Author: Dale Warburton

Dale is a former attorney turned passionate Bitcoiner with an interest in investments, macro, geopolitics, innovation, tech, nature, wildlife, MMA and Bitcoin (of course).

Categories
Crypto News Cryptocurrencies Cryptocurrency Law Regulation Ukraine

Ukraine Bans Citizens From Buying More Than $3,400 Crypto Per Month

Shortly after Russia’s invasion of Ukraine, crypto donations poured in from around the globe to help fund the war effort, eclipsing US$100 million. In a surprising twist, the nation’s central bank has now placed limitations on crypto purchases for its citizens:

Preventing ‘Unproductive Capital Outflows’

According to a National Bank of Ukraine (NBU) announcement, Ukrainians are now prohibited from purchasing digital assets using the country’s fiat currency, the hryvnia (UAH).

They are, however, permitted to purchase crypto up to a maximum of 100,000 UAH (approximately US$3,400) per month, provided it is done with foreign currencies. According to the announcement, these measures have been put in place under martial law to prevent “unproductive capital outflows” from the country.

The NBU commented that the measures were “temporary” and that it planned to allow those citizens fleeing the country to make cross-border peer-to-peer (P2P) transfers within the above limit from accounts in its national currency.

Not as Crypto-Friendly as Expected

With the Ukraine government being a beneficiary of crypto donations, even partnering with FTX to do so, the NBU’s move has been almost universally criticised on Twitter:

Capital controls are common, particularly during times of war, but there is something particularly stinging about this ban. Perhaps because it emanates from a nation that appeared to be progressive and on board with the crypto industry and community. It could also be the realisation that the NGU has effectively denied Ukrainians a financial offramp to further currency debasement, inflation and economic ruin.

As much of the developed world has “stood with Ukraine”, it’s evident that the latest measures represent just another blow for a population knee-deep in kinetic war:

Categories
Bitcoin Crypto News Lightning Network

Morgan Stanley Says Bitcoin’s Lightning Network Better Than Debit Cards

In a report released this week, global investment bank giant Morgan Stanley argued that bitcoin had reached a point where it is “more practical” for small payments than a debit card:

In outlining the reasons for its bold assertion, the report notes that bitcoin is progressing towards becoming a medium of exchange following an integration between Lightning Network-enabled Strike and BlackHawk Network, the world’s largest point-of-sale payment processor.

The integration, announced by Strike chief executive Jack Mallers at the 2022 Bitcoin Conference, allows consumers to pay in bitcoin using the Bitcoin network, and for merchants to receive US dollars without having to touch the asset.

Strike Announces Shopify Integration, Partnerships With NCR And Blackhawk Bringing Bitcoin Lightning Payments To Major Merchants
Strike chief executive Jack Mallers at the 2022 Bitcoin Conference. Source: Forbes

Put differently, if a consumer pays in bitcoin, the merchant can elect to receive either US dollars or bitcoin in real time with instant final settlement at virtually zero cost.

By contrast, traditional payment processors such as Visa or Mastercard charge merchants a transaction fee of 1-3 percent, in addition to imposing a 45-60 day settlement period in which charge-backs are possible.

Visa, PayPal, Bitcoin or Lightning Network? Let's compare | by GeniePay | Medium
Comparison of payment networks. Source: Geniepay

Lightning Network ‘More Practical’

Morgan Stanley noted that the “evolution of bitcoin usage as a medium of payment” will likely be driven by the ability of consumers to choose whether to pay for goods and services in physical locations with bitcoin through the Lightning Network.

This was largely because sending small payments was “more practical” with Lightning than debit cards, as Bitcoin’s layer-two solution can route transactions with next to zero fees. Furthermore, the banking giant expects that low transaction costs and merchant adoption will likely lead to less volatility in the asset over time.

In the US, where 85 percent of retail sales are still done in brick and mortar stores, this innovation is a potential game-changer for traditional retailers – a “superior payments experience”, as Jack Mallers would put it.

Many Twitter users found it astonishing that a Wall Street giant was effectively admitting that the Lightning Network was an improvement on the existing payments infrastructure:

It’s been more than a year since macro superstar Lyn Alden commented that people were “sleeping on the potential importance of Lightning”:

Based on available evidence, it appears that Alden’s comments were not only prescient but are playing out quicker than she could have anticipated.

Categories
Australia Bitcoin Crypto News ETFs Ethereum

Australian Crypto ETF Competition Heats Up, Two More Listings Set to Launch

Within days of news that Australians will soon receive the country’s first Bitcoin exchange traded fund (ETF), a slew of competitors look set to follow suit by launching their own own crypto ETFs.

Another Bitcoin ETF and the First Australian Ethereum ETF

According to a press release, 21Shares AG (“21Shares”), a Swiss-based issuer of crypto exchange traded products (ETPs), and Australian ETF provider ETF Securities have jointly launched two funds to provide direct access to bitcoin and ethereum respectively:

  1. 21Shares Bitcoin ETF (EBTC)
  2. 21Shares Ethereum ETF (EETH)

Both EBTC and EETH are due to list on April 27 on Australia’s secondary public exchange, the Cboe (formerly Chi-X), with EBTC tracking the price of bitcoin and EETH tracking the price of ethereum, both in Australian dollars. Much like Cosmos Asset Management bitcoin ETF (CBTC), whose bitcoin will be held by Gemini, both of 21 Shares’ funds have opted for an offshore custodian in the form of Coinbase, who will hold the assets in cold storage.

While 21 Shares claims that both of its products are a first in Australia, sticklers for detail may wish to point out that EBTC is in fact tied for first with CBTC, as both are scheduled to go live April 27.

In describing the commercial basis for its imminent listings, ETF Securities Australia executive chairman, Graham Tuckwell, said:

The products give investors a way of trading cryptocurrency in a tightly regulated environment, without the need to establish and maintain their own bitcoin or ethereum wallets, or manage the risks.

Graham Tuckwell, executive chairman, ETF Securities Australia

Biggest Capital Market Gets Left Behind

Shortly after news that Australia was going full steam ahead with crypto ETFs, a representative of global ETF provider VanEck described the US regulator’s conservative stance on listing a bitcoin ETF as “a big loss for investors”. And at present, there doesn’t appear to be an end in sight.

Last year, Crypto News Australia reported that there were more than 34 applications outstanding in the US, with “market manipulation” being one of the more frequently cited concerns.

It goes without saying that there are plenty of variables potentially holding up ETFs in the US – whether financial, political, or otherwise driven by “investor protection”. Whatever the case may be, it’s evident that as Australia becomes the eighth nation to launch a bitcoin and ethereum ETF, the world’s most developed capital market is getting left behind:

Categories
Australia Bitcoin Crypto News ETFs

Australia’s First Bitcoin ETF Gets Green Light for Imminent Launch

According to a report by the Australian Financial Review, the long-awaited Australian bitcoin exchange traded fund (ETF) has been given the go-ahead by regulators and may be open for trading within a week on the Cboe equities trading venue:

Bitcoin ETF Approved … Finally

As reported by Crypto News Australia last week, one of the major obstacles holding up approval of a local spot-based bitcoin ETF was the high margin requirements required of ETF providers – 42 percent against each trade.

ASX Clear, Australia’s equity clearing house, has now revealed that of the 35 applicants, only four were willing to stump up the tough margin requirements needed to cover the settlement risks of a bitcoin ETF.

We are now at our minimum number of clearing participants and that means we are good to go.

Hamish Treleaven, ASX chief risk officer

ASX chief risk officer Hamish Treleaven is expected to issue a notice today giving brokers, clearers, market makers and investors sufficient time to digest the news. Estimates vary, but some speculate that over A$1 billion could flow into Australia’s first bitcoin ETF – the Cosmos Asset Management bitcoin ETF (CBTC) – which may begin trading as soon as April 27.

Just the Beginning

Rather than having local bitcoin custodial services, CBTC has opted for the Winklevoss-powered exchange, Gemini:

Furthermore, as one half of the Winklevoss twins notes, the product is essentially a “fund of funds” as it invests in Canada’s Purpose Bitcoin ETF:

Expect the Floodgates to Open

Risk-averse regulators have treaded cautiously to date as they wade into uncharted territory, perhaps explaining why it has taken upwards of two years for a bitcoin ETF to be approved. Now that the mould has been broken, expect a slew of competitors to follow suit, each with its own custody and fee structure.

Although unconfirmed, it’s been reported that other fund managers are already working on a bitcoin ETF, including ETF Securities, VanEck Australia, BetaShares and Monochrome Asset Management.

While individuals in search of financial self-sovereignty may scoff at the notion of a bitcoin ETF – not your keys, not your coins – for many institutional investors, it is precisely the investor product (and green light) they were looking for:

The approval of the CBTC is a vote of confidence in the asset. Investment professionals wanting exposure will likely view the approval as reducing their career risk.

CBTC opens the door to Australian asset managers and superannuation funds that have sat on the sidelines pending a local regulatory stamp of approval. Now they’ve got it, it will be fascinating to see whether the uptake is as strong as predicted.

Categories
Crypto News Stablecoins TerraUSD

Terra UST Flips Binance USD to Become Third-Largest Stablecoin

Decentralised algorithmic stablecoin TerraUSD (UST) seemingly can’t help but make headlines these days. Most recently, it surpassed Binance USD (BUSD) to become the third-largest stablecoin by market capitalisation (market cap):

UST Making Waves

For the Terra team behind UST, it’s been a busy 2022 thus far, characterised by a string of bullish announcements that have thrust UST into mainstream consciousness.

Its youthful founder recently announced a program to buy US$10 billion in bitcoin to backstop the stablecoin and guard against extreme volatility that could undermine peg parity.

Terra Has A Huge Potential to Become The Second-Largest Bitcoin Holder, according to Do Kwon - CoinCu News
Do Kwon of Terra Labs, UST founder. Source: Coincu

Shortly after, Crypto News Australia reported that its market cap had soared some 700 percent in six months, surpassing Circle’s USD Coin (UDSC) as the fastest-growing stablecoin. In fact, its market cap has grown by 15 percent in the past 30 days alone:

Devil is in the Detail

When looking at the market cap for the top US dollar denominated stablecoins, it’s evident that BUSD has been marginally surpassed:

Top 7 stablecoins by market cap. Source: CoinGecko

However, eagle-eyed UST fans would be wise to temper their enthusiasm, as 24-hour volume reflected in the chart above demonstrates that BUSD still has almost five times the volume.

Compared to the incumbent, Tether (USDT), UST’s market cap is still five times smaller, not to mention that its volume remains at least 65 times lower.

However, when one looks at UST’s meteoric rise over the past six months (below), it’s self-evident that it is shaping up to become the fastest horse in the stablecoin race.

To be sure, UST isn’t widely embraced by the broader digital asset community. Despite the promise of censorship resistance, most criticism is directed against the stablecoin’s burning mechanism, which is necessary to maintain a 1:1 US dollar peg.

It’s too early in the decentralised stablecoin experiment to speculate how things will play out. For now, the only thing that can be said with confidence is that UST appears to be gaining ground on its rivals.

Categories
Crypto News Dogecoin Social media

Robinhood CEO Mocked for Saying Doge ‘Could Become Currency of the Internet’

Vlad Tenev, chief executive of US-based brokerage Robinhood, has been mercilessly mocked for his assertion that Dogecoin could become the native currency of the internet:

Tenev Wades into Hostile Waters

Tenev took to Twitter to share his thoughts on what it would take for Doge to become the base layer of value on the internet.

His initial claim relates to transaction fees, saying that they have to be “vanishingly small”. He continues to say that, fortunately, Doge is “already there” compared to the 1-3 percent network fees that major card networks charge.

He then turns to block time, saying that at one minute, Doge’s current throughput is sub-optimal for competing with Visa’s 65,000 transactions per second. However, says Tenev, “Fortunately, this is easy to solve simply by increasing the block size limit.”

While critics may be concerned that an increased block size would come at the expense of decentralisation, Tenev believes that the increased throughput is “actually a fair tradeoff”.

Under-fire Robinhood CEO Vlad Tenev. Source: CNN

Finally, he dismisses criticisms of Doge’s inflationary monetary policy and indeterminate hard cap supply limit by saying that it is less than the US dollar, and further, that “the inflation rate actually declines over time, and in a couple of decades it will be below 2 percent”.

Where to Begin?

You’d imagine that Robinhood would have earned some goodwill from the Bitcoin community following its recent Lightning Network announcement. However, the Twitter thread seemingly touched a nerve given all Tenev’s assertions have been thoroughly addressed as far back as 2017 during the infamous “Blocksize Wars”.

Some described the thread as “embarrassing”:

Image
Tenev’s assertions were viewed as clownlike. Source: @ShcoobyS

Others, however, questioned Tenev’s motives by “following the money”:

And perhaps Twitter user @1971Bubble has a point. Last year, Crypto News Australia reported that Robinhood’s Q3 crypto revenue had declined by 78 percent, largely due to Dogecoin.

For anyone paying attention between 2017 and now, it’s self-evident that Tenev’s assertions are misguided at best, and at worst, smack of self-interest. In the end, the saga was neatly summed up by Bitcoin proponent Mike Alfred, who offered Tenev some unsolicited advice:

Categories
Crypto News NFTs Social media

Dorsey’s First Tweet Lists for $48 Million But Gets Top Bid of $10,000

In determining the value of any asset, including NFTs, price is arguably the arbiter of truth. What, then, to make of an NFT of Jack Dorsey’s first tweet receiving a highest bid at just a fraction of its asking price?

‘Like the Mona Lisa’

Controversial entrepreneur Sina Estavi purchased Jack Dorsey’s first tweet (below) as an NFT in March 2021 for US$2.9 million. At the time, Estavi defiantly told naysayers:

Jack Dorsey’s first tweet NFT. Source: Opensea

Last Thursday, he then announced on Twitter that he wished to sell the NFT, and pledged 50 percent of its proceeds (which he thought would exceed US$25 million) to charity:

Dorsey, who since resigning from Twitter has been far more inclined to express what he really thinks, tweeted:

The auction closed April 13, with just seven total offers ranging from 0.09 ETH (US$277 at current prices) to 0.0019 ETH (almost $6). After opening the auction up again, at the time of writing bids on OpenSea had risen to US$10,882.40. Still, not quite the return on investment expected.

NFT Market Losing Steam

Last year, NFT was the word of the year, but this year the smart money may be more inclined to short it.

In 2021, brands could casually ride the NFT trend with success, but those late to the party, such as Liverpool Football Club, have encountered firm market resistance. As reported by Crypto News Australia last week, only 6 percent of the “LFC Heroes Club” NFT collection sold, making it one of the more spectacular failures in recent memory.

In the reality television series Survivor, host Jeff Probst utters the immortal words “the tribe has spoken” as castaways are voted off the island. In the context of Dorsey’s tweet, perhaps another tribe has spoken, so to speak.

Categories
Bitcoin Crypto News Ethereum Markets

$250 Billion Wiped from Crypto Market amid Market Fear and Leveraged Liquidations

After staging a recovery following January’s sell-off, the cryptocurrency market has yet again felt the pain of a sharp decline after U$250 billion was erased from the sector’s market capitalisation (market cap).

Cryptocurrency market cap. Source: CoinGecko

A Sea of Red

Initial negative price action started over the weekend, which saw bitcoin drop below US$43,000, accelerated by US$152 million in leveraged long liquidations. In total, the market saw over US$439 million in liquidations within 24 hours.

It is, however, worth noting that these levels remain relatively mild compared to prior episodes, suggesting that further losses may be on the horizon.

Bitcoin then continued its descent on Monday, dropping 15 percent in 24 hours, falling below US$40,000 for the first time since March 15. Meanwhile, Ethereum fell 14 percent, sinking below the US$3,000 mark for the first time since March 23. Across the board, with the exception of Monero (XMR), all major cryptocurrencies are significantly down over the past week:

Crypto market 7-day performance. Source: Quantifycrypto

Fear and Uncertainty

Digital assets form part of the broader investment universe, and due to their speculative nature tend to get hit hardest when sentiment shifts risk-off. Risk-on assets, such as equities and crypto, generally decline when market fear takes hold as investors seek safety in less risky assets.

For these reasons, bitcoin (and other digital assets) tend to mirror the performance of the equity market in the short term, specifically the higher volatility tech sector.

Since March 2020, Bitcoin’s correlation with the tech-heavy Nasdaq 100 has increased significantly:

BTC and Nasdaq correlation. Source: Koyfin

It’s therefore not surprising that all major global equities indices are down amid growing inflation and slower economic growth, resulting in many investors reducing exposure to higher volatility growth assets.

This follows news of the 10-year US Treasury yield rising to a three-year high, making tech stocks significantly less attractive, and cryptocurrencies even less so. In addition, there’s an ongoing war in Ukraine and the Federal Reserve is posturing to aggressively raise interest rates.

For these reasons, macro sentiment is negative and fear is widespread, resulting in a flight to safety away from assets such as cryptocurrencies. With US inflation figures due to be released this week, the market remains on edge, and as Bitcoin analyst Will Clemente recently opined on Twitter:

Categories
Bitcoin Crypto News

Former Blockstream Exec Announces 3 Jurisdictions to Make BTC Legal Tender

One of many exciting announcements emerging from the Bitcoin 2022 conference was one by former Blockstream chief strategy officer, Samson Mow, who brought three guests on stage to provide updates on bitcoin adoption in each of their respective countries.

Roatán, Honduras

Despite Honduras’ central bank rejecting recent rumours that bitcoin would be made legal tender, a special economic zone within Honduras known as Próspera, Roatán island, has announced that it recognises bitcoin and other cryptocurrencies as legal tender within its own borders. Honduras Prospera Inc, who promotes the jurisdiction, told the audience that:

Bitcoin within Próspera operates as legal tender. That means no capital gains tax on BTC, you can transact freely using BTC, and you can pay taxes and fees to the jurisdiction in BTC.

Joel Bomgar, president, Próspera Inc 

In addition, starting later this week the Próspera jurisdiction will enable municipalities in Honduras and corporate entities outside of the US to float Bitcoin bonds within Próspera.

Madeira, Portugal

The next bitcoin announcement came from an autonomous region of Portugal known as Madeira, a group of islands northwest of Africa. While not specifically saying whether bitcoin would become legal tender, the region’s president, Miguel Albuquerque, did however stress that bitcoin purchases and sales would not be subject to taxes. Presently, Madeira has one of the more attractive corporate tax rates at 5 percent.

Portugal's Madeira Islands Are World's Best Island Destination
Crypto-friendly Madeira is also a popular tourist destination. Source: Insider

Either way, Albuquerque is bullish on Bitcoin as he told the crowd:

 I believe in the future and I believe in bitcoin.

Miguel Albuquerque, president of Madeira, Portugal

Mexican Senator Throws Her Hat in the Ring

Finally, Mow invited Mexican Senator Indira Kempis on stage to give an update on efforts to propose bitcoin legislation in the country. 

Kempis has previously outlined a desire to introduce laws modelled on those of El Salvador, and she told the conference that her focus would be to make bitcoin legal tender:

In two months we will propose legislation to modify regulations in fintech and in monetary law. And we have a message for our president. We are looking forward to sitting down and having coffee with you to talk about this plan – bitcoin as legal tender in Mexico.

Indira Kempis, Mexican senator

As part of her efforts, Kempis would also be submitting a bill that would make financial inclusion and education a constitutional right.

At this stage, it remains unclear whether she will succeed in her endeavours, particularly in light of the Mexican central bank’s recently announced plans to launch its own digital currency.

Yet one thing is becoming clear – jurisdictions are increasingly embracing bitcoin to attract global capital and talent. Bitcoiners often refer to the “Sovereign Individual” thesis, whereby nation states are forced to begin treating citizens as paying customers, rather than cattle (who in the information age, have wings and can fly to friendlier jurisdictions). Arguably, we’re seeing that play out in real-time.

Categories
Bitcoin Crypto News Crypto.com Sports

UFC Fighters Can Now Receive Their Bonuses in Bitcoin

The Ultimate Fighting Championship (UFC) is taking its partnership with Crypto.com to the next level with the introduction of “Fan Bonus of the Night” – an innovative collaboration with the major exchange where fans vote on the allocation of fighter bonuses for pay-per-view (PPV) events to be paid out in bitcoin:

Fans Allocate Fighter Bonuses

Until now, the decision as to which fighters delivered performances worthy of a bonus lay solely with UFC matchmakers. However, since the advent of “Fan Bonus of the Night”, fans are now able to participate in what is always a controversial decision.

The inaugural fan bonuses will commence this weekend at UFC 273, headlined by Aussie featherweight champion Alexander “The Great” Volkanovski, who defends his crown against South Korean veteran TKZ, otherwise known as “The Korean Zombie”.

Alex Volkanovski (@alexvolkanovski) | Twitter
Alex Volkanovski proudly representing the Australian flag. Source: UFC

Voting for the “Fan Bonus of the Night” will take place on Crypto.com and is open to all users globally. Each fan will get three votes per PPV and can vote for two fighters within each bout. Voting opens at the start of the PPV prelims and ends one hour after the conclusion of the event. 

Bonuses on Top of Bonuses

In total, three bitcoin bonuses will be awarded, ranging from US$10,000 to U$30,000. Given that fighter pay remains a hot topic within the MMA community, it’s worth noting that these fan bonuses will be in addition to fighter salaries, as well as the U$50,000 “Fight of the Night” and “Performance of the Night” bonuses typically awarded.

“Uncle Dana”, as UFC president Dana White is affectionately known by fans and MMA (mixed martial arts) journalists alike, spoke positively about Crypto.com’s proactive approach to increasing fan engagement:

They’re [Crypto.com] constantly coming up with new ideas about how we can work together to connect with the fans. This new Fan Bonus of the Night is an awesome way to get fans more engaged in our events while rewarding the fighters for bad-ass performances.

Dana White, UFC president

In 2021 we saw a flurry of professional athletes elect to take their earnings in bitcoin, and this trends appears to be picking up steam. In January, UFC heavyweight champion Francis “The Predator” Ngannou elected to take half his fight purse in bitcoin, saying: “I believe bitcoin can empower people everywhere.”

As an inflation-resistant savings technology, it’s hard to argue with The Predator’s assessment of Bitcoin. However, given his knockout power, you’d probably be inclined to agree with him irrespective: