The last time I wrote was on the eve of Facebook’s cryptocurrency Libra announcement. At this time tomorrow, the US Congress will have held its first hearing on the matter. It’s been quite an active few weeks – Bitcoin reached highs over $13K at one point before retreating back to the $10K mark (still nearly 3x higher than its lows earlier this year). The SEC provided more guidance on crypto custody (echoing much of what was said in FinCEN’s guidance which I covered back in May) and qualified the first Reg A blockchain offerings.
However, all eyes are on Washington DC, with US Secretary Treasury Steve Mnuchin calling a press conference today to express Treasury’s view on digital assets and in particular the Libra token. You can watch a video of his remarks here.
He reiterated his previous stance on concerns over money laundering but did note that
Treasury Continue reading “FOMO in Washington DC: Mnuchin, Trump and Tomorrow’s Libra Hearing”
Unlike last year’s NYC Blockchain Week, which was more form over substance (anyone recall Lambos parked in front of the Hilton?), this year’s conferences focused on the progress that had been made over the past year and the future promise of the sector as institutions prepare their entries.
While bitcoin’s price experienced a significant price hike from May 8 through the end of the week (albeit at one point retreating back to $7K before reaching $8K again), there was other noteworthy news.
Amazon Web Services, used by many tech startups and larger companies for their cloud infrastructures, announced the expansion of its Blockchain as a Service offering. Microsoft announced the first decentralized identity infrastructure implementation by a major tech company built directly on the bitcoin blockchain (most have built on top of ethereum or private blockchains). While Microsoft continues to work with the ethereum blockchain for other projects, I Continue reading “Blockchain Week Bull Run”
Greetings from the very beginning of NYC Blockchain Week. This is where it all started just two years ago, when ETH and BTC prices began their meteoric rise in 2017, soon to be followed by the ICO boom and bust. The feeling is less frothy and more realistic, but just as exciting in my opinion. We’ve already lived through a major cycle in these past two years, and the energy I see reflects the building that’s been happening over the past year. As if on cue, BTC prices are back over $6000 and not negatively impacted by the news of the Binance hack — Taiwan-based Binance is the largest crypto exchange in the world by volume.
Speaking of which, up until this morning, the Binance hack was the biggest news to hit the sector in the past week. However, this morning FinCEN (the US Treasury Financial Crimes Enforcement Network) released Continue reading “FinCEN Weighs In”
The past couple of weeks have seen a flurry of activity in the blockchain and crypto markets:
- Yesterday, the WSJ published an investigative report that looked at money laundering in the crypto world. Of over $88M of illicit funds it tracked, $9M went through Swiss based exchange Shapeshift. Perhaps related to this investigation, Shapeshift announced a few weeks ago that it would require registration on its exchange. While 2017 was truly the “Wild West”, the growth of the sector (and its reluctance to self regulate) has led to the 2018 being the year of reckoning and increased scrutiny…
- Bitmain, the world’s largest crypto mining company, filed for its IPO on the Hong Kong stock exchange. While the company’s numbers reflect massive growth in 2017 from the crypto bull market, the prospective also noted $1B of surplus inventory due to slowdown in the market as well as a loss from its Continue reading “Days of Reckoning”
As much of the crypto world descended upon Manhattan for Consensus:Invest this past week, it was a different atmosphere than a year ago, when bitcoin was on its way to $20,000. Many cryptos were down 90% from all-time highs, with Bitcoin and Ether both off 80%+. Gone was the euphoria and any talk of “lambos” to an environment which I prefer – where tourists are gone and the real builders and investors remain. Instead of party-hopping, attendees had more substantive conversations about the future. The usual barrage of press releases trickled to a few.
In his fireside chat with Silver Lake co-founder Glenn Hutchins,, SEC Chairman Jay Clayton started his remarks talking about the promise of distributed ledger technology (aka blockchain). He answered questions about recent SEC action against ICOs and delineated between decentralized tokens such as Bitcoin and Ether, and tokens which are controlled centrally and issued as an Continue reading “The Stage is Being Set”
A few weeks ago, I wrote about the proliferation of stablecoins, crytpocurrencies using different mechanisms to maintain a stable value versus a specific price (most often US$). The goal is to reduce volatility when utilizing decentralized applications. Many exchanges have rolled out their own stablecoins which are used in trading cryptocurrencies on their exchanges — instead of using BTC or ETH which are prone to volatility.
Tether (USDT), the first stablecoin to trade in 2015, has been in the middle of significant drama within the past few days along with Bitfinex, the exchange it is closely tied to. Questions have circulated for years on whether Tether has the US dollar reserves to back its coin, claims that have been exacerbated in recent days as Bitfinex halted fiat deposits and changed banking partners. USDT lost its peg, falling at one point to less than $0.90, before recovering as Bitfinex re-opened deposits. Meanwhile, Continue reading “Into the Wild”
Several big announcements this morning: Gemini, headed by the Winklevoss twins, announced that they had received approval to issue its first cryptocurrency, a stablecoin called the Gemini Dollar (“GD”). Designed to facilitate the use of cryptocurrency as a medium of exchange, each GD will be backed by a US dollar, “in order to give it the stability of the fiat currency and the speed and borderless nature of a cryptocurrency”. Notable in this announcement is a partnership with State Street Bank, which will hold the cash deposit account tied to the GD. Gemini also acquired a crypto custody patent last week (link here).
Over the past year, several stablecoin projects have raised capital including Basis, Reserve and Carbon. Also announced today by itBit (the 50th largest crypto exchange in the world): a stablecoin initiative and related regulatory approval. In last week’s newsletter, I linked to the funding announcement for Continue reading “Stablecoins Galore”
Last week I wrote about how geopolitics can impact demand for public blockchain cryptocurrencies such as bitcoin. Cryptocurrency can serve as a (relatively) stable store of value when local currencies are devalued or taken out of circulation – most recently witnessed in Turkey.
In Venezuela, where citizens have flocked to bitcoin in light of hyperinflation, the government countered by announcing a state-controlled cryptocurrency called the petro. President Nicolas Maduro claimed to have raised over $700M for the oil-backed coin in February, although that account has not been verified. The petro also does not trade on any exchanges. Last Friday, he announced new economic measures as the IMF warned that Venezuela’s inflation could hit 1 million percent by the end of 2018:
Financial headlines over the past week focused on Turkey’s rapidly depreciating lira. Meanwhile many citizens there, ignoring President Erdogan’s calls to exchange gold and foreign currencies to local currency, tapped into the crypto market:
“Bunyamin Yavuz, a cardiologist in Ankara, said he no longer trusts local banks and now buys XRP, monero, lumens, among other cryptocurrencies as part of his investment portfolio. Yavuz told CoinDesk his holdings now consist of 30 percent cryptocurrencies, 20 percent U.S. dollars, and just 10 percent lira.” – Coindesk (August 10, 2018)
Bloomberg News reported this morning that the Turkish lira showed more volatility over the past week than bitcoin had. This “flight to safety” to crypto markets has played out throughout the world over the past few years.