Social Capital Reveals its ‘Big Bet’ Bitcoin Investment During Investor Call

In its investor conference call, Social Capital revealed its Bitcoin investment made in 2013.

The company CEO Chamath Palihapitiya, who is a bitcoin proponent, revealed last week that the company invested in Bitcoin seven years back when the price of BTC ranged between $13 to $1,200.

Today, Bitcoin is trading above $10,400.

In the Sept. 15 call, while talking about the company’s aim to “partner with iconic technology companies,” and the plan to take Opendoor public, Chamath likened his latest bet with that of Bitcoin, which belongs to the same category as Tesla and Amazon.

“I believe in this the same way that I believed in some of our other big bets that we’ve made, whether it was Bitcoin in 2013, Amazon in 2015, Tesla in 2016, and Virgin Galactic in 2019. We really try to find companies that we think are run by exceptional leaders with great asymmetric upside, which can 10x in 10 years.”

With Social Capital looking to raise $2 billion for three new blank cheque companies and even planning to go public itself to become the “Warren Buffett of tech investing,” it would be the first publicly-traded company of significant market value to invest in the leading cryptocurrency.

Bitcoin History

This isn’t the first time Chamath has talked about investing in the undisclosed amount of Bitcoin, but he hasn’t clarified if it was a private or fund investment.

A minority stakeholder at the Golden State Warriors and chairman of Virgin Galactic, he also worked as a senior vice president of Facebook from 2007 to 2011.

Earlier this year, he called bitcoin a “fantastic hedge” and advised that “everybody should have 1% of their assets in bitcoin.” He had shared in a separate interview that he bought “a lot” of BTC in 2013 and, at one point, had “almost 5% of all the bitcoin.”

Chamath has called the flagship cryptocurrency a “schmuck insurance” which will “protect our wealth” because it is an uncorrelated hedge to the government’s decision-making.

According to him, the gold 2.0 “is either zero or it’s millions.”

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Author: AnTy

Crypto Derivatives Exchange, Delta, Debuts Call and Put Options to be Settled in Tether (USDT)

Delta Exchange has begun the Call and Put options that will be settled via the USDT stablecoin, making a debut as the first crypto derivative platform to issue such products. The exchange, whose headquarters are based in Singapore, announced this news on September 17 and noted it is one of the four crypto exchanges that currently offer a complete order book for Call and Put options.

The contracts’ underlying digital assets will be Bitcoin (BTC), Binance coin (BNB), Chainlink (LINK), and Ether (ETH), while the maturity periods range from daily to monthly. Unlike futures, options contracts give holders the right to buy or sell but not the obligation, as is the former. This means that option contract holders can choose to execute their positions, depending on whether they are in or out of the money.

Similarly, Delta’s option contracts will give the exchange’s users an option to buy the underlying digital assets if the price goes down, and they were holding a call option. As for the put options, they will sell the underlying if the price goes up or opt for the contract to expire if the target price is still lower than anticipated.

Pankaj Balani, the CEO of Delta Exchange, noted that the options market is an ‘integral part’ of the whole crypto derivatives niche and is therefore optimistic that volumes will surpass futures demand within the next few months. The options have already been listed within the Delta Exchange trading portfolio and were made available to both retail and institutional prospects as of yesterday.

With more speculation and advanced trading in crypto markets, derivative products gain traction amongst the stakeholders in this burgeoning ecosystem. Delta’s Put and Call options further scale the range of available products and probably be among the pacesetters in a space that has traditionally been viewed as ‘sophisticated.’

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Author: Edwin Munyui

Hackers Extorting Bitcoin from Stolen ‘Call of Duty: Warzone’ Accounts

Hackers are targeting the accounts of the popular online game Call of Duty: Warzone and demanding bitcoin as a ransom payment from the victims to return the account, reported Motherboard.

Several victims are also complaining that the publisher behind the game, Activision is unresponsive to their requests for help. One victim told Motherboard,

“I turned it on one day, and my account was logged out, and I couldn’t sign in with my credentials, so I made a new account because I could not get in contact with Activision support, which I’m so mad about.”

Some of the hacks are done through previously compromised passwords from other websites, which is a common technique as finding breached data online is rather trivial. With people using the same password on multiple devices, it becomes easy for the hackers to break into their accounts.

The Warzone accounts that are advertised with rare weapon skins are on sale for hundreds of dollars.

Skins are awarded on fulfilling certain challenges, which at times can be time-consuming. They can also be purchased with an in-game currency, which can be bought with real money.

Activision actually recorded an increase of $596 million in in-game spending earlier this year. A large chunk of this comes from this free version of Call of Duty: Modern Warfare, Warzone.

In this game, players fight among 150 other players to be the last team standing. All the progress is saved to the Activision account of the player, and losing the account means they no longer have their character, ranking, and items.

In one case, the hacker demanded $400 from the victim to prevent their data, including bank information and posted a bitcoin address.

This bitcoin address has received a total of 1.2 BTC, worth about $12,000.

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Author: AnTy

Grayscale Consuming 53% More Bitcoin than Minted Since Halving

Goldman Sachs’ call covering bitcoin on Wednesday left the crypto community disappointed after they said that the largest cryptocurrency is not an asset class and they do not recommend it to their clients.

The report compared bitcoin with the Tulip mania from the 1600s and further argued that it is used for illegal activities and is prone to hacks. But the market trend showcases a completely different picture.

For starters, Bitcoin price jumped over 4% and went above $9,000 despite the negative remarks from the investment bank. BTC is continuing its upwards movement from yesterday and it makes its way to $9,400.

Also, institutional interest in the crypto market has been picking up lately with the open interest on bitcoin futures and options at CME Group hitting new highs. The volume on Deribit, the leader in the bitcoin options space, has been growing steadily as well.

Now, as per crypto enthusiast and independent researcher Kevin Rooke, since the historic halving event on May 11, Grayscale Investments have bought 18,910 BTC.

“Wall Street wants Bitcoin, and they don’t care what Goldman Sachs has to say,” said Rooke.

What’s even more interesting is only 12,337 BTC has been mined since the halving which indicates a rapidly growing institutional demand for Bitcoin.

Technically, the BTC mined since halving till May 27th should be 14,400 because the event cut down the miner inflow in half, from 1800 BTC per day prior to halving to 900 BTC per day.

But the halving also caused a decline in hash rate and the time it has been taking to find the blocks increased from the regular 10 minutes to 14.3 minutes which is still sitting high at 10.4 minutes on May 26th despite the 6% downward difficulty adjustment to 15.14 terahashes per second. It was only today that the block time has fallen below 10 minutes. As such, the less number of newly minted BTC.

The week following the halving when issuance was cut in half, 6,300 new BTC were minted while Grayscale’s Bitcoin Investment Trust bought 12,021 BTC on $112 million in inflows.

“GBTC had a record $29.9M/week inflows in Q1. Hasn’t been below $60M/week the past month,” shared Dan Elitzer.

As of Q1 of 2020, Grayscale was holding 1.7% of all bitcoin and this demand was driven by institutional investors, heavily dominated by hedge funds, at 88%.

At that time, Grayscale noted that “large increases in dollar-denominated inflows relative to Grayscale AUM have historically preceded market rallies.”

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Author: AnTy

Goldman Sachs’ Lazy Bitcoin Assessment is Embarrassing

Crypto community has been eagerly awaiting Goldman Sachs’ client call today in which they were to discuss bitcoin. But it all turned out to be a complete disappointment, as had been expected and not what was hoped.

Godlman’s bitcoin explanation is centered around illegal activity, forks, and exchange hacks.

“Cryptocurrencies Including Bitcoin Are Not an Asset Class,” summarized Goldman.

Ouch!

But as Cameron Winklevoss of crypto exchange Gemini points out, CFTC has already declared bitcoin a commodity over four years back.

Interestingly, Goldman also foresaw Bitcoin’s commodity-like financialization as early as 2014. At that time, they also hinted at the potential future price of bitcoin at between $1,000 and $1 million.

Predictable & Unrealistic, Naive & Lazy

Last week, it came into notice that Goldman Sachs will be covering “Implications of Current Policies for Inflation, Gold and Bitcoin” today.

Now, before the call has to go live, the leaked images showed what the investment bank thinks about bitcoin and it’s not pretty or surprising, it’s all the same old, same old.

The world’s leading cryptocurrency, according to Goldman Sachs, does not generate cash flow, any earnings, diversification benefits, dampens the volatility, or shows evidence of hedging inflation.

What it does is “abet illicit activities” such as Ponzi schemes, ransomware, money laundering, and darknet markets.

Moreover, “cryptocurrencies as a whole are not a scarce resource,” argues Goldman pointing out the forks BCH and BSV.

What else? It is “susceptible to hacking or inadvertent loss,” Goldman says, mentioning QuardrigaCZ and Parity.

And Oh, it’s “Tulipmania” on steroids. In the year prior to their peaks, while Nasdaq rallied 109% and Tulip prices 485%, Bitcoin and Ethereum rose 2,292% and Ethereum 14,193% respectively.

Bitcoin is antithetical to Goldman’s business model

Simply put:

Goldman Sachs “believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients,” states Goldman.

All of this because Goldman sees Bitcoin as competition and they don’t “gain anything by you buying BTC. No spread, no management fee, nothing,” said trader Cantering Clark. “You buying Bitcoin is antithetical to their business model,” he added. They also,

“believe that while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale.”

“I guess equities are now off limits?,” is Digital Currency Group founder and CEO Founder/CEO, Barry Silbert’s reaction to Goldman Sachs commentary on Bitcoin.

Dissing Gold Too

During the call, Goldman Sachs covered the macroeconomy where while talking about COVID-19 and GDP/economy risk, they projected Q3 to be a decent opening only to go downhill from there. They believe the “real numbers” for unemployment are far higher but calling it “not a depression.”

While they have zero concerns about inflation or debasing the US Dollar, they are more concerned with deflation. But believes negative interest rates are good for the economy.

“They are aggressively shitting on gold,” shared trader Scott Melker who live-tweeted Goldman’s client call that he was attending.

The precious metal also doesn’t offer any “reliable downside protection.”

“Don’t listen to what people say, watch what they do”

Not acknowledging the best investment of the last decade which is also outperforming most of the asset classes in 2020 so far doesn’t seem like a good call from the bank.

But it’s not like the bank is right all the time. Earlier this year, its analysts called for a $150-$200 price target for oil while it went down below zero last month.

Not to forget that, in mid-2017, the bank saw big declines in part due to bad market calls from its strategists.

The crypto community certainly didn’t take it lightly, given that Goldman didn’t even take its time to at least make well-informed and good criticism.

“It’s not that it’s a “bad call” – it’s just naive and lazy. It’s embarrassing,” said Peter Hans of Arca. “There are two types of people in FinServ, those who fear progress and those who embrace it.”

But does it really matter what they say. Jamie Dimon, the CEO of JPMorgan has been calling BTC a “fraud” only to turn around and profess his love for the technology and just this month the bank opened its services for bitcoin exchanges Coinbase and Gemini.

As such, the only take from all of this is, “’Don’t listen to what people say, watch what they do.”

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Author: AnTy

China Will Dry Run Its DCEP in May By Paying State Employees With The Digital Yuan

China’s national digital currency or ‘CBDC’ or as they call it, “DC/EP” has been in development for 5 years now. And there has been plenty of speculation since the last quarter of 2019, that it will be released anytime soon.

The Chinese President’s call for accelerated adoption of blockchain technology was seen as a big hint that the national digital yuan is ready to launch. However, Chinese officials and the People’s Bank of China have denied these claims.

However, the latest buzz suggests that DCEP is finally past its development stage and is being distributed among the state officials for testing purposes.

According to a report, published in ChinSci-Tech (a board of enterprise and public companies) on April 16, the new CBDC is being tested as a Transport subsidy scheme for local government officials as well as enterprise workers.

Another official report also confirmed that AliPay, a popular mobile payment subsidiary of Alibaba along with Ant Financial, was responsible for the development of digital yuan’s hardware infrastructure including distribution and payment gateway technology.

The Payment Trials Have Begun

According to reports available in local media, the Xiangcheng District of Suzhou would see local enterprises and government officials paying 50% of their worker’s transport subsidies in the digital yuan.

All the enterprises in the Suzhou district have been requested to sign a digital currency distribution agreement with a relevant bank and subsequently install a compatible digital wallet for the workers.

A total of 4 banks have been assigned across the province to make sure the testing phase begins smoothly. The four banks include Commercial Bank of China, the Agricultural Bank of China, the Bank of China and the China Construction Bank.

These reports also revealed that the enterprise must connect with one of the four banks to offer transport subsidies to their workers. The issuance agreement must be signed before the end of May.

The Finer Details of the DCEP

While there is no official statement or update from the government, however. The published letter in the ChinSci-Tec revealed finer details: including 5 patents by the Alipay group.

Examining these patents revealed that the new DCEP would work on a two-layer architecture and delivery system which would allow licensed third-party players to distribute the national CBDC.

By now it’s clear that Alipay would play a major role in the issuance and distribution of these digital currencies along with authorized banks.

A majority of the Chinese population won’t see a difference while using the CBDC, as the majority of the population is already using digital payments. The only difference would be the back-end and working of these CBDC as they are believed to function on top of the blockchain-based network.

It is also important to note that the network used by the government won’t be completely decentralized and has been mentioned by the senior officials of the People’s Bank of China.

Given the governance model of the Chinese government, speculations were high that the use of blockchain was just a facade and the whole idea behind a national CBDC was to have stricter monitoring of the flow of currency in the country.

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Author: James W

Investor Activity in Bitcoin Is ‘Fizzing Out’ As Market Undergoes A Black Swan Event

  • On-chain analyst Willy Woo says his call of “no chance this a top” when Bitcoin was just below $10k was “totally wrong”
  • In the short term, the market not looking good but long term looks solid

Earlier last month, Bitcoin broke above $10,000 that on-chain analyst Willy Woo said was the “real deal”. “Fundamental investment activity is backing this $10k breakout,” said Woo at that time.

However, as we saw in the past few weeks, bitcoin has been acting like a risky asset following the stock market, going from above $10,500 in mid-February to $7,630 on Monday.

In his latest update, Woo shared that he was “totally wrong” on his call of “no chance this a top” when Bitcoin was just below $10k. “The market right now, crypto and traditional, is undergoing a black swan,” said Woo.

A black swan is an unpredictable event that goes beyond what is normally expected and has potentially severe consequences.

Long term investor activity looking “solid”

We made a good start of 2020, with everything surging only to come to a crashing halt as coronavirus hit the market. This led to the biggest drop in the Dow Jones Industrial Average since the 2008 financial crisis. Over the weekend, the oil price war started by Saudi Arabia and Russia not only lead the oil prices to plunge but the global markets to undergo extreme sell-off.

Bitcoin wasn’t left unaffected either. Macro events hurt the digital asset hard as it dropped more than 27% in less than a month, however, it wasn’t nowhere near the carnage the global markets saw.

Today, bitcoin is yet again moving up just like the stock market on the hopes of stimulus from the central banks. The crypt asset is trading above $8,000, up nearly 4%. Woo said,

“This is a chart of on-chain “investor activity” right now. Long term looks solid. Short term is very weird, normally it’s smooth oscillations, not anymore, it’s like something hit it (COVID19?), it’s fizzing out. Waiting for this to reverse before we put in a bottom. Maybe soon.”

The positive movement in the bitcoin price also resulted in growth in the network. In the last 24 hours, as the BTC price increased, so did the addresses. Since March 4th, they have been declining but on March 9th, recorded an uptick, as per crypto data provider IntoTheBlock.

Daily Active Addresses
Source: @IntoTheBlock

During this time, 822 thousand addresses were active while 421.8 thousand new addresses were created. Network Net Growth has been 25.7 thousand new addresses. However, this jump in price saw 405.58 thousand addresses going to zero, that is, no balance in BTC.

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Author: AnTy

Here’s How Bitcoin Bull Run Will Start at $20,000

  • CNBC call for a 17% upside in bitcoin price
  • A wave of investors driven by FOMO will enter when we break into a new high
  • Bitcoin’s investment flow presently growing an order of magnitude (10x) every 4 years – on-chain analyst

Bitcoin price is still hovering around $10,250, not continuing the momentum but not sliding down either.

However, with CNBC making a call for a bitcoin boom, it might be time to get ready for a drop as CNBC’s call for bitcoin works as a reverse indicator.

According to the mainstream media outlet, despite bitcoin’s pull back above $10,000, the rally is far from over. MKM Partners chief market technician JC O’Hara told CNBC on Wednesday,

“When we look at cryptos as a whole, they tend to trade in two distinct phases. The first being dormant consolidation, which is followed by phase two, which is a high-momentum phase.”

“When you look at bitcoin we’re starting to see signs that the dormant consolidation from the second half of last year is slowly starting to change in terms of positive bullish momentum here.”

CNBC: A 17% Upside Coming

On a year-to-date basis, the world’s leading cryptocurrency has surged over 38% after finding a bottom in December. Ever since then, bitcoin has been on a steady rise. O’Hara said,

“We broke out of the downward sloping trend channel. We’re breaking above the $10,000 psychological level, and we’re of the opinion that positive momentum will continue to follow positive momentum. So that’s why we think in the short term we could see $12,000 on bitcoin.”

Currently, bitcoin is trading at $10,250 and a move to $12,000 would imply an upside of 17% from the current levels. Back in July, last year bitcoin briefly topped at $13,900 but we have yet to break into an all-time high.

Open field above $20,000

Bitcoin, the best performing asset of the decade with an upside of nine million percent would pull in another wave of investors driven by FOMO when we break into a new high, according to Jake Chervinsky, Counsel at Compound Finance.

Bitcoin remains a speculative asset for the newbies, he said while sharing his first foray into bitcoin which was after the flagship cryptocurrency made an ATH during the bull market of 2017 at $3k despite having heard of it in 2015. And this is why the bull market will start at $20,000. Vijay Boyapati said,

“Once the prior all time high is breached, there is no longer an overhang of supply. The price is free to run wild in an “open field”. This is when Bitcoin’s price appreciation begins to accelerate apace.”

Bitcoin making new all-time highs, Boyapati explained last June, will trigger a “feeding frenzy,” that will see media attention returning and new entrants attracted by the “allure of quick profits” which in turn even drive prices higher even faster. And that’s when the price will “eventually reach a crescendo top.”

Still too early to be an alternative to traditional stocks?

Mark Tepper, president of Strategic Wealth Partners, is also dipping a toe into bitcoin as he shared with CNBC,

“Overall, we’re seeing investors just continue to diversify away from traditional stocks and bonds towards alternatives. Bitcoin could fit into that alternative sleeve, but I still think it’s a little too early.”

Tepper holds bitcoin but hasn’t become a believer yet because according to him, it is “not an investment just yet still a speculative play.

However, on-chain analyst Willy Woo noted, in 2019 Visa processed $8.8T through their network while Bitcoin processed $727b meaning Visa accounts for 10% world GDP (payments) and Bitcoin 1%. Analyst Woo said,

“Bitcoin’s investment flow (aka annual investment velocity) is presently growing an order of magnitude (10x) every 4 years.”

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Author: AnTy

Will Russia’s New Prime Minister Help Foster The Adoption Of Cryptocurrencies?

The Russian Federation Prime Minister has made a call asking his country people to try and prioritize the development of the digital economy.

RIA NOVOSTI, a Russian news outlet on 16th January 2020 reported that Mikhail Mishustin, who had earlier in the day been confirmed as the new Russian Prime Minister had placed some priorities on certain areas of the economy that he was keen on focusing on.

The Prime Minister’s first order of business after getting into office was to outline the institutional areas in the country that were in urgent need of reforms. He pointed out that there was a need for the country to start implementing new information technologies. He said,

“The first thing we want to do is seriously engage in institutional reforms. Management reforms, introduce the latest digital technologies… Without a doubt, the state should become a digital platform that is created for people.”

Among the technologies that the country needs to implement are those touching on digital economies in the federation. Mishustin added that:

“The state should become a digital platform that is created for people.”

His statement came on the heels of the resignation of the entire government that had previously been led by Dmitry Medvedev, the former prime minister. The decision to resign is one that was arrived after Vladimir Putin, the country’s president addressed the national assembly and stated that the constitution needed to undergo certain changes.

Blockchain Plays a Crucial Role in Many Russian Companies

Some of the largest companies in the country, including many of which the government holds a significant stake have already started to test the blockchain infrastructure. Some have even gone ahead to apply some of its uses in their operations.

In 2019, Rosetti, the national energy grid operator in the country implemented a blockchain solution with the aim of automating payments in the retail energy sector. The solution would also be used to make certain that the transactions occurring between consumers, suppliers, and energy producers were clear as crystal in nature.

As 2019 was coming to a close, Sberbank, the majority government-owned bank, which also happens to be the largest in the state led the way in introducing a blockchain-based solution aimed at dealing with repurchase contracts. Before its introduction, it had received a patent for this blockchain solution which relies on smart contract technology to assist in automating repo relations between various entities.

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Author: Daniel W

Overstock Loses Investor in tZERO Days After The Departure Of Founder Patrick Byrne

Overstock interim CEO Jonathan Johnson, in an investor call on Monday with shareholders offered an update on the status of Makara Capital’s probable investment tZERO, the company’s security token exchange, Cointelegraph reports.

As per the interim CEO, Makar has said that it will no longer be investing in tZERO in the near future but it remains optimistic of what tZERO is developing and hopes to revisit its investment decision as tZERO continues with its build-up.

Late in March this year, Overstock revealed that Makara Capital and GSR Capital were set to invest $101 million equity and the deal was set to be inked in April. However, the company issued an update in April saying that negotiations were still ongoing stating that it was not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives.

The move by Makara Capital comes just days after the departure of Overstock’s long serving CEO Patrick Byrne who resigned citing his admission of a romantic relationship with a Russian informer who is currently in prison.

Makara’s departure after several months of conducting due diligence on tZERO and it appears that the dwindling returns seems to be a major aspect of the company’s departure.

During the investor call, Johnson reteriated Overstock’s commitment to blockchain business. Johnson said that Patrick’s departure will not change the company’s focus on blockchain business. Johnson said that the company’s shareholders and others can be assured that the new management will continue to nurture and grow the blockchain team in the business and the businesses currently in the Medici Ventures family.

On the news that the SEC is investigating tZERO and its potential security token sale, the company’s General Counsel, Glen Nickle, stated that the firm will continue to cooperate with the SEC.

Adding that tZERO is meeting with SEC on a weekly basis and SEC will communicate on its focus and the matter will be resolved amicably. Overstock shares have tumbled by about 10% since the departure of Patrick Byrne.

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Author: Joseph Kibe