Ripple tried to settle with the SEC before the watchdog’s XRP-related lawsuit. The “bitcoin rich list” has more names than ever. Grayscale reports an uptick in interest from pension funds and Coinbase makes an acquisition to beef up its institutional bitcoin offerings. It has been a huge news day, so buckle up.
Ripple tried to settle charges of conducting $1.3 billion worth of unregistered securities transactions when selling XRP to exchanges and the public, before the U.S. Securities and Exchange Commission (SEC) sued in December, CEO Brad Garlinghouse said Wednesday. In a Twitter thread, Garlinghouse addressed what he described as five “key questions” about the SEC’s argument, though he warned that he was limited in what he could say because the case is ongoing. Several exchanges have moved to delist or stop XRP trading.
Pensions or bust
Grayscale is reporting increased “participation” in its flagship bitcoin and crypto investment products from institutions, pensions and endowments, not just hedge funds. Newly named CEO Michael Sonnenshein told Bloomberg, “The sizes of allocations they are making are growing rapidly as well,” with some $27.5 billion in total assets under management. (Grayscale, like CoinDesk, is owned by Digital Currency Group.)
Rich list grows
The number of addresses holding over 1,000 bitcoin stands at a record high of 2,334, indicating that large bitcoin holders have been accumulating bitcoin during the market run-up. This comes after a brief depression in the total number of bitcoin “whales” in December. “The dip and renewed increase at the end of December shows relatively little interest in profit-taking on the part of these large holders, even though almost all holdings are currently in profit,” according to CoinDesk Research’s quarterly review report.
First acquisition of the year
Coinbase has acquired trade execution startup Routefire to bolster the exchange’s suite of institutional products ahead of a planned IPO. The terms of the deal were not disclosed, though Routefire was a small, seven-employee firm based in San Francisco. Coinbase has experienced intermittent outages during the run-up in bitcoin’s price above $40,000.
Cryptocurrency exchange Bakkt, which is majority-owned by Intercontinental Exchange, is in advanced talks to go public via a merger with a special purpose acquisition company (SPAC), Bloomberg reported, citing people with knowledge of the matter. The deal, if it’s concluded, would value the combined company at more than $2 billion, the report said. A deal could be announced as soon as next week.
- 1,981 BTC: Finland will auction bitcoin from 2016 enforcement actions. (CoinDesk)
- > 65,000: FinCEN logged well over 65,000 submissions related to its proposed “unhosted” wallet rule during its abnormally short, and potentially illegal, public comment period. (CoinDesk)
- AMENDED COMPLAINT: A senior district judge in Utah has acknowledged he made a “mistake” when granting Overstock’s motion to dismiss a lawsuit over its digital dividend issued in 2019. (CoinDesk)
- WHITE-KNUCKLE RALLY: Did bitcoin just experience its best week since 2017? (Bloomberg)
- DOWN TURN: Economy sees job loss in December for the first time in eight months as surging coronavirus takes toll. (CNBC)
- BTC’S BIGGEST FANS are hedge fund baby boomers (Bloomberg Opinion)
- MICRO STRATEGY? Read the company’s 2020 Shareholder letter. (Blog)
What Joe Biden’s $3 trillion stimulus package means for bitcoin
President-elect Joe Biden is reportedly considering a two-pronged stimulus effort in the form of $2,000 checks for Americans and a tax and infrastructure spending package worth $3 trillion, the first sign of what many market analysts predict will be a tide of fiscal stimulus under a new U.S. presidential administration. With increased spending, comes increased inflation projections – which many crypto insiders see as a boon for bitcoin’s programmatic, deflationary attributes.
If the 2020 Q1 was the quarter of market turmoil, Q2 the bitcoin halving and Q3 the explosion of stablecoins and decentralized finance applications, Q4 was the quarter of institutional FOMO for bitcoin and of Ethereum launching the first phase of its ambitious migration to a proof-of-stake (PoS) blockchain. The latest CoinDesk Quarterly Review looks at the performance of bitcoin and ether compared to macro assets and other crypto assets, and at their progress, milestones and value drivers over the past three months. Download the free report.
Yesterday, Facebook made the unprecedented decision to ban a sitting president, Donald Trump, from its services for his role in inciting the revolt that damaged the U.S. Capitol. Facebook and other social media firms have had four years to discuss how to balance publishing information in the public interest (because President Trump said it) when much of it is not factual.
Streaming service Twitch, e-commerce platform Shopify and others also banned the president, at least until he leaves office on Jan. 20. The president’s Twitter feed, meanwhile, was suspended for 12 hours, Jan. 6-7.
Many opponents have long called for Trump to be booted from his online bully pulpits, where he often commands a large audience (88.7 million people follow @realDonaldTrump, his personal Twitter account). Explaining the decision, Facebook CEO Mark Zuckerberg said the “current context is now fundamentally different, involving use of our platform to incite violent insurrection against a democratically elected government.”
Some in the crypto world see it differently.
“I think what is happening right now is absolutely ridiculous. One big circus show setting us up for the last act – total control of our thoughts and actions. Twitter and Facebook are mass scams. No matter what your political view, the amount of heavy-handed censorship is, let’s say, suspicious,” Josh Petty, founder and CEO of the alternative social media site Twetch, told Blockchain Bites over email.
It’s old hat to call crypto a libertarian insurrectionary movement, though there are some key areas where the two ideologies align – primarily in championing individualism and all the “classically liberal” rights associated with that. This means freedom of ownership, freedom of speech and freedom to “exit” from the crowd.
Instead of erecting laws to protect these freedoms, blockchains create cryptographic proofs to ensure certain conditions are always met. These are monetary assurances – like Bitcoin’s hard-capped supply, Ethereum’s infinite programmability or Solana’s blitzkrieg settlement speed – as well as cultural, like the idea that finance and speech should be uncensorable.
“People really value censorship resistance, both for themselves and others, to the degree where it can seem irrational to bystanders,” pseudonymous crypto researcher Hasu wrote in November, in a blog post titled, “Exploring Bitcoin’s core values and why we defend them.”
Blockchains, by connecting people directly, can assure certain freedoms that are often occluded when intermediaries get involved. If you believe that everyone has the right to a platform online, then you’d probably disagree with Facebook’s decision to ban Trump – regardless of the circumstances.
“Social media companies have no direct role in a democracy,” Petty said. “Social media companies, despite using the word ‘social’ to describe them, are private enterprises serving customers and their self-interests.”
Indeed, these bans could be seen as fatuous branding exercises. Trump has less than two weeks in office before a new president is sworn in, and many prominent figures in Congress and elsewhere are calling for his immediate removal.
While the hardline, anti-censorship approach has neat answers for complicated questions, in practice it often runs into just as many sticky situations.
Today, following news reports and a Southern Poverty Law Center (SPLC) investigation that found “white supremacists and neo-fascists” are using the streaming platform DLive, owned by Justin Sun’s Tron, the blockchain-based platform will take steps to suspend and ban streamers found in violation of its community rules.
“The DLive team actively are taking actions regarding streamers who are found to be part of or participants in the incident at the Capitol Building in Washington, D.C., on [Jan. 6] including but not limited to account suspension, removal of past broadcasts, freezing their earnings and abilities to cash out. The donation and paid subscriptions will be refunded to the accounts from which they originated,” a DLive press release reads.
Then again, DLive’s primary selling point was not censorship resistance but its rewards program.
Who won #CryptoTwitter?
Millenials Prefer Bitcoin Over Gold, But it it Still Extremely Unequal, Study Finds
A recent study revealed that Bitcoin and the rest of the cryptocurrencies no longer have the bad reputation that haunted them in the past. In fact, it seems that as the years go by, the preference towards digital tokens is beginning to overtake historically favored assets such as gold and silver.
SimpleMoneyLife —a site focused on personal finance— published a research compiling information from a lot of notable sources —and providing their own insights and findings too. The results are interesting and show that there is still a lot to work on even though the ecosystem has grown a lot.
The research cited a study by deVere Group revealing that 67% of millennials believe Bitcoin is a superior safe-haven asset to gold. This narrative is increasingly gaining traction in the world of cryptocurrencies and traditional finance.
Bitcoion vs Gold
SimpleMoneyLife claims that even as a scarce commodity, gold loses out to bitcoin in terms of rarity:
Unlike gold, we know exactly how much Bitcoin is currently in circulation and how much will be in 2050. Bitcoin is better at being scarce than gold.
The study also assures that the Blockchain technology market cap could exceed $40 Billion by 2025. Analysts say that this type of technology could influence how various industries currently do business and develop their activities. Some of the areas that will benefit the most from blockchain technologies are: Supply Chain Management, Secure Elections, Healthcare, Smart Contracts, Keeping Verified Records, Banking, and the Internet of Things (IoT).
Analysts also highlighted that the United States is starting to take a fresh look at blockchain technologies, adding that the country could begin investing close to $4.2 billion on blockchain solutions soon.
The Crypto Twitter community is also very active. SimpleMoneyLife explained that, on average, cryptocurrency enthusiasts send more than 70,000 tweets about Bitcoin every day. They did not share data on activity around other altcoins with a large social media presence such as Chainlink, Ethereum, XRP, Tron, or the new DeFi coins.
The Study Shows an Extremely Unequal Bitcoin Ecosystem
SimpleMoneyLife also highlighted some findings of the inequality of the Bitcoin ecosystem. As much as algorithmically Bitcoin has no preferences, socially, it does.
First, the Bitcoin ecosystem is male-dominated. The compilation notes that UBS says 85.77% of Males are Engaged in the Bitcoin Community Compared to 14.23% of Females.
Want to rdig deeper into the stereotypes? Bitcoin appears to be 80% dominated by white males. Hispanics and black respondents follow with 66% and 61%, of the rest respectively.
In terms of mining, China controls 65% of the network’s total power. Simultaneously, the rest is distributed around the world, with the United States far behind in first place with a mere 7.24% of mining power.
And in terms of wealth distribution, Bitcoin is extremely unequal, with just 2% of wallets controlling more than 95% of total Bitcoin wealth and the next 100 wallets dominating 13% of the remaining total.
TA: Ethereum Trims Gains, Why ETH Could Find Strong Support Near $1,275
Ethereum started a downside correction after trading to a new all-time high at $1,480 against the US Dollar. ETH price is currently approaching the $1,300 and $1,275 support levels.
- Ethereum started a fresh downside correction from the $1,480 resistance zone.
- The price is down around 10%, and it is trading close to the 100 hourly simple moving average.
- There was a break below a major bullish trend line with support near $1,385 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair is likely to find a strong buying interest near the $1,275 and $1,280 support levels.
Ethereum Price is Approaching a Major Support
After a strong increase above $1,400, Ethereum failed to test the $1,500 resistance zone. A new all-time high was formed near $1,480 before the price started a fresh decline.
There was a clear break below the $1,400 and $1,380 support levels. More importantly, there was a break below a major bullish trend line with support near $1,385 on the hourly chart of ETH/USD. The pair broke the $1,350 support level to move into a short-term bearish zone.
A low is formed near $1,292 and ether is currently attempting a fresh increase. It broke the 23.6% Fib retracement level of the recent decline from the $1,478 swing high to $1,292 low.
Source: ETHUSD on TradingView.com
On the upside, there is a major resistance forming near the $1,365 level. It is close to the 50% Fib retracement level of the recent decline from the $1,478 swing high to $1,292 low. There is also a connecting bearish trend line forming with resistance near $1,385.
Ether price is approaching a couple of important supports near $1,300 and $1,285. The main support is forming near the $1,275 level, below which there is a risk of a larger decline in the coming sessions.
Dips Supported in ETH?
Ethereum is currently down around 10%, and it is trading close to the 100 hourly simple moving average. To start a fresh increase, it must gain bullish momentum above the $1,365 and $1,385 resistance levels.
A successful close above the trend line resistance and $1,385 could set the pace for a fresh increase. The next major resistance is near the $1,450 and $1,480 levels.
Hourly MACD – The MACD for ETH/USD is slowly losing pace in the bearish zone.
Hourly RSI – The RSI for ETH/USD is currently well below the 50 level.
Major Support Level – $1,275
Major Resistance Level – $1,380
Kraken Daily Market Report for January 25 2021
- Total spot trading volume at $1.6 billion, close to the 30-day average of $1.65 billion.
- Total futures notional at $612.2 million.
- The top 5 traded coins were, respectively, Bitcoin, Ethereum, Tether, Polkadot, and Chainlink.
- While most coins were down, strong returns from Keep (+9.0%) and Icon (+7.2%).
|January 25, 2021
$1603.8M traded across all markets today
Crypto, EUR, USD, JPY, CAD, GBP, CHF, AUD
#####################. Trading Volume by Asset. ##########################################
Trading Volume by Asset
The figures below break down the trading volume of the largest, mid-size, and smallest assets. Cryptos are in purple, fiats are in blue. For each asset, the chart contains the daily trading volume in USD, and the percentage of the total trading volume. The percentages for fiats and cryptos are treated separately, so that they both add up to 100%.
Figure 1: Largest trading assets: trading volume (measured in USD) and its percentage of the total trading volume (January 25 2021)
Figure 2: Mid-size trading assets: (measured in USD) (January 25 2021)
Figure 3: Smallest trading assets: (measured in USD) (January 25 2021)
#####################. Spread %. ##########################################
Spread percentage is the width of the bid/ask spread divided by the bid/ask midpoint. The values are generated by taking the median spread percentage over each minute, then the average of the medians over the day.
Figure 4: Average spread % by pair (January 25 2021)
#########. Returns and Volume ############################################
Returns and Volume
Figure 5: Returns of the four highest volume pairs (January 25 2021)
Figure 6: Volume of the major currencies and an average line that fits the data to a sinusoidal curve to show the daily volume highs and lows (January 25 2021)
###########. Daily Returns. #################################################
Daily Returns %
Figure 7: Returns over USD and XBT. Relative volume and return size is indicated by the size of the font. (January 25 2021)
###########. Disclaimer #################################################
The values generated in this report are from public market data distributed from Kraken WebSockets api. The total volumes and returns are calculated over the reporting day using UTC time.
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