Bitcoin Purchases on Dorsey’s Square Cash App, Records Its 7th Straight Quarter of Growth

  • In 2019, Bitcoin generated $510 million in revenue and half of Cash app’s Q4 earnings
  • In 1Q20, the company is projecting up to $715 million in transaction and bitcoin costs

According to the financial report of the quarter four of Twitter founder and bitcoin proponent Jack Dorsey’s Square, customers bought $178 million of Bitcoin.

In total, the peer-to-peer payments and stock trading Cash App generated $361 million in revenue, half of which came from bitcoin trading. During the entire 2019, the cryptocurrency brought in $510 million in revenue.

Source: Square’s Bitcoin sales

This has been Square’s Cash app’s 7th straight quarter of growth, seeing $239% of year-over-year growth. This growth has been despite bitcoin losing its value for the better part of 2018 and 2019.

In the quarter first and second of 2018, Bitcoin lost 50.74% and 8.17% of its value but gained 2.63% in 3Q18 only to lose 43.21% in 4Q18. In 2019, while the first two quarters were green by 10.34% and 161.50%, the last two recorded negative returns of 25.11% and 10.30%.

Also, the company reached 24 million active users in the three months ending Dec. 2019, which has been an increase of 60% in comparison to 2018. They exceeded the expectations of the market by raking in over $1.3 billion in revenue, a solid 41% YoY increase. As a result, the shares of Square rallied as much as 10% on this better-than-expected fourth quarter results.

About 90% of this revenue was also generated in the US and that’s why the coronavirus might have much of an impact on the company’s return this year while PayPal lowered its outlook for first-quarter revenue growth by one percentage point.

Continued Growth

The Venmo competitor rolled out its bitcoin services across the US on its Cash App in the summer of 2018 and then in mid-2019, it allowed customers to deposit bitcoin into the app. For the first-quarter of 2020, the company is projecting up to $715 million in transaction and bitcoin costs.

On Wednesday’s investor call, Chief Financial Officer Amrita Ahuja said once a user starts using the app for bitcoin buying and selling, they tend to generate 2-3 times the revenue by regular users. Ahuja said,

“We are able to efficiently acquire customers, keep them engaged and show them additional ways we can continue to add value.”

The company already has a dedicated division for bitcoin, Square Crypto that announced a software development kit last month to make it easier for applications to integrate the Lightning Network, the second 2 layer on the bitcoin network for cheaper and faster payments.

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Author: AnTy

The XRP Ledger May Allow Third-Party Asset-Backed Tokens In the Future: Ripple CTO

According to Ripple’s head of tech, David Schwartz, the firm is creating a new feature which will let clients mint new asset backed tokens on its XRP ledger.

Ripple released a press statement explaining that its tech engineers are developing exciting fresh features which will lead to the broadening of the ledger’s functionalities which will also allow third-party users to roll on other cryptos on top of the XRP Ledger network.

While Schwartz was economical on the details of the fresh features, he explained that they will help in rolling on fixed-value tokens within the XRPP Ledger. He explained:

“Stablecoins is the obvious use case, but it’s not just stablecoins it’s essentially assets pegged to some external value.”

CoinDesk reports that such features are present in various blockchain platforms with the most notable one being Tether that operates stablecoin layers on different platforms simultaneously. However, Schwartz explained that asset-backed tokens running on XRP platform will be assured of guaranteed liquidity based on the ledger’s mechanics.

In a previous interview, Schwartz had explained that a entirely collateralized XRP stablecoin can be highly liquid. He added that instead of developing different markets for every virtual asset, the trades will happen in XRP ensuring liquidity of the stablecoin its popularity notwithstanding.

This will not be the first instance that Ripple is venturing into markets outside its settlement business. Xpring, the firm’s investment wing, purchased a decentralized payments platform known as Logos Network late last year. During the acquisition period, Xpring had stated that the new platform would allow Ripple to develop financial products and services on XRP Ledger.

Schwartz explained that the firm’s engineers had realized that the XRP Ledger has properties of algorithms that allow the firm to operate the same way as a decentralized exchange. It is these features that the firm aims to capitalize on and add several aspects which will let users easily offer their own digital assets.

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Author: Joseph Kibe

CME February Bitcoin Futures Expire Today, Trader “Expecting Shenanigans”

  • Open interest on Bitcoin futures contracts on regulated platform CME hits its peak this month
  • CME gap is fully closed at $8,500 and a potential bullish divergence has started to show up which means a bounce could be seen
  • The market is already very volatile and it is further expected to be even more so as bitcoin futures on the regulated platform CME expires today.

Bearish traders have a stronghold within the crypto market with Bitcoin’s (BTC) price down from above $10,000 earlier this week to $8,421. Shorts, meanwhile, are feeling the pain amidst this bloodbath.

Interestingly, on Bitfinex, the longs still dominate the market, making up to 95%. This majority contrasts sharply with the shorts on the Binance, which makes up 65% of its market.

Now, CME Bitcoin futures contracts for February are set to expire. Launched in Dec. 2017 during the market peak, CME recorded considerable growth over the last two years.

After the crypto-winter of 2018, 2019 brought a revival of volume: with prices climbing before dropping towards the second half of the year. However, in Feb. 2020, CME’s platform registered the highest average daily open interest (OI) on Bitcoin futures.

This month marked the highest ever OI on CME bitcoin futures, breaking $1 billion in trading volume for the third time.

However, since hitting $1.1 billion in daily volume on Feb. 18, according to the data provider – Skew Market – the volume on the exchange took a hit. During these two weeks, the daily volume hit lows of $118 million. This week, however, it’s been moving between $270 million and $450 million. OI also hit a low of $220 million down from $338 million on Feb. 14, before reaching a peak at $338 million.

This increased activity means the futures expiry will have a greater impact on BTC prices. In addition, CME has been accused of market manipulation, due to its involvement in the 2017 crash from the $20,000 ATH.

For the moment, Bitcoin is hovering around $8,600 and, according to the trader Crypto Michael said,

“We could see a bounce up to $9,000 from $8,300-8,400.”

“Futures expiring today, as well as current BTC prices, show that the gap is fully closed at $8,500 + a potential bullish divergence is starting to show.”

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Author: AnTy

Homeland Security Uses ICE’s Crypto Intelligence Program For Digital Asset Investigations

The United States’ Immigration and Customs Enforcement (ICE) recently disclosed that its frequent use of the Cryptocurrency Intelligence Program (CIP) for many of its Homeland Security Investigations where they relate to digital asset investigations.

Al Giangregorio, the HSI’s National Bulk Cash Smuggling Center (BCSC) unit chief has stated within an email, that the intel program was recently mentioned for the first time in ICE’s FY budget proposal for 2021.

No other explanations about CIP were given. Here is what Giangregorio said, though:

“The CIP supports any HSI investigation involving virtual currency or blockchain technology. The program has assisted in numerous investigations, including those involving methamphetamine and MDMA dealers, human trafficking, elder fraud, dark net market drug vending, child sexual exploitation sites, and, of course, trafficking in opioids.”

Cryptocurrency Wasn’t a Threat When BCSC Incorporated

Currently, the BCSC, which formally established the CIP, makes use of it in conjunction with the 2001 PATRIOT act to assist ICE’s HSI in tracking down financial criminals and cash smugglers.

Back in 2009, when BCSC incorporated, cryptocurrency wasn’t a threat, but it steadily became a more viable avenue for criminal activity, resulting in increased investment in crypto investigation tools by federal agencies. Giangregorio said:

“Over time, the BCSC has recognized that transnational criminal organizations have evolved and diversified [in] the way they transfer illicit proceeds. The BCSC established the CIP to adapt to changing methodologies and technology to target money laundering related to all types of criminal activity.”

HSI’s Anti-Cash Smuggling Experts Have an In-House Program

According to Giangregorio, the transition to digital money has prompted the experts working for HSI’s anti-cash smuggling division to build an in-house program.

This, and ICE’s FY budget proposal for 2021, may indicate how CIP was created. In its budget proposal, CIP is described as an unlicensed money services identifier for businesses conducting illegal crypto brokerage hotspots for darknet markets, peer-to-peer sites, trafficking and so on.

The cost of establishing and running CIP hasn’t been made public yet, but recent documents have shown that from 2017-19, $2.6 million was spent by the agency on contracts with Chainalysis alone.

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Author: Oana Ularu

Coinbase Admits To Testing Clearview’s Controversial Facial Recognition Software

The California-based crypto exchange giant, Coinbase, has admitted to using the controversial facial recognition software developed by Clearview.

According to BuzzFeed, which obtained an internal document from the New York-based AI company – Clearview – shows that the company has, so far, partnered with over 2,000 firms and authorities globally through the sale of its still controversial technology or through mutual sharing.

The company is currently facing a number of legal threats from organizations like Google and Apple.

Clearview’s facial recognition software, alongside its current operations, have faced intense scrutiny after the New York Times published a story indicating that the startup’s database contained over three billion images scraped from various websites and social media networks without the awareness or consent from users or publishers.

Hoan Ton-That, Clearview’s CEO, had indicated that the technology had only been used by law enforcement agencies, with the firm only working with organizations in the United States and Canada.

However, an anonymous source has since exposed the whole list of Clearview’s clients from over 26 nations.

The list includes renowned businesses like Walmart, Best Buy, Macy’s as well as banks, universities, government agencies, high schools and various police departments.

However, it is the inclusion of Coinbase that is surprising to the majority of crypto enthusiasts since the industry is driven by the need to have privacy.

A spokesperson for Coinbase has explained to BuzzFeed that the exchange was a test of the technology for security purposes as well as compliance. She explained, that Coinbase’s use of Clearview’s AI as a potential security framework.

“We used Clearview to see if the service could meaningfully bolster our efforts to protect employees and offices against physical threats and investigate fraud.”

The spokesperson went on to say that the exchange has yet to make any commitments on the use of this technology.

Coinbase is no stranger to user privacy issues, having previously been forced to clarify that it didn’t sell clients’ data after a top executive admitted that a former analyst had sold clients’ data to third parties.

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Author: Joseph Kibe

Shark Tank’s Robert Herjavec: Not A Big Believer in Gold; BTC’s Price Will ‘Quintuple’ Long-Term

  • “I’m a big believer in bitcoin, electronic payments in the future,” – Robert Herjavec, founder and CEO of Herjavec Group
  • The minute you have a large institutional company getting behind it then that world will change

According to Shark Tank’s Robert Herjavec, founder and CEO of Herjavec Group, Bitcoin is the future method of payment that will be accepted by most consumers in the coming years, due to its ease of use. Add the price of the world’s leading cryptocurrency will likely skyrocket. Herjavec told Kitco News,

“I’m a big believer in bitcoin, electronic payments in the future but I think we’re a long way away from that.”

While talking about the impact of coronavirus on the stock market that recorded its second-largest drop, Herjavec said that he is “not a big believer in gold,” though he understands the people’s need to go or the yellow metal. Bullion is a traditional safe-haven asset that soared to its 7-year high while the stock market took a brutal beating.

According to him, on a long-term basis base metals aren’t going to be an economic indicator. However, he is a believer in bitcoin, which is considered digital gold. He sees bitcoin’s future as the electronic payments but the digital asset is a long way away from that, he said.

Just like stocks, Bitcoin shed half of the gains it made in 2020, so far. Surging as high as $10,600 this month, bitcoin went back to $8,450 level yesterday. But Herjavec said he will buy the crypto asset at its current prices because, in the long term, the price of bitcoin will quintuple.

Referencing an analyst, he said over the long run consumers always go for convenience and bitcoin is just convenient. As for the crazy bitcoin price forecast, that goes as high as a million-dollar, they “don’t sound crazy” to Herjavec and sees it becoming a reality.

But he does say, one has to “disassociate the price of an individual type of Bitcoin.” Herjavec added,

“Because part of the challenge with Bitcoin is there is no one Bitcoin you can buy different types of Bitcoin and I think it’s a bit of a fragmented industry. The minute you have a JPMorgan Chase or you have a large institutional company getting behind it then that world will change.”

Watch the full video here:

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Author: AnTy

Warren Buffett Is Wrong, Everyone Should Have 1% of Assets in Bitcoin: Virgin Galactic Chairman

  • Have 1% of net worth in something completely uncorrelated to the world
  • However, there’s no knowing if bitcoin will remain uncorrelated if “all other risk assets if shit really hits the fan,” – said analyst Ceteris Paribus
  • Also, markets are falling apart which “seems to have crept into crypto” and there are no fresh funds moved into crypto in the current state of panic – economist and trader Alex Kruger

Chamath Palihapitiya, the chairman of Virgin Galactic, yet again doubled down on bitcoin being a “fantastic hedge.”

While talking to CNBC’s “Squawk Box,” the billionaire investor disagreed with Berkshire Hathaway chairman Warren Buffett on the value of bitcoin, that Buffett earlier this week said has no value because cryptos do not produce anything. The long term bitcoin critic said, he doesn’t own any bitcoin or crypto and he never will. Palihapitiya said on Wednesday,

“He is completely wrong and outdated on this point of view.”

“I think he’s an exceptional person. I’ve learned an enormous amount, both from afar and the few interactions I’ve had with him.”

1% of net worth should be in an uncorrelated asset

A bitcoin proponent, Palihapitiya said his views on bitcoin being an important part of an investors’ portfolio haven’t changed since the last time he wrote about it in Bloomberg in 2013.

“Everybody should have 1% of their assets in bitcoin specifically,” said Palihapitiya, who has also founded the investment firm Social Capital.

In the current environment where stocks are having the second-biggest drop ever amidst the deadly coronavirus scare and where the financial industry is running on exuberant amount of leverage, bitcoin is the money under your mattress.

Also, in a world where every financial instrument is correlated, an average individual citizen of any country in the world needs an uncorrelated hedge when there’s a lot of risk to the downside. Palihapitiya said,

“I don’t think when you wake up and see a coronavirus scare and the Dow down 2,000, you should not be going in and buying bitcoin. That is an idiotic strategy.”

“I think a reasonable strategy is to say 1% of my net worth should be in something completely uncorrelated to the world and how the world works. You quietly over some period of time accumulate a position and then just never look at it again and hope that that insurance under the mattress never has to come due. But, if it does, it will protect you.”

No knowing if Bitcoin will remain uncorrelated

Analyst Ceteris Paribus agrees with Palihapitiya but says there’s no knowing if bitcoin will remain uncorrelated if “all other risk assets if shit really hits the fan.”

In the past 10 years, bitcoin only lived in one type of world, a risk-on period with near-constant quantitative easing, but not through a financial crisis. Paribus said,

“What we do know is that bitcoin is uncorrelated to other assets in this particular environment.”

However, historically uncorrelated assets can converge in a time of crises, argues the analyst. As we saw this week, with bitcoin falling along with the stock market, it is perceived as risk and the correlation may further “increase with other risk assets (stocks) in a true time of panic.”

However, “portfolios should include it” still. Also, there’s’ no knowing if Bitcoin has been doing bitcoin things or having correlated risk-off moves.

Economist and trader Alex Kruger also pointed out that it’s good to be mindful of global markets risk appetite, even if “crypto is a mostly uncorrelated asset class.” Markets are falling apart which he says “seems to have crept into crypto.” He added,

“there had been lots of talk recently of traditional asset allocators moving funds into crypto. It is hard to see them moving fresh funds into crypto if the world is in a state of panic and their portfolios are suffering. Same applies to regular investors.”

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Author: AnTy

Shyft Network To Help Top Crypto Exchange Binance Comply With FATF’s Travel Rule

The world’s largest crypto exchange platform, Binance, has selected Shyft Network, the public blockchain protocol, to help with the implementation of the Financial Action Task Force’s (FATF) requirements.

The Shyft Network was initially developed as a peer-to-peer solution for players within the cryptocurrency space to adhere to international compliance requirements within the stringent FATF ‘travel rule’.

Before Shyft, There was no Infrastructure in Place

Samuel Lin, the Chief Compliance Officer at Binance, stated that before the development of the Shyft platform, there was no other infrastructure that companies could use to fulfill the FATF’s rules where it related to cryptocurrencies.

In 2019, the FATF published fresh guidance directed towards Virtual Asset Service Providers (VASPs) which will come into force by the end of June this year.

This new travel rule requires VASPs to conduct a thorough Know Your Customer (KYC) process and to share that information during transactions.

Former FATF executive, Rick McDonell, now Shyft’s top advisor, stated that the new deal will allow the crypto industry to evolve and interact more effectively with regulatory agencies.

McDonell also suggested that other exchanges should follow Binance’s lead in addressing compliance requirements, especially the FATF new travel rule.

Brave New World? What Shyft Aims to Accomplish

The Shyft Network aims to support crypto startups in adhering to an industry-wide solution to the FATF’s new requirements.

The firm is encouraging crypto businesses to utilize its suite of solutions like identity passporting, data attestation infrastructure as well as database bridging.

Shyft’s open-source technology was developed to adhere, not only to the FATF’s guidelines but also to GDPR legislation by the European Union.

The network aims at leveraging decentralized networks in establishing a set of safe data sharing values which can be used in various jurisdictions.

The new deal comes just months after Binance became a victim of extortion through hacking, with the perpetrator successfully stealing a large portion of KYC data from the platform. The firm aims at addressing these limitations within the industry, and partnering with Shyft was the partnership to accomplish this.

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Author: Joseph Kibe

Ripple (XRP) Price Analysis (February 27)

Key Highlights

  • XRP’s price valuation trades in a rally moving mode from a low line at $0.22 mark.
  • The XRP/USD market bulls are not strong in exerting much-needed forces.
  • There may be an occurrence of a series of range price movements soon around the $0.24 mark.

Ripple (XRP) Price Analysis

  • Major resistance levels: $0.28, $0.30, $0.32
  • Major support levels: $0.20, $0.18, $0.16

The bearish pressures in the XRP trade appeared to have partially exhausted while it touched a low value at $0.22 on February 26, during the last trading hour. The currency pair now moves in a rally from the spot earlier mentioned to trade around $0.24 mark.

The XRP/USD buyers are weak in their forces to push beyond a $0.24 price level at present. The XRP/USD sellers may regain their positions at the touch of $0.26 if resistance occurs.

Ripple Technical Indicators Reading

There has been a notable recovery moving bid in the XRP/USD market operations. The two trading SMAs are separated with space as the 14-day SMA trending indicator is underneath the 50-day SMA trend-line. Price has slightly rallied northward to trade around the smaller SMA at $0.24. Yet, the bigger SMA points towards the south direction to indicate that the crypto-market is still under pressure. The Stochastic Oscillators have crossed the hairs from the oversold region to briefly point north-east. That suggests that a series of range price movements may occur in a near time of the crypto.

Conclusion

The XRP/USD market seemingly appears to have commenced a recovery trading mote while it couldn’t break down a low point at a $0.22 mark. All in all, the XRP/USD bulls will have to increase their efforts to gain the market over the bears. At this point, fluctuations of price around the 14-day SMA trading indicator may lead to bringing down the market value to retest its previous low spot at the $0.24 line.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (bitcoinexchangeguide.com) holds any responsibility for your financial loss.

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Author: Ben Jordan

OneCoin Won’t Be Investigated by NZ Authorities but May Have Shut ePayments Systems Down

While New Zealand’s Commerce Commission has announced that it won’t investigate OneCoin, the ePayments Systems shutdown may be related to it.

The first warning against OneCoin was issued by the Financial Markets Authority back in 2018. In 2019, NZ police filed a report detailing fraud related to OneCoin at the Commerce Commission. The organization has since reported it has decided not to pursue an investigation, claiming that:

“The scheme was no longer operational in New Zealand and there was likely to be little prospect of obtaining compensation for participants.”

The Samoan Religious Community Promoted OneCoin in NZ

Among the promoters of OneCoin includes the Samoan religious community, which promoted it in NZ. Since January 2020, 3 Samoan religious organizations have been placed under investigation for money laundering.

It remains unclear who will be held accountable for the loss of millions of dollars.

Is OneCoin Behind the ePayments Systems Shutdown?

ePayments Systems, the largest digital payment company in the UK, has been shut down by the Financial Conduct Authority (FCA) on February 11th.

It’s believed that over £100 million in client funds were lost. Rumors of malpractice include OneCoin’s complicity in fraud because Robert Courtneidge – one of the former directors at ePayments Systems – worked for the law firm Locke Lord as a Global Head of Cards and Payments. Locke Lord also had, as a client, Ruja Ignatova, OneCoin’s founder.

Two months before Courtneidge left Locke Lorde, Ignatova suddenly disappeared, potentially with a lot of money in laundered investor funds from OneCoin.

Had Courtneidge Worked Closely with Mark Scott?

Back in November 2019, Mark Scott got a conviction for laundering more than 400 million euros for Ignatova, money that is unaccounted for at the moment.

It’s assumed that Courtneidge worked closely with Mark Scott in order to be appointed as ePayment Systems director. This relationship may have involved laundering enormous amounts of money for Ignatova through ePayment Systems.

Could this be why the FCA has shut down ePayments Systems under allegations of money laundering?

Courtneidge Had no Comment on Connections to OneCoin

When approached by the Financial Times on his connections to OneCoin, Courtneidge refused to comment. The same goes for ePayments Systems and Locke Lorde. The question remains whether ePayments Systems was used to steal money for Ignatova or not.

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Author: Oana Ularu