BitDigest May 18 · Issue #904

• Seas are settling following latest crypto storm
• US legislation proposed protecting investors from IRS penalties on forked assets
• GLXY and RIOT report Q1 gains

Crypto Fear & Greed Index

The Fear & Greed Index for bitcoin and other large cryptocurrencies collapsed, dropping 40 points over the past 7-days, to a 13-month low not seen since last year’s COVID-crypto-selloff. It should be no surprise that the index is now in an ‘extreme fear’ range as FUD has returned to the digital currency market. Whether it is Elon, Tether, or taxes, crypto prices are down as the newly initiated crypto buyer decides whether they can handle the recent market weakness.

The ride continues…

I have not heard of a good term to describe the feeling in your stomach when you see crypto prices experience the first big drop. (Any suggestions?) Anxiety hits and FUD rushes in. Its often compared the bitcoin rollercoaster meme. You experience the first big drop on a rollercoaster and for a split second you want off. You have experienced 5-Gs at over 125 miles per hour, but at the end, you love the ride and go again and again till your mother (or wife) tells you it’s time to go home – you can always come back to ride the coaster another day.  

The Headlines

Emmer Introduces Legislation Urging IRS to Provide Guidance on Forked Assets

www.emmer.house.gov

Representative Tom Emmer (R-MN) has introduced the Safe Harbor for Taxpayers with Forked Assets Act, which would protect tax payers by prohibiting penalties reported gains or losses of “Forked Assets” until the IRS provides formal guidance.

FDIC Wants Information on Crypto Uses by IDIs

www.fdic.gov

The Federal Deposit Insurance Corporation is gathering information and soliciting comments on the use case for digital assets by insured depository institutions (IDIs).

FTC Data Says $80 Million Lost to Crypto Scams

www.ftc.gov

The Federal Trade Commission released a new data spotlight showing that cryptocurrency-related scams have increased ten-fold over the past year with consumers losing more than $80 million to illicit crypto activities.

Crypto and Investment Gains Drive GLXY's Q1 Returns

www.investor.galaxydigital.io

📈Galaxy Digital (TSX: GLXY) reported comprehensive income for the quarter ending March 31, 2021 of $1.1 billion compared to a loss of $27 million in Q1’20 driven by a realized gain of $666 million and $151 million on digital assets and portfolio investments respectively.

Riot Reports Major Uptick in Q1

www.riotblockchain.com

📈Riot Blockchain (NASDAQ: RIOT) increased mining revenues by over 850%, to $23.2 million during the first quarter of 2021 generating record income of $7.5 million.

COIN Raising $1.25 Billion in Convertible Offering

www.investor.coinbase.com

📈Coinbase (NASDAQ: COIN) announced a proposed private offering of $1.25 billion in 5-year convertible senior unsecured notes to “bolster” the company’s balance sheet; net proceeds from the raise will be used for general corporate purposes including working capital and capital expenditures.

BITF Announces CAD$75.0 Million Private Placement

www.globenewswire.com

📈Canadian crypto miner Bitfarms (TSXV: BITF) is raising CAD$75 million to acquire new miners in an effort to triple its hashrate to 3 Ehash/s in 2021 and grow to 8 Ehash/s next year.

BofA Moving to T+0

www.bloomberg.com

📈Bank of America (NYSE: BAC) is joining Paxos Trust’s blockchain settlement platform allowing the US’ second largest bank the ability to settle stock trades in minutes rather than the current T+2 cycle.

EY Reiterates Commitment to Blockchain Technology

www.ey.com

Big four accounting firm EY announced the availability of a new Testing Studio as part of the second generation of the its Smart Contract & Token Review tools and a $100 million commitment to blockchain and crypto asset research.

Market Data

Bitcoin Sees $100 Million in Fund Outflows

www.coinshares.com

European digital asset manager Coinshares reports that the top investment products experienced record outflows totaling $98 million or 0.2% of total ≈$41 billion in bitcoin assets under management last week, however during this pull back, investments in alternative token products saw an inflow of 50% with $48.2 billion moving into different offerings.

Exchange, Custody and Product News

Kraken to Support SAND, ENJ and LPT

www.blog.kraken.com

Kraken is adding trading support for three new digital assets: the native token for decentralized world Sandbox (SAND), in game token Enjin (ENJ) and decentralized video streaming platform LivePeer (LPT)

Coinbase Releases DeFi Browser Extension

www.blog.coinbase.com

Coinbase (NASDAQ: COIN) has introduced a new Chrome-based browser extension that will provide users simplified access to decentralized apps (dapps) and decentralized finance (DeFi) applications on your desktop.

Thoughts on the Ecosystem

Fitch Issues Warning About CBDCs

www.fitchratings.com

Fitch Ratings released a report on central bank digital currencies warning that “the rise of digital payment systems… can create oligopolies among payment-system providers, often from the private sector.” In addition, “the potential for funds to move quickly into CBDC accounts from bank deposits, [may cause] financial disintermediation, and for heightened cybersecurity threats as more touchpoints are created between the central bank and the economy.”

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