2019's Top 10 Institutional Actors in Crypto

There were signs in 2019 that large institutions are moving closer to embracing cryptocurrency and blockchain technologies.

Slowly but surely, institutional players are moving into the crypto/blockchain neighborhood.

According to a 2019 Fidelity Investments survey, about 22% of institutional investors already have some exposure to digital assets, with most investments having been made within the past three years. Moreover, 4 in 10 respondents say they are open to future investments in digital assets over the next five years.

“Institutional investor involvement in cryptocurrency in 2019 has been primarily about getting the infrastructure in place, such as the opening of Fidelity Digital Assets and Bakkt,” Jonathan Levin, co-founder and chief strategy officer of Chainalysis, told Cointelegraph, adding: 

“Now that the infrastructure is in place, we expect institutional volume to come as long as they can get comfortable with the compliance and market risks of cryptocurrency.”

Banks and insurance companies seem to be more engaged than other institutional segments, commented Levin, “but once institutional support from these key sectors are in place, we expect an uptake from investors such as funds and family offices.” 

Clearly, there is still work to be done — particularly with regard to compliance — but with that as a preamble, here are our top 10 institutional actors in the last year:

1. Libra Association (stablecoin)

In June, Facebook aroused the crypto — and financial — world with its announcement of a new digital currency, Libra, and the formation of a Switzerland-based, non-profit organization, the Libra Association, to manage it — with a mandate to “help reinvent money and transform the global economy.”

The permissioned blockchain-based currency was to be tethered to a basket of bank deposits and short-term government securities. The new association began with 27 corporate partners, including Mastercard, Paypal, Visa, Vodafone, eBay and Uber.

The project ran into immediate headwinds, however, especially from global regulators who feared for their own fiat currencies and the creation of a shadow banking system. Two United States senators wrote a letter to Mastercard and Visa, among others, expressing “deep concern” that the project could destabilize the global financial system — as well as facilitate criminal and terrorist financing. Apple CEO Tim Cook said companies like Facebook shouldn’t be in charge of a global currency. Partners exited, and, by late 2019, one-quarter of the original partners were gone, including Visa, Mastercard, PayPal and eBay. 

Reports of Libra’s demise may be premature, though. Central bankers have been spurred to pilot their own digital currency projects in anticipation of Libra’s debut, and, in early December, the Libra Association was still projecting a 2020 stablecoin launch at least in some parts of the world, like Europe. 

Related: Libra Might Become Unrecognizable by Navigating Regulatory Concerns

2. JPMorgan Chase & Co. (stablecoin)

In February, J.P. Morgan, the largest bank in the U.S., introduced JPM Coin, claiming to be the first bank to create and test a digital coin representing fiat currency. The goal was to allow instantaneous payments between the bank's institutional clients on a permissioned blockchain platform. 

The stablecoin was to be 1:1 redeemable in a fiat currency (U.S. dollars) held by J.P. Morgan — unlike most stablecoins, like Tether (USDT) and USD Coin (USDC), that claim to have a 1:1 fiat collateral. It was slated to roll out in late 2019, but it had still not launched publicly as of Dec. 10.

J.P. Morgan has been actively exploring blockchain and crypto-related initiatives for several years — notwithstanding the fact that CEO Jamie Dimon once called digital currencies a "fraud." Its Interbank Information Network, a bank payment and data-sharing network based on J.P. Morgan’s in-house blockchain platform Quorum, implemented in 2018, has some 365 global members today and will expand in 2020 to Japan. 

Related: Ordinary Stablecoin or XRP Killer? What We Know About JPMorgan Chase’s New Cryptocurrency

3. Intercontinental Exchange/Bakkt (exchange)

A new institution-sized exchange company joined the crypto world in September 2019 when Intercontinental Exchange (ICE), which also owns the New York Stock Exchange, launched Bakkt, the first exchange to offer physically settled Bitcoin (BTC) futures contracts. The Chicago Mercantile Exchange, by comparison, has been settling BTC futures contracts in fiat currency, not Bitcoin, since December 2017. 

After a slow start, Bakkt’s Bitcoin futures volume edged higher through 2019 and, on Nov. 27, hit a new all-time high with 5,671 futures contracts traded (volume: $42.5 million). 

In early December, Bakkt launched the first regulated Bitcoin options and cash-settled futures in the U.S. The announcement came just a few days after Bakkt CEO Kelly Loeffler was named to fill the U.S. Senate seat of Georgia’s retiring Johnny Isakson (R).

Related: Wall St to Washington: Bakkt Launches New Products, CEO Joins Senate

4. U.S. Commodity Futures Trading Commission 

The incoming chairman of U.S. Commodity Futures Trading Commission (CFTC), Heath Tarbert, said in October that Ether (ETH), as well as Bitcoin, are commodities — not securities — and, as such, will be regulated under the Commodity Exchange Act with the CFTC as its primary regulator. 

“My guess is that you will see in the near future Ether-related futures contracts and other derivatives potentially traded,” stated Tarbert. 

This statement provided regulatory clarity and some relief to Bitcoin and Ethereum developers and investors, present and future. If the CFTC was going to regulate BTC and Ether, then surely it wasn’t going to ban them, which is a real concern. 

In his first public appearance in October, Tarbert also emphasized the importance of blockchain and digital assets. The U.S. has been falling behind in blockchain innovation, receiving little support from U.S. policymakers and regulators, according to Perianne Boring, CEO of the Chamber of Digital Commerce. However, here the chairman of the CFTC said, “I want the United States to lead because whoever leads in this technology is going to end up writing the rules of the game.” This was an “incredibly important” development, Boring told Cointelegraph. 

Related: CFTC’s New Chairman: Who Is Heath Tarbert, What He Thinks of Crypto

5. Fidelity Investments (custody):

Custody isn’t the most exciting segment of the crypto world, arguably, but it is a critical one, especially as the industry matures. It figures in many real-life investment decisions. How, for instance, will older Bitcoin holders pass on their BTC to their heirs when they die? 

In 2019, Fidelity Investments, the mutual fund colossus ($7.2 trillion under administration), stepped up with a full rollout of its Fidelity Digital Assets custody unit, four years in the making, which targets institutional investors like hedge funds, family offices and market intermediaries.

The firm’s carefully charted deployment route was marked by a series of milestones: Initial research (2014), formation of a blockchain incubator and initiation of a proof-of-concept process (May 2015), acceptance of Bitcoins as charitable donations by Fidelity Charitable (November 2015), formation of academic and industry partnerships (June 2016), acceptance of Ether for charitable donations (September 2017) and Fidelity Digital Assets unit announced (October 2018). 

In mid-December 2019, Fidelity Digital Assets announced that it may add support for Ether in 2020 if there is sufficient demand for it.

Related: Financial Institutions Use Stablecoins to Shake Things Up in 2020 

6. Utility Settlement Coin project/Fnality International (bank consortium)

Settling cross-border trades is often cited as a promising use case of blockchain technology, and, in 2019, a global banking consortium moved closer to putting that proposition to the test.  

In June, 14 financial institutions from the U.S., Europe and Japan collectively invested $60 million in a new company, Fnality International, that will build an Ethereum blockchain, upon which trades among the banks will be settled using a token called the Utility Settlement Coin (USC) — backed with cash collateral deposited in central banks.

Spearheaded by Switzerland’s UBS in 2015, the Utility Settlement Coin project’s additional shareholders include Banco Santander, Bank of New York Mellon, Barclays, CIBC, Commerzbank, Credit Suisse, ING, KBC Group, Lloyds Banking Group, Mizuho Bank, MUFG Group, Nasdaq, Sumitomo Mitsui Banking Corporation and State Street Bank & Trust.

One key challenge facing the consortium will be interoperability, according to Olfa Ransome, Fnality’s chief commercial officer:

“Not only must interoperability be achieved between legacy and digital venues and platforms, but also between competing blockchains — to support atomic settlement regardless of the standards and protocols — and between different means of on-chain payment.”

The platform is expected to be operational by mid-2020 once regulatory approvals have been secured.  

Related: Bank to Basics: USC Project Seeks to Disrupt Traditional Wholesale Banking

7. Fairfax County Retirement Systems (pension fund)

In February, Virginia's Fairfax County’s Retirement Systems (FCRS) became the first U.S. pension fund to invest at least a portion of its retirement holdings ($21 million) in cryptocurrency assets. The allocation, through Morgan Creek Digital, was just a small portion of the system’s assets, “given that the blockchain technology industry is still in its early stages," explained FCRS to its participants. It reportedly invested another $50 million in a second Morgan Creek Digital fund in October.

Pension funds’ conservative mandates have made them reluctant crypto investors until now; they are generally more cautious than hedge funds and university endowments. 

 Related: First Pension Funds Investing in Crypto — a Sign of Things to Come?

8. Chicago Mercantile Exchange (exchange)

Bakkt drew many of the crypto exchange headlines in 2019, but the Chicago Mercantile Exchange (CME), the world’s largest futures market, notched the most Bitcoin futures contracts. At its height, in May 2019, CME was averaging $515 million in daily volume and more than 13,600 futures contracts each day. On May 13 alone, Bitcoin traded a record daily volume of 33,677 contracts, equivalent to over 168,000 BTC (worth $1.705 billion at the time). 

CME’s activity dropped toward the end of 2019, though — from a year-to-date daily average of more than 7,000 Bitcoin futures contracts in May to less than half of that by early December.  

CME continues to expand its crypto product offerings, however, announcing in November plans to introduce options on Bitcoin futures contracts by mid-January 2020. Some industry players believe the Bitcoin derivatives market will one day dwarf the BTC spot market. 

Related: CME's Futures Options Sprinted Out of the Gate but a Marathon Lies Ahead

9. B3i Services AG (insurance consortium)

In July, the insurance industry’s high-profile blockchain consortium, B3i Services AG, announced its first product, a catastrophe excess-of-loss reinsurance coverage. The consortium expected it to be on the market for the January 2020 renewal season. 

Formerly known as the Blockchain Insurance Industry Initiative, B3i, incorporated in 2018,   employs blockchain technology to reduce friction in the transfer of risk. Each reinsurance contract in the network is written as a smart contract atop an open-source Corda blockchain platform. The smart contracts are capable of automatically validating a condition and can determine, for example, whether an asset should go to a nominee or back to the source, or a combination thereof. 

B3i started with five insurance companies experimenting with Ethereum in May 2016. Today, the consortium encompasses 18 insurance companies and reinsurers from five continents — including Aegon, Allianz, Axa, Swiss Re, Liberty Mutual, Munich Re, Tokio Marine and Scor, among others. 

10. Harvard University (university endowment)

When it was reported in April that Harvard University’s investment arm, Harvard Management Co. (assets: $38.3 billion), was making its first crypto investment, it was hailed as a win for the cryptocurrency/blockchain sector, which has struggled to attract institutional investors with deep pockets. 

Admittedly, the investment in blockchain-toolmaker Blockstack tokens was worth less than $12 million, a drop in the bucket for the world’s largest university endowment, but following Yale University’s lead in 2018 — that school invested in two crypto funds, managed by Andreesen Horowitz and Paradigm, respectively — it could signal a growing trend among high profile U.S. universities. Other elite university endowments, including Stanford and MIT, have been quietly testing the crypto waters, reported Cointelegraph in May.

Related: Ivy League Universities Set to Boost the Crypto Industry With an Injection of Institutional Investment

Compliance issues persist

Key obstacles remain, however, before institutions really plant their flag in crypto/blockchain territory. Chainalysis conducted a poll of financial institutions last November, in which more than half of the respondents cited compliance in one form or another as the issue preventing them from investing more in cryptocurrency. Also, 39% said they worry about the inability to control illicit activity, while nearly 18% indicated that they are unsure of their ability to comply with government regulations in the space. 

With growing commitments from heavyweights, like Fidelity, JPMorgan and ICE, however, and even stirrings from endowments and pension funds, there were clear signs in 2019 that large institutions are moving closer to embracing cryptocurrency and blockchain technologies in 2020. 

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Is the Future of Blockchain Tech Innovation in the East?

The U.S. could lose its position as the innovation leader as the Asian tech market has grown on the global stage.

Since the end of World War II, the United States has been an undisputed global leader in innovation. From putting a man on the moon to the “Traitorous Eight” of Fairchild and the birth of today’s Silicon Valley, the U.S. has been at the forefront of embracing emerging technology. This position has given the country a strategic advantage in dictating how technology is adopted and setting the basic standards for its use. However, as we enter the new decade, the U.S. is at risk of losing its place as the leading innovator to Asia, impacting our technological future significantly.

The rise of China

The largest competitor to the American innovation hegemony is China. Over the past few years, China has heavily focused on developing emerging technologies such as blockchain and AI. While PwC survey respondents viewed the U.S. as the most advanced territory developing blockchain today, they believe that in the next three to five years, the leader will be China. 

Over 500 projects have registered with China’s Cyberspace Administration since being required to do so this past January. There are nearly three times as many blockchain-related patents filed in China than the next closest country. China’s spending on blockchain technology will exceed $2 billion by 2023 according to a report from American market intelligence firm IDC. Even local governments are pledging funds to blockchain projects.

Related: What Happens If the US Loses the Blockchain War?

A national priority

All this activity and interest in blockchain technology has come about because the Chinese government openly supported it.

Blockchain development became a national priority when it was included in the country’s “13th Five Year Plan” back in 2016. China President Xi Jinping reinforced its importance to the country’s future during a speech in late October of last year, stating:

“We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.”

He also stressed that “it is necessary to lead the standard setting and right to speak in the world.”

Related: How Will China Pursue Xi Jinping's Blockchain Adoption Plan?

“De-intermediarization”

China is not known for little government oversight, and its approach towards blockchain is no different. A Chinese official even explained on state TV: 

“When talking about blockchain, many people are talking about ‘decentralization.’ I’d like to make a small change to the word. I think the essence of blockchain is ‘de-intermediarization.’ There is no way to get rid of the center.”

The standards China would like to set strongly differ from the underlying philosophy of peer-to-peer transactions created without the involvement of a state or central party. For blockchain pursuits, this might pose an uncomfortable thought, as Washington Post columnist Josh Rogin described: “While Westerners envision blockchain-based Web 3.0 as an open system, China could build a closed blockchain that it controls and corrupts for its own purposes.”

By leading the standard setting, China could significantly steer the industry in any direction of its liking and potentially limit the adoption of certain blockchain platforms it can’t control.

Related: Why the Fed Needs to Start Issuing Digital Dollars

Beyond the Great Wall

One way to set standards is to work with other global players early.

Partnering with 12 EU member states and 5 Balkan countries, China created the China-CEEC Blockchain Centre of Excellence, “focused on boosting the applied and fundamental research on blockchain and DLT technologies.”

China also formed a banking consortium with the other BRIC countries to “collaborative research on distributed ledger and blockchain technology in the context of the development of the digital economy.”

Even Walmart and IBM joined forces with JD.com and Tsinghua University to create the Blockchain Food Safety Alliance to “enhance food tracking, traceability and safety in China.”

China isn’t the only one

While China is certainly in the best position to lead blockchain innovation, it’s not the only country that could outpace the U.S. this coming decade.

The Korean market also has potential to become a leader for blockchain adoption in the world. The country is pioneering blockchain adoption in many areas of large business, startups and government. The Ministry of Science and Technology in South Korea has launched initiatives for training blockchain developers, and the Seoul Metropolitan Government plans to invest over $1 billion in blockchain and fintech startups by 2022.

A major part of enterprise blockchain development is happening in India. India is the number one country worldwide in the highly specialized field of systems integration engineering, and as a global leader in software innovation, India houses some of the world’s leading blockchain teams. India’s blockchain development leaders are leading decision-making and engineering for enterprises around the globe.

Not too late

While other countries are gaining on its position, the U.S. can still take action to keep its place as the leading global innovator. Through a combination of government intervention, investment and partnering with both private and public enterprises, the U.S. can support young industries like blockchain, fostering its growth and setting the standards for its use.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Tal Kol is the co-founder of Orbs. Tal previously co-founded Appixia, a mobile app startup acquired by Wix.com, and was the head of mobile engineering at Wix.com. He is an expert on blockchain applications and the former head of engineering of Kin at Kik Interactive.

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Rising BTC Price, Justin Sun’s Harassment Suit, and More on the Bad Crypto Podcast

Crypto news for your ears instead of your eyes

Those of you seeking yet another angle on consuming the latest and greatest crypto news should know about The Bad Crypto Podcast. This week’s episode starts with the good news that Bitcoin is on the rise, touches on Justin Sun’s harassment suit, and even takes a moment to acknowledge Peter Schiff’s remarkable public Bitcoin mistakes.

There’s even a full serving of commentary on the fact that PornHub has added new payment support for the Tether stablecoin. No stone is left unturned in the effort to make cryptocurrency and blockchain current events more accessible and relevant to those watching the technology.

Check out the latest episode below:
 

 

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Fewer Pronouncements of BTC's Death in 2019, but Here Are the Top 5

Here are the top five Bitcoin “burials” of 2019 as negative sentiments seemingly decline.

Bitcoin has long been disregarded as a speculative asset class that is doomed to fail by mainstream media outlets around the world.

The apathy toward the world’s preeminent cryptocurrency has been embodied by countless articles that have either hailed the death of Bitcoin or predicted its impending demise.

For the past three years, Cointelegraph has reviewed the top annual Bitcoin obituaries courtesy of 99Bitcoins’ list of news articles that have unwittingly foretold the end of the cryptocurrency.

In 2017, Bitcoin and the overall cryptocurrency market saw the biggest surge in history, when BTC’s value soared to over $20,000 by December of that year. The lofty gains were eventually curtailed by a humbling price correction and stagnation that ensued for much of 2018.

Unsurprisingly, the number of Bitcoin obituaries skyrocketed during those years. In 2017, Bitcoin’s “death” was predicted 124 times, while 2018 saw that number reduced to 93. At the end of 2019, a full decade since Bitcoin’s inception, the number of articles proclaiming the end of the cryptocurrency had fallen to just 40.

In this listicle, Cointelegraph looks at the top five Bitcoin burials of the last year.

Bitcoin will go to zero

The annual World Economic Forum in Davos is a major event in the global financial and banking sphere, and cryptocurrencies have been part of its debates and forums over the past few years.

During a TV debate hosted by CNBC in Davos in last January, Bitcoin’s underlying protocol became a major point of contention in its potential future as a valued cryptocurrency.

BCG Digital Ventures Founder Jeff Schumacher highlighted concerns regarding the way in which Bitcoin derives value from its proof-of-work protocol — suggesting that its value could plummet to $0.

“I do believe it will go to zero. I think it’s a great technology but I don’t believe it’s a currency. It’s not based on anything.”

The debate itself was not centered around an attack on Bitcoin but a robust debate around the future of cryptocurrencies and the power of the protocols that underpin the blockchain technology used to keep them running.

Bitcoin is “absolutely worthless”

As Bitcoin’s price began to rebound from a lowly start in 2019, an article in Gizmodo slammed the cryptocurrency and people who have invested into the space. 

The author of the piece was scathing in his take on Bitcoin as the cryptocurrency bounced back to a four-month high following a difficult market climate in 2018.

“It’s fake money that’s about as practical to use in the real world as Monopoly bills.”

The writer also took aim at Bitcoin’s proof-of-work consensus algorithm, criticising the energy-intensive demands of recording transactions and maintaining the blockchain.

Bitcoin is a “digital game” — a SharkTank investor

In May 2019, renowned investor Kevin O’Leary of SharkTank fame likened Bitcoin to playing a “digital game” in an interview on CNBC’s Squawk Box.

O’Leary’s comments came as Bitcoin was sharply appreciating in value midyear. His major criticism was that investors could not take large sums of value in and out of Bitcoin because buyers demand a guarantee on the value of BTC they’re receiving.

O’Leary made reference to his own efforts to buy real estate in Switzerland using Bitcoin, with the difficulty being that the receiver of such a large amount of Bitcoin is not ready to trade other assets due to the risk associated with BTC’s price volatility.

“To me, it’s garbage, because you can’t get in and out of it in large amounts.”

Buffett — Bitcoin is a “gambling device”

Globally respected investor Warren Buffett, founder of Berkshire Hathaway investment group, has long been a dissenting voice towards cryptocurrencies and Bitcoin in particular.

Earlier this year, Buffett cast fresh aspersions on the space while speaking to the press ahead of his company’s annual meeting.

Buffett went as far as saying that Bitcoin had become a “gambling device” and that the cryptocurrency hadn’t produced anything.

“I’ll tear off a button here. What I have here is a little token… I’ll offer it to you for $1000, and I’ll see if I can get the price up to $2000 by the end of the day... But the button has one use and it’s a very limited use.”

While slamming Bitcoin, Buffett gave credit to the power of blockchain technology while pointing towards JP Morgan’s recently developed blockchain products.

Bitcoin not built to last

An article in the New York Post speculated in June that Bitcoin would not survive in the future, despite another price surge occurring that same month.

The cryptocurrency had jumped up to $13,000, marking a massive increase in value from the beginning of the year, when it was hovering around $3,000. 

The author of the article suggested that the surge could have come down to Facebook’s reveal of its Libra cryptocurrency plans, which may have boosted market sentiment in the cryptocurrency sector.

The argument suggested that Facebook’s product is something that provides real value and could be the catalyst that leads to the demise of Bitcoin.

“In fact, it might spell the beginning of the end for bitcoin. There are almost no major Wall Street investors of substance with meaningful track records who have invested in bitcoin. To me, it’s fool’s gold. There are no financial statements, no balance sheets, no revenues or assets.”

Dawn of a new decade

A decline in the number of sweeping statements made about the future lifespan or looming demise of Bitcoin and cryptocurrencies is an interesting development in the space.

The dawn of 2020 brings down the curtain on the first decade of the crypto era. Bitcoin led the way with its inception in 2009, and the space has subsequently exploded over the past 10 years.

Coinbase CEO Brian Armstrong wrapped up his take on the last decade in a blog post early in the new year, in which he vilified the multitude of articles which had inaccurately written off Bitcoin.

“There were over 379 articles written, prematurely declaring the end of Bitcoin. Not only did Bitcoin survive, it thrived, becoming the top performing asset of the decade. The naysayers were proved wrong and we learned an important lesson about human nature: most big breakthroughs are contrarian ideas that people dismiss and ridicule at the start.”

As Armstrong suggests, the success and adoption of Bitcoin birthed an era of innovation that spawned a plethora of cryptocurrency and blockchain projects that have driven the development of the space.

Toward the end of the decade, the interest in the space spilled into mainstream industries. The world’s best investment firms started gaining exposure to crypto while some of the biggest companies began using blockchain technology or developing their own enterprise software and tokens.

A combination of all of these factors may be the reason for the significantly fewer Bitcoin obituaries being published. The focus seems to have shifted to major developments in the space, like Facebook’s Libra cryptocurrency plans and moves by regulators around the world.

via cointelgraph.com

BitFlyer Now Offers US Users 0% Fees When Buying Bitcoin With USD

Tokyo-based cryptocurrency exchange bitFlyer launched its commission-free campaign for BTC/USD trading pair to its U.S. customers.

People in the United States now have another zero-fee option to buy Bitcoin (BTC) with the U.S. dollar.

On Jan. 30, Tokyo-based cryptocurrency exchange bitFlyer launched its commission-free campaign for BTC/USD trading pair to its U.S. customers.

bitFlyer USA operates in 47 states in the U.S. and holds New York BitLicense

The zero-fee feature is only available for the BTC/USD trading pair and has been implemented on bitFlyer’s pro trading tool, bitFlyer Lightning, the firm noted in a blog post. The campaign is automatically applied to all new and existing bitFlyer USA customers clients, while the end date of the campaign period is to be defined. bitFlyer noted that they will announce any changes about two weeks in advance.

While bitFlyer is headquartered in Japan and has a subsidiary in Europe, the new opportunity is an exclusive offering of bitFlyer USA, the U.S. arm of the exchange that was launched in the U.S. in November 2017.

Currently operating in 47 states and territories in the U.S., bitFlyer is a bearer of a major cryptocurrency license known as BitLicense, which allows crypto businesses to legally provide crypto-related services in New York state.

What are the regular fees

According to the official website of bitFlyer, the company usually takes 0.00000001 BTC or one satoshi per “unit of transaction” of Bitcoin, which is less than one cent at press time. bitFlyer’s regular withdrawal fee for Bitcoin amounts to 0.0004 BTC ($3.7), while the one of Ether’s (ETH) accounts for 0.005 ETH or about $0.9 at press time. There’s also a $10 fee to wire USD out of a bitFlyer account.

Transaction fees on bitFlyer. Source: bitFlyer

As part of the newly announced campaign, bitFlyer USA is also announcing its first-ever trading competition in the U.S., the company’s representatives said in an email to Cointelegraph. Called “Trade Grand Prix,” the upcoming contest is open to all users in the U.S. and will reward the top 10 traders a total of $1,600 based on their weekly and daily trading volumes. The competition will start on Feb. 10, the exchange noted.

Founded back in 2014, bitFlyer claims to be the the “most used virtual currency exchange in Japan.” The exchange is also operating a fully-owned subsidiary in Europe, bitFlyer EUROPE S.A., which is located in Luxembourg.

bitFlyer’s zero-fee Bitcoin purchasing option enters the U.S. crypto market to follow other firms in the industry already offering cryptocurrency trading with no fees. As such, American stock brokerage Robinhood Crypto is a major provider of zero-fee crypto trading, allowing customers to trade seven major cryptos with no commission fee. In late September 2019, California-based financial firm SoFi launched commission-free crypto trading on its platform SoFi Invest.

via cointelgraph.com

Crypto Exchange Zebpay Reopens in India Despite Banking Ban

Singapore-based crypto exchange Zebpay opens its doors to Indian clientele once again after a 16-month hiatus.

Singapore-based crypto exchange Zebpay reportedly returns to the Indian market more than a year after an Indian Reserve Bank crackdown led to the exchange’s closure in the country. 

After discontinuing Indian services in late 2018, Zebpay will open its exchange for the country once again, although the central bank ruling that caused its demise has not changed, IBS intelligence wrote on Jan. 29, Citing “reports.” 

Shutdown in the face of regulation

In September 2018, Zebpay halted exchange availability in India after the Reserve Bank of India, or RBI, forbade banks from serving crypto companies. 

Although it closed operations in India, Zebpay announced expansion to Australia in May 2019, showing the outfit was still alive and growing. 

Comeback in spite of limitation

The RBI ban has not changed, but Zebpay has decided to open its doors to Indian customers once again anyway, according to IBS intelligence. 

Surrounding the rebound, Zebpay has updated its company brass, including a new CFO and CMO. The outfit also touts added features and crypto-based trading pairs. Additionally, the exchange expects to open an avenue for involvement in mutual funds, IBS wrote. 

The past several months have yielded numerous sessions in front of India’s Supreme Court on the RBI ban in an attempt to gain clarity on the situation. 

Cointelegraph reached out to Zebpay for comment, but received no response as of press time. This article will be updated accordingly upon receipt of a response.

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USDT Moves Every Eight Days on Average, Data Shows

Recent data shows Tether’s USDT stablecoin moves 46 times per year, on average.

Recent data from crypto data site Coin Metrics shows USDT tokens change locations every eight days on average. 

“The trailing 12 month velocity of @Tether_to on Omni, Ethereum and Tron has rapidly and consistently increased since September and currently sits at ATHs, where on average each $USDT turns over 46 times per year,” Coin Metrics posted on its Twitter account on Jan. 31. 

Moving on three blockchains

Tether, one of the crypto industry’s oldest stablecoin operations, originally built its USD-pegged token on Bitcoin’s Omni token layer. Tether also operates on Ethereum’s blockchain as an ERC-20 token.  

Several years after its inception, Tether issued USDT on Tron’s blockchain in 2019 as an added market option.

Based on Coin Metrics’ tweet, all three blockchains currently host all-time high USDT transaction numbers, in terms of how often each USDT token moves from any given location. 

Crunching the numbers

According to the numbers Coin Metrics listed, each USDT on the market moves approximately 46 times per year on average. 

Taking into account a 365-day year, this would mean an average USDT moves approximately every eight days. 

Such movement shows that the market still uses USDT regularly, even after years of insolvency doubts, lawsuits and questions.

Authorities subpoenaed Tether and allegedly related exchange Bitfinex near the end of 2017 on questions of solvency. 

In 2018, a law firm came forward, stating sufficient backing for USDT. As of recently, Bitfinex sits in the spotlight, facing four lawsuits for alleged market manipulation in 2017. 

Cointelegraph reached out to Coin Metrics for additional comment but received no response as of press time. This article will be updated accordingly should a response come in.

via cointelgraph.com

Europe’s First Crypto License Issuer Warns of New Unregistered Crypto Firm

The Commission de Surveillance du Secteur Financier of Luxembourg has spotted another unregistered crypto company.

Major European financial regulator, Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF), has spotted another unregistered crypto company.

The firm, Crypto Bull, operating under the url crypto-bull.io, claims to be based in Luxembourg while it does not have permission to provide crypto services in the country, the CSSF announced on Jan. 31.

The warning notice reads:

“The CSSF informs the public that this entity has not been granted any authorisation to provide investment services or other financial services in or from Luxembourg.”

The unregistered firm wants to provide services to British, Spanish and Russian users

According to the website, Crypto Bull positions itself as a “reliable and technologically oriented” platform for cryptocurrency trading. Claiming to be located at 2, place de Paris, 2314 Luxembourg, Crypto Bull does not explicitly note whether the company is licensed or not.

The firm seems to be directing its services to users in the United Kingdom, Spain and Russia, according to the three relevant company phone numbers on the website.

With its domain purportedly registered in February 2019, Crypto Bull has apparently had a chance to mislead some crypto users. In fact, some online reviews claim that the firm is not a legitimate investment platform but rather a crypto Ponzi scheme. Other reviews say that Crypto Bull has already come into the spotlight by authorities in Italy and Spain and was blacklisted as a scam.

Luxembourg was the first European country to license a crypto exchange

Meanwhile, Luxembourg has been friendly to the crypto industry as the country houses major global cryptocurrency exchanges like Bitstamp. The CSSF, which regulates Luxembourg-based crypto exchanges, reportedly issued Bitstamp the first crypto license in Europe back in 2016.

As previously reported by Cointelegraph, the government of Luxembourg views cryptocurrencies as “intangible assets” that are not subject to income tax until they are exchanged for fiat. As such, all crypto-related transactions were reportedly exempt from VAT within Luxembourg as of August 2019.

In line with supporting the development of the local crypto ecosystem, Luxembourg authorities have been actively monitoring the market for potential scammers and fraudsters. In September 2019, the CSSF red-flagged the activities of a fraudulent clone website that is impersonating cryptocurrency payment services provider BitPay. Previously, the regulator issued a warning against Cryptominingoptionsignal, another crypto-related entity that claimed to be licensed in Luxembourg.

via cointelgraph.com

Bitcoin Price Drops 3% on Brexit and Coronavirus Case in the UK

The BTC/GBP pair declined by 3% as Brexit occurred and a case of coronavirus turned up in the United Kingdom.

Bitcoin price (BTC) has been declining amid the recent coronavirus developments as today media reported that patients in the UK and Russia tested positive for the virus. The declining trend has been followed by major cryptocurrencies. 

Cryptocurrency market daily overview. Source: Coin360

In a day that will mark the departure of the United Kingdom (11 p.m. UTC) from the European Union and the confirmation of 2 cases of coronavirus virus infection in the UK, BTC/GBP pair has been declining by more than 3.7% since midnight.

Looking at the 15-minute timeframe, Bitcoin was trading near ‎£7,274 at midnight and started to decline steadily throughout the early morning.

BTC GBP 15-minute chart. Source: TradingView

Since 1:30 p.m., around the time most American and British news outlets reported on the confirmation of coronavirus, Bitcoin’s intraday price trend has been volatile. The digital asset reached a daily low of £7,015 around 2:30 p.m. with a slight recovery at £7,086 (around 4 p.m.). Shortly thereafter, the digital asset ended up declining again, nearly dropping to a daily low at 4:50 p.m.

 

BTC GBP 5-minute chart. Source: TradingView

As reported earlier by Cointelegraph, Bitcoin price declined after the coronavirus was confirmed in the U.S. and a similar effect seems to be happening in the BTC/GBP price as the health threat reaches a global presence. On the same page, the S&P 500 and the Dow Jones Industrial Average Indexes are down by more than 1% for the day.

Following the same trend, the FTSE 100, the main stock index for companies in the UK, declined more than 1%. However, the GBP/USD exchange rate was up today, contradicting the global stock market trend and suggesting an opposite behavior to Bitcoin.

The overall cryptocurrency market cap now stands at $255.7 billion and Bitcoin’s dominance rate is 66.2%. A handful of large-cap altcoins also mirrored Bitcoin’s losses. Most notably, Bitcoin SV (BSV) is down more than 8% and Bitcoin Cash (BCH) more than 5%. EOS is also down by more than 5%. On the winning side, NEM has gained more than 8% and Ontology (ONT) rallied 6%.

Keep track of top crypto markets in real time here

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Price Analysis Jan 31: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, ADA, ETC

The bears are attempting to stall the current rally but bulls are likely to defend the closest support levels, suggesting each dip represents a buying opportunity.

Morgan Creek Capital CEO Mark Yusko believes that Bitcoin should be a part of every investment portfolio. The performance analysis of the past five years shows that even portfolios that only held 1% of their total investments in Bitcoin managed to outperform their competitors. Bitcoin offers a ten-to-one downside capture, which makes it one of the most asymmetric assets that Yusko has ever seen.

The growing popularity of crypto derivatives indicates institutional players are gradually entering the space. The Chicago Mercantile Exchange group Managing Director and Global Head of Equity Index Alternative Investment Products, Tim McCourt, said: “CME Bitcoin futures have surpassed $100 billion in total notional value traded since their launch in December 2017.”

 Daily cryptocurrency market performance. Source: Coin360

Bank of Japan deputy governor Masayoshi Amamiya said in a seminar that the central bank should be ready to issue a central bank digital currency if the public demand for it increases. This shows that several major economies are exploring the possibility of launching a CBDC. 

As January comes to an end, multiple cryptocurrencies have risen sharply but can the bulls sustain the momentum? Let’s study the charts.

BTC/USD

Bitcoin (BTC) has turned down from the minor resistance at $9,600. However, with the 20-day EMA sloping up and the RSI in positive zone, the advantage is with the bulls. We anticipate the bulls to defend the dip to the 20-day EMA at $8,736, which is just below the 200-day SMA at $8,881.

BTC USD daily chart. Source: Tradingview

If the price rebounds off the 20-day EMA, the bulls will again attempt to clear the overhead resistance at $9,600. If successful, the BTC/USD pair is likely to move up to $10,360.89. 

Contrary to our assumption, if the bears sink the price below the 20-day EMA, the pair will weaken and can plummet to $8,240.67. The pair will turn negative if the price drops below the critical support at $7,856.76. The traders can trail the stops on their long positions to $8,200, which can be tightened further if the price dips below the 20-day EMA. 

ETH/USD

Ether (ETH) surged above the $173.841 to $180 resistance zone on Jan. 30 but the bulls have not been able to build on the strong up move. The price has reversed direction from $186.969. 

ETH USD daily chart. Source: Tradingview

There is a strong support at $173.841, which is just below the 200-day SMA at $175. If this support breaks, we expect the bulls to defend the 20-day EMA at $166. If the price bounces off either of these support levels, the bulls will make another attempt to move up to $197.75.  

Contrary to our assumption, if the bears sink the price below the 20-day EMA, the next support to watch out for is the $157.50 to $150 zone. A break below this zone will be a huge negative. The traders can trail the stops on the long positions to $160.

XRP/USD

The bulls are struggling to sustain XRP above $0.2326. This is a negative sign as it shows a lack of buyers at higher levels. There are several supports between $0.2326 and the neckline of the inverted head and shoulders pattern. We anticipate the bulls to defend this support zone aggressively.

XRP USD daily chart. Source: Tradingview

If the price rebounds off the support zone, the bulls will make another attempt to scale above the resistance at $0.25401. If successful, a move to $0.31503 is possible. 

Contrary to our assumption, if the XRP/USD pair breaks below the neckline, a drop to $0.20041 is possible. As the pair is struggling to move up, we suggest traders reduce their risk by trailing the stops on the long positions to $0.21.

BCH/USD

Bitcoin Cash (BCH) came very close to the overhead resistance at $403.88 on Jan. 30. However, the bulls have not been able to scale above this level and the price has once again turned down from it.

BCH USD daily chart. Source: Tradingview

There is a strong support at $360 but if the bears sink the price below this support, a drop to the 20-day EMA at $335 is likely. We expect the bulls to defend the 20-day EMA aggressively. If the price rebounds off $360 or the 20-day EMA, it will increase the possibility of a breakout of $403.88.

Conversely, if the bears sink the price below the 20-day EMA, a drop to $306.78 is possible. If this support holds, the BCH/USD pair might consolidate for a few days. The pair will turn negative on a break below $296.13. The developing negative divergence on the RSI warrants caution.

BSV/USD

Bitcoin SV (BSV) is currently at the support line of the symmetrical triangle. If the bears sink and sustain the price below the triangle, it will be a huge negative. This pattern has a target objective of $159.52 on the downside.

BSV USD daily chart. Source: Tradingview

However, we anticipate the bulls to attempt to stall the decline at $236. If successful, the BSV/USD pair will continue to consolidate between $337.8 and $236 for a few more days. The pair will turn positive above $337.80.

LTC/USD

Litecoin (LTC) broke above the overhead resistance at $66.1486 on Jan. 30, which completed a cup and handle pattern. This bullish setup has a target objective of $96.439. The 20-day EMA is sloping up and the RSI is in the overbought zone, which suggests that bulls have the upper hand.

LTC USD daily chart. Source: Tradingview

Currently, the bears are attempting to sink the price back below $66.1486. If successful, the price can dip to the 200-day SMA at $61.73 and below it to the 20-day EMA at $57.50. If the price rebounds off the 20-day EMA, the bulls will once again attempt to push the LTC/USD pair above $70.50.

However, if the price breaks below the 20-day EMA, a drop to $50 is possible. If the price sustains below $66.1486, it will invalidate the bullish setup. Therefore, we will wait and watch for a couple of days before suggesting a trade in it.

EOS/USD

EOS broke above the overhead resistance of $4.24 on Jan. 30, which was a huge positive. However, the bulls could not sustain the breakout and the price has again dipped back below $4.24. This suggests profit booking at higher levels. 

EOS USD daily chart. Source: Tradingview

The EOS/USD pair can now dip to the 20-day EMA at $3.68, which is likely to act as a strong support. If the price rebounds off the 20-day EMA, the bulls will once again attempt to propel the pair above $4.24.

However, we spot a developing negative divergence on the RSI, which is a bearish sign. If the bears sink the price below the 20-day EMA, a drop to the 200-day SMA at $3.3 is possible. 

BNB/USD

The bulls managed to push Binance Coin (BNB) above the overhead resistance at $18.50 on Jan. 30 and 31 but they have not been able to hold on to the breakout.  This shows a lack of buyers at higher levels.

BNB USD daily chart. Source: Tradingview

If the price sustains below $18.50, the BNB/USD pair will remain range-bound for a few more days. The pair will turn negative on a break below $16.50.

However, if the price rebounds off the 20-day EMA and breaks out of $18.50, a move to the 200-day SMA at $18.79 and above it to $21.8 is possible. For now, the stops on the long positions can be retained at $15.90.

ADA/USD

The bulls are struggling to scale above the overhead resistance at $0.0560221. This shows a lack of buyers at higher levels. Cardano (ADA) can now dip to the next support at $0.0461161. The 20-day EMA is also placed close to this level, hence, we expect the bulls to defend it aggressively.

ADA USD daily chart. Source: Tradingview

If the price bounces off $0.0461161, the bulls will again attempt to push the price above $0.0560221. If successful, a rally to $0.0652290 is likely.

As the ADA/USD pair has not been able to break above $0.0560221, partial profits can be booked at the current levels, if not done already, as suggested in our previous analysis. The stops on the remaining long positions can be kept at breakeven.

ETC/USD

Ethereum Classic (ETC) has turned down from $12.87278. The altcoin can now retest the breakout level of $10, as suggested in our previous analysis. If the price bounces off $10, it might offer a low-risk buying opportunity.

ETC USD daily chart. Source: Tradingview

However, if the retest of $10 fails to hold, the pullback can extend to the 20-day EMA at $9.15. We expect the bulls to defend the 20-day EMA aggressively. A bounce off this level or from $10 will increase the possibility of a move to $14.

Conversely, if the bears sink the price below the 20-day EMA, a drop to $7.7853 is possible. The developing negative divergence on the RSI is a bearish sign. Hence, traders should wait for the uptrend to resume before initiating long positions once again.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

via cointelgraph.com

Trezor Wallets Can Be Hacked, Kraken Reveals

Kraken’s security division revealed that the entire family of Trezor wallets can be hacked to steal private keys, though the method requires specialized hardware.

Kraken Security Labs revealed on Jan 31. that Trezor hardware wallets and their derivatives can be hacked to extract private keys. Though the procedure is quite involved, Kraken claims that it “requires just 15 minutes of physical access to the device.”

The attack requires a physical intervention on the Trezor wallet by either extracting its chip and placing it on a special device or soldering a couple of critical connectors.

The Trezor chip must then be connected to a “glitcher device” that would send it signals at specific moments. These break the built-in protection that prevents the chip’s memory from being read by external devices. 

The trick allows the attacker to read critical wallet parameters, including the private key seed.

Though the seed is encrypted with a PIN-generated key, the researchers were able to brute force the combination in just two minutes. 

The vulnerability is caused by the specific hardware used by Trezor, meaning that the company cannot easily fix it. It would need to completely redesign the wallet and recall all existing models.

In the meantime, Kraken urged Trezor and KeepKey users to not allow anyone to physically access the wallet.

In a coordinated response published by Trezor, the team minimized the impact of the vulnerability. The company argued that the attack would show visible signs of tampering due to the need to open the device, while also noting that the attack requires extremely specialized hardware to perform.

Finally, the team suggested users activate the wallet’s passphrase feature to protect from such attacks. The password is never stored on the device as it is added to the seed to generate the private key on the fly. Kraken also noted that this is a viable alternative, though researchers referred to it as “a bit clunky to use in practice.”

The feature also adds significant responsibility to each user. The passphrase needs to be complex enough to not be easily brute forced as well, and forgetting it would completely lock users out of their money.

Cointelegraph reached out to Kraken for additional details, but had not received a response as of press time. The article will be updated as more information becomes available.

via cointelgraph.com

Investigators Bust €6 Million Bitcoin and Gold Fraud Scheme

An international task force of French, Belgian and Israeli investigators brought down a fraud scheme responsible for stealing €6 million from French and Belgian citizens.

French, Belgian and Israeli investigators have brought down a scheme that defrauded €6 million ($6.64 million) from French and Belgian citizens, a Jan 29. press release from Europol reads.

The fraudsters promised significant returns for the victims’ investment in what appears to have been a Ponzi scheme.

The international network of fraudsters was allegedly masterminded by a French-Israeli citizen. Authorities arrested nine suspects connected with the scam in 2019.

The investigation started in 2018 and was coordinated by Europol and Eurojust.

The criminals reportedly set up a system promising large gains from investments in Bitcoin, diamonds and gold, and offered their “services” on undisclosed online platforms.

The fraud displays the tell-tale signs of a Ponzi scheme. The organizers promised returns from 5 to 35 percent then pretended to manage users’ wallets and invited them to invest more money. Some of the victims were indeed paid interest to increase their confidence in the platform.

Organizations were also targeted, with a “big French private company” and a local French authority reportedly falling victim to the scam.

Fraudsters succeeded in collecting at least €6 million, with outstanding invoices for several million more. Authorities managed to recover more than one million euros, with the rest supposedly having been transferred outside of the European Union.

French regulators previously noted a significant increase in crypto-related scam threats in the country.

via cointelgraph.com