Blockchain Progress

2021-04-23 20:00:52 ​​Biden ‘Tax Plans’ Speculations Spook Crypto Speculators

Bitcoin (BTC) and altcoin markets are in red today, with with BTC dropping below the key USD 50,000 mark – in the wake of fresh tax-related speculations from the United States.

The American President Joe Biden is reportedly set to unveil plans to enact sweeping new tax regulations, including changes to capital gains tax – which might affect thousands of crypto traders in the country also.

The plans will reportedly see the state almost double the rate of taxes on capital gains to 39.6% for those earning over USD 1m.

Some, though, are sensing an opportunity for bargain coin buying, while other pundits think the plan may never see the light of day due to pushback from the House.

Regardless, capital gains tax concerns were already pressing for American crypto enthusiasts, who already had to deal with selling-related dilemmas: Investors often have to pay capital gains tax on tokens they sell for fiat after holding for over a year.

However, BTC’s remarkable performance could end up hitting investors in the pocket, as they're now sitting on massive gains. In a year, BTC is up by 579%, ethereum (ETH) - 1,092%, while many altcoins recorded much higher gains.

"President Biden could be doing crypto — and especially crypto lending businesses like ours — a favor should his proposal to raise taxes for wealthy investors to over 40% go through. It would make even greater sense to play that oldest trick in the manage-your-finances-smart book: borrow against your assets to avoid capital gains taxes," Antoni Trenchev, Co-founder and Managing Partner of Nexo, a financial institution for digital assets with over USD 12bn in assets under management, said in an emailed comment, adding that BTC is collateral that appreciates in value.

"In fact, Biden would be doing us so great a favor, regardless of the short-term spook, that I wonder whether this proposal may not be a strategic prelude to pro-crypto legislation in the US," he added.

Meanwhile, Reuters reported that the news had left BTC, ETH and more “on the ropes,” and would “curb investment in digital assets.”

The news agency quoted Chris Weston, the head of research at Pepperstone Markets, as stating that “ether has been the poster child of movement. It has massively outperformed bitcoin.” However, Weston added that “technical selling” may have been “going through” in the markets – a suggestion that some shred reading, rather than a mass exodus may be underway.

However, Bloomberg quoted Matt Maley, the chief market strategist at Miller Tabak + Co, as stating,

“One of the biggest things you have to worry about is that the things with the biggest gains are going to be most susceptible to selling. It doesn’t mean people will dump wholesale, dump 100% of their positions, but you have some people who have huge money in this and, therefore, a big jump in the capital gains tax, they’ll be leaving a lot of money on the table.”

The New York Times stressed that the plan is not yet set in stone, adding that the proposal “is not yet final and could change before next week.”

Per media reports, Biden plans to reveal full details of what he has dubbed the American Family Plan next week.

In a separate report, Bloomberg quoted White House Press Secretary Jen Psaki as appearing to confirm that the plan existed, but stating: “We’re still finalizing what the pay-fors look like.”

The plan reportedly includes some USD 1.5trn worth of spending and tax credits designed to reduce poverty, lower childcare costs, and reduce or eliminate the cost of certain forms of education “according to people familiar with the proposal,” the New York Times added. Open / Comment

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2021-04-20 20:00:29 ​​Dogecoin's Surge a Result of a Elon Musk-DogeDay-Crypto Popularity Mix

The world's most popular meme coin, dogecoin (DOGE), continues to baffle the Cryptosphere and the spheres beyond it, with many seeing its recent massive surge as a result of a combination of elements, including: Elon Musk, Mark Cuban, DogeDay, Coinbase, increased crypto popularity, and a quick buck chase.

"There’s a tribe of investors, many of them Millennials, who see it as a cause, a movement. ... Dogecoin is symptomatic of the zeitgeist happening before our very eyes," Nexo co-founder Antoni Trenchev told Bloomberg.

At the time of writing, DOGE - the only green coin in the top 50 today - surged last Friday, entering the top 10 list by market capitalization, and quickly surpassing the first five coins on its way. At 7:27 UTC today, it's sitting on the 5th spot.

Its price is currently USD 0.42, after it appreciated 14.5% in a day, 107.5% since Friday, and 483% in a week. Overall, the price is up 629% in a single month and a whopping 20,940% in a year.


Per the 24-hour trading volume (USD 32bn), DOGE is in the 4th place, behind tether (USDT), bitcoin (BTC), and ethereum (ETH), respectively.

Investor Dan Tapiero wondered how DOGE "could be worth more than what ethereum was worth just 6 months ago." On November 1, 2020, ETH's market capitalization was USD 43.8bn. DOGE's current cap is USD 55.9bn.

Many, like Qiao Wang of the DeFi Alliance, find the reason for the rally to be a combination of factors:


Bloomberg Intelligence strategist Mike McGlone finds that the recent rally is exemplary of retail’s involvement in crypto markets, and a result of the "perfect storm" of "pandemic lock-ups, lots of cash in the system, and investors’ ability to speculate around the clock" in a market that's "the easiest to access in history."

Similarly, per Fast Company, a reason DOGE is surging this year may be that cryptos in general are becoming more popular with the "everyday" investor, while the Coinbase direct listing added legitimacy to the assets. Also, this mainstream media outlet labeled dogecoin as "the cute bitcoin cryptocurrency rival." Some Cryptoverse residents also argued that DOGE's fundamentals "have always been, "Bitcoin, except it's fun.""

As for why it surged on Friday, many also point to Elon Musk’s latest tweet, that said "Doge Barking at the Moon."

Many seem to agree that the social media force is a major part of the rally. The asset has little intrinsic value but is boosted by investors' fear of missing out (FOMO), with the main driver behind DOGE's popularity being its online communities, coupled with business magnates' support, like Musk, said Michael Kamerman, CEO of trading platform Skilling.

In the past week, the dogecoin subreddit on the Reddit platform got more than 205,000 new subscribers and now has 1.45m of them. On Twitter, Dogecoin has almost 879,000 followers.

Additionally, Mark Cuban recently reported that Dallas-based NBA team Mavericks had seen a surge in sales in DOGE.

“I have no idea what this DOGE rally means,” Cuban told CNBC last week. “But I do know that supply and demand is undefeated. So it will find its level.”

Furthermore, according to Bloomberg, Dogecoin’s sprint is propelled by the DogeDay hashtag trending on Twitter, with many, including Musk, pushing for record highs on April 20 (which is also a day celebrating cannabis use).


Jeff Dorman, Chief Investment Officer of US-based investment management firm Arca, found that, spurred somewhat by Musk’s tweets, DOGE has become the 2nd most popular cryptocurrency on Twitter, accounting for 23.2% of total crypto tweets.

He described the "bitcoin-less rally" as a result of a trader likely logging into the Robinhood app, seeing huge outsized gains in DOGE, "and immediately snap buying the only other tokens from the limited pool of assets available on the Robinhood app — causing large gains in LTC, BSV, BCH and ETC as well." Open / Comment

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2021-04-17 20:00:47 ​​Crypto and Traditional Finance To Merge Via M&As

As Coinbase has already gone public, and eToro, Kraken are also planning to list their shares, we can also expect to see an increase in acquisition activity in the coming months.

While it’s expected that mergers and acquisitions are set to increase this year, what isn’t so clear is who will be initiating such moves. Will traditional finance (or fintech) companies be acquiring crypto firms, or will it be the other way around?

It’s worth pointing out that mergers and acquisitions have already been increasing quite rapidly within the cryptocurrency industry. According to PwC’s 3rd Global Crypto M&A and Fundraising Report, the total value of M&As within crypto more than doubled in 2020, to just over USD 1.1bn. They expect to see further consolidation in the industry with some of the larger, well-funded, or profitable firms continuing their M&A activities.

"We expect the focus to be not on the acquisition of smaller competitors but rather of firms that offer ancillary services to their current offering (e.g. crypto media, data, compliance, research)," they added.

With an average value of USD 53m (up from USD 19 million in 2019), most of the previous deals involved one crypto firm merging with or acquiring another. For example, Binance bought CoinMarketCap, while Coinbase acquired New York-based crypto brokerage Tagomi.

Nonetheless, with bitcoin and crypto now turning the heads of financial institutions and banks, it’s likely that 2021 (and beyond) will bring a greater number of ‘traditional’ finance companies buying up firms within crypto. And we’ll also see an increase in crypto firms acquiring companies outside of the sector.

“Large scale crypto institutions may want to buy mid sized traditional fintech companies as part of acqui-hire strategy when building out liquidity or financial instruments requiring in-depth knowledge of the regulatory environment and offerings. Large scale traditional financial institutions may want to demonstrate thought leadership to growing nervousness amongst high net-worth individuals who are starting to fear missing out on significant capital growth potential within the crypto sector,” said Andrew Kessler, Chief Technology Officer and Co-founder of Zug-based digital data management platform Zenotta.

At the same time, Kessler expects that mid-sized institutions within crypto and traditional finance might want to team up, in order “to mutually strengthen their individual positions by bridging these two sectors.”

For Mike Colyer, the CEO of Digital Currency Group-owned mining-staking company Foundry, there will be one particular area of the crypto industry which will enjoy an increase in interest from firms outside of crypto.

“There is already an increasing trend among traditional companies to acquire or merge with crypto companies, especially those from the mining sector. In recent months, we've seen all kinds of publicly traded companies in North America, from sports lottery businesses to tech support solution providers, either acquire or merge with crypto mining businesses,” he told.

Colyer expects this trend to ramp up this year, while he also expects to “see more crypto players acquire traditional finance companies, especially as long as the bull market continues.”

Given that some crypto firms are now so large, big traditional finance corporations may be forced to acquire at least some of them, since the odds of building something equally successful in a shorter space of time are falling by the month.

“Given the time to market to build a crypto offering for all but the most agile traditional financial firms will be measured in years, if firms have not already started building a crypto offering then the only choice will be an acquisition to ensure they remain relevant. Paypal has led the pack with its recent acquisition of the custody infrastructure provider Curv,” said Seamus Donoghue, VP of strategic alliances at METACO, a digital asset infrastructure provider for traditional financial institutions. Open / Comment

2021-04-14 20:00:34 ​​COIN Touches Base On Nasdaq

The much-discussed and highly-anticipated event has finally begun: US-based major crypto exchange Coinbase went public on the Nasdaq stock exchange via a direct public offering (DPO) of its shares under the symbol 'COIN'.

Importantly, it may take a few hours until we're able to see the price in public. Per Jamie McGurk, a Partner at venture capital firm Andreessen Horowitz, a shareholder of Coinbase, an auction starts early in the morning on the first day of trading, first indicating size of demand, and then at what price as supply and demand starts to build. "Buyers and sellers will adjust their orders for several hours as the market begins to hone in on the equilibrium price," McGurk said.

As a reminder, after much speculation since the end of 2020, the exchange Coinbase filed to go public via USD 1bn direct listing on the Nasdaq Global Select Market in late February this year.

Antoni Trenchev, co-founder and managing partner of regulated financial institution for digital assets Nexo, said in an emailed commentary that,

"With its formidable institutional custody, Coinbase is uniquely positioned to legitimize an entire industry and give an unmistakable signal to the few remaining traditional players that haven’t yet dipped their toes in crypto that we’re here to stay, we mean business, and we mean it compliantly."

As a reminder, unlike the traditional initial public offering (IPO), in a direct listing, the company sells shares directly to the public without getting help from intermediaries. This is the route some major companies like Spotify and Palantir have chosen to take in recent years. Nearly 115m Coinbase shares are on the market now.

While the projected valuation stood upwards of USD 100bn in the days leading to the DPO, there were quite a few of those who expressed doubt that the math behind this number is possible.

But Coinbase’s valuation surpassing that of historic financial institutions like JPMorgan coinciding with crypto’s market capitalization surpassing USD 2trn provides the space with "much-needed stability that will reassure retail investors," commented Ganesh Swami, co-founder and CEO of the provider of blockchain data Covalent.

Just prior to the listing, late on Tuesday, Nasdaq said the Coinbase was given a reference price of USD 250 a share, which valued it at around USD 65.3bn. This, however, didn't indicate where the stock would open.

In early April, the exchange announced its Q1 2021 results, spurring a number of bullish narratives with its USD 1.8bn in revenue in the first quarter of 2021, compared to USD 1.3bn for the entire 2020. Open / Comment

2021-04-11 20:00:26 ​​Bitcoin Is More ‘Public’ Money than Central Bank-Issued Fiat Currencies

If you’ve read a research or policy paper from a government or central bank in recent years, you may have noticed an interesting distinction such institutions tend to make when it comes to money. They like to refer to national fiat currencies as ‘public money’ and cryptocurrencies — as well as other virtual currencies — as ‘private money,’ implying that one somehow ‘belongs’ to the public while the other is strictly the reserve of private individuals.

This distinction is misleading if not downright false, and for various reasons.

Yes, fiat currencies may be ‘public’ insofar as they’re created and managed by institutions which are (nominally) accountable to the public, and yes, cryptocurrencies may be ‘private’ insofar as they operate largely outside of the purview of governments. However, many figures working within the cryptocurrency industry argue strongly that members of the public have more of an influence over the development of cryptocurrencies than that of fiat currencies.

It’s not hard to find examples of central banks using the terms ‘public money’ and ‘private money.’ In a speech delivered in June by the Bank of England’s Christina Segal-Knowles, references are made to both, with money issued by a central bank being ‘public’ and pretty much everything else (including money issued by commercial banks) being ‘private.’

Likewise, the International Monetary Fund made a similar distinction in a blog published in February, in which it also happened to describe public money as “perfectly safe.”

Some proponents of the public-private money distinction appear to have a fairly rosy view of what public money is. Here’s the European Central Bank’s Fabio Panetta, offering a definition of public money in a speech delivered in November 2020:

“a public good that central banks have been managing for centuries in the public interest and that should be available to all citizens to satisfy their need for safety.”

However, the cryptocurrency industry would seem to disagree fundamentally with such a view of public money, particularly when it’s claimed that fiat currencies are managed “in the public interest” and are intended to “be available to all citizens.” For them, such an assessment is largely at odds with the reality of how money (in whatever form) is actually managed and distributed.

“There should be no public money with regards to citizens, all money created from an individual's productive output should be private and protected by property rights,” said Peter McCormack, the host of the What Bitcoin Did podcast, implying that ‘public’ is perhaps the wrong adjective to use to describe money, even when created by a central bank.

Likewise, others take issue with the distinction’s suggestion that Bitcoin (BTC) and other cryptocurrencies are somehow out of the reach of members of the public, while fiat currencies are somehow under their control.

“A cryptocurrency that is built using open-source code and does not provide its founders with any exclusive advantages over any other participant of its ecosystem (like Bitcoin) is definitely a more public good than central bank-issued currencies, where a centralized agency has exclusive, direct control over its issuance and price,” said Nishant Sharma, founder and CEO of mining-focused consultancy BlocksBridge Consulting.

Decentralized cryptocurrencies such as Bitcoin are decentralized precisely to the extent that no one group or individual holds dominance over their development, with the absence of a formalized or hierarchical governance structure meaning that members of the community have equal access to influence (at least in theory).

“Fiat currency management is decided by governments, with the public having little influence over policy. On the other hand ‘private currencies,’ if decentralized (like Bitcoin) are managed by the community, giving the ‘public’ control,” said Lou Kerner, CEO of BIGtoken. Open / Comment

2021-04-08 20:00:40 ​​USD 3 Trillion Corporation State Street Goes Crypto

US-based financial giant State Street aims to enter the crypto trading market in the middle of this year.

State Street's trading platform Currenex, that was reportedly put for sale last year, partnered with London-based Puremarkets Ltd (Pure Digital) in order to develop a wholesale, multi-custodial digital currency trading platform, Puremarkets said today, adding that the partners "intend to further explore the digital currency trading space."

"Pure Digital will be a fully automated, high throughput over-the-counter market for digital assets and cryptocurrencies with physical delivery and bank custody," the company said.

According to them, institutional participants will trade on the platform utilizing bilateral credit enabling efficient capital utilization and control for all trading participants.

"The Pure Digital trading platform will be the first of its kind, offering a wholesale interbank market for Tier 1 investment banks to trade bitcoin and other digital assets. Pure Digital is in discussions with several other Tier 1 investment banks to use the platform, which will provide a high throughput OTC market for digital assets and cryptocurrencies with physical delivery and bank custody," Norway’s digital asset-focused company Arcane Crypto said in a separate announcement. They indirectly own a 37.5% stake in Puremarkets.

At the end of 2020, State Street had USD 3.47trn in assets under management or 11% more than a year ago. However, their revenue dropped by 4%, to 2.9bn, and net income decreased by 5%, to USD 537m.

"While State Street rose to the challenges in 2020, we are laser-focused on fee revenue growth and expense management to continue to make progress in 2021 towards our medium-term targets. We are confident in the trajectory of our business and will continue to drive innovation, automation and productivity to achieve these goals," Ron O'Hanley, Chairman and CEO of State Street, said. Open / Comment

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