Iranian Banks Allowed to Use Bitcoin Generated by Sanctioned Miners to Pay for Imports

Iranian Banks Allowed to Use Bitcoin Generated by Sanctioned Miners to Pay for Imports

Iran’s central bank is now allowing its financial institutions, including banks, to use cryptocurrency, which is derived from the sanctioned miners, to pay for its imports, according to a report by the Financial Tribune.

The Central Bank of Iran (CBI) has already notified the banks and money changers of the amended regulatory framework for crypto payments. The local crypto mining industry, according to some, can generate as much as $2 million a day in revenue.

Iran, which is hit hard by the international sanctions, would now be able to pay for goods and services from other countries and circumvent the US economic sanctions.

It was back in October 2020 when the central bank first amended its regulations and allowed Bitcoin and other cryptos to be mined using subsidized energy. At the time, the bank stipulated that all miners’ coins had to be sold to the bank directly and only digital assets to be used for import funding.

Now, the central bank is extending the use of legal use of cryptos to other groups and institutions as well.

“It said lenders and money changers have been notified about the regulatory framework for crypto payment,” per the Tribune. “No further details were announced, the CBI website reported.”

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Author: AnTy

Riot Blockchain Now Holds 1,565 BTC on Balance Sheet After Mining 104 BTC in March

The bitcoin mining company generated 75% more BTC in Q1 of 2021 than in 1Q20. Meanwhile, mining machine maker Canaan is reporting supply chain disruptions impacting its revenue.

Nasdaq listed Bitcoin mining company Riot Blockchain has released its Q1 2021 results that reveal that it recorded an 80% increase in its BTC production from the same month last year, pre-halving.

Last month, Riot mined 187 BTC, up from 104 BTC in March 2020, bridging the total BTC produced in Q1 of 2021 to 491, a 75% increase over its pre-halving 1Q20 281 BTC.

As of March 31st, 2021, Riot holds 1,565 BTC on its balance sheet, reported the company.

In this new quarter, the company made some new hires in the top management and signed a definitive agreement to acquire Whinstone US, Inc. (“Whinstone”), creating a US-based industry leader in Bitcoin mining, for $80 million cash plus a fixed 11.8 million shares of Riot common stock, having an implied total transaction value of about $651 million.

Based in Texas, Whitstone is located on a 100-acre site with a total power capacity of 750 MW. Upon the closing of this acquisition, which is expected in Q2 of 2021,

“Riot is expected to be the largest publicly traded Bitcoin mining and hosting company in North America.”

Getting More Hash Power

Riot has also signed a large-scale contract with Bitmain for 42,000 S19j Antminers this month to increase its Bitcoin mining hash rate to an estimated 5 exahash per second (EH/s) by the end of 2021.

While preparing for the future, the company received previously ordered 2,400 S19 Pro Antminers shipped in late March and early April this year.

These new machines will be sent to Coinmint, a facility in Massena, NY, which will be installed by late April. Upon deployment, Riot will have a total of 16,146 Antminers in operation utilizing approximately 51 megawatts (“MW”) of energy, with an estimated hash rate capacity of 1.6 EH/s.

By the end of 2022, the company expects a total hash rate capacity of 7.7 EH/s with a fleet of approximately 81,146 Antminers — consuming about 257.6 MW of energy with an overall hash rate efficiency of 33 joules per terahash (J/TH).

This would mark a 92.5% jump over their previously estimated hash rate capacity of 4.0 EH/s by October 2021.

Significant Increase in Demand

On the other hand, crypto mining machine maker Canaan Inc is reporting supply chain disruptions caused by pandemic to impact its Q4 2020 revenue. The revenues fell to RMB 38.2 million ($5.9 million) from RMB 463.2 million ($70.72 million) a year ago and RMB 163 million ($24.9 million) in the preceding quarter.

The Hangzhou, China-based company said although the market demand for high-quality machines both in and outside of China “increased significantly,” in Q4 2020 along with the rising Bitcoin price, “they did not have sufficient inventory to deliver to its customers.”

But CEO and Chairman Nangeng Zhang said they mass-produced its next-generation A12 series of bitcoin mining machines in quarter fourth and delivered them at a large scale in Q1 of 2021.

Canaan (CAN) stocks dropped to $13.14, down about 65% from March high, despite the price of Bitcoin surging about 9% during the same period, hitting a new ATH at $63,200 today.

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Author: AnTy

Bitcoin Shortage is Real; PayPal & Cash App Buying More Than 100% of All Newly-Issued BTC

Ever since the Bitcoin halving on May 11, a mere 900 BTC have been generated every day, half of what has been mined before that day.

At the time, BTC price was around $8,500, and legendary investor Paul Tudor Jones had just come out with his Bitcoin bull thesis calling it the fastest horse as an inflation hedge.

While Square’s Cash App and Grayscale have been all in Bitcoin’s business, eating up more than half of the bitcoin supply, things were relatively very smooth.

Now, nearly seven months following the halving, BTC’s price has increased 10x, currently trading around $18,500.

This jump in price in the backdrop of zero and sub-zero interest rates, money printing by the central banks, and their ever-expanding balance sheets has captured the interest of companies like MicroStrategy and Square, celebrities like Maisie Williams and rapper Logic, high-profile investors like Stan Druckenmiller, Bill Miller, JPMorgan and BlackRock changing their tunes on BTC – seeing it replacing gold.

“All the big hitters in the hedge fund world are coming out to endorse bitcoin now; it is entering the realm of the mainstream,” said Pendal’s head of fixed income, Vimal Gor.

According to him, “ultimately, the government bonds will turn into a “dead asset class,” and cryptos have a part to play there. He added,

“We have so many clients asking us about bitcoin and what to do and how to get access. Large institutions have stayed away so far, but high-net-worth clients and wholesale investors are leading the charge.”

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On top of this, PayPal launched its new service enabling its customers to buy, sell, and hold cryptos directly from their PayPal accounts.

With 300 million active users, PayPal offers great potential in crypto adoption. PayPal, Cash App, and Robinhood provide millions of people instant access to Bitcoin, Ethereum, and other digital assets.

Already, in less than a month, the volume has exploded on PayPal’s crypto infrastructure provider Paxos.

itBit, the Paxos-run exchange, was doing a fairly constant amount of trading volume up until PayPal got involved.

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“PayPal is already buying almost 70% of the new supply of bitcoins. PayPal and Cash App are already buying more than 100% of all newly-issued bitcoins,” noted Pantera Capital in its latest blockchain letter.

If the growth continues, within weeks, PayPal will be buying more than all the newly-issued bitcoin. And this is just PayPal.

While demand continues to increase, this supply shortage will push the price of BTC higher, as we have seen in this quarter. Dan Morehead, CEO of Pantera Capital, said,

“When other, larger financial institutions follow their lead, the supply scarcity will become even more imbalanced. The only way supply and demand equilibrates is at a higher price.”

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Author: AnTy

Bitcoin Mining Revenue from Transaction Fees Shot Up to its Highest Level Since July 2019

In anticipation of the miner profitability to be reduced by 50%, that is halving, the percentage of BTC mining revenue generated from transaction fees shot up to its highest levels since July 2019, as per Coin Metrics.

“This is a positive signal for miners, as an increase in transaction fees can potentially make up for some of the lost block reward revenue after the upcoming halving.”

In the weeks leading up to the halving, it went above 6% which usually remains around 2%. In mid-2019, it went up to as high as almost 12%.

Source: Coin Metrics BTC Fees to Revenue

It is the result of a spike in bitcoin average transaction fee which also climbed to $3.19 on May 8th, last seen in July. During this gap, the fees remained below a dollar for the most part. The highest this fee has been was on December 22 during the 2017 bull run.

Besides fees, mempool data shows a massive backlog of bitcoin transactions. At one point today, 34.98k bitcoin transactions were waiting to be confirmed and processed by Bitcoin miners.

Source: Mempool Transaction Count

The revenue generated from both block rewards, which is now officially 6.25 BTC, and transaction fees are crucial for a proof-of-work (PoW) blockchain, as this revenue provides an incentive for miners to secure the network.

In the long-run, transaction fees will become an increasingly important part of bitcoin’s security model as the block reward continues to be cut in half every four years.

“As block rewards diminish, a larger portion of miner revenue will need to come from transaction fees. Therefore the percentage of BTC mining revenue generated from transaction fees is an important measurement for a blockchain’s long term health and security.”

Miners to be no more the biggest seller of Bitcoin

The reduction in block rewards also means, “miners will cease to be the biggest seller of bitcoin,” points out on-chain analyst Willy Woo. In turn, “exchanges selling their BTC fees collected into fiat” will bring the biggest sell pressure.

These exchanges or “tax agents on traders” will extract fees in BTC that will be dumped onto the markets and then sold for fiat the same as miners do.

Unlike traders buying or selling, where every trade has a buyer and a seller as such smart money buying or selling, miners and exchanges are unmatched sell pressures on the market.

The volume is already growing, on the spot exchanges the “real volume” hit $4 billion recently while the total aggregate daily volumes of bitcoin futures was $27 billion, as per Skew.

“The rise of the BitMEX style futures exchanges has made an irrevocable footprint on the price, we have much more sideways now from the additional sell pressure. While price moves more sideways, this creates an environment where large leverage traders have an easier time strategically liquidating the bulk of traders from their positions,”

and as such more volatility, explained Woo.

From here on in, futures exchanges that bring liquidity to markets will be the “largest bearish pressure on Bitcoin” further slowing down the price increase.

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Author: AnTy

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

Coin Metrics: Bitcoin Miners All-Time Revenue Tops $14 Billion

According to fresh data released by Coin Metrics, the all-time revenue generated by Bitcoin Miners has topped $14 billion.

Yahoo Finance had reported on 30th August that despite the network increasing its hash rate by a large percentage, miners are still in a position to make tons of money. For those not in the know, increasing the hash rate in a network reduces the profit made by miners.

BTC Miner Revenue Continue To Grow At An Exponential Rate

The report from Yahoo notes that after the inception of the BTC network, it took the miners a total of 8 years to surpass the $5 billion mark. It, however, notes that the next $5 billion was mined at a faster rate as it only took 8 months for the miners to break their all-time revenue and top $10 billion.

What these mining statistics mean is that if the current mining profitability is to remain on track, then chances are that miners will top the $20 billion revenue mark by the start of next year (2020). The current mark of $14 billion is the most impressive taken into account that the hash rate has recently been on a massive tear. It is a tear that has seen it break some past records in the last few months.

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Author: Daniel W

Ripple Moves 40 Million XRP To Different Wallets; Crypto Watchers Speculate FUD to FOMO

Ripple Moves 40 Million XRP To Different Wallets; Crypto Watchers Speculate FUD to FOMO
  • Ripple made several transactions to different wallets
  • This generated different comments from the community

Ripple has transferred around 40 million in XRP to different wallets int he last few weeks. This is something that the community is talking about and wondering why these large transactions are taking place.

According to Whale Alert, a twitter account that tracks large blockchain transactions, there have been several noteworthy transfers between June 8 and June 9.

What Are These Large Transactions?

One of these transactions was from Ripple to another wallet in which the company transferred 20,000,000 XRP ($8,440,297 at the time of processing the transfer). The sender address was identified to be from Ripple: rffYK32pnicbmUvodKsLxTyQFJyEb23gaZ. Meanwhile, the receiver’s address was not identified but the address was rHJMEHv4eKhBCmjqDEJtFcvZTZC9q1K1s7.

Seconds after the transaction, Ripple sent again 20 million XRP to another wallet called XRP 11 wallet. This address is the following: rHjJwY4maqRyUxCnJ9bNNQ2Tva9fe9T8ud. This specific address was used to transfer the third largest digital currency to different exchanges, including Digifinex, HitBTC and also Huobi.

The crypto community is currently wondering whether Ripple is currently flooding the market or selling XRP to other parties interested in holding the virtual currency.

Currently, CoinMarketCap shows that Ripple is being traded around $0.398 and it has a market capitalization of $16.83 billion. In the last 24 hours, XRP is the digital currency that lost the largest value among the top 10, falling almost 4%.

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: Carl T