CoinDesk Crypto

The central bank of Nigeria (CBN) has clarified a statement it issued last month that seemed to order financial institutions to shut down all accounts associated with cryptocurrency trading.

According to a report on Sunday, bank officials have said the directive is not to be mistaken for an outright ban. Instead, the bank said it has reiterated an already imposed 2017 ban on institutions facilitating cryptocurrency transactions.

Speaking on behalf of the bank’s chief, Godwin Emefiele, deputy governor Adamu Lamtek said the bank had never banned cryptocurrency activity in the country.

Related: India May Block IP Addresses of Crypto Exchanges: Report

The CBN did not place restrictions from use of cryptocurrencies and we are not discouraging people from trading in them, said Lamtek. “What we have just done was to prohibit transactions on cryptocurrencies in the banking sector.”

Lamtek was speaking at the 30th seminar for Finance Correspondents and Business Editors held in the country’s capital, Abuja.

Confusion arose last month when the CBN said it was reminding regulated banking institutions that “dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.” Institutions were told to “identify persons and/or entities” transacting with cryptocurrency or operating crypto exchanges.

That prompted many bitcoin users in the inflation-hit nation to take to social media in anger, seeking clarification on the bank’s order. In response, the CBN provided a five-page statement that included a pledge to protect Nigerian citizens from the risks of cryptocurrencies. 

Related: Bidding on NFT of First-Ever Tweet Ends Today; Top Offer Remains at $2.5M

See also: Nigerians Turn to Stablecoins for Protection Against Inflation

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The auction on a tokenized version of the first tweet ever sent is due to end in a few hours with a top bid of $2.5 million, where it’s been stuck for more than two weeks.

• The first-ever tweet was sent by Twitter founder and CEO Jack Dorsey 15 years ago today:

• Earlier this month, Dorsey called attention to a tokenized version of that tweet on the non-fungible token (NFT) platform Valuables.
• Even though the tweet was minted in December 2020, Dorsey’s action ignited a brief bidding war between Justin Sun, the founder of TRON and the CEO of BitTorrent, and Sina Estavi, whose LinkedIn profile describes him as CEO of Malaysia-based (and TRON-affiliated) Bridge Oracle.
• Estavi’s $2.5 million offer has been the high bid since March 6.
• While there was initial skepticism as to whether Dorsey would actually “sell” the NFT of the tweet, on March 9 he said via tweet (how else?) that the auction would end on March 21 and that he would accept the winning bid.

• GiveDirectly is a non-profit organization that specializes in giving direct cash transfers to low-income people, without strings attached. “Africa response” in Dorsey’s tweet likely refers to its “COVID-19 Africa Response” campaign.
• Given Twitter is based in San Francisco, it’s possible Dorsey won’t consider the auction over until midnight West Coast time.  

• Crypto Long & Short: Bitpanda’s Raise Is About More Than Market Infrastructure
• AMD, Unlike Nvidia, Won’t Try to Block Crypto Miners From Using Its Chips: Report
• Scaramucci Says More Companies Should Be Holding Bitcoin on Their Balance Sheets
• Hal Finney’s ‘Bitcoin and Me’

Chipmaker Advanced Micro Devices said it’s not going to restrict its graphics cards from being used for mining cryptocurrencies after rival Nvidia installed a limiter on some of its chips to prevent their use in mining ether, according to a report in PC Gamer.

• “The short answer is no,” PC Gamer quoted a product manager at AMD as saying regarding a potential mining limiter during a call.
• That stance is in contrast to Nvidia which last month installed a limiter to ensure its GeForce RTX 3090 graphics cards “end up in the hands of gamers” instead of cryptocurrency miners after gamers complained how mining demand was causing shortages.
• Of course, AMD may not have had much of a choice in not trying to limit how its chips are used. Not only is Nvidia’s 24GB GeForce RTX 3090 the best GPU chip for mining, because AMD’s drivers are all open-source, it limits the company’s control over them, PC Gamer noted.

• Bidding on NFT of First-Ever Tweet Ends Today; Top Offer Remains at $2.5M
• Crypto Long & Short: Bitpanda’s Raise Is About More Than Market Infrastructure
• Scaramucci Says More Companies Should Be Holding Bitcoin on Their Balance Sheets
• Hal Finney’s ‘Bitcoin and Me’

More companies should be holding bitcoin on their balance sheet due to the explosive growth of the U.S. monetary supply, former White House Communications Director and hedge fund founder Anthony Scaramucci said on CoinDesk TV.

• In a wide-ranging interview, the founder of SkyBridge Capital on Friday called the increase in the money supply a “silent tax on American savers.”
• “A responsible CFO or responsible treasurer will have to think about other assets to hold as a potential story of value for their companies.”

Also in the interview:

• The reason he’s so bullish on bitcoin is that it’s a “solution” to the undercutting of the Bretton Woods agreement that back in the early 1970s. Bitcoin has the potential to “start to standardize money again and that will be better for the working poor and the middle class.”
• Because of this, bitcoin could quite possibly one day be the currency of the world someday unless the U.S. dollar becomes digitized and is “no longer going to be influenced by politicians and policymakers.” But that would need to happen quickly, he said.
• SkyBridge now holds more than $600 million in bitcoin.
• Asked he if sees SkyBridge having an Ethereum-based product some day, Scaramucci said “Yes, I see that happening.
• Asked if he’s looking at decentralized finance, Scaramucci said, “Yes, so stay tuned.”
• He’s even more optimistic about the price of bitcoin than his year-end prediction of $100,000 would indicate but won’t change his forecast to avoid making this clients think he’s crazy. “I think they’ve grown to think that I am nuts.”
• His foray into politics has hurt him with both Republicans and Democrats but if his fund keeps performing it will cease to matter, noting his core fund is up almost 40% since last April and up 12 1/2% year to date. “I think if we continue to perform like that I think people are going to become indifferent to my political views.”
• Scaramucci registered SkyBridgeBitcoin.com the day after he was fired from the White House.
• He likes bitcoin at $20,000, $30,000 more than he liked it at $400 “because of the scaling nature of it.”
• He’s less worried about former U.S. President Trump’s negative views on bitcoin than he is about U.S. Treasury Secretary Janet Yellen, U.S. Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde all of whom have said negative things about bitcoin.

• Hal Finney’s ‘Bitcoin and Me’
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Innovative areas within cryptocurrency such as decentralized finance (DeFi) are firmly on the radar of global regulators, according to draft guidance released on Friday by the Financial Action Task Force (FAFT), a global anti-money laundering (AML) body.

As well as clarifying its wording on decentralized exchanges (DEXs), the mechanisms that power DeFi platforms and apps, the FATF also made an oblique reference to non-fungible tokens (NFTs) that are exploding in popularity.

NFTs and DeFi present added challenges to FATF, which is already struggling to graft AML rules onto pseudonymous-by-design transactions in the flourishing cryptocurrency industry.

Related: Coinbase Delays Highly Anticipated Direct Listing to April: Report

When it comes to DeFi platforms, the FATF said its standards may not apply to the underlying software or technology, but entities involved with the “DApp,” such as owners or operators may now be considered virtual asset service providers (VASPs) – regulator-speak for crypto entities that must meet the same AML requirements as traditional finance. So, it’s a clear shot across the bows of DeFi founders, investors and VC firms. 

As well as adding clarity on DeFi, the FATF guidance makes a careful change of terminology, which appears to nod in the direction of NFTs.

A specific reference to “assets that are fungible” – which has important implications in light of the current NFT craze – has been replaced by “assets that are convertible and interchangeable,” pointed out Siân Jones, senior partner at XReg Consulting.

“NFTs that can be converted or exchanged for fiat currency or other virtual assets were always in scope, and remain so,” said Jones, the driving force behind the widely adopted AML data-sharing standard, IVMS101. “Some terms that were capable of being construed by stakeholders in ways that FATF had not originally intended have been replaced by language that more closely expresses the FATF’s intentions.”

Related: Why Kentucky Is Trying to Become a Crypto Mining Hub

In a blog post summarizing the key points of the new guidance, blockchain analytics form CipherTrace concluded that only NFTs that can facilitate money laundering and terrorism financing are “virtual assets” in the eyes of the FATF.

“Some non-fungible tokens (NFTs) that may not initially appear to constitute VAs may in fact be VAs due to secondary markets that enable the transfer or exchange of value or facilitate money laundering, terrorist financing, and proliferation financing,” said CipherTrace.

• First Advisor, Scaramucci-Led SkyBridge Team Up to File for Bitcoin ETF
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Cryptocurrency exchange Coinbase’s highly anticipated public offering has been shifted to April after its plan for a March listing “slipped,” according to a Bloomberg report citing people familiar with the matter.

• No reason was given for the delay, but Bloomberg noted the U.S. Securities and Exchange Commission (SEC) has been reviewing the San Francisco-based exchange’s plan for a direct listing.
• Coinbase formally announced its plans to go public on the Nasdaq in January and this past week registered for as many as 114.9 million shares to be traded.
• Coinbase Class A shares will debut on the Nasdaq Global Select Market under the ticker “COIN.”
• CoinDesk reached out to Coinbase but did not receive a response by press time.
• Yesterday, it was announced Coinbase will pay $6.5 million in a settlement with the Commodity Futures Trading Commission (CFTC) over allegations the exchange “self-traded” digital assets between 2015 and 2018.

Read more: Coinbase Is Going Public: Everything You Need to Know

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• Coinbase Settles With CFTC for $6.5M Over Old Trading Practices
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First Trust Advisors and SkyBridge Capital, the hedge fund run by former White House Communications Director and recent bitcoin convert Anthony Scaramucci, have become the latest firms to seek to offer a bitcoin exchange-traded fund (ETF).

• In an S-1 filing with U.S. Securities and Exchange Commission (SEC) Friday, the firms applied to be able to offer the “First Trust SkyBridge Bitcoin ETF Trust.” First Advisor would be the adviser to the ETF, and SkyBridge would serve as the sub-adviser. Shares would trade on NYSE Arca, the filing said.
• The two firms are just the latest to file for an ETF. This bull run’s regulatory rush has seen WisdomTree file for a bitcoin ETF in March, NYDIG in February, Valkyrie in January and VanEck in December.
• Grayscale appears to be gearing up for an ETF product of its own. The crypto asset manager might apply for a new one or convert its existing bitcoin Trust into an ETF. The digital asset investment firm is owned by CoinDesk parent company Digital Currency Group.
• The flood of applications comes as the SEC is widely expected to approve the first bitcoin ETF this year.

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First Trust Advisors and SkyBridge Capital, the hedge fund run by former White House Communications Director and recent bitcoin convert Anthony Scaramucci, have become the latest firms to seek to offer a bitcoin exchange-traded fund (ETF).

• In an S-1 filing with U.S. Securities and Exchange Commission (SEC), the companies applied to be able to offer the “First Trust SkyBridge Bitcoin ETF Trust.” First Advisor would be the advisor to the ETF while SkyBridge would serve as the sub-advisor. Shares would trade on NYSE Arca, the filing said.
• The two companies are just the latest to file for an ETF. This bull run’s regulatory rush has seen WisdomTree file for a bitcoin ETF in March, NYDIG in February, Valkyrie in January, and VanEck in December of last year.
• Grayscale appears to be gearing up for an ETF product of its own. The crypto asset manager might apply for a new one or convert its existing bitcoin Trust into an ETF. The digital asset investment firm is owned by CoinDesk parent company Digital Currency Group.
• The flood of applications comes as the SEC is widely expected to approve the first bitcoin ETF this year.

• Coinbase Settles With CFTC for $6.5M Over Old Trading Practices
• Stimulus Checks, Bitcoin ETFs and Institutional Investment: Bitcoin’s Week in Review
• Is Bitcoin Due for a Price Correction?
• Bitcoin Pioneer Diego Gutierrez Zaldivar on the Crypto Outlook in Latin America

Crypto exchange Coinbase will pay $6.5 million in a settlement with the Commodity Futures Trading Commission (CFTC) over allegations the exchange “self-traded” digital assets.

According to a consent order published by the commodities regulator Friday, Coinbase self-traded a small amount of cryptocurrency between 2015 and 2018 through two of its automated trading programs. A now-former employee of the exchange also allegedly wash traded some amount of litecoin around that time period as well.

One of these programs was designed to project how much of any given cryptocurrency Coinbase was expected to sell on its retail brokerage app. The system would then purchase the suggested amount of cryptocurrency through its professional trading division (GDAX, now known as Coinbase Pro) and hold it in the exchange’s treasury.

Related: First Advisor, Scaramucci-Led SkyBridge Team Up to File for Bitcoin ETF

Self-trading is when “the same entity takes both sides of the trade,” a report by the U.S. Treasury Department and several financial regulators said in 2014. This type of market activity could be likened to wash trading, where an entity might pump the volume of an asset to make it appear as if more activity was occurring than in reality.

Importantly, the CFTC is not alleging that any Coinbase customers were harmed or that any wrongdoing occurred. Rather, it’s describing the activity as reckless but not intentional. This activity is no longer occurring, the CFTC said Friday.

Coinbase appears to have disclosed the investigation’s existence in its Form S-1, which the company filed ahead of publicly listing its shares on Nasdaq.

The CFTC began investigating “trades made in 2017 by one of the Company’s then-current employees,” according to the S-1. The investigation also included “the design and operation of certain algorithmic functions related to liquidity management on the Company’s platform.”

Related: Stimulus Checks, Bitcoin ETFs and Institutional Investment: Bitcoin’s Week in Review

While the CFTC has conducted other investigations into Coinbase, according to the S-1, including into an Ethereum “market event” and the bitcoin cash listing, this is the only investigation the exchange anticipated would have a “material adverse effect” on its operations.

In a concurring statement published with the settlement, CFTC Commissioner Dawn Stump wrote that while she agreed with the regulator’s findings, she wanted to ensure the public is aware that the CFTC doesn’t regulate spot exchanges.

Coinbase doesn’t offer any derivatives products and is therefore not registered with the agency, she wrote. The activity at the heart of Friday’s enforcement action also doesn’t impact any derivatives covered by the agency.

“The settled charges are based largely on conduct that is several years old, has not been repeated, and in the case of the charge of secondary liability, is based on conduct by an employee who left Coinbase years ago and who is not being charged,” she added.

In a statement shared with CoinDesk, a Coinbase spokesperson said the company neither admits nor denies the findings, but said the order does not find any Coinbase customers were harmed.

“We believe clear, common-sense regulations are needed to provide a stable trading environment for all market participants. Because of this, we proactively engaged with the CFTC throughout their investigation, and we believe that our conversations were constructive and contributed to an outcome that is satisfactory for both parties,” the spokesperson said.

UPDATE (March 19, 2021, 22:00 UTC): Added statements from Coinbase and CFTC Commissioner Dawn Stump.

• Is Bitcoin Due for a Price Correction?
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Convertible central bank digital currencies (CBDCs) offer countries a tantalizing chance to improve vital cross-border payment rails, researchers from the Bank for International Settlements (BIS) wrote in a March note.

Authors Raphael Auer, Philipp Haene and Henry Holden charted one road for cross-border CBDC finance in a detail-heavy research note. They offered a handful of potential mechanisms for multi-CBDC and took some pot shots at the public sector’s inevitable competitor.

The biggest benefits will only come if countries collaborate to eliminate traditional banking frictions for their new, interoperable form of money, the BIS researchers said.

Related: First Advisor, Scaramucci-Led SkyBridge Team Up to File for Bitcoin ETF

The paper balked at Libra’s (now Diem’s) plans to unite the digital payments world under a private entity’s cross-border global stablecoin. Interoperable CBDCs “are preferable” to the Facebook-led Diem project, the authors said, arguing convertible national cryptos “strengthen monetary sovereignty in the digital age” while private cryptos would simply shift the cross-border risks elsewhere.

Nevertheless the paper’s authors empathized with Diem’s desire to simplify cross-border finances. They said an interoperable, central banker-approved system for switching disparate CBDCs about would do a better job.

First, they’d have to convince central bankers that international collaboration on CBDC is worth the trouble. Aided by the fact that few countries have finalized their digital currency plans but troubled by the reality that competing interests abound, they described a long road ahead.

Central banks would have to coordinate on policy, technical standards, data requirements and regulation to establish a viable, linkable system. Authors pointed out that’s easier said than done; establishing the euro payments system took years.

Related: Coinbase Settles With CFTC for $6.5M Over Old Trading Practices

Monetary wonks could opt to build a “common distributed ledger” that houses multiple CBDCs. That’s an even harder lift, though. Multi-currency systems, which typically presage currency unions, are historically tricky beasts made no simpler by thorny issues of governance and access that come with DLT.

The authors said central banks have an opportunity to collaborate on these issues before launching otherwise walled-off CBDC systems. Indeed, only the Bahamas have issued a CBDC so far, leaving a “blank slate” for the rest of the world.

• Is Bitcoin Due for a Price Correction?
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• Bitcoin (BTC) trading around $58,882.38 as of 20:00 UTC (4 p.m. ET). Climbing 2.52% over the previous 24 hours.
• Bitcoin’s 24-hour range: $56,327.79-$59,242.58 (CoinDesk 20)
• BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.

Bitcoin’s price struggled to push higher after briefly touching $59,000 when markets opened in the U.S. on Friday.

Investors continued to monitor the potential fallout from U.S. Treasury bond yields, which some analysts warn could lead to a correction in risky assets from bitcoin to stocks.

The 10-year Treasury note yield went as high as 1.74% on Friday, the highest since January 2020, after the Federal Reserve signaled Wednesday it would keep loose monetary policy for the foreseeable future.

Related: First Advisor, Scaramucci-Led SkyBridge Team Up to File for Bitcoin ETF

“If we continue to see the U.S. bond market questioning the Fed forward guidance, it could lead to more downside pressure in risk assets and start to weigh on bitcoin by extension,” Joel Kruger, cryptocurrency strategist at LMAX Digital, told CoinDesk. “We think this is a risk worth considering, especially with bitcoin already having moved so far and fast in 2021 thus far.”

Price charts also are sending signals the oldest cryptocurrency might be losing steam, with patterns appearing that suggest the market is reaching an overbought condition, according to analysts with Cryptowatch, a unit of the cryptocurrency exchange Kraken.

Read More: Bitcoin Price Gets Fed Boost but Bond Yields Could Play Spoilsport: Analysts

The Fed’s reaffirmation of its pledge to keep monetary policy loose theoretically should benefit bitcoin’s price in the short term. A growing number of investors are betting bitcoin might act as a hedge against inflation. Many Wall Street economists expect inflation will escalate once more people start going out and spur an economic recovery thanks to the coronavirus vaccine. But rising U.S. Treasury bond yields could create extra selling pressure for bitcoin along with traditional risky assets.

Related: Coinbase Settles With CFTC for $6.5M Over Old Trading Practices

“If rates go higher, it will force investors to rethink their long equity exposure and could open a big sell-off in stocks,” Kruger said. “And as things stand in the short term, because bitcoin is still a maturing asset, it still shares correlations with risk sentiment. So bitcoin would be somewhat exposed if something like this played out.”

In the bitcoin derivatives market, options open interest remained high above $14 billion after reaching an all-time high on Wednesday. 

It “indicates that this week’s price rally could be more speculative,” said Yves Renno, head of trading at Wirex, who also noted that the bitcoin December’s futures contract is currently quoted at a much higher price than bitcoin’s spot price.

Read More: Brazil Becomes Second Country in the Americas to Approve a Bitcoin ETF

“If there are no significant events that take place and shake the market again, such as new legislation that would favour the issuance of the first U.S. exchange-traded fund (ETF), or a new large tech player entering the crypto economy, then there seems to be very little fundamental support for a new bitcoin rally in the short-term,” Renno said.

Ether (ETH) was up on Friday, trading around $1,828.06 and climbing 3.20% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

Alternative coins (altcoins) tend to see more price action after bitcoin logs new record high prices.

That happens because some traders and investors try to rotate into altcoins when bitcoin isn’t popping, in pursuit of potentially higher returns.

Read more: This Ether Options Play by Institutions Has Lottery Ticket Potential

Bitcoin has doubled this year, while ether saw more than 140% year-to-date returns, based on CoinDesk 20 pricing.

Notably, the total number of bitcoin locked in decentralized finance, which is largely based on the Ethereum blockchain, saw a sharp increase Friday, up 30% to 33,578 from a day ago, according to data from DeFi Pulse.

Digital assets on the CoinDesk 20 are mostly higher Friday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

• orchid (OXT) + 11.64%
• cardano (ADA) + 6.33%
• chainlink (LINK) + 3.55%
• 0x (ZRX) + 3.24%
• omg network (OMG) + 3.16%

Notable losers:

• cosmos (ATOM) – 2.68%
• xrp (XRP) – 0.44%

Equities:

• Asia’s Nikkei 225 closed in the red 1.41%.
• The FTSE 100 in Europe closed in the red 1.05%.
• The S&P 500 in the United States closed nearly flat, down by 0.060%.

Commodities:

• Oil was up 2.53%. Price per barrel of West Texas Intermediate crude: $61.52.
• Gold was in the green 0.40% and at $1742.67 as of press time.

Treasurys:

• The 10-year U.S. Treasury bond yield climbed Friday jumping to 1.726%.

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One of New York City’s modern art meccas is preparing for a potential future of non-fungible tokens (NFTs), according to a new job posting. 

The Guggenheim Museum wants its next MBA intern to provide an evaluation of non-fungible token (NFT)-based art, which its administrators called a “nascent, fast-growing, highly scalable area of the art world.”

“How will blockchain and crypto currency [sic] change how a museum defines its collection strategy?” the posting mulls.

Related: Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase

The Guggenheim is among the first traditional art museums to begin grappling with the NFT space amid the current market boom. A $69 million Christie’s auction of a Beeple NFT has caught the traditionally stuffy art scene by surprise. Sotheby’s, too, announced its intention to get more involved in the NFT space.

NFTs, which have been around for years, are a method for tracing and transferring digital ownership atop a blockchain network, most commonly Ethereum. They are the crypto world’s equivalent of an artist’s signature and a painting’s provenance.

“In what ways should the Guggenheim extend into a digital experience?” the posting asks of its applicants.

Detractors say NFT energy consumption is bad for the environment or argue the market is a bubble. Proponents claim NFTs democratize art and give creators space to market and profit. Guggenheim is more circumspect, fielding its own thoughts out to the interns.

Related: What Caused the Filecoin ‘Double Deposit’ on Binance?

The Guggenheim Museum did not respond to repeated CoinDesk inquiries.

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Days after being listed on Coinbase Pro, Cardano’s ADA token is available to Coinbase retail traders for the first time.

The San Francisco-based crypto exchange announced the listing Friday:

ADA is currently the third-largest cryptocurrency, with a market capitalization of $41.9 billion, according to CoinGecko.

Related: Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase

Fans of the ADA token have long clamored for a Coinbase listing. The coin is up roughly 3% in the past hour, trading hands at $1.30.

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Over the past year, crypto mining stocks have outperformed bitcoin (BTC), and the trend has accelerated since the cryptocurrency climbed past $20,000 a few months ago, according to the financial research firm FundStrat. The dynamic might hold if bitcoin stays in a bull market, the firm predicts.

• “Bitcoin and the wider crypto market are the modern-age digital gold rush,” wrote FundStrat, which means crypto mining stocks could see further upside.
• Because “miners play such a critical role in ensuring the Bitcoin network functions properly, investors have sought opportunities to gain exposure to mining companies,” which generate revenue in the form of mined bitcoin.
• The largest publicly listed mining companies include Riot Blockchain (NASDAQ: RIOT), Hive Blockchain (OTCMKTS: HVBTF), and Marathon Patent Group (NASDAQ: MARA).
• As the bitcoin price increases, miners spin up new rigs or upgrade hardware in pursuit of higher block rewards. And FundStrat expects more-efficient mining machines will help some firms remain competitive, which could boost profit margins.
• But buyer beware: “Mining company equities may serve as a high-beta play on bitcoin … [and when the cryptocurrency] enters a bear cycle, we would expect mining equities to have greater downside volatility than bitcoin,” according to FundStrat.

• Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase
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• Bank of America Says DeFi Potentially ‘More Disruptive’ Than Bitcoin
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This Saturday sees the first drop of “green” non-fungible tokens (NFTs).

A group of digital artists, including the scene’s leading celebrity, Beeple, will showcase a selection of blockchain-backed works that have been specially formatted so as to reduce their environmental footprint.

All proceeds from the CarbonDrop sale go towards the Open Earth Foundation, a project spun out of Yale University that uses a range of technologies, including blockchain, to begin to realistically account for carbon in our atmosphere.  

Related: Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase

This collaborative effort also involves input from RNDR, a system that incentivizes idle compute power to help render digital media effects like CGI, and Nifty Gateway, an NFT marketplace owned by Gemini, the cryptocurrency exchange founded by Tyler and Cameron Winklevoss.

It has not taken long for the explosion of interest in NFTs (title deeds to certain digital artifacts created using shared ledgers) to spotlight the putative environmental impact associated with mining crypto tokens. 

Within the cryptocurrency community, questions about the environmental damage caused by algorithmic mining invoke eye-rolling, from Bitcoin and even some Ethereum fans. Indeed, to many crypto purists “green NFTs” combine the sort of misplaced environmental whinging they would rather ignore.

The reality, like much else in the climate debate, is complex and nuanced. 

Related: What Caused the Filecoin ‘Double Deposit’ on Binance?

For Martin Wainstein, founder of the Open Earth Foundation, the fact that NFT artists have taken a firm and immediate stand provides a great way to raise awareness, and also to drive collaboration.

NFT art creation has highlighted the problem, but it’s not the problem per se, Wainstein points out. Rather, that’s the computational load of running smart contracts on Ethereum or the very large-scale proof-of-work mining that secures Bitcoin.  

“I think it’s fascinating that for the last four years, you haven’t seen a single investor or innovator saying, ‘Oh, I love this, but I’m not going to touch Bitcoin because of the energy consumption,’” Wainstein said. “But as soon as it touches art, it kind of blows up.”

The relationship between NFTs and Ethereum with regards to energy consumption seems to be a source of confusion.

“The thing that’s not really being talked about is that the Ethereum blockchain is gonna move with or without you. Like blocks happen and they’re full 100% of the time,” said RNDR Project Lead Joshua Bijak, whose background is in environmental electrical engineering. “It doesn’t matter if those are NFT transactions, it can be ERC-20 tokens or whatever. So it’s unfair to blame NFTs specifically for that.”

The steps being taken by the collaborators behind Saturday’s carbon-neutral NFT sale include lessening the number of Ethereum blockchain events needed to individualize each digital artwork, meaning less computational workload in the NFT minting process. 

“For the purpose of this auction, we’re trying to minimize how many deployments there will be,” Bijak said, explaining that switching out from the “open editions” variety of NFT contracts removes the tendency to mint tokens ad nauseam.

Additionally, each NFT artwork (there are six digital artists featured in the show), will have another one-of-a-kind token pinned to it, and this second NFT represents carbon credits from a voluntary registry of a Peruvian deforestation project.

It’s worth noting that Nifty Gateway came under pressure to streamline its minting process, which is now being addressed. 

Bijak points out this is now a highly sensitive area and even clear and reasonable attempts to minimize the relationship between NFTs and carbon emissions can cause consternation. 

An example would be the tweeted medium post from NFT platform SuperRare, which was welcomed by many but also resulted in some backlash and artists saying they would be leaving the platform.

Nature-inspired artist and composer Sara Ludy, whose work forms part of CarbonDrop, said she has been conscious about the cost of rendering digital work before the recent NFT wave highlighted artists’ concerns.

“Ecological concerns have been a part of my work for quite a while,” Ludy said. “It’s an awareness that I try to implement in my own practice, and also when I was teaching experimental 3D virtual reality applications, to be ecologically aware of your computer usage.”

Award-winning multi-disciplinary artist Kyle Gordon, who is also part of the show, said he expects to see NFT platforms coming under pressure in the coming months to implement other systems that will help with energy use. 

“At the end of the day, minting NFTs might not directly be the source of the energy usage, but by facilitating and encouraging the energy usage, it is part of the problem, part of a larger problem,” said Gordon. “While it’s really complicated, the key is collaboration.”

• Bank of America Says DeFi Potentially ‘More Disruptive’ Than Bitcoin
• Goldman Sachs Analysts Say They’re Brutally Overworked

Bitcoin (BTC) appears set to challenge record highs in the wake of this week’s dovish Federal Reserve meeting.

One expert, however, is calling caution, based on his observation of price charts as bitcoin rose from lows near $43,000 seen earlier this month. The chart pattern has taken the shape of what’s known as a rising wedge, a sign of uptrend fatigue.

“My concern is growing that we might run into a rising wedge scenario,” Patrick Heusser, head of trading at Swiss-based Crypto Finance AG, told CoinDesk in a Telegram chat. The wedge’s support line is pretty strong, with more than four touchpoints, and that does give me some confidence, though, if we break lower through the trendline, which is when things could get ugly.”

Related: Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase

The rising wedge comprises converging trendlines connecting higher lows and higher highs. The converging nature of the trendline indicates the waning of upside momentum. Hence, a breakdown – a move below the lower end of the rising wedge – is considered a sign of bullish-to-bearish trend change.

According to Heusser, a move below $54,000 would confirm the rising wedge breakdown and open the doors for a drop to $47,000. The immediate bias will remain bullish while the wedge support is held intact.

At press time, bitcoin is changing hands near $58,900, having put in lows under $56,500 early Friday, according to CoinDesk 20 data.

The cryptocurrency jumped from $55,000 to $60,000 earlier this week after the Fed signaled no interest rate hike until at least 2024, pushing back against growing fears of an early unwinding monetary stimulus.

Related: What Caused the Filecoin ‘Double Deposit’ on Binance?

Also read: Nexo: $100K BTC Is Inevitable but Won’t Be a Smooth Ride

Some analysts say the Fed’s dovish tone has put the cryptocurrency on the path to new record highs above $62,000. Patrick voiced similar opinion, while pointing to the rising wedge.

“In terms of the bigger picture, I see no change. We are still in a bullish scenario, but the consolidation phase will take a little longer and that is not a bad thing,” Heusser said.

• Bank of America Says DeFi Potentially ‘More Disruptive’ Than Bitcoin
• Goldman Sachs Analysts Say They’re Brutally Overworked

The Grayscale Bitcoin Trust could “morph into a systemic risk,” according to a report from crypto markets data company ByteTree.

In the report, ByteTree Chief Investment Officer Charlie Morris wrote that 81% of institutional inflows to bitcoin have come via GBTC. (Grayscale is owned by CoinDesk parent company Digital Currency Group).

From alternatives like Osprey’s bitcoin fund to Bitwise’s cryptocurrency index to Canadian bitcoin exchange-traded funds (ETFs), investors now have more choices for hassle-free bitcoin exposure. The once-sizable premium over the price of bitcoin for GBTC has flipped to a discount, reflecting a drop in demand for the vehicle.

Related: Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase

With GBTC offering no premium, institutional inflows will likely slow further, which means GBTC won’t buy more BTC, which would remove a support for the market, ByteTree said.

“With luck, this is a GBTC problem and does not spread,” Morris wrote. “Exchange-traded funds solve this problem. With many applications filed, I imagine they will come to market sooner or later. Like the European [exchange-traded products], they will trade at [net asset value], which is what investors want. Their fees will be lower, and all in all it will be a more attractive package. When they come, the only reason investors will stay in GBTC is capital gains tax.”

ByteTree says Digital Currency Group’s pledge to purchase up to $250 million in GBTC shares is not enough to keep the discount from falling further. 

“To be taken seriously, they need to pledge to buy back that quantity each week,” Morris wrote. 

Related: What Caused the Filecoin ‘Double Deposit’ on Binance?

Grayscale could convert GBTC into an ETF or apply for an ETF that isn’t linked to the fund. This past week, New York-based Simplify Exchange Traded Funds proposed an ETF that would invest in the Grayscale Bitcoin Trust.

• Bank of America Says DeFi Potentially ‘More Disruptive’ Than Bitcoin
• Goldman Sachs Analysts Say They’re Brutally Overworked

British hedge fund manager Alan Howard is the fourth-largest shareholder in digital asset manager CoinShares. 

• According to the CoinShares investor relations site, a company owned by Howard, AH (St Helier) Ltd, owns 5,484,580 shares, 8.24% issued share capital.
• On March. 11 CoinShares went public and listed on the Nasdaq First North Growth Market, an alternative stock exchange for small and medium-sized growth companies in Europe, and shares started trading.
• Prior to the listing, Howard was a hidden investor but now that CoinShares has gone public its prospectus reveals more information about the shareholders.
• CoinShares Executive Chairman Daniel Masters holds 15,035,459 shares, 22.59% of the company; Mognetti Partners Ltd holds 11,824,359, or 17.77%; and CoinShares co-founder Russell Newton holds 8,308,195, or 12.48%, followed by Howard.
• Howard has been actively investing in the digital assets space. On March 9, the digital asset custodian Komainu closed a $25 million Series A fundraise led by the hedge fund manager.
• CoinDesk has reached out to CoinShares seeking more information but did not receive a response by press time.

See also: CoinShares Releases DeFi Index Token for Institutional Investors

• Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase
• What Caused the Filecoin ‘Double Deposit’ on Binance?
• Bank of America Says DeFi Potentially ‘More Disruptive’ Than Bitcoin
• Goldman Sachs Analysts Say They’re Brutally Overworked

Brazil has become the second country in the Americas to approve a bitcoin exchange-traded fund (ETF) following the three launched in Canada this year.

• The Brazil Securities and Exchange Commission (CVM) has approved blockchain investment firm QR Capital’s bitcoin ETF which will trade on the Sao Paulo-based B3 exchange.
• The fund will trade under the ticker QBTC11, QR capital tweeted Friday.
• “The QBTC11 will have as reference the CME Group index of bitcoin futures contracts,” QR said.
• Reuters reported Friday the ETF listing will take place by June.
• This will be the fourth ETF of its kind following the three funds that launched on the Toronto Stock Exchange (TSX) in February and March.
• The first of these, launched by Purpose Investments, saw inflows of $564 million in its first two days. (Purpose’s ETF uses index information from TradeBlock, a CoinDesk subsidiary.)
• The U.S. Securities and Exchanges Commission (SEC) yesterday acknowledged VanEck’s application to launch a bitcoin ETF, which, if approved, would be the first of its kind in the U.S.

See also: Valkyrie Files for an ETF That Would Invest in Firms With Bitcoin on Their Balance Sheets

• Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase
• What Caused the Filecoin ‘Double Deposit’ on Binance?
• Bank of America Says DeFi Potentially ‘More Disruptive’ Than Bitcoin
• Goldman Sachs Analysts Say They’re Brutally Overworked

The U.S. Federal Reserve announced Friday it will allow the expiration of an emergency suspension on certain bank-capital rules. The temporary measure was enacted last year when the coronavirus hit. 

The Fed had been letting banks exclude cash and government bonds on their balance sheet when calculating their Supplementary Leverage Ratios (SLR), a gauge of capital adequacy. That rule will not be extended and will expire at the end of March, the Fed said in a statement.

The Fed added that it would “seek comment” on adjusting the SLR exemption and will take action to make sure that the changes “don’t erode the overall strength of bank capital requirements.” In April 2020, the exemption allowed banks to support the Treasury market, and expand the size of their balance sheets.

Related: Market Wrap: Bitcoin Near $59K as Worries on Bond Yields Increase

The Fed’s announcement “is causing a dollar pop and a bit of a dump in risk assets as it reduces bank liquidity,” CrossTower Head of Trading Chad Steinglass said in an emailed statement.

Bitcoin, while often cast by cryptocurrency analysts as a potential hedge against inflation, is still considered by many Wall Street investors to be a risky asset, and it often ends up trading in sync with stocks rather than safer plays like bonds.

Prices for bitcoin briefly retreated early Friday as the decision was announced but have since recovered. As of 15:18 UTC (11:18 a.m. ET), the largest cryptocurrency was changing hands at $58,884.

• What Caused the Filecoin ‘Double Deposit’ on Binance?
• Bank of America Says DeFi Potentially ‘More Disruptive’ Than Bitcoin
• Goldman Sachs Analysts Say They’re Brutally Overworked