Jack Dorsey’s Square is building a bitcoin-inspired financial services business

Square is building a new business to help bitcoin developers build financial services products, CEO Jack Dorsey said Thursday.

Dorsey, who is also CEO of Twitter, said that the new business was called TBD, although he didn’t clarify whether this meant he was still thinking of a name.

Square executives said in June that the company was planning to build a hardware cryptocurrency wallet and software service with the intent of making bitcoin “more mainstream.”

Twitter account for Square’s new business has already been set up.

Mike Brock, who leads the Strategic Development Group at Square’s payments service Cash App, will be in charge of Square’s new business, Dorsey said.

Insider has reached out to Square for more information on TBD.

Square, a digital payments company based in San Francisco, has…

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Is Bitcoin Still Considered An Inflation Hedge?

Bitcoin, which was once touted by crypto enthusiasts and wealth managers alike as a hedge against inflation, has continued to fall in recent weeks even as new data has shown costs are soaring.

On Tuesday, the Labor Department announced that its Consumer Price Index, which measures a basket of goods and services as well as energy and food costs, jumped 5.4 percent in June from a year earlier, the fastest pace in 13 years.

US stocks tumbled at the open while bitcoin remained flat and tumbled steadily throughout the morning and afternoon.

Even on Wednesday, after several major players on Wall Street voiced concern that inflation won’t be a temporary blip, but rather that elevated prices are here to stay, bitcoin remained at almost the same level as before the CPI announcement, trading at around $32,800 per coin.

The recent wave of hot inflation data goes back to March, when the CPI clocked in at 2.6 percent from a year earlier. In April, that figure rose to 4.2 percent, then 5.0 percent and 5.4 percent in May and June.

Briefly in March, bitcoin appeared to be rising along with the CPI numbers, strengthening the argument that it protects holders from a weakening US dollar. The crypto peaked in mid-April at more than $62,000 per coin.

But then, as inflation concerns continued to get worse throughout the spring, bitcoin reversed course, cutting its price in half just as Americans’ purchasing power was declining rapidly, which is when many predicted bitcoin would prove to be most valuable.

“Bitcoin isn’t behaving like an inflation hedge anymore and will continue to remain heavy over expectations over higher yields,” Ed Moya, senior equity analyst at foreign exchange firm Oanda, said Tuesday in a note to clients.

To be sure, some have said that bitcoin needs more time for its price to reflect rising inflation. David Morris, a columnist at CoinDesk, argued that…

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British cops seize nearly $250M in cryptocurrencies tied to money laundering scheme

British police announced Tuesday that they seized almost $250 million in cryptocurrency, making it the country’s largest such capture ever amid an ongoing investigation into international money laundering.

The announcement by the Metropolitan Police’s economic crime command comes just weeks after they announced another record-setting haul of about $158 million in crypto.

The recent seizures, totaling more than $400 million, are part of an active probe into money laundering after organized crime groups began using cryptos to wash their dirty money, authorities said.

“While cash still remains king in the criminal word, as digital platforms develop we’re increasingly seeing organised criminals using cryptocurrency to launder their dirty money,” Metropolitan Police deputy assistant commissioner Graham McNulty said in a statement.

McNulty added that authorities have “have highly trained officers and specialist units working hard in this space to remain one step ahead of those using it for illicit gain.”

Police arrested a 39-year-old woman on suspicion of money laundering after the first haul was discovered in June.

She was released on bail, but authorities said she’s been interviewed “under caution” over the…

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Bitcoin Is Down 45% From Its High — Is it Time to Buy?

Holders of Bitcoin (CRYPTO:BTC) have been on a wild ride over the last few months. From the high it touched in mid-April, its price has fallen by more than 45%, erasing $500 billion in market value. But with that plunge in the rear-view mirror, many people are now asking the question: Is this a good time to buy Bitcoin?

Before making any hasty decisions on that front, investors should consider the pros and cons of owning this cryptocurrency.

The bull case for Bitcoin

Bitcoin is an electronic cash system powered by blockchain, a type of distributed database that could revolutionize the financial industry. Specifically, blockchain eliminates the need for traditional financial institutions (e.g. banks) to keep the records or facilitate transactions. Instead, it relies on a distributed network of computers that manage transactions, mint new tokens, and maintain the ledgers that make Bitcoin secure. Ultimately, this means that transaction fees are sharply reduced and cross-border transactions are accelerated, creating a more efficient financial system. These are major selling points for Bitcoin and other cryptocurrencies.

Moreover, Bitcoin has achieved greater mindshare than any other cryptocurrency. It became the first widely adopted digital token after its launch in 2009, and remains the most popular cryptocurrency in terms of active addresses, and the largest crypto in terms of market value. In addition, Bitcoin has also seen a flurry of mainstream adoption in the past few years as fintech firms like PayPalSquare, and MercadoLibre have integrated it into their platforms.

However, the most compelling case for Bitcoin centers on its scarcity. Specifically, the computer code that underlies it caps the total number of tokens that can ever be mined to 21 million. Once that limit is reached — which is expected to occur sometime around the year 2140 — it will be impossible to create more Bitcoin tokens. This makes Bitcoin a sort of digital equivalent to gold or silver, in the sense that both derive much of their value from their rarity.

As a final thought, Ark Invest CEO Cathie Wood recently expressed her belief that the value of a Bitcoin token will eventually rise to $500,000 — roughly 14 times its current price. Given Wood’s reputation as one of Wall Street’s current hot stock pickers, investors may want to pay attention to her opinions.

The bear case against Bitcoin

One of the most compelling arguments against buying Bitcoin is its volatility. The token price has been as high as $64,800 and as low as $9,100 during the past 52 weeks. Moreover, it recently lost half of its value in just two months, and wild fluctuations like this are nothing new for the cryptocurrency. For instance, investors saw Bitcoin’s price plunge 80% in 2018, from $17,500 in January to $3,200 by December. That type of volatility makes Bitcoin a very risky investment.

Bitcoin naysayers also cite its extremely energy-intensive mining process as a headwind to its mainstream adoption. Indeed, research from Cambridge University calculates that the amount of energy consumed annually in mining Bitcoin is 67 terawatt-hours (TWh). That’s roughly 0.27% of all electricity produced worldwide in a year, and more than is used to power the entire country of Austria.

Finally, Bitcoin is far from the only blockchain-powered cryptocurrency that could disrupt the traditional financial system. Thousands of others exist, and many — like Ethereum and Polkadot — have more utility than Bitcoin, as they incorporate smart contracts and decentralized financial applications.

The verdict

There are good arguments on both sides of this debate — but personally, I’m inclined to agree with Wood. I wouldn’t be so bold as to put a…

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China Situation Not as Bad, Bitcoin to Reclaim $60K In 2021: Interview with OKEx

CryptoPotato had the opportunity to host a discussion with Lennix Lai – the Financial Markets Director at OKEx.

Established in 2017, OKEx is one of the leading cryptocurrency exchanges in the world by means of trading volume and is also a big player in China. We took the opportunity to discuss, first hand, what’s currently going on in the market from both a retail and institutional perspective, as well as what’s actually happening in China.

$60K Bitcoin In 2021

After Bitcoin lost around 50% from its all-time high at almost $65K recorded in mid-April,

One of the most pressing questions that people have is whether or not Bitcoin is still in a bull market.

“I think the correction is already kind of finished or at least close to being finished – whoever needs to sell or deleverage. The last rally was mostly driven by leveraged trading – we could see insane numbers in […] all kinds of trading metrics, showing that everyone was adding a lot of leverage. It makes sense – that’s how bull markets come to live.”

Lai thinks that a lot of the downturn can be attributed to deleveraging, and that’s why we saw the really sharp crash.

However, he also thinks that the correction is “really quite done” and almost “close to finished.” Despite this, he noted that there’s still a lot of uncertainty in the crypto market, mostly originating from the ongoing regulatory clampdown. Yet, he outlined that things are starting to calm down, and prices don’t react as much to negative news.

He concluded that we’re “definitely” in a bull run.

As for price targets, Lai believes that we will see bitcoin’s price recovering to $60K this year, “but it will take longer time to reach higher goals like $100K.” He thinks that $100K is possible in “one or two years” after this one.

China: Recycled FUD or Reason To Worry?

China is arguably one of the most heavily discussed topics within the cryptocurrency community. The country started clamping down, yet again, on Bitcoin a couple of months back. While a lot of it seemed like recycled FUD, there are some new developments that have to be considered. The country did clamp down on Bitcoin mining, and as a result, a lot of the operations, if not all, have started to relocate. As CryptoPotato reported, over 3 tons of Bitcoin mining rigs will supposedly relocate from Guangzhou to Maryland.

The Director of Financial Markets at OKEx said that the country is specifically going after Bitcoin mining, but owning Bitcoin is completely legal and that the cryptocurrency can be owned “like a digital property.”

He reaffirmed, however, that there are plenty of warnings against the dangers of cryptocurrency trading, but most of it is for people to be aware – they don’t prohibit it.

“For those in China who would like to trade, it’s still okay, but you have to be aware of the risks.”

Another interesting thing that we touched on was the difference in the market. With over 1,600 employees globally, OKEx operates in a variety of jurisdictions, so we were curious to know how the European market, for instance, is different from the Chinese.

Speaking on the matter, Lai said:

“The European, or the Western-based customers, are more professionally-oriented. They already have a lot of crypto knowledge and they are very professional already. They understand a lot about trading compared to the Asia-Pacific Economic Cooperation (APEC) customers.”

Source: Crypto Potato


Goldman Sachs: Ethereum could overtake Bitcoin

U.S. multinational investment bank Goldman Sachs thinks the native crypto of the Ethereum blockchain has what it takes to unseat bitcoin as the dominant store of value crypto.

According to a report by Business Insider on Tuesday, the bank believes ether’s use cases currently possess the highest “potential,” being the most popular development platform for smart contracts.

The report cited Goldman’s Tuesday note to clients which, while bullish on ether, denied cryptos’ superiority to gold when it came to taking the top spot among safe-haven assets.

“Gold is competing with crypto to the same extent it is competing with other risky assets such as equities and cyclical commodities,” the note said.

“We view gold as a defensive inflation hedge and crypto as a risk-on inflation hedge.”

Goldman also said…

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Bitcoin, ether tumble as investors take off risk amid global markets slide

The price of bitcoin slipped 7% Thursday amid a broader cryptocurrency sell-off that has also dragged crypto-linked stocks lower.

The world’s largest digital asset by market capitalization slipped to $32,639 as of Thursday morning ET, sinking back below the $33,000 level for the first time in over a week.

Other cryptocurrencies have also been trading rangebound as of Thursday morning ET:

Bitcoin in the past months has been trading in a range at just around half its April peak price of nearly $65,000.

It is expected to be in a consolidation phase between the $30,000-$42,000 zone in the near term, said Pankaj Balani, CEO and founder of Delta Exchange, in a statement.

“We expect it to spend the next few weeks testing this range on either side,” he said. “Though we have seen an upward bias in the last few days it will take some work for BTC to break above the $42,000 mark.”

Cryptocurrency-linked companies have also suffered amid the sell-of.

For now, though, Balani said there are limited catalysts here for any break on the upside in the short term.

In fact, crypto lender Amber Group says the price of bitcoin may have to fall as low as $25,000 before major investors start snapping up bitcoin in large quantities again.

The cryptocurrency market, particularly bitcoin, has been…

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Will Cathie Wood’s Bitcoin ETF Spark a New Cryptocurrency Boom?

Many people had never heard of Cathie Wood before 2020, but it didn’t take long for her to achieve almost legendary status as an investor. Her ARK Invest exchange-traded funds all more than doubled last year, and despite some turbulence for the ARK Innovation ETF (NYSEMKT:ARKK) and her other offerings so far this year, many investors still see Wood as an innovative voice with an eye toward the trends that will define high-growth investing for years to come.

One of Wood’s prevailing themes is financial innovation, and she sees Bitcoin (CRYPTO:BTC) and other cryptocurrencies playing a major role in changing the way people think about money. Late last month, ARK Invest made a move that could finally help get cryptocurrency  further into the mainstream, and many market watchers think that she might be able to succeed where so many others have thus far failed.

The latest bitcoin ETF proposal

On June 28, ETF sponsor 21Shares US filed paperwork with the U.S. Securities and Exchange Commission to create the ARK 21Shares Bitcoin ETF. The intent of the ETF is to provide direct exposure to Bitcoin via shares that correspond to a certain amount of Bitcoin per share. 21Shares US is working with ARK Invest on the marketing front, and it hopes to use the ticker symbol ARKB if the SEC approves the ETF to begin trading, consistent with the tickers of ARK Invest ETFs.

The fund will work in a manner similar to other ETFs. ARK 21Shares Bitcoin won’t directly buy and sell Bitcoin itself, but institutional investors will be able to buy and sell large blocks of shares by depositing or withdrawing an equivalent amount of Bitcoin with the fund. That feature allows institutional investors to regulate the price of the fund’s shares, avoiding the massive premiums and discounts that investors have seen with the Grayscale Bitcoin Trust (OTC:GBTC), which lacks the ability for institutions to make block share purchases and redemptions.

The ARK 21Shares Bitcoin ETF also plans to make its ETF available at a cost consistent with the other funds in its family. The proposed sponsor fee will be 0.95% per year, which is less than half Grayscale Bitcoin Trust’s 2% annual fee.

Is the SEC ready for bitcoin ETFs?

Yet the big question facing Wood and ARK Invest is whether the SEC will actually move forward to approve a Bitcoin ETF. Other exchange-traded fund providers have been looking to create Bitcoin ETFs for years. As far back as 2013, the crypto-famous Winklevoss brothers sought to get a Bitcoin ETF available for investors. By 2017, several other well-known ETF companies had followed suit with proposals of their own. Yet the SEC based its decisions not to grant approval for Bitcoin ETFs at that time to the prospects for manipulation and fraud in the cryptocurrency markets.

Crypto bulls seem to think, however, that…

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Why Bitcoin Could Face Another Sell-Off Before Racing to $100K

The general sentiment in the market has flipped bullish, as Bitcoin moves into the mid-range of its current levels. The first cryptocurrency by market cap has been making its way back from the lows and trades at $35,375 with a 10.5% in the weekly chart.

BTC pushing into resistance in the daily chart. Source: BTCUSD Tradingview

In the coming days, further appreciation seems probable if BTC’s price managed to break above and sustained the monthly open at $35,000. This weekend’s pump has been an important step towards that goal.

However, pseudonym trader NebraskanGooner recommends caution as Bitcoin has been rejected around its current levels after it usually retraces lower. He added:

(…) current market conditions have proven we can’t get excited at resistance. I can’t help but think that everyone’s still just blindly buying & max pain would still be down 1st.

Alex Mashinsky, a founder at Celsius Network, shared a similar thesis. He believes Bitcoin has undergone 2 capitulation selling events over May and June. The first one was driven by retail investors FOMO buying when BTC’s price stood at its all-time high, $65,000.

These investors sold at a loss when BTC’s price dropped to the high area at $40,000 and continue to do so as the downtrend extended. The second capitulation event was driven by the mining sector.

China’s crackdown on BTC miners forced them to sell a portion of their holdings to migrate their operations out of the country. In addition, regulators in the Asian giant shut down bank transactions related to cryptocurrencies.

The Grayscale Effect In The Price of Bitcoin

In total, around $6 billion were sold by retails investors in May, miners, and China users in June. The third capitulation event could be the final, but the worst of the current year. Mashinsky said:

We are about to get one more wave of selling… mostly from the FOMO $20B worth of GBTC arb institutional trade. Hedge funds used leverage loans from Genesis Trading and others to buy BTC in Jan/Feb 2021 that will become unlocked for the first time starting next week…

The Grayscale Bitcoin Trust buys the underlying asset and offers its clients GBTC shares. These can trade at a discount or premium in relation to the spot market. The Trust’s shares remain “locked” for these investors for a 6-month period.

After, they are free to trade their shares in the market and leverage the premium. GBTC shares will be…

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Bitcoin billionaire Mircea Popescu dead, leaving $2B fortune in limbo

Controversial Bitcoin billionaire Mircea Popescu, 41, has suddenly died, leaving behind a massive crypto fortune that could be worth as much as $2 billion — and which some speculate could be lost forever.

Popescu, known to be among the largest individual holders of Bitcoin in the world at one point, drowned last week off the coast of Costa Rica near Playa Hermosa after going for a morning swim, according to local news reports.

Popescu was reportedly “swept away by the current and died on the spot.”

His death has since been confirmed by three women who were reportedly known to be close to him, though others have raised questions over whether he’s actually dead.

His website, which he previously actively maintained, has not been updated since June 23, the day of his reported death.

Popescu, a controversial figure with “documented instances of sexism and bigotry,” according to Nasdaq.com, was estimated to hold at least tens of thousands of Bitcoins, with some estimating even larger holdings.

The lower end of those estimates would place the value of Popescu’s ownership close to $2 billion, based on the peak value of Bitcoin reached in April. Based on Bitcoin’s current value, his holdings would have been worth closer to $1 billion.

It remains unclear who, if anyone, has access to his digital assets, and crypto watchers are already speculating that the fortune could be gone.

Alexander Marder, a research analyst for Crypto Briefing, said on Twitter that Popescu’s Bitcoins may be lost forever, along with those of John McAfee, the antivirus software pioneer who hanged himself in a Spanish jail cell last week.

Anthony Pompliano, founder of Pomp Investments and noted Bitcoin bull, said in a since-deleted tweet that the loss of Popescu’s holdings could benefit other current holders of the crypto.

“Mircea Popescu, a Bitcoin OG, has passed away. He likely owned quite a bit of bitcoin,” Pompliano said on June 27 in the since-deleted tweet. “We may never know how much or if they are lost forever, but reminds me [of what] Satoshi said: ‘Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.’”

Pompliano appeared to be referencing a…

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