Skip to main content

CoinDesk Crypto

Iran Gives Crypto Miners One Month to Register With the State

6 years 2 months ago

Iranian Vice President Eshaq Jahangiri announced on Monday the country’s cryptocurrency miners will soon have to register their rigs with the government.

  • Under the directive, miners will have to disclose their identities, the size of their mining farms and their mining equipment type with the Ministry of Industry, Mines and Trade. 
  • Miners will have a month to register their equipment, according to the Ministry, which will then publish a list of licensed mining centers.
  • Jahangiri’s announcement is the latest in Iran’s cat-and-mouse game with the country’s illegal crypto miners, who smuggle in rigs and are sometimes caught. 
  • Officials said Monday they want to “eliminate the confusion of cryptocurrency activists” with the new directive. That confusion has largely been of Iran’s own making: conflicting mining policies, tariffs and laws have left miners in a gray zone for years.
  • The directive will ultimately give Iran tighter control over its on-the-books miners, though it remains to be seen how much of the underground community will heed the directive. Iranian miners contributed nearly 4% of bitcoin’s hashrate in April.
  • The directive did not specify the punishment for failing to register. However, illegal bitcoin miners have faced jail time and steep fines in the past.
Related Stories
CoinDesk

Bitcoin’s Lightning Network Is Vulnerable to ‘Looting’: New Research Explains

6 years 2 months ago

Savvy attackers might be able to “loot” bitcoin from others by way of the Lightning Network if users aren’t careful, a new cybersecurity report warns. 

The Hebrew University of Jerusalem computer scientists Jona Harris and Aviv Zohar have taken a closer look at a “systemic” Lightning Network attack that could lead to loss of funds. The attack, which they describe in their new paper, “Flood & Loot: A Systemic Attack on the Lightning Network,” preys on Bitcoin blockchain congestion. 

The problem with the Bitcoin blockchain is it’s slow to settle payments and it only supports a few transactions per second. The Lightning Network is a second-layer solution that helps to solve this massive problem by pulling payments off the Bitcoin blockchain. 

Related: Cryptography Startup Brings Private Payment Channels to Tezos Blockchain

But Lightning is still tied to the Bitcoin blockchain. This attack exploits the connection and tries to take advantage of Bitcoin’s aforementioned limitations.

Developers have long known about this attack vector. But before Harris’ and Zohar’s report, no one had done a deep analysis to measure in detail how feasible such an attack would be. These researchers found an attack is not very hard and it could be lucrative for attackers.

“The resulting high volume of transactions in the blockchain will not allow for the proper settlement of all debts, and attackers may get away with stealing some funds,” writes Harris in a post explaining the mechanics of the attack.

Harris cautions users not to experiment with this attack since it “can allow funds to be stolen from innocent users. Do not try this at home.”

The ‘Flood’

Related: One Man’s Mission to Deploy Solar-Powered Bitcoin Nodes Across Africa

The attack relies on a couple components of the Lightning Network. 

The whole point of the Lightning Network is to keep funds “off-chain,” meaning “off” the Bitcoin blockchain. That way, people can make bitcoin payments while using bitcoin’s scarce block space as little as possible. Bitcoin only can handle a few transactions per second in total, which isn’t a lot.

That said, if something goes wrong, a user always has the ability to kick their Lightning transaction back to the Bitcoin blockchain.

Read more: Lightning Solves Bitcoin’s Speed Problem, but Watch Out for Fraudsters

First, Lightning works the best when the underlying blockchain is used very minimally. The problem comes if a bunch of Lightning channels are closed at once in the “flood” portion of the attack: The underlying bitcoin network cannot handle the volume, leading to problems. 

Second, there’s an expiration date built into each transaction by which users can send their bitcoin back to the blockchain without someone stealing it.

The Lightning Network is made up of thousands of nodes. Similar to how the internet works under the hood, a payment needs to hop along several nodes before it reaches its destination. Lightning uses “hash time-locked contracts” (HTLCs) undergirded by cryptography so that users don’t have to trust their money with these complete strangers. HTLCs have baked in rules, such as requiring knowledge of a “secret” to obtain the bitcoin inside, which none of these intermediary strangers know. 

But the researchers are exploring a way to kind of game the system. In short, HTLCs build a deadline into each of these payments, giving users a chance to “settle” their funds on the bitcoin blockchain if something goes awry. After this deadline passes, the HTLCs are up for grabs; as a result, a malicious user can steal the funds held in the contracts. 

The ‘Loot’

You might be able to see where this is going. Attackers take advantage of the blockchain congestion and pair it with exploiting the HTLC deadlines. 

The attack relies on the bitcoin blockchain being filled to the brim with transactions so that no more can get through. The attacker hopes he or she can push the contracts past the built-in deadlines. If successful, the attacker can begin to “loot” the expired contracts.

“By attacking many channels and forcing them all to be closed at the same time […], some of the victims’ HTLC-claiming transactions will not be confirmed in time, and the attacker will steal them,” Harris explains in the blog post.

The researchers ran simulations on a test Lightning Network with dummy coins to test how feasible such an attack is.

In short, each closed channel results in one more transaction being pushed to the Bitcoin blockchain. The attacker will attempt to simultaneously close as many channels as possible to increase the number of transactions sent to the blockchain, increasing the chance of success. 

Using their simulations, the researchers found that attacking 85 channels at once was enough to “guarantee a successful attack.”

Harris notes an attacker targeting 100 channels leads to a reward of “at least” 7402 HTLCs, with the average HTLC today holding about $138 worth of bitcoin. That could mean a payday of roughly $1,021,476.

They also found that, as expected, less block space leads to a higher attack success rate because an HTLC is less likely to go through before the deadline.

Finding “potential victims” was also eerily easy. In the simulation, the researchers found it wasn’t hard to set up channels with other users. Indeed, 95% of Lightning nodes accepted their invitations to set up a Lightning channel.

The Fix

Still, this research could be seen as a part of a broader effort to improve the payment system and, one hopes, make it safer for more users. In this way, bitcoiners like to describe bitcoin as “anti-fragile” – the more a system fails and the more it is subject to attacks, the stronger it gets. 

The researchers argue the attack is systemic and “eliminating the risk entirely seems to be a complicated task.” 

That said, Harris suggests several strategies for solving the problem, or at least ameliorating it if the issue can’t be stomped out entirely. One is increasing the HTLC deadline so it is easier for a user tp counter the attacker via the Bitcoin blockchain in time.

Lightning Network watchtower Teos developer Sergi Delgado told CoinDesk that so-called “anchor outputs,” an in-progress upgrade, could also make the attack much harder. 

Anchor outputs would allow users to bump up their transaction fee to get the transaction into the Bitcoin blockchain faster. This step would make it more difficult for the attacker to prevent a counter-transaction from being sent to the blockchain.

“The current, simple version of anchors doesn’t fix it […], but a more mature version should,” Delgado said.

Read more: Researchers Surface Privacy Vulnerabilities in Bitcoin Lightning Network Payments

The Lightning Network could significantly improve bitcoin payments by speeding them and scaling Bitcoin as a whole so more people can use the digital currency at once. But many argue the network isn’t ready for prime time. As the network grows, researchers are exploring problems like this one in the hopes that one day they can be fixed.

With these and other potential improvements, Harris thinks there’s hope. But it will take some work. “I believe the Lightning Network is here to stay, but of course more work is required in order to minimize the potential of such threats before [Lightning] could become mainstream. There are ongoing discussions in the community around this and I believe we are on the right track,” Harris said.

Related Stories
CoinDesk

Bitcoin Up 27% in First Half of 2020, Beating Gold, Silver and Platinum

6 years 2 months ago

Bitcoin showed its luster during the first half of 2020 by rallying more than 27% percent amid mediocre returns from precious metals including gold, silver and platinum. 

Gold underperformed bitcoin by nearly 11 percentage points despite gaining 16 percent in the first half of 2020 and making eight-year highs in late June. Silver and platinum both finished the first half of 2020 with negative gains. 

Bitcoin’s strong performance is no shock to some analysts, especially in context of the benchmark cryptocurrency’s increasing correlation with equity markets. “Given that equities are now near, or in some cases above, their highs reached in February, it’s not surprising to see bitcoin do the same,” said Ryan Watkins, bitcoin analyst at Messari.

Related: Market Wrap: As Stocks Rally, Bitcoin Trades Above $9.3K for the First Time in 10 Days

Why compare returns from bitcoin to gold or other precious metals? “Gold is bitcoin’s most aspirational asset,” explained Watkins. “Like bitcoin, gold is a scarce commodity whose value is derived almost entirely from its monetary premium.” 

Unlike gold, however, bitcoin investors have historically experienced more extreme volatility. Silver and platinum were also much more volatile than gold through the first half of 2020.

Bitcoin and gold could be seen more like complementary investments than competitives ones based on their performance over the past six months, said David Lifchitz, managing partner at Paris-based quantitative cryptocurrency trading firm ExoAlpha. Given bitcoin’s historic volatility, holding “digital and physical gold together” could provide a better risk-return profile than holding either of them individually, said Lifchitz. 

See also: Bitcoin Sees Small Gain as Gold Rallies to One-Month High

Related: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Investors typically adjust their portfolios based on the amount of risk required to achieve a certain return. Increased returns often bring with it higher volatility or risk. Depending on how assets correlate, though, a properly weighted portfolio can achieve a higher expected return with a lower level of risk than would be found in a portfolio containing just one asset.  

Investing in bitcoin and the less-volatile gold during the first half of 2020 could have reduced an investor’s risk without sacrificing returns, Lifchitz told CoinDesk. Equal investments in gold and bitcoin, for example, could have more or less matched returns from an investment only in bitcoin while suffering less of a drawdown in March, Lifchitz explained. 

But risk-adjusted returns from bitcoin and gold over the last six months “may not hold true going forward,” said Lifchitz. For one thing, the cryptocurrency market has grown eerily quiet over the past few weeks as bitcoin’s volatility has plummeted. 

A Bloomberg July report on bitcoin noted bitcoin’s 260-day volatility is “at the lowest versus the same gold-risk measure since the crypto asset’s parabolic 2017 rally.” Senior commodity strategist Mike McGlone, who authored the report, said, “Volatility should continue declining as bitcoin extends its transition to the crypto equivalent of gold from a highly speculative asset.”

See also: Crypto Long & Short: Is Bitcoin More Like Gold or Equities?

Bitcoin’s dropping volatility to historic lows could quickly change directions, however. McGlone described bitcoin as a “resting bull” ready for a breakout, adding, “We expect recent compression to be resolved via higher prices.”

Related Stories
CoinDesk

Cardano at One-Year High on Shelley Upgrade

6 years 2 months ago

Cardano (ADA) continues to skyrocket.

The eighth-largest cryptocurrency by market value jumped to $0.1021 on Saturday to hit its highest price level since June 2019. It has rallied by a staggering 170% in the second quarter, according to CoinDesk data. 

At press time, ADA is trading near $0.098, representing a 200% year-to-date gain. Its bitcoin-denominated price (ADA/USD) also clocked a one-year high of 1,120 satoshis (0.00001120 BTC) last week. 

Related: China Stocks Surge and NYC Real Estate Craters: 5 Stories Shaping Markets Today

Cardano-specific factors look to have fueled the big price rally, given that bitcoin, the top cryptocurrency and an anchor for crypto markets, has gained just 30% so far this year. 

According to Daniel Ferraro, marketing director at blockchain intelligence firm IntoTheBlock, ADA’s impressive rally is the result of the excitement surrounding the “Shelley” upgrade, which would make Cardano 50 to 100 times more decentralized than other prominent blockchain networks. Further, it will introduce an incentive scheme, or staking, designed to reach equilibrium around 1,000 stake pools.  

Staking refers to the process of holding coins in a cryptocurrency wallet to support the operations on a blockchain in return for newly minted coins. It is similar to earning interest on a fixed-income investment such as bonds. 

Read more: Compound’s ‘Yield Farmers’ Briefly Turned BAT Into DeFi’s Largest Coin

Related: First Mover: As Bitcoiners Watch Dollar, Deutsche Bank Sees Trump Win Hurting Reserve Status

An incentivized testnet (ITN) was launched in December 2019 to allow ADA holders, who acquired coins before November, to earn real staking rewards by participating in the testing of the Shelley upgrade. Currently, there are over $13 billion ADA staked on ITN, according to itn.adapools.org. 

“The price rise seen over the past couple of months was likely fueled by the launch of staking on ITN,” said Simon Peters, crypto market analyst at investment platform eToro, who added, “The ITN phase is over and the focus now is on the mainet, which will go live once the hard fork takes place later this month.” 

The first node deployed to the mainet on July 1, containing all features that will be implemented following the hard fork, expected to happen on July 29.

Following the completion of the upgrade, ADA investors, irrespective of the size of their holdings and the date of acquisition, would be able to earn staking rewards and delegate their coins. 

The lure of making passive income by staking and participating in network activities is likely to keep investor interest in the cryptocurrency high. 

Sell the news?

“The Shelley upgrade will be another case of buy the rumor, sell the news,” Mostafa Al-Mashita, vice president of digital liquidity firm Secure Digital Markets, told CoinDesk in June. 

“Buy the rumor, sell the news” refers to a situation where the price of an asset rallies in the days or months leading up to a highly anticipated positive event and drops on profit-taking after the event has happened. 

ADA has carved out impressive gains over the past few months and may remain better bid ahead of the July 29 mainnet launch. Were investors to “sell the news,” the cryptocurrency may face some downside pressure in August. 

Read more: Search for Yield Drives Ether’s Put-Call Ratio to One-Year High

Over 80% of Cardano’s total supply of 31.112 billion coins is currently “in the money” or making a profit, of which 4.16 billion coins have been acquired at an average price of $0.087, according to data source IntoTheBock.

To put it another way, the acquisition cost of more than 4 billion coins is just 11% below the current market price of $0.098. 

As a result, these holders may be tempted to take profits if prices begin to fall and their actions would add to bearish pressures around the cryptocurrency, possibly leading to a deeper decline. 

Also, ADA-related sentiment in Twitter is extremely bullish at the moment, according to data provided by the blockchain analytics form Santiment. 

“For many coins, extremely positive sentiment can coincide with a local top or short-term price correction, as the crowd reaches ‘peak hype’ and some of the whales begin to offload their bags on the increasingly optimistic bulls,” Dino Ibisbegovic, market analyst at Santiment, told CoinDesk.

Related Stories
CoinDesk

ConsenSys, Polychain, Tron, CipherTrace: Blockchain Startups Got $30M+ in US ‘PPP’ Bailout Loans

6 years 2 months ago

More than 75 companies in the blockchain and cryptocurrency industry collected at least $30 million in payroll loans from the U.S. government.

The U.S. Small Business Administration (SBA) published details of its Paycheck Protection Program (PPP) on Monday, revealing a who’s who of major and minor firms in the industry.

Loan recipients included Zcash developer Electric Coin Company, Ethereum venture studio ConsenSys and Rainberry Inc., the U.S. entity acquired by Justin Sun’s Tron Foundation at the time of its BitTorrent acquisition in 2018.

Related: Irish Charity Receives $1.1M Grant to Build Blockchain Platform for Aid Distribution

Crypto venture firms were also represented on the list, including Polychain Capital and Unchained Capital.

The PPP was created by the Trump administration during the COVID-19 outbreak to help businesses pay their employees during the ongoing economic crisis. The effort was meant to stem layoffs, though some 44 million Americans have filed for unemployment benefits since March.

The loans to blockchain startups are likely to be controversial among cryptocurrency users given the industry’s roots in the liberterian-leaning cypherpunk movement, which distrusted governments and banks. (Satoshi Nakamoto famously embedded a headline about bank bailouts into Bitcoin’s genesis block.) However, not taking an available subsidy arguably might have put any one company at a disadvantage to competitors that did, regardless of what the recipient believes about the policy’s merits, as one industry insider pointed out.

It may have even been a point of strategy. “Every fund has been telling their startups to [apply],” one Silicon Valley investor told CoinDesk in April.

Related: Cardano Developer IOHK Launches $20M Fund for Ecosystem Startups

The SBA published data on more than 660,000 recipients from a variety of sectors. Each entry included a range of how much money was received (specific amounts were not published) and the bank that issued each loan.

Loan recipients from the blockchain industry include:

  • ConsenSys received between $5 million and $10 million in April from Signature Bank.
  • Cybersecurity and blockchain solution firm KryptoBlocks may have received anywhere from $1 million and $5 million in May and June. (Note: KryptoBlocks appeared on the list twice: once for a loan between $1 million and $2 million, spelled “KRYPTOBLOKCS” and once for a loan between $2 million and $5 million.)
  • Crypto exchange Bittrex received between $1 million and $2 million in May from Celtic Bank Corporation.
  • Compliance firm CipherTrace received between $350,000 and $1 million from First Republic Bank in April.
  • Cardano maker IOHK USA LLC received between $350,000 and $1 million from Bank of America in May.
  • Rainberry Inc., formerly known as BitTorrent Inc. prior to its acquisition by Tron, received between $2 million and $5 million from Bank of the West in April.
  • Polychain Capital received between $350,000 and $1 million from Signature Bank in April.
  • Electric Coin Company received between $350,000 and $1 million from Newtek Small Business Finance in April.
  • Crypto portfolio organizer Blockfolio received between $350,000 and $1 million from Wells Fargo Bank in April.
  • Security token issuance consultant TokenSoft received between $350,000 and $1 million from Cross River Bank in April.
  • Amalgamated Token Services, Inc. received between $350,000 and $1 million from Silicon Valley Bank in April.
  • Crypto tax adviser Token Tax LLC received between $150,000 and $350,000 from JPMorgan Chase Bank in May.
  • Crypto Blockchain Plug received between $150,000 and $350,000 from Umpqua Bank in May.
  • Crypto Kids Camp received between $150,000 and $350,000 from MBE Capital Partners in June.
  • Wallet maker MyCrypto received between $150,000 and $350,000 from JPMorgan Chase Bank in May.
  • Wallet maker MyEtherWallet received between $150,000 and $350,000 from Customers Bank in June.
  • MobileCoin received between $350,000 and $1 million from Blue Ridge Bank in April.
  • AccessCoin received between $150,000 and $350,000 from FieldPoint Private Bank & Trust in April.
  • CoinAlpha received between $150,000 and $350,000 from Radius Bank in April.
  • Athena Bitcoin received between $150,000 and $350,000 from Citizens National Bank of Greater St. Louis in April.
  • CoinZoom received $150,000 and $350,000 from Zions Bank in April.
  • CoinMe received between $350,000 and $1 million from First Financial Northwest Bank in April.
  • Digital Assets Data received between $350,000 and $1 million from Silicon Valley Bank in April.
  • BTCMiner received between $150,000 and $350,000 from Northeast Bank in June.
  • Chainscale received between $350,000 and $1 million from Bank of America in May.
  • FogChain received between $150,000 and $350,000 from City National Bank in April.
  • Quarkchain received between $150,000 and $350,000 from Fremont Bank in April.
  • SkuChain received between $150,000 and $350,000 from Cross River Bank in May.
  • SALT Blockchain received between $1 million and $2 million from Alpine Bank in April.
  • ChainWorks received between $150,000 and $350,000 from Fifth Third Bank in April.
  • Everchain received between $350,000 and $1 million from Bank of America in May.
  • Chain.io received between $150,000 and $350,000 from Tioga-Franklin Savings Bank in April.
  • ShipChain received between $150,000 and $350,000 from Celtic Bank Corporation in May.
  • OmniChain Solutions received between $150,000 and $350,000 from First United Bank and Trust Company
  • Unchained Capital received between $150,000 and $350,000 from Burling Bank in April.
  • Truffle Blockchain Group received between $350,000 and $1 million from JPMorgan Chase Bank in April.
  • Voyager Digital Holdings received between $350,000 and $2 million from Signature Bank and BNB Bank in April.
  • Bitnomial received between $150,000 and $350,000 from BMO Harris Bank in April.
  • Permission.io received between $350,000 and $1 million from Zions Bank in May.
  • Factom (which is now bankrupt) received between $150,000 and $350,000 from Silicon Valley Bank in April.
  • Tax services firm Lukka received between $1 million and $2 million from Dime Community Bank in April.
  • Decentralized ID firm Civic Technologies received between $350,000 and $1 million from First Republic Bank in April.
  • Crypto exchange ShapeShift received between $1 and $2 million from Signature Bank in April.
  • Red Leaf Chicago, a DigitalMint crypto ATM provider, received between $150,000 and $350,000 from Surety Bank in April.
  • Clark, Sharp and Reynolds, the company behind the Coinsource bitcoin ATM machines, received between $350,000 and $1 million from Titan Bank in April.
  • Crypto exchange bitFlyer USA, the U.S. affiliate of the Japan-based bitFlyer, received between $150,000 and $350,000 from Signature Bank in April.
  • Ledger Holdings, the legal entity behind crypto derivatives provider LedgerX, received between $150,000 and $350,000 from Signature Bank in April.
  • All In Bits Inc., the entity behind Cosmos contributor Tendermint, received between $350,000 and $1 million from Wells Fargo Bank in May.
  • Nebulous, which builds software and hardware for the Sia Network, received between $150,000 and $350,000 from Needham Bank in April.
  • Plutus Financial, which conducts business as Abra, received between $350,000 and $1 million from Pacific Western Bank in April.
  • Circle Internet Financial, better known as Circle, one of the companies behind the USDC stablecoin, received between $1 million and $2 million from Silicon Valley Bank in April.
  • Tech firm Trail of Bits received between $1 million and $2 million from Signature Bank in April.
  • The Sovrin Foundation received between $350,000 and $1 million from Synovus Bank in April.
  • The Algorand Foundation Singapore (with a listed address in New York) received between $150,000 and $350,000 from Silicon Valley Bank in April.
  • Crypto settlement platform Seed CX (which recently axed its exchange) received between $350,000 and $1 million from BMO Harris Bank in April.
  • Moon Inc., the entity behind the LibertyX crypto ATMs, received between $150,000 and $350,000 from Solera National Bank in April.
  • Storj Labs received between $350,000 and $1 million from Bank of America in May.
  • Radar Relay received between $350,000 and $1 million from Community Bank of Colorado in April.
  • Prime Trust received between $350,000 and $1 million from Lexicon Bank in April.
  • Celsius Network received between $150,000 and $350,000 from Signature Bank in April.
  • Quantstamp received between $150,000 and $350,000 from Silicon Valley Bank in April.
  • Crypto miner producer Core Scientific received between $2 million and $5 million from City National Bank in April.
  • Dharma Labs received between $150,000 and $350,000 from Radius Bank in April.
  • Cambridge Blockchain received between $150,000 and $350,000 from Cross River Bank May.
  • Blockchain and AI infrastructure firm Griid Infrastructure received between $150,000 and $350,000 from Signature Bank in April.
  • Crypto mining colocation firm Compute North received between $350,000 and $1 million from Highland Bank in April.
  • Messari received between $150,000 and $350,000 from Silicon Valley Bank in April.
  • Crypto media outlet Bitcoin Magazine’s parent firm BTC Media received between $350,000 and $1 million from Celtic Bank Corporation in April.
  • Crypto media firm The Block received between $150,000 and $350,000 from Silicon Valley Bank in April.

This is a developing story.

Marc Hochstein, Zack Seward, Daniel Nelson and Matt Yamamoto contributed reporting.

Correction (July 6, 19:02 UTC): An earlier version of this article misidentified two of the loan recipients. The R3 LLC that received SBA financing is different than the R3 LLC that develops blockchain technology. SafeChain Solutions is also different from the SafeChain blockchain firm.

Related Stories
CoinDesk

ConsenSys, Polychain, Tron, CipherTrace: Blockchain Startups Got $18M+ in US ‘PPP’ Bailout Loans

6 years 2 months ago

More than 40 companies in the blockchain and cryptocurrency industry collected at least $18 million in payroll loans from the U.S. government.

The U.S. Small Business Administration (SBA) published details of its Paycheck Protection Program (PPP) on Monday, revealing a who’s who of major and minor firms in the industry.

Loan recipients included Zcash developer Electric Coin Company, Ethereum venture studio ConsenSys and Rainberry Inc., the U.S. entity acquired by Justin Sun’s Tron Foundation at the time of its BitTorrent acquisition in 2018.

Related: Irish Charity Receives $1.1M Grant to Build Blockchain Platform for Aid Distribution

Crypto venture firms were also represented on the list, including Polychain Capital and Unchained Capital.

The PPP was created by the Trump administration during the COVID-19 outbreak to help businesses pay their employees during the ongoing economic crisis. The effort was meant to stem layoffs, though some 44 million Americans have filed for unemployment benefits since March.

The loans to blockchain startups are likely to be controversial among cryptocurrency users given the industry’s roots in the liberterian-leaning cypherpunk movement, which distrusted governments and banks. (Satoshi Nakamoto famously embedded a headline about bank bailouts into Bitcoin’s genesis block.) However, not taking an available subsidy arguably might have put any one company at a disadvantage to competitors that did, regardless of what the recipient believes about the policy’s merits, as one industry insider pointed out.

It may have even been a point of strategy. “Every fund has been telling their startups to [apply],” one Silicon Valley investor told CoinDesk in April.

Related: Cardano Developer IOHK Launches $20M Fund for Ecosystem Startups

The SBA published data on more than 660,000 recipients from a variety of sectors. Each entry included a range of how much money was received (specific amounts were not published) and the bank that issued each loan.

Loan recipients from the blockchain industry include:

  • ConsenSys received between $5 million and $10 million in April from Signature Bank.
  • Cybersecurity and blockchain solution firm KryptoBlocks may have received anywhere from $1 million and $5 million in May and June. (Note: KryptoBlocks appeared on the list twice: once for a loan between $1 million and $2 million, spelled “KRYPTOBLOKCS” and once for a loan between $2 million and $5 million.)
  • Crypto exchange Bittrex received between $1 million and $2 million in May from Celtic Bank Corporation.
  • Compliance firm CipherTrace received between $350,000 and $1 million from First Republic Bank in April.
  • Cardano maker IOHK USA LLC received between $350,000 and $1 million from Bank of America in May.
  • Rainberry Inc., formerly known as BitTorrent Inc. prior to its acquisition by Tron, received between $2 million and $5 million from Bank of the West in April.
  • Polychain Capital received between $350,000 and $1 million from Signature Bank in April.
  • Electric Coin Company received between $350,000 and $1 million from Newtek Small Business Finance in April.
  • Crypto portfolio organizer Blockfolio received between $350,000 and $1 million from Wells Fargo Bank in April.
  • Security token issuance consultant TokenSoft received between $350,000 and $1 million from Cross River Bank in April.
  • Amalgamated Token Services, Inc. received between $350,000 and $1 million from Silicon Valley Bank in April.
  • Crypto tax adviser Token Tax LLC received between $150,000 and $350,000 from JPMorgan Chase Bank in May.
  • Crypto Blockchain Plug received between $150,000 and $350,000 from Umpqua Bank in May.
  • Crypto Kids Camp received between $150,000 and $350,000 from MBE Capital Partners in June.
  • Wallet maker MyCrypto received between $150,000 and $350,000 from JPMorgan Chase Bank in May.
  • MobileCoin received between $350,000 and $1 million from Blue Ridge Bank in April.
  • AccessCoin received between $150,000 and $350,000 from FieldPoint Private Bank & Trust in April.
  • CoinAlpha received between $150,000 and $350,000 from Radius Bank in April.
  • Athena Bitcoin received between $150,000 and $350,000 from Citizens National Bank of Greater St. Louis in April.
  • CoinZoom received $150,000 and $350,000 from Zions Bank in April.
  • CoinMe received between $350,000 and $1 million from First Financial Northwest Bank in April.
  • Digital Assets Data received between $350,000 and $1 million from Silicon Valley Bank in April.
  • BTCMiner received between $150,000 and $350,000 from Northeast Bank in June.
  • Chainscale received between $350,000 and $1 million from Bank of America in May.
  • FogChain received between $150,000 and $350,000 from City National Bank in April.
  • Quarkchain received between $150,000 and $350,000 from Fremont Bank in April.
  • SkuChain received between $150,000 and $350,000 from Cross River Bank in May.
  • SALT Blockchain received between $1 million and $2 million from Alpine Bank in April.
  • ChainWorks received between $150,000 and $350,000 from Fifth Third Bank in April.
  • Everchain received between $350,000 and $1 million from Bank of America in May.
  • Chain.io received between $150,000 and $350,000 from Tioga-Franklin Savings Bank in April.
  • ShipChain received between $150,000 and $350,000 from Celtic Bank Corporation in May.
  • OmniChain Solutions received between $150,000 and $350,000 from First United Bank and Trust Company
  • Unchained Capital received between $150,000 and $350,000 from Burling Bank in April.
  • Truffle Blockchain Group received between $350,000 and $1 million from JPMorgan Chase Bank in April.
  • Voyager Digital Holdings received between $350,000 and $2 million from Signature Bank and BNB Bank in April.
  • Bitnomial received between $150,000 and $350,000 from BMO Harris Bank in April.
  • Permission.io received between $350,000 and $1 million from Zions Bank in May.
  • Factom (which is now bankrupt) received between $150,000 and $350,000 from Silicon Valley Bank in April.
  • Tax services firm Lukka received between $1 million and $2 million from Dime Community Bank in April.
  • Decentralized ID firm Civic Technologies received between $350,000 and $1 million from First Republic Bank in April.
  • Crypto exchange ShapeShift received between $1 and $2 million from Signature Bank in April.
  • Messari received between $150,000 and $350,000 from Silicon Valley Bank in April.
  • Crypto media outlet Bitcoin Magazine’s parent firm BTC Media received between $350,000 and $1 million from Celtic Bank Corporation in April.
  • Crypto media firm The Block received between $150,000 and $350,000 from Silicon Valley Bank in April.

This is a developing story.

Marc Hochstein, Zack Seward and Daniel Nelson contributed reporting.

Correction (July 6, 19:02 UTC): An earlier version of this article misidentified two of the loan recipients. The R3 LLC that received SBA financing is different than the R3 LLC that develops blockchain technology. SafeChain Solutions is also different from the SafeChain blockchain firm.

Related Stories
CoinDesk

sMPC is the Key to Unlocking DeFi's Next Stage of Growth

6 years 2 months ago
Garnering the attention of institutional investors has always been challenging for the crypto community, but as the total value locked in decentralized finance soars beyond $1.5 billion this summer, the increased activity is signaling readiness for mainstream adoption
Guest Contributors

Blockchain Bites: E-Gold Claims, Arca’s New Fund and Generation Z

6 years 2 months ago

Arca, a Los Angeles-based money manager, launched an innovative new fund on Ethereum, while our columnists look at Generation Z’s impact on investing and a DeFi future where bitcoin and Ethereum work together. Here’s the story.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top Shelf

Russian Dolls
A Russian court convicted two men for extortion, but did not force them to return over $900,000 in crypto since crypto has no legal definition as property. Other courts have taken a different view.

Related: Crypto Long & Short: Crypto Markets Are Maturing, but Gen Z Is Rewriting How Markets Work

Suppressed Evidence?
E-Gold, a defunct digital currency project that was a precursor to bitcoin, has claimed the U.S. government suppressed crucial evidence in a 2008 landmark case that has since shaped the cryptocurrency industry.

Arca’s Fund
A bitcoin exchange-traded fund may never receive approval from the U.S. Securities and Exchange Commission (SEC), but an even stranger crypto investment vehicle finally has: a blockchain transferred fund. On Monday, Los Angeles-based money manager Arca began selling shares in the “Arca U.S. Treasury Fund,” an SEC-registered closed-end fund whose digital shares – ArCoins – trade atop the Ethereum blockchain. 

Bitcoin To Go
Travala.com, a Binance-backed online travel agency (OTA), is adding support for Expedia bookings in a partnership that brings bitcoin payments back to the travel giant’s properties for the first time since 2018.

Cardano Wave
Cardano developer house IOHK has made a six-figure investment into Wave Financial, its partner for a new $20 million Cardano fund. Charles Hoskinson, IOHK’s CEO, will become an adviser to Wave Financial as part of the deal.

Related: Money Reimagined: Bitcoin and Ethereum Are a DeFi Double Act

Bankrupt in Pretoria
Willie Breedt, CEO of South African cryptocurrency investment firm VaultAge Solutions, has been officially declared bankrupt while on the run from angry investors.

Finding Fakes
Blockchain startup Fantom is launching a pilot to help combat Afghanistan’s counterfeit drugs problem using its blockchain to trace products along the supply chain.

Market Intel

Positive Correlation
Bitcoin’s positive correlation with stocks continues Monday, with the cryptocurrency drawing bids alongside gains in global equities. Bitcoin’s positive correlation with stocks makes it vulnerable to bouts of risk aversion in traditional markets. The equity markets could soon come under pressure, dragging bitcoin lower, if the U.S. Federal Reserve fails to appease equity markets with additional stimulus, markets writer Omkar Godbole said.

How to Value Bitcoin: Bitcoin Days Destroyed

How to place a value on bitcoin? Its data is unfamiliar territory for many investors. Nearly half of investors in a recent survey said a lack of fundamentals keeps them from participating.

In a 30-minute webinar July 7, CoinDesk Research will explore one of the first and oldest unique data points to be developed by crypto asset analysts: Bitcoin Days Destroyed.

We’ll be joined by Lucas Nuzzi, a veteran analyst and a network data expert at Coin Metrics. Lucas and CoinDesk Research will walk you through the structure of this unique financial metric and demonstrate some of its many applications. Sign up for the July 7 webinar “How to Value Bitcoin: Bitcoin Days Destroyed.”

Opinion

Generation Z
Noelle Acheson looks at the potential influence of Generation Z on how institutional crypto asset markets will evolve. “This generation will emerge into a market in which traditional investment standards no longer apply, and for which the word “unprecedented” has lost most of its meaning. They will do so without the clear asset differentiation that their parents and older siblings have relied on to make portfolio decisions.”

DeFi Double Act
In the latest edition of his Money Reimagined newsletter, Michael Casey explores the growing complementarity between bitcoin and Ethereum. “The data simultaneously highlight that bitcoin is the crypto universe’s reserve asset and that Ethereum’s burgeoning DeFi ecosystem is crypto’s go-to platform for generating credit and facilitating fluid exchange.

CoinDesk Podcast Network

BREAKDOWN: It’s Time for a Revolution in Financial Education, Feat. Tyrone Ross
To decrease wealth inequality, one passionate financial adviser argues why financial education needs different content, from different voices, delivered through different channels. 

Who Won #Crypto Twitter?

Related Stories
CoinDesk

Visa Seeks Ethereum Developer for New ‘Distributed Application’

6 years 3 months ago

The world’s largest payment network is looking for a developer with knowledge of Ethereum to work on a new blockchain-based application.

  • Visa’s job posting, first reported by Decrypt, says the payments giant is looking for a blockchain engineer with at least two years’ experience with blockchain architecture, and decentralized applications (dapps).
  • The successful candidate will join Visa B2B – its blockchain-based cross border payments platform that launched last June – at the company’s global headquarters.
  • The new hire will work as part of a team building a new “distributed application.”
  • Although primarily focused on Ethereum, the company is also interested in developers with knowledge building on Bitcoin, Ripple, or the R3 enterprise blockchain.
  • Visa processes up to 150 million transactions worldwide every day, making it the largest payment network in the world.
  • A former member of the Libra Association, Visa has expressed an interest in the potential for well-regulated blockchains to radically overhaul payments systems in emerging and developing markets.
  • The job ad doesn’t provide any more information on what the mentioned distributed application could be. CoinDesk has reached out to Visa for comment.

See also: Visa Patent Filing Would Allow Central Banks to Mint Digital Fiat Currencies Using Blockchain

Related Stories
CoinDesk

Compound’s ‘Yield Farmers’ Briefly Turned BAT Into DeFi’s Largest Coin

6 years 3 months ago

A digital advertising token briefly became bigger than ether in the decentralized finance (DeFi) space, all thanks to popular lending protocol Compound.

  • Basic Attention Token (BAT) – a token used to incentivize digital ad consumption on the Brave browser – was the most used coin in DeFi in Q2 2020.
  • BAT’s volumes in DeFi came to $931 million, over $300 million more than ether, according to a report Monday from Dapp.com.
  • Jon Jordan, director of communications at DappRadar, a data source on decentralized apps, told CoinDesk the token’s overnight popularity came from generating the best return on Compound, not because of any feature of BAT.
  • Data from DappRadar found more than $500 million worth of BAT was borrowed on Compound in June alone, enough to make it the most traded digital asset in the DeFi space across Q2 2020
  • Launched as recently as June 15, Compound quickly became one of the most popular DeFi platforms as it rewarded lending and borrowing activity with free COMP tokens, worth around $200 at press time.
  • “Yield farmers” – who maximize activity on Compound to receive as much free COMP as possible – could earn a high rate of interest from lending BAT, where annual percentage yield (APY) stood at 14%.
  • The next highest yield was 3.5% for the stablecoin tether (USDT).
  • Trading volumes for the interest-receiving proxy token, cBAT, were up to about $320 million in June.
  • When Compound modified its COMP reward system to disregard interest rates on Thursday – so markets with less borrowing demand suddenly had smaller allocations – the lender-heavy BAT market promptly subsided.
  • BAT's supply on Compound fell from $324 million to $155 million Thursday, and is now down to just $24 million as of Sunday.
  • BAT borrowing on the platform fell from $292 million to $126 million, and was just $2 million by Sunday.
  • Rock-bottom borrowing means BAT’s APY has now slumped to 0.17%, one of the lowest rates on Compound, which has taken out many of the lenders, too.
  • Only $67 million worth of BAT loans has been made on Compound in July.
  • Over the same timeframe, $478 million worth of dai loans have been made; its APY is currently 2.63%.
Related Stories
CoinDesk

Arca Labs Launches Ethereum-Based SEC-Registered Fund

6 years 3 months ago

A bitcoin exchange-traded fund may never receive approval from the U.S. Securities and Exchange Commission (SEC), but an even stranger crypto investment vehicle finally has: a blockchain transferred fund. 

On Monday, Los Angeles-based money manager Arca began selling shares in the “Arca U.S. Treasury Fund,” an SEC-registered closed-end fund whose digital shares – ArCoins –  trade atop the Ethereum blockchain. The fund invests a majority of its assets in short-term U.S Treasury bills and notes. The company told CoinDesk it received a “Notice of Effectiveness” on July 6.

The launch marks the first time the crypto-skeptical SEC has allowed a fund represented by cryptographics tokens to enter the investment markets under the Investment Company Act of 1940. Arca has been pushing for various forms of the ArCoin proposal for nearly 20 months, as shown in regulatory filings.

Related: Securitize Debuts On-Chain Royalty Payouts for Lottery.com Security Token

“Our announcement today is a ground-breaking and transformative step toward the unification of traditional finance with digital asset investing as this new category of regulated, digital investment products is made available to investors,” said Arca CEO Rayne Steinberg in a press statement.

Executives have previously heralded their proposed fund as a pace setter for a hybrid digital asset class. ArCoin marries perhaps the investment world’s least risky asset, Treasurys, with blockchain, the up-and-coming tech backbone they believe will lend efficiency and security to the trading and settlement process.

Specifically, Arca’s digital development wing, Arca Labs, chose the Ethereum blockchain, one of the largest public blockchains in the world and the landing site of many novel crypto assets, including so-called digital securities like ArCoin, which uses the ERC-1404 protocol, according to the June 24 prospectus.

ERC-1404 is a more restrictive derivative of the popular ERC-20 interoperability protocol. The main difference is that ERC-1404 restricts where holders can send a token to a collection of whitelisted addresses. That’s a crucial point for regulators wary of letting tokens outside their scope.

Related Stories
CoinDesk

Kraken-Owned Crypto Facilities Wins UK License to Offer Derivatives Trading

6 years 3 months ago

A London-based subsidiary of cryptocurrency exchange Kraken has been approved to operate its derivatives platform by the U.K.’s financial regulator.

  • Crypto Facilities, also known as Kraken Futures, announced it had been granted a Multilateral Trading Facility (MTF) license from the U.K.’s Financial Conduct Authority (FCA) on Monday.
  • The license will allow for institutional clients to trade on the futures platform who would otherwise be prohibited by law from trading on unlicensed exchanges.
  • The news marks Crypto Facilities as the first and only licensed derivatives platform offering exposure to leveraged cryptocurrencies in the European Union, according to the company.
  • Jesse Powell, the co-founder and CEO of Kraken, said sophisticated investors will now be able to access crypto derivatives in the EU “for the first time.”
  • The FCA is planning a limited ban on selling crypto derivatives like exchange-traded notes, arguing such products are “ill-suited” to retail investors.
  • The regulator put out a warning about popular cryptocurrency derivatives exchange BitMEX in March, saying the firm had been targeting U.K. investors without its approval.
  • Crypto Facilities was acquired by San Francisco-based Kraken in February 2019 in an undisclosed deal thought to be for at least $100 million.
  • It currently offers up to 50x leverage on its bitcoin (BTC), ether (ETH), XRP (XRP), bitcoin cash (BCH) and litecoin (LTC) futures products.

See also: Swiss Bank InCore Enables Euro On-Ramp for Crypto Exchange Kraken

Related Stories
CoinDesk

First Mover: As Bitcoiners Watch Dollar, Deutsche Bank Sees Trump Win Hurting Reserve Status

6 years 3 months ago

Bitcoiners, already rocked by this year’s coronavirus-inflicted turbulence, face a fresh source of volatility as the market heads into the second half of 2020: the U.S. presidential election. 

According to Deutsche Bank, Germany’s biggest lender, a reelection victory by President Donald Trump could threaten the U.S. dollar’s century-long reign as the world’s de facto reserve currency. 

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: Bitcoin Rises in Line With Stocks After Dip Below $9K

In a July 1 report, Deutsche Bank foreign-exchange analysts wrote that Trump, a Republican, has shaken up “policy orthodoxies and institutions” during this term. In contrast, former Vice President Joe Biden, the presumptive Democratic nominee, would likely pursue “policies that are more predictable and mainstream, with traditional U.S. alliances valued.”

A Biden win could “help support the post-World War II financial architecture” including multilateral organizations such as the Group of Seven, International Monetary Fund, World Bank, World Trade Organization and North Atlantic Treaty Organization, according to Deutsche Bank.

That system propelled the U.S. dollar to a dominant role in global foreign-exchange markets. The dollar is the primary currency for international payments, a staple of central-bank reserves and the price denomination for commodities from gold to oil as well as cryptocurrencies like bitcoin.

“It is plausible that President Trump can do a great deal more damage to the U.S. reserve status in a second term, and as long as Biden is prudent with his choice of Treasury Secretary and provides multilateral global leadership, the USD’s reserve status is in a safer pair of hands,” the analysts wrote. 

Related: Bitcoin’s Price Correlation With S&P 500 Hits Record Highs

The dollar’s reserve status is a crucial factor in the bitcoin market because the cryptocurrency is seen by many investors as “portfolio insurance on broad-based currency debasement,” as Delphi Digital analyst Kevin Kelly phrased it in a report last week. And dollar-linked tokens known as stablecoins have become an increasingly common means of moving money around in fast-growing digital-asset markets. 

The dollar has seen little erosion of its dominance so far in 2020, even as the Federal Reserve has injected about $3 trillion of freshly created money into global financial markets. That figure represents a 67% increase since Jan. 1 in the total amount of money previously created by the U.S. central bank. The U.S. Dollar Index, which tracks its value against a basket of major currencies including the euro, yen and British pound, is up 0.7% on the year.  

While a Trump win might be negative for the dollar in the long term, it’s probably positive in the short term, according to Deutsche Bank. That’s partly because Biden would be more likely to reverse the tax cuts that Trump pushed for during his term, and “fiscal flexibility in the short term is more constructive for the USD, in so much as fiscal capacity relieves some of the burden from monetary policy,” the analysts wrote. 

Trump, who has made the economy a centerpiece of his presidency, has consistently pushed for stimulus over the past four years. He campaigned in 2016 on a promise of tax cuts and delivered in late 2017 with a $1.5 trillion fiscal package, pledging that the deal would produce annual increases in gross domestic product of 3%. As the promised growth failed to appear for two straight years, he pressed the Federal Reserve for interest rate cuts; the U.S. central bank obliged. 

This year, as the coronavirus ushered in a recession, Trump signed a $2 trillion relief bill into law, and his administration has applauded the economic benefits of the Fed’s trillions of dollars of emergency loans and monetary stimulus.

“I’m getting more and more happy with him,” Trump said of Fed Chair Jerome Powell during an interview last week with Fox Business Network. “He’s had to liquefy a little bit. Let us liquefy. Let the economy, I mean – put out that money that you need.”

Patrick Tan, CEO of Novum Alpha, which offers digital-asset investment products, wrote last week in a Medium post there is currently “limited risk of the dollar losing its gravitational pull, but in the long run this becomes less clear.” 

Trump has often stated his general preference for a weaker dollar, which tends to improve the competitiveness of U.S. exports, though often at the expense of higher domestic consumer prices. 

If the Deutsche Bank analysts are right, a Trump victory in November could mean the world eventually gets the weaker dollar he says he wants.

Tweet of the day Bitcoin watch

BTC: Price: $9,200 (BPI) | 24-Hr High: $9,239 | 24-Hr Low: $8,919

Trend: Bitcoin is trading in the green near $9,200 on Monday. However, the immediate bias remains neutral with prices trapped in a narrow range of $8,800 to $9,300 for the tenth day running. 

The consolidation could end with a price breakout as bullish signs have emerged on technical charts. To start with, multiple daily candles with long lower wicks created over the last 10 days indicate bearish pressures are waning. 

A similar sentiment is being echoed by the higher lows on the daily chart MACD histogram, an indicator used to identify trend strength and trend changes. Meanwhile, the 14-day relative strength index (RSI) is looking to breach a two-month descending trendline in favor of the bulls. 

What’s more, the overall bullish structure of higher lows and higher highs created in the two months to mid-May is still valid. 

A range breakout, if confirmed, would open the doors for a rally to $10,000. Acceptance above that level would signal a resumption of the broader uptrend from lows under $4,000 observed in March. 

Alternatively, a break below $8,800 would expose the higher low support at $8,630 created on May 27. A close (midnight, UTC) below that level would invalidate the overall bullish trend and shift risk in favor of deeper losses. 

Related Stories
CoinDesk

First Mover: As Bitcoiners Watch Dollar, Deutsche Sees Trump Win Hurting Reserve Status

6 years 3 months ago

Bitcoiners, already rocked by this year’s coronavirus-inflicted turbulence, face a fresh source of volatility as the market heads into the second half of 2020: the U.S. presidential elections. 

According to Deutsche Bank, Germany’s biggest lender, a reelection victory by President Donald Trump could threaten the U.S. dollar’s century-long reign as the world’s de facto reserve currency. 

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: Bitcoin Rises in Line With Stocks After Dip Below $9K

In a July 1 report, Deutsche Bank foreign-exchange analysts wrote that Trump, a Republican, has shaken up “policy orthodoxies and institutions” during this first term. In contrast, former Vice President Joe Biden, the presumptive Democratic nominee, would likely pursue “policies that are more predictable and mainstream, with traditional U.S. alliances valued.”

A Biden win could “help support the post-World-War-II financial architecture,” including multilateral organizations like the Group of Seven, International Monetary Fund, World Bank, World Trade Organization and North Atlantic Treaty Organization, according to Deutsche Bank.

That system propelled the U.S. tender to a dominant role in global foreign-exchange markets. The dollar is the primary currency for international payments, a staple of central-bank reserves and the price denomination for commodities from gold to oil as well as cryptocurrencies like bitcoin.

“It is plausible that President Trump can do a great deal more damage to the U.S. reserve status in a second term, and as long as Biden is prudent with his choice of Treasury Secretary and provides multilateral global leadership, the USD’s reserve status is in a safer pair of hands,” the analysts wrote. 

Related: Bitcoin’s Price Correlation With S&P 500 Hits Record Highs

The dollar’s reserve status is a crucial factor in the bitcoin market, since the cryptocurrency is seen by many investors as “portfolio insurance on broad-based currency debasement,” as Delphi Digital analyst Kevin Kelly phrased it in a report last week. And dollar-linked tokens known as stablecoins have become an increasingly common means of moving money around in fast-growing digital-asset markets. 

The dollar has seen little erosion of its dominance so far in 2020, even as the Federal Reserve has injected about $3 trillion of freshly created money into global financial markets. That figure represents a 67% increase since Jan. 1 in the total amount of money previously created by the U.S. central bank. The U.S. Dollar Index, which tracks its value against a basket of major currencies like the euro, yen and British pound, is up 0.7% on the year.  

While a Trump win might be negative for the dollar in the long term, it’s probably positive in the short term, according to Deutsche Bank. That’s partly because Biden would be more likely to reverse the tax cuts that Trump pushed for during his first term, and “fiscal flexibility in the short-term is more constructive for the USD, in so much as fiscal capacity relieves some of the burden from monetary policy,” the analysts wrote. 

Trump, who has made the economy a centerpiece of his presidency, has consistently pushed for stimulus over the past four years. He campaigned in 2016 on a promise of tax cuts and delivered in late 2017 with a $1.5 trillion fiscal package, pledging that the deal would produce annual increases in gross domestic product of 3%. As the promised growth failed to appear for two straight years, he pressed the Federal Reserve for interest-rate cuts, and the U.S. central bank obliged. 

This year, as the coronavirus ushered in a recession, Trump signed a $2 trillion relief bill into law, and his administration has applauded the economic benefits of the Fed’s trillions of dollars of emergency loans and monetary stimulus.

“I’m getting more and more happy with him,” Trump said of Fed Chair Jerome Powell, during an interview last week with Fox Business Network. “He’s had to liquefy a little bit. Let us liquefy. Let the economy, I mean – put out that money that you need.”

Patrick Tan, CEO of Novum Alpha, which offers digital-asset investment products, wrote last week in a Medium post that there is currently “limited risk of the dollar losing its gravitational pull, but in the long run this becomes less clear.” 

Trump has often stated his general preference for a weaker dollar, which tends to improve the competitiveness of U.S. exports, though often at the expense of higher domestic consumer prices. 

If the Deutsche Bank analysts are right, a Trump victory in November could mean the world eventually gets the weaker dollar he says he wants.

Tweet of the day Bitcoin watch

BTC: Price: $9,200 (BPI) | 24-Hr High: $9,239 | 24-Hr Low: $8,919

Trend: Bitcoin is trading in the green near $9,200 on Monday. However, the immediate bias remains neutral with prices trapped in a narrow range of $8,800 to $9,300 for the tenth day running. 

The consolidation could end with a price breakout as bullish signs have emerged on technical charts. To start with, multiple daily candles with long lower wicks created over the last 10 days indicate bearish pressures are waning. 

A similar sentiment is being echoed by the higher lows on the daily chart MACD histogram, an indicator used to identify trend strength and trend changes. Meanwhile, the 14-day relative strength index (RSI) is looking to breach a two-month descending trendline in favor of the bulls. 

What’s more, the overall bullish structure of higher lows and higher highs created in the two months to mid-May is still valid. 

A range breakout, if confirmed, would open the doors for a rally to $10,000. Acceptance above that level would signal a resumption of the broader uptrend from lows under $4,000 observed in March. 

Alternatively, a break below $8,800 would expose the higher low support at $8,630 created on May 27. A close (midnight, UTC) below that level would invalidate the overall bullish trend and shift risk in favor of deeper losses. 

Related Stories
CoinDesk

Bitcoin Rises in Line With Stocks After Dip Below $9K

6 years 3 months ago

Bitcoin’s positive correlation with stocks continues Monday, with the cryptocurrency drawing bids alongside gains in global equities. 

As of 09:35 UTC, the leading cryptocurrency by market value is trading at $9,190, representing a 1.4% gain on a 24-hour basis, according to CoinDesk’s Bitcoin Price Index. 

Meanwhile, major European equity indices are up at least 1.5% each, following a 4% rise in mainland Chinese stocks seen during the Asian trading hours. Futures tied to the S&P 500 are also up over 1%, according to data source Investing.com. 

Related: First Mover: As Bitcoiners Watch Dollar, Deutsche Sees Trump Win Hurting Reserve Status

Equities are flashing green despite a worrying increase in coronavirus cases in the U.S. and other parts of the world. According to CNBC, investors are cheering the progress of potential coronavirus drugs. On Friday, the European Commission moved to grant conditional approval for U.S.-based Gilead’s antiviral drug remedesivir to be used in the European Union. 

Equities save the day

Bitcoin fell below the psychological support of $9,000 on Sunday, validating bearish lower highs at $10,000 and $9,800 created on June 10 and June 23, respectively.

In addition, momentum indicators like on-balance volume (OBV) were signaling weakness, as noted by popular trader NebraskanGooner Sunday. As such, the cryptocurrency looked set for a deeper loss. 

However, selling pressure ran out of steam near $8,900 around 06:15 a.m. Tokyo time, as U.S. stock futures rose and bitcoin prices charted a quick move back above $9,000. The cryptocurrency would have faced stronger chart-driven selling had prices established a foothold below that psychological support. 

Related: Search for Yield Drives Ether’s Put-Call Ratio to One-Year High

So, the uptick in stocks looks to have saved the day for the bitcoin bulls. The cryptocurrency’s positive correlation with stocks reached record highs last week.

Also read: Bitcoin’s Price Correlation With S&P 500 Hits Record Highs

Problem ahead?

Bitcoin’s positive correlation with stocks makes it vulnerable to bouts of risk aversion in traditional markets. The equity markets could soon come under pressure, dragging bitcoin lower, if the U.S. Federal Reserve fails to appease equity markets with additional stimulus. 

According to analysts at JPMorgan, the U.S. money markets are signaling the need for further monetary and/or fiscal policy. “If the additional stimulus is not delivered, then the money market curve inversion could worsen, eventually becoming a more problematic signal for equity and risky markets going forward,” said the bank’s analysts. 

The Fed seldom disappoints markets. The central bank has already expanded its balance sheet by over $3 trillion in the past 3.5 months and will likely add more, if deemed necessary. 

BTC awaits directional move

Bitcoin has witnessed minimal movement over the past nine days, with upside capped around $9,300 and downside restricted near $8,830. 

Notably, the trading range narrowed to $395 last week. That’s the smallest weekly trading range since the last week of March 2019.

A prolonged period of consolidation often ends with a big move to either side. For instance, the cryptocurrency jumped 26% in the first week of April 2019, having witnessed low-volatility consolidation in the preceding five weeks. 

Disclosure: The author holds no crypto assets currently.

Related Stories
CoinDesk

Afghanistan Approves Blockchain Project to Help Tackle Scourge of Counterfeit Meds

6 years 3 months ago

Blockchain startup Fantom has been given the green light to start tracking medicinal drugs in Afghanistan to help stem the country’s counterfeiting problem.

  • After a signing ceremony with the Afghan Ministry of Health and several pharmaceutical distributors last month, the startup has unveiled details of its Smart Medicine pilot project.
  • The project aims to keep track of pharmaceutical drugs traveling along the supply chain in order to stem the distribution of fake products caused by a lack of appropriate checks.
  • Being able to verify the authenticity of medicines is vital in preventing counterfeit products, Michael Kong, CIO of Fantom, said in a Telegram interview with CoinDesk.
  • Several pharmaceutical companies are involved in the project including Mumbai-listed Indian company Bliss GVS, Afghanistan-based Royal Star and Indian manufacturer Nabros Pharma.
  • Fantom will supply labels to trace 80,000 products created by Nabros and Bliss GVS over Fantom’s smart contract platform and Opera blockchain network.
  • The products will cover four areas of pharmaceuticals including 50,000 hand sanitizers, 10,000 joint creams, 10,000 Kofol chewable tablets and 10,000 Diacare foot creams.
  • The pilot will demonstrate how scanning product data to a blockchain can create an immutable record, Kong said.
  • The startup will design shipping labels that are to be scanned by Royal Star at every stage of the distribution process.
  • Labels can be checked on Fantom’s platform and will contain a unique hash code that can be publicly verified on-chain and includes 11 data points.
  • These data points will be able to verify the product name, batch number, barcode number, expiry date, production date, a U.S. Food and Drug Administration (FDA) number, producer’s name, location of scan, the status of the scan, and time and date of a scan. 
  • The project is also collaborating with Nigeria-based blockchain startup Chekkit which is providing a QR code scanning system in the audit trail to guarantee products are not tampered with.
  • Counterfeit drugs are responsible for the deaths of thousands of people every year, with inferior or useless products ranging from cancer treatment to antimalarial pills.
  • One in 10 medical products in developing countries is substandard or falsified, according to the World Health Organization (WHO).
  • The announcement of the pilot follows on from a formal partnership agreed between Fantom and the Afghan government to establish a blockchain initiative for public health last November.
  • The startup was given a mandate to invent a solution for detecting counterfeit drugs, Kong confirmed.

See also: VeChain to Develop Drug-Tracing Platform for Pharma Giant Bayer

Related Stories
CoinDesk

IOHK Invests Six-Figure Sum Into Crypto Asset Manager Wave Financial

6 years 3 months ago

Cardano developer house IOHK has made a six-figure investment into Wave Financial – its partner for a new $20 million Cardano fund.

  • Jenny Corlett, an external spokesperson for IOHK, confirmed the investment had just been made, but declined to comment on the equity arrangement and any plans to make further commits into Wave.
  • CoinDesk understands the sum isn’t big enough for IOHK, a Hong Kong-based company, to have significant sway over Wave’s corporate governance.
  • Charles Hoskinson, IOHK’s CEO, will become an advisor to Wave Financial as part of the deal.
  • IOHK invested $10 million into a joint “cFund” to support startups and early-stage businesses working on Cardano and other IOHK tech initiatives last week.
  • Wave Financial, a private company based in Los Angeles and London, said it would raise the other $10 million from external investors.

See also: Coinbase Custody to Support Secure Cardano Staking This Year

Related Stories
CoinDesk

Crypto Firm CEO Went Into Hiding After Claims 2,000 Investors Defrauded

6 years 3 months ago

Willie Breedt, CEO of cryptocurrency investment firm VaultAge Solutions, has been officially declared bankrupt while on the run from angry investors.

  • As reported by News24 on Monday, Breedt – who is suspected of defrauding over 2,000 investors – was handed a sequestration order by the Gauteng High Court in Pretoria, on Friday.
  • A sequestration order is an order delivered by a court which forces a debtor into bankruptcy.
  • The order comes after Breedt went into hiding from upset investors who were seeking the return of around 277 million South African rand ($16.3 million) they had placed with VaultAge for investment in cryptocurrencies.
  • Investors assigned debt collectors to try and recover their losses.
  • Breedt had told police he was being intimidated before he disappeared.
  • He was discovered by investigators hiding at a guest house in the Silver Lakes Estate in Pretoria.
  • After the court order was granted, a raid was conducted on the Silver Lakes premises by the sheriff of the court, South African police, an organized crime unit called the Hawks, and a team of forensic investigators specializing in crypto crime.
  • A number of electronic devices were seized including a laptop and a Ledger Nano hardware wallet – a device for storing cryptocurrencies.
  • The South African Reserve Bank, the country’s central bank, has now assigned PricewaterhouseCoopers to investigate VaultAge Solutions and agents involved in selling cryptocurrencies for the now-defunct company.
  • The sequestration order resulted from a court application from one of the firm’s biggest investors, Simon Dix, who said he is owed 7.5 million rand (almost half a million U.S. dollars) by the firm.

See also: Singapore Man Fined $72K for Promoting Crypto Ponzi OneCoin

Related Stories
CoinDesk

Travala.com Lets Travelers Once Again Book Expedia Hotels in Crypto

6 years 3 months ago

Travala.com, a Binance-backed online travel agency (OTA), is adding support for Expedia bookings in a partnership that brings bitcoin payments back to the travel giant’s properties for the first time since 2018.

  • The Australia-based booking platform plugged into Expedia Group Partner Services’ “Rapid API” and its 700,000 listed hotels on Monday.
  • Travala.com users can pay for Expedia listings in over 30 cryptocurrencies including bitcoin, which Expedia had accepted before shelving the option in June 2018.
  • “Their booking flow isn’t built for [crypto] like ours” is, Travala.com CEO Juan Otero told CoinDesk. “It was a bit of a nightmare for them to accept bitcoin payments.”
  • Expedia Partner Services’ Senior Vice President Alfonso Paredes said in a press statement that Expedia recognizes that “payment choice continues to evolve.” He said the partnership will help Travala.com scale.
  • The partnership marks a rare alliance between a crypto-focused firm and its widely-known, juggernaut competitor: Expedia is the world’s second-largest OTA. “Travala is one of the very few projects in the crypto space that is bridging the gap to traditional multinationals in a huge way,” Otero said.
  • Otero said the partnership comes as his travel business rebounds from its COVID-19 lows. In June, Travala.com’s month-over month booking revenue surged 170% (to $184,000) and room night bookings jumped 81%. Additionally 13% of bookings were paid in Travala.com’s AVA token, a crypto equivalent of loyalty points and airline miles.
  • “Working with Expedia means we can drive traveler loyalty throughout the recovery period,” he said.
Related Stories
CoinDesk

Bad Ravencoin Code Allows Attackers to Generate Coins Without Mining

6 years 3 months ago

Unidentified attackers exploited a Ravencoin vulnerability to mint extra RVN “beyond the coinbase of 5000 RVN per block,” Ravencoin lead developer Tron Black wrote in a Medium post on Thursday.

According to Black, members of Ravencoin’s CryptoScope team, who developed Solus Explorer, reached out to the Ravencoin developer team recently with their findings. 

The vulnerability was caused by a community code submission. “Law enforcement has been notified and is working with us,” Black said. 

Related: New Tool Will Find Secrets – Including Crypto Keys – in Your Public Code

The extra coins increase the total supply of 21 billion RVN by 1.5% or the equivalent of 44 days worth of mining.

Ravencoin is an open-source fork of bitcoin that launched in 2018. It’s designed to facilitate the transfer of assets from one party to another, and users can create assets on the protocol that adhere to rules independent of those on the platform. The project’s website specifically calls out the Game of Thrones’ reference to Ravens as messengers of truth, which parallels the concept of blockchains as a technology for ultimate truth. 

Read more: Rappers, Ravens and Lord of the Rings: The Race for ‘Dope’ Coin Names Is On

The Fallout

Black suggested the Ravencoin community either absorb the economic cost of extra RVN or shift the halving of the coins 44 days sooner. Black did not return a request for comment by press time.

Related: Overstock’s Medici Acquires Digital Tokens Representing Startup Equity Shares

“The vulnerability does not allow the stealing of RVN or assets that you own and control, but the minting did create RVN that should not exist,” Black said. “Because those RVN were transferred to an exchange and traded, they are mixed with other RVN and therefore any programmatic attempt at burning them, with miner and community backing, would cause irreparable harm to innocent victims. As it stands, the burden has been shared across all RVN holders in proportion to their RVN holdings in the form of inflation.”

Black urged users to keep trading to a minimum until a fix is issued. He also said that Ravencoin would not publish the details of the vulnerability until the fix could be implemented. As of yet, there is no timeline for when the chain will be updated.

Related Stories
CoinDesk
Checked
16 minutes 27 seconds ago
CoinDesk Crypto
Leader in cryptocurrency, Bitcoin, Ethereum, XRP, blockchain, DeFi, digital finance and Web 3.0 news with analysis, video and live price updates.
Subscribe to CoinDesk Crypto feed