The soaring contemporary architecture and breathtaking views of the Palazzo di Vista in Bel Air may seem well worth the $87.77 million it’s listed for. But the lucky buyer will also acquire a $7 million art collection, including an NFT (non-fungible token) art gallery, curated by MDP Art Curators, with works by Ghost Girl and BigHead Music Producer.
“The art world is changing so fast in this digital world, so we thought, ‘Why not incorporate it into the house world?’ ” says Compass’ Aaron Kirman. He holds the listing with The Agency’s Mauricio Umansky, who says, “It adds another level of fun where you just might attract the right buyer. And it’s a great marketing campaign.”
One early booster of NFTs has been developer Phillip Braunstein, president of Colossal Properties, and it’s already changed the way he views his homes. “Where I would maybe in the past have looked for a really nice wall to put a piece of art, now I’m going to be focusing on how to integrate the digital art experience,” he says. As a collector of NFT art, Braunstein sees enormous benefits in integrating NFTs into real estate portfolios. Not only is their provenance authenticated on blockchain, they also cut out some of the hassle of maintaining traditional artworks.
“NFT art is interesting, because in a sense it’s more durable. You can’t really have any soilage or damage from sunlight. And it’s easy to take down and remove,” he says. “I know some friends where the majority of their [art] collection is in storage because they simply don’t have wall space, but with the NFT art, you could have thousands of art pieces that you could rotate in and out using your phone.” Colossal Properties’ 1250 Hilldale residence in the Hollywood Hills, listed for $18 million, displays Braunstein’s set of four Gummy Bear NFT works by the artist WhIsBe.
In another sign of changing times, both Palazzo di Vista and 1108 Wallace Ridge (listed at $65 million by Kirman and Michael Chen of the design-development firm Luxford Group) are accepting Bitcoin cryptocurrency at the rate equivalent to the asking price. “It’s just an additional way of us trying to make it easy on potential buyers, because there are so many multimillionaires and billionaires invested in using crypto,” Umansky says.
As new practices become more commonplace and accessible, the digitization of real estate transactions could transform the industry. “Imagine if I could show you I own my house by just a QR code on my smartphone,” Braunstein says.
But many questions remain — as Umansky notes, there has yet to be a major L.A. real estate transaction through Bitcoin. “It’s something new,” he says. “It’s exciting — but I think there is still a lot to learn.”
If you are an investor who dabbles in cryptocurrencies, or even are what we in the industry call “crypto-curious,” you know ethereum ETHUSD, +6.85%
as the No. 2 cryptocurrency behind bitcoin BTCUSD, +5.09%
— and the blockchain imbued with the ability to write self-executing “smart” contracts right into the code underlying a transaction between parties.
What you might not know about is some of the complexities of how the ethereum blockchain functions, its challenges in terms of security, scalability and energy consumption. Ethereum has a market capitalization over $250 billion and at least five times greater than its competitors. But high fees and network congestion have degraded performance and priced certain activity out of the market, providing an opportunity for a variety of competitor blockchains to emerge. Conceived and funded in 2017, these blockchains are now jockeying to make inroads in the smart contract market by providing alternative solutions to some of its problems.
These blockchains, with names that certainly would fit into any horse race (such as Cosmos, Solana and Polkadot) each have their own competitive characteristics that have positioned them well against challenges for ethereum. (Bitcoin, as the first and biggest blockchain, is and may always be the No. 1 with its unrivaled status as “digital gold.”)
A big drawback that ethereum developers are seeking to shore up is that, like with bitcoin, its mining is incredibly energy-intensive. In the “proof of work” (PoW) consensus algorithm currently used by both bitcoin and ethereum, so much computing power is used to solve ever-more complicated equations that the University of Cambridge estimates the annual electricity usage of ethereum to be on par with the country of Ecuador, a country of 17 million people. Bitcoin would be similar to Argentina’s annual energy consumption, according to these calculations.
Other blockchains have addressed this problem by using “proof of stake” (PoS) models in which cryptocurrency is used as collateral to secure activity instead of relying on computations typically carried out at massive data centers. Ethereum is now also speeding in that direction as well and should get there as early as the last quarter this year.
Another technical aspect that is hurting ethereum is congestion, where intense activity runs up transaction fees, known as gas prices. Here, ethereum is a victim of its own success attracting many more users than other competitor blockchains. In a way, it’s like a popular restaurant where patrons find it difficult to get a table.
Still, this has provided a window of opportunity for competitors as users look elsewhere for cheaper and faster alternatives. For instance, Solana, which announced last month a $314 million fundraising round, is much faster and cheaper to use due to its ultra-high scalability.
Congestion is also often created by traders’ bots written to do front-run and back-run ethereum mining transactions in ever-more sophisticated arbitrage activities. But here again, there is evidence that ethereum can stay ahead. There is a newly created research-and-development organization called Flashbots that has been undertaking activities to manage the arbitrage happening on networks, and already gas fees have fallen.
Ethereum has to move carefully to transition from PoW to PoS while its competitors build their proof-of-stake blockchains from scratch. To use another analogy, it is as if ethereum was a plane changing its engines in mid-flight while its competitors took off with the latest model already in place.
Still, ethereum is responding aggressively to keep its smart-contact crown. Ethereum’s developers and proponents are responding by improving the blockchain’s scalability. Initiatives have gained traction in recent months to reduce congestion. Known as “layer 2” solutions because they manage activity away from the base-layer blockchain, these innovations batch transactions in a way that reduces pressure on ethereum to settle transactions so frequently.
As a result of Flashbots and the rapid adoption of these layer 2 solutions such as Polygon, average gas fees decreased by 80% on the ethereum network in the second quarter.
Other ethereum-boosting activities include enacting an upgrade in the next few weeks. EIP-1559, in crypto-speak, is one of the most highly anticipated updates of the network since its launch six years ago. EIP 1559 will change how ethereum miners are paid, with a base rate plus a tip, to better manage network congestion at times of peak demand. It also includes a fee-burning mechanism that will remove ether from circulation — behaving almost like a stock buyback.
If you are just tuning into this as the news begins to hit even mainstream business publications this month, it might all sound very complicated. Just know that this is ethereum moving through some of the fundamental changes to upgrade its system to make it more functional, efficient and secure. It’s possible these efforts will allow it to maintain its position against the challengers. But the coming months will tell.
Ethereum and the challengers
Ethereum has a lot to do to move through its plan, and how this will change the competitive field will be important — and exciting — to watch. If you are interested to see how this plays out through ethereum’s efforts this summer, and then as we move into 2022, when ethereum transitions from PoW to PoS, here are a few blockchains to keep an eye on as this horse race plays out:
Ethereum: It’s the smart contract blockchain of choice. It’s also what is known as the settlement layer. While the blockchain itself is being upgraded, there are a host of other so-called “layer 2” solutions, such as Polygon, Arbitrum, Optimism and so-called “zero-knowledge” based systems that are being released to help with scaling. They manage transactions offline from the ethereum blockchain, roll them up and bring them back to the ethereum blockchain to “settle” the accounts. This expansion of “layer 2s” has shown ethereum’s power, even as these new challenger blockchains also become a force of their own. Watch closely for the continued progress of ethereum, including the EIP-1559 update and toward a PoS model to see if the picture is coming together relatively quickly.
Solana: It offers the highest throughput smart contract platform. Its transaction throughput is orders of magnitude faster than the competition. The competitive advantage of Solana has largely been that it is the cheaper and faster blockchain. This advantage will begin to fade if ethereum manages its updates successfully. Besides, Solana’s weakness is often perceived as its lack of decentralization. Blockchain believers prize decentralization as the way to keep networks secure because it reduces exposure to specific points of vulnerability.
Binancesmart chain: It’s similar to Solana — fast and cheap. But more than any other competitor in the race, BSC is criticized for being too centralized because it is controlled by Asia’s dominant crypto exchange Binance. Decentralization is a fundamental element in making blockchains secure because it avoids single points of vulnerability that can be hacked.
Polkadot: It offers a settlement layer, which allows different blockchains to interact in a shared security model. Designed largely by one of the original architects of ethereum, Polkadot provides among the easiest ways for new projects to get a purpose-built blockchain out the door.
Cosmos: Like Polkadot, Cosmos enables developers to build “app-specific” blockchains using a standard software development kit (SDK). Cosmos recently released the interblockchain communication protocol, or IBC, which connects all of the different blockchains in the Cosmos ecosystem.
Tim Ogilvie is the co-founder and CEO of Staked, which provides infrastructure services for institutional investors wanting to earn rewards from blockchain staking.
“We welcomed being invited to Sequire’s event featuring Bit Digital and other leading Blockchain companies,” says Sam Tabar, Chief Strategy Officer at the Company, “The conference provided our CEO a great venue for Bit Digital to share its positioning and our special opportunity related to China.”
About Bit Digital
Bit Digital, Inc. is a bitcoin mining company headquartered in New York City with one of the largest currently-owned fleets among US listed bitcoin miners. Our operations are in the United States and Canada. For additional information, please contact Samir Tabar at [email protected] or visit our www.bit-digital.com.
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 3.D of our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2020. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or Bitcoin hash rate, as well as other factors beyond our control, may also materially affect the future performance of Bit Digital’s production of bitcoin. Additionally, all discussions of financial metrics assume mining difficulty rates as of July 2021. See “Safe Harbor Statement” below.
Safe Harbor Statement
This press release may contain certain “forward-looking statements” relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the company does not assume a duty to update these forward-looking statements.
 Actual operating hash rate will vary depending on network difficulty rate, total hash rate of the network, the operations of our facilities and the status of our miners.
CANTON TOWNSHIP, Mich. – A juvenile in Canton Township and six other men have been identified as members of “The Community,” an international group that hacks into people’s cellphones — often bribing or tricking mobile phone companies — to steal millions of dollars in Bitcoin and other cryptocurrency, officials said.
How the scheme worked
Beginning in 2017 and through May 2018 in Michigan, a group of people known to investigators as “The Community” conspired to use “SIM hijacking” or “SIM swapping” to steal cryptocurrency such as Bitcoin, Litecoin and Ethereum, according to federal officials.
Members of The Community would get control of a person’s cellphone number by linking it to a subscriber identity module (SIM) card under The Community’s control, authorities said.
The victim’s phone calls and messages would be routed to a device controlled by someone in The Community, according to court records.
When The Community got control of someone’s phone number, they could use it to access online accounts such as email, cloud storage and cryptocurrency exchange accounts, court documents show.
Once they gained control of someone’s cryptocurrency wallet or online exchange account, members of The Community could steal the funds, officials said.
Stolen funds from an attack were divided among the members of The Community who participated in that attack, according to authorities.
Member of ‘The Community’ identified
In March 2018, officers at the Canton Police Department alerted Homeland Security about a person involved in a complex SIM-swapping scheme, court records show.
HSI Detroit launched an investigation into The Community and identified a participant in the scheme. On May 9, 2019, authorities said they executed a search warrant at the house and seized a Trezor device, or Bitcoin hardware wallet.
Trezor devices are used to store cryptocurrency. This device had about 60.20371501 Bitcoins — valued at around $629,854, according to the complaint.
At the time of the search warrant, the owner of the Trezor device was a juvenile, according to officials.
Authorities believe the Bitcoins on the Trezor device was obtained through The Community’s wire fraud conspiracy. The juvenile had earned more than $1 million worth of cryptocurrency as a result of his fraudulent activity with the group, according to court documents.
Juvenile speaks with officials
On Aug. 22, 2019, the juvenile appeared for an interview with Homeland Security at his attorney’s office and voluntarily provided the PIN code for his Trezor device, according to authorities.
He described being involved in about 50 SIM swaps between October 2017 and February 2018 with three men named Colton Jurisic, Ricky Handschumacher and Conor Freeman, as well as others, court records show.
The juvenile told authorities that he, Jurisic and Freeman were involved in a May 2018 SIM swap that resulted in the theft of about $160,000 worth of cryptocurrency.
He said a second SIM swap with Jurisic, Handschumacher and Freeman netted them about $6 million worth of cryptocurrency, court records show.
The juvenile entered into an agreement with the United States Attorney’s Office consenting to the civil judicial forfeiture of the Bitcoins, according to officials.
6 men named in federal indictment
Jurisic, Handschumacher and Freeman are three of six men named in a federal indictment against The Community. The others are Reyad Gafar Abbas, Garrett Endicott and Ryan Stevenson.
Here’s more information on the defendants:
Freeman, 20, is from Dublin Ireland.
Handschumacher, 25, is from Pasco County, Florida.
Jurisic, 20, is from Dubuque, Iowa.
Abbas, 19, is from Rochester, New York.
Endicott, 21, is from Warrensburg, Missouri.
Ryan Stevenson, 26, is from west Haven, Connecticut.
All six men listed above were identified as members of The Community, according to federal authorities.
In the indictment, they are accused of executing seven attacks, during which they stole $2,416,352 in cryptocurrency.
Three other people were charged in the criminal complaint: Jarratt White, 22, of Tucson, Arizona; Robert Jack, 22, of Tucson, Arizona; and Fendley Joseph, 28, of Murrietta, California.
White, Jack and Joseph were employees of mobile phone providers charged in relation to the conspiracy, officials said. According to court records, they helped members of The Community steal the identities of subscribers to their employers’ services in exchange for bribes.
“Mobile phones today are not only a means of communication, but also a means of identification,” U.S. Attorney Matthew Schneider said. “This case should serve as a reminder to all of us to protect our personal and financial information from those who seek to steal it.”
February 2018 attack
On Feb. 15, 2018, members of The Community worked together to activate a SIM card and link it to the mobile phone number of a person they were targeting, according to authorities.
That person’s mobile provider was deceived by social engineering into transferring his mobile number to a device controlled by The Community, court records say.
Using the phone number as a starting point, The Community used the person’s identity to gain control over his email address, a Dropbox account, a cryptocurrency exchange account and a cryptocurrency wallet, according to the indictment.
The Community transferred cryptocurrency owned by the victim — valued at $114,705 — to one or more cryptocurrency wallets controlled by the group, officials said.
Abbas is specifically named as someone who participated in an online chat planning the attack, officials said. Abbas is accused of accessing the victim’s exchange account and transferring stolen funds.
March 2018 attack
On March 6, 2018, members of The Community collaborated to link another SIM card to the mobile phone number of a different victim, according to the indictment.
Starting with the victim’s phone number, The Community seized control of multiple online accounts, including an email account, Twitter account, cryptocurrency exchange accounts and a cryptocurrency wallet, officials said.
Authorities said they transferred cryptocurrency valued at $4,929.37 from the victim’s cryptocurrency wallet to one or more wallets controlled by the group.
Endicott is accused of being part of this attack. His role in The Community was to research victims and provide personally identifiable information associated with them to help the group steal identities, feds said.
May 7, 2018, attack
On May 7, 2018, Freeman, Handschumacher and Jurisic were involved in an attack targeting a third victim, officials said.
An employee of a mobile phone provider was bribed by an unnamed member of The Community to transfer a person’s mobile phone number onto a SIM card controlled by the group, according to court documents.
That member of The Community paid the bribe via LocalBitcoins.com and PayPal, authorities said.
Using the victim’s phone number, The Community took control of an email account, a Twitter account, a cryptocurrency exchange account and a cryptocurrency wallet, federal officials said.
Cryptocurrency valued at $1,669.56 was transferred from the victim’s wallet to one or more controlled by The Community, according to authorities.
Freeman and Jurisic provided personally identifiable information of the victim to The Community to help facilitate the attack, officials said.
Handschumacher coordinated with the other member of The Community and told that member to bribe the mobile phone provider employee, according to court records.
May 9, 2018, attack
The same member of The Community who bribed a phone provider employee in the May 7, 2018, attack did so again for an attack executed two days later, officials said.
A bribed employee transferred the mobile phone number of a new victim to a SIM card controlled by The Community, and that allowed the group to steal that person’s identity. They took control of an email account, a Skype account and a cryptocurrency exchange account, court records show.
The Community transferred $55,493.76 worth of cryptocurrency into wallets controlled by the group, the indictment says.
Abbas accessed the victim’s email account to facilitate the attack and transferred the stolen funds, authorities said.
May 15, 2018, attack
An employee of a mobile phone provider was once again bribed by the same member of The Community to target a third victim in May 2018, officials said.
On May 15, 2018, that employee provided personally identifiable information about the victim, which allowed The Community to impersonate the victim and convince a customer service representative to transfer that person’s mobile phone number to a SIM card controlled by the group, court records show.
Using the phone number, The Community took control of an email account, cloud storage accounts and a cryptocurrency wallet, the indictment alleges.
The group took cryptocurrency valued at $100,000 from the victim’s wallet, according to authorities.
Freeman, Handschumacher and Jurisic were all involved in this attack, court documents say.
Freeman and Jurisic provided personally identifiable information about the victim, and Freeman also transferred the stolen funds, according to records.
May 16, 2018, attack
The following day, The Community activated a SIM card targeting another victim and bribed a mobile phone provider employee to have a phone number transferred onto it, officials said.
Using the phone number, The Community took control of an email account, an Evernote account, cryptocurrency exchange accounts and cryptocurrency wallets, federal officials allege.
In this attack, The Community transferred $1,921,335.80 worth of cryptocurrency from the victim’s wallet into one or more wallets controlled by the group, the indictment says.
Freeman is accused of transferring the stolen funds, and Handschumacher is also named as a participant in this attack, authorities said.
May 18, 2018, attack
The Community bribed a mobile phone provider employee to transfer another phone number onto their SIM card on May 18, 2018, officials said.
That phone number was used to seize control of an email account and cryptocurrency exchange accounts, the indictment says.
Officials said The Community transferred $164,972.47 worth of cryptocurrency into their possession.
Jurisic provided personally identifiable information about the victim to set up the attack, and Freeman accessed the victim’s email and cryptocurrency exchange wallets to transfer the stolen funds, according to authorities.
Freeman is charged with conspiracy to commit wire fraud, four counts of aiding and abetting wire fraud and four counts of aiding and abetting aggravated identity theft.
Handschumacher and Jurisic are each charged with conspiracy to commit wire fraud, three counts of aiding and abetting wire fraud and three counts of aiding and abetting aggravated identity theft.
Abbas is charged with conspiracy to commit wire fraud, two counts of aiding and abetting wire fraud and two counts of aiding and abetting aggravated identity theft.
Endicott is charged with conspiracy to commit wire fraud, aiding and abetting wire fraud and aiding and abetting aggravated identity theft.
Stevenson is charged with conspiracy to commit wire fraud.
“The allegations against these defendants are the result of a complex cryptocurrency and identity theft investigation led by Homeland Security Investigations, which spanned two continents,” said acting special agent in charge Angie Salazar, of HSI Detroit. “Increasingly, criminal groups are turning exclusively to web-based schemes to further their illicit activities, which is why HSI has developed capabilities to meet these threats head on.”
Copyright 2021 by WDIV ClickOnDetroit – All rights reserved.
The price of bitcoin has slid under the $30K zone on Tuesday, dipping to $29,300 per unit during the early morning trading sessions (EDT). The global cryptocurrency market capitalization of all the crypto coins in existence is $1.19 trillion as it decreased by more than 6% in the last day.
Bitcoin’s Market Cap Sees $19 Billion Shaved in 24 Hours
Digital currency markets have lost considerable value during the last week and seven-day stats show a number of coins have shed double-digit percentages. Bitcoin (BTC) is currently trading for $29,656 per unit at the time of writing, down 5% during the last 24 hours. Weekly statistics show BTC is down more than 10% and holds a $556 billion market valuation. BTC’s market cap has shaved off $19 billion since yesterday.
Today, BTC commands 46.7% of the $1.19 trillion, while ethereum (ETH) captures 17.1%. Ethereum is swapping for $1,757 per unit, down 5.7% on Tuesday and seven-day statistics show ETH is down 11.9%. The biggest loser in the top ten crypto market cap positions is polkadot (DOT), which has bled 26% this past week. Cardano (ADA) has lost 19.3% and dogecoin (DOGE) over 18% this week.
Besides the coin unus sed leo (LEO), the top market performers today are all stablecoins. These include DAI, TUSD, BUSD, USDC, USDT, HUSD, UST, and PAX, respectively. 52.18% of BTC’s market share is traded in USDT, and 51.09% of ETH trades are also in tether (USDT). 24-hour volume between all crypto assets in existence has jumped over 15% today and is around $67.7 billion. Tether (USDT) commands $47.7 billion of that volume, which is 70.45% of all the global trades recorded on Tuesday morning, according to cryptocompare.com data.
Google Trends Indicates Interest in Crypto Is Lackluster
In addition to markets seeing a slump, interest in digital assets has been lagging a great deal according to data from Google Trends. Coin Metrics’ authors Nate Maddrey and Kyle Waters explain in the latest “State of the Network” issue 112, that crypto Google search trends have been lackluster.
“Worldwide Google search volume for bitcoin shows that interest levels closely followed BTC’s rapid price movements this year and tend to track major changes in price historically. While Google Trends data is not absolute search volume for bitcoin, it does show the relative level of popularity for bitcoin searches over time,” the author’s report explains. Coin Metrics adds:
Relative search interest this year for bitcoin has not yet surpassed levels achieved in late 2017. This might be a sign that many retail investors and the general public were already aware of bitcoin prior to the recent price movements this year. Institutional adoption is a big reason for bitcoin’s recent successes in 2020/2021 which will not be captured easily from Google search interest.
Similarly, ethereum (ETH) searches on Google Trends are also lower than the number of queries three months ago. No one knows exactly where the crypto market is going and the latest downfall has been attributed to the issues with bitcoin mining in China and the regulatory crackdown worldwide. This week in the U.S., the New Jersey Bureau of Securities told the crypto firm Blockfi that it needs to stop accepting new interest account users in New Jersey.
“All aspects of the Blockfi platform continue to be accessible to our clients in New Jersey,” Blockfi’s CEO and founder Zac Prince said. “The order calls for Blockfi to stop accepting new BIA clients residing in New Jersey beginning July 22, 2021.” Furthermore, on Monday afternoon, senator Elizabeth Warren, D-Mass., explained that the Consumer Financial Protection Bureau needs to supervise cryptocurrency risks.
What do you think about the recent crypto market action and bitcoin price downturn? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Coin Metrics’, Bitcoinwisdom.io,
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Bank of America may be loosening its stance on bitcoin.
Driving the news: Bank of America has approved the trading of cash-settled bitcoin futures for some clients, Coindesk’s Will Canny and Tanzeel Akhtar report.
Why it matters: This would be a change in tone from a bank that’s historically distanced itself from the cryptocurrency business.
Flashback: “Currently, we do not lend against cryptocurrencies and do not bank companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trading and investment,” Bank of America CEO Brian Moynihan said to the Senate Banking Committee on May 21.
State of play: Clients of brokerages sitting on the crypto trading sidelines have had other options like fintech startups Coinbase and Robinhood.
Yes, but: “We continue to evaluate the opportunities, risks and client demand for products and services related to cryptocurrency,” Moynihan had added in May. This was a sentiment shared by his peers at Citigroup and Wells Fargo.
Just last month, CNBC reported Goldman Sachs was trading bitcoin futures with crypto firm Galaxy Digital.
What they’re saying: “BofA getting into this as the crypto market cools is an interesting note on the momentum behind bitcoin’s institutional moment,” Coindesk deputy global news editor Zack Seward tells Axios.
“The fact that it’s a futures play gives BofA clients the ability to bet on the market through thick and thin.”
The bottom line: From weather derivatives to bonds backed by David Bowie’s music, financial services firms have long demonstrated flexibility to create and offer financial products in response to client demand.
Regulators are signaling they want more control over an expanded cryptocurrency universe that has pushed further into Wall Street activities without the investor and consumer protections that apply to traditional securities and financial services.
The catch: no single regulator inspects crypto exchanges or brokers, unlike in the securities and derivatives markets. Regulators step in only when they believe U.S. law applies to a particular cryptocurrency or transaction, based on the way the asset was sold or traded.
Once a quirky asset that required navigating special exchanges to buy, cryptocurrencies can now be easily purchased on mobile apps from PayPal Holdings Inc., Square Inc.’s Cash app and Robinhood Markets Inc.
“A lot more money is being put into it, there is a lot of trading and the uses seem to be expanding,” said Dan Berkovitz, a commissioner on the Commodity Futures Trading Commission. “I see a concern about whether we have a shadow financial system developing, and that should be a question for all of the regulators.”
Securities and Exchange Commission Chairman Gary Gensler has told House lawmakers that investor protection rules should apply to crypto exchanges, similar to those that cover equities and derivatives. Regulated exchanges are required by law to have rules that prevent fraud and promote fairness. But crypto exchanges face no such standard, Mr. Gensler said at the Piper Sandler Global Exchange and FinTech conference last month.
The amount of bitcoin held on exchanges has declined to a six-month low as the price of bitcoin has seen a 47% decline since its previous all-time high.
Bitcoin held on exchanges has seen a continuous decline over the past couple of weeks. The supply held on exchanges has been declining since Mid-May. The current supply on exchanges based on the percentage of the total supply saw a new six-month low being hit.
Low supplies of BTC on exchanges is bullish
On-chain analysis company Santimenttweeted the statistic, saying, “The ratio of Bitcoin’s supply on exchanges has encouragingly slid down to its lowest since early January. The 6-month low is a promising sign, as it generally will indicate that there is a decreased risk of more major BTC selloffs.”
According to Santiment, the decline in bitcoin held on exchanges is a positive thing. The lack of bitcoin in exchanges means there cannot be any major sell-offs like the ones already seen this year.
Bitcoin holds above $33,000
While bitcoin has witnessed a two-month correction from its all-time high of $64,000. It appears that there is still plenty of accumulation going on at this price range. Whales recently caused the biggest daily accumulation spike, with over 60,000 BTC being purchased in a single day. Bitcoin saw a price surge of 5% over the weekend before a correction on Monday took the crypto back down to $33,500.
Currently, bitcoin is consolidating inside a price range of $31,400 and $40,550.
Bitcoin mining difficulty drops 28%
Bitcoin also recently experienced a dramatic decline in mining difficulty. Following China’s extended ban on mining crypto in the country, mining companies have been pulling out of China en masse. The removal of Chinese miners has seen fewer miners operating at present. Which has seen the hash rate decline dramatically. The total hash rate recently hit a 19-month low of 87.6 TH/s.
Ransomware is to bitcoin as the Internal Revenue Service is to the dollar. Just as the taxman forces you to use dollars to pay your taxes, electronic ransom demands have been set in bitcoin, forcing companies, individuals and even some governments to use the cryptocurrency if they wish to regain control of their computer systems.
If this sounds wacky, bear with me. Before getting into the full explanation, we need a brief tour of theories of money. The most widely accepted is that money was created because early humans found it so inconvenient to barter with pigs, llamas or berries. It would be much easier to swap my llamas for widely accepted items—cowrie shells, fancy feather boas or carved stones—and then swap those items again for grain than it would be to find someone with grain who happened to want llamas.
Money was also a means of accounting for debts; easier still than using cowrie shells would be to take the grain now, get some notches on a tally stick, and later provide llamas, or grain, or whatever was promised to pay off the debt.
The first of these theories focuses on money as a means of exchange, an area where bitcoin has floundered because of the cost and hassle required to actually buy something in bitcoin. Only when its anonymity and international nature help enough to offset these disadvantages, such as in evading money-laundering laws, taxes and capital controls, is it much used. The rest of bitcoin trading is speculation and exchange arbitrage.
The second theory focuses on money’s role as a unit of account, an area where bitcoin hasn’t had any success so far. Even in El Salvador, where bitcoin is being made legal tender, stuff will still be priced first in dollars, then translated into bitcoin for anyone paying in crypto.