CoinDesk Crypto

Open Money Initiative co-founder and cryptocurrency powerhouse Jill Carlson will be joining the board of Chia Network, the programmable money platform founded by Bram Cohen.

Carlson will help the company “build” its “strategic partnerships and rapid adoption among developers, financial firms, multinationals and governments,” Chia said in a press release shared with Coindesk.

“Jill’s knowledge, combined with her alignment for our mission to radically improve global financial and payments systems, will help drive our business forward,” Chia President and COO Gene Hoffmann said in the release.

Related: Market Wrap: Bitcoin Back Above $30K in Volatile Trading Session

The announcement represents the latest win for Chia, which has been on a growth spurt. It is also an offshoot of Carlson’s and Cohen’s friendship, which dates to their first joint conference appearances in 2017 and 2018. The pair, who have continued to meet at industry events, rank among the industry’s most influential figures and often share insights.

“I’m thrilled to be joining the Chia team as we look to supercharge adoption and provide an eco-friendly way to deliver decentralized finance opportunities for people around the world,” said Carlson, who is also an investor with San Francisco-based Slow Ventures and member of the World Economic Forum’s Global Future Council on Cryptocurrencies.

Carlson co-launched the Open Money Initiative in 2019 to explore how people use money in closed economies and disintegrating currency systems.

Earlier this year, she joined the board of the non-profit Mina Foundation, which supports the Mina lightweight blockchain protocol. But she has been selective about accepting directorship positions. Chia’s mission dovetailed with central, intertwining themes in her career of boosting access to financial services and operational efficiency.

Related: Security Token Market Shows Signs of Resurgence

“For anyone working in this space, it comes down to asking yourself every day, ‘Here are the things that I’m spending time on, do I believe in them, do I believe that they are going to be impactful on the lives of people?'” Carlson said in an interview with Coindesk.

She sees Chia’s approach as an “alternative” to financial products that “fail users” and “exclude people.”

Chia touts its decentralized blockchain and smart transaction platform as more energy efficient than competing systems. It launched its mainnet on March 17 and began enabling transactions on May 3.

Last month, the San Francisco-based company closed a $61 million D funding round spearheaded by Andreessen Horowitz (a16z) and Richmond Global Ventures. Slow Ventures also participated in the capital raise. At the time, Chia had an estimated $500 million valuation, according to a Bloomberg report, and Cohen has been upfront about his intent to take the company public in the near future.

Chia’s other board members are Cohen, Hoffman, David Frazee, managing partner at Richmond Global Ventures, and Chuck Stoops, a veteran financial services and technology executive.

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Goldman Sachs has conducted its first repo trade using JPMorgan’s private blockchain network.

According to a report by Bloomberg on Tuesday, the initial trade was conducted by Goldman on June 17 and came in the form of a tokenized version of a U.S. Treasury bond swapped for JPMCoin. The transaction took three hours and five minutes to complete.

JPMCoin is the investment bank’s stablecoin pegged 1:1 to the U.S. dollar.

Related: Galaxy Digital Will Provide Liquidity for Goldman Sachs’ Bitcoin Futures Trades

“We see this as a pivotal moment for the digitization of transactional activity,” said Mathew McDermott, global head of digital assets for Goldman’s global markets division, per the report.

Repurchase agreements, or repos for short, are a type of loan where financial institutions sell collateralized securities in a contract only to buy them back at an inflated price at some other date, usually overnight. It is particularly beneficial to banks as it enables them to borrow on the cheap.

McDermott said the blockchain development was a huge boon to the repo market, currently valued at over $4.6 trillion globally, given how repos function with collateral and cash being interchanged simultaneously and instantaneously.

“We pay interest per the minute,” said McDermott. “We firmly think this will change the nature of the intraday marketplace.”

Related: Goldman Sachs Starts Coverage of Silvergate Capital With Neutral Rating

See also: Goldman Sachs Plans to Offer Ether Options: Report

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Polkadot, the token for the smart contract blockchain of the same name, rose by more than 70% in just four hours on U.S.-based crypto exchange Coinbase. However, the price on other exchanges followed the larger market sell-off.

The crypto market has experienced a massive sell-off since Monday as bitcoin, the No. 1 cryptocurrency by market cap, plummeted below $30,000 during early trading hours Tuesday in the U.S., for the first time since January. DOT’s price, along with most of the major alternative cryptocurrencies, also declined, sinking as low as $13.04 in the past 24 hours, according to CoinDesk 20 data.

However, DOT’s price was one of the biggest winners of the day on Coinbase; it went as high as $22.80 around 12:00 p.m. ET Tuesday, up more than 70% in four hours, according to data from TradingView and Coinbase.

Related: Market Wrap: Bitcoin Back Above $30K in Volatile Trading Session

A spokesperson from Coinbase told CoinDesk the team is currently investigating what happened, and said the price discrepancy of DOT between Coinbase and other major exchanges is likely due to the “send and receive” function being disabled as part of “the incident.”

The San Francisco-based crypto exchange also moved the DOT/USD and DOT/BTC trading pairs on its professional platform Coinbase Pro into limited-only mode at 1:35 p.m. ET as a result of the incident.

DOT/USD and DOT/BTC “were moved to limit only to dampen (sic) expected volatility as the asset price reverts to parity with other exchanges once the incident is resolved,” the spokesperson said.

There was an incident regarding DOT trading on Coinbase on June 20, but according to both the website and the spokesperson, a fix was implemented on June 21. The U.S. crypto exchange giant started offering DOT trades on June 16.

Related: MicroStrategy’s Most Recent Bond Drops Below Par as Bitcoin Sells Off

At press time, DOT is changing hands at $15.17 on Coinbase, consistent with its price showing on CoinDesk 20.

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A recent large-dollar funding round by Securitize signals that security tokens may be poised for a comeback.

If so, more private companies will bypass traditional initial public offerings (IPO) and instead use blockchain technology to digitize the capital-raising process. Some in the industry now go so far as to predict a sixfold increase in the total dollars raised using such funding methods over the next four years.

Securitize, which helps private companies raise money by issuing tokens, completed a $48 million Series B fundraising round on Monday. Morgan Stanley and Blockchain Capital co-led the round, which was oversubscribed.

Related: Securitize Raises $48M in Funding Round Led by Morgan Stanley, Blockchain Capital

While this niche failed to live up to the hype of the 2017-2018 cryptocurrency boom, several firms interviewed by CoinDesk said they expect the security token industry to finally take off on a global scale, citing strong demand from issuers and investors. Security tokens are digitized versions of traditional instruments such as stocks and bonds. Some even expect this industry to surpass the market volume for cryptocurrencies in the next five years.

In terms of proceeds, the global security token market could reach $3 billion by 2025, growing at 56.9%, compounded annually, according to security token marketplace Area2Invest.

“Two years ago, there was no infrastructure for a security token marketplace: no licensed platforms, broker-dealers, and no transfer agents,” said Max Dilendorf, a crypto lawyer at Dilendorf Law in New York.  “The U.S. Securities and Exchange Commission’s (SEC) recent approval of Securitze as a transfer agent is yet another sign that the industry is prepared for take-off.” 

Shunning IPOs

A security token offering can give companies room to remain private longer and expand their investor base without the burdens of being a public company, proponents say.

Related: The Infinite Tomato Economy

“The shine has come off launching an IPO. Companies are staying private longer and most of a company’s value is generated when it is private and young,” said Carlos Domingo, CEO of Securitize.

In May, crypto wallet provider Exodus concluded a $75 million offering of its Class A common stock using security tokens.

The offering came after the SEC’s decision to raise the Regulation A limit, allowing companies to raise up to $75 million in a 12-month period for individual investors, generally only permitted for accredited and institutional investors in traditional capital raising methods.

Due diligence required

However, not all security tokens are quality offerings.

“Investors are judging unique offerings based on the expected return on investment,” said Dave Hendricks, CEO of Vertalo, an Austin, Texas-based startup that helps issue and manage digital securities. “Many of the early security token offerings were micro-funds (sub-$10 million market cap). Founders decided that issuing a security token would attract a class of investors that were more interested in how the security was formatted rather than the underlying quality of the offering.” 

Despite optimistic projections, market participants caution that widespread adoption of security tokens will take time.

“Adoption of security tokens has been slower than we originally anticipated as regulatory view and market adoption takes time,” wrote Saum Noursalehi, CEO of tZERO, a provider of blockchain technology for security tokens. Still, there are early signs of growth. For example, tZERO noted a recent uptick in issuer interest with $54 million traded on the platform in 2020, up from $5 million in 2019, according to the company, in an email to CoinDesk.

And others are seeing even more activity, indicating what could be ahead. Dilendorf Law has “$1 billion in tokenized securities in the pipeline, seeing major players enter the game looking to fundraise on a global scale,” according to the law firm.

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First Arbitrum, now Optimism.

A pair of Ethereum scaling solutions will be supported by Alchemy, the developer platform announced Tuesday. Optimism’s mainnet launch is set for July. 

Gas fees and transaction speeds have been a recurring hurdle for Ethereum users and stymied the network’s ease of use. At times transactions on Ethereum cost more to execute than the value of the transaction itself. This has led to a search for alternative layer 2 solutions, resulting in projects like Polygon and Matter Labs’ zkSync pulling in major funding rounds. 

Related: Why Ethereum’s Price Is Built on Firmer Ground Than Bitcoin

Optimism itself has been a beneficiary of this search, raising $25 million in February in a round led by VC giant Andreessen Horowitz.

“Layer 2s are becoming a practical and imminent way to reduce the biggest pains Ethereum users have,” said Alchemy Product Manager Michael Garland. “Alchemy’s partnership is playing a huge role in getting the technology adopted by the biggest applications.”

Using optimistic rollups, Optimism’s gas costs are 35 times cheaper than Ethereum’s.

Why Optimism? 

Optimism uses rollup technology to help scale Ethereum apps. A rollup is a sidechain aggregation of transactions in a smart contract that will settle to the mainchain at some future point. The “rollup” aspect refers to the way the sidechain bundles many transactions to be committed to the mainchain.

Related: Market Wrap: Bitcoin Slides to Two-Week Low, Ether to Below $2K as China Reiterates Crypto Ban

Optimism, previously known as Plasma Group, was a pioneer in “optimistic rollups,” meaning that state changes are first published with minimal inspection and fraud checking, allowing for additional speed. Any user can flag invalid updates, though, with the transgressor being punished by the protocol. 

When asked what made Optimism stand out from other layer 2 solutions, Alchemy’s Garland said the biggest difference is in how Optimism resolves fraud.

“Optimism uses a mechanism that makes fraud proofs much quicker,” he said. 

More layer 2s to come

Garland said this won’t be the last layer 2 Alchemy supports. Consider this a continuation of meeting developers where they are when it comes to making tech adoption less onerous, he said. 

“Optimism has a ton of high-profile projects like Uniswap and Synthetix committed or already using their network, plus there’s a lot of excitement among the rest of the developer community for Optimism,” he said. 

The Optimistic Virtual Machine (OVM) is compatible with the Ethereum Virtual Machine (EVM), which means Ethereum developers can migrate existing smart contracts without them breaking.

“Alchemy is a world class engineering team providing critical infra support to the Ethereum ecosystem,” Jinglan Wang, CEO and founder of Optimism, told CoinDesk via email. “We’re so stoked to have their support on this insane journey to the wild west of technology.”

Alchemy is said to power 70% of the top Ethereum applications and over $30 billion in on-chain transactions.

“Optimistic Ethereum is poised to have a massive impact on the blockchain world with transformational tech,” said Alchemy CEO Nikil Viswanathan. “We’re excited to help power the ecosystem’s growth.”

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While headlines from the blockchain industry have recently been dominated by Bitcoin, the biggest story in the space has still largely been overlooked (or missed) by most news outlets: the rise of DeFi, or Decentralized Finance.

The upcoming IPO debut of two hydro powered renewable energy crypto mining companies on Nasdaq could turn out to be good news for those bullish on crypto and the overall market, especially as Bitcoin struggles to recover.

The total open interest in the bitcoin futures market is sitting at $11.3 billion, down 59% from its April 13 peak of $27.3 billion according to Arcane Research. 

The report said the downward trading indicates that institutional investors are being “cautious” at the moment. It also notes that three-month futures in bitcoin are in backwardation, meaning they are traded at a discount to current spot prices. That is generally perceived to be a bearish signal. 

Open interest on the Chicago Mercantile Exchange (CME) as a share of total bitcoin futures was climbing at the end of May, but is now trading downward. The CME’s open interest is currently sitting at 12.2% of the bitcoin futures market, according to the report. That puts it in fourth place, behind retail platforms Binance (22.5% of total open interest), OKEx (14%) and Bybit (12.9%).

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“I think it’s safe to say that institutional interest has waned,” said Nathan Cox, chief investment officer at Two Prime. Cox said that institutions remain “hungry” for crypto as a whole, but their ability to step in is limited by the recent volatility in the market. 

Meanwhile, some note the decline in futures activity indicates that other market participants are also stepping back. 

“What this shows is a lot of retail traders got burned when the market started to come lower,” said Patrick Heusser, head of trading at Crypto Finance AG.

Nonetheless, Two Prime’s Cox remains optimistic that larger investors will buy the dip. 

Related: Why Ethereum’s Price Is Built on Firmer Ground Than Bitcoin

“As things stabilize I would expect to see large institutions announce positions, likely being accumulated into this pullback,” he said. 

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CipherTrace, a security firm that tracks crypto crimes, has closed a $27.1 million Series B round of funding led by Dan Loeb’s Third Point Ventures, CoinDesk has learned. 

The fundraising round was also backed by early investors Neotribe, Acrew Capital and Seraph Group.

A representative for Third Point Ventures, which received a CipherTrace board seat, confirmed its participation in the funding, in an email to CoinDesk. Loeb’s investment companies have now backed three crypto startups, including Bitwise and eToro.

Related: Visa, PayPal Join Crypto VC Blockchain Capital’s New $300M Fund

CipherTrace plans to double its 100-person operation by June 2022 as it tries to capitalize on the growing market for crypto intelligence. It’s hardly alone in the field. TRM Labs and Chainalysis have raised capital in the last three months, Blocktrace unveiled a new software product on Monday, and Elliptic announced today that it has completed a pilot project with Santander, Spain’s largest bank, to detect suspicious activity. 

“It’s a good time to be in our space,” CipherTrace CEO Dave Jevans told CoinDesk in an interview. He said he has had 12 months of steady business from asset recovery and insurance companies, and is looking to banks next. “We’re seeing a lot of growth in basically everything we’re doing now.”

CipherTrace sells compliance tools to crypto exchanges, government investigators and banks. It compiles intelligence on wallets to help organizations track transactions, but doesn’t share data on individuals.

Jevans said it’s up to the courts to unmask individual wallet-holders; his company just helps investigators move from point A to B. 

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Rolling out specialty intelligence software has been one recent CipherTrace strategy. It launched a sanctions compliance platform for decentralized finance (DeFi) projects in April as the market for tools used to comply with the Financial Action Task Force “travel rule” is “really heating up,” Jevans said. The global financial watchdog announced rules in 2019 to combat the use of cryptcurrencies in money laundering and funding for terrorists.

Another target area has been privacy coins. CipherTrace claims it can occasionally break through the veil of secrecy of monero, a cryptocurrency that has been used by criminals. Jevan said that while his team is “supportive of the monero project,” he insisted the privacy coin is doomed to fail without some degree of oversight and noted that blockchain tracing and compliance tools are necessary if cryptocurrency is going to flourish.

“We’re not gonna get the next billion people into the market without these tools,” he said.

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The Norwegian Financial Supervisory Authority (FSA) said Tuesday there is a need for a legal framework if cryptocurrency is to become a suitable form of investment for consumers.

• In a post, the FSA said cryptocurrencies received increased attention recently along with significant criminal activity. In addition, the high volatility associated with crypto creates a high risk of loss, the authority said.
• The regulatory body stressed the cryptocurrency market remains largely unregulated and consumer protections are needed.
• In September 2020 the European Commission presented a proposal for regulation of the crypto market, but the rules won’t be in place for several years, the FSA noted. 
• “Until such regulations are in place, anyone considering trading in cryptocurrency should think carefully and understand the significant risk that such investments entail. Consumers who want to try this with open eyes should not invest more than they can afford to lose,” said the FSA.

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Digital asset bank Wyoming Deposit & Transfer (WDT) has been awarded a bank charter by the Wyoming Division of Banking allowing the bank to provide commercial banking and custodial services for tokenized assets and digital currencies.

• The Wyoming Special Purpose Depository Institution (SPDI) charter provides a regulatory framework to support digital asset banking activities.
• WDT said it is the third charter of this type to be awarded.
• In September, cryptocurrency exchange Kraken became the first entity to secure a bank charter from the state. The second charter was issued to Avanti Bank in October.
• “We are pleased to have worked closely with the Wyoming Division of Banking to unite the goals of the Wyoming Legislature and regulators with the urgent need for fiduciary institution access to a qualified and regulated digital asset custodian and transfer agent,” said WDT CEO Julie Fellows.
• Gov. Mark Gordon disclosed he owns cryptocurrencies during an appearance at CoinDesk’s Consensus 2021 in May.

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A pair of nominees for the U.S. Treasury Department pledged to, if confirmed, ensure new anti-money laundering (AML) regulations involving cryptocurrencies would be implemented.

President Joe Biden (D) nominated Brian Nelson to be Under secretary for Terrorism and Financial Crimes and Elizabeth Rosenberg to be assistant secretary for Terrorist Financing earlier this year. The Senate Banking Committee held a confirmation hearing on Tuesday to debate their nominations, addressing different issues around financial crimes and whether or not crypto plays a role.

In response to Sen. Catherine Cortez Masto (D-Nev.) asking the nominees how they would limit the damage from crypto-related crimes, Nelson noted the Anti-Money Laundering Act of 2020, a bill passed into law last year, already tasks the Financial Crimes Enforcement Network (FinCEN) with applying new crypto-related regulations.

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“Obviously this is an issue that was [and] has been a great concern for some time now, and it’s reflected in the new Anti-Money Laundering Act that this committee really championed,” he said. If confirmed he said he “would prioritize implementing pieces of that legislation including new regulations around cryptocurrency.”

The Treasury Department’s Terrorist Financing and Financial Crimes office would have to work with its international partners to address crypto crimes, he added.

Likewise, Rosenberg noted that international cooperation is needed to tackle cryptocurrency-related crimes. She said she would “seek to ensure” that any cryptocurrency regulations are both appropriate and consistent across different jurisdictions.

Part of TFFC’s mission is to coordinate with international offices to ensure different nations all have similar regulatory regimes, she said.

Related: US Treasury Calls for Businesses to Report Crypto Transfers of More Than $10K to the IRS

“Without that kind of collaboration and … regulatory framework, it’s all too easy for criminals to avoid the U.S. jurisdiction and conduct their illegitimate activity from another jurisdiction,” she said.

The nominees’ comments reflect a growing level of scrutiny around the role cryptocurrencies play in different sorts of crimes. Treasury Secretary Janet Yellen repeatedly brought up concerns around crypto use in terrorist financing during her own confirmation process, and recent ransomware attacks have drawn further attention to cryptocurrencies.

“It reflects a balancing of regulating to prevent virtual currency and other types of new technology from undermining our AML system while also being respectful of the fact that we need to support responsible innovation and preserve that here in the U.S. and not see that leave the country,” Nelson said.

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“In fact, nearly every single Western search engine is nothing more than Google or Bing search under a different name, a so-called skin. Because we don’t rely exclusively on Big Tech search engines under the hood as other private search engines do, we’re able to give our users the privacy guarantees they expect from Brave products.”

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Shares of MicroStrategy are falling Tuesday, dragged down by the collapse in the price of bitcoin (BTC), the cryptocurrency the firm’s CEO has bet the business-intelligence software company’s future on – a wager that could soon become a money-losing one if bitcoin drops much further.

• MicroStrategy exploded onto the crypto scene last summer after CEO Michael Saylor used the company’s treasury reserves to buy bitcoin. And then he bought some more. And so on. And so on. At last count, the firm held some 105,085 bitcoins, making the firm by far the cryptocurrency’s largest known corporate holder.
• Up until a little more than two months ago, with the bitcoin bull market in full swing, that bet was paying off handsomely. Now, not so much. After reaching an all-time high of more than $64,000 in mid-April, the price of bitcoin has more than halved for several reasons, including concerns about the environmental impact of mining for bitcoin, a crackdown on crypto by China and fears of a hostile regulatory climate in the U.S.
• With the price of bitcoin currently at around $29,000, it’s about $3,000 per coin above the average price of $26,080 that Saylor shelled out for his bitcoin. Should bitcoin fall below that, MicroStrategy’s bitcoin gamble would become a money-losing one.
• As it is, if bitcoin doesn’t rebound in a big way by the end of June, MicroStrategy would be forced to write down even the bitcoin it bought just a few days ago.
• On Monday, the company said it had bought 13,005 bitcoin for $489 million at an average price of $37,617, including transaction costs. If the current Q2 were to close right now with bitcoin trading at about $29,000, MicroStrategy would need to write that purchase down by about $96 million.
• It’s not just shareholders who likely aren’t happy with Saylor right now. In addition to using cash flow to buy bitcoin, MicroStrategy has sold debt – some of it convertible – to fund its crypto-buying ways. It also recently said it was going to sell shares to buy more bitcoin, though that currency doesn’t buy what it did even a week ago. This past Friday, shares of MicroStrategy closed at $647.39 a share. In recent trading, they were at $517.93, down 11.26% on the day. In February they hit a 52-week high of $1,315.
• Still, long-time holders know that back in August 2020, when Saylor bought his first bitcoin, the company’s shares were less than $200 apiece.

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Regulated crypto bank Anchorage Digital said Tuesday it will provide custody and staking support for FLOW, the native token of the Flow blockchain.

According to Anchorage President Diogo Monica, the firm’s decision to support FLOW was based on “massive demand” from its institutional clients, who are not only interested in investing in FLOW, but also in products being built on the network.

The Flow blockchain was developed in 2019 by Dapper Labs, the company behind the ultra-successful non-fungible token (NFT) platform NBA Top Shot. After running into congestion on Ethereum with its first NFT hit, CryptoKitties, the firm decided to build its own blockchain.

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To date, NBA Top Shot has been pretty much the only game in town on Flow, though other projects are starting to emerge.

Monica said support from a federally chartered crypto bank like Anchorage offers protocols like Flow legitimacy in the crowded market, as well as other more tangible benefits. 

“There is a lot of other value added here that doesn’t quite come through to the public at large but that exists from us participating in liquidity, providing lending services, providing stable infrastructure, auditing, all these other things,” Monica said. 

Anchorage now supports over 60 digital assets, including FLOW.

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PayPal and Visa are chasing bets across the crypto industry as partners in Blockchain Capital’s fifth venture fund, a $300 million war chest announced Tuesday.

The increasingly crypto-savvy companies are relative newcomers to crypto VC. While both have invested directly in a handful of crypto startups, joining as limited partners (LPs) means an outside manager will place broader equity investments on their behalf. PayPal confirmed to CoinDesk this is its first such arrangement with a crypto VC firm.

Blockchain Capital is one of older and larger crypto-native venture capital firms with over $1.5 billion under management, General Partner Spencer Bogart told CoinDesk. He said the firm’s fifth fund also received backing from pension funds and university endowments but declined to name additional LPs. 

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By Bogart’s telling, the payments giants are hungry for bolder investment opportunities across an industry they believe in but need the help of a “field guide” to fully navigate.

“There’s nothing better than walking an early-stage startup into the likes of a Visa or PayPal and helping them secure a commercial agreement, and helping make sure that on Visa and PayPal’s side, they have solutions for the products that they want to launch,” he said.

Bogart said the LP route gives these firms indirect equity upside while also getting an early read on startups for partnership deals.

PayPal also sees it that way. “Investing in Blockchain Capital’s new fund allows us to engage with and learn from entrepreneurs driving the future of digital currencies and blockchain,” PayPal crypto lead Jose Fernandez da Ponte said in a statement.

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Blockchain Capital is looking to scatter this $300 million in early-stage gems – “not exactly the Coinbases and the Krakens of the world just yet,” said Bogart. It began deploying capital over 12 months ago but most of its new fund is waiting. (Coinbase, Kraken, Anchorage and OpenSea are previous Blockchain Capital investments.)

The new fund is maintaining a focus on crypto infrastructure plays like startups building to support decentralized finance (DeFi) and non-fungible tokens (NFTs) while avoiding the assets themselves, Bogart said.

Blockchain Capital’s fourth fund, announced in March 2018, clocked in at $150 million.

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Bitcoin dipped below the long-held support at $30,000 on Tuesday, hitting the lowest level since Jan. 28.

The cryptocurrency traded at $29,700 shortly before press time, bringing the year-to-date gain down to just 3%, according to CoinDesk 20 data.

The drop comes a day after the People’s Bank of China ordered the country’s major financial institutions to stop facilitating crypto transactions and signals an end of the four-week-long consolidation between $30,000 and $40,000.

Related: MicroStrategy Falls With the Bitcoin It Holds; Breakeven Point Looms

The market looks south with demand-side pressures weakening in the wake of regulatory fears and the Federal Reserve’s recent hawkish tilt, analysts told CoinDesk.

“There’s no direct evidence showing people in China are buying the BTC dip. As shown in the ChaiNext tether (USDT) OTC index, the value hovered at 99 for the last few weeks in June, which shows a slight discount in trading USDT,” Matthew Lam, an analyst at crypto exchange OKEx, said.

“There is little evidence of dip demand. People are still sidelined,” Amber Funds said in a Telegram chat.

Bitcoin price drop

Bitcoin peaked above $64,000 in mid-April and fell by 35% in May on the back of concerns regarding the negative environmental impact of cryptocurrency mining and renewed regulatory crackdown in China.

Related: Bitcoin Finds Support at $30K; Faces Resistance at $36K

Last week, the Federal Reserve unexpectedly brought forward the timing of the first interest rate hike to 2023, adding to bearish pressures around the cryptocurrency.

While bitcoin is down 8% on a 24-hour basis, other major coins like ether, XRP, and cardano are nursing 10%-20% losses. Dogecoin, the joke cryptocurrency, is trading 25% lower.

As such, bitcoin’s dominance rate, or the top cryptocurrency’s share in the total market, has hit one-month highs above 47%, per data source TradingView.

Matthew Dibb, COO, and co-founder of Stack Funds, foresees a further rise in bitcoin’s dominance rate.

“I personally think the best trade right now for crypto (regardless of direction) is long bitcoin dominance or short alternative cryptocurrencies against bitcoin,” Dibb told CoinDesk.

“If the market falls, bitcoin should fall less than altcoins (we are seeing that recently),” Dibb said. “If the sentiment recovers, bitcoin will go up more than altcoins.”

• The absence of a quick recovery above $30,000 may bring more chart-driven selling.
• Key support is now located at $27,000, below which the focus would shift to the early December highs around $19,900.

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The fight for clean energy–powered cryptocurrency mining moved forward Tuesday as Stronghold Digital Mining, a digital asset miner powered by alternative energy, announced a $105 million funding round.

The raise comes from two private placements of equity securities, with investors being granted registration rights that require a future public listing, Stronghold told CoinDesk. Investors include MG Capital, various family offices and Greg Beard, a former senior partner at private equity firm Apollo Global Management. Beard is listed as Stronghold’s co-chairman and CEO.

The Pennsylvania company converts waste coal, a material left over from coal mining, into power used to mine bitcoin and other cryptocurrencies. Defined as a Tier II alternative energy source by state regulators, waste coal is equivalent to hydropower in its environmental impact. The company estimates that for each bitcoin mined, 200 tons of waste coal is eliminated.

Related: Market Wrap: Bitcoin Slides to Two-Week Low, Ether to Below $2K as China Reiterates Crypto Ban

“A negative impact on the environment has long been a criticism of Bitcoin mining, with good reason,” Beard said in a statement, adding: 

“Our ownership of the Scrubgrass Plant [in Kennerdell, Pa.] combined with the environmental benefits which accrue to the region allow us to mine bitcoin at what we believe to be some of the lowest costs in the industry while making a transformational contribution to the environment.”

The company describes itself as a “vertically integrated” miner, meaning that in addition to owning its own mining hardware, it also owns a power plant. The setup (minus the waste coal) is reminiscent of mining firm Greenidge Generation in neighboring New York state. 

The bitcoin mining industry’s carbon footprint has come under increased public scrutiny in recent months. In mid-May, Elon Musk announced his company, Tesla, would no longer accept bitcoin as a payment method citing environmental concerns. Musk later said Tesla would resume payments once the mining industry reached 50% clean energy usage. 

Related: Facts and Misinformation About ‘Green Bitcoin,’ With Jonathan Koomey

Earlier this month, Sen. Elizabeth Warren (D-Mass.) publicity criticized bitcoin for its negative environmental impact.

In promoting itself as an “ESG-friendly” mining firm, Stronghold seeks to at least complicate the narrative around bitcoin’s environmental cost.

“Coal waste fires have been wreaking havoc in my home state of Pennsylvania for the last hundred years,” Stronghold co-Chairman Bill Spence said in a statement, adding:

“Simply put, we employ 21st century crypto mining techniques to remediate the impacts of 19th and 20th century coal mining in some of the most environmentally neglected regions of the United States.”

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Crypto custody provider Fireblocks is being sued by a company claiming it lost access to more than $70 million worth of ether, according to a report by Calcalist. Fireblocks said it is investigating the issue.

• Crypto staking platform StakeHound filed a lawsuit against Fireblocks at the Tel Aviv District Court on the grounds of alleged negligence, Calcalist reported Tuesday.
• A Fireblocks employee allegedly did not protect or back up the private keys to a digital wallet, which were then deleted, preventing StakeHound from accessing its assets.
• “This is a human error committed by an employee of the defendants, who worked in an unsuitable work environment,” the filing said, according to Calcalist.
• “The defendant irrevocably lost access to the plaintiff’s digital assets, which were deposited in an e-wallet provided by the defendant, causing the loss of 38,178 of the plaintiff’s ETH coins,” equivalent to nearly $72 million at the time of writing.
• In response, Fireblocks said, “We are actively investigating the situation and assisting all parties involved to resolve the issue,” in a statement on its website.
• “All Fireblocks’ customers’ funds are safe, and customer keys are backed up and recoverable,” the statement said. In this case “the keys were generated by the clients and stored outside the Fireblocks platform.”

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The sell-off in bitcoin (BTC) has been stabilizing around $30,000 support since Monday, which could attract short-term buyers. Upside appears limited near the $36,000 resistance level given the near three-month downtrend.

Bitcoin was trading around $31,700 at press time and is down about 22% over the past seven days. Sellers remain in control, which could cap upside moves this week.

• The relative strength index (RSI) registered an oversold reading on May 19. Since then, buyers have defended support around $30,000.
• Upside momentum is weak, evidenced by several weeks of consolidation below $41,000 resistance.
• The RSI on the weekly chart is not yet oversold, meaning sellers have not yet capitulated.
• Lower support is seen around $27,000, which is a 61% retracement of the March 2020 low.

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