Publicly-Traded Canadian FinTech Company Invests 1.5% of its Assets into Bitcoin

Publicly-Traded Canadian FinTech Company Invests 1.5% of its Assets into Bitcoin

The $1.5 Million worth of corporate Bitcoin investments is just the beginning, MOGO plans to buy more BTC next year.

Canadian Fintech company MOGO is investing $1.5 million in Bitcoin. This investment represents the company’s 1.5% assets, as of the end of the third quarter of 2020. But the company is not done with its Bitcoin investment, it plans to do more of it with more of it in 2021. Greg Feller, President, and CFO of Mogo said,

“We plan to initially allocate a modest portion of our capital toward bitcoin investments and will consider additional investments in bitcoin as we monetize some of our existing $17 million portfolios which we expect to begin doing in 2021.”

The company which is publicly traded on the NASDAQ and TSX believe it is “well-positioned to capitalize on the fast-growing demand for bitcoin.”

This isn’t the first time that Mogo has ventured into the cryptocurrency market. Back in 2018, it launched MogoCrypto to enable the buying and selling of Bitcoin in Canada. Recently, it also announced its bitcoin rewards program, an opportunity to earn BTC by engaging with Mogo’s products.

Earlier this month, the company reported a 135% month-over-month increase in the value of Bitcoin traded on its platform from Oct. to Nov. 2020. Feller said,

“We are strong believers in bitcoin as an asset class and believe this investment is consistent with our goal to make bitcoin investing available to all Canadians. In addition, we believe bitcoin represents an attractive investment for our shareholders with significant long-term potential as its adoption continues to grow globally.”

Mogo is just another addition to the long line of companies that have been making corporate investments in the world’s largest cryptocurrency.

MicroStrategy, Square, Ruffer Investment, and many others have jumped on the Bitcoin bandwagon along with the big names like Guggenheim, Paul Tudor Jones, Stanley Druckenmiller, Ben Miller becoming Bitcoiners.

“Most investment banks and private banks will announce crypto offerings,” and “several large public companies will issue BTC-related capital structure instruments,” predicts Su Zhu, CEO of Three Arrows Capital for 2021. He also sees several central banks announcing “substantial stakes in BTC.”

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Author: AnTy

Bitwise Liquidates its XRP Position, Reinvests Proceed in Other Crypto Assets in the Fund

Bitwise Liquidates its XRP Position, Reinvests Proceed in Other Crypto Assets in the Fund

The firm says it “does not invest in assets that are reasonably likely to be deemed securities.”

Bitwise Asset Management has liquidated its just over $9 million worth of position in XRP. “Prior to the sale of the asset on December 22, 2020, XRP was approximately 3.8% of the Fund,” when its AUM was $242 million, says the San Francisco-based crypto fund manager.

The proceeds from the sale have been reinvested in other assets of Bitwise 10 Crypto Index Fund including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Stellar (XLM), Bitcoin Cash (BCH), Chainlink (LINK), Tezos (XTZ), and EOS.

In an official announcement that came on Wednesday, the company said the decision has been made in response to the US Securities and Exchange Commission (SEC) filing an action in the court that XRP is security and subject to the registration requirements of the federal securities laws. The company noted,

“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws.”

As we reported, three exchanges have already suspended XRP trading. The Asia-based OSL known for its OTC trading desk has “suspended all XRP payment in and trading services on the OSL platform, effective immediately and until further notice,” tweeted the exchange.

Two small crypto trading platforms Beaxy and CrossTower have also halted trading for XRP.

This week, the price of XRP has fallen 50%, going as low as $0.296 today, a level is last seen towards the end of November, and is currently trading at $0.310.

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Author: AnTy

Stellar Invests $3 Million in Digital Assets Settlement Network Across LATAM

Stellar Development Foundation is investing up to $3 million, paid in Lumens (XLM), in digital assets settlement network across LATAM, Settle Network.

This investment will help boost the payment tools of Settle Network that are focused around stablecoins, including fiat-to-crypto onramps, stablecoin issuance, and payment processing.

As we reported, the team of Stellar is currently working on making XLM useful globally. Denelle Dixon, the CEO and Executive Director of SDF, said,

“Settle Network is delivering on the vision and mission of Stellar, putting blockchain technology and access to finance into the hands of people that need it.”

Founded in 2018, Settle Network is a Stellar-based platform that provides digital asset settlement across LATAM and users of Argentine Peso and Brazilian Reais stablecoins.

Stablecoins have been one of the main themes in 2020, with their supply exploding. Stellar is now ready to take the help of stablecoins for “international remittances and cross-border payments.”

Besides Settle Network, SDFs Enterprise Fund has also invested in Abra, SatoshiPay, and DSTOQ. Jason Chlipala, Chief Operating Office of SDF, said,

“We created the Enterprise Fund to support inspiring businesses like Settle Network that demonstrate the value of Stellar, bring value to the Stellar ecosystem, and represent our mission.”

“We are proud of the impact this fund has made in its first year and look forward to furthering its reach in 2021.”

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Author: AnTy

Genesis Report Shows Investors’ Varying Views on Bitcoin’s Value By 2030

Much has been said about Bitcoin and its recent price rally. The asset’s performance has drawn praise and criticism alike, with multiple speculations floating around on what could happen soon.

While proponents believe this is the beginning of a march towards a six-figure valuation, detractors claim that it is just another bubble waiting to drag investors down. However, a new report shows that many investors are feeling more conservative in their outlook towards it.

A Great Year for Investors

Genesis Mining published its Bitcoin Investor Prediction for 2020. The report shows a varying view of what investors expect to happen to BTC. While some investors are bullish on Bitcoin’s long-term potential, others remain conservative with their predictions.

Genesis Mining started on an explanatory note, giving reasons why Bitcoin has rallied so much in 2020 despite the pandemic. The firm highlighted three reasons: investors’ desire for a safe haven asset, increased institutional adoption, and the decentralized finance (DeFi) market growth.

Genesis Mining also sought the opinion of other Bitcoin investors. The goal was to gain insights into why and how these investors think. Questions asked included their investment level, when they decided to join the Bitcoin market, and why they chose to take the plunge.

Not So Bullish on Long-Term Price

While these questions provided different insights into who the investors were, their price predictions were quite startling. Despite the optimism surrounding Bitcoin’s ability to blitz through alternative assets in the coming years, only 17 percent of surveyed investors expect BTC to surpass $50,000 in value by 2030.

As Genesis’ report showed, there was no visible consensus concerning where Bitcoin’s price will be in the next decade. However, about 16 percent of investors see Bitcoin oscillating around the $10,000 to $20,000 price range.

In general, only 50.2 percent of investors believe that Bitcoin will have risen above the $20,000 mark by 2030.

Those who held incredibly bearish positions gave several reasons for their views. These included the threat of stringent regulations and a possible ban on Bitcoin’s use. They also mentioned reduced market hype and the possibility of CBDCs replacing BTC.

The bulls believe increased adoption and declining trust in traditional currencies would be instrumental to Bitcoin’s rise.

Such a disparity also appears to be the distinction between this rally and the 2017 bull’s run. Investors are more realistic in their predictions than blindly thinking that the gravy train will keep moving.

While the opinions on Bitcoin’s exact value varied, there was more consensus about whether it is the best asset class.

As the Genesis report showed, 66.3 percent claimed that the asset is a better investment option than the dollar. 52.3 percent believe that the asset will bring higher returns than real estate, and 54.5 percent claim the asset beats the United States stock market.

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Author: Jimmy Aki

New Report Traces Origin of Extensive Celebrity Bitcoin Scams to Eastern Europe

Bitcoin scam ads appear to be growing as hackers are looking to capitalize on the asset’s rally.

In a recent investigation, authorities appear to have traced a Bitcoin ad-based scam operation to addresses in Russia.

Russia or Ukraine

Last weekend, The Guardian Australia reported on a significant Bitcoin ad scheme operating for about two years. The scammers use images of several famous people without their consent in articles promoting fraudulent crypto investment schemes. Many of these schemes promise vast returns on activities ranging from crypto investment to mining, hoping to catch unsuspecting victims.

The Guardian had traced five people who reportedly registered hundreds of fake websites related to the scam. All five have addresses in central Moscow, and the news source added that it had submitted the Email addresses for two of the suspects to Google.

The Guardian also reported that the scam could have also originated from Ukraine. It referenced a March 2020 report from the Organized Crime and Corruption Reporting Project (OCCRP), which discovered a call center in Kyiv that ran ads for similar Bitcoins scams.

Keeping the Lawyers Happy

The investigation into the case appears to have been self-preservatory. The company fell into troubled waters with Australian millionaire Dick Smith after his identity was used in an ad campaign to promote fraudulent crypto schemes on The Guardian.

As The Australian reported in October, Smith, who runs an electronics retail store named after himself, threatened to sue The Guardian Australia for defamation. While the ads themselves didn’t feature cryptocurrencies, they linked to fake interviews featuring successful individuals like Smith.

In these interviews, Smith reportedly boasts about making significant gains in his crypto investments. Many of the interviews also reportedly featured attractive headlines like “Get rich in a few days” and “How to make money easy.”

Smith’s lawyer, Mark O’Brien, said at the time that the business mogul was focused on ensuring that the scams come to a permanent end.

“While we acknowledge that The Guardian Australia does take the fraudulent advertisements down once notified, that does not prevent [its] Australian readers from falling victim to this prolific cryptocurrency scam.”

Hoping to avoid any legal case, the news medium appeared to have gone on an investigation spree of its own. Investigations from Google should help bring more clarity to the issue, and the news source will hope to bring the scammers to justice sooner rather than later.

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Author: Jimmy Aki

JPMorgan: Bitcoin’s Rise Coming at Gold’s Expense; BTC Price Overshot, Bullion Due for Recovery

JPMorgan Chase says the rise of digital assets could make gold suffer.

While money poured into Bitcoin in October, gold saw a record amount of outflows. According to the bank’s quantitative strategists, including Nikolaos Panigirtzoglou, this trend is only going to continue in the long run as more institutional investors take a position in the largest crypto asset.

Over the past few months, many have recognized Bitcoin as a good alternative to gold, and JPMorgan is just one of them. As we reported, even Ray Dalio is warming up to digital gold, with Citi, Wells Fargo, Deutsche Bank, and others seeing Bitcoin as a diversifier to the yellow metal.

Compared to bitcoin’s 156% return YTD without even hitting $20k yet, bullion only raked in 20.5% gains in 2020 after reaching a new peak.

“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced,” wrote the JPMorgan strategists.

According to the bank’s calculations, for now, Bitcoin only accounts for 0.18% of family office assets compared to gold ETF’s 3.3%.

However, bitcoin is seeing a lot of demand, as seen with the Grayscale Bitcoin Trust, which saw an inflow of almost $2 billion since October, while gold ETFs had a $7 billion outflow during the same period.

“If this medium to longer-term thesis proves right, the price of gold would suffer from a structural flow headwind over the coming years,” wrote JPMorgan’s strategists.

Bitcoin Flow from Gold Funds
Source: Bloomberg

In the short-term, the bank sees Bitcoin prices overshot, hence a selling with gold due for a recovery.

However, many believe both gold and bitcoin should be part of a portfolio. Even Dalio said Bitcoin has similarities to gold and other store holds of wealth.

“Gold buyers do not care what JPM thinks. Americans don’t buy or own much gold. 92% of demand is outside of US. Bitcoin the fastest horse and can go up 20x-would be worth $6 trillion. If so gold doubles to $20trillion in mkt value. Plenty of value to go around,” said Dan Tapiero, co-founder of 10T Holdings.

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Author: AnTy

Fidelity Digital to Custody BTC as Collateral for BlockFi’s USD Loans to Institutions

Fidelity Digital Assets will now allow its institutional customers to use their Bitcoin as collateral against cash loans.

This new offering has been introduced in partnership with blockchain startup BlockFi, which announced on Wednesday that it is “thrilled” to support “Fidelity’s entrance into the digital asset financing space.”

“Having an ability to finance positions is a critical component of financial services infrastructure, and this collaboration reflects an exciting development for the digital asset ecosystem,” said Zac Prince, CEO and founder of BlockFi.

BlockFi will be offering US dollar loans to institutional clients holding BTC as collateral in custody accounts at Fidelity Digital Assets (FDA), the unit of Boston-based asset manager Fidelity Investments. Christine Sandler, Head of Sales and Marketing for FDA said,

“We continue to see demand for increased capital efficiency from institutions that maintain long bitcoin positions, and with this collateral agent capability, our customers seeking that efficiency can access more opportunity with the capital that they trust us to keep safe.”

Cash will be offered worth 60% of loans backed by the digital asset with “room for client-level customization” and even adjusted to meet large firms’ needs, said Prince.

Combining risk-managed loan agreement with custody furthers the opportunity for institutions in the digital asset space. Sandler said,

“The business and market momentum we’ve seen this year have reinforced our belief that institutional investors are looking for a more comprehensive offering in the digital assets space.”

With this new offering, FDA is entering into the “thriving lending market” of digital assets that target those Bitcoin investors who want to turn their cryptocurrency into cash without selling.

Hedge funds, crypto miners, and over-the-counter trading desks are the potential customers, Tom Jessop, president of FDA, said in an interview with Bloomberg. He sees the loans to be longer-term than the typical repo trade.

According to him, holding BTC to back loans is “a foundational capability,” and “as the markets grow, we’d expect that this becomes a fairly important part of the ecosystem.”

Right now, BlockFi offers 8.6% APY for users that HOLD BTC on their platform.

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Author: AnTy

Bitcoin Funds Attracted $4B in Inflows in 2020, CoinShares AUM Surges to $15B

Digital asset manager CoinShares saw its assets under management (AUM) rising to an all-time peak of $15 billion, which were standing at just $2.57 billion at the end of 2019.

This surge is the result of institutional investors pumping the second-highest amount on record, $429 million, into the company’s crypto funds, for the week ending Dec. 7.

Grayscale’s assets under management have risen to over $12.4 billion by amassing inflows of $4.3 billion this year. Just last week, the world’s largest crypto fund had more than $336 million in inflows.

“On an anecdotal level, based on our client conversations over the course of 2020, we have seen a decisive shift from enquiries of a speculative nature to those that begin with comments such as, ‘bitcoin is here to stay, please help us understand it,’” said James Butterfill, investment strategist at CoinShares.

“Given the levels of interest, this suggests we are only on the cusp of institutional adoption rather than it cooling down,” he added.

Weekly-Crypto-Asset-Flows-by-Institution

Source: CoinShares

The second-largest cryptocurrency Ethereum also saw inflows of US$87m, representing 20% of total inflows, far greater than its current share of 14%.

Bitcoin-focused funds attracted inflows of $334.7 million last week, bringing the total inflows so far this year to nearly $4 billion.

In contrast to this growth, gold experienced outflows of a record $9.2 billion over the last four weeks from its investment products, while bitcoin saw inflows totaling $1.4 billion during the same period, as per CoinShares latest report.

However, inflows into gold products were higher in the entire year at $45.7 billion.

The CoinShares report attributes these gains to the weak US dollar, which highlighted the fears of excessive monetary policy, combined with worries over management of the COVID crisis.

This is a period when gold should outperform; as such, the report believes, “investors are choosing to allocate to Bitcoin to help diversify the limited-supply asset component of their portfolios.”

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Author: AnTy

DeFi ‘Monster’ Aave is Ready for the Next Phase of Adoption

DeFi assets are back to uptrending as Bitcoin and ETH continue to explode higher. The total value locked in decentralized finance is also rising, reaching $14.2 billion.

Market participants are excited by the latest developments put out by DeFi heartthrob Andre Cronje, the creator of Yearn.Finance who is constantly putting out collaborations with more and more DeFi projects. Cronje shared,

“I have so much more planned for when v2 launches, custom money markets (yield & insurance), Cream will be a lending reserve into Aave, agnostic Cover for all aTokens, and we can finally put ytrade, yleverage, and leveraged stable coins into production.”

This has been in response to Aave founder and CEO Stani Kulechov’s tweet where he shared that the popular DeFi project has already been working with Cronje since the beginning of this year. Kulechov added,

“The recent collaborations with @iearnfinance are IMO positive sign for DeFi. All DeFi protocols should work towards cross composability.”

Not just this, the project has also achieved a big milestone in the form of processing over $1 billion in flash loans since launching in January.

All of this certainly got the community excited, and AAVE jumped over $76.5, up nearly 170% from about $28 earlier this month.

To trader @SmartContracter, AAVE is a “monster,” which he believes is “going to blow BTC out of the water in terms of performance in 2021.”

Next Phase for DeFi

Another news came in the form of Copper, an institutional custody provider announcing the launch of CopperConnect, the first-ever DeFi tool for crypto institutions.

With this service’s help, an institution can effectively contribute to a decentralized pool of assets and earn passive income on that.

With unaudited DeFi projects decreasing, the fluctuation in the value of the market has been less dramatic, making the risk now more manageable for sensations, which as a result has “led to high demand from institutional crypto investors for secure ways to gain exposure to the DeFi marketplace.”

“In recent months, we have seen a significant increase in the number of institutions looking to deposit liquidity onto our project. However, to date, institutions have not had the tools available to comply with their exacting risk management rules,” said Kulechov.

To satisfy this demand, Copper provides the safety of assets throughout the DeFi lifecycle, which will help the AAVE project gain institutional adoption.

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Author: AnTy

US Tax Authorities Discusses Taxing Digital Currencies; Each Standard Method Has Trade-Offs

  • Tax regulators across the U.S. are debating on the trade-offs in taxing digital assets, Bloomberg Law states.
  • Erika Nijenhuis, a senior counsel at the department’s tax policy office, said at a virtual conference on Thursday.

The world’s largest economy is looking for ways to increase revenues, including taxation of digital assets and cryptocurrencies. During a virtual interview at the OECD’s 2020 Global Blockchain Policy Forum, senior counsel at the Treasury Department, Erika Nijenhuis, stated the U.S is developing domestic reporting rules on taxing cryptocurrencies.

In their quest to find the best models, the tax regulators are debating different tradeoffs that proposed tax models offer, including the risk factor approach and the direct reporting of tax from crypto transactions.

The authorities are looking for a balance that will be efficient in collecting the tax proceeds. This ranges from checking the burden placed on the crypto-taxable parties such as crypto money transmitters and exchanges and how to enhance compliance across these firms. Nijenhuis said,

“There are trade-offs among all of them, and we are hard at work thinking about all of those issues.”

“None of those are easy questions.”

The U.S. Internal Revenue Service (IRS) has been at the forefront of taxing crypto assets in calling for clarity on taxing these assets.

Earlier in the month, David W. Klasing, a boutique Californian tax firm, reported that the IRS looked into Coinbase accounts to catch offenders who do not comply with the platform’s reporting tax standards.

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Author: Lujan Odera