Author: José Oramas

José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.

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Bitcoin Gold Institutions Investing

JPMorgan Says Institutional Investors Are Replacing Gold With Bitcoin

Bitcoin’s market cap hit the US$1 trillion dollar mark last week as BTC’s price surged to US$55,000. Analysts at American investment bank JPMorgan put forward three main reasons behind the recent BTC price surge, and one of them is institutional interest. 

Institutions Are Fuelling Bitcoin

It seems institutions are taking the lead again and driving the price this quarter, when it was retail investors that had out-bought institutions in the first quarter of 2021.

According to a Bloomberg report, JPMorgan said that institutional investors were the main driving force behind bitcoin’s recent price surge, mainly because they see it as a “better inflation hedge than gold”.

The re-emergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge. Institutional investors appear to be returning to bitcoin, perhaps seeing it as a better inflation hedge than gold.

JPMorgan statement

The two other key factors were “recent assurances by US policymakers that there is no intention to follow China’s steps towards banning the usage or mining of cryptocurrencies”, and “the recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s bitcoin adoption”.

JPMorgan Believes Bitcoin Could Go 10x – But Still Doesn’t Like It

JPMorgan has been one of the most hesitant traditional financial institutions when it comes to bitcoin and cryptocurrencies. But as cryptocurrencies and blockchain technology demonstrate their usefulness especially in times of financial crises, most institutional investors have decided to engage with cryptocurrencies one way or another.

While JPMorgan still doesn’t like Bitcoin – or any crypto, really – its CEO, Jamie Dimon, recently conceded bitcoin could grow by up to 10 times within the next five years, which could be his most positive comment yet about BTC.

Categories
Crypto News Stablecoins Tether

Tether Calls Latest Bloomberg Hit Piece a ‘Tired Attempt to Undermine its Business’

Stablecoin issuer Tether is not so comfortable with a recent investigative report by Bloomberg, calling it a “tired attempt to undermine its business”. 

Where Are Tether’s Billions?

Bloomberg’s Zeke Faux is the author of the report, titled Anyone Seen Tether’s Billions?, which has put Tether in the spotlight by revealing the company has loaned billions of dollars to crypto companies, including crypto lender Celsius Network.

[Faux’s] article does nothing more than attempt to perpetuate a false and ageing story arc about Tether based on innuendo and misinformation, shared by disgruntled individuals with no involvement with or direct knowledge of the business’s operations. It’s another tired attempt to undermine a market leader whose track record of innovation, liquidity and success speaks for itself.

Tether statement

Celsius provides retailers with interest accounts. The crypto bank has been subject to scrutiny as US regulators consider these interest accounts unregistered securities.

Tether and its Involvement With Chinese Firms

It was also revealed that Tether is holding Chinese debt, lending billions of dollars to Chinese firms using bitcoin as collateral. One of these firms is Evergrande, reportedly close to defaulting on its debt payments. Tether has repeatedly denied all ties to the cash-strapped real estate group.

Chinese real-estate company Evergrande is facing a debt crisis after years of risky borrowing. Some analysts say it is the world’s most indebted real estate developer.

Last month, Crypto News Australia reported that Tether and its parent company, Bitfinex, had filed a petition to the Supreme Court of New York to block an information request submitted by CoinDesk.

A week ago, Bitfinex won a class-action lawsuit levelled against Tether, claiming it was a “clumsy attempt at a money grab”.

Categories
Bitcoin Crypto News Cryptocurrencies Investing Markets

Legendary Billionaire Investor Finally Buys BTC, Admitting It Has ‘Crossed the Chasm to Mainstream’

“It’s more than an inflation hedge” – this is how Soros Fund CEO Dawn Fitzpatrick recently referred to bitcoin, adding that the cryptocurrency market has “crossed the chasm to mainstream”.

In a recent interview with Bloomberg, Fitzpatrick – who’s also the chief investment officer of Soros Fund, a private US investment firm with over US$6 billion in assets under management – discussed the current state of the stock market, Chinese companies in the US, and bitcoin, stating that her company is exploring crypto beyond the inflation hedge narrative.

Bitcoin Has Surpassed the ‘Inflation Hedge’ Narrative

While other institutional investors and billionaires have satanised bitcoin and cryptocurrencies in general – among them Warren Buffet’s right hand man, Charlie Munger – Fitzpatrick points to how the crypto market now has over US$2.3 trillion in market cap and 220 million users globally. To reinforce her point, the number of active crypto addresses reached the 50 million mark two weeks ago.

A ‘Market Crash’ is Getting Closer

During the Bloomberg interview, Fitzpatrick was asked what her fund’s current market strategy was against hyperinflation. She said that a market crash was nearing, and that high inflation combined with low interest rates have pushed the fund to stockpile cash by borrowing against various securities.

I think we’ve all been surprised at how long [high inflation] feels like it’s going to last now.

Dawn Fitzpatrick, CEO and CIO, Soros Fund

Fitzpatrick’s statements echo the words of billionaire Marc Lasry when in June he lamented not buying enough bitcoin. “As more and more people start using bitcoin, it’s going to keep going up. It’s happened a lot quicker than I thought it would. I should have bought a lot more. That was my mistake,” Lasry said.

Other billionaire investors such as the outspoken Chamath Palihapitiya consider that bitcoin has “effectively replaced gold”, as he said earlier this month, and would continue to do so as the cryptocurrency market cap grows.

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Banking Bitcoin Crypto News Mining

BTC-Backed Loans a Reality as Miner Obtains $100 Million Credit to Buy More Equipment

Marathon Digital Holdings, one of the largest publicly traded American Bitcoin mining companies, has obtained a US$100 million credit line from Silvergate Bank, secured with bitcoin and USD.

According to its press release, the mining firm secured the loan on October 1. The credit line will be available for a year, and is expected to be renewed annually by agreement between both parties. The funds will be used to expand the company’s BTC mining operations and to acquire new equipment. 

[The] revolving line of credit is secured by our bitcoin holdings and USD [and] consistent with our strategy to focus on agility as it enhances our ability to act opportunistically and in a manner that is efficient for both our business and our shareholders. By having this line of credit in place, we believe Marathon is better positioned to continue growing over the coming quarters.

Fred Thiel, CEO, Marathon Digital

Over $360 Million in BTC Holdings

The firm also revealed its quarterly BTC production and miner installation updates. By the third quarter of 2021, the company produced 1,252.4 new minted bitcoins, 340.6 minted in September alone. This represents a 91 percent production increase quarter-on-quarter and increasing total bitcoin holdings to approximately 7,035.

At press time, Bitcoin was trading at US$51,260, which gives Marathon’s bitcoin holdings an approximate fair market value of US$361.2 million.

Not the First BTC-Backed Loan

This is the first BTC-backed loan issued by an American bank, but not the first BTC-backed loan as such. Crypto News Australia reported in July how Glen Oaks Escrow, a California-based escrow company, made its first BTC-backed refinance loan for a property in San Diego.

We have seen similar moves in Australia as some people use crypto to pay off their mortgages or even put their houses up for bitcoin.

Categories
Australia Blockchain Crypto News Investing

Senator Bragg Tells Blockchain Body: ‘Australia’s Digital Asset Plan is Coming’

Speaking at this year’s NFT Fest, NSW Senator Andrew Bragg said that Australia’s digital asset plan could be enacted in 2022, bringing crypto-related legislation to benefit the local industry and put Australia at “the front end of the digital asset society”.

The NFT Fest gathered dozens of speakers from the crypto and blockchain space last week to speak about some of the industry’s trending topics. Senator Bragg was among the participants, and he talked about the current national regulatory climate for crypto companies.

According to Bragg, the Senate Select Committee will publish its report to include regulatory recommendations, mainly about consumer protection and driving investment into Australia, by the end of this month.

Bragg is one of the few crypto-friendly politicians in Australia, and a firm believer that proper crypto regulation could boost investment and jobs in the country. As the market and technology develop in parallel at a faster rate, he says it’s time for Australia to do proper research and implement a robust regulatory framework for market participants.

It is clear from our investigations that we need a robust policy framework for digital assets, guided by three objectives: consumer protection, investor promotion, and market competition.

Senator Andrew Bragg

Net Zero Emissions and TradFi

Bragg pointed out the fact that digital assets have a bad reputation in Canberra partly because traditional financial institutions are undermining crypto.

He also backed his plans to run the crypto space on renewable energy as part of the government’s repositioned goal of achieving net zero carbon emissions.

Senator Bragg closed his speech by pointing out the dangers posed by the tech giants, prompting the implementation of a regulatory framework to counter their power over society in what he calls “a battle for the ages”.

Big tech has way too much power over our society. They’re not Australian companies. We don’t want them to run the world … Let’s implement a new regulatory framework over the next 12-18 months… Our battle against big tech is a battle of the ages.

Senator Andrew Bragg
Categories
Blockchain Crypto Art NFTs Scams Solana

Alleged 17-Year-Old Artist Sells Fake NFTs in $500,000 RugPull

Iconic Sol, an NFT project on the Solana blockchain, has apparently rugged its investors after failing to deliver several artwork pieces and disappearing with US$500,000.

A 17-year-old 3D artist is presumed to be behind the project. The teenager promised to deliver 8,000 NFT artworks on the project’s Discord channel and some of the tokens were supposed to be available in an October 1 presale. A total of 2,000 NFTs were up for grabs at a price of 0.5 SOL, many of them selling out quickly. 

The presale generated the anonymous artist 1,000 SOL, or US$138,000, but the estimated amount of stolen funds is over half a million dollars. The event was reported by SOL Big Brain, a popular member of the Solana NFT community:

Data from Solana Explorer shows the person(s) behind the project has already sent the money to different addresses. And just as concerning for investors, instead of receiving the NFTs the artist sent them a bunch of random emojis.

Beware of Fake and Non-Existent NFTs

This is probably the first rugpull on the Solana network. But it’s hard to say as controversy still surrounds a previous Solana project backed by American rapper Lil Uzi called Eternal Beings, whose floor price plunged after the rapper deleted his Twitter posts regarding the project.

Fake and non-existing NFTs are becoming an increasing concern in the DeFi space. As Crypto News Australia reported, last month an NFT collector paid almost US$500,000 worth of ETH for an NFT that never existed.

Categories
Blockchain NFTs Solana

Solana NFT Project Accused of Rug Pull After Lil Uzi Deletes Tweets

Another day, another rug pull in the crypto world – or at least that’s what it seems with the recent price plunge of Eternal Beings, computer-generated NFT avatars that were promoted by American rapper Lil Uzi Vert.

US rapper Lil Uzi Vert. Source: vogue.com

What Happened?

Eternal Beings is an NFT project built atop Solana (SOL), consisting of 11,111 alien avatars with a similar appearance to Uzi – as in his clothes, hair and tattoos.

The rapper promoted the project to his Twitter followers with guaranteed price moonings and hype. The avatars were launched on the Solanart marketplace on September 28, but after the NFTs sold out at a mint price of 2.5 SOL, Lil Uzi deleted all of his posts related to the project, causing the floor price to dip and hover below 1.60 SOL.

Was Uzi Behind the Project?

It’s unknown if Uzi was behind Eternal Beings or if he was just being paid to promote the project to his followers. Moderators in the project’s Discord tried to calm their users by reassuring them Uzi was still part of the project. Yet that didn’t go so well as moderators started blocking several users who contradicted them.

What the crypto community and Eternal Beings’ more than 45,000 members believe is that this was another hyped-up rug pull. But another question arises: will the US Securities and Exchange Commission intervene if the regulatory body determines Uzi’s tweets to be the promotion of an investment product? The deleted tweets can be found on internet archive WayBack Machine:

If this was a rug, it would make it Solana’s second rug pull by far. In August, Crypto News Australia reported how Luna Yield, a cross-chain yield aggregator built on the Solana blockchain, stole nearly US$10 million from liquidity pools.

Categories
Australia Blockchain Crypto News NFTs

Industry Leaders Set to Speak at This Week’s Australian NFT Fest

Dozens of speakers from the crypto and blockchain industry will be hosting this week’s Australian NFT Fest to talk about some of the hottest trends in the industry right now.

The list gathers 50 experts on the industry and their take on popular trends in the DeFi and crypto space, such as NFTs and the rise of blockchain video games like Axie Infinity.

The event was organised by Richelle Cox, content director of Melbourne-based digital commerce agency Honey Digital, in collaboration with Steve Vallas, CEO of Blockchain Australia. The virtual meeting is free to watch and will last from 10:00 am to 6:15 pm AEST. 

Some of the speakers include Gauthier Zuppinger and Jess Ford, co-founders of NonFungible.com; Lakoz, the Aussie co-founder of the NFT collection Koala Intelligence Agency (KIA); and Caroline Bowler, CEO of Melbourne-based crypto exchange BTC Markets.

NFTs Are Red Hot in Australia

NFTs are wildly popular in Australia, and as the NFT bandwagon keeps rolling at its frenzied pace more Aussies are jumping on board.

Crypto News Australia recently reported how one Aussie made 9x his investment by flipping a piece of virtual real estate he purchased on the Pokemon-inspired Axie Infinity. Kieran Warwick, the co-founder of Illuvium, a decentralised strategy game and NFT collection built on the Ethereum network, bought a “plot” at A$300 and sold it for $28,000.

A lot of money is being poured onto the NFT market in Australia. Aussie-based horseracing platform ZED RUN, for example, raised US$20 million for NFT racehorses.

However, other projects have fallen at the first hurdle. The Llama NFT platform Sollamas, for one, promised to compensate affected users after its error-plagued launch last month.

Categories
Crime Crypto News Ethereum Institutions

ETH Developer Pleads Guilty to Helping North Korea Use Blockchain to Evade Sanctions

Virgil Griffith, a prominent Ethereum developer and one of the most recognised names in the crypto industry, has pleaded guilty to a federal charge accusing him of conspiring with the North Korean government to evade US sanctions law.

Two-Year Legal Battle Not Yet Over

Griffith’s September 27 appearance in the Southern District of New York courthouse ended a long battle with US authorities. Griffith had been arrested in November 2019 shortly after giving a keynote speech in the North Korean capital of Pyongyang. 

The reason for his arrest, according to prosecutors, was that the subject of Griffith’s presentation was how to launder money and evade sanctions using blockchain technology. While awaiting trial on house arrest, in July Griffith apparently violated the terms of his bail and was taken into custody.

Defence Lawyer’s Testimony Thwarted

According to Ethan Lou, a journalist who claims to know Griffith, he tried to seek legal advice on how best to prove his innocence. Griffith also tried to access his Coinbase account to pay his lawyers but access was denied numerous times. According to Lou, the court wanted a lawyer’s testimony to show Virgil tried to seek legal advice, but the lawyer was based in Singapore and was unable to travel.

Now that Griffith has pleaded guilty, US authorities have imposed a six-year prison penalty. The formal sentencing is expected to take place in January 2022. Needless to say, the case has raised a lot of eyebrows in the crypto community. “Unclear what new development caused this guilty plea,” tweeted Lou. “One possible reason is the barring of the remote testimony of an Ethereum Foundation lawyer.”

It is unknown what prompted the guilty plea. Griffith faced a charge of “conspiracy to violate” sanctions laws, meaning he was accused of trying to help North Korea but not actually helping the rogue state, giving the prosecution the green light to proceed without providing any tangible evidence.

Seven months ago, the US Department of Justice charged three North Korean hackers allegedly involved with cybercrimes that caused over US$1.3 billion in damages. These actors were said to have helped the North Korean government by stealing cryptocurrencies to fund its nuclear program.

Categories
Bitcoin Payments

Lightning Network Up 161% Since January; What’s Driving Its Growth?

The Lightning Network, a layer-2 scaling solution for Bitcoin, has seen a robust amount of activity since Twitter announced adding support for bitcoin payment features including Lightning wallets.

New nodes and channels on the Lightning Network have increased 23.68 percent and 22.24 percent respectively, signalling a fast-paced adoption for the protocol.

Lightning Network monthly chart. Source: Glassnode

At the time of writing, there were 27,188 nodes running on the network, of which 15,974 had active payment channels. This respectively represents a 5.43 percent and 6.04 percent 24-hour increase. The number of new channels kicked off this week with 74,163, an 8.4 percent increase in 24 hours.

Source: 1ML

Strike API to Allow Borderless, Instant Payments Over Twitter

Digital wallet Strike – built atop the layer-2 network – recently announced its integration to Twitter with the Strike API platform, allowing Twitter users in the US and El Salvador to receive tips through their strike accounts.

This is part of Twitter’s experiment to deal with crypto asset transactions, starting with iOS users. Apparently, this feature will spread to Android users in coming weeks.

When you take one of the world’s largest social internet networks and you combine it with the world’s best open monetary network, Twitter accidentally becomes one of the best remittance experiences in the world.

Jack Mallers, Zap CEO

Remittances constitute over 20 percent of El Salvador’s GDP (Gross Domestic Product) as many Salvadoreans work overseas to send money to their families staying in the country. As Crypto News Australia reported earlier this month, adopting bitcoin and its network could save El Salvador US$400 million a year in remittances.

The Lightning Network has proven to be an efficient scaling solution for slow BTC deposits. This year, crypto exchange OKEx integrated the Lightning Network into its platform to allow faster and cheaper BTC withdrawals and deposits.