Mining rig manufacturer Canaan has filed for an IPO with the U.S. Securities and Exchange Commission to raise $400 million on the Nasdaq Global Market. Prior to this filing, the company had also attempted to go public in Hong Kong and China. Credit Suisse and Citigroup are among its underwriters.
Canaan Inc., a holding company that owns China-based Canaan Creative, filed a registration statement with the U.S. Securities and Exchange Commission (SEC) on Oct. 28 for an initial public offering (IPO). “We are offering American depositary shares, or ADSs. Each ADS represents Class A ordinary shares, par value US$0.00000005 per share,” the filing details. The company hopes to raise $400 million.
The underwriters named in the filing for the IPO are Credit Suisse, Citigroup, China Renaissance, CMBI, Galaxy Digital Advisors, Huatai Securities, and Tiger Brokers. The company plans to apply to list its ADSs on the Nasdaq Global Market under the symbol CAN. Canaan also told the SEC that, based on a report by independent research firm Frost & Sullivan which it paid for:
We were the second largest designer and manufacturer of bitcoin mining machines globally in terms of computing power sold in the six months ended June 30, 2019.
The company plans to use the proceeds to research and develop ASICs related to AI and blockchain algorithms and applications, expand its AI and blockchain business globally, optimize supply chains, and repay debts.
Canaan attempted an IPO in Hong Kong last year but let the application lapse in November. The South China Morning Post reported that Hong Kong regulators said IPOs by cryptocurrency businesses are “premature.” The company also attempted to go public in China three years ago through a reverse merger by buying a Shandong-based electric equipment maker, but that plan also fell through.
Canaan’s Nasdaq IPO filing comes only days after Chinese President Xi Jinping commented on the development of blockchain technology in China which sent shares of blockchain and digital currency-related firms soaring. Some even speculated that Xi’s speech caused the recent hike in prices of bitcoin and other cryptocurrencies.
About Canaan and Avalonminers
Founded in 2013, Canaan provides “supercomputing solutions through our proprietary high-performance computing ASICs,” its registration statement reads. The company currently sells bitcoin mining machines under the Avalonminer brand and mining machine parts. In July, the company started leasing its mining machines.
The company’s total revenue was $394.1 million in 2018, a 106.8% increase year-on-year, but its net income fell 67.4% last year to $17.8 million. For the six months period ending June 30, the total revenue fell 85.2% compared to the same period last year to $42.1 million. The company also recorded a net loss of $48.2 million during that time period.
According to the filing, since the company has less than $1.07 million in revenue for the last fiscal year, it qualifies as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). “An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise not applicable generally to public companies,” the filing details.
The company recently introduced two new lines of Avalonminers: the A1146 and the A1166. The former rig processes bitcoins’ hashes at speeds of 46-56TH/s, with a power efficiency rated at around 57J/T, and a price tag of $1,978. The latter costs $1,204 and performs at 66-68TH/s with a power efficiency of around 47J/T. Both are expected to ship in February, according to the company’s website.
What do you think about Canaan filing for an IPO in the U.S.? Do you think the company will successfully raise $400 million? Let us know in the comments section below.
Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Images courtesy of Shutterstock and Canaan.
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There are currently riots going on in Chile, Hong Kong and Lebanon. While in every place they are caused by complex local issues, there is a global problem that is an underlying trend: low interest rates which make it impossible for young people to save for their future and at the same time push housing prices to become unattainable. And people with no future are easy to take to the streets. Cryptocurrency offers an alternative in the form of taking away governments’ power to control people’s money.
At least 17 people have already died in Chile as a result of clashes between protesters and security forces that were sparked by a minor hike in public transportation prices. In Lebanon members of different religious and ethnic sects have joined forces to fight against a tax on Whatsapp calls. And the people of Hong Kong continue their protests against the administration, despite the fact that the extradition law to mainland China that triggered it has already been withdrawn.
Other incidents of anti-government protests recently occurred in Catalonia, Spain, Bolivia, Ecuador, Guinea and Iraq. These events are the result of varied local issues that appear to be unconnected, but the fact that they are all happening around the same time suggests there might be an underground current bringing them to the surface right now.
Looking at the different protest movements around the world, the common denominator that stands out is that they are all led by young people or that young people are the most militant group. The youthful spirit was often a factor in riots or revolutions in the past, but organization of persistent protests required more established powers such as labor unions or political parties to lead the way. Analysts have came up with a few reasons that might explain this, such as the spread of social media and fears about climate change, but economic anxiety appears to be the driving force.
Losing Your Ticket Into the Middle Class
The global economy is locked in a situation which was never seen before in modern times. Many of the most powerful central banks in the world now offer historically low or even negative interest rates, in a way that distorts the normal economic functioning in areas beyond their control. Much has been written about the hazardous effects of this practice on investors and businesses, but negative rates are also detrimental to the lives of young people and how they perceive their chances of making a future for themselves.
The most obvious way this happens is by punishing people who want to plan for the future. Central banks hope that lower interest rates will push consumers to spend more, so this is not an unintended consequence, and as a result saving fiat money no longer makes sense. Young people understand that the value of any savings will only deteriorate, and in some cases be completely wiped out, by inflation. This is at the same time that banks will charge them interest on their debts. However, the most profound way low interest rates hurt young people is in its unintended consequence in the housing market.
Buying property is the most common way people in previous generations have stored their wealth. In many countries, getting onto the property ladder is considered the ticket into the middle class and economists have warned that young people are postponing marriages and not having kids of their own due to not having the prospect of owning a home one day. People who have little to lose also have little to fear, and thus clashing with armed police or soldiers during riots is not as much of a deterrent as it is to older people with assets to lose.
It should be no surprise than that the young people of Hong Kong are the most persistent protesters so far, as the city has the world’s most expensive housing market. In a place where a parking spot for your car costs almost US $1 million, now it is hard for people who need to be entering the workforce to imagine ever being able to stop paying the sky-high rent and finally buy a permanent home of their own. This is in sharp contrast to the older folks who only become more rich as the housing prices rise and thus much less likely to want to rock the boat.
Under these conditions, and with central bankers determined to keep lowering interest rates no matter the side effects on real-estate prices, riots can only be expected to spread further around the world. We can also expect to see more young people turn to radical ideas to change the economic status-quo that is crushing them, such as moving to a cryptocurrency-based system where those in power no longer have a monopoly on the flow of money.
What do you think about the link between low interest rates and the spread of protests and riots around the world? Share your thoughts in the comments section below.
Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.
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Every year the world seems to be getting crazier and more people are starting to realize that it stems from oppressive government transgressions against a peaceful society. The world has noticed millions of people from France, Hong Kong, Venezuela, Indonesia and more are rising up because citizens are sick and tired of the manipulation. Because of all the money printing, hyperinflation, capital controls, austerity measures, and privacy-invasive tactics, groups and individuals have discovered that cryptocurrencies are profound tools for achieving economic freedom and the interest in permissionless money has only just begun.
Individuals Worldwide Are Protesting Against Oppressive Governments and the Growing Wealth Disparity
Three years after the 2008 economic crisis, the Occupy Wall Street (OWS) protests started in New York City’s Zuccotti Park and quickly spread across the world. OWS protest camps were staged internationally and there were many other types of similar demonstrations like the Arab Spring protests, the British student protests, the bank bail-out protests, and the Iranian election demonstrations. All of these activists had been fighting against economic inequality and the huge wealth disparity within the world. Now, little more than eight years later, people are rising up again for the same reasons. Revolution-style protests are taking place in Argentina, Venezuela, Indonesia, Netherlands, France, India, Russia, Hong Kong, Chile, Lebanon, Peru, Haiti, Egypt and Syria, and the whole world is watching closely.
The Argentines have literally watched their government destroy the economy slowly. The socialist leaders recently initiated currency controls as the country’s central planners have failed to fend off hyperinflation. In September, the Argentine government told the public the peso was extremely weak and restricted foreign currency purchases. Hundreds of thousands of Argentines took to the streets in Buenos Aires demanding that the government fix the situation.
There’s also been a massive food crisis and nourishment has been hard to come by in the Latin American country. Ivan Martinez, a protester in Buenos Aires, told news outlet Al Jazeera: “The situation is dire for all of us.” “I’m a construction worker but there is no work. It’s difficult to feed my children. That’s why I come here because the president’s policies are slowly killing us,” he added.
Similar to Argentina, Chile is also facing serious economic problems and the country’s citizens have risen up in protest. For a while, Chile was known as Latin America’s economic powerhouse with seemingly never-ending prosperity. But this year is very different as Chile is suffering from rapid inflation and pension shortages. The government has been raising prices, despite the economic outlook, thinking that austerity measures and tax hikes will solve the problem. The capital’s subway operator Metro de Santiago raised the price of tickets to $1.15 during rush hour and Chilean politicians also increased electricity costs by 10%. Much like the OWS protests, the Chilean government doesn’t know who is behind the uprisings that can be seen throughout major cities across Chile. The media details the movement was largely organized on the internet using social media platforms.
The streets of Paris this year saw thousands of yellow vests demonstrating against rising taxes, the manipulated banking system, and the region’s unethical bureaucrats. The group known as Gilets Jaunes formed marches in Paris that saw hundreds of thousands of people in the streets. Banks were vandalized and one group of Gilets Jaunes started burning banknotes at the bill printing factory.
“Starting today we start to burn foreign bills stock — The first paper ream we have here is for Israeli banknotes,” the bill factory employees stressed. “We start with this, then we burn everything — If the French government doesn’t change, all foreign countries that are waiting for their bills, will not be delivered.” It’s unknown how far the group of employees went with the burn, but the economic uncertainty in France remains dire.
Hong Kong has seen weeks and weeks of protests that don’t seem to be ending anytime soon. The demonstrations stem from Hong Kong citizens wanting to partition themselves from Beijing as China has been in full control over the territory since the British handover. However, activists have been striking at the root of Chinese banks located in the country following massive sit-ins at the national airport and demonstrations across several locations citywide.
In mid-August pro-independence activist, Chen Haotian, told protesters to initiate a bank run on China’s banks. That week, Haotian called upon the people to withdraw bank deposits. Chinese financial institutions were also attacked again on October 1, as China honored the 70th anniversary of communist rule. Dissenters besieged a Bank of China branch in Hong Kong, while also smashing the storefront glass of another Chinese bank called China Life the same day.
Citizens of Indonesia have been protesting as well, as students demonstrated against a proposed ban on extramarital sex. But just like Hong Kong, the protest reports go well beyond the controversial ban and dissenters on the streets have said government rules have been constantly overbearing. The Indonesian protests stem from a deteriorating economy and poor central planning, and the rise ups have been growing fervently thanks to social media. Civil rights, basic freedoms, and privacy are the main issues, many Indonesian protests participants will tell you. “It’s not a one-issue protest,” explained Andreas Harsono of Human Rights Watch in Indonesia. “And it’s also not a unified or organised movement.”
An economic crisis is devastating India according to various reports from news.Bitcoin.com’s Kevin Helms. It all started at the end of September when the Reserve Bank of India told 137 smaller financial institutions to limit withdrawals to 1,000 rupees ($14) and the public erupted in protest. “Depositors will be allowed to withdraw a sum not exceeding ₹ 1,000 (rupees one thousand only) of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI directions,” the bank told the public. To this day, customers are still having problems withdrawing their hard earned money from a number of cooperative banks.
Egyptians are protesting their oppressive government right now because even though the economy is doing well, the country’s bureaucrats are the only ones reaping the benefits. Just like the Egyptian rise ups in 2011, the people are looking to see certain politicians arrested and jailed for their transgressions.
The three weeks of demonstrations in Egypt are no different than what’s happening throughout various countries across the world. Egyptians are upset about the draconian repression, increased political corruption, and government-imposed austerity measures. Thousands of Egyptians have been arrested and the latest demonstrations have people questioning “whether the Egyptian political system is about to collapse.”
The people living in Lebanon want a new government and word on the streets is the overreaching politicians continue to hurt the average working-class citizen. Lebanese are tired of the bureaucrats taxing the people on every single thing they do and the recent protests started after a tax proposal on Whatsapp calls. Hundreds of thousands of people took to the streets in anti-government protests against a 20-cents-per-day charge for using voice over internet protocol (VOIP) platforms. The most popular is Whatsapp in Lebanon, but Lebanese also use Facebook messenger. Lebanese activists have called for a new government and the latest demonstrations are the largest since 2005.
The youth in Russia have been protesting Vladimir Putin’s authority since 2012 and Putin doesn’t seem to care. Dissidents in Russia keep protesting and the police just continue to arrest the activists immediately. A protest last July saw 1,300 student arrests at opposition demonstrations. People in Russia are tired of the laws against Russian protesters and in September roughly 20,000 took to the streets to put an end to prosecutions tied to mass protests. Russian prosecutors had started an oppressive criminal case against demonstrators when people rallied against alleged rigged elections.
Social Media, Encrypted Chats, Precious Metals, and Cryptocurrencies
Throughout all of these events and the financial turbulence worldwide, safe-haven assets like precious metals and cryptocurrencies are being used as tools for economic freedom. Other tools such as the use of guerilla-styled social media tactics and encrypted chats are being deployed globally.
Millions of people from other nation states like Venezuela, Netherlands, Peru, Syria, South Sudan, Zimbabwe, Haiti, and Spain are rising up against their corrupt governments as well. It’s pretty easy to see why they are growing tired of the manipulation and it’s safe to say the central planners’ band-aids and money printing tactics are not helping.
What do you think about all the protests happening worldwide? Do you think cryptocurrencies can help people? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Reuters, Wiki Commons, Fair Use, Pixabay, and Twitter.
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A now-viral post by a Chinese cryptocurrency trader has highlighted the stark drop in the price of American sneaker-backed tokens in the wake of the NBA-China fallout.
A now-viral post by a Chinese cryptocurrency trader has highlighted the stark drop in the price of American sneaker-backed tokens in the wake of the fallout between the NBA and China.
As Reuters reports on Oct. 16, the anonymous trader’s Weibo post from earlier this month had shone a spotlight on an apparent 10% crash in the price of crypto tokens backed by Nike’s Air Jordan sneakers on a United States-based exchange.
“It’s clear sneaker speculators were pulling money out of the market,” the trader told Reuters.
He interpreted the market response in the context of Chinese netizens’ anger over a now-notorious tweet from Houston Rockets general manager Daryl Morey, in which he declared solidarity with anti-government, anti-Beijing protesters in Hong Kong.
NBA’s $4 bln Chinese market
As the report notes, Morey — who swiftly deleted the controversial tweet — was accused of endorsing violence and touting a “secessionist pipe dream” by Chinese state media.
Reuters has calculated that the price of tokens backed by Air Jordan 1 Retro High Satin Black Toe sneakers — the latest in a line-up of exclusive and iconic sneakers sported by NBA stars — had fallen 34% since the Morey incident.
Reuters’ analysis is based on data from global digital asset exchange 55.com, which the report notes is used by Chinese traders, who — while being banned from trading on domestic platforms — exchange their yuan for Tether (USDT) via Alipay or WeChat to purchase tokens.
George Gao — reportedly as a sneaker brand influencer in China with over 38,000 YouTube followers — told Reuters that the anger of basketball fans in mainland China over the Morey controversy had been unprecedented.
The NBA’s Chinese market is reportedly estimated to be worth over $4 billion.
“Political factors do affect my choice,” Chen Luwei — a Chinese sneaker fan studying in Australia — told reporters.
Hong Kong protesters gathered in support of Daryl Morey, according to an update on Oct. 16 from the Hong Kong Free Press.
Cryptocurrencies and the protest movement
As reported this summer, Hong Kong’s pro-democracy, anti-government protest movement has allegedly been spurring the wider adoption of cryptocurrencies such as Bitcoin (BTC), with some retailers in the city moving to introduce support for cryptocurrency payments.
Morgan Creek Digital co-founder Anthony Pomplianoproposed that in the aftermath of the hardline response to Hongkongers’ protests on the Chinese state’s anniversary — Bitcoin’s non-seizability has become “very attractive” for those whose civil liberties are under threat.
This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.
Hosted by CoinEx Chain Foundation, “CoinEx Chain Global Nodes Election Launch Conference” was successfully held in Shenzhen on Oct 16. The conference marked the official launch of CoinEx Chain’s nodes election. More than 500 blockchain practitioners, including investors, KOLs, technical and financial experts, as well as top institutions and medias attended the conference to witness the important milestone of CoinEx Chain.
Global Nodes Election Kicks Off & Hoo.com, RockX, IFWallet and CETDAC Announced to Join as Nodes Partners
During that conference, Eddie Jiang, CMO of CoinEx, introduced the detailed rules of how to be one of CoinEx Chain’s 42 nodes and their related rewards. The profits of nodes are mainly from block production reward and transaction fees. CoinEx Foundation will offer 350 million CET (CoinEx Token) in total as block production reward.
On the same day, Hoo.com, RockX, IFWallet and CETDAC announced to join CoinEx Chain’s nodes election. The founders of those entities attended the Shenzhen conference and expressed their bullish prospect about CoinEx Chain. “We strongly recognize the vision of CoinEx Chain and are willing to be one of the nodes and participate in the ecosystem building”, Ruixi Wang, founder of Hoo.com said on the conference.
Exploring the Next Generation of Public Chain
On the conference, the core team members of CoinEx Chain delivered keynote speeches to attendees about the mission, design concepts and prospects of CoinEx Chain.
Haipo Yang, founder & CEO of CoinEx, had this to say on the conference. “Public chain is the most important infrastructure, or even the essence, in the blockchain industry. The ultimate goal of CoinEx Chain is to lead the next generation of public chain for decentralized finance.”
Jiazhi Jiang, Lead Developer of CoinEx Chain, introduced CoinEx Chain’s technical innovation to solve the current bottlenecks of public chain. “Currently, the development of public chains are faced with many problems: performance, expansibility, privacy protection, cross-chain, etc,. CoinEx Chain’s solution is the parallelism of dedicated public chains: DEX Chain, Smart Chain and Privacy Chain, each of which performs its own functions, by cross-chaining for both high performance and flexibility.”
CoinEx Chain World Tour
Following the Shenzhen conference, CoinEx Foundation will continue world tours in Shanghai, Wuzhen, Beijing, Singapore and Hong Kong to showcase CoinEx Chain’s innovation to blockchain professionals and recruit node partners from all the world. The core team members will introduce the product design concept and future development plan of CoinEx Chain. Attendees can directly talk to the core team members to discuss the prospects of CoinEx Chain and exchange views about the nodes election.
About CoinEx Chain
CoinEx Chain is the world’s first public chain exclusively designed for Decentralized Exchange (DEX). CoinEx Chain aims to create a decentralized trading system with community-driven operations, transparent trading rules, and self-controlled user assets. Besides the DEX Chain, CoinEx Chain will also include a Smart Chain supporting smart contracts and a Privacy Chain protecting users’ privacy. Ultimately, CoinEx Chain will become a perfect ecosystem powered by the parallel public chain architecture.
This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.
Major crypto exchange BitMEX announced that it will restrict access to its platform from Seychelles, Hong Kong and Bermuda.
Major cryptocurrency exchange BitMEX announced that it will restrict access to its platform in Seychelles, Hong Kong and Bermuda.
Per an announcement published on Aug. 19, in order to ensure the safety of funds and the stability of the exchange, the firm restricted access from countries in which the offices and workers of its parent company — HDR Global Trading Limited — reside. BitMex also claims that this is a proactive measure and noted, “This change will have no financial impact on the business and will affect very few people.”
Part of a broader initiative
BitMEX noted that closing trading in the aforementioned jurisdictions as part of a wider effort to bring transparency to the crypto space as it becomes more regulated. The exchange reportedly intends to improve the transparency of its systems and show third parties the reasoning behind features of the platform.
BitMEX also claims to be working on independent audits of its insurance fund, market-making activities and tradeable contract structure. The exchange reportedly hopes to share the results of those audits in the near future.
BitMEX is the second-largest cryptocurrency exchange with a reported 24-hour trade volume of over $2.5 billion, according to CoinMarketCap.
As Cointelegraph reported in June, BitMEX’s competitor Binance DEX, the decentralized exchange developed by major cryptocurrency exchange Binance, blocked web interface access to users based in 29 countries.
Hong Kong and Argentina pay through the nose for Bitcoin, Binance could be back in the U.S. within months and Barclays cuts ties with Coinbase in the U.K.
Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Bitcoin (BTC) briefly veered back into four figures this week — reversing recent gains. It comes amid cooling tensions between the United States and China in their long-running trade war, with Washington deciding to delay the introduction of new tariffs that would have affected laptops and smartphones. Interestingly, crypto consumers in some parts of the world have ended up paying a premium for their Bitcoins in recent days. A report on Wednesday revealed that investors in Hong Kong were paying about $300 extra for BTC at the time — with pro-democracy protests and violent clashes with police creating political uncertainty. Over in Argentina, where the peso collapsed following the sitting president’s shocking defeat in primary elections, consumers on local exchanges were at one point paying out $420 more for their crypto than they would on major platforms.
More than 20 trading pairs vanished from Poloniex this week, with the California-based crypto exchange blaming their removal on low trading volumes. LTC/XMR, DASH/XMR, STEEM/ETH, GAS/ETH, LOOM/USDT and FOAM/USDC were among the pairings affected. Poloniex has stressed that each of these assets will remain independently tradable. This isn’t the first time that the American platform has streamlined its offering in recent months. Back in May, nine coins were delisted for its U.S. customers — Bytecoin (BCN), GameCredits (GAME) and Gas (GAS) among them — due to uncertain regulations.
Changpeng Zhao — or good ol’ CZ, for short — has predicted that Binance will be back in the business of operating crypto-to-fiat operations in the U.S. within two months. In an interview, the exchange’s CEO said: “I don’t want to promise any fixed dates, but there’s a lot of work being done and there’s a lot of things going on in flux, but I would say in a month or two.” June saw Binance temporarily restrict services in the U.S. as it worked to open a new division that would have the approval of the Financial Crimes Enforcement Network. CZ added that he is upbeat about the future of U.S. regulation — saying that the clear legal framework for traditional financial services shows that the environment for crypto will improve in time.
In news that could hit the crypto community hard, British banking giant Barclays has reportedly severed ties with the Coinbase exchange. For users in the United Kingdom, this could slow down the exchange of crypto for British pounds substantially. Until recently, Coinbase users were able to access the U.K.’s Faster Payments Scheme, but restrictions brought in last month meant they had to use SWIFT instead — an inferior system that takes days to complete a transfer. Spain’s Santander was also accused of joining the bank blockade against Coinbase this week, with British users complaining that they were struggling to deposit fiat funds. A U.K. spokesman denied this was the case, telling Cointelegraph: “We do not block payments to any legitimate company, however in certain circumstances we will refer payments for additional security checks, where we believe there may be a higher risk of fraud.”
The Intercontinental Exchange’s Bakkt, the much-anticipated U.S. platform for daily and monthly Bitcoin futures, has a launch date: Sept. 23. The company says it is full steam ahead on the service, and testing is now under way after it secured approval from regulators. Bakkt had initially announced plans to offer such a platform back in August 2018, but it suffered repeated delays because of compliance issues. The futures contracts are going to be provided through a partnership with Intercontinental Exchange Futures U.S. and International Exchange Clear U.S.
Winners and Losers
At the end of the week, Bitcoin is at $10,134.51, Ether at $184.93 and XRP at $0.27. The total market cap is at $263,812,932,637.
The top three altcoin gainers of the week are BitBall, CyberFM and Tellurion. The top three altcoin losers of the week are Boltt Coin, Skeincoin and Block-chain.com.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“Opinion: Many #cryptocurrency in the top market cap would be absolutely #Rekt by #EthereumClassic if we removed #Ethereum from the brand. I know we are original Ethereum project, but maybe this can be water cooler chatter at summit eh?”
“Cryptocurrency investments are risky. Investors should be extra cautious when dealing with promoters who claim their offering does not have to be registered with securities regulators. Quick returns of 150% are as rare as Bigfoot.”
“So far crypto has focused mostly on retail investors […] or institutional investors. […] Half the money in the U.S. is managed by financial advisors, and right now it’s very difficult for them to access that market.”
The start of the week saw Goldman Sachs give a bullish forecast for BTC prices — suggesting a short-term target of $13,971 for the dominant cryptocurrency. Its target has been based on Elliott Wave Theory, which forecasts market trends by identifying extremes in investor psychology, along with price highs and lows. The financial institution has been taking an increasing interest in the crypto market of late — exploring the potential of creating a digital currency and ramping up the development of a secret project last month by opening a job vacancy for a digital asset project manager.
A theory has been circulating that this week’s downturn in BTC prices could be because of sell-offs from a Chinese Ponzi scheme worth $3 billion. An estimated 10 million investors were scammed when PlusToken was created in the middle of 2018 — and in a nod to a classic Ponzi scheme structure, it promised high investment returns at different rebate percentages for its four tiers of members. Dovey Wan, the founding partner of Primitive Ventures, has claimed that mass sell-offs from wallet addresses known to be associated with PlusToken are now taking place. She has urged exchanges and over-the-counter platforms to blacklist them as a matter of urgency. However, researchers from TokenAnalyst have countered Wan’s claims, citing a lack of evidence of addresses associated with PlusToken moving large amounts of Bitcoin to known exchanges.
In other Coinbase news, its U.K. customers have reportedly been told that the exchange is dropping support for Zcash after Aug. 26. The fact that customers in the U.S. and the European Union remain unaffected has prompted speculation that Brexit could be to blame. Affected users can either convert their Zcash to another cryptocurrency on the exchange or transfer their assets to another wallet. If no action is taken by the deadline date, the remaining crypto will be liquidated into British pounds. British Bitcoin entrepreneur Alistair Milne has suggested that Coinbase may have been told to delist Zcash in order to regain access to the U.K.’s Faster Payments System. For its part, Zcash has stressed that it is “100% compatible” with British regulations — and says its presence on other U.K. exchanges remains unaffected.
Some of Craig Wright’s documents in a recent trial were faked, Bitmessage developer Jonathan Warren has alleged. The man behind the peer-to-peer messaging service claimed there were chronological inconsistencies in the paperwork the Australian computer scientist provided to court in the long-running lawsuit filed by late cyber-security expert David Kleiman’s estate. Warren accused Wright of faking some contracts, emails and Bitmessages that were reportedly set to move Kleiman’s assets under his control. Kleiman’s estate is suing Wright for $5 billion amid allegations he stole hundreds of thousands of BTC. Wright — who has claimed he is the inventor of Bitcoin — denies the allegations.
Reports suggest 300,000 LTC addresses may have been affected by a dusting attack, in which users received a fractional amount of Litecoin that could then allow malicious actors to track those addresses. Here, Joshua Mapperson explains what a dusting attack means, why it has happened and what crypto consumers can do to stay safe.
Statistics by an international recruiting company suggest that global demand for blockchain engineers has increased by 517% over the past year. Cointelegraph’s Julia Magas takes a look at how the jobs market in the crypto industry has evolved since 2018 — and where vacancies are being advertised.
Have you received a letter from the Internal Revenue Service? If so, time is running out to reply — and those who don’t respond with details of all crypto transactions between 2013 and 2017 run the risk of having their tax accounts audited. Our Lokay Cohen takes a look at what you need to do…
On August 15, the San Francisco-based digital currency exchange Coinbase announced that it had acquired the cryptocurrency custody service Xapo’s institutional branch. The business move puts Coinbase in the limelight, making it the largest custodial service for digital assets worldwide, with more than $7 billion under custody.
Coinbase Acquires Xapo’s Institutional Arm and Now Commands $7 Billion Worth of Digital Assets
As early as 2010, Bitcoin supporters such as Hal Finney predicted that someday most BTC transactions would occur between massive bitcoin-backed banks. Finney believed that if a digital currency like bitcoin was to gain mass adoption, the network would not be able to include every single financial transaction in the world. The renowned cryptographer said that large bitcoin-backed banks would fill the void and “work like banks did before the nationalization of currency.” Fast forward to today, where firms like Coinbase are holding massive amounts of digital assets in custody. On Thursday, the California exchange announced that it had acquired Xapo’s institutional crypto operation and established itself as one of the largest crypto custodians worldwide. Coinbase published a blog post in regard to the acquisition and stated:
In just over one year since launch, Coinbase Custody has grown to over $7 billion in Assets Under Custody (AUC) stored on behalf of more than 120 clients in 14 different countries, making it the largest, most globally recognized and most trusted institutional custodian in the world.
Coinbase Growth Since 2012: $8 Billion Valuation, $600 Million in Annual Revenue
Coinbase has come a long way since Brian Armstrong and Fred Ehrsam started the company back in 2012. That year Coinbase allowed users to buy and sell BTC using a bank transfer and quickly became one of the biggest BTC providers next to Mt. Gox. Throughout 2012 and 2013, investors and venture capitalists started seeing potential in Armstrong and Ehrsam’s company and began to invest. The founders participated in a Y Combinator startup incubator, received $5 million from Fred Wilson in May 2013, and $25 million from Andreessen Horowitz, Union Square Ventures (USV), and Ribbit Capital in December 2013. By 2014, Coinbase users grew to more than one million accounts and the assets under the company’s control continued to grow exponentially from there. The cryptocurrency community really took notice of how large Coinbase had grown two years later, when in February 2016, Brian Armstrong told the public that “[Coinbase is] now storing about 10% of all bitcoin in circulation.”
Coinbase is now valued at over $8 billion, after closing a funding round in 2018 for $300 million to “accelerate the adoption of cryptocurrencies and digital assets.” In 2019, despite stiff competition, the San Francisco tech company has estimated revenue between $569-650 million. Binance comes close to Coinbase, with The Block reporting in February that the exchange pulled in $446 million in profits. Kraken captures $150 million annually, Bitstamp $17M, Bitfinex $10M, and Itbit $4M in revenue. Coinbase has around 800 employees and the firm has made roughly 10 acquisitions since 2012. The company acquired startups like Blockr, Earn.com, Cipher, Digital Wealth, Keystone Capital, Blockspring, and now Xapo’s institutional arm. Coinbase has also made various equity investments like the recent cryptocurrency derivatives exchange Blade as well as acquiring Horizon Games, Textile, Near, and Dharma.
In 2017 Speculators Estimated Xapo Held $10 Billion Worth of Bitcoin With Keys Spread Across 5 Continents and a Swiss Military Bunker
Xapo started its business similarly to Coinbase, but did not offer its bitcoin wallet and cold storage vault services until March 2014. The Hong Kong-based company was founded by Wences Casares and Federico Murrone and quickly became a well-known crypto brand. In 2015, the company moved its headquarters to Zug and two years later the firm was granted a European e-money license in Gibraltar. That year, during the all-time highs of 2017, it was estimated that Xapo’s Swiss bitcoin vaults held billions of dollars’ worth of digital assets. Quartz columnist Joon Ian Wong reported on Xapo’s vault in Attinghausen, Switzerland when he visited the facility. The security was extreme and resembled a James Bond movie, Wong noted during his visit.
“[Xapo] won’t tell me how much bitcoin is stored in the vault, but he says he sometimes takes customers with “millions” of dollars worth of the cryptocurrency stored with Xapo to tour the vault,” the reporter wrote in October 2017.
Despite the company not disclosing how many coins are held in the Swiss vault, estimates from Bloomberg in the spring of 2018 said Xapo held more than $10 billion. By the summer of 2018, Xapo Inc. received the sixth Bitlicense and was approved to operate in the state of New York as a regulated Bitcoin business.
Over the last two years, Xapo has made around $4.2 million in revenue annually. Additionally, Xapo employs around 52 people and the company has raised a total of $40 million since its inception in 2014. Reports stemming from Xapo’s vault in Switzerland have made speculators believe the company’s institutional vault still has a massive amount of digital wealth under its wing. Moreover, during Wong’s visit to the vault three years ago, Xapo told him the vault operators can never unwind. “This is not a race. It is a chess game. You have to think about the opponent’s next movement. You can never relax,” the Xapo executive detailed.
Sure. Consumers won’t mind bitcoin banks, but that is a huge systemic risk. Say goodbye to all of the core benefits of Bitcoin. Inflation resistance, censorship resistance, Gone.
Members of the Crypto Community Discuss the Current Custodial Trend
Coinbase and Xapo have scared some cryptocurrency advocates who think that storing a vast array of coins in custodial services might not be a good idea. Digital currency pundit Jill Carlson tweeted: “The Xapo [and] Coinbase collaboration has me asking: ‘What happens if someday one entity just custodies all 21 million bitcoins? Aren’t we just recreating the same, broken financial system?’” Edge Wallet founder Paul Puey responded by saying: “You need more than just the option too. You need a majority of crypto held in noncustodial solutions. Otherwise, we run the risk of losing the ability to transfer funds without a third-party.” Puey continued:
Bitcoin then just becomes an overleveraged asset class like a gold ETF.
Using a cringe-face emoji, Monero developer Riccardo Spagni jokingly wrote: “A few months back a VC told me that ‘custody is the most exciting space in the ecosystem right now.’” The Block writer Frank Chaparro (Fintech Frank) said that no smart asset manager would custody all of their coins with one provider. “There is a need for multiple custodians – we see this even in the so-called broker financial system,” Chaparro insisted. However, Coinshares executive Meltem Demirors revealed that she believes “everyone custodies their coins with one provider.” “Did you know that everyone in the U.S. custodies their share certificates with one entity – the DTCC?” Demirors wrote.
Mega Bitcoin Banks Issuing Their Own Digital Bucks and Verifiable Proof-of-Reserves
The mega crypto bank discussion has many crypto enthusiasts wondering if the massive amount of digital currency custodianship is good for the environment. Coinmetrics executive Nic Carter sarcastically explained that he’s “waiting for a major custodian/exchange to implement proof of reserves” with a picture of a rotting skeleton next to a computer. It’s a stark cry from Hal Finney’s 2010 prediction, when he said that megabanks would be “the ultimate fate of Bitcoin.” “Most Bitcoin transactions will occur between banks, to settle net transfers,” Finney detailed. He also said that these banks would use the BTC to be “high-powered money,” which would serve as a reserve. Then these Bitcoin-backed banks could “issue their own digital cash,” Finney emphasized.
We have seen Hal’s prediction already start to occur within the cryptocurrency industry as large exchanges, which have silently become the largest crypto banks in the world, are starting to mint their own digital assets. Binance has created binancecoin (BNB), which holds the sixth largest crypto valuation out of more than 2,000 digital asset markets. Coinbase and Circle Financial have the Centre foundation, which controls the regulated stablecoin USDC. With a transparent blockchain system, a true “proof-of-reserves” type of scheme could transpire, unless people decide to trust these companies like the financial institutions today. If the community simply trusts these mega crypto banks then unsustainable banking techniques like fractional reserves could proliferate unchecked.
The way things are moving, with the recent Coinbase acquisition of Xapo and digital currency exchange providers becoming far bigger than traditional institutions, it begs the question: are mega bitcoin banks the shape of cryptocurrency custody to come? It may not be the future we chose, but it’s the one that’s fast becoming a reality.
What do you think about the Coinbase acquisition of Xapo? Do you think that custodial services will dominate the crypto industry? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Coinbase, Xapo, Pixabay, Twitter, Centre, Circle, Jamie Redman, and Wiki Commons.
Higher prices on LocalBitcoins coincide with political uncertainty in a move copied in Argentina.
Bitcoin (BTC) has begun trading at a premium in Hong Kong as continued political uncertainty produces a widely-reported spike in demand.
Copycat moves underline fiat distrust
Data from P2P Bitcoin exchange LocalBitcoins showed traders paying around $300 more per coin than elsewhere on Aug. 14, which translates into a premium of around 2%.
Hong Kong is the latest jurisdiction to see investors stump up a higher implied USD price for the cryptocurrency, with Argentina notably in a similar situation this week.
As Cointelegraph reported, the premium there, which at one point reached $1,000 on LocalBitcoins, was tied to a sudden collapse of the Argentine peso following a surprising defeat of the incumbent president in the primary elections.
Bitcoin premium suggests demand for a politically-neutral digital money
Both events underscore an increasing tendency to treat Bitcoin as a safe haven asset in times of fiat unpredictability. Despite BTC/USD losing around 9% this week, the move pales in comparison to peso holders’ 30% losses over the same period.
“Bitcoin is becoming the asset of last resort in areas of extreme currency devaluation and political uncertainty,” Rayne Steinberg, CEO of crypto hedge fund Arca, told Bloomberg Tuesday.
The premium, meanwhile, is down to liquidity, Dovey Wan, co-founder of crypto fund Primitive, commented on the Localbitcoins data.
“The key diff is: In China there is sufficient local supply of Bitcoin (miners, exchanges etc) but Argentina is lacking local liquidity,” she summarized on Twitter earlier this week.
On Tuesday, August 13, most digital currency prices have dropped in value between 2-5% while crypto trade volumes globally have fallen to $46 billion in the last 48 hours. Despite the downturns across the board, bitcoin cash (BCH) is holding steady, up 2% today and now commanding the fourth largest market valuation.
Most crypto markets are in the red today as many popular digital assets have lost a few points over the last day. At the time of writing, the overall market capitalization is roughly $286 billion. BTC prices are down a touch over 3% this Tuesday as each BTC is trading for $10,984. BTC does capture 68% of the $286 billion with a market valuation of $196 billion this week. The cryptocurrency is down 6.6% over the last seven days and has about $15.1 billion in global trading volume.
Behind BTC is ETH which has dropped more than 3% today as each ETH is swapping for $205. Ethereum markets have a valuation of about $22 billion in total and there’s roughly $5.6 billion in ETH trades worldwide. Ripple (XRP) has been extremely boring but dropped from $0.32 to $0.29, losing 2% in the last 24 hours. Lastly, litecoin (LTC) has seen the worst of the declines this week, losing more than 10.9%. Each LTC is swapping for $84 per coin and markets are down 2.5% on August 13.
Bitcoin Cash Fundamentals Look Bullish
Bitcoin cash (BCH) markets are leading the top 10 crypto pack as BCH has gained 2.17% in the last 24 hours. BCH is trading for $337 per coin and the cryptocurrency’s market capitalization today is roughly $6 billion. There’s 1.27 billion in global BCH trades and bitcoin cash currently holds the sixth largest trade volume. The top pair traded with bitcoin cash is tether (USDT) which has around 48.7% of all BCH trades today.
This is followed by BTC (32%), USD (9.4%), ETH (6.4%), and KRW (2%). The exchanges swapping the most BCH include Coinbene, Huobi Pro, Huobi Korea, Huobi Japan, and the trading platform EXX. Many traders have noticed that BCH has outperformed a bunch of other digital assets this past week, spiking more than 10% on Sunday. The well known digital currency trader Don Altexplained that bitcoin cash may see a price run-up soon. On August 11, Don Alt tweeted:
[Bitcoin Cash] is one of the charts with the most potential out there right now. Looks as if it wants to pull a BTC like run soon. As long as it can close through resistance (0.035) I’ll suspect BCH is going to retest blue (0.075) which would be + 150% from here.
Goldman Charts Indicate a BTC/USD Rally Toward $14K
A series of BTC/USD chart slides stemming from Goldman Sachs suggest that the current BTC price dip could be a buying opportunity for investors. The slides were created for institutional clientele and implied there was a possibility BTC could touch $13,971 per coin. “Any such retracement from $12,916-$13,971 should be viewed as an opportunity to buy on weakness as long as it doesn’t retrace further than the $9,084 low,” one slide details. The Goldman Sachs analyst used an Elliott Wave analysis, a tool that attempts to locate market cycles and trends in wave patterns. However, critics of the Elliott Wave principle believe the chart research is too broad and vague due to the fact that it’s very difficult to recognize the start and end of each wave.
SEC Postpones Three Exchange Traded Funds
The BTC/USD price started fumbling after the U.S. Securities and Exchange Commission (SEC) delayed the Vaneck Solidx Bitcoin Trust, Wilshire Phoenix, and the Bitwise Bitcoin ETF Trust. Almost immediately after the announcement from the U.S. regulator, BTC/USD prices dipped from a high of $11,560 to $11,350 on Monday. Reports reveal that the Wilshire Phoenix proposal decision may come on September 29, while the Vaneck Solidx Bitcoin Trust could be made in mid-October.
The regulator has delayed Bitcoin exchange-traded funds (ETF) for years starting with the Bitcoin ETF backed by the Winklevoss twins. Speaking during the Bakkt Digital Asset Conference, SEC commissioner Hester Peirce told the crowd that regulators are stiff against the crypto industry because regulators are the ones who get the blame when things go wrong. “It is very natural for regulators to be conservative because if we make a mistake then people are going to blame us and I know if people lose money, they always blame the regulator,” Peirce told the crowd.
Crypto Price Downturn Could Last Much Longer
According to the popular trader Cryptowolf, if the current BTC/USD price follows historical data the current correction could continue. BTC prices have failed to break the upper resistance above the $12K region over the last two weeks. Cryptowolf says the current correction will only last six and a half weeks if prices follow historical data. “One of the reasons I don’t expect a new high anytime soon in bitcoin is the lack of time in this correction,” the trader remarked on Sunday. “History has proven that every reversal rally was then followed by a correction of 189 – 203 days before breaking its previous high — Currently at only 45 days correction.” If the analyst’s timeframe correlates with prior prices, it started beyond the $12K rejections this month as BTC/USD stopped short just before the $14K zone at the end of June.
Trade Wars, Faltering Debt and Hyperinflation Could Pose Systemic Risk to the Global Economy
Overall digital currency prices are still holding strong as the world’s economic woes continue to grow. Fears of a deep recession have started to look certain as particular regions pose a systemic risk to the global economy. There’s anxiety over a no-deal Brexit between the U.K. and the Eurozone as well as a chance that Italy could abandon the monetary system.
Economists are finding that Hong Kong is not only suffering from the U.S.-China trade war, but the protests are disrupting the country’s businesses as well. On August 12, the country’s most popular airport suspended all flights because protestors brought the international travel hub to a standstill. The airport in Hong Kong is one of the busiest worldwide with more than 1,100 daily flights. Reports detail that over 700 protestors have been arrested for “taking part in a riot” and unlawful assembly.
Meanwhile, all eyes are on the German economy this week where economists and data reveal a looming recession. Data expected this week will show how the country’s economy performed during the first two quarters of 2019. Additionally, while the world was focused on the 10,000,000% inflation rate in Venezuela, people are now watching the economic chaos in Argentina. With all of the global fears growing, larger spot gold prices have touched all-time highs above $1,500 per ounce. Despite the 45-day long correction, with the global economy in disarray, cryptocurrency market prices remain strong.
Where do you see the cryptocurrency markets heading from here? Let us know what you think about this subject in the comments section below.
Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.” Cryptocurrency and gold prices referenced in this article were recorded at 12 p.m. EST on Tuesday, August 13, 2019.