Author: Jody McDonald

Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.

Categories
Crypto News Markets Monero Privacy Regulation Zcash

Privacy Coins XMR, ZCASH Surge Amid Political and Regulatory Uncertainty

The past 24 hours has been kind to privacy coins, with many seeing gains of over 20 percent amid concerns about the regulatory environment in the US, a crackdown by exchanges on accounts linked to Russia, and ongoing economic sanctions.

Monero, the largest privacy coin by market cap, shot up 22 percent in under three hours according to CoinGecko, peaking at almost US$206 before consolidating around the US$185-190 range.

Likewise, Zcash is up over 30 percent since March 8, having climbed from US$106 and is currently trading at close to US$145, according to CoinGecko. This rally from Zcash follows a significant bounce in November 2021 after the announcement of plans to transition to a proof-of-stake blockchain.

Smaller Privacy Coins Also Up

The surge in privacy coins hasn’t been limited to the large caps; most smaller plays are also up significantly in the past day: Oasis has gained 10.4 percent, Secret is up 14.5 percent and Horizen 17 percent.

Even low-cap and relatively unknown privacy protocols are surging: Pirate Chain is up 18 percent, Tornado Cash 32.7 percent and Verge by 25 percent, all in the past 24 hours.

What Caused the Surge?

Opinion is divided on what exactly has sparked this sudden surge in privacy coins, and there are likely several factors at play.

The release of the crypto executive order by President Biden, with its focus on consumer protection and illicit activity along with the suspension by Coinbase of over 25,000 addresses linked to Russian criminals, are thought to be important factors.

There is also some speculation that Russian oligarchs may be buying up privacy coins to help them get around economic sanctions while maintaining their anonymity:

To put the surge in privacy coins in context, according to CoinMarketCap the overall crypto market cap is up around 4 percent over the past 48 hours.

Categories
Bitcoin Crypto News Markets

Total Exchange BTC Inflows Show Sellers May Be Exhausted

Despite the chaotic geopolitical environment, the Bitcoin market is in a fairly balanced state with low exchange inflows, suggesting seller exhaustion. Could this indicate we’re approaching a turning point in the market?

According to market analysis firm Glassnode, net BTC inflows to exchanges since September 2021 have been virtually flat, indicating fairly modest sell-side supply pressure. Even with the heightened geopolitical uncertainty of the past week, total exchange inflows have remained relatively small at around 1000 BTC per day.

Investors Flock to BTC Derivatives

Although the net inflow of BTC to exchanges overall has been flat, there has been a movement of BTC from exchanges with less derivative market dominance to those with more, indicating investors may be looking increasingly to hedge risk rather than actually sell their BTC.

Bitcoin balances on exchanges. Source: Glassnode

Binance, FTX, Bittrex and Bitfinex have seen significant growth in the amount of BTC they hold: in aggregate, these exchanges have seen an increase of BTC inflows of 24.3 percent since the end of July 2021. In contrast, all other exchanges Glassnode tracks have seen drops. 

In addition to the growth of their held BTC, Binance and FTX have seen their dominance in the BTC derivatives markets more than double since December 2020. This growth in derivatives suggests that investors are generally looking to find ways to offset their risk rather than sell.

Other Market Indicators Further Suggest Seller Exhaustion

According to Glassnode, the majority of sell-side pressure for BTC has been coming from short-term HODLers – those who bought in the past 155 days – who are about 15 percent down on their investment on average. Selling pressure from long-term HODLers has been in steady decline since January 2021.

Despite many recent sellers realising losses, the aggregate market losses are not nearly as significant as we’ve seen in previous bear markets – around 0.5 percent of market cap per day compared to around 1.0 percent in previous bear markets.

According to Glassnode, these relatively small aggregate losses may be a further signal of seller exhaustion, that is to say most of those who plan to sell already have. Although they warn a “final and complete capitulation” is still possible based on historical precedent.

Are We Getting a Look at Bitcoin’s Bear Bottom?

Another encouraging indicator that the bottom of the bear market may be close is that approximately 52.5 percent of all transaction volume is currently spent at a loss: historically this figure has been around 55 percent in the final stages of bear markets.

This finding follows a sell-off of BTC in January 2022, where Bitcoin’s relative strength indicator (RSI) dropped to levels not seen since March 2020 during the Covid crash, which some analysts suggested showed that BTC was oversold and primed for a rebound.

Categories
Coinbase Crypto Exchange Tokens

Coinbase Introduces ‘Experimental Asset’ Warning for Crypto Traders

Leading cryptocurrency exchange Coinbase has started rolling out a new ‘Experimental’ label to help inform its users about the potential risks of trading less established assets on their platform.

In a March 8 blog post, Coinbase said it intended to increase the number of newly created and relatively unknown tokens released on the platform and felt the label was necessary to ensure transparency and to educate users:

As we expand our asset offerings, we will be bringing on more, often newly created assets or lesser-known tokens that could come with additional trading risks, including higher price swings and increased order cancellations.

Coinbase blog post

What Assets Qualify as ‘Experimental’?

The new ‘Experimental’ label will initially be applied to all newly added assets and to assets with relatively low trading volumes.

Coinbase says these criteria may change over time and assets will move into and out of the ‘Experimental’ category depending on their age, trading volume and other market factors:

Experimental Assets Not Restricted

Assets labelled as ‘Experimental’ will not be restricted in any way: users will still be able to send, receive, buy, sell and hold assets as normal.

However, users will be required to read a warning message and confirm they understand the risks before trading an experimental asset for the first time.

Labelling Useful for New Users

The ‘Experimental’ label follows the announcement that NFTs are coming to Coinbase soon and the success of its Super Bowl ad, both of which likely attracted new users to the platform. 

Given that many of these users will be relatively new to crypto, the new label may help them avoid some uninformed investment decisions.

Categories
Crypto Exchange Payments Russia

Crypto Exchanges Resist as Visa, Mastercard and Paypal Suspend Russian Services

Major crypto exchanges, including Coinbase and Binance, have continued to resist calls to suspend their services in Russia despite a wave of withdrawals of major payment providers from the Russian market.

Following on from PayPal’s withdrawal last week, Visa and Mastercard have now moved to suspend their services inside Russia:

In a statement released on March 5, Visa announced its restrictions would come into effect in coming days and would mean Visa cards “issued in Russia will no longer work outside the country and any Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation”.

In a similar move, Mastercard will be suspending all cards issued by Russian banks, and any cards issued outside Russia will not work at Russian merchants or ATMs.

Russia Partners With Chinese UnionPay to Fill Void

In response to the announcements by Mastercard and Visa, several Russian banks – including the federation’s largest lender, state-owned Sberbank – have said they will begin issuing cards from the Chinese operator UnionPay in partnership with the Russia-based payments network MIR.

Crypto Unlikely to Help in Avoiding Sanctions

Although at first glance it seems reckless for crypto exchanges to continue operating in Russia,  given the risk of circumventing sanctions, the relatively small scale of crypto markets, the lack of Ruble pairs, and blockchains’ highly traceable and immutable nature may actually make the risk relatively small.

According to Carole House, the US National Security Council’s director of cybersecurity, the sheer volume of currency Russia would need to circumvent the West’s economic sanctions “would almost certainly render cryptocurrency as an ineffective primary tool for the state”.

Jake Chervinsky, the Blockchain Association’s head of policy, created a Twitter thread to explain why Russia can’t use crypto to evade sanctions:

Perhaps more importantly, there exists a much more established alternative for the Russian government – the Chinese CIPS network (which is essentially the Chinese SWIFT).

Categories
Airdrop Crypto News Russia Scams

Ukraine Update: Over $56 Million in Donations, Airdrop Cancelled and Scams Aplenty

Over US$56 million in crypto donations have now been sent to support Ukraine in its ongoing conflict with Russia. This milestone comes amid the cancellation of a planned airdrop from the Ukrainian government and a spate of scams looking to capitalise on the crypto community’s generosity.

Crypto Generosity Providing Crucial Aid

According to the blockchain analytics platform Elliptic, over 100,000 separate donations have been made to the Ukraine government and supporting NGOs since the start of the conflict, totalling just over US$56 million. This is over 50 percent up from the US$37 million figure reported by Crypto News Australia reported just a few days ago.

The donations are made up of a variety of cryptocurrencies. Elliptic lists the approximate breakdown as:

  • 31.2 percent Bitcoin;
  • 33.7 percent Ethereum;
  • 17 percent stablecoins;
  • 14.5 percent Polkadot; and
  • 3.6 percent other crypto.

In addition to crypto donations from individual users, UkraineDAO auctioned off a Ukrainian flag NFT for US$6.5 million worth of Ethereum, proceeds of which will go to the NGO Come Back Alive.

Government Airdrop Cancelled Amid Spoof

A planned Ukrainian government airdrop – designed to reward users who had donated to the Ukrainian cause – was cancelled after the Peaceful World token (WORLD) was identified as a spoof of the official Ukrainian government airdrop:

The Ukrainian government decided to abandon its airdrop to avoid exposing users to potential phishing scams and spam attacks:

Scammers Seek to Take Advantage

Amid the wave of generosity, scammers have sought to take advantage by duping well-intentioned users into donating crypto to addresses not associated with the Ukrainian government or any registered NGOs.

A range of Ukrainian crypto scams have been reported, including phishing emails purporting to be from the UN Office for the Coordination of Humanitarian Affairs, fake websites, and dodgy forum posts. 

Malware Hunter Team has reported a rapid increase in phishing websites with domains such as “Ukraine-donate” and “Ukraineglobalaid” since the start of the conflict.

To avoid falling victim to a donation scam and to ensure your funds go where you intend, it is recommended you only donate to wallet addresses released by officials from the Ukrainian government or supporting NGOs.

Categories
DeFi Ethereum Privacy Tornado Cash

Tornado Cash Token (TORN) Surges 94% Following Bullish Protocol Updates

The native token for the Tornado Cash protocol (TORN), an Ethereum-based privacy protocol, has surged 94 percent following the launch of its latest network updates.

Tornado Cash is a fully decentralised privacy protocol which enables anonymous transactions on the Ethereum network. The protocol achieves anonymity primarily by breaking the on-chain link between source and destination addresses when transactions are made.

Price Increase Follows Launch Of Relayers

The latest price action for TORN follows the adoption and implementation of the protocol’s 10th on-chain governance proposal, which saw the addition of relayers to the network:

The community voted overwhelmingly in favour of the proposal, which was accepted on February 19. Following the launch of relayers on March 2, the price of TORN spiked from around US$37 to around the $US67 mark.

What Are Relayers?

Tornado Cash relayers are community members who process withdrawal transactions and allow users to send transactions to accounts with no ETH balance – they are considered an important part of the protocol and improve users’ privacy. 

Relayers are compensated for their network services with a small portion of users’ deposits. Anyone can become a relayer, provided they meet the minimum balance requirement of 300 TORN and accept the terms and conditions.

TORN Gaining Momentum

The addition of relayers to the Tornado Cash protocol is a further boost following its integration of ETH layer 2 solution Arbitrum in December 2021, which saw a dramatic decrease in gas fees and improvements in transaction times:

The protocol was also recently assessed by DeFi safety, which found it to be highly secure – awarding Tornado Cash an overall score of 85 percent.

Categories
Australia Crypto News Regulation

Australian Advisory Committee Outlines Factors for Easing Crypto Adoption

An advisory committee to the Australian government released a report this week highlighting issues that need attention in order to facilitate the safe and widespread adoption of crypto technology in Australia.

The report, developed by the Cyber Security Industry Advisory Committee and released by the Australian Department of Home Affairs, outlines the risks and opportunities presented by cryptocurrencies and suggests Australia would benefit from the creation of a set of guidelines to protect businesses and investors.

There is a need for regulatory settings that provide greater clarity and confidence about how the cryptocurrency market can operate in Australia.

Cyber Security Industry Advisory Committee report

Key Areas For Government

The report recommends the government explore four key areas to help keep Australians safe:

  1. setting minimum security standards for exchanges;
  2. improving crypto-centric capability and training for law enforcement;
  3. adopting best-practices and infrastructure from other jurisdictions; and
  4. increasing transparency requirements for operators of blockchain-based products and services such as DEXs and NFT marketplaces.

Opportunities Aplenty

Although the report focuses on how government can regulate the crypto space to minimise criminal activity, it also highlights some of the opportunities crypto presents:

“Distributed ledger technology is useful to businesses beyond its cryptocurrency capabilities. It can increase brand trust through its ability to enhance transparency and provide an immutable record of assets for other purposes.”

Apart from crypto acting as a currency, the four main opportunities mentioned in the study are:

  • supply chain tracking;
  • the tokenisation of traditional assets such as loans and real estate;
  • the possibility for businesses to attract a new set of customers; and
  • the potential for lower energy use than existing financial infrastructure.

Australian Crypto Adoption Growing, Regulation Coming

A report of this kind comes at an important time for the Australian crypto industry, following significant growth in adoption in the past two years. We’re now seeing more and more crypto companies listing on the ASX and large crypto-based events starting to attract interest. 

As the industry grows, it’s important that government keeps up and provides both clarity to the market and protection to consumers and businesses.

Categories
Australia Crypto News Payments

1st Energy Becomes First Australian Energy Retailer to Go Crypto

In a first for the Australian market, energy retailer 1st Energy will begin allowing cryptocurrency as a form of payment following a new partnership with crypto payment platform BitPay. 

From March 4, 1st Energy customers will be able to pay their power bills using a range of popular cryptocurrencies including BTC, BCH, ETH, DOGE, SHIB and XRP.

Crypto payments will be made via BitPay, which is currently the largest crypto payment provider globally and has been used by several large companies including AT&T, Microsoft and WeWork.

How Does It Work?

Payments can be made using the BitPay wallet app, crypto debit card (which will launch in Australia soon), or Chrome browser extension.

Customers who choose to pay their 1st Energy bills using BitPay, firstly need to select which crypto to make payment in: currently there’s support for 13 cryptocurrencies and five stablecoins. 

1st Energy customers are then presented with a QR code, which can be scanned using the BitPay wallet app. They can then see the exact amount of crypto needed to pay their bill. The bill amount will be locked for 15 minutes so that fluctuations in the value of the crypto don’t change the figure a person owes.

Crypto Payments a Competitive Advantage

The adoption of crypto as a payment method is a reflection of the increasing mainstream adoption of the technology. 

1st Energy believes providing crypto payment options offers a competitive advantage over its larger and slower-moving competitors:

As a smaller retailer, we are all about choice, and part of that is giving customers the option to pay the way they want. 

Felix Baillie, 1st Energy representative

Is Paying With Crypto Worth It Right Now?

Of course there are also downsides to paying with crypto – everyone knows about the guy who spent 10,000 BTC on a couple of pizzas. Bitcoin, in particular, recently has fallen out of favour as a means of payment, with many preferring to HODL – BitPay reports that BTC now accounts for only around 65 percent of payments on its platform, down from 92 percent in 2020.

The desire to HODL in addition to the murky regulatory environment in Australia may reduce the number of customers willing to pay using crypto, but seeing more companies add the option is undoubtedly a positive sign for crypto adoption in Australia.

Categories
Blockchain NFTs Solana

Number of Daily Active Solana (SOL) Accounts Surges 300% Since Last Upgrade

A new report has found the estimated number of daily active users on the Solana blockchain has surged around 300 percent since the last network update in September 2021.

SOL daily active accounts. Source: OurNetwork

The report from OurNetwork – a substack newsletter that covers the Solana ecosystem – used Solana’s unique daily active signers figure as a proxy for daily active users: this figure peaked at 299,000 in late January but has since dropped off to around 232,000.

Unique signers peaked at 299,000 in late January, but tapered off a bit to 232,000 after the network’s most recent bout with degraded performance. Solana’s long-term uptrend has recently been bolstered by its two top wallets – Solflare and Phantom – launching their own iOS mobile apps, along with strong consumer participation in the Solana NFT market. 

OurNetwork report

Solana Ecosystem Sees Sustained Growth

This increase in Solana daily active signers follows a general long-term uptrend in usage of the blockchain since mid-2021. The NFT market in particular has been a strong driver of growth for Solana. Since the June 2021 launch of the Metaplex protocol, the number of unique NFT owners on the network has grown from 28,000 to almost 2.5 million:

SOL unique owners. Source: OurNetwork

User Growth Despite Outages, Security Concerns

Somewhat surprisingly, the growth in Solana users continues fairly consistently despite relatively frequent and major disruptions to the network. 

Already, in the first two months of 2022 Solana has seen multiple outages either due to DDoS attacks or the network being over-taxed by legitimate users.

Categories
Crypto News Crypto Wallets Cryptocurrencies Russia

Ukraine Government Raises Over $37 Million in Crypto After Public Appeal

Since the start of Russia’s military invasion of Ukraine on February 24, over US$37 million in Bitcoin and other cryptocurrencies has been donated to the Ukrainian government and Ukraine-based non-governmental organisations (NGOs).

This figure is rising rapidly as donations continue to pour in from crypto users around the globe.

Ukraine has been fairly progressive in its approach to crypto, having officially legalised Bitcoin and other digital assets in 2021.

The official Twitter account of the Ukrainian government issued a request for crypto donations on February 27, including to its official Bitcoin, Ethereum and USDT (ERC-20) addresses. 

Initially there was some scepticism about the legitimacy of the request, with Ethereum founder Vitalik Buterin tweeting a warning – but it was later confirmed the addresses were under the direct control of the Ukrainian government. 

Analytics Show Most Donations Direct to Government

According to crypto analytics firm Elliptic, of the current donations, US$10.6 million has gone directly to the Ukrainian government from 13,670 individual transactions – including the donation of one NFT worth US$1.86 million, which was originally intended to raise funds for imprisoned Wikileaks founder Julian Assange.

The remainder of the donations have gone to NGOs, most notably Come Back Alive, which has received over US$6.5 million in Bitcoin and has come to rely more heavily on crypto donations following the suspension of its Patreon account due to funding military activity.

Crypto Shines During Conflict, Both Sides Could Benefit

Many in the community have noted the advantages crypto provides over more traditional payment systems during times of crisis. While Russia looks like it may be entirely cut off from the SWIFT network and Patreon suspends the accounts of NGOs, crypto donations continue to flow unabated:

Of course, crypto’s decentralised nature allows for funds to flow freely to both sides of the conflict and there’s still significant doubt and concern about how crypto might influence the course of this, and future, military conflicts.