeff Wilcke was observed moving $11m worth of his tokens to an exchange which was said to be to fund his next venture. The Crypto does not know if he bought them or was given them but notes that a recovery to VC from 2019 levels or other inflows to crypto will be needed to balance these kind of sales to fund projects.
Fun Fact: Nike patents a system for tokenising shoes on Ethereum (USPTO 10-Dec)
The Crypto Report 30-Nov-2019
Top 3 Company Headlines
Bakkt offers Bitcoin custody (PR 12-Nov)
Google plans checking accounts with Citi (WSJ 13-Nov)
Franklin Templeton to use CURV wallet for tokenised stocks (PR 21-Nov)
Top 3 Macro and Risk Headlines
FCA to ban mini-bonds sales to small investors (Guardian 26-Nov)
BRICS nations propose cryptocurrency for payments (The Block 15-Nov)
Swiss plan to remove legal hurdles for DLT (PR 27-Nov)
The Crypto's View
Bitcoin based IRAs are set to break $1bn soon which makes the 60% premium to NAV the Grayscale Digital Large Cap Fund traded at last week baffling as it contains over 80% BTC. Its sister GBTC holds only BTC and its premium has ranged between an equally baffling 100% and zero.
This may reflect US retail investor optimism about mass adoption of crypto assets but the Crypto observes that eMoney competitors like Google continue to emerge as do government backed DLT projects such as the BRICS settlement project. Twitter CEO Dorsey’s comment that “Africa will define the future of Bitcoin” could mean that its use-case as a payments solution is overshadowed by more appropriate local solutions like mPesa.
Fun Fact: US man arrested for visiting DPRK to give crypto lecture (PR 29 Nov)
The Crypto Report 31-Oct-2019
Top 3 Company Headlines
Booking Holdings follows 6 others out from Libra (Bloomberg 14-Oct)
SEC halts $1.7 billion Telegram offering (PR 11-Oct)
Nomura invests in Line project (PR 4-Oct)
Top 3 Macro and Risk Headlines
Bitcoin surges after Xi Jinping supports DLT (Reuters 26-Oct)
CFTC deems ETH a commodity (Yahoo 10-Oct)
Bermuda to accept tax payments in USDC (Circle 16-Oct)
The Crypto's View
Xi Jinping’s support for DLT, legal clarity and a new list of projects contrasts with Zuckerberg's DC reception, EU resistance, and much of Libra deserting before battle began.
Libra’s white paper target of 1.7bn unbanked would be badly served by a currency basket and that already appears to be history. MZ testified Libra could stand up for the US against China yet it already has access to most of those 1.7bn through the BRI and deployment of its telco materiel in their homes.
The Crypto is reminded of Operation Barbarossa which ignored advisers. China won’t stop, however, and the Crypto bets Satoshi would be sad if immutability were used to control rather than emancipate users and reduce corruption in countries where the unbanked scrape out their existence.
Fun Fact: Cryptocurrency political donations are deemed legal in Japan (Cointelegraph 08-Oct)
The Crypto Report 30-Sep-2019
Top 3 Company Headlines
Square to pivot away from payments (AFR 05-Sep)
DB joins JPM’s 334 member iiNetwork (FT 15-Sep)
Kik Messenger shut to fight SEC (Blog 24-Sep)
Top 3 Macro and Risk Headlines
IMF’s IFRIC views cryptos as ”intangible assets” (Korea Times 23-Sep)
DPRK building crypto based economy (Vice 19-Sep)
Ethereum clogged by Tether (Trustnode.com 11-Sep)
The Crypto's View
Mastercard and Bank of America joining Marco Polo Network, DB joining JPM, and IBM snagging 6 of 11 Hyperledger posts show the weight of resources competing with decentralised projects. Bitcoin bull Yusko pointed at this month’s all-time high hash rate but due to “Moore’s Law” type gains in CPU performance that’s less $ of CPU deployed than in 2017. ETH suffered delays and the Lightning Network crawls along. The Crypto sees why Dorsey is steering Square into services and why FB CEO back-pedalled from the 2H 2020 LIBRA launch. FB has the inverse plan to Square i.e. a high margin/low regulation business to enter a high regulation/low margin one. For a realistic (and heartening) view on DLT serving the unbanked look at the Oxfam project in Vanuatu or the DPRK efforts enabling the private sector and skip over the repressive Iranian criminalisation of crypto.
Fun Fact: Catalonia’s DLT based citizens ID project aims to thwart Govt. access to data (VilaWeb 07-Sep)
The Crypto Report 31-Aug-2019
Top 3 Company Headlines
Binance reveals Venus project (PR 18-Aug)
Elwood on a mission for $1bn crypto fund (FT 30-Aug)
African Mega Bank Standard joins ICBC’s Marco Polo (PR 22-Aug)
Top 3 Macro and Risk Headlines
ETH’s Vitalik says "we’re full" (Bloomberg 27-Aug)
MIT AI finds “just” 2% of BTC trades illicit with “only” 77% unknown (PR 02-Aug)
ING finds Austrians sceptical vs non G7 citizens (Der Standard 14-Aug)
The Crypto's View
Venus, ICBC led Marco Polo, and talk of a CBDC shows how China dominates. Western focus on STOs was knocked a tad by Overstock news and of ETH at capacity, but the Crypto finds the INX raise and Alan Howard’s ambitions encouraging: they focus on pro-investors/VC. The Hockney print STO in Korea and $75m Dominican Estancia STO show what appeals to retail rather than UHNW or institutions. Congruent with that, ING data shows the further an economy is away from G7 quality the more citizens fear their fiat. The Crypto prays that Bannon's "Global Populist Revolt" turns out to be just tinfoil-hat (at least in the US) and that BoE Governor Carney's proposed pivot from the $ to a (SDR type?) currency he may one day manage at the IMF is the probable outcome.
Fun Fact: Steve Bannon: cryptocurrencies are part of the ‘global populist revolt’ (CNBC 02-Aug)
The Crypto Report 31-Jul-2019
Top 3 Company Headlines
Libra testimony (Forbes 15-Jul)
Germany approves $280m Fundament STO (Securities.io 23-Jul)
CFTC investigating Bitmex (CCN.com 19-Jul)
Top 3 Macro and Risk Headlines
Trump “not a fan” (newsbtc 12-Jul)
UK issues crypto guidelines (CoinDesk 31-Jul)
Japan backs SWIFT replacement (ZDnet 19-Jul)
The Crypto's View
Libra is the inevitable focus from June yet nothing but a yawn emerged from Senate hearings or other responses. The CoinDesk report suggesting that 58% of Americans have “awareness of Bitcoin” is congruent with indifference of the mass market rather than a wave of new adoptees. Crypto projects are yet to reveal a “killer app” that will capture the imagination and use of the mass market in the way that email did for the internet. Note the remarks by the Huawei President pondering whether China might launch a central bank backed crypto coin. There are already 300m users of eMoney Alipay in China alone which dwarfs the number of active bitcoin users never mind the millions of mPESA users in Africa, Suica users in Japan etc. Crypto projects got a wake-up call this month about what the mass market finds interesting and (as far as mass market eMoney use is concerned) are way behind.
Fun Fact: Crypto posterboy John McAfee announced he will also run to be UK Prime Minister at same time as US president since his birth at a US airbase in the UK gives him unique qualifications to occupy both roles at same time (CCN.com 26-Jul)
The Crypto Report 30-Jun-2019
Top 3 Company Headlines
Facebook reveals Libra (CoinDesk 18-Jun)
Gram Asia selling GRAM via Liquid (PR 11-Jun)
Binance geoblocks 21 nations (Cointelegraph 02-Jun)
Top 3 Macro and Risk Headlines
Switzerland and EU cannot agree (Reuters 24-Jun)
IMF predicts central banks will start cryptocurrencies (IMF Blog 27-Jun)
US, Japan top crypto traffic (Cointelegraph 01-Jun)
The Crypto's View
Libra shows that mass market bankers are right to fear Bezos and Brin rather than BTC or Buterin. The Crypto’s editor was published on top news site CoinDesk spotlighting the canard that is FB’s focus on the unbanked. Regulators and many important players around the world saw it the same way. Mass market projects should fear both the entrance of a muscular competitor and regulators concerns. Niche projects should take heart that crypto is acknowledged as an important technology.
Fun Fact: Libra Foundation member Breakthrough Initiatives’ main focus is on the search for extra-terrestrial life (Breakthrough Initiatives 30-Jun)
The Crypto Report 31-May-2019
Top 3 Company Headlines
Binance $40m hack re-org considered (Twitter 07-May)
FINRA approves Ethereum Trust listing (PR 23-May)
Galaxy $71m Block.one exit (PR 21-May)
Top 3 Macro and Risk Headlines
Token capital raises rebound (Cointelegraph 25-May)
51% attack in Bitcoin Cash (Twitter 24-May)
Europol takes down BestMixer.io (PR 22-May)
The Crypto's View
Approval for Grayscale to list ETHE draws attention to the premium on their older Bitcoin Trust GBTC that has doubled to nearly 40% and the astonishing 450% on the Ethereum Classic trust ETCG. In 2018 fiat inflows to crypto surged to participate in the ICO boom with a “crypto winter” reversal as projects converted back to fiat to fund projects. Since the weak debut of “unicorns” Uber and Lyft there’s anticipation of PE stakes being securitised to be floated into nascent STO markets. It may be that the booming IEO market has led to similar inflows and price impact in the past few weeks as well as hopes of further easy gains from early STOs. The Grayscale premiums are evidence that crypto investors are extremely optimistic. The Crypto expects stakeholders will try to reap valuations for their unicorns that traditional markets are cynical about.
Fun Fact: Chinese developer Wei Liu files Bitcoin copyright counterclaim to Craig Wright (CoinDesk 30-May)
The Crypto Report 30-Apr-2019
Top 3 Company Headlines
Bitfinex accused of $850m Tether loss by NY AG (Bloomberg 26-Apr)
NYT’s Popper says Facebook seeks $1bn crypto funding (Twitter 8-Apr)
KT unveils blockchain-ready 5G platform (Korea Times 16-Apr)
Top 3 Macro and Risk Headlines
SEC posts Digital Asset Investment Contract Framework (SEC Apr-03)
France asks EU to adopt its crypto regs (Reuters 16-Apr)
Switzerland to draft security token trading regs (PwC 05-Apr)
The Crypto's View
The April Fool’s Day (Hawaii time) bitcoin rally lasted until the Tether shock added to the list of crypto firms that have lost control of vast customer assets. Community rows about the bitcoin creator and forks won’t embolden mass adoption either. Explaining bitcoin to his mom, the Crypto used the “digital gold” analogy. So are forked tokens “digital isotopes”? Gold only has radio-isotopes that decay but blockchains are immutable so the Crypto suggests “digital molybdenum” is a better analogy. It’s very useful for making tools and has mass adoption by bacteria in a vital role for daily life by “fixing” nitrogen. It’s not convenient for buying pizza and maybe not for my mom’s savings either. She is OK with keeping some cash on her contactless card to pay for the train or a newspaper though. Soon it will be built into her and billions of other user’s mobile phones.
Fun Fact: Primitive Ventures launches alternate reality game “Satoshi’s Treasure” aimed at teens with $1m of hidden prizes (CoinDesk 15-Apr)
The Crypto Report 31-Mar-2019
Top 3 Company Headlines
Circle rumoured raising $250m (The Information 02-Mar)
GOX liquidator holds large amounts of illiquid crypto (PR 19-Mar)
Non-Reg exchanges inflate volume 95% (Crypto Potato 23-Mar)
Top 3 Macro and Risk Headlines
IDC forecasts 89% rise in DLT spend (PR Mar-04)
UN says DPRK made $670m from hacking (Nikkei 08-Mar)
SEC warns some “stablecoins” may be securities (Decrypt 16-Mar)
The Crypto's View
For any math-based science more data is welcome but sadly analysis of huge misreporting of trading volume (almost all by non-reg exchanges) is not. This may help explain why “stablecoins” tracking error is poor (not to mention Tether rewording its backing pledge) and why the SEC delayed a decision on ETFs. Numbers suggest crypto markets are only just about able to absorb the daily sell needs of miners and ICOs which kept too much in crypto. Challenges await if tokenisation is really going to “disrupt” established asset markets. Repackaging those assets but with higher trading impact/costs is not a good way forward.
Fun Fact: The Lightning Torch too big at $150 as too few channels have staked enough for it to be passed along (CoinDesk 13-Mar)
The Crypto Report 28-Feb-2019
Top 3 Company Headlines
QuadrigaCX files for creditor protection (PR 01-Feb)
JPM Coin launched (CNBC 13-Feb)
Kraken buys CME index provider Crypto Facilities (PR 04-Feb)
Top 3 Macro and Risk Headlines
Crypto projects boost hedge-selling of derivatives (Bloomberg Feb-13)
Luxembourg extends law to crypto assets (PR 14-Feb)
World Gold Council: crypto is no substitute (CoinDesk 20-Feb)
The Crypto's View
The drama of QuadrigaCX losing access to almost $200m in customer funds after the CEO died adds to the plethora of crypto-exchange security disasters. Coinlab’s suit for $16bn against MtGox reminded us of that huge event so Coinbin’s mere $26m bankruptcy failed to affect prices. It could be that the $500m Q4 loss estimated for Bitmain’s mining activity encouraged hopes that supply would soon drop, even if dreams of BTC ETFs receded further into the future. Mizuho, MUFG, and JP Morgan all announced stablecoins. This validation of DLT does not indicate any fresh demand for non-fiat risk while crypto projects continue to sell derivatives to reduce short term exposure.
Fun Fact: Echoing the legend of two pizzas bought in 2010 for 10,000 BTC ($38m at today’s price), Lightning Network fans bought 150 pizzas for an average price of $25 demonstrating the network improvement over the cost and transaction speed of BTC. (CoinDesk 15-Feb)
The Crypto Report 31-Jan-2019
Top 3 Company Headlines
Kik contesting SEC enforcement action (WSJ 27-Jan)
Nomura JV with Line (PR 30-Jan)
Galaxy raising $250m crypto loan fund (Business Insider 24-Jan)
Top 3 Macro and Risk Headlines
BIS Raphael Auer report on PoW economics (PR 23-Jan)
UK FSC issues guidance on crypto (PR 23-Jan)
Hamas’ Abu Obeida appeal for BTC (Telegram 29-Jan)
The Crypto's View
The BIS economist’s report looks far into the future at the risks of a 51% attack but subtly highlights the more pressing worry of bitcoin miners running at below break-even in most places except those with cheap electricity like China and Georgia. Thanks to the baked-in reduction of bitcoin mining rewards about every 3-4 years break even must double in just over a year and again and again. This is will coincide with the end of the useful life of many mining rigs on top of those taken out of use where electricity is too expensive. Validating BTC transactions has never been a big part of mining revenue so unless BTC prices double from here transaction settlement capacity will drop even more than the peak of around 300,000 a day a year ago. If fees for that tiny volume rose to cover the estimated $6m a day in mining costs it would rule out the use of the current version of BTC for mass market use never mind what happens when the reward rate halves in a year and thereafter.
Fun Fact: CoinDesk writers voted on top influencers and launched a set of collectable trading cards with their images. At time of writing Nouriel Roubini is the highest priced card (CoinDesk 31-Jan)
The Crypto Report 31-Dec-2018
Top 3 Company Headlines
25% of Pantera portfolio may be securities (Bloomberg 14-Dec)
GMO axes mining rig production (PR 25-Dec)
Kraken PE offered at $4bn valuation (Finance Magnates 11-Dec)
Top 3 Macro and Risk Headlines
LinkedIn sees 33x jump in jobs for blockchain coders (PR 13-Dec)
US Congress bill to block Iranian sovereign token (PR 17-Dec)
G20 pledges crypto regulations (PR 01-Dec)
The Crypto's View
Basis chose to refund its $133m ICO in case it is judged a securities issue but other projects’ treasury (especially if too much kept in crypto) may no longer be enough for refunds. The huge jump in demand for coders shows that projects continue to build. The Kraken valuation is a monster. If it is more real than its Nordic namesake then it appears that VCs are stepping in to fill the gap left by ICO funding. Status ended the year with more ETH in its account than its ICO raised, cut staff 25% and asked for pay cuts to be made up for with more tokens. Staff may be praying crypto prices don’t repeat 2018 but at least for coders there are other places to earn the rent. The Crypto wonders how many other firms have been trading crypto rather than focusing on their projects?
Fun Fact: Smart Valor CEO makes ambiguous V sign in Christmas greeting (Twitter 25-Dec)
The Crypto Report 30-Nov-2018
Top 3 Company Headlines
Amazon launches QLDB products (PR 28-Nov)
Revolut to open in Japan with Rakuten and Sompo (CNBC 29-Nov)
Galaxy Digital reports $136m YTD loss (Bloomberg 28-Nov)
Top 3 Macro and Risk Headlines
SEC guidance on crypto securities (PR 16-Nov)
HK SFC crypto regulation update (PR 01-Nov)
Paraguay backs huge Golden Goose mine and exchange (PR 18-Nov)
The Crypto's View
Bitmex reported that a dozen large ICOs have delayed launching. The Eurekahedge crypto currency hedge fund index reports dismal YTD losses with the 17 venerable funds it tracks more or less tracking bitcoin. The Crypto is not surprised that fresh money is reluctant to allocate to crypto “hedge funds” that don’t hedge much but not that big money continues to arrive from incumbents deploying DLT and with huge customer bases.
Fun Fact: Star Trek’s Shatner Tweets defending Buterin (CoinDesk 08-Nov)
The Mogul Report 31-Oct-2018
Top 3 Company Headlines
Fidelity plans crypto launch (Forbes 15-Oct)
Coinbase Revenue forecast $1.3bn (Bloomberg 30-Oct)
BitStamp bought by Korbit owner NXM (Fortune 29-Oct)
Top 3 Macro and Risk Headlines
Stablecoins pressured by Tether wobble (Bloomberg 15-Oct)
Only 63 of 155 September ICOs raise assets (CoinTelegraph 24-Oct)
Japan's FSA grants SRO status to JVCEA (CoinTelegraph 24-Oct)
The Crypto's View
Rumours of NXMs price for Bitstamp are not far from the $352m a surgeon led firm paid for Korean rival Bithumb a week before. The Crypto notes that volatility and sentiment in crypto assets has been crushed. NY OTC listed GBTX closed yesterday on just an 8% premium and CBOE notes low BTC futures volatility. This suggests to The Crypto a breakout as it did when he saw this happen to the Nikkei in February 1995. Going long a strangle is the logical trade to profit but The Crypto does not give investment advice. He observes that NXM, the surgeon and FIDO will be pleased if it is the upside leg. Since so many are positive The Crypto fears the surprise will not be a nice one.
Fun Fact: DJ Khaled and boxer Floyd Mayweather in crypto fraud suit (Independent 22-Oct)
The Crypto Report 30-Sep-2018
Top 3 Company Headlines
Google to allow ads for regulated crypto exchanges (CNBC 26 -Sep)
Huobi buys Japan regulated BitTrade exchange (CoinTelegraph 13-Sep)
SEBA raises $104m for Zug crypto bank and exchange (Bloomberg 26-Sep)
Top 3 Macro and Risk Headlines
NY AG report faults crypto exchanges’ risk controls (PR 18-Sep)
Swiss Bank SRO guidelines encouraging crypto services (Reuters 21-Sep)
Philippines to publish ICO regulation (CoinTelegraph 04-Sep)
The Crypto's View
Positive regulated crypto news this month was accompanied by expansion plans such as Ribbit ($420m fintech fund), NASDAQ (Cinnober TOB), Coinbase (100 Wall St hires, more listings, Caspian jv), Line (5 DAPPs, Japan coin), Softbank (mobile payments), JP Morgan (Quorum IIM test with 75 banks) and EF Hutton (new crypto services). One of the Crypto’s favourite sentiment indicators is the premium on the $1.5bn NY listed bitcoin trust GBTC which sagged to just 19%. It’s spent most of its life between 50-100% on hallucinations of a flood of institutional money arriving that would push up prices despite than the inevitable premium collapse that more alternative vehicles would bring. This indicator tells the Crypto that either traders have capitulated on there being no wave of institutions or that they have arrived but are not pushing prices.
Fun Fact: The MW Scrabble dictionary added Bitcoin so some have reported it’s officially worth 11points (CNN 24-Sep)
The Crypto Report 31-Aug-2018
Top 3 Company Headlines
Mt.Gox creditors near $1.4bn settlement (mtgox-creditors.com 01-Aug)
Bitmain mulling $18bn IPO (CoinDesk 10-Aug)
Huobi reverses into Pantronics (HKEX 22-Aug)
Top 3 Macro and Risk Headlines
SEC turns down ETF requests again (SEC 22-Aug)
More than 200 ICOs being investigated in US (NASAA.org 28-Aug)
Lloyd's of London enters Crypto Market (CoinDesk 28-Aug)
The Crypto's View
Ironically for a math based technology, popular valuation of crypto assets is usually light on the numbers based methods of CFA or equivalently educated analysts. The Crypto applauds the efforts of Satis Group building on earlier work by pioneers like Bogart, Selkis, and Burniske whose report from 30-Aug has value estimates for dozens of crypto assets. Many are rated at zero but the survivors are tagged with high upside. Time will tell but it is refreshing to see some math being used intelligently rather than more common faith-based assertions or chartist voodoo.
Fun Fact: Canaan is offering a crypto mining TV in pre IPO PR (SCMP 02-Aug)
The Crypto Report 31-July-2018
Top 3 Company Headlines
Coinbase launches crypto asset custody service (CoinDesk 02-Jul)
Palladium $150m warrant bond to build Malta Fintech with Bittrex (PR 10-Jul)
Galaxy Q1 loss $134m disclosed ahead of TSXV listing (Bloomberg 26-Jul)
Top 3 Macro and Risk Headlines
SIX to launch crypto exchange in 2019 (PR 06-Jul)
Gallup poll shows just 2% of US citizens own crypto (PR 27-Jul)
Iran preparing sanctions evading crypto Rial (PressTV 25-Jul)
The Crypto's View
There is much chat among crypto traders hoping for a boost from the arrival of “institutions” but some are already involved and hurting. The Q1 loss at Galaxy and the YTD losses reported by the Eurekahedge Crypto Hedge fund index show strong correlation with the overall level of Bitcoin and the other majors and that very little was done to hedge exposures. VCs and presale ICO buyers may have done better as a Boston College study shows excess returns for ICOs in month 1. That assumes they avoided enough of the 56% of ICOs that are moribund by month 4.
Fun Fact: 12 Russians indicted with US election meddling were traced via the Bitcoin they mined and used to buy the Guccifer domain and other services. (NY Times 13-Jul)
The Crypto Report 30-June-2018
Top 3 Company Headlines
Alibaba's Ant Pay raising $14bn for DLT expansion (PR 08-Jun)
Coinbase buys registered broker-dealer Keystone Capital (CNBC 08-Jun)
Ebang miner may raise $1bn in HKEX IPO (PR 29-Jun)
Top 3 Macro and Risk Headlines
PWC Crypto Valley reports ICO issuance YTD exceeded 2017 already (PR 30-Jun)
Liechtenstein PM promotes Crypto Laws due early 2019 (PR 21-Jun)
Japan FSA mandates AML improvement at 6 exchanges (PR 22-Jun)
The Crypto's View
Record YTD numbers for crypto capital raises, new regulations, regulated exchange launches and mega company entrants validate DLT but bring a big rise in (mostly fiat) outflows needed to execute. 2016 crypto outflows to fiat were dominated only by miners’ hardware and LX spend. ICO and crypto account openings surged in 2017 but only the former YTD. Crypto conversion to fiat is the air leaking from the 2017 bubble. El Erian’s “gut feeling” that bitcoin is a buy at 5000 (last year it was 3000) lacks math. We all know what exits from the gut.
Fun Fact: Potcoin sponsored Denis Rodman Singapore appearance to support his friends POTUS and Kim Jong Un (CoinTelegraph 08-Jun)
The Crypto Report 31-May-2018
Top 3 Company Headlines
NVIDIA warns of 2/3 drop in mining chip sales (Market Watch 12-May)
Circle raises $110mn Series E funding (Press Release 15-May)
Coinshares launches Koimanu JV with Nomura (Press Release 15-May)
Top 3 Macro and Risk Headlines
DoJ opens crypto manipulation probe (Bloomberg 24-May)
Shrimp and frogs clog ETH network (EWN 20-May)
New Japan FSA guidelines for crypto exchanges (CoinTelegraph 06-May)
The Crypto's View
Regulation enforcement stepping up a notch (DoJ and Upbit probes and MAS warnings) co-incided this month with Gemini adopting NASDAQ’s SMARTS manipulation detector and Coinbase announcing more tools for professionals. Japanese tax experts estimate more than 300 people declared profits over $1m last year and the FSA issued guidelines similar to existing securities rules. As institutional involvement grows and tax claims rise more news like this is inevitable and welcome. It’s a testament to the maturing of crypto that in the context of a 20% drop on the month for Bitcoin many small or dubious tokens were hit much harder.
Fun Fact: Stormy Daniels chose Vice Industry Token (VIT) contributing to Verge (XVT) crashing over 60% down (a loss of over $800m) from its Mindgeek deal (CoinDesk 25-May)
The Crypto Report 30-Apr-2018
Top 3 Company Headlines
Yahoo Japan buys 40% of BitARG (Reuters 13-Apr)
tZERO unveils token trading platform (Press Release 09-Apr)
SBI to launch own exchange (Business Insider 27-Apr)
Top 3 Macro and Risk Headlines
Australia extends KYC/AML laws to crypto & licenses exchanges (newsBTC 11-Apr)
FSA exchange survey finds 3.5m crypto users in Japan (FSA 30-Apr)
NY AG Schneiderman questions multiple out-of-state exchanges (Press Release 17-Apr)
The Crypto's View
Even more regulation is coming to cryptoland. The Crypto observes this has coincided with an upswing in values vs fiat and a downswing in assets like Verge with its over-hyped deal (an advert campaign) with MindGeek.
Fun Fact: John McAfee charges $105,000 per tweet for promoting cryptocurrency projects (CoinTelegraph 03-Apr)
The Crypto Report 31-Mar-2018
Top 3 Company Headlines
Google to ban crypto adverts (PR 13-Mar)
Yahoo! Japan to add crypto to its online FX business (Nikkei Asian Review 23-Mar)
Telegram raises $1.7bn in ICO so far (SEC 30-Mar)
Top 3 Macro and Risk Headlines
JFSA warns Binance and 7 others (Reuters 23-Mar)
Gox whale offloads $400m of BTC with $1.9bn to go (Bloomberg 07-Mar)
CBOE writes to SEC to permit bitcoin ETFs (CoinTelegraph 27-Mar)
The Crypto's View
Though 2018 ICO issuance flows have exceeded 2017, many deals have been open to large fiat contributions in the premarket phase. Telegram is the biggest so far, has registered with the SEC, and its large subscribers have almost certainly been offered that choice. The deal sizes mean larger outflows to fiat adding to incomplete Gox liquidation which may partly explain weak market YTD.
Binance has moved to Malta rather than comply with JFSA rules yet big ticket investors clearly like some regulatory oversight. Jurisdictions which get the balance right (soon to be joined by Liechtenstein) have gained much market share and appear set to grow.
Fun Fact: Ex-Liverpool football star Michael Owen launches OWN coin via GCOX in Singapore (Bloomberg 21-Mar)
The Crypto Report 28-Feb-2018
Top 3 Company Headlines
Rakuten to launch its own cryptocurrency (Mobile World Live 27-Feb)
Circle buys Poloniex for $400m (Press Release 26-Feb)
Digital Currency Group $114m stake Silvergate Bank (Press Release 26-Feb)
Top 3 Macro and Risk Headlines
SEC asks for info (CNBC 28-Feb)
GS misquoted: really saying crypto is much less than 1% of global GDP (CoinTelegraph 28-Feb)
Coinbase disclosing only 13000 accounts to IRS (Fast Company 27-Feb)
The Crypto's View
Some huge positives from heavyweight commitments like DCG, Rakuten, and Circle have balanced negatives like IRS disclosures (for a surprising small number of people) and SEC investigations. These have resulted in not much net movement in the total crypto market cap.
Except for the persistent premium on GBTC the Crypto would posit that equilibrium is close.
Fun Fact: Russia’s security services have arrested a nuclear scientist for allegedly using military supercomputers to mine Bitcoin (BBC 09-Feb)
The Crypto Report 31-Jan-2018
Top 3 Company Headlines
Line applies for cryptocurrency exchange licence (CCN 31-Jan)
Telegram plans $500m pre-ICO (CoinTelegraph 08-Jan)
UCL fights degree fraud with Bitcoin (Bitcoin Magazine 25-Jan)
Top 3 Macro and Risk Headlines
Facebook incl crypt in ban of non-regulated asset adverts (CoinTelegraph 30-Jan)
Venezuela announces “Petro” token presale (CoinDesk 31-Jan)
World Gold Council strikes back (CoinTelegraph 30-Jan)
The Crypto's View
Line is big and MUFG, DMM, SBER, Kodak and Facebook also engaged this month. Crypto fans are celebrating the arrival of "institutionals" but they can be competitors too.
The Gold Council knocked back that they have a 5,000 year track record and 250x the traded volume of Bitcoin. Even humble orange juice futures (possibly "soft gold"?) trade bigger volume. Ranting remarks in crypto chat rooms about hedge funds going short are missing the obvious point that CME crypto futures compared to their "whales" are minnows.
Fun Fact: Arsenal Football Club signs crypto-currency deal with gaming firm CashBet (BBC 24-Jan)
The Crypto Report 31-Dec-2017
Top 3 Company Headlines
Cryptokitties becomes the largest dapp on Ethereum (CoinTelegraph 04-Dec)
DMM Group plans cryptocurrency exchange (Bitcoin.com 21-Dec)
QUOINE partnership with Gibraltar Blockchain Exchange (PR 22-Dec)
Top 3 Macro and Risk Headlines
CBOE to begin bitcoin futures on 10-Dec (Business Insider 04-Dec)
SEC Chairman Jay Clayton statement on cryptocurrencies & ICOs (SEC 12-Dec)
Coinbase announces insider trading probe (Fortune 20-Dec)
The Crypto's View
Regulators became more active in the crypto world this month. In the US the SEC warned to observe existing laws and further ICO legal actions started. More positively Japan approved 5 more exchanges and major companies like SBI (a QUOINE investor) and DMM announced expansion plans.
Governance will be an important topic in 2018. Firms in jurisdictions with regulation have a chance to take advantage of those that do not as the rush of China based business to partner elsewhere shows.
Fun Fact: A Tesla S owner has set up his vehicle to mine bitcoin (CoinTelegraph 04-Dec)
The Crypto Report 30-Nov-2017
Top 3 Company Headlines
Gibraltar Blockchain Exchange & Rock Token launch (PR 6-Nov)
World’s first bitcoin mutual fund launched by Tobam (FT 21-Nov)
Tezos sued for securities fraud by ICO investor (Coindesk 3-Nov)
Top 3 Macro and Risk Headlines
SEC statement on celebrity ICO endorsements (SEC 01-Nov)
SegWit2x called off (Linux Foundation 08-Nov)
BTC avg transaction fee double all time high (bitinfo 12-Nov)
The Crypto's View
All-time highs for prices make headlines but BTC avg trade costs hitting $18 and size spiking over $100,000 show it is migrating further from mass-market. That is negative for some crypto-economic models. Institutional interest grows with the launch of the Gibraltar Stock Exchange’s “Gibraltar Blockchain Exchange” and a French mutual fund which signed CACEIS in the key custodian role. Ironically this and the news that futures markets (a zero sum game that make short sales easier) are a step closer has been accompanied by US listed GBTC premium over underlying assets soaring to 68%, close the high of its range. Market maturity should be driving the premium lower.
Fun Fact: "From seed to sale" is the IBM pitch to BC government for regulating the cannabis industry to protect consumers (CoinDesk 6-Nov)
The Crypto Report 31-Oct-2017
Top 3 Company Headlines
Overstock (OSTK:NASDAQ) ICO for tZERO regulated market (PR 24-Oct)
AMD (AMD:NASDAQ) shares down, Morgan Stanley say mining chip boost temporary (FT 30-Oct)
Tezos struggles with infighting (Reuters 18-Oct)
Top 3 Macro and Risk Headlines
CME to launch bitcoin futures (Reuters 31-Oct)
Dubai emCash, 1st state issued cryptocurrency (CoinTelegraph 01-Oct)
Jeff Garzik Metronome cross-chain cryptocurrency (Bloomberg 24-Oct)
The Crypto's View
The Crypto wonders if all these hard forks are an attempt by worried miners and mining hardware sellers to stay in business. Proof of stake (PoS) is coming to Ethereum. It uses much less energy and eliminates conventional mining. Litecoin tested segwit first. If PoS is successful it may come to Bitcoin.
Fun Fact: The Arkansas Sheriff’s Office in the USA is mining bitcoin to help it with dark web investigations (CoinDesk 30-Oct)
The Crypto Report 30-Sep-2017
Top 3 Company Headlines
GBTC & Van Eck withdraw SEC fund listing applications (Reuters 28-Sep)
Ripple & R3 file law suits against each other (Reuters 08-Sep)
Nexon (TSE:3659) KRW91.3bn, 65% Korbit stake (Hankyung 26-Sep)
Top 3 Macro and Risk Headlines
China bans ICOs (PBoC 04-Sep)
Top browsers implement Bitcoin API (CoinDesk 16-Sep)
Japan issues licences to 11 crypto exchanges (CoinDesk 29-Sep)
The Crypto's View
China led a wave of regulatory news. The SEC charge 2 ICOs with fraud. Risk is high but business continues e.g. Nexon/Korbit or the CBC bancassurance app. Japan stands out as permissive.
Ethereum made ERC20 official, Geth released new node software, the Raiden scaling project will ICO. The Buterin & Teutsch interactive ICO protocol and the Zt-Snark/Zt-Stark privacy discussion are early stage but positive. This is all increasingly complicated but it will improve Etheruem.
Fun Fact: Rock star Gene Simmons is open minded about launching “KISScoin” (TheStreet 15-Sep)
The Crypto Report 31-Aug-2017
Top 3 Company Headlines
Blockstream launch Bitcoin transaction satellite broadcast (PR 15-Aug)
Fisco (3807:TSE) test bitcoin bond (Bloomberg 16-Aug)
Filecoin ICO raises $200m in 1 hour despite tech issues (CoinDesk 10-Aug)
Top 3 Macro and Risk Headlines
Chinese regulator considers shutting down all ICOs (CoinDesk 29-Aug)
Estonia planning national “estcoin” (BBC 25-Aug)
IRS using Chainalysis to find Bitcoin tax cheats (CoinTelegraph 23-Aug)
The Crypto's View
Blockstream’s satellite broadcast is momentous. It’s like GPS for Bitcoin and it is likely the first of many. The Crypto sees a future where even if the entire internet was shut down, every satellite would also have to be destroyed. Bravo!
ICOs are drawing increasing attention. Many raise much more money than they need from investors, keep the excess, and spend it very questionably. Regulators in the USA, Canada, China, and Singapore have all recently signalled they will take action. The Crypto is aware of around 200 ICOs scheduled over the next few months. How long until something serious goes wrong?
Fun Fact: An aide to Putin wants $100m for bitcoin mining so that Russia can rival China (Bloomberg 08-Aug)
The Crypto Report 31-Jul-2017
Top 3 Company Headlines
Tezos ICO raises approx $232m or 65k BTC & 360k ETH (CoinDesk 13-Jul)
Coinbase exchange adds 1m users last month (CoinTelegraph 03-Jul)
LedgerX to be 1st regulated Bitcoin options exchange (Bloomberg 24-Jul)
Top 3 Macro and Risk Headlines
SEC confirms tokens are securities (Press Release 25-Jul)
Chinese firms create ICO guidelines (ETHNews 26-Jul)
Hiring freezing in the blockchain industry (CoinDesk 16-Jul)
The Crypto's View
SegWit is now a certainty. There is some chatter of a hard fork but The Crypto is completely unconcerned. The Crypto thinks that people will use it as a way to dump so-called “Bitcoin Cash” for other currencies and reinvest in real BTC.
The Crypto has been reflecting on the risks around ICOs. For example, Bancor raised more money than they needed. To deal with the excess they set up a contract to repurchase tokens at the rate they sold them at the ICO. The intention was to create a floor below which the price wouldn’t fall. It turned out to be a duff plan when the market price of ETH fell and the ETH set aside for the contract was depleted.
Fun Fact: Floyd Mayweather is apparently very excited for the Stox ICO (Instagram 27-Jul)
The Crypto Report 30-Jun-2017
Top 3 Company Headlines
Daimler (DAI:GR) €100m bond via blockchain (Automotive World 28-Jun)
DigitalX sell 40% stake to BGL for Bitcoin via Australian Securities Exchange (PR 07-Jun)
Pantera Capital files with SEC for ICO hedge fund (SEC 27-Jun)
Top 3 Macro and Risk Headlines
Putin endorses Ethereum (Vanity Fair 12-Jun)
Singapore trials tokenised form of S$ (MAS 12-Jun)
Bitcoin helps cannabis industry solve its banking problem (Bloomberg 13-Jun)
The Crypto's View
The Initial Coin Offering (ICO) craze is only the beginning. The Crypto expects that tokens with the legal recognition of conventional equity, debt etc. will come soon. The Crypto suspects the supply of capable blockchain coders is already in high demand. They will command a high hiring price.
Bitcoin is booming in Japan. The Crypto sees regular announcements of new, large, retail companies accepting it as payment at their outlets. After Putin’s endorsement, the Crypto wonders if Russia will be the next big adopter. Burger King will apparently begin accepting bitcoin in Russia this summer (Uznay Vse 28-Jun).
Fun Fact: The Unicode Consortium added a Bitcoin symbol; you’ll be able to type it and computers everywhere will soon uniformly recognise and display it properly (Unicode 20-Jun)
The Crypto Report 31-May-2017
Top 3 Company Headlines
Fidelity include cryptocurrency prices in client accounts (Reuters 23-May)
Kik chat app ICO (Press Release 25-May)
Walmart plans blockchain delivery drones (Fortune 30-May)
Top 3 Macro and Risk Headlines
Ethereum to move toward “proof-of-stake” Casper system (CoinDesk 05-May)
Ripple locks $14bn XRP, 87.5% total market cap (Coin Telegraph 18-May)
Ex-FBI Chief says cryptocurrencies impede criminal investigations (CoinDesk 11-May)
The Crypto's View
Debate is heating up around BIP 148, a proposal to increase the transactional capacity of Bitcoin. The key date is 01-Aug. There is some risk of a hard fork. If that happens, long term holders will have bitcoins on both chains. If BIP 148 is successful then most users have little to worry about or do. The Crypto recommends vigilance when receiving bitcoins around 01-Aug.
Consensus 2017, the blockchains conference, saw an extraordinary number of bigger-than-ever announcements. The Crypto expects a very interesting year ahead!
Fun Fact: Polish start-up Userfeeds hopes to combat fake news with a reputation-based platform built using Ethereum (CoinDesk 16-May)
The Crypto Report 30-Apr-2017
Top 3 Company Headlines
SEC to review Winklevoss ETF application (SEC 25-Apr)
USD wire transfer problems worsen for Bitfinex (CoinDesk 20-Apr)
Stampery blockchain add-in for Microsoft Office (Microsoft 10-Apr)
Top 3 Macro and Risk Headlines
Japan legalises cryptocurrencies (RT 01-Apr)
Bitmain mining hardware vulnerable (Antbleed 27-Apr)
Litecoin SegWit scaling agreed (CoinDesk 21-Apr)
The Crypto's View
The Crypto correctly predicted a Bitcoin price increase (see last month’s report). The Crypto suspects 3 more reasons for the increase: 1) the SEC said it will review its Winklevoss ETF decision; 2) purchase of Bitcoin to move funds off the Bitfinex exchange and; 3) Japanese legalisation.
The Bitcoin Core/Unlimited debate is done. Methods to control Bitcoin by Unlimited supporters at Bitmain (e.g. ASICboost, Antbleed, isAuthToRun) have been uncovered and neutralised. If SegWit is successful on the Litecoin blockchain this will boost support to do it for Bitcoin.
Fun Fact: Porsche announces its first innovation contest for blockchain start-ups (Porsche 03-Apr)
The Crypto Report 31-Mar-2017
Top 3 Company Headlines
SEC rejects Winklevoss Bitcoin ETF (SEC 10-Mar)
Alibaba (BABA:NYSE) consider blockchain to fight food fraud (CoinDesk 24-Mar)
Stratis’ Breeze Wallet to facilitate coin tumbling (Nasdaq 10-Mar)
Top 3 Macro and Risk Headlines
Bug sends 70% Bitcoin Unlimited nodes offline (CoinDesk 14-Mar)
European Commission proposes RegTech pilot (EC 27-Mar)
Group of 47 Japanese banks to use Ripple (CNBC 02-Mar)
The Crypto's View
The large majority of users, nodes, exchanges, wallet providers, and others, seem to support Bitcoin Core. The only group which favours Bitcoin Unlimited is large miners. Risk of a hard fork is decreasing. The Crypto expects to see the price of Bitcoin increase again.
The Crypto observes an increase in the number of trading systems (Stock Exchange of Thailand, IBM/Trafigura) and tracking projects (Foxconn, Maersk, UN, Alibaba, Sweden’s land registry). Hyperledger’s bond trading platform has gone open source (CoinDesk 24-Mar). The Crypto expects many more trading platforms to emerge.
Fun Fact: The UN World Food Programme explores using Ethereum for tracking food (WFP 06-Mar)
The Crypto Report 28-Feb-2017
Top 3 Company Headlines
Northern Trust (NTRS:NASDAQ) IBM (IBM:LSE) blockchain PE admin (PR 21-Feb)
bitFlyer share issue; Sumitomo (8316:T) MHFG (8411:T) Dai Ichi (8750:T) (PR 14-Feb)
Ripple to do National Bank of Abu Dhabi x-border payments (NBAD 01-Feb)
Top 3 Macro and Risk Headlines
Bitcoin hits record $1206 per coin (UPI 24-Feb)
PBOC holds closed-door meetings with exchanges (Bloomberg 08-Feb)
New Ethereum Enterprise Alliance (Reuters 27-Feb)
The Crypto's View
The Bitcoin price increase may be related to rumours that the SEC will approve the Winklevoss ETF (COIN:NASDAQ). The SEC hosted a large meeting with the twins, their counsel, and service providers. The approval/denial decision is due 10-Mar. At this stage a large meeting with key people could be a sign of congratulation or that more work is needed. Will the SEC approve an ETF with an underlying asset which trades mostly in China, with questionable AML/CFT regulations, with poor liquidity? The Crypto will not be surprised either way.
The new Ethereum Enterprise Alliance (EEA) has 30 participating members including banks, IT firms, and two blockchain start-ups. The use of blockchains for smart contracts is vastly more interesting than just currency. The Crypto encourages the EEA but is pessimistic. Hopefully it will not turn out like the useless R3CEV project.
Fun Fact: Georgia is the 1st country to do blockchain land registry (Forbes 07-Feb)
The Crypto Report 31-Jan-2017
Top 3 Company Headlines
Credit China Fintech (8207:HK) $30m BitFury deal (PR 26-Jan)
Daimler acquires PayCash (Automotive World 16-Jan)
GMO (TSE:9449) launches wallet service (Finance Magnates 18-Jan)
Top 3 Macro and Risk Headlines
DTCC to use blockchain for $11tn credit derivatives post-trading (Euro Money 11-Jan)
China exchanges introduce fees, volumes normalise (Bloomberg 25-Jan)
Trump threatens remittances to Mexico (CNN 25-Jan)
The Crypto's View
GBTC has wisely ended its offering. Investors can no longer create units at NAV to sell at a premium when the 12 month restriction lapses. Existing holders cannot sell at a huge premium in the market now and then re-invest at NAV. It was plainly disclosed that this could happen but typical “pink sheets” investors probably were not aware. If it turns out that insiders and/or early investors were swapping their units like this by selling to general (non-professional) investors at a massive premium to NAV, extracting a lot of cash while superficially retaining their overall percentage holding, this could be very embarrassing and potentially legally explosive.
The Crypto suspects that a lot of the “net new investment” was from this kind of activity. Their own NAV and GBTC performance numbers show a premium erosion over a 1M, 1Q, and 1Y basis.
Fun Fact: A Federal Reserve employee received 12-month probation and $5,000 fine for mining Bitcoin at work on Fed computers (Federal Reserve 30-Jan)
The Crypto Report 31-Dec-2016
Top 3 Company Headlines
Overstock starts trading shares on Bitcoin blockchain (Wired 15-Dec)
IBM&Credit Mutuel Arkea plan client ID blockchain tech (Computer Weekly 30-Dec)
BNP Paribas makes 1st real time blockchain payment (Reuters 21-Dec)
Top 3 Macro and Risk Headlines
Bitcoin about to hit $1000 (CNBC 29-Dec)
OCC plans special bank charter for fintech companies (OCC 02-Dec)
Ukrainian Exchange launch Bitcoin futures contract (PR 19-Dec)
The Crypto's View
The price of Bitcoin rapidly increased. The Crypto is only partly sure why – Chinese demand. The BTC China exchange in Shanghai has the world’s largest volume. Daily volume increased approx. 28 times from 01-Sep to 22-Dec.
The Crypto remains unsure of the basis for any fiat valuation of Bitcoin. Good data seems impossible to find for Bitcoin spending (obscurity is of course part of Bitcoin’s appeal) except at exchanges, where currency is valued in terms of other currency. There is a philosophical point about how a currency has value because it’s in demand...but it seems today that Bitcoin is in demand mostly because of its fiat value. Tomorrow may be different. Until then, The Crypto will puzzle at how to value Bitcoin accurately.
Fun Fact: Medicinal Genomics is using the Bitcoin blockchain to register all known cannabis genomes. The goal is to reduce confusion over which strain you purchase (NewsBTC 05-Dec)