The U.S. Commodity Futures Trading Commission (CFTC) has just named Coinbase vice president Dorothy DeWitt as its new market supervisor.
CFTC Chairman Heath Tarbert announced in a press release Tuesday that DeWitt, who is also the exchange’s general counsel for business lines and markets, will be the new director of the Division of Market Oversight (DMO), the group responsible for overseeing derivatives platforms and products, including the young market for bitcoin futures.
DeWitt has also spent time at Citadel Securities, S&P Global and Davis Polk & Wardwell, and has previously been a portfolio manager.
Her new role will see her evaluating and potentially approving new bitcoin derivatives products in the U.S. DMO has examined CME, Cboe and Bakkt’s various bitcoin futures proposals in the past.
She succeeds former DMO director Amir Zaidi, who oversaw the first bitcoin futures contracts as they entered the crypto space in late 2017.
In a statement, Tarbert thanked Zaidi “for his more than nine years of service at the CFTC,” saying:
“[DeWitt] brings to the CFTC more than 20 years of private sector experience in the financial services and legal fields. Her strong investment, risk, legal, and compliance background and familiarity with distributed ledger technology, including crypto assets, will be invaluable as the agency looks to develop a holistic approach to regulating 21st century commodities.”
Former DMO director Vince McGonagle has been serving as acting director of the division during the transition period.
Tarbert first took office in July 2019, after Congress confirmed him in June. The former Treasury Department official succeeded Christopher Giancarlo, who was famously dubbed “Crypto Dad” after advocating for a “do no harm” approach to regulating the crypto space before Congress.
Since leaving the agency, Giancarlo has joined the advisory board to the Chamber of Digital Commerce, a trade association focused on blockchain and cryptocurrency policy in Washington D.C.
Native support for bitcoin cash is coming to HTC’s blockchain phone.
Today, HTC announced its partnership with Bitcoin.com to add bitcoin cash support for its Exodus 1 blockchain phone. The new function will come with Bitcoin.com’s preinstalled wallet and be rolled into the Exodus 1 software update. Bitcoin.com will also sell the Exodus 1 and all future versions.
In a statement, HTC’s chief decentralization officer Phil Chen called the update a natural next step for the phone. “The Zion Vault is happy to support BCH natively in hardware so security goes hand-in-hand in the BCH blockchain as an alternative to dominant payment rails and platforms,” he said.
With the partnership, Zion Vault, the phone’s key management software can now secure BCH transfers by signing off on transactions.
First announced at Consenses 2018, HTC has regularly updated the Exodus 1 with new blockchain features. An update in May allowed users to directly swap cryptocurrencies within the Zion Vault wallet.
Exodus 1 may soon be replaced by HTC’s second-generation blockchain phone: the newer, cheaper Exodus 1s. Chen has previously told CoinDesk that the $200-$300 phone would ship in the third quarter.
The computing power dedicated to mining bitcoin has hit yet another new high, suggesting that more than 600,000 powerful new machines may have come online in the last three months.
According to data from crypto mining pool BTC.com, bitcoin’s two-week average hash rate has crossed another major threshold, reaching 85 exahashes per second (EH/s) around 19:00 UTC last Friday. Meanwhile, mining difficulty also adjusted to a new record of nearly 12 trillion.
Notably, both figures have jumped 60 percent since June 14, the data shows.
Bitcoin’s mining difficulty – a measure of how hard it is to create a block of transactions – adjusts after 2,016 blocks, or roughly every two weeks. This is to ensure the time to produce a block remains around 10 minutes, even as the amount of hashing power, deployed by machines around the globe competing to win freshly minted bitcoins, fluctuates.
Several new models of application-specific integrated circuit (ASIC) miners hit the market over the summer, with an average hashing power around 55 tera hashes per second (TH/s).
Assuming all of the 35 EH/s of new hashing power added since mid-June came from these top-of-the-line models, a back-of-the-envelope calculation suggests that more than half a million such machines have connected to the bitcoin network. (1 EH/s =1 million TH/s)
These powerful ASIC miners, made by major manufacturers such as Bitmain, Canaan, InnoSilicon and MicroBT, are priced from $1,500 to $2,500 each. So if more than half a million of them were delivered, as estimated above, the leading miner makers could have made $1 billion in revenue over the past three months.
Bitcoin’s spiking hash rate and difficulty are in line with the soaring price since earlier this year, which led to increasing demand for mining equipment that has significantly outstripped supply. It’s also in part thanks to the rainy summer season in southwestern China which resulted in cheap, abundant hydroelectric power.
Further, there has also been a growing interest in Russia’s Eastern Siberia region, where the Brastsk hydropower station built in the Cold War era has been utilized to power mining farms that are estimated to account for almost 10 percent of the total computing power on the bitcoin network.
Miners in China estimated earlier this year that bitcoin’s average hash rate in the summer would break the level of 70 EH/s, which happened in August.
As such, major miner manufacturers have already sold out equipment that is due for shipment until the end of the year with customers placing pre-orders three months in advance.
TokenInsight, a startup that focuses on analysis of crypto trading and mining activities, said in a report published Friday that additional supplies of miners are expected to hit the market in the coming months.
“Following the drastic increase in bitcoin’s price, the bitcoin mining market saw significant inflation in Q2 2019. Most of the miners from various manufacturers were in serious shortage and pre-orders submitted in Q2 and Q3 are to be delivered by the end of the year,” the report states.
Therefore, the firm estimates mining difficulty will maintain its growth momentum to reach 15 trillion by the end of the year – with bitcoin’s average total hashing power crossing the threshold of 100 EH/s for the first time in its history.
Liquid, a second layer tech for bitcoin created by Blockstream, just onboarded another crypto partner.
The sidechain for faster BTC payments now has around 30 members, including Bitfinex, BITMex, OKCoin, and other exchanges, with the total of $900,000 moving around on the network, Blockstream’s chief strategy officer Samson Mow told CoinDesk.
Now Canadian bitcoin exchange Bull Bitcoin is joining the platform. The new partnership will allow the users of Bull Bitcoin to interact with other exchanges on the network.
Tentatively scheduled on the early 2020, the integration of Liquid tech into Bull Bitcoin’s operations will require some effort from the exchange’s tech team, Bull Bitcoin CEO Francis Pouliot said.
“We’re making sure we have this backup layer. We want to make sure bitcoin succeeds, and this is our way to participate in strengthening the network,” Pouliot told CoinDesk.
As a part of the partnership, Bull Bitcoin is going to issue its own asset on the Liquid network: Canadian dollar-pegged token dubbed L-CAD, which is supposed to be used as the exchange’s voucher for buying bitcoin.
The popular inter-exchange settlement network, Liquid has collaborated with Canada-based bitcoin exchange, Bull Bitcoin turning its member score to nearly 30.
Based on the reports concerning the Bull Bitcoin partnership with Liquid Exchange Network, the investors using the Bull Bitcoin platform will now be open for interaction and communication with other popular exchange networks on Liquid’s sidechain.
The integration is tentatively scheduled to take place in the early phase of 2020. Bull Bitcoin CEO, Francis Pouliot stated that the collaboration would need some inputs from the technology arm of the exchange for the successful integration.
Bitcoin (BTC) is flashing green at press time, while its share of the cryptocurrency market has reached at 30-month highs above 70 percent.
As of writing, the cryptocurrency is trading at $10,350 on Bitstamp – up 6 percent on a 24-hour basis – after hitting an eight-day high of $10,506 earlier today. At that level, BTC was up 12.7 percent from the one-month low of $9,320 hit on Aug. 29.
Over the last nine weeks, BTC has consistently found takers in the range of $9,000–$10,000. The resulting recovery rallies, however, ended up creating lower highs – a sign of bull market exhaustion – as seen in the chart below.
- Bitcoin’s price recovery from the Aug. 29 low of $9,320 is backed by an uptick in the dominance rate to 30-month highs.
- Weak trading volumes, however, indicate the recovery could be short-lived and a fall back to $9,750 could be in the offing in the next day or two. Weekly chart indicators continue to call a bearish move.
- A high-volume UTC close above the bearish lower high of $10,956 (Aug. 20 high) is needed to revive the short-term bullish outlook.
- A weekly close (Sunday, UTC) above $12,000 is needed for full bull revival.
The question now is whether the latest recovery from sub-$10,000 levels will invalidate the bearish lower-highs setup with a move above $10,956.
The gains seen in the last four days look sustainable and could be extended further, as BTC’s dominance rate – the cryptocurrency’s share of the total crypto market – has jumped to 70.10 percent, the highest level since March 2017, according to CoinMarketCap.
The gauge stood at 69 percent on Aug. 29, when BTC’s price slipped to one-month lows below $9,400.
Many observers consider price gains sustainable if they are backed by a rise in the dominance rate, as discussed last month. The shift indicates money is being poured into BTC for the long haul and not to fund purchases of alternative cryptocurrencies.
Trading volumes, however, tell another story, and suggest the recovery seen in the last four days could be short-lived.
The green bars (buying volumes) seen in the last four days on the hourly chart (above left) are smaller compared to the red bars (selling volumes) seen during bitcoin’s drop to one-month lows on Aug.29.
Buying volumes only ticked up slightly in the 60 minutes to 21:00 UTC yesterday. During that time frame, BTC rose from $10,200 to $10,470. Further, Sunday’s green bar (above right) is significantly smaller than those observed during previous breakouts above $10,000 (marked by arrows).
Put simply, the price bounce seen in the last four days lacks substance and a pullback, possibly to $9,750. could be in the offing in the next day or two.
The outlook as per the daily chart would turn bullish if prices print a UTC close above $10,956 on high buying volumes. That would open the doors to $12,000
The bitcoin bulls have failed four times in the last 10 weeks to secure a weekly close (Sunday, UTC) above $12,000. Meanwhile, the sellers have failed persistently failed to keep prices below $9,500.
A downside break looks likely, as key indicators have turned bearish, including a bearish crossover of 5- and 10-week moving averages.
The moving average convergence divergence (MACD) histogram has also dropped below zero for the first time since February, while the Chaikin money flow, which incorporates both prices and trading volumes, has slipped to a 4.5-month low of 0.10, a sign of weakening bullish pressures.
Argentina has reimposed capital controls, limiting citizens’ and businesses’ freedom to buy foreign currency.
As Bloomberg reported on Sep. 1, the increasingly troubled South American nation took the step as the Argentine peso (ARS) suffers overwhelming losses against major fiat currenciessuch as the U.S. dollar.
Argentina puts $10K limit on dollar access
Argentina has shown an affinity for Bitcoin (BTC) in recent times, with trade volumes accelerating as uncertainty around the economy grew. Last month, a premium appeared on the country’s cryptocurrency exchanges.
Now, access to hard currency is restricted to just $10,000 for individuals looking to dump ARS on the market, despite its exchange rate falling 34% in USD terms since Aug. 2.
Demand for Bitcoin, a cross-border asset which is impossible to control, should therefore increase further, some suspect.
“Buy Bitcoin,” cryptocurrency-focused attorney Preston Byrne tweeted following the news.
Draper may force Bitcoin switch
Argentina’s economic woes may not match those of Venezuela, yet Bitcoin advocates appeared to preempt the crisis months beforehand.
Should Draper win, he demanded Argentina shun the peso altogether, adopting Bitcoin as its new official state currency.
“That would be a perfect decision, as there’s a lack of confidence in this coin,” he reportedly commented at the time of the meeting in March.
Bitcoin (BTC) could drop to $9,000 in the next 24 hours, having strengthened the short-term bearish case with a drop to one-month lows earlier today.
The top cryptocurrency by market value fell to $9,320 at 07:36 UTC today, the lowest level since July 28, according to Bitstamp data.
Prices fell 4.48% on Wednesday, confirming a downside break of a recent narrowing price range represented by trendlines connecting Aug. 20 and Aug. 26 highs and Aug. 15 and Aug. 22 lows.
Essentially, sellers came out victorious in a tug of war with the bulls, signaling a resumption of the sell-off from the Aug. 6 high of $12,325.
That bearish view has been bolstered by BTC’s drop to four-week lows below the July 15 low of $9,467. As a result, a deeper slide to levels below $9,000 could be in the offing.
As of writing, BTC is changing hands at $9,415 on Bitstamp, representing a 7 percent drop on a 24-hour basis.
The range breakdown and the drop to one-month lows have exposed July’s low of $9,049.
Supporting the bearish case are the downward sloping 5- and 10-day moving averages. The 14-day relative strength index (RSI) has also breached key support (horizontal line) and is reporting bearish conditions with a below-50 print.
What’s more, the cryptocurrency has also found acceptance below the 100-day moving average (MA) – a level which acted as strong support in the seven days to Aug. 27.
Further, the 50-day moving average is beginning to trend south in favor of the bears.
Trading volumes picked up as BTC dived out of the narrowing price in the U.S. trading hours yesterday. In fact, the selling volume witnessed in the four hours to 20:00 UTC on Wednesday was the highest since Aug. 7.
All-in-all, the stage looks set for a deeper drop in BTC. Acceptance below the July low of $9,049 would open the doors to $8,500.
The bearish case would be invalidated if the cryptocurrency finds acceptance above Wednesday’s high of $10,280, although, as of writing, that looks unlikely.
Weekly close is pivotal
Bitcoin’s weekly line chart shows the cryptocurrency has charted a double top bearish reversal pattern with neckline support at $9,533. As of writing, prices are trading below the neckline support.
The breakdown, however, would be confirmed, only if prices print a UTC close below $9,533 on Sunday. That would create room for a sell-off to lows below $7,550 (target as per the measured move method).
The double top breakdown, if confirmed, would imply an end of the rally from lows near $4,050 seen on April 1.
It is worth noting that that the moving average convergence divergence histogram has already confirmed a bearish reversal with a drop below zero – the first since February.
Hotmine CEO Oles Slobodenyuk couldn’t have picked a better place to pitch his product: a bitcoin mining rig that doubles as a home heating appliance.
Irkutsk, Eastern Siberia, is famously cold in the winter, when subzero temperatures are the norm. So a few weeks ago, when Slobodenyuk took the stage at the Baikal Blockchain and Crypto Forum with one of Hotmine’s little white boxes in tow, he opened with a joke about the warm August weather.
“I was told that in Irkutsk, the average temperature of the air is minus 2 degrees Celsius, so I brought a radiator with me,” he said.
Eventually, Slobodenyuk told the crowd, Hotmine aspires to sell up to 200,000 of its devices to Irkutsk residents. But the Ukraine-based company’s ultimate ambitions are even greater.
“Our goal is to reach the point where 80 percent of all mining is done with the smart use of the hot air it’s producing, at the same time protecting the bitcoin network,” Slobodenyuk told CoinDesk, adding:
“We believe mining should become decentralized again, with a full node in every home.”
It’s a lofty goal, given that the four largest mining pools controlabout 60 percent of the total hashrate, or processing power devoted to securing the bitcoin network, according to BTC.com. But like bitcoin itself, Hotmine will seek to employ economic incentives to achieve its decentralist ideals.
According to Slobodenyuk, each Hotmine miner performs calculations at a rate of 8 tera hashes per second (th/s). With the current price of bitcoin, he said, 1 th/s earns about $7.20 a month, so a single heater can make about $55 for its owner while radiating heat for up to 10 square meters.
While the concept itself isn’t new — last year, a French company called Qarnot announced a CPU-based mining heater that earns ether, for example – Hotmine is focusing on a region where it’s likelier to resonate.
At the current prices for electricity in Irkutsk of 1-2 cents per kilowatt-hour, one heater needs less than $10 worth of power per month, so effectively the heat would be free, plus a modest income in bitcoin, Slobodenyuk said.
Even the coming halving, or periodic reduction in the amount of new bitcoin awarded to miners, won’t hurt this model, he claimed.
Hotmine started in 2013 – a lifetime ago in crypto time – with an experiment in a village near Kiev, Slobodenuyk said: it provided a bunch of homes with prototype mining boilers. People got free heat without even thinking about bitcoin, as all the work with crypto had been done for them.
After two years, the chips inside the boilers got old and mining stopped being profitable. When presented with the opportunity to keep the boilers but pay a little for electricity, people opted to switch back to wood stoves. Flashy new tech wasn’t compelling if it didn’t save them money.
Now, Hotmine is looking for partners to manufacture the electronics and metal boxes for its money-making heater. So far, it has offers from three potential partners in Russia.
Oles Slobodenyuk, CEO of Hotmine, with the mining boiler model
A pilot batch of 60 heaters is scheduled for release as soon as November to test demand, the company announced. Approximate price tag: $1,050. By the end of the year, Hotmine aims to sell 100 to 200 heaters.
Asked if he believes people would readily learn how to deal with bitcoin wallets and exchanges to spend their radiators’ earnings, Slobodenyuk said that at first, they won’t have to.
Hotmine can partner with crypto service providers, and all consumers would have to do is give a bank account number before harvesting their income converted to fiat.
Sooner or later people might want to go further down the rabbit hole and figure out bitcoin for themselves, Hotmine hopes.
Warming to bitcoin
Another believer that bitcoin-powered heating is ready for wide adoption, at least in places like Eastern Siberia, is Irkutsk resident Ilya Frolov.
His startup, Imagine8, makes heating systems in which miners manufactured by market leader Bitmain are immersed in mineral oil, which distributes their heat to the floor. To showcase the tech, Imagine8 plans to build and rent out guest homes that use it.
Frolov, who has been working on such systems since 2016, said he and a school friend brought on some two dozen people to use the mining heaters in their homes in the Irkutsk suburbs.
Initially, Frolov would ask homeowners to heat their homes with the system and send him their electricity bills. Some were fine with this option, but more people caught the bitcoin bug as they learned how it works, Frolov said:
“First, they were like, ‘I heard about bitcoin, that’s a pyramid [scheme], but I want free heating.’ Then, we worked with them, gradually converted them to our religion. And in the end, they were like, ‘Ok, I figured that out, I’m going to mine bitcoin myself.”
According to him, such customers paid for hardware and installation, then learned to handle wallets and exchange accounts and now are taking care of their bitcoin themselves.
Other companies use the same technology now, and some people would buy miners and oil reservoirs and construct the system themselves after watching videos posted by Frolov and his competitors, he said.
An average house as big as 100 square meters takes about 10 kilowatts to heat via an electric boiler, a popular option in Irkutsk. Electricity bills in the Irkutsk winters might cost a homeowner several hundred dollars a month. Instead, six or eight specializing mining chips, known as ASICs can heat a home like that and earn owners some bitcoin.
And the environment benefits, Frolov argued, when machines do double duty, “instead of having the heat from ASICs wasted in the air and people heating their houses with coal.”
- Experts say Hamas is now using bitcoin for cross-border fundraising at an unprecedented rate. Still, even the largest estimates of terror financing in the region are apparently dwarfed by civilian bitcoin usage in the Gaza Strip, local experts tell CoinDesk.
- General awareness in Palestine of bitcoin and ethereum has increased since 2018.
- Freelance payments and remittances are reportedly the leading use-cases for bitcoin transactions in the Palestinian territories.
Terrorists aren’t the only Palestinians using bitcoin. Sources in Gaza told CoinDesk bitcoin is now more popular than ever among civilians, too.
“There are some offices that now do $5 million to $6 million a month,” freelance web developer and Gaza-based bitcoiner Ismael Al-Safadi told CoinDesk about local money changers. “I’ve seen an office send 100 BTC in one [transaction]. … There are also a lot of small clients. They send $200 or $1,000.”
The $5 million figure dwarves the “tens of thousands of dollars” in illicit transactions reported earlier this week by the New York Times.
Last year, CoinDesk reported that one such cryptocurrency dealer served roughly 50 clients a month purchasing or liquidating an average of $500 each. He has since relocated to Europe, having earned enough to emigrate.
Yet two sources with knowledge of the matter estimated there are up to 20 bitcoin dealers now operating in Gaza. Since PayPal and other online services exclude the Palestinian territories, this is one of the only ways for freelancers to easily receive international payments.
For example, Al-Safadi takes more than 70 percent of his monthly earnings in bitcoin. Based on the social media groups he participates in, Al-Safadi estimates there are around 10,000 occasional bitcoin users in Gaza. Indeed, an anonymous source in Gaza who taught seminars about cryptocurrency to roughly 300 Palestinians since 2017, told CoinDesk just one such Facebook group focused on bitcoin has 5,000 members.
The teacher said there is a nascent interest in ethereum applications among Palestinians as well, both at home and abroad. Sameh Sadaqa, a Palestinian in the United Arab Emirates developing an ethereum-based charity platform called Takatuf, told CoinDesk his first pilots will distribute crypto donations to schools in both Gaza and the West Bank. A test experiment began last week.
Sadaqa told CoinDesk:
“People there [in Palestine] are starting to learn and ask about it. … Palestinians are more using bitcoin [than ether] … to make international transfers and to bypass Israeli control.”
It’s hard to say what the local transaction volume truly is, since the Palestinian crypto ecosystem doesn’t connect directly to banks or global crypto exchanges. Instead, much like the Iranian community in 2018, it is dominated by peer-to-peer transactions, private social media groups and unofficial dealers.
All Gazan sources agreed: most local bitcoin users are cashing out in fiat, not holding or using it for secondary business transactions.
Yet, perhaps as an unintended consequence, the teacher said that Hamas’s ongoing fundraising campaign to gather bitcoin donations from abroad for its military wing, the Qassam Brigades, has actually boosted awareness among the civilian population.
“Everybody was talking about ‘what is bitcoin’ then,” the teacher said about news in February, when blockchain analytics firms identified a Coinbase account participating in a campaign that garnered $4,000.
Part cypherpunk black market, part terror-driven police state, the Gaza Strip since 2018 has generated a truly unique bitcoin ecosystem.
On one hand, entrepreneurs are using bitcoin in slowly growing numbers thanks to the high demand for mobile financial services. According to recent data from the Palestinian Monetary Authority presented in July at a fintech workshop in the West Bank city of Rawabi, 77 percent of adults in the Palestinian territories are unbanked even though 2.6 million Palestinians have smartphones.
Al-Safadi, the Gaza-based developer, told CoinDesk that Qassam Brigades operations are “secret” and not publicly related to the civilian bitcoin ecosystem. However, bitcoin dealers are now required to record the wallet address, amount and full name and ID number of every client for each liquidation for police records.
“Gaza works like a black market,” he said, adding he doesn’t know what the police do with this “surveillance” information.
Meanwhile, Hamas’s Qassam Brigades have stepped up their bitcoin fundraising strategy this past summer. According to the New York Times, the Qassam Brigade website now features a bitcoin tutorial and a wallet address generator to create a fresh account for each donation.
An anonymous source with knowledge of the matter told CoinDesk these donations have exceeded $12,000 so far this year. Another anonymous anti-money-laundering expert with knowledge of Hamas operations estimated the terror group’s bitcoin mining brought in $195,000 worth of crypto this year.
Such activities related to bitcoin are generally deemed noncompliant by local banks, as there’s still a longstanding rift between Palestinian political factions in different territories. A spokeswoman for the Bank of Palestine, which operates in both the Hamas-governed Gaza Strip and the Fatah-governed West Bank, told CoinDesk that the Palestinian Monetary Authority forbids institutional bitcoin transactions.
“We are not allowed, as banks, to trade with [bitcoin] or use it under any circumstances,” the Bank of Palestine spokeswoman said.
Even with all these factors considered, most Palestinian sources estimate the aforementioned civilian usage far outweighs bitcoin-related terror activity in the region.
Most Palestinian bitcoin users are accepting bitcoin payments for freelance work, or remittances from family abroad, and cashing it out through local peer-to-peer groups. The UAE-based Sadaqa said that, in an attempt to curtail terror financing, Israeli and American authorities sometimes interfere with bank transfers.
Indeed, in 2006 after Hamas rose to power, cash transfers to Gaza were temporarily halted across the board.
“The crypto market is promising in Palestine and has a good opportunity to grow there,” Sadaqa added.
Both Al-Safadi and the local seminar teacher said they hope global exchanges and official banks will eventually allow Palestinians to transact with bitcoin through compliant digital platforms.
“Bitcoin has a unique potential, but it’s not a big potential. There are still many steps to be taken,” the teacher said, adding:
“In Germany, you have places to go to exchange bitcoin easily without extra fees and hustles … something like this has to be here in Gaza. If it stays between some IT guys and money exchangers that are willing to take risks, it stays like this.”
We believe that the best way for global commerce to become more efficient and accessible is by bringing cryptocurrency to the masses, says Flexa app makers
More than 10 years after bitcoin was founded, user adoption remains one of the biggest challenges still facing the world’s largest cryptocurrency. To solve this, Flexa built an app called Spedn, which allows cryptocurrency holders to make instant payments to merchants that accepts Flexa as a payment provider.
“The Flexa team has decades of payments experience, and at this point, we believe that the best way for global commerce to become more efficient and accessible is by bringing cryptocurrency to the masses,” the company wrote in a blog post last year.
“By making cryptocurrencies spendable in mainstream commerce, our sincere hope is that we can help bring the full promise of blockchain technologies to people all over the world.”
Flexa claims that Spedn will not only benefit consumers who want to spend cryptocurrency, but also the merchants who accept it. “Accepting cryptocurrencies in their stores [will] reduce payment fraud and processing costs,” the startup stated.
No additional hardware or software is needed on the retailers’ side in order to integrate the payments, they only need to allow Flexa to be a new payment provider on their existing systems.
For customers, the process of paying is similar to existing digital payment methods like Apple Pay and Google Pay. Once the Spedn app is downloaded, payments can be made by scanning an automatically generated QR code to the payments terminal at the till.
One of the other issues facing cryptocurrency in its quest to become a mainstream form of payment is price volatility. Recent positive news in the cryptocurrency space, for example, has seen the price of bitcoin shoot up by around $2,000 over the last two days – which Flexa’s announcement may well have contributed to.
To counter this, Flexa has partnered with New York-based cryptocurrency exchange Gemini so that payments can be made using a so-called stablecoin pegged to the US dollar.
Flexa has only announced a limited list of retailers, which include Whole Foods, Nordstrom and Lowes. However videos shared online also show Starbucks accepting cryptocurrency payments through the app.
In total, around 100 merchants are expected to accept cryptocurrency payments through the Flexa app by the end of the year, totalling more than 30,000 stores.
Eventually, Flexa wants to make it possible for any shop to accept any cryptocurrency.
“As the Flexa network grows, we hope to show the world just how transformative cryptocurrencies can be for all kinds of payments, not just peer-to-peer transactions, but also retail paumnets, dining and beyond,” Flexa’s announcement stated.
“The world of payments is evolving quickly now, and we believe that Flexa will be a massive part of the shift toward more efficient and more accessible commerce around the globe.”
- Bitcoin has risen by $1,000 since Friday’s announcement by Bakkt exchange that it will be launching physically-settled bitcoin futures on Sept. 23. The price rise has neutralized the bearish setup on the intraday charts seen last week.
- The gains could be extended further to $11,000, as the hourly chart is reporting a bullish continuation pattern.
- The weekly chart continues to call a deeper pullback to $9,000 with key moving averages (MAs) producing a first bearish crossover since February.
- A weekly close above $12,000 is needed for a complete bullish revival.
Bitcoin (BTC) has gained $1,000 since the Bakkt exchange announced it has the green light to offer bitcoin futures, but key resistance still lies ahead.
The top cryptocurrency picked up a bid around $9,700 in the U.S. trading hours on Friday and printed highs above $10,750 earlier today, according to Bitstamp data.
Notably, the move above $10,000 happened on Friday after CoinDesk reported that the Intercontinental Exchange’s young subsidiary Bakkt has received regulatory approval to launch its much-anticipated platform for daily and monthly BTC futures.
Bitcoin futures to be launched by Bakkt will be physically settled, as opposed to the cash-settled futures listed on the Chicago Mercantile Exchange.
Put simply, BTC futures trading on Bakkt will not rely upon unregulated spot markets for settlement prices and the party will receive delivery of bitcoins from the Bakkt Digital Asset Warehouse at the end of the contract period.
Many observers, including cryptocurrency analyst and trader Scott Melker, are of the opinion that Bakkt’s physically-delivered futures product will open the floodgates for the institutional money and is a long-term bullish development for bitcoin.
Physically delivered futures require the actual purchase of bitcoins, which, according to Melker is a “huge” development. Also, there is general consensus that the price discovery in new physical delivery markets will contribute to building confidence in BTC prices.
That said, some observers are warning that an increased institutional volume my not necessarily translate into stronger buying pressure.
“Volume is volume, don’t express your bias toward it”, popular Cryptocurrency market analyst @CryptoNekoZ tweeted earlier today.
Meanwhile, financial analyst and tech journalist Joseph Young tweeted over the weekend that, “Bakkt launch was priced into the market”.
So far, the markets have reacted positively to Bakkt news if the $1,000 price rise is anything to go by.
The cryptocurrency is currently trading at $10,700 on Bitstamp and could rise further to $11,000. The gains, however, could be short-lived as the odds are stacked against the bulls, according to technical charts.
BTC witnessed a high-volume ascending triangle breakout earlier today. The bullish continuation pattern indicates a resumption of the rally from the last week’s low of $9,467 and has created room for a rise to $11,000.
So far, however, the upside has been capped around $10,750.
BTC fell 10.49 percent last week, strengthening the case for a deeper pullback put forward by the preceding week’s rejection above $12,000.
The 14-week relative strength index has created a bearish lower high. Further, the 5-week moving average (MA) has crossed below the 10-week MA for the first time since February.
Currently, the 5-week MA is seen at $10,610 and the 10-week MA is located at $10,691. The bearish crossover indicates the path of least resistance is to the downside.
The moving average convergence divergence histogram continues to produce lower highs above the zero line, a sign of weakening bullish momentum.
All-in-all, the case for a fall back to $9,000 remains intact. The outlook would turn bullish only if prices print a weekly close (Sunday, UTC) above $12,000.
A small bank in New York City has started doing business with cryptocurrency firms, joining the very short list of U.S. financial institutions to embrace the sector.
Quontic Bank opened a checking account for a bitcoin ATM company a few weeks ago and is in the process of completing a contract to deliver banking services to another crypto startup. The bank wouldn’t name either client.
“We’re just taking steps so that when the regulatory environment becomes more crypto-friendly, we don’t have a lot of catching up to do,” said Quontic chief executive Steven Schnall, who acquired the bank in 2009. “We’re looking to diversify our product offering and our customer mix by entering into that field.”
While Schnall wouldn’t say how big he wants Quontic’s crypto business to be, he claimed the pending contract “could impact millions of Americans.”
Crypto-friendly banks are extremely rare, in part because of the extra work they have to do complying with know-your-customer (KYC) and anti-money laundering (AML) regulations.
“Banks and other financial institutions have to look out for any suspicious activity,” said Joshua Klayman, head of the blockchain and digital assets practice at law firm Linklaters. “If you have a startup that raised money doing an ICO and didn’t do proper KYC or AML, that bank doesn’t know who the proceeds are from.”
Like those institutions, Quontic is a relative pipsqueak in the banking industry. With $420 million in assets, it is only 0.015 percent the size of JPMorgan.
Yet Quontic stands out because its leaders caught the crypto bug early on.
Students of crypto
Schnall, a longtime mortgage lender, became interested in bitcoin when it was worth less than $1, bought his first bitcoin at $75 in 2013 and lost 500 BTC in the Mt Gox debacle.
Patrick Sells, now the bank’s chief innovation officer, said Schnall began to educate him on bitcoin the first few times they met, while Sells was doing mortgage lead generation for Quontic through his own firm.
To learn more about the mechanics of cryptocurrency, Schnall and Sells built an ethereum mining operation, independent from Quontic, in January 2018. (Schnall said he is now more bullish on bitcoin than any other cryptocurrency.)
The two executives even came close to launching their own cryptocurrency, also separate from the bank, called QCoin. They lined up $2.5 million for an initial coin offering (ICO) but called it off after the market crashed.
Undeterred by the ups and downs, the bankers said that they believe banking and crypto can have a symbiotic relationship and are exploring what steps toward that goal might look like under the U.S. regulatory framework.
The bankers helped educate their staff of 180 by giving them each $20 in bitcoin when the price of bitcoin was around $3,000, and they’re looking to hire employees with experience in cryptocurrency.
“We can teach them the banking side,” said Sells, vaping in a white v-neck and jeans at Quontic’s Manhattan headquarters. “It’s easier to do that than vice versa.”
While the bank wants to let cryptocurrency companies know that it’s open to banking them, Quontic said it has high standards for crypto customers.
When the bitcoin ATM network approached Quontic a year ago, the company was not prepared for the bank’s compliance vetting.
It didn’t have a disaster recovery plan, it was not properly tracking the currency transaction reports (CTRs) filed to regulators, and the company’s reporting was not up to Quontic’s standards.
After working closely with the bank for a year, the company opened an account at Quontic a few weeks ago.
To Schnall, such professionalism is necessary for crypto startups to be taken seriously.
“You don’t have mom-and-pop financial institutions. You’re not going to have mom-and-pop crypto players of any significance,” Schnall said. “Crypto companies have to have strong controls, internal audit, and a very robust system of compliance.”
Additionally, the juice has to be worth the squeeze for Quontic to bank a crypto firm.
“There must also be a strong strategic motivation for us as well – such as meaningful deposit balances, etc.” Schnall said. “‘Meaningful’ is relative to how complex, risk-laden and labor-intensive the account will be.”
Blockstream has launched a colocation mining service and already counts the Fidelity Center for Applied Technology and LinkedIn founder Reid Hoffman as customers.
On Thursday, the bitcoin and blockchain technology firm announced a new mining wing, Blockstream Mining, along with a BetterHash-based mining pool, Blockstream Pool. Led by cryptographer Dr. Adam Back, Blockstream is best known for its bitcoin-sidechain ecosystem, the Liquid Network.
Blockstream Mining will host colocation services across North America with its most recent installation in Georgia. The announcement stated that 300 megawatts, or 300,000 kilowatt-hours of energy, will be made available to customers.
That level of energy supply would be able to power up around 100,000 more-advanced ASIC mining models such as MicroBT’s WhatsMiner M20S or Bitmain’s AntMiner S17 Pro.
These machines on average have an electricity consumption of about 3 kWh per unit with a hashing power of around 55 terahashes per second. That could add about six exhashes per second to bitcoin network’s computing power (1 exhash = 1 million terahash).
Blockstream says its self-mining efforts currently make up one percent of the global bitcoin hash rate. The future relationship between Blockstream’s self-mining and Blockstream Mining was not specified.
Blockstream CSO Samson Mow says the firm’s mining efforts, even before the latest launch, were largely based on concerns about the network’s future:
“We began self-mining back in 2017 after being motivated by widespread concern that mining decentralization was declining. At the time it appeared that parties involved in ASIC manufacture, hosting, and pool operations were becoming a centralizing force and holding back Bitcoin from reaching its full potential. We figured we could use our Bitcoin expertise to improve the situation.”
In this vein, Blockstream also announced the launch of Blockstream Pool running the BetterHash mining protocol. Introduced in 2014 by Blocskstream project OpenHash, BetterHash decentralizes mining pool decisions, such as which block to mine, to individual owners. Proponents argue it further decentralizes and democratizes bitcoin mining.
Blockstream Pool is the graduate of a one-year testnet and is available to Blockstream Mining customers. As of now, Blockstream Mining is exclusive to enterprises and institutions.
Bitcoin.com has announced it will launch a crypto exchange called Exchange.Bitcoin.com.
Price of BCH last 30 days via CoinDesk data.
This is the latest addition to a suite of products Bitcoin.com provides beyond their news service. The company has also developed a crypto casino, a wallet, and a P2P bitcoin cashexchange, aimed at furthering the utility of the forked alternative to bitcoin.
“While our company thinks the bitcoin cash network will be adopted by the masses worldwide, we also think it’s important to promote free markets and choice,” the company said in a statement.
Expected to launch in early September, the exchange will list many of the largest capitalized coins including bitcoin, ethereum, and litecoin. Additionally, it plans to offer around 50 trading pairs, as well as Simple Ledger Protocol (SLP) tokens tied to the BCH blockchain.
Former CEO and proponent of bitcoin cash Roger Ver said:
“We’re on the cusp of something very exciting with SLP tokens — It’s the beginning of a world where we can tokenize anything and, as people realize the potential this holds, they’re going to start demanding a place to trade their tokens.”
- Bitcoin could rise to $10,500 in the next 24 hours or so, as the 4-hour chart is looking more bullish.
- A break above $11,120 is needed to revive the short-term bullish outlook, though.
- Some expert believe the just-announced U.S. Fed interest rate cut could bode well for BTC in the long-run.
Bitcoin (BTC) has eked out moderate gains amid the U.S. Federal Reserve’s announcement of its first rate cut in over a decade.
The top cryptocurrency by market value is currently trading at $9,950 on Bitstamp, representing a 2 percent gain on a 24-hour basis.
The Federal Reserve (Fed) on Wednesday said it will lower interest rates by 0.25 percent to cushion the economy from a global slowdown and trade tensions. That was the first U.S. interest rate cut since the great financial crisis of 2008, and indeed since the creation of bitcoin in 2009.
BTC rose by over $200 to $10,000 in the three hours leading up to the Fed’s announcement at 18:00 UTC. More importantly, the cryptocurrency remained bid in the following hours and hit a high of $10,172, according to Bitstamp data.
The price action seems to have convinced investors that BTC picked up a bid due to Fed’s rate cut.
Boon for bitcoin?
Some observers believe rate cuts by the Fed bode well for BTC.
This is because an interest rate cut reduces the yield on a currency. Further, the liquidity added to the economy via rate cuts often leads to inflation and loss of purchasing power of the currency.
Put simply, falling interest rates mean fewer reasons to hold U.S. dollars, as pointed out by Alan Silbert, executive managing director at INX Trading Platform.
Silbert believes the Fed will deliver more rate cuts in the near future. The central bank, however, refrained from signaled further easing yesterday.
The Fed has cut rates less than 12 months away from bitcoin’s mining reward halving – a process aimed at curbing inflation by reducing reward for mining on the blockchain by 50 percent every four years.
Essentially, BTC’s monetary policy is on a preset path – its supply is halved every four years.
The monetary policy divergence would widen further if the Fed embarks on a full-blown easing cycle, as anticipated by Silbert. That would further strengthen bitcoin’s appeal as store of value and may bolster the bull market.
As for the next 24 hours, bitcoin looks set to test key average located at $10,500.
BTC rose above $10,000 yesterday, validating the seller exhaustion signaled by the long-tailed doji created on the 4-hour chart on July 28.
That bullish doji reversal indicates that the sell-off from recent highs above $13,000 has ended and the path of least resistance is to the higher side. The descending triangle breakout confirmed yesterday also indicates a bull reversal.
Notably, buying volumes picked up following the price breakout. The green volume bar created in the four hours to 16:00 UTC yesterday was the highest since July 19.
Hence, the cryptocurrency may rise toward $10,500 (50-day moving average) over the next day or two. However, the outlook as per the daily chart would turn bullish only if and when BTC invalidates the bearish lower-highs pattern with a move above $11,120.
The case for a rise to the 50-day MA in the next 24 hours would weaken if prices find acceptance below yesterday’s low of $9,574, although that looks unlikely.
Lightning-centric bitcoin wallets are gaining traction in 2019 and making small transactions affordable by reducing network fees.
The bootstrapped Spanish startup Bluewallet garnered 35,000 downloads so far this year, according to co-founder Nuno Coelho, a significant jump from the 5,000 users it had in 2018.
Coelho told CoinDesk the wallet’s built-in lightning marketplace, offering connections to external services like the crypto exchange ZigZag, the blog Yalls and games like Lightning Roulette, facilitates nearly 10,000 referrals a month. So far, BlueWallet users have completed more than 100,000 lightning transactions.
“The things we are working on now are to prepare the wallet for the next bull run,” Coelho said. “To allow users to have more control over the fees when the market will be with higher fees.”
After a year of operations, Bluewallet is currently raising its first round of venture capital. It is hardly alone. Competition across the marketplace is ramping up with a crop of new wallets seeking funding to support lightning development, sources told CoinDesk.
The price of bitcoin over the last 30 days via CoinDesk data.
In June, the Lightning Labs wallet launched and attracted 2,000 downloads within the first 24 hours. That same month, the bitcoin wallet provider Samourai Wallet announced a partnership with the French lightning node-maker Nodl to make the mobile wallet lightning-compatible.
At the same time, Zap wallet creator Jack Mallers told CoinDesk that 500 Android users downloaded Zap since early June. This summer could be described as a lightning boom for product development.
Plus, Mallers added, Zap now has more than 25,000 desktop downloads and 1,000 active TestFlight users on iOS.
“Not only are they downloading it, but the applications are actually checking assets because they’re using it and the wallets are open,” Mallers said. “On average, we get thousands of asset downloads a day. That means we have thousands of active users.”
According to Google’s analytics, Mallers said, only 33 percent of those users are located in the United States. While Bluewallet has far more American users, Coelho said his company’s wallet also appears to be gaining traction in Indonesia, the Philippines and Japan, based on App Store data and the times that users interact with the product.
Across the board, all of these apps share a common trait: They lack a clear business model.
However, for some, that process might be seen as a feature, not a bug.
“It’s not our main priority to focus on a business model at the moment,” Coelho said. “It’s our priority to … put product out there and talk to users.”
Like Coelho, Mallers said he is not in a rush to profit from this wallet because playing the long game means focusing on users for now. Lightning Labs developers told CoinDesk the startup will offer premium services for wallet users in the future, but collecting fees from users isn’t a priority for their team either.
“It wasn’t very clear how a lightning wallet would make money. A lightning wallet’s point is to help with scaling,” Mallers said.
Most mainstream wallets like Jaxx and Bread earn revenue by taking a percentage of transaction fees. They also rely on other revenue models like fundraising tokens (Bread) or integration partnerships (Jaxx). Meanwhile, open-source wallets like Bluewallet and Zap de-prioritize the business model as they seek to stabilize the product with the help of volunteer contributors.
“You cannot accelerate the development of bitcoin,” Coelho said. “We see this as a long-term project, from 5–10 years.”
So far, most of these wallet apps rely on an autopilot setting rather than making users manage channels and independent nodes. Coelho said those options for experts will come with time, considering that the LND beta version many such wallets are experimenting with is just one year old.
As such, Coelho concluded:
“Our goal was just to show this is what lightning could be in the future.”
Bitcoin futures platform Bakkt is gearing up to launch soon, the head of its parent firm said Thursday, although he did not set a firm timeline.
Intercontinental Exchange (ICE) CEO Jeffrey Sprecher, speaking during a quarterly earnings call, said Bakkt is “working to develop a regulated ecosystem that services the evolving needs of [participants] around the world,” adding:
“Subject to final regulatory approvals, we plan to launch our physically settled bitcoin futures in the very near future.”
Sprecher did not provide a specific timeline.
Bitcoin prices over the last seven days via CoinDesk data.
ICE first announced Bakkt in August, unveiling an ambitious plan to offer physically-settled bitcoin futures contracts and additional work with Microsoft, Starbucks and BCG Consulting.
While the company initially planned to launch the platform in December 2018, Bakkt was delayed a number of times, and does not currently have a firm launch date.
Bakkt initially intended to have the Commodity Futures Trading Commission (CFTC), which oversees derivative products in the U.S., approve its futures contracts, but ultimately self-certified.
The company is now waiting on a trust charter from the New York Department of Financial Services. Once NYDFS approves Bakkt’s warehouse, the company will be able to launch its new product.
The company is facing competition, however: TD Ameritrade-backed ErisX is also planning to launch physically-settled bitcoin futures contracts, and LedgerX announced Wednesday that it had already gone live with a product.
Bakkt aside, ICE generated $1.3 billion in revenue across the second quarter, according to a release.
ICE chief financial officer Scott Hill said ICE intends to launch its ETF Hub, a single portal for traders to take part in the exchange-traded fund market, in the coming months. The company believes the ETF market might double in the next few years.
Payments company Square reported its second-quarter earnings Thursday, revealing $125 million in bitcoin sales through its Cash App, nearly doubling a record first quarter.
“During the quarter, bitcoin revenue benefited from increased volume as a result of the increase in the price of bitcoin, and generated $2 million of gross profit,” the earnings report explains.
Founded by Twitter co-founder Jack Dorsey, Square reported that bitcoin represented very nearly half of the total revenue on its Cash App, at $260 million, for the second quarter of 2019. Bitcoin costs, however, are listed at $122.9 million in the unaudited quarterly report, yielding the aforementioned $2 million in profit.
On an investor call Thursday afternoon announcing the numbers, Dorsey said:
“We love you, bitcoin.”
The first quarter of 2019 was Square’s best quarter for bitcoin at the time, with $65.5 million in revenue and $832,000 in profit. Clocking $125 million in sales in the second quarter, however, represents significant growth and a new record for the company. For comparison, the company reported $166 million in bitcoin sales in all of 2018.
With a net loss for the quarter of $6.7 million on $1.17 billion in total revenue, bitcoin remains a long way away from the center of Square’s overall strategy. Transaction-based revenue in Q2 topped $775 million, according to the report.
The company sells bitcoin to users through its Cash App, a service that expanded to all 50 U.S. states in August 2018.
Earlier this week, the company clarified the role of Square Crypto, a project within the company created to make open-source contributions to the bitcoin protocol and ecosystem.
A senior research director at market intelligence firm CB Insights told CoinDesk he believes adding bitcoin is helping Square drive more usage from its customers.
“They don’t really make a lot of money on it, but it is driving engagement,” Chris Brendler said.
Wednesday, July 31 — crypto markets are seeing widespread green, with Bitcoin (BTC) breaking back above $9,700 and many large market cap altcoins seeing solid gains of between 3 and 9% on the day.
Despite trading in a lower price range since dropping back to a four-figure price point in a recent corrections, BTC is today up a solid 2.4%, bringing it to $9,717 by press time.
This mild uptick nonetheless stops short of bringing the coin back into the green on its 7-day chart, where Bitcoin is still reporting a fractional 0.7% loss. On the month, losses are starker, topping 8%.
Yesterday, Peter Tchir — a former Executive Director at German multinational investment bank Deutsche Bank — argued that Bitcoin is an indicator of hidden geopolitical tensions, pointing to the coin’s momentous performance this May at a time of fraught trade talks between the United States and China.
Also this week, erstwhile Bitcoin bear and CNBC host Joe Kernen predicted that the top coin could hit $55,000 — a 500%+ price surge — by the time of its next halving in May 2020.
Top altcoin Ether (ETH) — which celebrated its fourth birthday yesterday — has posted a 1.9% to trade around $212 by press time. In corrections earlier this week, the coin had circled perilously close to the round $200 mark, but has since recovered ground and is just slightly in the red, at 2.2%, on its 7-day chart. On the month, however, Ether is down over 18%.
XRP is reporting a 2.7% gain on the day, while among the remaining top ten coins several alts are seeing stronger upward momentum: Bitcoin Cash (BCH) is posting a 7.5% gain on the day, Litecoin (LTC) is up 3.6% and Binance Coin (BNB) is up 4.1%.
In the context of top twenty coins, Tezos (XTZ) is outstripping all other assets, seeing a 24% gain on the day following news of the token’s listing on major United States crypto exchange Coinbase. At press time, XTZ is trading at $1.24
Still among the top twenty, strong gains are being reported by Chainlink (LINK) — up over 9% — as well as by NEO (NEO), IOTA (MIOTA) and Cosmos (ATOM), all of which are up by 4-5%.
Total market capitalization for all cryptocurrencies is at $261,434,827,781 at press time, according to Coin360 data.
Dominating the crypto headlines this week is the hearing devoted to examining regulatory frameworks for cryptocurrencies and blockchain held at the United States Senate Banking Committee. Cointelegraph reported live on the most important developments during the hearing as it unfolded.
Yesterday’s Committee hearing notably follows upon earlier hearings in mid-July that had examined the regulatory hurdles surrounding Facebook’s Libra.
Despite the lack of decisiveness in the bitcoin market following the dominant crypto asset’s abrupt drop from $14,000 to $9,500, many analysts – even bearish ones – generally remain confident that the bitcoin price is heading towards a new record high in 2020.
On CNBC’s Squawk Box, as CCN reported, prominent news anchor Joe Kernen emphasized the imminence of the next halving of the Bitcoin blockchain protocol, suggesting that it could act as a major catalyst for the asset over the medium to long term.
Bitcoin price should surge as one crucial event disrupts supply & demand ratio
In recent years, the bitcoin price has been primarily driven by supply and demand from the market. As the market capitalization of the asset grew, the impact of news and events have started to lessen.
The block reward halving of bitcoin, which occurs approximately every four years, is expected to have a fundamental effect on the circulating supply of bitcoin, altering the rate at which new BTC are mined.
On the Bitcoin blockchain protocol, users mine BTC to secure transactions and process payments using mining equipment and electricity. In return for the consumption of resources, miners are rewarded with BTC, which then is sold, primarily through over-the-counter (OTC) markets.
During or around May 2020, the amount of BTC miners receive for processing transactions on the Bitcoin blockchain protocol will decline by half, leading to a decline in the inflow of BTC into the global market from miners.
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“With what we produce of gold every year, it would take 62 years to produce that much gold. If you do the same kind of analysis using bitcoin or silver or anything, you can come up with some of these flow metrics that are highly correlated. Silver I think is 22 years and gold is… and in the next halving, bitcoin, all of the sudden, gets close up to where gold is…. we will see anyway.”
Due to the block reward halving and other technical indicators, technical analysts who remain bearish on the short-term trend of bitcoin have stated that in the long-term, the trajectory of the dominant cryptocurrency is likely to be positive.
Venezuelan President Nicolás Maduro and his administration appear to be leveraging tax revenue and cryptocurrencies as part of a broader effort to evade economic sanctions, an investigation by Spanish newspaper ABC has found.
As detailed in a story published Monday, the newspaper asserts it uncovered a scheme by which Maduro and his associates were using a digital wallet app to turn tax revenue from domestic airports into bitcoin and other cryptocurrencies that were then transferred to exchanges in Hong Kong, Hungary, Russia and China.
There, the funds were converted and sent back to Venezuela, according to the report.
The effort is the latest example of how the ban on Maduro’s government from using US bank accounts and from participating in the open international market has forced it to look at cryptocurrencies as a way to obtain dollars.
The newspaper alleges that the tax revenue in question came from the Maiquetia International Airport (IAIM) located near Caracas, the country’s capital, and that taxes were collected through an automated system that works with an app called Jetman Pay.
Maduro’s administration is said to be in talks to expand its use of the app, including for proceeds it collects from refueling airplane that traffic the airport.
In a contract – allegedly yet to be signed – the Jetman Pay app would be used to directly defy the U.S. ban again. Under the scheme, a plane would land at IAIM, at which point it would transfer fiat currencies in exchange for fuel. Petróleos de Venezuela, S.A, the state’s oil and natural gas company, would then use the app to pay government taxes, upon which it would be sent abroad as cryptocurrency.
The automated system has been used at IAIM since February 2018 for airport tax collection.
The report concluded by speculating that Maduro may be looking to expand the scheme to other airports across the country.
The European arm of Japan-based cryptocurrency exchange bitFlyer has launched a bitcoin buying and selling service aimed to be easier to use than spot trading exchanges.
BitFlyer Europe announced the news on Tuesday, saying the new trading platform targets people wanting “a simple way to buy and sell bitcoin, from total beginners to experienced traders.” Until now, the firm offered only a pro-trader service, dubbed Lightning, as its euro-bitcoin marketplace.
Available via the bitFlyer Europe website, the “bitFlyer Buy/Sell” service allows users to exchange bitcoin for euros, with a maximum of 20 BTC per transaction.
According to its website, the service is not an order book exchange and users will pay no fees on sales or purchases of bitcoin. Presumably, in that case, bitFlyer is making its money on the spread between its own buying and selling prices.
Indeed, while the global average price for bitcoin displayed on crypto data service CoinMarketCap is €8,526 at time of writing, bitFlyer is offering sales at €8,727.
On sign-up, new users are expected to check a box indicating they are not residents of the U.S. Standard know-your-customer procedures request personal details such as address and phone number, as well as an identity documents like a passport or driving license.
The firm describes itself as the “only” crypto exchange to be licensed in Japan, the U.S. and the EU.
Andy Bryant, co-lead and COO of bitFlyer Europe, said:
“bitFlyer Buy/Sell is a virtual currency exchange for everyone – with simple two-click buy and sell capability. Not only is bitFlyer Buy/Sell easy to use, but with us users have the confidence that they are using a trusted, regulated platform with long-standing global heritage.”
Bitcoin wallet and blockchain explorer provider Blockchain just launched its first exchange platform.
Blockchain’s head of retail products, TD Ameritrade alum Nicole Sherrod, told CoinDesk the custodial exchange, called The PIT, can connect to non-custodial Blockchain wallets for nearly instant transfers. Registration opens today, with the ability to trade up to 26 assets rolling out over the next two weeks.
Sherrod said that with nearly 40 million wallets already created – and an exchange matching-engine set up in London’s Equinix LD4 data center – PIT could be posed to attract more liquidity than competitors.
“That’s what market makers are looking for,” Sherrod said. “They want to co-locate [data center servers] with you, they want to directly connect to your matching engine. It’s the way it’s done on Wall Street.”
Indeed, Tom Haller, previously the chief software architect for trading systems at the New York Stock Exchange, contributed to the development of PIT’s matching engine.
Sherrod added the exchange will measure speed in “microseconds,” like traditional asset exchanges. However, an anonymous industry expert was skeptical about whether that theoretical speed with remain constant under real pressures. The source said many infrastructure dependencies are “almost impossible to model out,” so the system will only prove itself when tested by “real-world trading volumes.”
Either way, Blockchain is prioritizing diverse token offerings over margin trading options and the bitcoin software update SegWit, both of which are also on the road map.
“Beyond the 26 [assets] we already know what our phase two asset listings are going to be, as well as phase three,” Sherrod said, declining to name any assets beyond what the wallet already supports.
It remains to be seen how PIT will compete with mainstream exchanges like Binance and Coinbase, which also offer a plethora of crypto assets. Coinbase was also a wallet provider and brokerage, before it became Silicon Valley’s iconic unicorn exchange.
“We’re looking to compete on the overall client experience,” Sherrod said, adding that a new customer support team has become the second-largest division of the company as part of a broader shift to exchange services.
Mainstream exchanges are generally slow to respond to retail users when market activity spikes, so Sherrod argued that beyond speed this is another area where PIT could rival incumbents.
Only time will tell if the new revenue flows Blockchain users generate through transaction fees will justify this expansion into the heavily saturated exchange space, with fierce competition for market makers and heavily regulatory costs.
Blockchain is applying for new licenses in various jurisdictions, Sherrod said, but failed to specify which ones. In the meantime, the exchange won’t operate in any jurisdiction that requires a license, a spokesperson added.