Financial technology company Investview said it holds more than $1 million in bitcoin and other cryptocurrencies on its balance sheet.
See also: Valkyrie Files for an ETF That Would Invest in Firms With Bitcoin on Their Balance Sheets
Related StoriesBitcoin (BTC) retail investors have picked up the slack amid an apparent decline in institutional inflows so far this quarter, according to a report by JPMorgan strategist Nikolaos Panigirtzoglou.
The decline in institutional investment may be one reason behind bitcoin’s failure to hold above $60,000, as CoinDesk has reported. However, all eyes are on a pickup in retail investment, especially given a new round of U.S. stimulus checks going out in recent days.
Not all bitcoins are created equal in the eyes of institutional investors, according to “Shark Tank” star Kevin O’Leary.
Institutions want greater transparency about where and how bitcoin is mined, raising the prospect that only some of the supply will end up in Wall Street custody, O’Leary said Monday on CoinDesk TV’s “First Mover.”
Also known as “Mr Wonderful,” O’Leary has changed his mind about bitcoin as an asset class, now weighting BTC at 3% of his personal portfolio. But he said he doesn’t want to buy bitcoin mined in a way that causes energy waste and environmental damage.
Related: Investview Says It Holds More Than $1M in Crypto on Its Balance Sheet
“I want to make sure my coin is mined efficiently,” he said, comparing dirty bitcoin to “blood diamonds” that finance unsavory activities in the developing world. Such desire among investors could preclude buying bitcoin mined in China, for instance, which is known for powering its mining with coal-derived electricity (though also hydroelectric plants during the rainy season).
O’Leary’s comments suggest the recent influx of traditional investors to the bitcoin market could revive an old debate, though for new reasons.
For years, there has been talk of newly mined, “virgin” bitcoins fetching a premium over units that have passed through multiple wallets. Supposedly, buyers wanted to avoid any taint from coins that may have been used in illicit darknet marketplaces.
If true, this would mean bitcoin is not truly fungible, or interchangeable, meaning it lacks one of the fundamental properties of money. However, evidence of virgin bitcoin premium has been largely anecdotal, and many market participants have called the idea dubious.
Related: Bitcoin 1Q Retail Flow Exceeding Institutional Investment: JPMorgan Strategist
If O’Leary is right, however, Wall Street’s environmental conscience – or at least, its desire to project one – could lead to a new differentiation between supposedly fungible coins.
Sustainability committeesThe founder of a mutual fund company, a venture capital firm and an exchange-traded fund (ETF), O’Leary noted that many institutions have two committees deciding on asset allocations these days: an investment committee and a sustainability committee.
Bitcoin needs to satisfy stakeholders on both before companies are going to jump in, he argued.
“I don’t think the community realizes how big this issue is going to become,” he said.
O’Leary said he plans to be active in the mining space, partnering with miners that want to reduce their carbon footprint.
He predicted that some institutions may want to mine their own BTC so as to assure provenance for their clients.
According to O’Leary, only 10% of people at financial institutions who want to invest in the premier cryptocurrency have done so yet, suggesting big unmet demand and rising future prices.
Read more: The Frustrating, Maddening, All-Consuming Bitcoin Energy Debate
Related StoriesNifty Gateway, the popular non-fungible token marketplace, warned in a statement that a small group of its users experienced “account takeovers.” Victims have claimed they either had their NFTs stolen or NFTs purchased using their credit card information and then stolen.
This is a developing story and will be updated.
Related StoriesThe Asian cryptocurrency exchange Bybit has climbed in industry rankings to become the world’s second-largest bitcoin futures trading platform by open interest.
At press time, Bybit accounts for $3.53 billion, or 16.1%, of the global bitcoin-futures open interest of $21.2 billion, according to data source Skew. That share of the market puts Bybit just behind No. 1 Binance’s 17.5%.
Bybit, which has offices across Asia, has registered solid growth over the past five months and more so this year. The exchange ranked sixth on the list of biggest bitcoin futures exchanges in October and fifth in early January. Bybit’s client profile is about 70% retail and 30% institutional, the exchange’s spokesperson told CoinDesk in a Telegram chat.
Related: Investview Says It Holds More Than $1M in Crypto on Its Balance Sheet
“We have to recognize the overall bull market as a key factor, and we certainly prepared ourselves well in taking advantage of it by increasing our server capacity and building in redundancy,” the spokesperson said. “When large volume came with sudden spikes/volatility, we managed to execute orders as usual while many other exchanges experienced downtime.”
The Chicago Mercantile Exchange (CME), seen as more heavily focused on institutional trading activity, now ranks fourth below OKEx, after holding the top position in late December and January.
The change in the leaderboard suggests institutional activity has cooled in this quarter, while retail participation has picked up. The spot market activity paints a similar picture. According to JPMorgan, retail investors have purchased over 187,000 BTC so far this quarter and institutions have accumulated 173,000 BTC.
Also read: Nearly $40B in US Stimulus Checks May Be Spent on Bitcoin and Stocks: Mizuho Survey
Related: Bitcoin 1Q Retail Flow Exceeding Institutional Investment: JPMorgan Strategist
Some of Bybit’s growth might be attributable to its referral program. The exchange launched the referral scheme on Jan. 7 this year, under which existing clients and any new customers they refer can qualify for $10 bonuses paid in BTC.
Retail traders, inspired by the 2020 rally, also may have flocked to Bybit for its 100x leverage: For every $1 in the trading account, users can trade in the market up to $100 in value, with a 1% margin requirement.
Related StoriesDigital assets trade association CryptoUK has called on U.K. Chancellor of the Exchequer Rishi Sunak to act over delays for startups registering for the Financial Conduct Authority’s (FCA) Money Laundering Registration (MLR) regime for crypto-asset businesses.
In a letter to Sunak, shared on the group’s website, CryptoUK Chairman Ian Taylor says the U.K. is “missing out on a major opportunity” as crypto companies trying to sign up under the new regulatory regime experience an “arduous process” and with most of the group’s members having received little or no response from the FCA.
So far, only four out of 200 applications have received a decision, claimed Taylor, adding, “For some, more than eight months have elapsed without a single response from the regulator.”
Related: Investview Says It Holds More Than $1M in Crypto on Its Balance Sheet
With the FCA having become an anti-money laundering and counter terrorist financing supervisor of businesses last January, it brought in the MLR scheme requiring crypto-asset businesses to become compliant and to register to continue trading.
In December, the FCA acknowledged a backlog of applications from crypto firms that were already trading, extending the deadline for applications to be approved until July 9, 2021.
“The clock is again ticking as we approach the new July deadline, whereby existing firms legally have to cease trading,” writes Taylor. “Additionally, hundreds of new businesses have been waiting for months to progress their applications, with staff and overhead costs mounting, as they cannot start trading and earning revenues until their [applications have] been approved.”
The ongoing situation threatens to benefit larger organizations with the funding to “wait the process out,” he wrote, warning that some businesses may either leave the U.K. or cease trading, which would be a blow for the U.K. economy.
Related: Bitcoin 1Q Retail Flow Exceeding Institutional Investment: JPMorgan Strategist
Read more: UK’s FCA Warns Investors of High-Risk Crypto Investments and Scams
“Whilst our industry appreciates that all new regulatory regimes take time to embed, the industry is experiencing significant challenges with this regime, which run deeper than the issues made public by the FCA,” Taylor said.
CryptoUK is a self-regulatory trade association launched back in 2018 and represents over 50 businesses in the crypto-asset industry.
Related StoriesNearly $40 billion of the latest round of direct stimulus checks could be spent on bitcoin and stocks, according to a new survey.
See also: Mizuho Analyst: Bitcoin Will Make PayPal ‘Center of People’s Financial Lives’
Related StoriesUpdate (March 15, 17:30 UTC): PancakeSwap says it has regained access to the DNS. Cream is still working to resolve the issue.
Decentralized finance (DeFi) applications Cream Finance and PancakeSwap have reported “DNS hijacks” of their platforms.
According to tweets from both projects, the hijacker is asking for users to input the 12-word seed phrase unique to each crypto wallet in order to steal funds from investor accounts.
Related: Investview Says It Holds More Than $1M in Crypto on Its Balance Sheet
Cream and PancakeSwap are urging users to stay away from the applications until the hijack is addressed.
This is a developing story and will be updated.
Related StoriesBrian Brooks, who left his post as acting head of the Office of the Comptroller of the Currency (OCC) earlier this year, is starting to cobble together what’s next.
On Monday, California-based data-sharing startup Spring Labs announced Brooks as the newest member of its board of directors.
“Spring Labs is transforming financial data exchange in a way that is better for consumers,” Brooks said in a press release. “I launched my financial inclusion initiative Project REACH while at the OCC, and I look forward to working with the Spring Labs team to bring the benefits of financial services to more Americans, while reducing cost and increasing security for everyone.”
Related: Investview Says It Holds More Than $1M in Crypto on Its Balance Sheet
Spring Labs, which was founded as Springcoin, Inc., uses cryptography and permissioned blockchain networks to change how consumer data is stored and shared. The startup raised nearly $15 million in a seed round in 2018 followed by a $23 million Series A in 2019.
Late last year, Spring Labs announced its fraud-prevention work with lenders in the clean-energy financing space. In Monday’s press release it touted partnerships with over 50 financial institutions, including GM Financial, SoFi and Avant.
“We are thrilled that [Brooks] shares our vision as we build the secure rails for data exchange,” Spring Labs co-founder Adam Jiwan said in a statement.
Under Brooks, the OCC published a number of interpretative letters on how national banks can interact with the cryptocurrency space, with particular attention paid to stablecoins and their issuers.
Related: Bitcoin 1Q Retail Flow Exceeding Institutional Investment: JPMorgan Strategist
Prior to joining the public sector, Brooks served as the chief legal officer of Coinbase.
Related StoriesOkeke Leticia Chigozie, a 28-year-old Nigerian logistics worker, dreams of opening her own shoe store in Nigeria. Having no credit history, she does not qualify for a bank loan to fund her enterprise. Instead, she joined a traditional savings group in her community, sometimes called esusu. These savings circles allow those without access to traditional banking services to save money and acquire loans or credit.
The problem is that in inflationary countries like Nigeria and Zimbabwe, the value of savings could plummet. Stablecoins – cryptocurrencies pegged to a strong fiat currency like the U.S. dollar or a basket of assets to keep their prices stable – could be a solution to Leticia’s problem.
“Devaluation is a problem because if you check the last two years, 20,000 naira doesn’t really have a lot of value now,” Leticia said. “What if I can actually invest this money somewhere or probably save it somewhere and the value doesn’t go down? Then I can use it for something better. Why not?”
Related: Investview Says It Holds More Than $1M in Crypto on Its Balance Sheet
Dollar stablecoins have become a compelling option for individuals and businesses in markets facing local currency volatility and hyperinflation, according to Josh Hawkins, senior vice president of marketing at Circle. In Argentina, another inflationary economy, people are increasingly turning to DAI, a stablecoin backed by the U.S. dollar, after the government imposed restrictions on the amount of dollars citizens could purchase.
“We’ve seen growing demand for digital dollars, especially over the past 12 months,” Hawkins told CoinDesk via an email.
Untapped marketTraditional savings groups, large and small, play a vital role in providing savings and credit opportunities to millions of people, not just in Nigeria but across the African continent. In Africa, around 350 million adults do not have bank accounts, according to the World Bank. Globally, the unbanked are disproportionately female and poor, and savings circles are mostly formed and run by women. In 2018, in South Africa alone, 11 million people were part of traditional savings groups (called skovels) and saved around $3 billion.
“I’m a low-income earner. Most of the people who join these African traditional savings groups are low-income earners,” Leticia said.
Related: Bitcoin 1Q Retail Flow Exceeding Institutional Investment: JPMorgan Strategist
A small esusu, like the one Leticia joined, is made up of around 12 or more friends, colleagues or neighbors. The members periodically contribute a fixed portion of their earnings to a communal fund. Leticia contributes around 20,000 Nigerian naira ($41) monthly. After collection, the total sum is given to one member of the group on a rotational basis, which means each member of the group has a chance to access the full fund, without interest. To join the group, Leticia didn’t need to have a credit history or a bank account. Someone from the group just had to vouch for her.
Often, the funds that are collected are redistributed as they are, without any value increase. In fact, a 2017 study conducted in Ghana, Malawi and Uganda showed that although community savings groups helped boost the number and longevity of businesses created in villages, they did not increase total household income or food security.
Digitizing savings fundsAronu Ugochukwu, CEO of fintech firm Xend Finance, said he created a platform that serviced African traditional savings groups because his mother, a professor of medicine, belonged to one. Growing up, every few months his mother would say, “This is my month.”
“And every time she said it’s her month, she got a huge sum of money. So that’s what she used to buy a car, or maybe pay for a big project,” Ugochukwu said.
Ugochukwu is introducing community cooperatives and credit unions to stablecoins. Through Xend, community savings groups and larger credit unions in Nigeria will have the opportunity to maintain the value of their savings and even earn higher yields by converting their funds to stablecoins like USDC backed by the U.S. dollar, Ugochukwu added.
To create Xend Finance, he partnered with TechFusion, a digital platform that helps credit unions and savings groups to manage their funds. TechFusion is one of many fintech firms coming in to digitize the informal savings sector in Nigeria.
“We’re not changing what they are used to doing. We’re just improving it, giving them more access to the international money markets,” Ugochukwu told CoinDesk.
But most of these savings funds are informal, he said. For context, Nigeria’s informal “cash” economy accounts for around 64% of its GDP. According to Ugochukwu, many larger informal credit unions use middlemen to manage funds that earn very low yields of around 1%.
“There’s a lot of fraud going on there between the source and then the end users. So we’ve been trying to solve that problem,” Ugochukwu said.
But it’s not just about improving financial inclusion by giving people the technology to access financial services but digging into the root cause of this problem, which is low income, Matthew Okwe, CEO of TechFusion told CoinDesk.
You can always connect people to a bank when you open an account for them but if they don’t have money to put in the bank, that account is useless, he added. In fact, despite Nigeria adding 8.1 million new bank accounts in 2019, there were 45.57 million dormant or inactive accounts, according to local reports.
“What they basically need is to improve on their income opportunities. Once we are able to help them grow their income sustainably then giving them technology to manage, that process makes a lot of sense,” Okwe said.
Enter stablecoinsLeticia hasn’t really heard of many opportunities to increase her savings.
“You know, when you don’t have so much you wouldn’t really be hearing about or getting a whole lot,” Leticia said.
But if there was an opportunity for her to avoid devaluation and invest her money in something better, she said she’d be open to trying it.
“Because as it is, when it’s your turn and you take your money, you may not really have anything worthy in mind to spend it on or actually invest in, so the money becomes useless and you might end up spending it either way. So if there is a way to invest it in something stable, I’d like it very well,” Leticia said.
Opening aspiring entrepreneurs like Leticia to stablecoin investments is not impossible. According to the World Bank, the major driver of financial inclusion in sub-Saharan Africa has been mobile money accounts, or cash tied to an account on a mobile phone. Vodafone’s M-Pesa, for example, is one of the largest mobile money services in Africa, with around 40 million users across the continent.
Xend Finance, which can be accessed via a mobile phone, will enable groups to directly store their funds in stablecoins like USDC without a middleman while earning interest on the funds.
“Unlike fiat dollars, dollar-backed stablecoins are available instantly to anyone with an internet-connected device, anywhere in the world, with near-zero transaction fees,” Hawkins said.
Xend Finance, backed by Binance, ran a successful pilot in January with 1,500 participants from 75 countries, according to Ugochukwu. The platform is set to officially launch at the end of March.
Related StoriesJack Ma’s Ant Group leads the way in blockchain patents, according to Clarivate’s Derwent World Patents Index (DWPI), a ranking dominated by Chinese companies.
See also: Tencent and Ant Group-Backed Banks to Join China’s Digital Yuan Trial: Report
Related StoriesThe team behind the New Economy Movement blockchain, the NEM Group, have launched a new, business-enterprise-facing project today called Symbol.
Symbol is a proof-of-stake blockchain with its own token (XYM) the NEM Group is marketing as an enterprise blockchain solution for fintech, supply chains and everything in between. On Symbol’s public blockchain, PoS validators can stake a supernode with their XYM or stake their tokens in another supernode’s pool.
“We believe we are going to see a lot of flexibility in how people use these private and public networks together. You can think of your private network as something of staging area and platform for public network. We’re excited to see what comes out of that,” NEM Software CTO Kristy-Leigh Minehan told CoinDesk.
Related: Investview Says It Holds More Than $1M in Crypto on Its Balance Sheet
The platform will allow business to launch their own private blockchains, which can interoperate with Symbol’s public chain. Additionally, the NEM team told CoinDesk, Symbol will support “atomic swaps” to transfer data and coins between different blockchains.
Atomic swaps are an old cryptographic trick that originated from Bitcoin which allow two blockchains to transfer data (typically, a coin) without the need for an intermediary to escrow the trade.
Tokens and DeFi applicationsNEM’s Symbol can accommodate the hot DeFi applications of Ethereum fame and the rest like securities tokens and NFTs, Minehan said, using tokens called mosaics. She said that one Kentucky whiskey company has used these mosaics to tokenize barrels of whiskey that only approved buyers can purchase.
For something like NFTs, Minehan said that the next step is “having a digitization of the underlying asset [like a jpeg] embedded in the transaction itself,” which requires storing a significant amount of data on-chain.
Related: Bitcoin 1Q Retail Flow Exceeding Institutional Investment: JPMorgan Strategist
NEM is also generally focused on making Symbol “the platform for tokens out in the space,” she said (emphasis hers), be they NFTs, whiskey barrels, CBDs, or stablecoins, and she emphasize that the team’s focus with Symbol will be trying to bridge the public-private blockchain gap.
Related StoriesBitcoin (BTC) made a new all-time-high this weekend, but the move was short-lived. The uptrend from January continues to slow, which is probably causing some profit taking. Traders will likely defend lower support.
Related StoriesWith celebrities like Kings of Leon, DJ Alesso and Post Malone having recently leapt onto the non-fungible token (NFT) bandwagon, it seems robots aren’t to be left out.
Hong Kong-based Hanson Robotics announced Monday the launch of a collection of NFT-based digital artworks by its robot called Sophia.
Created in collaboration with artist Andrea Bonaceto and curated by Los Angeles-based IV Gallery, each piece will be linked to a NFT to be sold on Nifty Gateway marketplace on the March 23.
Related: Investor Discovers Beeple NFT Purchased for $969 Now Worth $300K
See also: What Are NFTs and How Do They Work?
Sophia (who also makes music) is described as a “human-like robot” powered by artificial intelligence (AI), using neural networks, symbolic AI and data from her “life” to respond to her “perception” of Bonaceto’s artworks, according to her creator Dr. David Hanson.
“How she responded to Andrea’s art simply thrills me. I’m one proud father,” said Hanson.
NFTs are cryptographic assets that can have variable features. They have been used to represent a wide range of unique tangible and intangible items, from art to collectible sports cards to virtual real estate and even digital sneakers.
Related: This Isn’t the Revolution I Signed Up For
On Thursday, an NFT artwork by crypto artist Beeple was sold for a record $69.3 million by top auction house Christie’s.
Read more: Why the NFT Frenzy Won’t Drive Up Prices for Bitcoin Just Yet
Related StoriesTrading on the first licensed cryptocurrency exchange in Hong Kong has gone live.
According to a press release shared with CoinDesk on Monday, BC Group subsidiary OSL has executed its first customer trades through its trading desk.
The crypto trading platform is the only one in the jurisdiction to hold both the Type-1 and Type 7 licenses – first granted by Hong Kong’s Securities and Futures Commission (SFC) in August 2020. A type-1 allows the platform to deal in securities, while a Type-7 license permits digital asset activity. The exchange is also audited by “Big Four” accounting firm PwC.
Related: Investor Discovers Beeple NFT Purchased for $969 Now Worth $300K
Huobi recently announced it had been granted Type-4 and Type-9 licenses from the SFC to manage and advise on securities investments.
OSL’s first live trades comes after a trial-use period that was completed with the participation from trading partners and investors, according to the release.
The exchange targets institutional and professional investors providing them with custody, prime brokerage, exchange and software as a service.
“With today’s trades, we break new ground for financial services in Asia,” said OSL CEO Wayne Trench. “Trading and storing digital assets like bitcoin can now be securely conducted in Hong Kong with the supervision of a world-leading regulator.”
Related: This Isn’t the Revolution I Signed Up For
See also: BC Group, VSAL Join Forces to Serve Institutional Bitcoin Market in Asia
Related StoriesBitcoin is losing altitude on Monday amid weak buying pressure from institutional investors.
The crypto market leader fell as low as $54,790.33 Monday morning, having reached a record high of $61,556.59 on Saturday, according to CoinDesk 20 data. At press time, a small bounce to $55,786 was seen.
“The failure to establish a foothold above $60,000 and the decline is likely the result of the flat-to-negative Coinbase premium – a major bellwether for institutional demand,” according to Ki Young Ju, CEO of blockchain analytics firm CryptoQuant.
Related: Investor Discovers Beeple NFT Purchased for $969 Now Worth $300K
CryptoQuant’s Coinbase premium indicator measures the spread between Coinbase’s BTC/USD pair and Binance’s BTC/USDT pair. A positive spread implies increased demand from high-net-worth investors and institutions, as these entities prefer to trade via regulated exchanges with over-the-counter desks such as Coinbase.
The premium was negative over the weekend when bitcoin broke above $60,000 and remains marginally positive at press time, implying weak institutional demand.
The spread has been significantly higher previously as prices surged above the major psychological levels of $20,000, $30,000, $40,000, and $50,000. Bitcoin has charted a six-fold rally over the past six months mainly on the back of increased institutional participation
“I think [we’ll see bitcoin] short-term bearish or going sideways until there’s significant institutional spot inflows in Coinbase,” Ki said.
Related: This Isn’t the Revolution I Signed Up For
“Whale addresses holding 1,000 or more bitcoin have been selling, this does not mean the bull run is over, it just means that profit taking is happening,” according to market analyst Lark Davis.
Meanwhile, Patrick Heusser, head of trading at the Swiss-based Crypto Finance AG, says the latest pullback is healthy, as the breakout above $60,000 was mainly driven by leveraged traders. “The perpetual futures funding rate and futures premium was super stretched,” Heusser told CoinDesk.
And Joel Kruger, currency strategist at LMAX Digital, told CoinDesk an overextended market has pulled back on the back of more reports of a possible cryptocurrency ban in India.
Bitcoin may suffer a deeper drawdown in the short-run if the U.S. bond yields continue to rise, destabilizing stock markets. Technical studies such as the weekly chart relative strength index are also warning of a notable price pullback.
However, the broader outlook remains bullish with the likes of Diginex CEO Richard Byworth predicting a rally to $175,000 by the end of 2021.
See also: Diginex Anticipating Bitcoin Rise to $175K by End of 2021, CEO Says
Related StoriesThe Oakland Athletics baseball team, often referred to as “the A’s,” is temporarily allowing fans paying in bitcoin for seasonal use of private suites.
According to a press release on Sunday, A’s fans can now either pay $64,800 in fiat currency or one bitcoin, worth roughly $56,155 at press time, for a private suite that seats up to six people.
“The price of a season suite may fluctuate depending on when it’s purchased, which adds to the excitement,” said the A’s president Dave Kaval. “We invite our fans to become the first bitcoin suite holders in sports.”
Related: Bitcoin Plunges Below $55K Amid Weak Institutional Inflows, Profit Taking
Kaval also said private suites were a way for groups of six to socially distance themselves at a time when current state health guidelines are limiting stadium seating to two and four pods. The bitcoin offer ends on April 1, according to the release.
Earlier this month, Mark Cuban’s Dallas Mavericks began allowing fans to purchase merchandise and tickets using dogecoin.
See also: DOGE Adoption on the Rise. Dallas Mavericks to Accept Dogecoin for Tickets, Merchandise
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