CoinDesk Crypto

Crypto lender BlockFi is partnering with an independent crypto pricing provider to value customer deposits and collateral.

CF Benchmarks will price customers’ assets based on data it has sourced from five crypto exchanges that have passed the criteria in its methodology for pricing crypto: Bitstamp, Coinbase, Kraken, Gemini and itBit. 

BlockFi is the first crypto lender for which CF Benchmarks is pricing assets, even though the company usually works with firms such as exchange-traded fund provider Wisdom Tree. In September of last year, CF Benchmarks was the first cryptocurrency index to be recognized as a “Benchmark Administrator” under European regulations. 

Related: Aave Becomes Second DeFi Project to Overtake MakerDAO for Most Crypto Deposited

Read more: CME’s Bitcoin Index Provider Wins First EU Crypto Benchmark License

“You might see other providers in the market that operate exchanges and use the exchange for pricing but it might not be an indication of where the actual price is and where the liquidity is,” David Olsson, BlockFi’s global managing director of European and Asian markets, said in an interview.

CF Benchmarks’ indices update every second versus the five or 15 seconds at other index providers, CF Benchmarks CEO Sui Chung said. Prior to adding CF Benchmarks, BlockFi was able to capture data several times a minute, said Olsson.

“In terms of risk, let’s say with a five-second index … if you try to liquidate the loan when the market is moving very quickly, you may miss the boat and by the time you’ve managed to liquidate, you’re actually in negative equity,” Chung said. 

Related: BlockFi Raises $50M From Universities, NBA Star, Others as Crypto Lending Soars

Read more: BlockFi Raises $50M From Universities, NBA Star, Others as Crypto Lending Soars

Because bitcoin is an asset that can move in clips of hundreds of dollars per second, capturing price data allows BlockFi to hedge against flash crashes more efficiently, Olsson added.

The partnership follows a $50 million Series C funding round BlockFi raised to increase personnel and equity capital as the company expands its global reach. 

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Federal Reserve Chairman Jerome Powell explains the U.S. central bank’s economic approach, including how it will address its previous 2% inflation goal over the next decade.

CoinDesk First Mover Editor Bradley Keoun has already laid out the implications for the crypto space – you can read his article here.

Check this page for updates on commentary and analysis on the day’s events. Watch Powell’s comments here. 

Related: Bitcoin Pops and Drops After Powell Introduces Average Inflation Targeting

ND (10:00): Powell’s done for the day. The symposium will continue through tomorrow, with Bank of England Governor Andrew Bailey giving a speech Friday morning.

BK (10:00): Based on the muted market reaction after Powell’s comments, nothing he said was very far out of line with expectations – that the Fed is comfortable letting inflation rise above its 2% target over the next few years. But the Fed has left itself flexibility to change its monetary-policy plans in the future. And certainly Powell didn’t rule out any use of its monetary-policy tools, such as a broader expansion of its balance sheet to keep markets from tumbling if the economy worsens and bankruptcies increase. Entirely possible – and within the new framework – that the Fed could come out with more trillion-dollar money infusions the next time markets start to falter/lurch.

BK (9:52): Bitcoin’s price rally post-Powell speech has faded, now down to ~$11,400 from ~$11,600 earlier:

ND (9:49): The banking system was “well-capitalized and highly liquid,” Powell says, addressing the pre-COVID-19 economy.

Related: First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole

The point of the Fed’s efforts across the last six months was not to stimulate the economy but “provide a little bit of comfort” to individuals and businesses: “Our response was actually quite different from what it was in the financial crisis, so we could immediately cut rates to zero, we raised our asset purchases essentially without limit to support market function.”

The economy can recover – if the U.S. can keep the pandemic under control. The hard part is that a lot of communal activities (restaurant, hotel industries) might find it difficult to recover.

ND (9:47): Powell is saying more direct aid would be best but this is “very hard for us to do”; says he’d look to policy to address this concern.

ND (9:46): Low-wage workers have been disproportionately harmed by the ongoing pandemic, Powell says. He says his institution can support a strong labor market to try and mitigate but this would need to be an “all-governmental” effort. [University of Michigan Provost Susan M. ] Collins asks if the Fed can take any additional efforts to support minority-businesses and institutions in particular.

BK (9:46): Powell says “our policies are for the benefit of all Americans” but notes that its tools are “blunt” and the real power on any “distributive” efforts lie with lawmakers.

BK (9:40): The dollar is choppy – hourly chart of euro exchange rate vs. dollar after Powell’s speech comes out:

ND (9:36): Powell says that “public faith in large institutions around the world is under pressure,” and he hopes being transparent will help address that. We’ve definitely seen skepticism in institutions like the Fed in our space. That Powell is acknowledging this doubt is interesting.

He also said he doesn’t expect today’s move to “dictate” particular outcomes, noting this is kind of a subjective effort.

BK (9:32): “People don’t generally think about inflation moving up as a good thing,” Powell says. Sort of the elephant-in-the-room question for most non-economics/finance geeks.

ND (9:29): Powell’s prepared remarks have ended, but he’s participating in a Q&A with University of Michigan Provost Susan M. Collins.

BK (9:28): Of course, as we’ve seen, the Fed changes its long-run policies pretty much whenever the circumstances require it to do so – with a new rationale for doing so.

And here, too, the central bank is giving itself an out: “Of course, if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal, we would not hesitate to act.”

BK: (9:26): Bitcoin’s price rises 1.8% during Powell’s speech.

BK (9:24): Fed will review longer-run goals and policies roughly every five years, according to the statement. Powell says new policy statement was “revised today with unanimous consent” from Fed officials, adds “a robust job market can be sustained without causing an outbreak of inflation.”

The implication for crypto is that the Fed will likely let inflation run hot for a few years, which could theoretically weaken the dollar and boost prices for bitcoin.

ND (9:21): The Fed just confirmed it’s going to look for increasing inflation at times when needed. In an update to its statement of monetary policy strategy, the Fed says that if inflation falls below its 2% target consistently (as it has for most of the last decade), it will target inflation above 2%.

On price stability, the [Federal Open Market Committee] adjusted its strategy for achieving its longer-run inflation goal of 2% by noting that it “seeks to achieve inflation that averages 2% over time.” To this end, the revised statement states that “following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.”

BK (9:16): Powell notes interest rates are close to the “lower effective bound” i.e. zero “even in good times” – while noting that productivity growth has declined in recent years – the ultimate driver of underlying economic growth.

ND (9:11): Powell is opening his remarks by explaining the history of the Fed’s current inflation targets and why the central bank has approached previous targets the way it has.

“Inflation targeting was also associated with increased communication and transparency, designed to clarify the central bank’s policy intentions,” he said. Bit of tea leaf reading but it sounds like he’s expecting a change.

And, of course, monetary policy has evolved, he noted.

BK (9:11): Nothing new from Powell so far. He’s just walking through the recent history of monetary policy.

BK (8:40): The Federal Reserve has pumped about $3 trillion into the financial system this year to help markets recover from the devastating economic toll of the coronavirus. So far, consumer prices have stayed muted, perhaps due to the deflationary impact of slowing demand for goods and services from households and businesses. Powell is expected to discuss whether to explicitly embrace a new policy of allowing inflation to run above the central bank’s 2% annual target. That way, above-target inflation would offset periods of time (such as most of the past decade) where price rises have undershot the target.

Such an explicit commitment would imply to traders that the Fed would stay unusually dovish on inflation for years to come — letting inflation run hot, which likely could push up prices dollar-denominated assets like stocks, gold and bitcoin, since the currency’s purchasing power would be weakening by definition.

Bloomberg News reported on Wednesday the Fed might keep short-term interest rates close to zero for five years or more, under a policy that could be unveiled as soon as next month.

ND (8:40): Thirty minutes before Powell opens at the Jackson Hole Fed symposium, hosted by the Kansas City Fed, and the big question in and out of crypto will remain the economy. While Powell’s keynote remarks are likely to draw the most attention, it’ll be just as interesting to see what the panelists and guest speakers through the rest of the two-day symposium say.

Last year saw now-former Bank of England Governor Mark Carney discuss the need for a financial system which moves away from the dollar. That’s significant in and of itself, but he coupled the suggestion with the idea that a synthetic hegemonic currency, created through a network of central bank digital currencies, could act as the dollar’s replacement (among other alternatives). Carney’s successor, Andrew Bailey, will take the virtual stage Friday.

Related Stories

• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
• WATCH: Fed Chair Powell Lays Out Plan to Let Inflation Rise Above 2% for a While

Federal Reserve Chairman Jerome Powell explains the U.S. central bank’s economic approach, including how it will address its previous 2% inflation goal over the next decade.

CoinDesk’s First Mover Editor, Bradley Keoun, has already laid out the implications for the crypto space – you can read his article here.

Refresh this page periodically: We’ll be updating live through the event, and you can watch the livestream here.

Related: First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole

ND (9:47): Powell is saying more direct aid would be best but this is “very hard for us to do”; says he’d look to policy to address this concern.

ND (9:46): Low-wage workers have been disproportionately harmed by the ongoing pandemic, Powell says. He says his institution can support a strong labor market to try and mitigate but this would need to be an “all-governmental” effort. Collins asks if the Fed can take any additional efforts to support minority-businesses and institutions in particular.

BK (9:46): Powell says “our policies are for the benefit of all Americans” but notes that its tools are “blunt” and the real power on any “distributive” efforts lie with lawmakers.

BK (9:40): The dollar is choppy – hourly chart of euro exchange rate vs. dollar after Powell’s speech comes out:

Related: Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech

ND (9:36): Powell says “public faith in large institutions around the world is under pressure,” and he hopes being transparent will help address that. We’ve definitely seen skepticism in institutions like the Fed in our space. That Powell is acknowledging this doubt is interesting.

He’s also said that he doesn’t expect today’s move to “dictate” particular outcomes, noting this is kind of a subjective effort.

BK (9:32): “People don’t generally think about inflation moving up as a good thing,” Powell says. Sort of the elephant-in-the-room question for most non-economics/finance geeks.

ND (9:29): Powell’s prepared remarks have ended, but he’s participating in a Q&A with University of Michigan Provost Susan M. Collins.

BK (9:28): Of course, as we’ve seen, the Fed changes its long-run policies pretty much whenever the circumstances require it to do so — with a new rationale for doing so.

And here, too, the central bank is giving itself an out: “Of course, if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal, we would not hesitate to act.”

BK: (9:26): Bitcoin’s price rises 1.8% during Powell’s speech.

BK (9:24): Fed will review longer-run goals and policies roughly every five years, according to the statement. Powell says new policy statement was “revised today with unanimous consent” from Fed officials, adds “a robust job market can be sustained without causing an outbreak of inflation.”

The implication for crypto is that the Fed will likely let inflation run hot for a few years, which could theoretically weaken the dollar and boost prices for bitcoin

ND (9:21): The Fed just confirmed it’s going to look for increasing inflation at times when needed. In an update to its statement of monetary policy strategy, the Fed says that if inflation falls below its 2% target consistently (as it has for most of the last decade), it will target inflation above 2%.

On price stability, the FOMC adjusted its strategy for achieving its longer-run inflation goal of 2 percent by noting that it ‘seeks to achieve inflation that averages 2 percent over time.’ To this end, the revised statement states that ‘following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.’

BK (9:16): Powell notes that interest rates are close to the “lower effective bound” i.e. zero “even in good times” – while noting that productivity growth has declined in recent years – the ultimate driver of underlying economic growth.

ND (9:11): Powell is opening his remarks by explaining the history of the Fed’s current inflation targets and why the central bank has approached previous targets the way it has.

“Inflation targeting was also associated with increased communication and transparency, designed to clarify the central bank’s policy intentions,” he said. Bit of tea-leaf reading but it sounds like he’s expecting a change.

And of course, monetary policy has evolved, he noted.

BK (9:11): Nothing new from Powell so far. He’s just walking through the recent history of monetary policy.

BK (8:40): The Federal Reserve has pumped about $3 trillion into the financial system this year to help markets recover from the devastating economic toll of the coronavirus. So far, consumer prices have stayed muted, perhaps due to the deflationary impact of slowing demand for goods and services from households and businesses. Powell is expected to discuss whether to explicitly embrace a new policy of allowing inflation to run above the central bank’s 2% annual target. That way, above-target inflation would offset periods of time (such as most of the past decade) where price rises have undershot the target.

Such an explicit commitment would imply to traders that the Fed would stay unusually dovish on inflation for years to come — letting inflation run hot, which likely could push up prices dollar-denominated assets like stocks, gold and bitcoin, since the currency’s purchasing power would be weakening by definition.

Bloomberg News reported on Wednesday that the Fed might keep short-term interest rates close to zero for five years or more, under a policy that could be unveiled as soon as next month.

ND (8:40): Thirty minutes before Powell opens at the Jackson Hole Fed symposium, hosted by the Kansas City Fed, and the big question in and out of crypto will remain the economy. While Powell’s keynote remarks are likely to draw the most attention, it’ll be just as interesting to see what the panelists and guest speakers through the rest of the two-day symposium say.

Last year saw now-former Bank of England governor Mark Carney discuss the need for a financial system which moves away from the dollar. That’s significant in and of itself, but he coupled the suggestion with the idea that a synthetic hegemonic currency, created through a network of central bank digital currencies, could act as the dollar’s replacement (among other alternatives). Carney’s successor, Andrew Bailey, will take the virtual stage Friday.

Related Stories

• WATCH: Fed Chair Powell Lays Out Economic Policy Approach
• Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

Market Moves

As Federal Reserve Chair Jerome Powell prepares to speak Thursday at the U.S. central bank’s annual Jackson Hole Economic Symposium in Wyoming, the occasion offers a glimpse of just how dramatically once-slow-moving monetary forces have accelerated due to the devastating economic toll of the coronavirus pandemic. 

This time last year, President Donald Trump was vehemently criticizing Powell on Twitter for setting interest rates too high, as U.S. economic growth slowed and the national debt swelled past $22 trillion.

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Related: Chainalysis Report Shows Healthy Crypto Usage in Venezuela

At at the 2019 Jackson Hole gathering, then-Bank of England Governor Mark Carney warned in a speech that the U.S. dollar’s status as the de facto global currency contributes to an unsustainable international economic and monetary regime. He argued that world leaders should create a “synthetic hegemonic currency,” potentially provided “through a network of central bank digital currencies.” 

Fast forward to now, and the Jackson Hole conference has been forced to go virtual because of the coronavirus. Trump’s economic stewardship, including a U.S. stock market that many investors now say is propped up by the Fed’s $3 trillion of freshly printed money, has become a core issue in the 2020 presidential election. The national debt now stands at $26.5 trillion.  Digital currencies are now being studied and pursued by central banks in China, the U.S. and just about everywhere else. Goldman Sachs recently warned the dollar risked losing its dominant reserve status. 

“The pandemic has sped up key structural trends and triggered substantial market swings,” strategists for the $7 trillion money manager BlackRock wrote this week. “The policy revolution was needed to cushion the devastating and deflationary impact of the virus shock. In the medium term, however, the blurring of monetary and fiscal policy could bring about upside inflation risks.”

Many investors are betting on bitcoin as a hedge against the potential debasement of the U.S. dollar, but Fed officials say deflationary forces might be stronger because of an expected drop off in demand from consumers and households.

Related: LIVE: CoinDesk Covers Fed Chair Powell’s Jackson Hole Speech

Crypto traders will focus in the short term on what the Fed’s speech might mean for bitcoin prices, which have surged almost 60% in 2020, far exceeding this year’s 7.7% year-to-date gain in the Standard & Poor’s 500 Index of U.S. stocks. 

But the Fed’s actions could also have implications for ether, the native token of the Ethereum blockchain, where entrepreneurs are developing alternative currencies and semi-autonomous lending and trading networks that might one day replace the current financial system. There’s also a fast-growing business in dollar-linked “stablecoins,” with the amount doubling this year to $13 billion.

“So much has changed,” said Joe DiPasquale, CEO of the cryptocurrency-focused hedge fund BitBull Capital. “There is this danger of the U.S. [dollar] in the future no longer being the world’s reserve currency. We are in a much worse position than we were in a year ago.”

Mati Greenspan, founder of the cryptocurrency and foreign-exchange analysis firm Quantum Economics, wrote this week that Powell’s return to Jackson Hole comes at a time when “people are just starting to ask questions about the intrinsic value of money.” 

“U.S. authorities have just taken on an inordinate amount of debt, more than they could possibly ever hope to pay back,” Greenspan wrote. “So the only viable option is to decrease the value of that debt by way of monetary debasement. It’s despicable and dangerous, but the only other option is austerity, which is too unpopular for any public servant to mention at this time.”

Bitcoin Watch

Bitcoin’s options market is foreseeing little price turbulence in the short-term despite central bank watchers expecting fireworks from the Federal Reserve on Thursday.

• Bitcoin’s implied volatility on one-month options, which gauges market’s expectations for price gyrations over the four week period, fell to 52% early Thursday – the lowest level since July 25, according to data source Skew. 
• Short-term price expectations have declined sharply from 70% to 52% over the past two weeks.
• The three-month gauge has pulled back from 80% to 68% and the six-month has declined from 80% to 72%.
• Analysts expect Powell to signal tolerance for high inflation – a move that could weaken the U.S. dollar and propel bitcoin higher.
• However, with strong expectations already built in, the scope for disappointment is high. The dollar may surge if Powell’s comments fall short of expectations.
• The event, therefore, has potential to trigger big moves in either direction

Read more: Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech

– Omkar Godbole

Analogs The latest on the economy and traditional finance

As dollar weakens, U.S. Treasury says Vietnam deliberately devalued dong (Bloomberg)

Fed Official George “not an advocate of letting inflation run hot” (CNBC)

Former FDIC chair dissents from rule change to facilitate bank dividends in “stressed” Coronavirus economy (FDIC)

Hurricane Laura, headed for U.S. Gulf Coast, could inflict $25B of damage (Bloomberg)

Intel unit in Japan to parry economic espionage (Nikkei Asian Review)

Australia’s ANZ bank launches digital lending platform for small businesses​​​​​​​ (ANZ)

Tweet of the day What’s Hot

Why DeFi Pulse’s Key Metric Is So Simple It’s Confusing (CoinDesk)

Publicly traded crypto miner Marathon to buy fellow miner Fastblock for $22M in stock (CoinDesk)

Fidelity’s chief strategist to head new bitcoin index fund with $100K minimum (CoinDesk)

From Luckycoin to Yam, the crypto industry can’t help making inside-joke meme tokens (CoinDesk)

Japan’s messaging giant LINE launches a digital wallet and blockchain development program (CoinDesk)

– Sebastian Sinclair

Related Stories

• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
• WATCH: Fed Chair Powell Lays Out Economic Policy Approach

Bitcoin’s options market foresees little price turbulence in the short-term, even as central bank watchers expect fireworks during a speech by the chairman of the Federal Reserve on Thursday morning.

• Bitcoin’s implied volatility on one-month options, a gauge of the market’s expectations for price gyrations over the four week period, fell to 52% early Thursday – the lowest level since July 25, according to data source Skew. 
• Short-term price expectations have declined sharply from 70% to 52% over the past two weeks.
• Over three months, the gauge has pulled back from 80% to 68%, while the six-month line has declined from 80% to 72%.

• At 9 a.m. Eastern today, the Fed Reserve’s Jerome Powell is expected to announce new measures from the central bank at his annual keynote at the Jackson Hole symposium.
• Investors usually buy both calls (bullish bets) and puts (bearish bets) ahead of such key events, pushing implied volatility higher.
• Analysts expect Powell to signal tolerance for high inflation – a move that could weaken the U.S. dollar and propel bitcoin higher.
• However, with strong expectations already built in, the scope for disappointment is high, and the dollar may surge if Powell’s comments fall short of expectations.
• The event, therefore, has potential to trigger big moves in either direction.
• The lull in expectations for bitcoin price volatility may reflect that traders are playing a wait-and-see game until Powell’s planned direction becomes clear.
• That said, any potential volatility in the forex markets could feed into cryptocurrencies, as the inverse correlation between bitcoin and U.S. dollar has strengthened over the past few weeks.

• The 60-day inverse correlation is now strongest in at least 16 months.
• Further, the implied volatility terms structure remains steep, meaning the six-month implied volatility is still hovering above the three-month, which in turn is greater than the one-month metric.
• That “indicates that uncertainty is high,” Denis Vinokourov, head of research at the London-based institutional brokerage BeQuant, told CoinDesk in a Telegram chat.
• At press time, bitcoin is trading near $11,380, representing a 0.8% decline on the day.

Also read: Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

Related Stories

• Chainalysis Report Shows Healthy Crypto Usage in Venezuela
• LIVE: CoinDesk Covers Fed Chair Powell’s Jackson Hole Speech
• First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole
• WATCH: Fed Chair Powell Lays Out Economic Policy Approach

Related: LIVE: CoinDesk Covers Fed Chair Powell’s Jackson Hole Speech

LIVE: Keoun and CoinDesk regulatory reporter Nikhilesh De are covering Powell’s speech on CoinDesk.com and Twitter. Follow our live coverage here.

Related Stories

• First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole
• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
• Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

The Libra Association has hired Stevan Bunnel, a veteran of the U.S. Department of Homeland Security, as its general counsel just three months after announcing his predecessor.

• According to a Thursday report by Bloomberg Law, Bunnel will replace Libra’s first-ever general counsel, Robert Werner, a former FinCEN staffer who was hired as recently as May.
• Werner said Bunnel is “an outstanding lawyer and a great guy.”
• Bunnel brings considerable experience to the role having spent time at Homeland Security as general counsel, and before that holding the position of managing partner of the Washington, DC, office of O’Melveny & Myers LLP, a large international law firm.
• Earlier in his career, Bunnel spent several years at the Washington, DC, U.S. Attorney’s Office, per his LinkedIn profile.
• The general counsel role meant Werner would have had to give up his seat on the board of directors at Deutsche Bank Trust Co., a position he told Bloomberg was unwilling to relinquish.
• The Libra Association, comprised of some 26 members including Facebook, was created to develop a global digital currency payments network.
• The association has come under fire on multiple occasions from regulators and lawmakers over concerns the project poses a threat to central bank policies and fiscal sovereignty.
• In recent months, Libra has been building a stronger legal team to help smooth its path to launch.

See also: Libra Hasn’t Abandoned Multi-Currency Stablecoin: Policy Director

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The New Zealand stock exchange has halted trading for the third day in a row as a result of criminal cyberattacks.

• According to a report by Bloomberg on Thursday, the NZX exchange has suffered connectivity issues leading to a series of outages that were the result of targeted disruption by bad actors from outside the country.
• The criminals are demanding bitcoin in order to cease the distributed denial-of-service (DDoS) attacks, which flood the bandwidth of a particular system with traffic rendering it slow or unusable.
• The exchange suffered outages during the last hour of trading on Tuesday and again for over three hours on Wednesday.
• Today’s outage has yet to be resolved, according to Bloomberg.
• According to another report by ZDNet, the attacks may be directed by a criminal cyber gang using monikers like Amada Collective and Fancy Bear that belong to more famous hacker groups.
• Specifically, the attackers have been targeting the exchange’s hosting service Spark, demonstrating a level of sophistication by regularly changing the protocols involved.
• Over recent weeks, the group has tried to extort bitcoin from other well-known financial services including PayPal, MoneyGram, YesBank India, Braintree, and Venmo.

See also: Twitter Hack Used Bitcoin to Cash In: Here’s Why

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• NYSE Can Allow Firms to Raise Funding Through Direct Listings, Says SEC
• Unconfiscatable? Using Bitcoin to Resist Police Extortion in Nigeria
• Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future
• Market Wrap: Bitcoin Braces for $700M in Options to Expire; Record $7B Value Locked in DeFi

The Securities and Exchange Commission (SEC) has given the green light for the New York Stock Exchange (NYSE) to allow some companies to raise capital without the expense of an IPO.

• In a Wednesday order, the SEC approved the exchange to amend Chapter One of the Listed Company Manual to allow firms to hold direct listings.
• The move means companies can now launch a direct listing on the NYSE as an alternate to the initial public offering (IPO), generally preferred by the SEC.
• The direct benefit means it would reduce costs associated with soliciting a bank to underwrite the transaction of an IPO.
• Previously, companies that have sold common equity securities in a private placement were allowed to list shares on the NYSE “solely” to allow shareholders to trade the stock.
• The rule change widens the scope to allow companies to list shares “in addition to, or instead of” facilitating shareholder sales.
• Firms will be allowed the new listing on a case-by-case basis and must meet certain thresholds, including being likely to sell $100 million in shares on the first day of trading on the NYSE.
• The so-called Primary Direct Floor Listing will also allow companies to avoid certain restrictions associated with IPOs, namely lockup periods that prevent insider trading.
• The American Securities Association (ASA), a brokerage group, said direct listings without protections against insider trading would allow for nefarious actors to cash out at “inflated valuations.”
• That would leave “Mr and Mrs. 401(k) holding the bag,” the ASA wrote in a March letter addressed to the SEC as cited in the Wall Street Journal.
• However, in the Wednesday order, the SEC said the NYSE’s direct listing plans already had sufficient investor protections in place.
• The changes come at a time when U.S. crypto exchange Coinbase is said to be preparing to list on the U.S. stock market sometime in early 2021 with preference given to a direct listing.
• On Wednesday, the SEC also announced changes to the rules for accredited investors, slightly expanding the pool of Americans who can invest in private securities.

See also: Crypto and Fintech Investor Ribbit Capital Files to Raise $350M for ‘Blank Check’ IPO

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• New Zealand Stock Exchange Hit Repeatedly By Cybercriminals Demanding Bitcoin
• Deribit Suffers Outage Over ‘Hardware Issues,’ May Miss Thursday’s Options Expiry
• NASA Is Bankrolling a Blockchain for Quadcopter Communications

UPDATE (09:35 UTC, Aug. 27, 2020): Deribit has tweeted that the issue is resolved and trading is once again live.

The most popular cryptocurrency options exchange, Deribit, is suffering a severe service outage.

• According to company tweets early on Thursday, the trading platform is suffering “hardware issues” and a technician has been called to reboot its servers and (hopefully) bring services back to normal functionality.
• “We are not hacked and your funds are safe,” an initial tweet stated.
• Deribit went on to warn that it may not have its systems back online in time for today’s daily options expiry.
• In that case, the firm will “manually adjust the options expiry to reflect the actual market at the time of expiry.”
• The value used for the adjustment would be drawn from Deribit’s index as listed on test.deribit.com.
• However, the outage may knock confidence in the exchange with the news that Deribit doesn’t seem to have server redundancy to avoid such severe ramifications from technical issues.
• Similar issues have affected top U.S. spot exchange Coinbase in the past, leading it to eventually pledge to do more in terms of redundancy provision.
• Deribit may, in fact, have been lucky the outage didn’t occur Friday, when over $700 million-worth of monthly contracts are set to expire, most of them on Deribit.
• Today’s daily bitcoin option expiry is worth $22.8 million, alongside $6.5 million in ether options.
• Deribit is by far the most popular options exchange in the crypto space in terms of trading volumes:

Also read: Fidelity’s Chief Strategist Starts Bitcoin Index Fund

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• First Mover: Binance’s New DeFi Futures Let Crypto Traders Bet on Decentralization

Concordium, an ambitious project whose founders have close links to companies including Volvo, IKEA, Saxo Bank and Nasdaq, is looking to shake up the seemingly glacial world of enterprise blockchain. 

The most striking thing about Concordium, which launches its third testnet next month, is the way it pushes what was once anathema to big corporates: public and permissionless blockchains.

Businesses, wary of tipping their hands and giving away any competitive advantage, have traditionally preferred the idea of private and permissioned blockchains. But many advocates of blockchain tech believe only open systems hold true transformational promise. The oft-cited analogy centers on the relevance of internet versus intranet.  

Related: ‘Boring Is the New Exciting’: How Baseline Protocol Connected With 600 Corporates

Read more: ‘Boring Is the New Exciting’: How Baseline Protocol Connected With 600 Corporates

Toeing the line between the privacy requirements of regulated businesses and full-broadcast blockchains like those of Bitcoin and Ethereum has led some very smart people to opt for an attenuated architecture when it comes to distributed ledgers. 

However, Concordium is confident it has found a third way, keeping sensitive data private using a clever identity and zero-knowledge-proof (ZKP) system, providing firms with a safe, flexible option to deploy open blockchains.

The momentum around projects like Baseline Protocol, which now has some 600 big firms using it, is a solid indicator ZKP tech is ready for prime time.

‘Something totally new’

Related: ConsenSys Acquires JPMorgan’s Quorum Blockchain

According to Concordium CEO Lone Fønss Schrøder, sometimes you need a permission-based ledger; but in order to realize new business models, it has to come in combination with baked-in permissionless possibilities. 

“I think that’s really what large corporations are looking for,” said Fønss Schrøder. “If you look at Hyperledger, for example, or R3, I don’t think it is blockchain in the sense of really providing something new. It’s not decentralized. Companies are seeing it as just another way to do their mainframe applications. But when you talk about permissionless blockchain, it’s something totally new.”

Blockchain today simply doesn’t meet the needs of corporations, says Fønss Schrøder, and a lack of permissionless flexibility has led to no uptick in business adoption. 

Concordium’s chief marketing manager, Beni Issembert, went further: Businesses underwhelmed by today’s enterprise blockchain offerings are squarely in Concordium sights.

“Businesses that are open-minded feel a lot of frustration and desolation when it comes to using Hyperledger and R3 Corda. And we are talking to those disappointed businesses,” Issembert said.

Big-name partners

It would be easy to write Concordium off as some kind of naive newcomer – both R3 and Hyperledger declined to comment on the Concordium white paper. 

But the project, which has its roots in Denmark, features an impressive cast of players from business and academia. On the science side, Concordium’s research center at Denmark’s Aarhus University is run by widely cited cryptographer Ivan Damgard. Last September, Torben Pryds Pedersen, creator of the Pedersen Commitment cryptographic primitive, was appointed as Concordium’s CTO.

Read more: Staying Alive: Why the World of Enterprise Blockchain Has Turned to Collaborations

In terms of corporate clout, Fønss Schrøder is a boardroom director at IKEA, vice chairman of Volvo and spent 22 years at A.P. Moller Maersk. Concordium’s founder, Lars Seier Christensen, founded Saxo Bank in 1992, while the blockchain’s advisers include former Danish Prime Minister Anders Fogh Rasmussen, and heavy hitters from Nasdaq, Mastercard and Skype.

It’s one thing to announce a paradigm shift in the way businesses intend to use blockchain technology, but another to show hard evidence of this new permissionless demand. 

“We are already in contact with those people [Volvo and IKEA] and looking at ways to fulfill what they would like to do. But we are not only targeting 20 or 40 businesses,” said Issembert. “We are focused on the next generation of commerce, the new unicorns; firms that you don’t have to convince the best approach is an open system.”

Open use cases

It should be pointed out that Volvo has blazed a trail when it comes to tracking the minerals used in electric car batteries with the help of Hyperledger Fabric. IKEA has also done some interesting blockchain experiments with the likes of Tradeshift using the Maker protocol. 

Neither Volvo nor IKEA would confirm to CoinDesk whether they were testing Concordium at this time.

Read more: IKEA in ‘World First’ Transaction Using Smart Contracts and Licensed E-Money

If large corporations have been mostly happy with proofs-of-concept using closed enterprise blockchains, what are the new use cases that open systems like Concordium can offer? 

Fønss Schrøder said a major opportunity exists in rethinking the way procurement and supply chains work, for example. (In terms of new entrants to the enterprise blockchain space, there have also been some interesting moves from the EOS ecosystem, particularly in Latin America.)

“It could be smart contracts, which actually will function as marketplaces for you and your whole procurement sector,” said Fønss Schrøder. “I think about what Maersk has been doing, but the disadvantage for Maersk is that this should never have been built on a permission-based blockchain; it should have been permissionless. But that’s the kind of logistical use case I’m sure we will be able to support.”

Volvo board member Fønss Schrøder also sees plenty of uses for open blockchains in the car industry, across secondary markets, for instance, and the service agreements that come with that.

“Nearly every car sold by Volvo has some kind of lease arrangement or car-care, and blockchain is well suited to support this on the insurance side and on the service side,” said Fønss Schrøder.

Public, but private

As far as the ZKP secret sauce, Issembert called this the “backbone of the network,” but could not disclose details.

“For the ZKP design approach, we are going to come to the market with our own solution. It’s not something that has been seen yet,” he said.

Read more: WATCH: ‘Big Four’ Exec Says Privacy Is Key to Enterprise Blockchain Adoption

Next month sees Concordium’s third testnet come into being, with a view to going live in January 2021. 

“We will have the smart contract layer ready and then we will see which corporations will build on it,” said Fønss Schrøder. “It will be very interesting. I don’t think we will disappoint you.”

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Messaging giant LINE has launched a wallet for users to manage digital assets and a blockchain platform where developers can issue their own tokens, tokenize digital assets, and run decentralized applications (dapps).

• LINE’s development platform aims to allow companies to easily introduce blockchain technology, CoinDesk Japan reported.
• LVC Corporation, operator of the company’s crypto and blockchain businesses, and LINE TECH PLUS PTE unveiled the platform, LINE Blockchain Developers and BITMAX Wallet on Wednesday. The wallet services are now only available in Japan, where LINE is particularly well-known.
• The company is developing the proprietary LINE Blockchain and issued its own token LINK (LN) for trading against several major crypto assets such as bitcoin and ether in 2018.
• LINE also started offering trading services via its crypto exchange Bitbox. It was approved for a crypto business license in September 2019. 
• The company established the LINE Blockchain Lab in April 2018, which has been tasked to build the LINE Token Economy.
• LINE, with more than 84 million users in its messaging app, aims to leverage its existing network to jumpstart the development of its token economies and accelerate adoptions of many dapps built on its proprietary blockchain platform.
• The company is one of a handful of messaging apps that have tried to develop blockchain technology and issue their own tokens, but it stands out for the progress it has made.
• Canadian messaging company Kik and Russia-originated Telegram have met with lawsuits from the U.S. Securities and Exchange Commission for their controversial fundraising processes called Initial Coin Offering (ICO), while American messaging giant Facebook’s stablecoin project Calibra is stalled and facing major challenges from the U.S legislators and financial authorities. 

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When Hong Kong regulators gave crypto firm OSL a nod of approval last week, it was the icing on the cake for the HKEX-listed digital asset trading platform. 

Hong Kong’s Securities and Futures Commission (SFC) granted BC Group crypto subsidiary OSL an “approval-in-principle” for its license application for Type 1 (dealing in securities) and Type 7 (automated trading service or ATS), as it pertains to crypto and virtual assets.

The bigger picture is that Asian crypto hubs like Hong Kong, Singapore and Japan have a clearer regulatory stance going forward and are progressing faster than the U.S. and Europe. Perhaps this should be expected, given that Asia remains the global leader in terms of crypto trading volumes.

Related: Hong Kong Regulator Gives Crypto Exchange OSL Tentative Licensure Approval

“I think regulatory progress has been so much more significant than in North America,” OSL CEO Wayne Trench said in an interview. “You’ve got regulators who’ve been front-foot trying to embrace this movement and embrace the technology. The West is perhaps slightly less developed with more obscurity or uncertainty, which just really makes it difficult right for the traditional institutions to engage.”

Read more: Hong Kong Regulator Gives Crypto Exchange OSL Tentative Licensure Approval

This is not to say Hong Kong is delivering light-touch regulation when it comes to virtual assets; quite the opposite, said BC Group CEO Hugh Madden. 

“The SFC flies very carefully and is heavily focused on consumer protection,” Madden said. “If you look at the details of the SFC’s licensing framework, it’s quite specific. They prescribed mandatory insurance to protect consumers with specific percentages for hot and cold storage. When you add in the levels of controls, capital and scale of your organization, it’s really quite a tough hurdle.”

Related: Is Bitcoin Mining Legal in India? Miners Still Don’t Know

The SFC did not respond to a request for comment by press time.

OSL, which states it is the first crypto company to be granted provisional approval by the SFC, has acquired insurance cover for both hot (connected to the internet) and cold (fully offline) storage of digital assets but declined to go into details of the size of cover or markets providing it. OSL is also set apart from other crypto plays in that it’s audited by Big Four accounting firm PwC. 

Read more: Crypto.com Lands Record $360M Insurance Cover for Offline Bitcoin Vaults

In terms of timelines, Madden said if all the SFC’s supervisory requirements are met, OSL should have its full license by the end of this year.

Asian autonomy

The SFC announced its regulatory framework for virtual asset trading platforms back in November 2019, emphasizing the regulator would only grant licenses to platform operators meeting standards comparable to licensed securities brokers and automated trading venues.

“With the license in principle given to OSL now, it would appear the SFC is keen to promote the licensing framework that was clarified last November,” said Malcolm Wright of industry group Global Digital Finance.

Read more: PwC Report Shows Major Growth in Crypto M&A in Asia and Europe

Wright, a compliance expert based in Hong Kong, said Singapore, Japan and Hong Kong have a natural advantage in that they are able to develop their frameworks with relative autonomy. 

“The U.S. and Europe are more complex environments,” he said via email. “For Europe, first there needs to be European agreement (e.g., 5th Anti-Money Laundering Directive) and then each country has to implement it into law – a process that can take several years to complete and can still lead to unevenness in regulatory approach.”

‘Travel Rule’ landscape

OSL and BC Group have also earned their regulatory chops thanks to their close involvement with the Travel Rule Protocol (TRP), a Financial Action Task Force (FATF) “Travel Rule” solution for crypto led by Dutch lender ING and Standard Chartered Bank, and including Fidelity Digital assets and BitGo.

Read more: In Banking First, ING Develops FATF-Friendly Protocol for Tracking Crypto Transfers

Madden pointed out that OSL has license applications underway in both Hong Kong and Singapore. He has personally followed the progress of FATF rules for crypto closely in Asia and internationally, and has had the chance to engage with multiple regulators.

Madden described the Travel Rule solution jurisdictional map as “an interesting landscape,” with virtual asset service providers (VASPs) in the large economies tending to be more domestically focused, while very trade-oriented financial centers are working in a more international fashion.

“Fortunately, we’re all well-known to each other, and all the groups are brilliant at communications in order to try and stay aligned,” Madden said.

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Nigerian programmer Adebiyi David Adedoyin hears knocking at his apartment door. He’s just woken up and headed to the bathroom. He decides to take his time. He’ll answer in a minute.

But the knocking grows louder – and more urgent. 

Inching open the bathroom door, Adedoyin sees someone clawing open his apartment window. 

Related: Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

“Someone’s there,” a voice says.

It’s probably the police trying to break in, he realizes, from all the stories he’s heard.

Adedoyin is sure he hasn’t done anything wrong. But with the Nigerian police, that doesn’t matter. He still might need to brace for trouble. 

As he thinks through what to do next, Adedoyin is thankful a chunk of his money is stored in bitcoin. His crypto wallet is in a hiding spot the officers probably won’t think to check. That means they’re less likely to steal it.

Police corruption

Related: Market Wrap: Bitcoin Braces for $700M in Options to Expire; Record $7B Value Locked in DeFi

While there are many principled police officers in Nigeria who help tackle crimes, police corruption is pervasive. Many Nigerian police are known for extorting and even sometimes torturing citizens rather than helping them solve legal quandaries. 

“Right there in the bathroom, where I was in my boxers with just my phone, AirPods and pack of cigarettes, I could hear them shouting for me to come open the door,” Adedoyin told CoinDesk.

This is a well-documented phenomenon in Nigeria. Over the past several years, an online social media movement has emerged against the police. On Twitter, people use the hashtag #EndSARS to publicize the poor treatment they’ve received from police. SARS stands for Special Anti-Robbery Squad, which is a particularly brutal and mistrusted wing of the Nigerian police force.

Human rights research organization Human Rights Watch released a 102-page report outlining the abuses in painful detail in 2010. 

“Human Rights Watch’s research revealed that people refusing to pay bribes are routinely subjected to arbitrary arrest, unlawful detention and threats until they or their family members negotiate payment for their release. Extortion-related confrontations between the police and motorists often escalate into more serious abuses. The evidence suggests that police officers have on numerous occasions severely beaten, sexually assaulted, or shot to death ordinary citizens who failed to pay the bribes demanded,” the report reads.

Tricks and strategies

Adedoyin notes that Nigerians have to develop their own tricks to avoid police extortion, especially the younger Nigerians who are the main targets. Some people walk along different routes to avoid walking near the police.

 “Now it’s up to each person to prevent oneself from entering such situations,” he said.

The practice is common enough that Adedoyin has been extorted by police officers more than once, and his friends have, too.

Corrupt police officers take their detainee’s phone. They scan through it looking for SMS or email messages signalling how much money the detainee has in the bank. 

If the police officer finds the detainee doesn’t have any money, they’re less likely to waste their time.

Locked in the bathroom, Adedoyin rapidly scrolls through his most recent messages, deleting any bank statements or emails showing how much money he has.

The bathroom door lock breaks. 

Adedoyin is confronted by four police officers, all carrying guns. One slaps Adedoyin and asks him why he didn’t come open the door. As Adedoyin expected, another officer snatches his phone and scans through for any grain of evidence that Adedoyin has money.

Adedoyin didn’t have time to delete everything. The officer finds some evidence of how much money he makes. They finally let him go once he pays.

Where using bitcoin comes in

It was a bad experience. But Adedoyin is happy that his bitcoin trick worked – most of his money is still safe. 

“The money they collected to let me go in that case would have been a lot more if I had more money in my account. But I had most of my money in bitcoin,” Adedoyin said.

Why does using bitcoin help in this situation? Adedoyin’s ploy is to pretend that he doesn’t have much money to extort. His solution is to store his money in a bitcoin wallet instead of in a bricks-and-mortar bank. Since bitcoin’s less common, it’s less likely the police officers find it.

Put another way, he’s not putting his money into bitcoin as a safeguard because of its decentralization properties. Rather, he just thinks police officers are far less likely to look for a crypto balance than a fiat balance to see if he’s ripe for extortion. 

“[The officers] don’t think to check [bitcoin] wallet apps, because most of them don’t even know what bitcoin is and even think bitcoin is a scam,” Adedoyin said.

The second reason he has bitcoin is he hopes the price will keep rising. Like many other bitcoiners in the region, he sees it as an investment that might pay off in the future. 

But for now, he keeps most of his money in bitcoin as security against the next time the police come banging on his door.

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A speech by Federal Reserve Chair Jerome Powell scheduled for Thursday offers a reminder of just how dramatically once-slow-moving monetary forces have accelerated due to the devastating economic toll of the coronavirus pandemic. 

This time last year, President Donald Trump was vehemently criticizing Powell on Twitter for setting interest rates too high, as U.S. economic growth slowed and the national debt swelled past $22 trillion.

This time last year, then-Bank of England Governor Mark Carney delivered a speech at the Fed’s annual Jackson Hole Economic Symposium in Wyoming warning the U.S. dollar’s status as the de facto global currency contributes to an unsustainable international economic and monetary regime. He argued that world leaders should create a “synthetic hegemonic currency,” potentially provided “through a network of central bank digital currencies.” 

Related: Unconfiscatable? Using Bitcoin to Resist Police Extortion in Nigeria

Fast forward to now, and the Jackson Hole conference has been forced to go virtual because of the coronavirus. Trump’s economic stewardship, including a U.S. stock market that many investors now say is propped up by the Fed’s $3 trillion of freshly printed money, has become a core issue in the 2020 presidential election. The national debt now stands at $26.5 trillion. Digital currencies are now being studied and pursued by central banks in China, the U.S. and just about everywhere else. Goldman Sachs recently warned the dollar risked losing its dominant reserve status. 

“The pandemic has sped up key structural trends and triggered substantial market swings,” strategists for the $7 trillion money manager BlackRock wrote this week. “The policy revolution was needed to cushion the devastating and deflationary impact of the virus shock. In the medium term, however, the blurring of monetary and fiscal policy could bring about upside inflation risks.”

Read more: The Federal Reserve Is Experimenting With a Digital Dollar

As the spread of the coronavirus earlier this year triggered lockdowns and quarantines, the global economy this year entered its deepest recession since the early 20th century. 

Related: Market Wrap: Bitcoin Braces for $700M in Options to Expire; Record $7B Value Locked in DeFi

When markets from stocks to bitcoin swooned in March, the Fed slashed interest rates close to zero and has since announced plans to buy U.S. Treasury bonds in essentially unlimited amounts while providing emergency liquidity for money markets, Wall Street dealers and corporations. 

“The road ahead is highly uncertain,” Fed Governor Michelle Bowman said Thursday in a speech in Kansas.  

‘No easy way out’ for Powell

Many investors are betting on bitcoin as a hedge against the potential debasement of the U.S. dollar, but Fed officials say deflationary forces might be stronger because of an expected drop off in demand from consumers and households.

Analysts for Bank of America, the second-biggest U.S. bank, wrote earlier this week in a report that bond market traders expect the Fed to adopt a “major new policy framework aimed at better achieving its 2% target” for annual inflation. As of the last reading, the central bank’s preferred measure of consumer price increases registered just 0.9%, so the baseline expectation is the Fed would let inflation rise well above 2% so that the average over a long period of time gets closer to the target. 

Read more: Bitcoin Risks Deeper Drop if Dollar Rebounds

“Let us be optimistic and say it takes three years to create some inflation,” Matt Blom, head of sales and trading at the digital-asset firm Diginex, wrote Wednesday in an email. “We would need to drive it above 3.5% and maintain it there for years before we are able to use an average calculation.” 

It’s unclear what Fed scenario is already priced into the market, but Bank of America’s Athanasios Vamvakidis, a foreign-exchange analyst, wrote that there is “no easy way out” for Powell and his colleagues. 

“Without inflation eventually acting as a budget constraint, we see risks for recurring and worsening bubbles, with further divergence between Wall Street and Main Street,” Vamvakidis wrote. 

What Powell’s speech could say about the dollar’s future

Crypto traders will focus in the short term on what the Fed’s speech might mean for bitcoin prices, which have surged almost 60% in 2020, far exceeding this year’s 7.7% year-to-date gain in the Standard & Poor’s 500 Index of U.S. stocks. 

But the Fed’s actions could also have implications for ether, the native token of the Ethereum blockchain, where entrepreneurs are developing alternative currencies and semi-autonomous lending and trading networks that might one day replace the current financial system. There’s also a fast-growing business in dollar-linked “stablecoins,” with the amount doubling this year to $13 billion.

Read more: Fed Reserve Analysts Say Common Digital Currency Distinction ‘Problematic’

“So much has changed,” said Joe DiPasquale, CEO of the cryptocurrency-focused hedge fund BitBull Capital. “There is this danger of the U.S. [dollar] in the future no longer being the world’s reserve currency. We are in a much worse position than we were in a year ago.”

Mati Greenspan, founder of the cryptocurrency and foreign-exchange analysis firm Quantum Economics, wrote this week that Powell’s return to Jackson Hole comes at a time when “people are just starting to ask questions about the intrinsic value of money.” 

“U.S. authorities have just taken on an inordinate amount of debt, more than they could possibly ever hope to pay back,” Greenspan wrote. “So the only viable option is to decrease the value of that debt by way of monetary debasement. It’s despicable and dangerous, but the only other option is austerity, which is too unpopular for any public servant to mention at this time.”

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The bitcoin market bottomed out around $11,100 before bouncing back; DeFi continues an upward trend, garnering interest from traders and perhaps creating new ones.

• Bitcoin (BTC) trading around $11,467 as of 20:00 UTC (4 p.m. ET). Gaining 1.2% over the previous 24 hours.
• Bitcoin’s 24-hour range: $11,102-$11,593.
• BTC above its 10-day moving average but below the 50-day, a sideways-turning-bullish signal for market technicians.

Bitcoin’s price was able to hold above $11,100 Wednesday, going as low as $11,102 before jumping as high as $11,593. 

Read More: Bitcoin Drop Squeezes Out Weak Derivatives Positions

Related: Unconfiscatable? Using Bitcoin to Resist Police Extortion in Nigeria

Katie Stockton, analyst at Fairlead Strategies, sees $10,000 as a lower bound in trading because the world’s oldest cryptocurrency lacks market momentum. “The pullback in bitcoin appears healthy,” Stockton noted. “That said, there is room for further near-term downside with support in the $10,000-$10,055 area, where there was once resistance, and room to short-term oversold territory.” 

Jean Baptiste Pavageau, a partner at quantitative trading firm ExoAlpha, says bitcoin continues to be affected by gains in alternative cryptocurrencies, or altcoins. Indeed, one way to measure this is looking at bitcoin’s dominance, which hit a 2020 low of 60.26% in August. 

”The flattishness of the bitcoin price since the beginning of August allowed the altcoin market cap to grow quickly with an inflow from bitcoin traders toward altcoins,” said Pavageau.  

However, two key events looming over the balance of this week might increase bitcoin market action. One is Thursday’s speech from Federal Reserve Chair Jerome Powell. “The key thing to watch from Powell’s speech tomorrow is the possible shift of the inflation target from a unique figure, like 2%, to a range such as 1.75%-2.25%,” said Chris Thomas, head of digital assets for Swissquote Bank. “This would create a dovish feel to the market and we’d likely see some dollar weakness.”

Related: Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

Another event is the expiration of 65,000 BTC options, over $700 million at current market values, on Friday. The vast majority of these options are on crypto derivatives platform Deribit. 

“We may see some volatility as a few traders try to push the futures market towards the $11,000 or $12,000 strike,” said Swissquote’s Thomas, adding, “$11,000 would be a buying opportunity and $12,000 we’d likely see further selling.” 

Read More: Fidelity’s Chief Strategist Starts Bitcoin Index Fund

Value locked in DeFi at $7B

Ether (ETH), the second largest cryptocurrency by market capitalization, was up Wednesday, trading around $386 and climbing 1.4% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: BitGo Weighs Building a Sidechain for WBTC as Ethereum Fees Climb

The total value locked in decentralized finance, or DeFi, has surpassed $7 billion in value, according to aggregator DeFi Pulse. Over 4.8 million ETH and 49,248 BTC is currently “staked” in various DeFi services, gaining a percentage profit or “yield” in return. 

Vishal Shah, founder of crypto derivatives platform Alpha5, says DeFi’s opportunities are captivating the interest of traders, and perhaps creating some brand-new ones. “Derivatives traders naturally look for complex risk to exploit, and, by comparison to DeFi, typical derivatives instruments are quieter,” Shah said. “I think the nuanced specifics of DeFi are probably even giving rise to a new breed of derivative traders.” 

Read More: What to Make of the SEC’s New Accredited Investor Rules

Other markets

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

• qtum (QTUM) + 10.4%
• chainlink (LINK) + 7.4%
• 0x (ZRX) + 5%

Read More: Binance’s New DeFi Futures Let Crypto Traders Bet on Decentralization

Notable losers as of 20:00 UTC (4:00 p.m. ET): 

• bitcoin gold (BTG) – 1%

Read More: FTX Exchange’s $150M Deal for Mobile-First Blockfolio Is Retail Trading Play

Equities:

• Asia’s Nikkei 225 ended the day flat, in the red 0.03%, as a Japan-U.K. trade deal is expected to be finalized by Friday.
• Europe’s FTSE 100 closed flat, in the green 0.14%, as a stronger pound hurt internationally exposed company stocks, dragging down the index.
• The United States’ S&P 500 gained 1%, led by tech stocks as Salesforce jumped 26% on expectations of a stellar earnings announcement.

Read More: Crypto and Fintech Investor Ribbit Capital Files to Raise $350M for IPO

Commodities:

• Oil is flat, down 0.03%. Price per barrel of West Texas Intermediate crude: $43.35.
• Gold was in the green 1.1% and at $1,952 as of press time.

Read More: Marathon to Buy Fastblock Mining for About $22M in Stock

Treasurys:

• U.S. Treasury bonds were mixed Wednesday. Yields, which move in the opposite direction as price, were down most on the two-year, in the red 3.8%.

Read More: Democrats Ask Trump Admin. For Details on Terrorist Crypto Seizures

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Mathew J. D’Souza, crypto entrepreneur and CEO of Blockware Solutions, died on Aug. 21 after a seven-year fight with leukemia. He was 29.

D’Souza’s firm, a major U.S.-based mining rig distributor, announced his death and said a memorial service would be held in Park Ridge, Ill., where the company is based, on Wednesday. 

Despite a short life, he was greatly accomplished. He graduated with a Bachelor of Science in Accountancy (with Honors) in 2012 and a Master of Accounting Science in 2013 from the University of Illinois at Urbana-Champaign. Before entering the crypto world, D’Souza worked with accounting firm KPMG. 

Related: Arctos Inks $1M Sale and Leaseback Deal With Bitcoin Miner Blockware

In crypto, however, he quickly made his mark. In 2017 he co-founded two firms, Blockchain Opportunity Fund, LLC, a multi-million dollar cryptocurrency hedge fund, and Blockware Solutions, LLC, a leading service provider for the bitcoin mining Industry. While CEO, Blockware Solutions became one of the largest distributors of mining rigs to the U.S. market, according to the company.  

In 2019 he co-founded the bitcoin mining fund Blockware Mining, LLC and served as the company’s CEO.

In addition he was a keen observer and advocate of the blockchain and crypto space and a frequent source of insight for reporters at CoinDesk. He was a featured speaker during the virtual Consensus: Distributed conference in May.  

D’Souza is survived by his parents and brothers. Blockware Solutions said those wishing to pay tribute to his memory could make donations to the Evans Scholars Foundation. 

Related: Canaan’s Post-IPO Stock Plunge Reveals Sales Slump, Price War With Bitmain

A Celebration of Life will be held on Friday, Aug. 28, from 3 p.m. to 8 p.m. local time at Cooney Funeral Home located at 625 Busse Highway in Park Ridge, Ill.  The Memorial Service will be held the next day at 10 a.m. at Mary, Seat of Wisdom Parish, 920 W. Granville, Park Ridge.

Two U.S. tech firms are building NASA a blockchain-based communications solution they believe has potential for the space agency’s quadcopter fleet.

• Orbit Logic and the Fraunhofer USA Center for Experimental Software Engineering won $124,800 in NASA funding Tuesday to build “Space Communication Reconstruction and Mapping with Blockchain Ledgering,” or SCRAMBL for short.
• While the proposed SCRAMBL is far from the launchpad, the system as described in a brief seeks to use blockchain to propagate data between networking satellites, increasing their communication efficacy, coordination and “overall awareness.”
• “Lightweight and tailored” algorithms will shore up communication breakdowns, according to the SCRAMBL project brief. If one node cuts out, the rest will quickly and dynamically adapt.
• Such flexibility could be of particular use for NASA’s budding army of tiny drones moving in tandem, the SCRAMBL project proposal said. NASA is currently spending billions on an octocopter mission to Saturn.
• As pointed out by the two firms, quadcopter swarms need to stay nimble in inhospitable environments, where communication is spotty but operational awareness remains paramount. They told NASA that blockchain could be just the ticket.
• NASA did not return CoinDesk queries, and Orbit Logic did not pick up calls.

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Blockchain firm Coda Protocol announced the launching of its node operator mentorship program on Wednesday. 

• In a press statement emailed to CoinDesk, the firm said that in order to train people to run nodes it would pair them with “technical ambassadors” from its team, and this program would also be a gateway for applicants to seek a grant of Coda’s tokens to help develop the network.  
  
• We are proud that 30% of our community comes to us having never run a node before,” said Evan Shapiro, CEO of O(1)Labs, the firm developing Coda Protocol, in the statement. “We made this program to really make it easy for people to get involved with what we’re building,” he added. 
  
• According to Shapiro, Coda is also on track for its expected mainnent launch in Q4. “It’s just a few more testnets and we’ll be there,” he said. 

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Fidelity Investments’ chief strategist is heading a new bitcoin index fund that appears to be Wall Street’s latest play for high-dollar institutional crypto bets.

• “Wise Origin Bitcoin Index Fund I, LP” has a $100,000 minimum buy-in and a high-ranking executive officer to boot: Peter Jubber, head of strategy and planning for the increasingly crypto-friendly investments giant Fidelity.
• Disclosed in a Wednesday morning filing with the Securities and Exchange Commission, the fund is the latest example of Wall Street veterans warming up to bitcoin. Fidelity, one of the largest mutual fund firms in the U.S., is also leading the Street in bitcoin research and services.
• Wise Origin links back to Fidelity Investments via Jubber and Fidelity’s brokerage service and distribution subsidiaries, both of which are set to receive sales compensation from the new fund. It also shares a Boston office building with Fidelity.
• Fidelity declined to comment on its ties to the fund. A Delaware corporation called FD Funds GP is Wise Origin’s general partner, and Jubber is FD Funds’ president.
• While it is not known how the fund will approach bitcoin investing, Jubber waxed bullish on blockchain in a 2017 podcast sponsored by Fidelity. At the time he said his firm had sketched out 10 years of potentialities for the institution-disrupting tech.
• “Every incumbent should be spending time and money on this topic to understand it, at least to understand the threat,” he said in the podcast. “But I think there’s just a massive opportunity.”
• The fund has yet to raise any capital from investors.

Read more: Fidelity’s Man: Can Tom Jessop Bridge Crypto and Wall Street for Good?

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