Mt. Gox Saga Continues: CoinLabs Make Deal with Trustee

Mt. Gox Saga Continues: CoinLabs Make Deal with Trustee

The estate only has 0.23 BTC to give out for each BTC that is locked up in bankruptcy with a claim on it.

After several repeats of the postponement of the Mt. Gox rehabilitation plan deadline, the latest development in this more than the seven-year-old case is CoinLab Inc. coming to an agreement with Nobuaki Kobayashi, the trustee to Mt. Gox bankruptcy, and MGIFLP, a unit of Fortress Investment Group LLC.

As per this agreement, creditors will get the chance to get access to as much as 90% of the remaining Bitcoin lost on the Japanese exchange in 2014.

However, the plan needs to be approved by creditors, said Coinlab in a statement on Friday, adding that investors aren’t obligated to take the early payment and can wait for the lawsuit to settle.

A total of 850,000 BTC belonging to thousands of customers were lost. Since then, the coins that have been found are facing a long and tedious process of reimbursement with no results yet.

According to a CoinLab spokesman, for each BTC locked up in bankruptcy with a claim on it, the estate only has 0.23 BTC to give out. Coinlab’s deal would pay investors from the trust.

Founded in 2012, CoinLab has a $16 billion claim against Mt. Gox. As per the statement, the company is not part of the settlement and will continue its litigation.

“I am thrilled that people are finally getting paid by Mt. Gox,” said Venture capitalist Tim Draper, an original investor in CoinLab.

“As Mt. Gox’s creditors are some of the earliest believers in cryptocurrency, I look forward to getting my Bitcoin as do the tens of thousands of people that have claims.”

This new development in the Mt. Gox saga could be a factor in Bitcoin’s price falling back to $35,550 last night. However, the “move down was already expected from a TA point of view,” noted HXRO Labs. “Objectively, this should be bearish news short term.”

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Author: AnTy

Deeper Pullback in Precious Metals Indicates Flows Are Moving Towards Bitcoin

However, if the dollar rally continues on “that would sink a few boats.”

Cryptocurrencies are already leading the market gains in 2021.

On Friday, Bitcoin price nearly hit $42,000 and is currently holding strongly above $40k with over $14 billion in ‘real’ volume.

This week, BTC started with a dip to about $28,500 and since then has seen a 42% increment in its value.

“The surge in Bitcoin is indicative of froth but not only in that market, in many other areas where risk premiums have come down sharply in the past year despite a recession,” said Kevin Caron, portfolio manager for Washington Crossing. “We view Bitcoin as a proxy for risk appetite.”

Besides Bitcoin, altcoins also enjoyed a good week with notable mentions including Nano (256%), Pundi X (146%), YFL (130%), Stellar (128%), Loopring (126%), ROOK (118%), Nexus (107%), Verge (96%), ALPHA (87%), YFI (82%), SOL (78%), MATIC (67%), KIMCHI (62%), KP3R (60%), IOTA (58%), and Ethereum (58%).

These gains led to the total cryptocurrency market capitalization to climb to $1.09 trillion.

Bitcoin awakening

While cryptocurrencies are enjoying just another green week, the same is not the case for metals.

As we reported, precious metals have been taking a beating for three days in a row. Since Wednesday, spot gold has lost 6.6% of its value and is now seeing a slight relief to $1,847 per ounce. The same is the case for silver, which slid a good 12.8% during the same period.

These losses have been the result of the US dollar index rising and keeping above the 90 level. Unlike the traditional safe-haven asset, Bitcoin and the stock market remained unaffected by the greenback’s strength.

According to Charlie Morris of ByteTree, the deep slide in precious metals could be the result of flows moving towards Bitcoin. “If this continues, expect a dollar counter-rally. That would sink a few boats,” he said.

Much like gold, treasuries also sold off as investors focused on further stimulus. The sell-off in 10-year US Treasuries pushed their yields to their highest levels since March. Despite the UK economy losing 140,000 jobs in December, the first time in eight months. Francois Savary, chief investment officer at Swiss wealth manager Prime Partners, said,

“Investors are buying the end of an erratic Trump administration and looking forward to something new, which is a Biden presidency and the prospect of a significant spending program.”

The Biden administration is expected to be good for cryptocurrencies with the expectations for more stimulus and money printing. Frank Spiteri, chief revenue officer at CoinShares, said,

“It seems like we’re in the middle of a simultaneous awakening among institutions to Bitcoin as an uncorrelated store of value assets with the possibility of serving as an inflation hedge in the face of a highly unconventional monetary policy environment.”

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Author: AnTy

What’s Happening on the Bitcoin Network Amidst The Red Hot Market?

Miners are reaping the fruits of rising BTC price and fees as blockchain activity continues to ramp up.

Bitcoin continues to smash new record highs, the latest one being $35k and nearly $36k. But this has just started and we have a long way to go.

This ATH came after the market had a 20% pullback on Monday providing a ‘buy the dip’ opportunity. “A large pullback of 20% – 30% should be expected, even in a bull market,” noted Arcane Research.

And this drop has been the result of sky-high funding rates and of course an overly confident market that led to $1.2b worth of longs getting liquidated in the BTC futures market — by far the largest daily liquidation since BTC started moving a few months ago.

After normalizing, these funding rates have started rising back up already.

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What’s just as interesting is the activity the largest crypto network has been seeing.

This price action has actually been on the back of the strong volume. Leading spot exchanges crushed all the previous records by having three days with over $10 billion in volume.

“$80+ billion in trading volume in the last 24 hrs on Binance. ATH x 2!” resulting in scaling issues, noted the CEO of leading spot exchange, Changpeng Zhao.

In terms of blockchain activity, Bitcoin active addresses grew by 9.3% week-over-week to start 2021, averaging over 1.1 million per day. These addresses are actually near all-time highs.

On January 3rd, the 7-day average reached 1.15 million, just shy of the all-time high of 1.18 million set in December 2017. The number of hourly active addresses (24h MA) actually just hit a new ATH.

Network security continues to look strong as well with the hash rate growing by 11.7%, again reaching for a new all-time high.

Bitcoin miners are currently enjoying revenue of $33 million per day, as per data source Glassnode. This has been thanks to the rising BTC prices and the average Bitcoin fees that have yet again surged to $11, moving up since Dec. 13.

Between the last halving and October, the average daily revenue was at around $10 million. It has only been within 5 weeks in late 2017 that this number has been higher.

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Author: AnTy

Ripple’s Trump Card in The SEC’s Lawsuit Against XRP is China

While Ripple CEO Brad Garlinghouse continues his broken record, XRP enthusiasts are left grasping at straws, and the increasing amount of tokens move to exchanges.

Ripple said on Monday that the Securities and Exchange Commission (SEC) is planning to file a lawsuit against the company over the alleged sale of unlicensed securities, XRP. According to Ripple CEO Brad Garlinghouse, the case will also be naming him and co-founder Chris Larsen as defendants.

Garlinghouse took to Twitter on Monday to share this update and yet again continued his broken record of the authorities favoring Bitcoin and Ether to the broad crypto market.

“Today, the SEC voted to attack crypto. Chairman Jay Clayton – in his final act – is picking winners and trying to limit US innovation in the crypto industry to BTC and ETH,” said Garlinghouse.

“The SEC – out of step with other G20 countries & the rest of the US govt – should not be able to cherry-pick what innovation looks like (especially when their decision directly benefits China),” he added. “Make no mistake. We are ready to fight and win – this battle is just beginning.”

Garlinghouse characterized this decision as parting shots by Trust administration officials and predicted that the incoming Biden administration might be more favorable to the industry. Meanwhile, Ripple is preparing to litigate, he said.

“I think we have to stand up for all of crypto—and not let the SEC bully the entire industry,” Garlinghouse told Fortune, adding, “We’re going to be on the right side of history.”

An “embarrassment” to the Crypto Industry

“We know crypto and blockchain technologies aren’t going anywhere,” said Garlinghouse on Twitter and added that Ripple would continue to use XRP “because it is the best digital asset for payments – speed, cost, scalability, and energy efficiency” and it is already traded on over 200 exchanges globally.

According to him, XRP “will continue to thrive.” However, that’s not what the crypto industry feels.

“XRP isn’t a cryptocurrency; it’s not meaningfully decentralized, it’s literally a token on a DB maintained by a single entity,” and is in no way comparable to Bitcoin, said Nic carter, founder of Coin Metrics.

XRP’s claimed and “only” use case as a bridge currency for remittances has been made redundant by stablecoins because “no one wants to use a volatile, illiquid, thinly traded asset as a bridge currency,” said Carter.

Calling it a “shallow fraud” and “embarrassment” to the crypto industry, Carter believes it is time to end this madness by making Ripple accountable.

Trying to Find the Silver Lining

“XRP is a fully functional currency that offers a better alternative to bitcoin,” is what Ripple says in its Wells Submission.

Throughout 2020, Ripple’s biggest argument for XRP not being security has been Bitcoin and Ether being Chinese-controlled, which the company says will mean “innovation in the cryptocurrency industry will be fully ceded to China.”

“Looks like the Ripple/XRP team is sinking to new levels of strangeness. They’re claiming that their shitcoin should not be called a security for *public policy reasons*,” commented Ethereum co-founder Vitalik Buterin on this China control.

XRP enthusiasts are now left grasping at straws. One Twitter user pointed out how the big tech giants; Amazon, Apple, Facebook, Google, Tesla, and all the big banks have been sued by the SEC as well, “One could say it’s an interesting path to follow. Every cloud has a silver lining,” he noted.

XRP is currently the biggest loser among the top 40 cryptos, down 18% while trading at $0.463.

In response to this report, not only the social volume for XRP “exploded, but” there has also been an increase in tokens moving to exchanges, per Santiment.

If the SEC sues Ripple, it will take time to conclude as it will involve years of debate between the company and the agency on XRP’s security nature.

In the immediate future, however, the bigger question is “if centralized exchanges delist XRP while the case is pending,” said Jake Chervinsky, General Counsel at Compound Finance.

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Author: AnTy

BlackRock CIO on Bitcoin: There’s ‘Clearly Greater Demand than Supply’

As Bitcoin continues to hover around $23,000, everyone finds the leading digital asset valuable one way or the other.

Recently, Guggenheim Investments’ Scott Minerd called for a $400,000 price target for Bitcoin driven by the digital asset’s scarcity and “rampant money printing” by the central banks.

According to BlackRock Chief Investment Officer, Rick Reider, putting a number on Bitcoin as a valuation is hard, but he said, “demand outstrips supply today.”

This especially holds true with all the money printing going on in the US and Europe, and other parts of the world. The Federal Reserve’s balance sheet has actually made a new record at $7.36 trillion this week.

“I think there is clearly greater demand than supply. I think it’s a storehouse of value,” said Reider in an interview with Bloomberg.

“Millennials have definitely adopted Bitcoin as one of ways to get that store of value,” he said.

“I wouldn’t say it should be this price or that price, I just don’t know how you could determine that, but It does strike me it’s gonna be part of the asset sweep for investors for a long time.”

This is the second time Reider has shared bullish comments on the digital asset. Just last month, he said on CNBC that Bitcoin could replace gold in the future.

However, according to Goldman Sachs Group, Bitcoin and gold can co-exist despite the largest digital currency pinching some demand from the traditional safe-haven asset.

“I would argue that Bitcoin is the retail inflation hedge,” said Jeff Currie, head of commodities research at Goldman Sachs, in an interview with Bloomberg.

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Author: AnTy

“Outrageous Demand” for Bitcoin & Crypto from Retirement IRAs

  • Grayscale continues to add Bitcoin to its stash, currently holding 570,860 BTC.
  • In the past six months, GBTC’s holdings have grown by 56% to represent more than 3% of Bitcoin’s circulating supply.

As we reported, Michael Sonnenshein, Managing Director of the Grayscale Investments, said the most extensive digital assets manager had seen inflows that “are now probably up 6x what they were last year.” Sonnenshein said in an interview on Thursday,

“It’s some of the world’s largest investors and the allocations that they’re making are bigger than we’ve ever seen before and their time horizon for this is generally something over the medium to longer-term.”

This growing demand can be further seen in the premium that people pay to get exposure to digital assets through Grayscale.

GBTC shares are currently trading at a premium of more than 30%. This premium has been slowly grinding up since early October, when it was just around 6%. However, we are nowhere near the 132% premium people paid in March 2017. On-chain analyst Willy Woo said,

“Wow 33% GBTC premium, that’s outrageous demand for Bitcoin via retirement IRAs.”

“If I was a Euro Pacific shareholder I’d be wondering why the company is not getting in on that obvious growth business. Like Kodak revolutionized photos until one day it didn’t run towards digital.”

However, it’s not just Bitcoin that Grayscale users are after. The premium on other products is even higher than GBTC except for its BCH product, which is actually on a discount (-13%).

ETHE is trading at 170% premium, ETCG 43%, and LTCN at the most significant 2,259% premium. Trader and economist Alex Kruger said,

“When crypto heats up, premiums to Net Asset Value (NAV) for Grayscale products skyrocket.”

“Driven by dumb money buying Grayscale products from a brokerage.”

Grayscale is currently holding 2.94 million ETH, 948.34k LTC, 12.29 million ETC, 225k BCH, 35.65 million XRP, 18.94 million XLM, 192.7k ZEC, and 450.11k ZEN.

In an attempt to protect the average folk by restricting access to asset purchases, SEC has ended up creating “a racket where the many subsidize the few,” said Alex Kruger. Because primary issuance is for accredited investors, an average person has to buy in the secondary market to pay a premium.

The institutions that are buying GBTC do so directly from Grayscale at a 2% fee with a 6-month lock-up but gain a premium twice a year.

The crypto market has repeatedly pointed out that more competition and ETF getting approval from the US Securities and Exchange Commission will push these premiums down.

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Author: AnTy

Bitcoin Network Fees Declines 40%, Inactive Supply Also Trending Downwards

Bitcoin continues its bull riding.

The relentless appetite for risk is driving the market higher yet again. Today, BTC/USD went as high as $20,900, and with that, aggregate Bitcoin futures open interest (OI) advanced to a new record high.

Interestingly, although OI on CME remains above $1 billion, it has lost some ground to the likes of OKEx and Binance.

“With the contango structure abound, the path towards $20,000 is still intact, even if the said path is turning out to be much choppier than some would have hoped,” said Denis Vinokourov of Bequant.

The premium on Bitcoin futures actually stabilized last week. The average of the retail-focused platforms went above CME for the first time in almost two months for the December contracts, as per Arcane Research data.

However, the same can’t be said of Ethereum, which no longer has a boisterous market with its OI making little progress since the 2.0 beacon chain was activated on Dec. 1st.

At the same time, the amount of Ethereum locked across DeFi has risen to above 7mln, and in ETH 2.0, it has gone above 1.5 million.

Network Metrics

According to IntoTheBlock, the number of Bitcoin addresses with a balance reached an all-time high of 33.22 million on Dec. 10, “pointing to an increasing amount of people investing in BTC.”

Realized Cap also reached $150 billion with an increase of 50% since the beginning of this year and 25% in just the past two months.

The network metrics otherwise have been flat for both the cryptocurrencies. Both assets had a 2% to 3% decrease in active addresses over the past week.

ByteTree - Bitcoin network metrics
Source: ByteTree – Bitcoin network metrics

Volume on the exchanges has also been dropping sharply; Bitcoin volume is down 40% since the top in late November.

The same is the case for network fees; after a sharp increase last week, Bitcoin fees declined by about 40%. With this, Ethereum again averaged almost twice as much in daily fees as Bitcoin – $2.3 million to $1.2 million.

Even the number of BTC in circulation that hasn’t moved in over a year is trending downwards, indicating that the inactive supply is getting active again.

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When it comes to stablecoins, Tether’s total supply has passed 20 billion and is the undisputed leader of stablecoins with over 5x the supply of any other stablecoin.

However, while Tether’s active addresses dropped by about 10.5% week-over-week, USDC active addresses grew by 22.8% week-over-week. But USDC averaged about 26K per day to USDT’s 163.2K per day.

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Author: AnTy

$50,000 Per BTC ‘Is A Reasonable Price Target Even For Q1 To Q2 Of Next Year’

The appetite for Bitcoin among institutional investors continues to grow at a fast pace.

Every week, a new company or public figure announces its investment in Bitcoin or the digital assets’ potential as a store of value, much like gold.

This appetite can be seen with the Bitwise’s Crypto Index Fund — with 75% BTC, 13% Ethereum, and 12% other crypto assets weightage — which surged more than 70% in a couple of days of its launch, that too while the digital assets slipped by a few percentages.

But over the weekend, the crypto market took over as BTC went from $17,600 earlier in the week to $19,500 on Sunday.

Today, BTC/USD is trading around $19,150, down 0.09% with $2.24 billion in volume.

Ultimately Bullish

Still, the largest cryptocurrency is up 166% YTD, and this Bitcoin rally is “fundamentally sound,” according to Antoni Trenchev, co-founder of Nexo.

According to him, any dips are just Christmas coming early — “a great entry point for you to purchase some Bitcoin just before liftoff,” said Trenchev in a recent interview with Bloomberg.

These price drops, according to him, are profit-taking and the rumor about last-minute legislation from the Trump administration, which according to him are just going to be more anti-money laundering and know-your-customer policies “just like in the banking sector.”

However, the new legislation will ultimately be a “very valid bridge bullish sign for Bitcoin, and that will set the stage for the next leg up,” he said.

The regulatory threat has been taking the edge off the market, and Trenchev is extremely bullish on BTC price.

Nowhere Near the Top

According to Trenchev, his predicted a $50,000 BTC target price by the end of the year “is a reasonable price target even for Q1 to Q2 of next year.”

The reason for his bullishness is simple, since the summer, the market has seen retail, institutional investors, high net worth individuals, and family offices positioning themselves and purchasing Bitcoin and other cryptos. And this is

“very different from what we had 2017 and 2018 where this was a really retail-driven frenzy where everybody was maxing out on leverage and credits to buy bitcoin.

This has not yet happened.”

Although retail has come, it is nowhere near what we saw in 2017, which makes this rally “fundamentally much more sound,” he added.

In the macro scheme of things, all the stimulus unleashed by the central banks and government in 2020 will continue moving into next year. As we reported last week, the ECB has already announced its big numbers, and the US might reach a compromise on the relief package soon.

Morgan Stanley chief rates strategist also noted that G10 central banks would inject another US$2.8 trillion of liquidity next year – just in their government bond purchases.

This is to be seen if and when all this liquidity will find its way into the financial and Bitcoin market. We are already seeing some rotation out of gold and into Bitcoin this year, thanks to the latter’s digital gold narrative.

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Author: AnTy

ETH 2.0 Effect: Staked Value & Miner Revenue Continue to Uptrend

Ethereum 2.0 deposit contract continues to amass more and more ETH.

The trend particularly gained momentum after ETH 2.0 finally went live on Dec. 1st. More than 81,500 ETH were deposited to the contract on Tuesday, bringing the total staked value to about 1.35 million ETH.

This represents 253.75% of phase 0, “the Beacon Chain” goal, as per Dune Analytics.

While more than 1% of ETH supply is locked in ETH 2.0 contract, about 7 million ETH are locked in DeFi, and another 3 million are with Grayscale’s Ethereum Trust.

With the Beacon Chain’s successful launch, the enthusiasm around Ethereum is increasing not only among the retail but also institutions.

In the world of mining, the “new generation of Bitmain ETH machine E9 is in production,” with “China’s ETH mining enthusiasm is higher than BTC this year. At least 10 companies are preparing to make new ETH mining machines,” noted Chinese publication Wu Blockchain.

For now, a full transition to proof-of-stake (PoS) is still far off, and at least for a year, ETH1 will continue to run normally with no changes to the mining.

“There are still plenty of mining rewards left to be earned, and there will be for the foreseeable future,” stated one of the biggest mining pools, F2Pool.

According to an F2Pool’s report, mining revenue is to be unaffected by the development of ETH 2.0 and “will be a profitable option for at least another year or two.”

Ethereum creator Vitalik Buterin himself had stated that the issuance rate of the cryptocurrency would remain stable at 4.7 million tokens per year for the foreseeable future.

However, there is Ethereum Improvement Proposal (EIP) 2878, which seeks to reduce inflation by reducing the block reward from 2 to 0.5 ETH, and EIP 1559 that suggests modifying the dynamics of the Ethereum fee market to mitigate certain issues with the user experience that arise during times of high congestion, that is to be considered but are currently under discussion and debate.

As of writing, Ethereum mining revenue is $0.036 per MH/s, trending up since last month, as per Bitinfocharts.

In November, Ether miners raked in over $262 million in revenue, up 22.4% from the previous month but down from September’s $321 million, which resulted from DeFi mania.

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Author: AnTy

Grayscale Seeing New Group of Investors Seeking Ethereum as a First & Only Asset

While Bitcoin continues to rule the cryptocurrency market, the second-largest crypto Ethereum also sees a lot of traction.

According to Michael Sonnenshein, managing director at Grayscale Investments, which caters to institutional and accredited investors only, up until 2020, most investors’ first stop was Bitcoin. But now, the most actively used blockchain in the world and its token Ether is getting more attention, he said.

“Over the course of 2020, we are seeing a new group of investors who are Ethereum first and in some cases Ethereum only,” Sonnenshein said in an interview with Bloomberg. “There’s a growing conviction around Ethereum as an asset class.”

Its Ethereum product, Grayscale Ethereum Trust (ETHE), has 29.6 million shares outstanding currently compared to just 5.2 million at the end of 2019. In 3Q20, it recorded inflows of $204 million, an increase from $20 million in 4Q19.

As per the company’s report, in the third quarter of this year, more than 17% of inflows into the Grayscale Ethereum trust came from new institutional investors.

Interestingly, ETHE is trading at a premium of about 120%, up from 18% in October but down from 950% in June this year. In comparison, Grayscale Bitcoin Trust (GBTC) is currently trading at a premium of 27.5%, which was 17% at the beginning of this year and the highest in May 2017 at 132% per Ycharts.

Earlier this week, Grayscale also announced a 9-for-1 split for its ETHE shares.

ETH’s 352% YTD gains beat Bitcoin’s 165% when it comes to the price of the digital assets. Ether is currently trading around $600, well off its January 2018 all-time high of about $1,430.

Ethereum “appears to be maintaining platform leadership status,” according to Bloomberg Intelligence strategist Mike McGlone.

On Dec. 1st, ETH achieved a significant milestone as phase 0, the Beacon Chain, went live; this is the first step in achieving scalability and reduced cost. Not to mention the wild world of decentralized finance (DeFi) with a total value locked of $14.5 billion.

“The development of the asset class has continued to solidify itself,” Sonnenshein said. “Ethereum has along the same lines of the staying power Bitcoin has.”

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Author: AnTy