BitDigest April 10 · Issue #634

• Crypto markets fall following first two bitcoin halvings (BCH and BSV); miners fleeing from BCH
• French regulators recommend that regulations for digital currencies separately address coins that qualify as securities and those that do not
• Visa has announced a new card program paying rewards in bitcoin

Verified Fake News

In writing BitDigest, I am constantly reminded that I have the ability to shape the message I am sharing. It’s a lot like the question of whether the glass is half full or half empty. I actively try to report on both sides of the story, but must admit that I knowingly take a more optimistic approach to digital currency stories. To compensate for this, I provide links to all the stories I write about and do try to share news that speaks against the need for a central bank digital currency or the latest statement from bitcon-haters Peter Schiff and Nouriel Roubini.

On Wednesday, I shared an article on a blockchain-based news tracking system developed by the Agenzia Nazionale Stampa Associata (ANSA) a global wire service run by the publishers of leading Italian newspaper.  ANSA’s 24 members publish 43 major Italian newspaper. Their idea in developing the new platform was to allow readers to verify the truth by validating the source content on a blockchain. As ANSA explained, the platform allows readers to “track the origin of the news and at the same time – support the professionalism of [its] journalists.” 

The platform uses a smart contract which verifies if the source content is available on the blockchain. If the article matches a record on the distributed ledger, the article receives a digital sticker verifying the origin. If the source of the article is not verifiable, no sticker is provided and the reader can automatically identify the story to be questionable.

In our current political environment as daily cries of fake news are a constant, I think the large US wire services like the Associated Press, United Press International, and Reuterscould really benefit from establishing a similar platform for English speaking news sites.

Weekend Reading

I received several emails about my recent commentary about Ross Ulbricht and the movie Deep Web. Over the long weekend, you may wish to read the first recognized article on the Silk Road. In June of 2011, Gawker published an article on Silk Road, titled “The Underground Website Where You Can Buy Any Drug Imaginable.”

Describing the dark web site as “Amazon—if Amazon sold mind-altering chemicals” author Adrian Chen explains how the sites reputation-based trading system helped drive the online marketplace. He stressed the positive aspects of the platform explaining that Silk Road bans the sale of “anything who’s purpose is to harm or defraud, such as stolen credit cards, assassinations, and weapons of mass destruction.” Chen also openly explains that the site uses bitcoin, instead of other forms of payment that can be traced or blocked, and tells the reader that the digital currency can be purchased on the Mt. Gox Bitcoin Exchange.

If you prefer to stream, rather than read, A&E produced their own version of the Silk Road story. “Silk Road: Drugs, Death and the Dark Web” is a 90 minute televised crime story on the rise and fall of the marketplace. I started watching this last night and plan to continue.

Happy Passover and Easter.

The Headlines

France Thinks Digital Assets Should Be Regulated Under Separate Regimes: Tokens vs. Currencies

www.amf-france.org

France’s financial regulator has responded to the European Commission request for consolation on digital currencies by suggesting that digital assets should fall under a new regulatory regime distinguishing security tokens from digital currencies. “We believe it is important to keep the electronic money regime, which is relevant and should not be undermined by a new regulation. However, it would be useful to work on the articulation between the different regimes,” the AMF responded in its public comments.

Visa to Start Paying Rewards in Bitcoin

www.bloomberg.com

Credit card giant Visa announced it has joined with Fold to offer a new card that earns rewards denominated in the cryptocurrency instead of airline miles or cash. Up to 10% of cash purchased will be credited to users in bitcoin.

Bitcoin Fund Starts Trading on TSX

www.globenewswire.com

3iQ’s Bitcoin Fund has completed its IPO and began trading on the Toronto Stock Exchange yesterday under the symbol QBTC.U. (I will begin to report on its performance weekly). The exchange traded product is the first fund to track the price of bitcoin to be traded on a major North American exchange. The closed-end fund listed with $14 million and has appointed Gemini as its custodian.

Binance Responds to Claim of Theft

www.binance.com

A report broke this week accusing Binance of stealing $1 million in early 2019 after falsifying a story that it had blocked a Ukrainian user’s account after a request from Korean law enforcement was made. Binance responded to the charges by explaining the story and sharing screen shots of the Korean “Request for Cooperation.”

Canaan Report Drop in Top and Bottom Lines for 2019

www.investor.canaan-creative.com

Nasdaq traded Chinese crypto miner manufacturing company Canaan (NASDAQ: CAN) announced a full year increase in computing power sold (rising 47% to 10.5 million Thash/s) but top line revenues of $204 million dropped 48%. The company reported a loss from operation of $151 million in FY19. In FY18, the company broke-even. Investors responded by selling shares; CAN closed yesterday’s market down 9%.

Block.one to Begin Voting on EOS Issues

www.block.one

Block.one announced plans to begin EOS voting in May. The EOS developer said initially the company would refrain from voting on staking proposals.

Reddit Upgrade May Add Digital Currency Concept

www.decrypt.co

Reddit appears to be creating a blockchain-based points system. Reports have surfaces showing the social news aggregator has added a crypto wallet, with each user having their own public address. It is believed that users will be able to keep their community points (token?) here.

Market Data

Bitcoin SV Halves and Bitcoin Cash's Hashrate Collapses

www.bitinfocharts.com

Bitcoin SV (Satoshi Vision) (BSV) was the second bitcoin child-coin to halve this year and like bitcoin cash (BCH) a day earlier, the BSV’s hashrate dropped, falling 16.6% after the halving occurred. Pricing is down 10% this morning. What is of more importance today though is that two-days after completing its quadrennial halving, BCH’s hashrate has collapsed, losing 58.9% of miners support over the past 24-hours.

CoinDesk Releases Q1 Report

www.coindesk.com

CoinDesk released its quarterly industry report for Q1’20. The 34-slide report focuses on the March 12th crypto crash and how investors responded by looking at how the narrative has changed for bitcoin, ethereum, and other assets, and how the participants in crypto markets are shifting in the wake of Q1’s defining event.

Bitcoin Volatility Hits Highest Level Since 2014

www.blog.kraken.com

Kraken issued its March report on bitcoin volatility finding that bitcoin’s annualized volatility broke a 9-month downtrend in March, surging 178%, to its highest level since January 2014. The report also shows that bitcoin’s 30-day correlation with the S&P 500 may be greater than many people believe running above 0.70 18% of the time.

Number of Bitcoin Whales Growing

www.insights.glassnode.com

Glassnode Insights reports that the number of whales holding at least 1,000 bitcoin (BTC) has reached a two-year-high as investors have responded to the March crash by beginning to accumulate more of the leading digital currency.

Exchange, Custody and Product News

Gemini Adding Chainlink, Dai, and Orchid

www.gemini.com

Gemini is adding three new digital currencies to its digital exchange bring the total number of cryptocurrencies it can trade to 9. Gemini will begin allowing deposits for Chainlink (LINK), Orchid (OXT) and Dai (DAI) to be added to user accounts on April 24th with trading to commence shortly thereafter.

Chainalysis Launching Partnership Program

www.cointelegraph.com

Leading blockchain analytics firm Chainalysis is launching a partnership program to expand its operations and broaden its intelligence capabilities. The program will work to partner with crypto infrastructure providers, new distribution partners, and data providers.