VanEck launches its first multi-token cryptocurrency fund

VanEck launches its first multi-token cryptocurrency fund

The ETN will contain exposure to seven different major cryptocurrencies.

On Monday, VanEck, a financial institution with close to $82 billion in assets under management with exchange-traded funds, or ETFs, mutual funds and institutional accounts, announced the launch of its first cryptocurrency fund. The fund is listed as an exchange-traded note, or ETN, on the Deutsche Borse Xetra and SIX Swiss exchanges with exposure to Bitcoin (BTC), Ethereum (ETH), Polkadot (DOT), Solana (SOL), Tron (TRX), Avalanche (AVAX) and Polygon (MATIC).

Gijs Koning, co-head of VanEck Europe, elaborated on why it was important for the firm to facilitate investment in digital currencies:

"In early 2017, we determined that digital assets could provide a store of value alternative to currencies and gold, as well as a host of technology solutions that could bring down costs in the payments and investing industries."

While VanEck's cryptocurrency financial products are gaining traction in Europe, they face regulatory hurdles in the U.S. There, the firm's offerings are limited to private digital currency funds for institutional investors and only stock-based ETFs comprised of companies utilizing blockchain technology.

Last November, the U.S. Securities and Exchange Commission rejected VanEck's Bitcoin spot ETF application. In explaining the decision, the regulatory agency cited that the underlying exchange responsible for listing the ETF, Cboe BZX, did not have a proper "surveillance-sharing agreement with markets trading the underlying assets [of Bitcoin]." The SEC then used the same rule to reject Fidelity's Wise Origin Bitcoin Trust spot ETF the week prior. Two ETFs, the ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF, received SEC approval partly because they track the price of regulated Bitcoin futures contracts, and not its spot price derived from averages of numerous exchanges.

Averted a year ago, controversial transaction monitoring rule is back on Treasury’s radar

Averted a year ago, controversial transaction monitoring rule is back on Treasury’s radar

The Treasury will consider imposing KYC regulations on transactions involving self-custodied wallets.

As the Department of the Treasury has announced its regulatory agenda for the fiscal year on Jan. 31, many in the Web3 space have likely experienced flashbacks to December 2020, when the agency had first proposed to impose Know Your Customer, or KYC, rules on transactions that involved self-custodied crypto wallets.

The Treasury’s semiannual agenda and regulatory plan, a document that is meant to inform the public of the department’s ongoing rulemaking activities and encourages public feedback, features a clause entitled “Requirements for certain transactions involving convertible virtual currency or digital assets.”

Ascribed to the Treasury’s Financial Crimes Enforcement Network, or FinCEN, it proposes to require banks and money service businesses to “submit reports, keep records and verify the identity of customers” in relation to transactions with funds held in unhosted wallets.

In FinCEN parlance, unhosted (also known as self-hosted) wallets are those that are not controlled by an intermediary financial institution or service. Users of such wallets “interact with a virtual currency system directly and have independent control over the transmission of the value.”

The rule proposed in December 2020 would have required registered cryptocurrency exchanges to collect personal details of their customers transacting with an unhosted wallet if the value of the transaction exceeded $3,000. A person sending funds from an exchange account to their private wallet would fall within the scope of the rule.

Introduced in the waning days of Secretary of the Treasury Steven Mnuchin’s tenure, the rule was scrapped amid massive pushback from the industry.

At the time, Mnuchin said that the rule addressed “substantial national security concerns” associated with the cryptocurrency market. The resurgence of the agency’s focus on the self-hosted wallets measure could have to do with the “crypto as a national security threat” focus of the executive order that the Biden administration is reportedly preparing.

Still, mentioning a rule on the Treasury’s semiannual agenda does not mean that it will necessarily be adopted.

Price analysis 1/31: BTC, ETH, BNB, ADA, SOL, XRP, LUNA, DOGE, DOT, AVAX

Price analysis 1/31: BTC, ETH, BNB, ADA, SOL, XRP, LUNA, DOGE, DOT, AVAX

BTC and altcoins are attempting to end January on a positive note by overcoming overhead resistance levels as Bitcoin aims to flip $40,000 back to support.

Bitcoin (BTC) started 2022 on a losing note, dropping about 20% to its worst performance in January since 2018 when the price plunged 26.61%, according to on-chain analytics resource Coinglass.

Now, all eyes turn to February, which has historically favored the bulls. The only two negative closes in February were in 2020 and 2014.

One positive sign during the recent price decline has been that the long-term hodlers have not panicked. Glassnode data shows that the number of coins that last moved between five and seven years ago surged to a new all-time high.

Daily cryptocurrency market performance. Source: Coin360

El Salvador's President Nayib Bukele projected a “gigantic price increase” for Bitcoin. Bukele’s prediction is based on the fact that if the millionaires of the world, who are more than 50 million in number, want to buy at least one Bitcoin, there isn’t enough supply to fulfill that demand.

Could Bitcoin and the major altcoins end the month on a strong note? Let’s study the charts of the top-10 cryptocurrencies to find out.


Bitcoin has pulled back in a strong downtrend. In a sliding market, the sentiment is to sell on rallies rather than buy the dips as traders make more money on the downside.

BTC/USDT daily chart. Source: TradingView

The first sign of a change in sentiment will be a break and close above the 20-day exponential moving average (EMA) ($39,318). Such a move will indicate that demand exceeds the supply near the 20-day EMA resistance. The BTC/USDT pair could then march toward the 50-day simple moving average (SMA) ($43,791).

Conversely, if the price turns down from the current level or the 20-day EMA, it will suggest that bears are defending this level aggressively. The pair could then dip to $35,507.01. If this support cracks, the selling could pick up and the price could retest the Jan. 24 low at $32,917.17.

This is an important level for the bulls to defend because if it cracks, the pair could plummet to the strong support at $30,000.


Ether (ETH) is facing resistance near the breakdown level at $2,652 but a minor positive is that bulls have not given up much ground. This suggests that traders are buying the dips as seen from the long tail on Jan. 31’s candlestick.

ETH/USDT daily chart. Source: TradingView

The bulls will now again try to push the price above $2,652 and the critical resistance at the 20-day EMA ($2,802). If they succeed, it will suggest that the selling pressure could be reducing. The bulls will then see an opening and attempt to push the pair to the resistance line of the channel.

Contrary to this assumption, if the price turns down from the current level or the 20-day EMA, the bears will attempt to pull the ETH/USDT pair to the $2,300 to $2,159 support zone. The bears will have to sink and sustain the price below this zone to clear the path for a further decline to $1,700.


Binance Coin (BNB) re-entered the channel on Jan. 25, but the recovery faltered near $400. This suggests that the bears have not yet given up and are selling on rallies.

BNB/USDT daily chart. Source: TradingView

If bears sink and sustain the price below the channel, the BNB/USDT pair could again retest the critical support zone at $330 to $320. The downsloping moving averages and the RSI in the negative territory indicate that sellers hold the edge.

The pair could plummet to $250 if the $320 support gives way as several traders are likely to panic and rush to the exit. This negative view will invalidate in the short-term on a break and close above the 20-day EMA. The pair could then rise to the resistance line of the channel.


The failure of the bulls to secure a meaningful rebound off the psychological support at $1 indicates a lack of aggressive buying at this level. The bears will now attempt to build upon their advantage and sink Cardano (ADA) below $1.

ADA/USDT daily chart. Source: TradingView

Both moving averages are sloping down and the RSI is in the negative zone, indicating that the bears are in command. A break and close below $1 could signal the start of the next leg of the downtrend.

The ADA/USDT pair could first drop to $0.80 and then to the support line of the channel. The bulls will have to push and sustain the price above the resistance line of the channel to signal a change in trend.


Solana (SOL) has been consolidating in a tight range between $80.83 and $104.82 for the past few days. The bulls tried to push the price above the range but failed and now the bears will try to grab the opportunity and attempt to pull the altcoin below $80.83.

SOL/USDT daily chart. Source: TradingView

If they succeed, the SOL/USDT pair could resume its downtrend. The pair could first drop to the support line of the channel where the bulls may attempt to arrest the decline. If they fail in their endeavor, the pair could plunge to $66.03.

On the contrary, if the price rebounds off $80.83, the pair may extend its stay inside the range for a few more days. The buyers may gain strength if they push and sustain the pair above the breakdown level at $116.


Ripple (XRP) has been consolidating between $0.54 and $0.65 for the past few days. After failing to cross above the overhead resistance, the price could now drop to the support of the range.

XRP/USDT daily chart. Source: TradingView

The downsloping moving averages and the RSI in the oversold territory indicate advantage to bears. The critical level to watch on the downside is $0.54 because if it cracks, the XRP/USDT pair could drop to $0.50.

This level is likely to act as a strong support as a break and close below it could lead to panic selling. On the upside, a break and close above the 20-day EMA ($0.66) will be the first sign that bulls are on a comeback.


Terra’s LUNA token is struggling to sustain the rebound off the support line of the descending channel. This indicates that sentiment is negative and demand dries up at higher levels.

LUNA/USDT daily chart. Source: TradingView

If the bounce again fails to sustain the higher levels, the sellers may smell an opportunity and try to sink the LUNA/USDT pair below the channel. If they succeed, the pair could drop to $37.50, which may act as strong support.

If the current rebound sustains, the bulls will try to start a relief rally, which could reach the 20-day EMA ($63). If the price turns down from this resistance, the pair could again turn toward $37.50. Alternatively, if bulls push the pair above the 20-day EMA, the rally could reach the downtrend line of the channel.

Related: Ethereum price risks dropping to $2K on ‘bear flag’ setup


Dogecoin (DOGE) has been consolidating between $0.13 and $0.15 for the past few days. This suggests that bulls are buying near the support but have not succeeded in pushing the price above the overhead resistance.

DOGE/USDT daily chart. Source: TradingView

A minor positive is that the RSI has formed a bullish divergence indicating that the selling pressure may be reducing. However, if buyers fail to drive the price above $0.15, the bears may regroup and again attempt to pull the DOGE/USDT pair below the support.

A close below $0.13 could result in further selling, driving the pair to the psychological level at $0.10. The bulls will have to push and sustain the price above the 50-day SMA ($0.16) to ward off the short-term threat from the bears.


Polkadot’s (DOT) weak rebound off the strong support at $16.81 indicates a lack of buying at current levels. The downsloping moving averages and the RSI near the oversold territory indicate the path of least resistance is to the downside.

DOT/USDT daily chart. Source: TradingView

If bears sink and sustain the price below the $16.81 to $15.83 support zone, it will indicate the resumption of the downtrend. The DOT/USDT pair could then drop toward the strong support at $10.37.

Contrary to this assumption, if the price rises from the current level, the bulls will make one more effort to propel the pair above the 20-day EMA ($20.98). If they succeed, the pair could rise to the breakout level at $22.66 where the bears may pose a strong challenge.


Avalanche (AVAX) is facing stiff resistance at the breakdown level at $75.50, which suggests that the sentiment remains negative and bears are selling on rallies. The downsloping moving averages and the RSI in the negative territory indicate that bears have the upper hand.

AVAX/USDT daily chart. Source: TradingView

The sellers will now try to sink the price below the immediate support at $61.06. If they manage to do that, the AVAX/USDT pair could drop to the strong support zone at $51.04 to $47.66. The bulls are likely to defend this zone with vigor.

A strong bounce off the support zone could brighten the prospects of a bottoming formation with the price remaining stuck between $47.66 and $75.50 for a few days.

The first sign of strength will be a break and close above $75.50. Alternatively, a drop below $47.66 could signal the resumption of the downtrend.

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.

Litecoin is finally launching its major Mimblewimble upgrade

Litecoin is finally launching its major Mimblewimble upgrade

Privacy opt-ins are coming to Litecoin even as regulators continue to scrutinize anonymity-boosting protocols.

After two years of development, Litecoin (LTC) has finally launched its highly anticipated Mimblewimble upgrade, opening the door to more privacy-oriented transactions on the network. 

Mimblewimble’s integration into Litecoin came by way of the Mimblewimble Extension Block, also known as MWEB, which allows the network’s users to opt-in to confidential transactions. MWEB lead developer David Burkett, who has been sponsored by the Litecoin Foundation, said the upgrade improves Litecoin’s viability as a fungible currency that can be used for everyday transactions, pay employee salaries and even purchase real estate.

Mimblewimble is a privacy-focused decentralized protocol that derives its name from a tongue-tying spell that was first made famous in the Harry Potter book series. The protocol has a confidentiality feature that allows users to conceal transaction information. It also provides a framework for other blockchains to enhance the usability of their cryptocurrency. 

Litecoin first embarked on Mimblewimble integration in a pair of Litecoin Improvement Proposals dating back to October 2019. The network launched its first Mimblewimble testnet in October 2020 following initial delays due to low community participation. The testnet was also launched around the time that regulators in Europe — chiefly, Europol — were sounding the alarm over privacy coins.

Related: Crypto policy advocacy group warns of 'disastrous' provision in a new US bill

Privacy coins that promote anonymity and attempt to obfuscate digital ledger transactions have come under scrutiny around the world. As Cointelegraph reported, several exchanges ditched their support of leading privacy coins Monero (XMR), Zcash (ZEC) and Dash (DASH) in early 2021 amid regulatory heat.

In addition to anonymity and private transactions, Mimblewimble’s technology places heavy emphasis on fungibility and scalability — key features that are currently lacking across many blockchains. The Litecoin Foundation believes the Mimblewimble integration will contribute to LTC’s status as “sound money,” which is a broad concept that refers to stable monies that are less susceptible to depreciation and influence from monetary policy.

Despite being one of the earliest cryptocurrencies to hit the market, Litecoin has struggled to stay relevant over the years. LTC is currently ranked 21st in the market cap rankings with a total value of $7.5 billion.

WEF's blockchain head will lead the Crypto Council for Innovation

WEF's blockchain head will lead the Crypto Council for Innovation

CCI board member Fred Ehrsam cited the WEF executive’s “in-depth knowledge of crypto” in addition to her experience working with governments across the globe.

Sheila Warren, the head of blockchain and distributed ledger technology at the World Economic Forum, will be assuming the position of CEO of the Crypto Council for Innovation, or CCI, starting in February.

In a Monday announcement, the CCI said that beginning on Wednesday, Warren would lead the alliance of crypto-friendly firms aimed at supporting lawmakers on crypto and blockchain regulation. CCI board member and Coinbase co-founder Fred Ehrsam cited the WEF executive’s “in-depth knowledge of crypto” in addition to her experience working with governments across the globe.

“The crypto ecosystem is poised to deliver large-scale economic growth, empower communities and improve lives all over the world,” said Warren. “I am excited to drive CCI’s mission of realizing the transformative potential of crypto through education and advocacy for a responsible, forward-thinking global policy environment that will ensure that crypto’s benefits are accessible to all people, regardless of their current economic privilege.”

Formed in April 2021, the CCI includes supporters like Coinbase, Fidelity Digital Assets, Paradigm, Ribbit Capital, Andreessen Horowitz and Block — formerly Square. In July, the group hosted a virtual event called “The ₿ Word” exploring how institutions could potentially adopt Bitcoin (BTC) and blockchain technology. 

As one of the major cryptocurrency exchanges, Coinbase seems to have stepped up its efforts to lobby lawmakers in the United States around "sensible regulation." However, Ripple Labs led an expensive campaign around the Securities and Exchange Commission's treatment of XRP tokens as securities, spending $690,000 on lobbying in 2020 without any concrete results in this area.

Related: 6 Questions for Sheila Warren of the World Economic Forum

During her time at the WEF, Warren explored central bank digital currencies and promoted the adoption of blockchain technology. She has spoken at a number of events in the crypto space including the Hyperledger Global Forum and Unitize conferences and has written for Cointelegraph previously on the importance of crypto as an educational tool for empowering diversity and financial inclusion.

Bottom ahead? Solana paints its first 'death cross' as SOL losses 50% in January

Bottom ahead? Solana paints its first 'death cross' as SOL losses 50% in January

Recently, death crosses between the 50-day and 200-day exponential moving averages have acted as a reliable predictors of bottoms.

Solana (SOL) looks poised to paint its first “death cross” this week, raising fears that its ongoing selloff would continue further into February.

Real selloff threat

Notably, the SOL price's 50-day exponential moving average (50-day EMA; the red wave) will eventually close below its 200-day EMA (the blue wave), signaling a bearish crossover, called a death cross, that typically prompts traders to sell.

SOL/USD daily price chart featuring its 50-200 EMA death cross. Source: TradingView

The threat surfaces as SOL looks to close January at nearly a 50% loss — as of the month's final day, the Solana token was down by over 2.50% to nearly $91, compared to almost $180 at the start. Meanwhile, the catalysts behind SOL's price crash remain pretty much intact.

Crypto-assets have fallen this month as traders have attempted to assess how fast the Federal Reserve would increase its benchmark rates from near-zero levels to tame booming inflation and tighter jobs market. Solana, as a result, has wiped half its market valuation in January from $55.19 billion to $28.79 billion; that is, after it closed 2021 at a whopping 11,144% profit.

That has got some financial experts to expect a "crypto winter" ahead, a term referring to concerning bearish cycles in the cryptocurrency market, such as the one seen during 2018 wherein digital assets' combined market cap fell by more than 80%.

As of now, SOL's interim bullish outlook hangs over its possibility to hold above $83, its current support level. A break below the said price floor could have the Solana token find its next pullback opportunity not until $65, as shown in the chart below.

SOL/USD daily price chart featuring its interim support targets. Source: TradingView

Both support levels were instrumental in sending the SOL/USD pair to its record high above $260 last year.

Philip Gunwhy, partner at, remained long-term bullish on Solana, citing its exponential growth in the decentralized finance (DeFi) and nonfungible token (NFT) sectors that, in turn, tends to boost SOL's demand. However, the analyst noted that SOL's swift rebound in the short term depends on the performance of the broader crypto ecosystem.

"For Solana, maintaining solid support at $65–$85 area is undoubtedly the primary focus for the week while maintaining a longer-term focus to retest its All-Time High around $260," Gunwhy said.

Rebound scenario

No previous data shows how SOL traders react to a death cross since it will be Solana's first 50–200-day EMA bearish crossover to date. But considering that people who trade SOL have been trading Bitcoin (BTC) over the recent years, one can notice that death crosses bother them very little.

For instance, a 50–200-day EMA crossover, witnessed in the Bitcoin market in June 2021, followed a drop towards $29,000. But a month later, the BTC price bounced back strongly, eventually reaching its all-time high of $69,000 in early Nov. 2021.

BTC/USD daily price chart featuring recent death crosses. Source: TradingView

Similarly, over the past decade, death crosses in the S&P 500 (SPX) have lost their significance due to false bearish alarms. For instance, the last two bearish crossovers between the SPX's 50-day EMA and 200-day EMA — in December 2018 and March 2020 — led to bottom formations, followed by strong price rebounds.

S&P 500 daily price chart featuring recent death crosses. Source: TradingView

That raises the possibility that SOL's death cross would have its price bottom out in the coming sessions, followed by a bullish reversal. In doing so, the Solana token may eye previous support/resistance levels for a potential rebound move towards its 200-day EMA.

SOL/USD daily price chart featuring rebound scenarios. Source: TradingView

More cues for a bullish rebound also come from the SOL price's oversold relative strength index (RSI), a classic buy signal.

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

'No signs Bitcoin has bottomed' as data warns BTC price downtrend continuing

'No signs Bitcoin has bottomed' as data warns BTC price downtrend continuing

Little genuine relief is on the horizon if the latest data is any guide, says Material Indicators, as Bitcoin meanders around $37,000.

Bitcoin (BTC) received a welcome boost at the Wall Street open on Jan. 31 as fresh research painted a gloomy picture for near-term price action.

BTC/USD 1-month candle chart (Bitstamp). Source: TradingView

Trader "not interested" in longs below $38,500

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing toward $38,000 on Monday, reversing a correction that had set in immediately after Jan. 30's weekly close.

With stocks giving some relief to bulls, many analysts remained hands-off on Bitcoin while higher levels nearer $40,000 remained unchallenged.

"Bitcoin chopping around and fighting resistance, while the volume remains low overall," Cointelegraph contributor Michaël van de Poppe summarized after his latest YouTube update.

"As stated, sub $38.5K not that much interested in any long entries, unless higher timeframe bullish divergences play out. $37.5K is a first minimal step."

Fellow trader Pentoshi added that a suitable buy-in zone lay immediately below current levels.

"I think you can likely bid 33K–36K. And scale in. And see yearly open on BTC in February. Lose 33K on HTF basis and cut it," he considered as part of Twitter comments on the day.

At the time of writing, BTC/USD traded at around $37,700, up $1,100 versus earlier lows.

Expect "ranging" to continue for BTC

Other sources were more somber on Bitcoin's upcoming prospects.

Related: Bitcoin price down 20% so far in 2022 after worst January since 2018

Highlighting signs from its Trend Precognition set of on and off-chain indicators, analytics suite Material Indicators revealed that no significant change of tact had occurred versus the start of Bitcoin's decline in November.

"Zoomed out to a MACRO view of Bitcoin as we approach the monthly close. Trend Precognition shows no signs that BTC has bottomed. Expecting to range as the downtrend continues," it commented on Twitter.

Such a perspective ties in with those who believe that a lower low is necessary for Bitcoin to put in a convincing floor and begin to tackle resistance.

Previously, fellow monitoring resource Whalemap identified $27,000 as an area of significant support should the current range give way.

Meanwhile, Cointelegraph has produced a list of potential price triggers for the coming week.

Altcoin Roundup: Cross-chain bridge tokens moon as crypto shifts toward interoperability

Altcoin Roundup: Cross-chain bridge tokens moon as crypto shifts toward interoperability

MULTI, SYN and CELR saw a substantial boost in price as the crypto ecosystem focused on integrating cross-chain interoperability as a new fundamental component in DeFi.

Interoperability is shaping up to be one of the main themes for the cryptocurrency market in 2022 as projects across the ecosystem unveil integrations that make their networks Ethereum (ETH) Virtual Machine (EVM) compatible.

While this has been one of the long-term goals of the ecosystem as a step on the path to an interconnected network of protocols, it has also created a new decentralized finance (DeFi) market for multi-chain bridges and decentralized finance.

Here are three of the top volume cross-chain bridges that the cryptocurrency community uses to transfer assets between blockchain networks.


Multichain (MULTI), formerly known as Anyswap, is a cross-chain router protocol that aims to become the go-to router for the emerging Web3 ecosystem.

According to data from Defi Llama, Multichain is the top-ranked cross-chain swap protocol by total value locked, with $8.95 billion currently locked on the platform.

Multichain total value locked. Source: Defi Llama

One of the main reasons for the high TVL on Multichain is the large number of blockchain networks supported by the protocol. Currently, 30 different chainscan be accessed on the network.

Blockchain protocols supported by Multichain. Source: Multichain

According to data provided by Multichain, the protocol has processed a total of $53.15 billion worth of volume since launching, with $19.08 billion of that being transacted in the past 30 days alone. There are currently 485,399 users that have interacted with the Multichain protocol, amounting to nearly 2.256 million transactions.

Multichain network statistics. Source: Multichain

Users who deposit tokens into one of the pools supported by Multichain receive a sare of the transaction fees generated by the pool in question.

The protocol's native MULTI token is used to vote and participate in the governance of the Multichain ecosystem and has a circulating supply of 18.64 million tokens out of a total 100 million.


Synapse (SYN) refers to itself as a “cross-chain layer ∞ protocol” that is designed to offer users interoperability between separate blockchain networks.

According to data from Defi Llama, Synapse recently hit an all-time high in total value locked of $1.16 billion prior to experiencing a wave of outflows that lowered the TVL to 740.43 million.

Total value locked on Synapse. Source: Defi Llama

The Synapse protocol currently supports 12 different chains which have a combined total bridged volume of $5.33 billion according to data from the platform’s dashboard.

Total bridged volume on each network supported by Synapse. Source: Synapse

A large percentage of the total volume recorded on Synapse has come since the start of 2022 with the protocol seeing an all-time high bridge volume of $157.8 million on Jan. 23.

Synapse bridge volume. Source: Synapse Analytics

The protocol's native SYN token has several uses within the ecosystem. Token holders can use it to conduct community governance votes via the SynapseDAO, liquidity providers (LPs) receive a percentage yield paid out in SYN for their deposits and it is also used as a subsidy to pay for the gas expended by network validators to secure transactions across the network.

LPs also receive a share of the protocol fees earned by the Synapse platform on each transaction.

Related: Web3 innovations are replacing middlemen with middleware protocols

Celer cBridge

Another popular cross-chain bridge is the Celer cBridge, a multi-chain network that enables instant, low-cost value transfers between 19 different networks.

The cBridge is a subsector of the larger Celer (CELR) ecosystem and utilizes the CELR token for operations on the protocol and as the reward token for liquidity providers.

Along with the CELR rewards paid to LPs, a percentage of the transaction fees generated by people who use the liquidity pools to bridge funds across chains are paid out to LPs and added directly to the pools, allowing the rewards to compound.

According to data from cBridge analytics, the total value of funds locked in the bridge contract (pool-based bridge) and the funds locked in the token vault contract (canonical token bridge) currently stands at $240.92 million.

cBridge usage statistics. Source: cBridge

A total of 89,897 unique addresses have interacted with the protocol since inception and have conducted a total of $2.842 billion in transaction volume.

Similar to the transfer trend seen with Synapse, the transaction volume on cBridge has gotten noticeably higher in 2022 with a record $71.12 million being transacted on Jan. 22.

Daily transaction volume on cBridge. Source: cBridge analytics

Some of the protocols currently supported by cBridge include Ethereum, Binance Smart Chain, Avalanche, Polygon, Fantom, Metis, Harmony, Gnosis, Arbitrum and Optimism.

Want more information about trading and investing in crypto markets?

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

How Bitcoin Adoption Could Bring Major Prosperity To Puerto Rico

How Bitcoin Adoption Could Bring Major Prosperity To Puerto Rico

To mitigate austerity and resolve debt, Puerto Rico should follow in El Salvador’s footsteps and make bitcoin legal tender.

By 2017, I was peripherally aware of the existence of Bitcoin as an idea, though it remained unknown to me as a global phenomenon. I had yet to learn about Bitcoin as the antifragile and sovereign monetary system able to compete globally at scale with the U.S. dollar — as the political economic worldview grounded in anarcho-capitalist, “cypherpunk” philosophies of power, value, individual autonomy and mutualist community sovereignty. For the time, I remained ignorant of Bitcoin’s Austrian school resistance to Keynesian fiscal and monetary policy, as well as the sacrosanct status of modern monetary theory in global governance, U.S. statecraft and academic circles. In 2017, I only knew that it was a tool my libertarian friends accumulated by running a server in their homes (what I later learned is the process referred to as “mining”) and then saved or spent as computerized, intangible blockchain cash on the internet.

Fast-forward to summer 2021 — as I began furiously and energetically composing the syllabus for my fall United Nations course, I had the privilege to teach at the University of Delaware. I became motivated to incorporate current, salient events into the curriculum. As such, I eagerly plunged into my summer reading to conduct my own investigation once and for all into the phenomenon of Bitcoin which had eluded me for years. Upon ruminating on dazzling works such as Saifedean Ammous’ “The Bitcoin Standard” (2018), Sara Horowitz’s “Mutualism: Building the Next Economy from the Ground Up” (2021), Eric Lonergan and Mark Blyth’s “Angrynomics” (2020), and Lana Swartz’s “New Money: How Payment Became Social Media” (2020), I confidently assembled my syllabus for a course focused on exploring the merits of global Bitcoin adoption.

Following a Twitter exchange with Matthew Klein — an author of “Trade Wars Are Class Wars” (2020) — I also reached the conclusion that Bitcoin resolves the present emergency of American household debt and rising inequality created by the international use of the U.S. dollar. A system which generates worsening financial crises for Americans as the U.S. must satisfy global demand for reserve assets through unproductive investments and further domestic indebtedness. Bitcoin, like the gold standard prior to World War I, has the capacity to facilitate a functioning trading system by implementing a symmetrical mechanism to constrain those institutional distortions producing excessive global demand for American financial assets. Puerto Rico has been America’s “canary in the coal mine” since the Cold War. Puerto Rico experienced a rising deficit through lower income from deindustrialization and higher spending on imports before the rest of the U.S. Both the deficit in the U.S. and Puerto Rico resulted from foreign savers buying U.S. assets which yielded negative saving rates domestically, heavy borrowing and increased debt issuance.

In 2017, I began formulating the research project that would later grow into my doctoral dissertation. In August, September and November 2017, hurricanes Irma, Maria, Harvey and Nate did hundreds of billions of dollars’ worth of destruction to the U.S. and resulted in unknowable death tolls. Irma and Maria catastrophically impacted Florida and Puerto Rico, and the excessive damage done to the islands of Puerto Rico — to critical public infrastructure — resulted in a series of cascading failures of the many networks and systems of energy, transportation, communications, water supply and wastewater treatment. These failures significantly extended the horizon of the emergency and compounded the already intense sovereign financial crisis that had begun to mount decades earlier as concurrent problems with the U.S. dollar began to metastasize in the late 1990s.

As I was interested in the concepts of autonomy, sovereignty and freedom as they relate to debt, macroeconomic policies and powerful Keynesian governing institutions, I decided I wanted to meaningfully understand precisely how Puerto Rico came to issue roughly $73 billion in outstanding public debt that was purchased cheaply by bondholders and hedge funds. I wanted to understand exactly how the financial industry interacted with sovereign debt, as well as how Keynesian fiscal and monetary policies in the U.S. during the late 20th and early 21st centuries had directly put the islands of Puerto Rico in this abysmal, deeply indebted position. Little did I know at the time that the specter of Puerto Rico’s debt crisis would come to haunt the rest of the U.S. before long as a direct result of the faltering international dollar system.

I wanted to learn everything I could about Puerto Rico’s debt so that I might be able to make informed policy proposals for recovery and building resilience into the island’s political economy. As I immersed myself in the “expert” literature on Puerto Rico — and specifically research on managing their public debt crisis — I quickly learned that nearly every academic writing about the topic has an extraordinarily superficial, one-dimensional and impractical grasp of the situation and how to deal with it. Many distinguished scholars and activists never even approached the issue of how they believe the problem ought to be dealt with or policies they would prescribe; instead they opt only to critique, critique, critique! In these accounts, it’s always neoliberalism’s fault; academics shrewdly construct “straw man” arguments focused on illustrating the evils and injustices of capitalism and the imperialism of Western ideas, only to knock it over and propose nothing in its place. No one seems to have the answer, yet thought-leaders write books upon books criticizing every effort made to make life better and less precarious for people living under the system’s neoliberal status quo. Those texts that do offer policy suggestions for reform to help ameliorate and solve Keynesian financial crises are unable to think outside the box of Keynesianism itself — attempting to solve the intractable flaws within Keynesianism with more Keynesianism!

I identified as an advocate of Keynesian policies until the final months of 2020; I believed these policy prescriptions provided the only practical — albeit flawed — path forward in cultivating economic growth, increased employment and managing the already unwieldy inflation of the U.S. dollar. Admittedly, promoting Keynesian policies was a bitter pill for me to swallow. To me, much of this scholarship was more an exercise in futility or fantasy than a plan that could be realistically implemented. Many of the ideas put forward have already been tried, and they failed as a result of how impractical or misguided they were! That said, I reluctantly set aside my convictions and intuitions and accepted that I must be misunderstanding something. After all, how could I confidently feel as though I understood the problem and solutions better than University of British Columbia professor, accomplished journalist, and bestselling author Naomi Klein (who wrote the anti-Bitcoin, “The Battle for Paradise”), or broadcasters on NPR (“Puerto Crypto” likewise criticizes the disastrous neoliberalism of Bitcoin), or CUNY and Hunter College Professor Yarimar Bonilla (who has similarly critiqued Bitcoin in Puerto Rico)?

Like in the film “Indiana Jones and the Last Crusade” (1989), it took a leap of faith for me to muster the courage to step out into the chasm and then have the trust in myself restored when I found my footing on rock-solid ground beneath me. I profoundly respect Yarimar Bonilla and everything she does to educate students, our country and the world. Her book, “Non-Sovereign Futures,” (2015) was positively inspirational to me and my research goals. This book changed the way I understand the concepts of sovereignty, autonomy and freedom; it influenced the way I think about the processes of creativity and innovation in politics. What I struggle with is Dr. Bonilla’s argument against Bitcoin in The Nation. In 2018 — over a year after Hurricane Maria, and a year before Governor Ricardo Rosselló was ousted in July 2019 — then-Governor Rosselló was attempting to “sell” the notion of post–Maria Puerto Rico as a “blank canvas” for innovation and investment; he was also trying to institute many of the policies we have now seen El Salvador’s President Nayib Bukele adopt in the fall of 2021.

I believe Bonilla, in arguing against Bitcoin adoption in Puerto Rico, more persuasively highlights the manifold benefits. Puerto Rico has been mired in stories of corruption and graft over the last several years; Bitcoin’s public, distributed ledger technology in blockchain provides overwhelming transparency, accountability and precision concerning the flow of federal emergency aid, charitable donations and government contracts. Whether one was in favor of or opposed Governor Rosselló’s resignation, Bitcoin adoption in Puerto Rico and the disruptive uses of blockchain technology are a separate issue — one that has lost its momentum in the political turmoil and constitutional crises over the last few years as Wanda Vázquez’s administration assumed power before sitting Governor Pedro Pierluisi took over.

I will end with this in response to Bonilla’s charge that Puerto Ricans would be guinea pigs for Bitcoin and blockchain technologies, for new systems of decentralized energy and donation management: It is no longer the case that Puerto Ricans will be experimental subjects. One of the most effective and powerful organizations in the area of emergency management and disaster response is Team Rubicon; thanks to the platform The Giving Block, which facilitates Bitcoin and cryptocurrency fundraising for nonprofit organizations, one can donate bitcoin to Team Rubicon at their convenience. Just like Dr. Bonilla and Governor Pierluisi, I, too, care deeply about the future of Puerto Rico and the extraordinary people who call the islands their home. As such, I beseech academics and political leaders to watch and learn from President Nayib Bukele’s bold move to complement the U.S. dollar with Bitcoin adoption in El Salvador. After years of research and investigation, I am confident that Puerto Rico — just like El Salvador — will be served by and profit from legalizing bitcoin and mining bitcoin.

As Mark Blyth and Eric Lonergan outline in “Angrynomics” — in the wake of the 2008 Global Financial Crisis, Iceland was the country most imperiled as four Icelandic banks recklessly grew their balance sheets to 10 times the volume of the country’s entire economy before the bubble burst, sending the Icelandic economy into a tailspin. Iceland responded by sticking their servers for online gaming and bitcoin mining under the ground to reduce the cooling costs generated by heat from computing power. Emergent innovations such as running the global industries of online gaming and bitcoin mining from underground helped Iceland recover faster than nearly all other countries hurting from the financial crisis. By 2016, Icelandic wages were higher than they were before 2008, unemployment was down and consumer confidence was soaring. Tourism began to thrive once again as Icelanders “swarmed” and pushed for new, creative ideas. I sincerely believe Iceland’s and El Salvador’s examples are models for other countries and sovereignties to follow and to help cultivate a more prosperous and peaceful world. Bitcoin has only just begun to transform global politics, and game-theoretically, it’s more advantageous to get in now on the ground floor! Who will be the next to follow in El Salvador’s footsteps?

This is a guest post by Christopher Tharp. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Clever NFT traders exploit crypto’s unregulated landscape by wash trading on LooksRare

Clever NFT traders exploit crypto’s unregulated landscape by wash trading on LooksRare

LooksRare aims to be an alternative to OpenSea, but the amount of wash trading on the platform raises questions on whether users really view it as a viable competitor.

LooksRare made its debut on Jan.10 and the recently launched NFT marketplace has drawn a lot of attention, not only because its daily trade volumes were more than double Opensea’s on the second day of trading, but also because it has become the new playground for wash traders.

Wash trading is a series of trading activities involving the same trader buying and selling the same instrument simultaneously, creating artificially high trading volume and a manipulated market price for the asset in play.

In the United States, wash trading in traditional financial markets has been illegal since 1936 and the most recent highly publicized scandal related to wash trading is the manipulation of LIBOR in 2012.

While wash trading has been highly regulated and closely monitored by exchanges and regulators, it seems to have found its new path in the unregulated crypto space and especially in NFT marketplaces like LooksRare.

A community-owned marketplace is a double-edged sword

LooksRare started with good intentions to share profits within the community. The token incentives and the trading rewards were essentially the secret weapon that attracted high volumes and beat Opensea in light-speed fashion right after its launch, but these same factors have also become the very weapon wash traders are using to flood the marketplace.

LooksRare appears to have foreseen the possibility of wash trading that could be induced by the lucrative trading rewards, but according to LooksRare Docs, they believed the cost of trading from platform fees and royalty fees would be too high to create any incentives for wash trading. Interestingly, reality shows the opposite.

LooksRare vs. OpenSea volume and unique users. Source: Dune Analytics @elenahoo
LooksRare vs. OpenSea volume and transactions. Source: Dune Analytics @elenahoo

The graphs above show that daily users and daily transactions from LooksRare are only a tiny portion (2% to 3%) of OpenSea, but the volumes are more than triple or even quadruple OpeaSea’s.

Using Jan. 19 as an example, the average trade volume on LooksRare is approximately $380,000 per user whereas on OpenSea it is only $3,000. Similarly, the average trade volume per transaction is around $415,000 on LooksRare, whereas for OpenSea it is only $1,676.

Basically, what the data shows is a very small group of users executing trades worth hundreds of thousands dollars. This surely does not sound like a playground for normal NFT buyers. With a 2% platform fee, royalty fee and the volatile gas fee from the Ethereum network, wash traders seem to still be able to find a sweet spot to balance their cost and profit.

Let’s have a look at how wash traders profit from buying and selling the same NFT.

How trading rewards are allocated

LooksRare’s trading rewards allocation. Source: LooksRare

LooksRare’s trading rewards are distributed over a total of 721 days over four phases. The daily reward is the highest during the first 30 days in Phase A and the total reward is the highest in Phase C (240 days).

LooksRare’s trading rewards allocation. Source: LooksRare

The amount of trading rewards a single trader can obtain for any given day is the product of the fixed daily LOOKS trading reward (2,866,500 LOOKS) and the ratio between the individual trader’s trading volume and the total trading volume of the day. Therefore, the more trading volume created by the trader, the more reward they get. This mechanism creates great incentives for large volumes of wash trading.

In addition to the trading rewards, traders can also earn a portion of the platform fees collected based on the amount of LOOKS staked as well as staking rewards and liquidity provider rewards. But compared to the trading rewards gained from wash trading, the other rewards are too insignificant and close to a rounding error, so they will not be considered here.

A closer look at a wash trader with $90 million in daily trade volume

The largest LooksRare single-day trade volume was on January 19, 2022. By plotting the top 10 wallets traded on that day, two wallets stand out with more than $90 million U.S dollars traded on the day from each one as shown in the graph below. The activities from these two wallets also show back and forth buy and sells between them, which is a clear indication of wash trading.

Top 10 Traders on the largest volume day — Jan 19, 2022. Source: Dune Analytics @elenahoo

Most of the time the wash traders choose NFTs with 0% royalty fee such as Meebits or Terraforms so the only costs from the trade are the 2% platform fee and the gas fee. In this specific example, on Jan. 19, the trader bought and sold Loot multiple times using these two wallets at a price around 6,500 times the floor price.

An example of a wash trading on Loot. Source: LooksRare

Based on the trading reward allocation and assuming the two wallets belong to the same trader, the total trading volume from this trader on Jan. 19 was $186 million; the trading reward earned from the trades is $6.2 million and the fee paid is $3.7 million (using $4.9 as LOOKS market price and 2% platform fee), resulting in a net profit of $2.5 million, which is 1.34% of daily return or equivalently 12,661% of annual return.

Buy amount  on Jan 19, 2022 from the whale trader’s two wallets. Source: Dune Analytics @elenahoo
Sell amount on Jan 19, 2022 from the whale trader’s two wallets. Source: Dune Analytics @elenahoo

Most trading rewards on LooksRare go to the wash traders

Rewards claimed 24 hours prior to time of writing (Jan. 24, 2022). Source: Dune Analytics @elenahoo

Looking at the last 24 hours (as of Jan.24), 29% of the LOOKS rewards went to the top 10 traders. Similarly, when looking at the largest trade volume day, Jan. 19, 28% of the rewards went to the top 10 traders.

Rewards claimed on Jan. 19, 2022. Source: Dune Analytics @elenahoo

A large portion of the rewards go to a small number of wash traders. This does not exactly follow LooksRare’s philosophy of “By NFT people, for NFT people.” Sharing the profit within the community seems to have failed so far and the lion’s share of the profit only goes to just a few traders.

As Delphi Digital correctly pointed out, this model is unsustainable in the long-term and the trading volume is likely to drop significantly as wash traders gradually leave when it is no longer profitable.

LooksRare still has a long way to go to compete with OpenSea in terms of number of users and non-zero royalty NFT trade volumes. It will be interesting to see how the dynamic changes when the trading reward reduces by half in Phase B starting on Feb. 10, 2022.

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

Bitcoin, Tether And Poking The Financial Beast

Bitcoin, Tether And Poking The Financial Beast

Tether has long been viewed as a problem by certain organizations as it enables bitcoin businesses to operate beyond the rails of banking.

One of the longest-running problems in the Bitcoin ecosystem for businesses has been banking relationships. Prior to NYDIG and their recent efforts to start plugging American banks and credit unions into Bitcoin rails, the only banking options for businesses in the space were Signature Bank in New York and Silvergate out of California. Major banks have been very combative and at odds with businesses in the space for years. Hell, they've been combative and at odds with their own customers simply trying to patronize Bitcoin businesses, closing accounts or shutting down cards for years now at this point. No businesses have exemplified the hostile and antagonistic nature of these interactions more than Bitfinex and Tether. Not just in the case of banks either, but legacy regulators.

One of the first big instances of Bitfinex running afoul of this antagonism was in 2016. The Commodity Futures Trading Commission ordered them to pay a fine of $75 million dollars for failing to register as a futures commission merchant (FCM) under the Commodity Exchange Act (CEA). This was ultimately the result of Americans trading leveraged financial products on the platform without Bitfinex complying with the appropriate regulations. The key point of the regulation revolved around what constituted actual delivery of the underlying commodity and in what time frame it occurred. In order to escape registration requirements you are required to be able to prove actual physical delivery of the commodity (bitcoin) within 28 days. Because all of the Bitcoin backing the leveraged products were custodied by Bitfinex and only credited to users accounts, this was viewed as not meeting the definition of physical delivery, and therefore Bitfinex was required to register as a FCM.

To sidestep this registration requirement Bitfinex ended up contracting with Bitgo to restructure how their bitcoin storage system worked in order to comply with the regulation's requirement to physically deliver within 28 days. They provided each user a segregated multisig wallet which Bitgo co-signed for and began storing each individual user's funds in separate wallets. This would be the first in a long line of events that can be ultimately described as antagonism from regulators and financial institutions forcing a business in this space to either comply with burdensome regulation or engage in riskier behavior in order to circumvent the need to comply. Ultimately this architecture change is what allowed a still unknown entity to compromise their system and get away with 119,756 BTC. Had this system not been implemented, I remind you specifically to comply with U.S. regulations, then only a tiny fraction of those funds would have been available in a hot wallet that could be remotely compromised. Even though you could put some of the blame on Bitfinex for not registering as an FCM, the regulations even putting them in the position where they had to comply or be compatible with a loophole is ultimately what created this situation in the first place.

This is a pattern that repeats itself through the entire history of Tether and Bitfinex in this ecosystem. Whether it is direct pressure from the regulators themselves, or indirect pressure in the form of regulated entities cutting business ties with Tether or Bitfinex, the story of both companies is the story of being pushed further and further into a corner as they were methodically and progressively ostracized by jurisdictional regulators and financial institutions from the United States.

Tether was originally created in 2014. For a short period it was known as "Realcoin," but after a month everything was renamed to Tether. The company and product were founded by Brock Pierce, Reeve Collins, and Craig Sellars. The initial launch of the company involved three different stablecoin tokens being issued: one for the U.S. dollar, one for the euro, and lastly one for the Japanese yen. All of these tokens were issued and circulated directly on the Bitcoin blockchain using the protocol Mastercoin (later rebranded to Omni).Omni is a second-layer protocol on top of Bitcoin using OP_RETURN to record the issuance and transfer of new tokens inside of bitcoin transactions without requiring the Bitcoin network to enable new rules (everyone who cared about the tokens could validate new rules around them and refuse to accept invalid token transactions, while everyone else could just ignore new rules and see "gibberish" encoded on the blockchain).

The reason for wanting to do this in the first place is sort of in a way the reason for Bitcoin existing in the first place, i.e., you want all the benefits Bitcoin provides minus the volatility. You want Bitcoin plus stability, i.e., a stablecoin. Bitcoin is a mechanism that allows things to settle with finality in ten minutes (and nowadays with the Lightning Network instantly), but the bitcoin asset is very volatile. So putting a token on the blockchain backed by fiat in the bank brings that same settlement efficiency (as long as you trust the people holding the fiat in the bank) to more stable fiat currencies. Now given the antagonistic way banks have dealt with companies in this space, the utility of this should be pretty intuitive. Instead of having to deal with all the problems of banks refusing transactions and wires, or specific relationships between transacting parties, you just have to get the money into a bank and can transact with the token on the blockchain. All of those annoying fiat bank problems can be pushed to the time of final redemption of the token for real bank money instead of having to be dealt with every time you make a single transaction.

Given Bitfinex's situation in hindsight it shouldn't surprise anyone they enabled trading of Tether at the start of 2015 a few months after the company and token’s launch. The ability to delay actual bank settlement in transferring fiat balances is a natural alleviation if your problem is friction dealing with the banking system. For a few years this arrangement worked very well, even to the point that other exchanges who also had troubles with the banking system used Tether for access to fiat liquidity in operating their own businesses, but eventually the legacy system began to ostracize Tether. In early 2017 Wells Fargo began blocking payments to and from Tether that flowed through them. They were the correspondent banking partner with the Taiwanese banks that Tether (and Bitfinex) were using to custody fiat funds. Both companies filed a lawsuit against Wells Fargo, but within a week both suits were dropped.

This led to a year or slightly more of banks playing whack-a-mole with Tether and Bitfinex. Right after the Wells Fargo wire blockage, Bitfinex also had all banking relationships severed by their Taiwanese banks. During this time period both companies bounced around through multiple banking relationships. Things got to the point where new accounts, sometimes even under newly incorporated entities, were being opened up in a shell game of trying to move money in and out and keep it shuffling around before any bank realized the deposits were for cryptocurrency activity.

August in 2017 marked the start of a new phase for the avalanche of attention from banks and regulators in the United States. Twitter user Bitfinex’ed (@Bitfinexed) made his first accusation against Bitfinex and Tether for systemic market manipulation of the entire ecosystem. His post went into defining a supposed trader on Bitfinex he called "Spoofy," and his accusations that Spoofy was engaged in widespread market manipulation on the platform. For those not familiar with trading, spoofing is a practice of putting orders in on an exchange to buy or sell something and then removing the orders when the market price reaches the point things would actually be bought or sold. Lots of the time other traders will front run and start buying or selling before those orders would be hit, so a trader with enough funds can actually push the market price around by effectively tricking other people into buying or selling, and then removing their own orders without having to fulfill them. Bitfinexed's accusations were that this behavior could very well be Bitfinex themselves, and that the behavior was a systematic manipulation of the entire crypto market. He later went on to outright accuse Tether of printing money out of thin air with no backing, but in this initial post he left it insinuated instead of accusing them outright.

For the next year or so Tether was constantly berated by accusations of fraud, market manipulation, and not being fully backed by dollar reserves. They contracted with Friedman LLP to conduct an audit of Tether reserves, but all that was ever published by the firm before Tether severed the relationship was attestations. The difference between an audit and attestation is an audit would comprehensively look through an entity's balance sheets including assets, obligations, revenue, etc., to build a comprehensive picture of how those all balance out, where as the attestations simply attested to witnessing proof of holding certain assets or currency in reserve at the time of the attestation. Eventually the relationship ended due to, paraphrasing Tether's statement on the matter, "the large amount of time and resources being spent on the very simple Tether balance sheet meaning the audit will not be produced in a short enough time frame." I would like to point out here though, unless this has recently changed in the last year or two, no other stablecoin I am aware of has published an actual full audit of their operations. So the framing back then in the context at the time I feel was a completely disingenuous singling out of Tether and demanding a higher standard of transparency than what was demanded of other stablecoin issuers.

Throughout this whole saga in late 2017/early 2018 both Bitfinex and Tether completely cut ties with U.S. customers. Two other important factors in this story occurred around the same time period, although they were to differing degrees not publicly known until later. One was Tether and Bitfinex beginning a banking relationship with Noble Bank in Puerto Rico, a 100% reserve bank founded by Brock Pierce (an original founder of Tether), and the other was Bitfinex beginning to utilize Crypto Capital for fiat payment processing. This was the entity constantly shuffling money between new bank accounts set up under new corporate entities.

Before getting into the unraveling of one of these stories (regarding the Noble Bank relationship) it's worth mentioning a short period of time in early 2018 when Bitfinex had a banking relationship with Dutch bank ING. I mean very short. Within a few weeks of Bitfinex publicly acknowledging the relationship, ING closed their banking accounts. Later in 2018 Tether and Bitfinex severed ties with Noble Bank, and the bank was put up for sale. The publicly-given reason was the bank’s lack of profitability as a full reserve bank, but my own speculation is that their own custodial bank New York Mellon was likely pressured by New York regulators to in turn pressure Noble Bank for their relationship with Tether and Bitfinex. See the continuing theme? Banks and regulators constantly ostracizing both companies from banking services is the pattern here. After jumping ship from Noble, Tether began holding reserves with Deltec Bank in the Bahamas.

Now here is where the story gets absurd. In 2019, $850 million dollars of Bitfinex funds held by Crypto Capital were seized by multiple governments, one of which was the United States. The company had been opening bank accounts under shell corporations and claiming to the banks that they were engaged in real estate transactions in order to process deposits and withdrawals on behalf of Bitfinex, Tether, and other cryptocurrency companies using their services. For months the company led Bitfinex on, would not fully explain the issue, and eventually Bitfinex addressed the problem by taking a loan from Tether out of their backing reserves. This is when the New York Attorney General sued Bitfinex and Tether for being short $850 million in Tether reserves. The United States government seized almost a billion dollars, and then sued the companies the money was stolen from for not having that money.

This case dragged on for almost two years until February 2021, when Tether settled with the NYAG for an $18.5 million dollar fine. They were required under the terms of the settlement to issue quarterly reports of exactly what was backing Tether.

Image source

Only about 6% is real cash reserves or treasuries under Tether's direct control (for clarification to readers not familiar with such details, "fiduciary deposits" are effectively bank deposits not directly held by Tether). The balance sheet of reserves is essentially the inverse of what it started as. In the beginning Tether actually did have hard cash on hand for reserves, now the majority of their reserves are simply commercial paper (short-term loans issued by corporations). The risk profile of this versus simply holding physical cash is massive, as the value of all that commercial paper is effectively only as stable as the company that issued it.

That said, why are they in this position in the first place? Because of the years of regulators and banks constantly cutting them off from fiat financial rails and pushing them further and further into a corner. Think about that for a minute. The entire chain of events that led to a much riskier balance sheet profile, which puts anyone holding Tether at a greater risk of losing their value, was caused directly by constant antagonism from banks and regulators. It doesn't change the risk, but I think it is an important context to provide.

So what lies ahead for Tether?

Given the recently announced El Salvadorian Bitcoin bond, and the fact that Bitfinex will act as the broker and Tether will be accepted as payment, I think the road ahead for Tether is going to be very dangerous in a sense. Simply existing as an alternative fiat settlement system has led to non-stop harassment and scrutiny from governments and banks that have at times pushed both businesses to the point of potential failure and liquidity crises. That was just for passing dollars around between exchanges. They are now, after having already been backed into a corner, literally facilitating the sale of the first sovereign Bitcoin bond in human history. If just moving money between crypto exchanges has elicited the level of regulator and bank ire that Tether and Bitfinex have been subjected to, what will this bond issuance elicit?

I fully believe in response to this, the United States government will be coming for both Bitfinex and Tether in full force. The setting of the stage for that is written all over their recent obsession with stablecoin regulations, USDC's recent move in response to this wind change of shifting all reserves to short-term treasuries, and in general the entire historical response and antagonism of both companies. The United States has subtly reacted to this ecosystem existing the way an immune system reacts to a virus, and with things evolving to the point of a nation-state issuing a bond backed by bitcoin, that immune response will likely increase.

I have always considered the attacks, and frankly deranged conspiracy theories, surrounding Tether are absurd. But that doesn't change the fact that attacks against them have continued increasing in intensity while they have been backed further and further into the corner. The more that Tether, and by proxy Bitfinex, facilitate the evolution of this ecosystem financially beyond the control of the existing U.S.-dominated financial system, the more the hammer will be swung at them. Just because prior whacks have missed doesn't mean all attempts in the future will. To think so is to subject yourself to the gambler's fallacy. Not to mention the basket of issues commercial paper backing introduces in terms of stability risk tied to general global financial markets, i.e., if the companies who issued that paper do poorly, become insolvent, or can't make good on the paper then there are no dollars backing that Tether when any of those things happen. That becomes the rock to the government antagonism's hard place. On one side the traditional banking system and regulators squeezing them into a corner, and on the other the risk of economic misfortune of issuers of the commercial paper effectively deleting that Tether backing if defaulted on.

And to top all of this off, very recently the rebel government of Myanmar in their fight against the military government adopted Tether as a currency.

What do you think the domino effects of that will be? I think they will result in Tether being backed further into a corner, and more frantic swings of the hammer will come. Maybe this is me being a pessimist, but I have always thought if Tether came to an end it would be due to the U.S. government having enough of it. I think they're about at that point.

This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Top 5 cryptocurrencies to watch this week: BTC, LINK, HNT, FLOW, ONE

Top 5 cryptocurrencies to watch this week: BTC, LINK, HNT, FLOW, ONE

BTC is attempting to form a bottom while LINK, HNT, FLOW and ONE are showing early signs of accumulation.

Bitcoin’s (BTC) relief rally rose above $38,500 on Jan. 29, but the bulls are struggling to sustain the higher levels. For the past few days, Bitcoin’s sentiment has closely followed the U.S. equity markets. Hence, analysts warned traders to be careful and not to read much into any possible weekend rallies when traditional markets are closed because it could be a trap.

However, analysts at trading suite Decentrader said in a recent report that a “near-term relief bounce” is possible. The report also highlighted that “meaningful buyers” were stepping in and that could result in “a potential change in the higher time frame trend from bearish to bullish.”

Crypto market data daily view. Source: Coin360

The recent downturn in Bitcoin seems to have turned the JPMorgan analysts bearish as they believe the increased volatility could “hinder further institutional adoption.” In a note, the strategists have reduced their long-term theoretical Bitcoin price target from $150,000 to $38,000.

If Bitcoin extends its recovery, select altcoins could attract buying from the aggressive bulls. Let’s study the charts of the top-5 cryptocurrencies that could extend the recovery in the short term.


Bitcoin’s relief rally has reached the stiff resistance zone between $37,332.70 and $39,600. The 20-day exponential moving average ($39,475) is also present in this zone making this important for the bears to defend.

BTC/USDT daily chart. Source: TradingView

The downsloping 20-day EMA and the relative strength index (RSI) in the negative zone indicate advantage to bears.

If the sellers pull the price back below $37,332.70, the BTC/USDT pair could gradually drop to $35,507.01 and later retest the Jan. 24 intraday low at $32,917.17. A break and close below this support could clear the path for a possible drop to $30,000.

Alternatively, if the price turns up from the current level and breaks above $39,600, it will suggest a possible change in the short-term trend. The pair could then rally to $43,505 and later retest the 200-day simple moving average ($48,833).

BTC/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the 20-EMA has started to turn up gradually and the RSI has risen into the positive zone. This indicates that bulls are trying to make a comeback. If buyers drive the price above $39,600, the pair could reach the 200-SMA, which may act as a resistance.

On the other hand, if the price turns down from the current level and slips below $37,312.70, it will indicate that bears have not yet given up. The sellers will then try to pull the price to $35,507.01, which is an important support for the bulls to defend.

If the price rebounds off this level, it will suggest that traders are buying on dips. That may increase the possibility of a break above $39,600.


Chainlink (LINK) has been range-bound between $15 and $36 for the past several months. Several attempts to escape the range have failed, indicating that bulls are buying at the support and bears are selling at the resistance.

LINK/USDT daily chart. Source: TradingView

The bears pulled the price below $15 on several occasions in the past few days but they could not sustain the lower levels. This may have attracted buying from aggressive traders who are attempting to push the price above the 20-day EMA ($18.91).

If they succeed, the LINK/USDT pair could rise to the 200-day SMA ($24.75). Contrary to this assumption, if the price turns down from the 20-day EMA, the bears will again try to pull the pair below $15 and start a new downtrend.

LINK/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that bulls have pushed the price above the $16.88 overhead resistance. The 20-EMA is turning up and the RSI is in the positive territory, indicating that bulls have a slight edge.

If buyers sustain the price above $16.88, the pair could start an up-move to $20 and then to $23. Conversely, if the price turns down and plummets below $16.88, it will indicate that bears continue to sell on rallies. The pair could then drop to $14.


Helium (HNT) plunged below the 200-day SMA ($26.67) on Jan. 21, but the bears could not sustain the lower levels. The bulls aggressively purchased the dip to $20 and pushed the price back above the 200-day SMA on Jan. 26.

HNT/USDT daily chart. Source: TradingView

The recovery hit a wall at the 20-day EMA ($28.84) and turned down but the bulls did not allow the price to dip below the 200-day SMA. The price has been trading between the moving averages for the past three days.

This tight-range trading is unlikely to continue for long. If bulls drive and sustain the price above the 20-day EMA, the HNT/USDT pair could rally to $36 and then to the downtrend line.

This positive view will invalidate if the price turns down and plummets below the 200-day SMA. That may pull the pair down to $20.

HNT/USDT 4-hour chart. Source: TradingView

The price broke out of the downtrend line, indicating that the bears may be losing their grip. The bears tried to sink the price back below the 20-EMA but the bulls are attempting to defend the support.

The up-move may pick up momentum after bulls drive the price above $31 as that could signal a 1-2-3 bottom. There is a minor resistance at the 200-SMA but once that is cleared, the pair could start its march toward $40. Conversely, if the price turns down and plummets below $26, the pair could drop to $24.

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Flow (FLOW) has been in a strong downtrend for the past few months. The bears pulled the price below the strong support at $6 on Jan. 22 but have not been able to build upon their advantage. This indicates accumulation at lower levels.

FLOW/USDT daily chart. Source: TradingView

The bulls have pushed the price back above the breakdown level and the 20-day EMA ($6.41) today. If they sustain the price above the resistance level, it will signal a possible change in trend.

The 20-day EMA is flattening out and the RSI has recovered into the positive territory, indicating that bulls are on a comeback.

This positive view will invalidate if the price turns down from the current level and plummets below the $6 support. Such a move will indicate that bears continue to sell aggressively at higher levels.

FLOW/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the price is facing resistance at the 200-SMA. This is a critical level to watch out for because the previous recovery had faltered at this resistance. If the price turns down from the current level, the FLOW/USDT pair could drop to the 20-EMA.

If the price rebounds off this level with strength, it will indicate that bulls are buying on dips. The buyers will then make one more attempt to push the pair above the 200-SMA. If they manage to do that, the pair could rally to the overhead resistance zone at $9.27 to $9.70.


Harmony (ONE) is trading inside a large range between $0.16 and $0.36. The bears recently tried to sink the price below the range but the bulls firmly held their ground.

ONE/USDT daily chart. Source: TradingView

The price has rebounded off the support and the bulls will now try to push the ONE/USDT pair above the 200-day SMA ($0.19). If they succeed, the pair could rise to the 20-day EMA ($0.23) where the bears may again mount a stiff resistance.

A break and close above the 20-day EMA could clear the path for a possible rally to $0.28. Conversely, if the price turns down from the current level, the bears will attempt to pull the pair below $0.16. If they can pull it off, it will signal the possible start of a new downtrend.

ONE/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the formation of a symmetrical triangle pattern. The 20-EMA has flattened out and the RSI is just below the midpoint indicating a balance between supply and demand.

This indecision could tilt in favor of the bulls if the price rises and sustains above the triangle. That could suggest a possible trend reversal and the pair may rise to $0.22 and later to $0.26.

This positive view will invalidate if the price turns down and plummets below the support line. Such a move will indicate that the triangle acted as a continuation pattern.

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.