BitDigest March 20 · Issue #619
- Crypto markets jumped overnight gaining $33 billion in total market-cap, an increase of 21.8%
- Another Japanese lawmaker has expressed the need for Japan to issue a central bank digital currency to maintain the strength of its currency in global markets
- Numerous reports are appearing warning consumers to beware of fake websites and malware
| I heard a rumor earlier this week that a major bank (my bank) had limited cash withdrawals from ATMs. This turned out to be false, but banks are closing allowing employees to go into self-quarantine (Chase announced it was closing 20% of its branches and I expect more banks to follow) and there are already stories of people either withdrawing large amounts of cash (Bill Ackman) or banking systems being closed prohibiting cash withdrawals altogether (Venezuela).This obviously gives me fears of the Cyprus bank shut-down of 2013. I do not think this is going to occur – I think the same financial regulators I have questioned over their acceptance of digital currencies are actually doing a good job to help support the global financial system – but going shopping and seeing the empty shelves at my local market adds to my concern that further corona virus fears and market uncertainty could cause a mini run on the banks. The obvious risk avoidance strategy is self-custody of assets. We spoke about this in the office this week, volleying back and forth the benefits of self-custody with the cumbersome processes that still exist and the weaknesses of having a quasi-bearer instrument. The reality is that this technology has improved. We now have dashboards to help manage our assets and systems connecting your wallet to your computer no longer require a cord. More improvements are coming to digital wallet technology, but the question I am asking myself is do we actually want to live in a world where we self-custody all assets? It certainly gives me an added sense of security to know I am in full control of my assets – assuming I do not lose my wallet or forget my password – but our economy has evolved into a service oriented environment, trusted third parties do exist, and they offer great service and drive innovation with new features.For now I remain the master of my own domain and am in full control of all of my own digital currencies. I did withdraw some additional cash this week, but my fiat holdings are still held by a third party and as I sit here today, I think that although the idea of self-custody appears to be utopian, many of us will likely ask our same financial partners to custody our digital assets with our traditional market securities. Maybe using multi-sig will provide us with a false sense of security that we are still in control, but the reality is its no different than what we are doing today; we are still relying on that trusted third party to facilitate our transactions. |
| Weekend Reading Bitcoin’s 48-hour increase coincides with $180 million of new tether (USDT) being minted. Past studies have argued that bitcoin spikes, including the 2017 run, occurred around new large issuances of USDT. The theory was that the new tether was being minted without 1:1 USD reserves. In response tether published a transparency update with a proof of funds report by Delaware based law firm Freeh, Sporkin & Sullivan LLP. Unfortunately, as of last night, the latest update to this is from June 2018 so this argument will definitely be repeated in the coming days.Here is a copy of the University of Texas study (updated) that raised the initial argument and a rebuttal from the University of Queensland that argues it is unlikely tether manipulation caused the large bitcoin moves. |
The Headlines
Japan Needs a Digital Yen to Maintain Global Position
Argentina Releases Blockchain for Gas Distribution
UK Sees Growing Crypto-Blackmail Cases
1.2 million Italians Accessing Bitcoin with Bank
Scammers Are Stealing COVID-19 Aid With Fake Sites
Storj Cloud Storage Platform Launched
Vitalik Provides Future Roadmap
Market Data
Bitcoin Sentiment Understandably Weak
Bitcoin Still Outperforming S&P 500
Sell-Off Driven by Newbies
Exchange, Custody and Product News
Tether Launching on Bitcoin Cash Network
Kraken Warns of Malware and Fake Sites
Reports you may have missed
After significantly outperforming equities leading up to its halving event on Friday, BTC-0.14% continued its upward trend over the weekend, now trading just below $66k. ETH-1.39% has generally followed suit, although continuing to lag behind BTC, with its current price around $3200. SOL0.05% , meanwhile, has continued its strong rebound from the recent price slide, reaching $156 yesterday, currently trading slightly below that level. The crypto market is broadly performing well...
Happy Halving Day to all. It has been another volatile 24 hours for crypto markets, with war-related headlines sending risk assets lower overnight. BTC-0.14% briefly dipped below the $60k mark but has since recouped all its losses and is now trading above $64k. ETH-1.39% followed BTC's initial drop, trading below $2900 last night, but it has now rebounded to above $3000. SOL0.05% has shown remarkable resilience amid the turmoil, now...
Tether Outlines New Organizational Structure, Aptos Partners with Microsoft, Brevan Howard, and SK Telecom
Traditional markets are finding some relief in Thursdayâs trading after four consecutive sessions of losses. The SPY and QQQ have gained approximately 0.30%, while the IWM (+0.99%) is showing outsized gains. Crypto markets are finding larger relief, with $BTC rising 3.92% to $63.7k, and $ETH gaining 2.71% to exceed $3,050. Injective ($INJ) is one of the leading tokens today, gaining 9.37% following news of a partnership with JamboPhone to bring blockchain-powered financial solutions to emerging markets. JamboPhone...
Equities and crypto assets are selling off in tandem today as inflation and geopolitical fears have spooked risk assets. The SPY and QQQ have decreased by 0.46% and 0.92%, respectively, while crypto is selling off more aggressively. $BTC (-5.49%) has tested the high $59,000s and $ETH (-4.42%) is trading below $3,000. Among a sea of red, $SUI is showing relative strength, gaining 6.44% on the back of a partnership announcement with...
