On New Year’s Day, the U.S.-based crypto exchange Bittrex announced via Twitter that it was delisting three leading privacy coins: Monero (XMR), Zcash (ZEC) and Dash. A link promised further details, but those who followed it learned nothing to explain why trades in those tokens would end on Jan. 15.
Still, the news couldn’t have been entirely surprising. Regulators, both in the United States and abroad, have been casting a gimlet eye at privacy coins these days. Unlike Bitcoin (BTC) and Ether (ETH), the coins promise enhanced anonymity by hiding users’ addresses and transaction amounts, which make transactions more difficult to trace. Government agencies suspect they may be used for tax evasion, money laundering and perhaps other criminal activities.
The U.S. Treasury Department’s Financial Crimes Enforcement Network, for instance, noted in its Dec. 23 proposed rule change that anonymity-enhanced cryptocurrencies, or AECs, “have a well-documented connection to illicit activity,” having been “used to launder Bitcoins paid to the wallet used in the Wannacry ransomware attack,” for instance. Moreover:
“Several types of AEC (e.g., Monero, Zcash, Dash, Komodo, and Beam) are increasing in popularity and employ various technologies that inhibit investigators’ ability both to identify transaction activity using blockchain data and to attribute this activity to illicit activity conducted by natural persons.”
Elsewhere, the U.S. Internal Revenue Service announced in September that it would provide a bounty of up to $625,000 to anyone who could break Monero, the most widely used privacy coin — suggesting that the agency believes the coin may be used to hide taxable income.
“Bittrex’s action does not surprise me”
Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission and now a senior fellow at Harvard University’s Kennedy School, told Cointelegraph: “Bittrex’s action does not surprise me.” He went on to clarify that “the use of crypto for illegal purposes has been a top concern of law enforcement agencies and regulators in the U.S. (and elsewhere), so a focus on privacy coins is to be expected.”
The scrutiny of the coins is not confined to the United States. In 2019, the South Korean unit of OKEx delisted five privacy coins, including XMR, Dash and ZEC, citing the G20’s Financial Action Task Force’s Anti-Money Laundering rules — in particular, the need for the exchange to have an address for both the sender and recipient of a crypto transaction, which privacy coins do not provide. Japan, for its part, banned privacy coins in June 2018, referring to Monero, Zcash and Dash at that time as “three anonymous siblings.”
Dave Jevans, CEO of CipherTrace — a crypto analytics firm — commented to Cointelegraph: “It isn’t surprising to see delistings of privacy coins in the wake of increasing regulatory scrutiny that carries additional risks.” As previously reported, CipherTrace has been developing Monero tracing tools on behalf of the U.S. Department of Homeland Security. “Regulators are focused on privacy coins because of concerns that these coins could be more easily leveraged by bad actors to launder stolen funds,” Jevans told Cointelegraph.
BTC remains “currency of choice for criminals”
But as is often the case with cryptocurrencies, things aren’t as simple as they first appear. While acknowledging that many of regulators’ concerns with privacy coins are valid, Jevans observed that “the data still shows that Bitcoin, which is more traceable than cash, remains the currency of choice for criminals because of the ubiquity of off-ramps into fiat.” Meanwhile, following the Bittrex delisting, Dash’s Twitter account unsurprisingly issued a defensive statement, noting: “Dash’s privacy functionality is no greater than Bitcoin’s, making the label of ‘privacy coin’ a misnomer for Dash.”
Others have suggested that the Bittrex action might have been an effort to get in step with the FATF’s Anti-Money Laundering guidelines, or “travel rule,” and if so, other U.S. exchanges may soon do likewise. Andrew Miller, a professor at the University of Illinois and a board member at the Zcash Foundation, had doubts about this explanation, telling Cointelegraph: “Since Kraken, Gemini and other exchanges continue listing privacy coins, I don’t think it’s because of a specific regulatory requirement.”
When Cointelegraph contacted Bittrex about its recent delistings, a spokesperson for the company said: “Bittrex does not have a comment for this story.” It should be noted that Bittrex U.S. also delisted XRP on Dec. 29, but that is likely down to the U.S. Securities and Exchange Commission filing charges against Ripple.
“Nothing inherently wrong”
Other commentators argue that there is not anything intrinsically problematic about privacy coins. Indeed, they are a useful innovation, though perhaps they need to be managed better. “There is nothing inherently wrong with privacy coins,” said Jevans, even if they make it easier to launder money than BTC.
As noted, cash is easier to launder than Bitcoin, yet no one is talking about eliminating cash, he suggested. Miller added that privacy coins, too, could be a counteragent for excessive monitoring of crypto markets on the part of authorities, including “warrantless bulk surveillance.”
Giulia Fanti, a professor at Carnegie Mellon University, told Cointelegraph: “The global economy is moving towards a digital financial system that will enable fine-grained surveillance by governments and/or corporations.” Privacy coins matter, among other reasons, as they signify innovation:
“They are helping spur the development of cutting-edge privacy technologies that could eventually be used in centralized digital financial services. So, while privacy coins can certainly be used for money laundering, they also provide an important counterweight to some concerning societal trends.”
Preston Byrne, a partner with law firm Anderson Kill, told Cointelegraph: “Privacy coins are an important innovation not just in terms of incentivizing the development of new decentralized crypto systems but also in terms of the importance to society of having a confidential means of entering into transactions generally, a role currently filled by cash.” Moreover, privacy coins may be less useful in hiding certain illicit activities than some regulators think — provided certain guardrails are in place, according to Byrne:
“Attempting to hide one’s activity through a privacy coin is also unwise due to the fact that, at least for the time being, getting from the cryptoverse into real assets requires touchpoints with regulated exchanges where KYC [Know Your Customer verification] is conducted. Pushing privacy coins off of exchanges where KYC takes place strikes me as counterproductive.”
Importance of “regulated touchpoints”
Still, Jevans believes that “we should expect more exchanges in the U.S. and globally to delist privacy coins in order to ensure compliance until they can deploy a risk-based approach to preventing money laundering.” This may not help, though, said Byrne: “In the long term, the explosive growth in so-called ‘decentralized exchanges’ will likely pick up the slack, without the benefit to the government of having coins occasionally make contact with regulated touchpoints.”
These “regulated touchpoints” could indeed prove privacy coins’ salvation. A custodial wallet operator, for instance, “can generally see the transactions a user is executing and can still require the user to provide some form of identity,” explained Fanti, adding:
“So, even if a privacy coin hides transaction contents on the public blockchain, there may still be ways to enforce regulatory requirements — at least for some important classes of transactions — with the cooperation of custodial wallet operators.”
Both Zcash and Monero also support a technology called “view keys” that give an option to disclose information about a transaction to auditors or regulators in a secure manner, as Miller added: “It’s a common misconception that privacy coins fundamentally undermine or are incompatible with the existing way regulations are applied” — a sentiment voiced on social media, suggesting that privacy coins are more about personal freedom than money laundering.
On Jan. 7, it was announced that a crypto custodian will issue wrapped Monero on the Ethereum network, suggesting that not just DEXs could be working on finding a place for the three so-called privacy coins to flourish.
Expect more KYC/AML enforcement
In the end, a kind of balancing act may be required on the part of regulators and the crypto community, where the challenge is to preserve the privacy strengths of cryptocurrencies but without making them a haven for money launderers and ransomware criminals.
“I would expect to see continued efforts to address the risk and to step up KYC/AML enforcement as the new administration comes in,” Massad told Cointelegraph, adding: “Whether privacy coins can be ‘managed better’ to satisfy both law enforcement interests and those who like the greater anonymity they provide is an interesting question. I can’t say I’ve seen that yet though.”
Art or digital heresy? – Cointelegraph Magazine
Since 2011, a group of enthusiasts and collectors have been obsessed with the physical manifestation of Bitcoin.
On the face of it, physical Bitcoin seems like a contradiction to the key terms that define it, so a trustless, instantly transferable virtual currency becomes a real world coin that has all the disadvantages of Earth-bound cash. But there are numerous advantages too when it comes to privacy, storage and ease of use — and they look pretty cool too.
“A lot of people know about Bitcoin, but very few people actually own Bitcoin. Even fewer own physical Bitcoin,” explains Bobby Lee, who has owned a 10 BTC coin since 2011 and designed and produced his own coins under the BTCC Mint brand until 2018. He added:
“Physical Bitcoins are a rarity, they’re sort of like Picasso and Van Gogh paintings were back in those days. Nobody realized how rare they were. I expect these physical Bitcoins will gain in popularity and appreciation by connoisseurs worldwide.”
Physical Bitcoin typically comes in the form of metal coins, with the private key hidden behind a tamper proof holographic sticker Although highly prized by collectors, Lee said the coins are also practical too.
“The reality is that it’s impossible for me to send people Bitcoin if they’re new to Bitcoin,” he said, referring to digital Bitcoin’s steep learning curve to set up wallets and seed phrases. “Physical Bitcoin, there’s no permission needed, I just hand it to them. Recently my cousin got married in Toronto Canada, and I was able to give them some Bitcoin as a gift and they didn’t need to set up a wallet, I just mailed it to them.”
A piece of history
For ‘cryptonumist’ Elias Ahonen, author of the Encyclopedia of Physical Bitcoins and Crypto-Currencies, physical Bitcoin is also a marker of history. “These coins are the physical manifestation, or artefacts, of Bitcoin in every technical phase,” he says. “Anything that happened with miners from the early Bitcoin era we can’t really point to, but these physical coins we can and collectors find that personally meaningful and also something worth preserving.”
Ahonen was a first year political science student at Wilfred Laurier University in Waterloo when he first became interested in Bitcoin.
“I had just bought my first Bitcoin on an exchange and not being technically sound, I was convinced I was going to lose my private key to the wallet and get locked out of my Bitcoin,” he said: “So I decided instead to buy the physical Bitcoins which held the private key inside of them.”
This turned out to be a wise move as he did indeed lose access to his original wallet ,fortunately with less than 1 BTC in it. And of course it led to a whole new career as a Bitcoin historian and coin broker. “It’s taken me around the world on all kinds of adventures where I pick up half a million dollars’ worth of coins at an airport coffee shop,” he said.
Multi billion dollar industry
Precise figures for the size of the industry are hard to come by, but almost $3.25 billion dollars worth of Bitcoin (at today’s prices) was minted under the original ‘Casascius’ coin brand between 2011 and 2013. More than 1.5 billion worth (or 44,000 BTC) remains unspent and out in the wild.
One of the most valuable is the 1000 BTC coin, three of which remain unopened out of the five minted. “It’s actually the most valuable coin in the world,” said Ahonen. Worth $35 million on face value alone today, it’d fetch considerably more as an ultra-rare collectible. That puts it ahead of its nearest mainstream rival, the ‘Flowing Hair Silver/Copper Dollar‘ from 1794 which last sold for $10 Million in 2013.
Right now you can snap up a 1 BTC Casascius coin from 2011 on eBay for $130,000. If your budget doesn’t stretch that far, there’s a 0.5 BTC coin from 2013 that’s a steal at only $30,000 – and there’s even an unfunded 1 BTC coin from BTCC Mint on sale for $4900. On Crypto De Change, they’re offering a 1 BTC ‘Titan One’ silver coin for just $15,100 (sadly, when you try to buy it you just get a 404 error).
Dim dark days of 2011
Physical Bitcoin traces its history back to 2011 when Utah computer scientist and Bitcoin contributor Mike Caldwell came up with the idea as an educational tool. “Bitcoin was very difficult to explain and in 2013 the average person simply could not get their head around it,” explains Ahonen, adding:
“The idea was that by taking this physical coin, and actually putting the Bitcoin inside of it, you could make a demonstration and say, look here’s a Bitcoin, I’m giving to you and now that you have it, I don’t control it.”
Caldwell’s first plan was to print out the private key to 1 BTC on a bit of paper, stick it in the middle of a washer, and seal both sides with tamper proof stickers. He quickly abandoned this in favour of something a little more high end, contracting a company that made brass tokens for amusement arcades to produce thousands of beautiful Casascius coins. They feature the Bitcoin logo, year and denomination, along with the slogan Vires In Numeris or ‘Strength in Numbers’.
The coins became popular and Caldwell introduced 5, 10, and 25 BTC coins, followed by gold plated bars with 100, 500 and 1000 BTC. As Bitcoin’s price surged in 2013, smaller denominations below 1 BTC began to appear.
“Crypto enthusiasts would buy these physical Bitcoins from Casascius and give them to friends and family as gifts,” recalls Lee, who’s brother Charlie is the founder of Litecoin. “And that’s precisely what my brother did.”
“That December (2011) he gifted me a 10 Bitcoin and paid about $50 for it. So it was relatively inexpensive. Obviously it’s now worth $100,000.”
By 2013 Caldwell had sealed 90,683.9 Bitcoin into metal coins — around half of which remain unspent in the form of 21,000 or so physical coins.
“It was very much a hobby, I don’t think he ever made any money, or any significant amount of money selling those,” says Ahonen. “Frankly, he took a huge amount of personal risk by basically handling the private keys. He was actually concerned that someone would come and hurt him (to steal them).”
The Feds object
The whole exercise came to a shuddering halt in 2013 when the Financial Crimes Enforcement Network contacted Caldwell to accuse him of operating an illegal money transmitting business, and he was forced to wind it up.
“It put a damper onto the physical Bitcoin thing,” Ahonen said. “That’s where the rise of these buyer funded coins really came from and also other larger companies that actually have money transmitter licenses.”
A raft of different manufacturers, from boutique artisans to big companies, sprang up in its wake, producing not only Bitcoin but also Litecoin, Dogecoin and Ethereum among others. They included bhCoin, Lealana, Microsoul, Nasty Mining, Recalescence Coins, Ravenbit, Alitin Mint, Cryptmint, Titan Bitcoin and Satori Coin. Ahonen detailed the works of 50 different outfits in his 286 page encyclopedia in 2015, and leveraged the contacts he made writing it to produce a new book called Blockland.
Bobby Lee’s BTCC Mint
The BTCC Mint was an offshoot of Lee’s exchange, BTCC and produced some of the most sought after physical Bitcoin until the company changed hands in 2018. Lee designed the coins himself — “I see myself as an artist having created BTCC Bitcoin” — with the first coins released in early 2016.
“The idea was to take advantage of our BTCC Mining Pool, to mine fresh uncirculated coins into the physical Bitcoins. Over the three years we ran the BTCC Mint business, we minted over 8,700 BTC worth of physical Bitcoins.”
Lee and a select group of highly trusted team members inserted the private keys into the coins by hand. He added:
“I handled the private keys with extreme caution, and have properly deleted all private key data, so naturally, there have been no reports of funds lost or stolen from any BTCC Mint products. I’m most proud of that pristine track record.”
This touches upon one counterintuitive aspect of physical Bitcoin — it breaks the crypto commandment of: ‘don’t trust, verify’. Ahonen points out that purchasers need to completely trust the manufacturer and everyone in the production process as it’s impossible to tell if the coin even contains a private key, or if it does, if the manufacturer kept a copy.
“Bitcoin comes from a specific type of philosophy, which is around not your keys, not your Bitcoin. It very much goes against the concept of trusting other people. But with any type of physical Bitcoin, you effectively are trusting the person created to not have the private key. So there is this implicit paradox.”
Symbols of wealth
While BTCC Mint coins featured a Bitcoin logo and the slogan “In Crypto We Trust”, other coins featured artwork that attempted to capture the philosophy behind cryptocurrency. “I would say that with some there’s a very stark, very clear symbolism, which is very philosophical,” explains Ahonen. “With others, it will clearly be something more difficult to decipher and may be personal to the creator.”
There are plenty of circuit boards, bulls and rockets going to the moon, as well as mining pools, Greco Roman warriors, Buddhist imagery, famous figures like Adam Smith and Satoshi Nakamato and historic events like the collapse of Mt Gox and Bitcoin Pizza. “For me personally, the most striking had a burning bank that was on fire,” Ahonen said: “And the bankers were kind of crying on the steps as people were pulling down the pillars of the bank using chains which obviously represent blockchain.”
Not just keepsakes
Apart from collecting, there are a couple of real world uses for physical Bitcoin too. One is for inheritance planning. “Several of my buyers actually have been looking for physical Bitcoin because they want to put them in a safe deposit box for the purposes of inheritance,” he said: “They have got 100 individual coins, and will split them up with the kids evenly – which is much harder if you have exchange accounts or (have BTC) on wallets or USB sticks.”
Physical coins are also the ultimate privacy coins as there’s nothing to associate the owner with an address and they can be traded a million times without ever leaving a record on the blockchain. Theoretically of course, this would make physical Bitcoin a very attractive way to launder money or pay for drug deals, hence the interest from the U.S authorities.
“I don’t know of anyone specifically using it that way,” Ahonen said carefully. “But you could very easily imagine someone using that way, it’s extremely plausible.” He went on to add: “It’s the same as having gold coins. You can hide them, you can do anything with them. No one can really track them.”
Where did all the manufacturers go?
Sadly, physical Bitcoin’s best days appear to be behind it, with one of the last commercial scale manufacturers, Denarium, closing down in July 2020 after producing more than 15,000 coins. Lee believes that increasing regulations and the sky high Bitcoin price have made the logistics more difficult.
“You can’t sell physical Bitcoins in the U.S. due to regulations and as Bitcoin gets very expensive, it’s very cumbersome to ship in the mail,” he said. “There’s lots of inherent risks, insurance needs and so on.”
Ahonen added that there are still numerous hobbyists doing it as a labor of love or as a side project: “It’s a niche thing, but they do exist.”
Lee’s Ballet Wallet is probably the closest living relative — it’s a metal card with a QR code address and a scratch off wallet passphrase. Able to be used by complete noobs with zero technical knowledge, the wallets support 50 cryptocurrencies and more than $28 million worth of cryptocurrency is currently held on them.
“The inspiration for Ballet came in large part from how much customers loved the simple design of the BTCC Mint physical bitcoins,” he said. Lee designed it to appeal to our different senses, you can feel the design as it’s in relief and there’s a real heft to it as opposed to a plastic credit card.
“You can also hear it. I mean literally if you tap on the table that’s the sound of Bitcoin. And we have a surprise feature where if you actually scratch the QR code you can smell it.”
He scratches it off an empty wallet and holds it up to my nose. It smells like perfume. But don’t bother licking it though, as Lee didn’t come up with anything for taste.
Bank on the future
While the heyday of physical cryptocurrency appears to have passed for now, what about the future? Is there any chance that after Bitcoin becomes the world’s reserve asset that we’ll see 100 Satoshi notes being used for everyday purchases?
Lee thinks this isn’t likely, due to the need for trust:“So that’s why it’s not very feasible to have real Bitcoin embedded in physical form and go for 100 satoshi (coins) circulating in the real world. I think physical Bitcoin will remain in the art, limited edition … collector’s world, just like gold coins.”
But Ahonen sees a future for physical Bitcoin outside of art and collecting: “I do believe that there’s a future for physical Bitcoins simply because they’re such a simple way to hold and verify through the use of an intermediary.” He added:
“I mean, grandma can buy it and put it in her safe deposit box. It’s not necessarily as feasible to do that with a USB stick with whatever program that gets outdated. It’s fairly future proof and fairly idiot proof. And I could see banks, or some sort of institutions creating some sort of physical Bitcoins in the future.”
Bitcoin’s rollercoaster ride, Ether shines, XRP mystery: Hodler’s Digest, Jan. 3–9
Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
Brace for impact? After hitting $42,000, Bitcoin price volatility may rise
Another week, another spate of all-time highs. Bitcoin managed to crack $42,000 on Friday, surging by 9% in just three hours.
A sharp correction soon followed, with prices tumbling by 7% in the following eight hours. This may seem rather tame in percentage terms — but that’s a drop of almost $3,000.
Whales have been selling en masse since the start of 2021 and taking a profit on their positions. They’re currently locked in a battle with new buyers in the U.S. who are aggressively accumulating BTC. Key metrics to observe right now include Bitcoin outflows from Coinbase and stablecoin inflows into major exchanges.
Raoul Pal has warned that a “New Year Head Fake” could cause a nasty correction in the BTC and gold markets. It’s unclear whether this would be as brutal as the flash crash last March, but it’s worth noting BTC is overbought on weekly and monthly charts.
Long term, JPMorgan Chase believes that BTC could hit $146,000 by crowding out gold, however, it warned a short-term surge to between $50,000 and $100,000 will prove “unsustainable” this year.
At the time of writing, BTC’s market cap has vaulted beyond Facebook, Tencent and Alibaba, and it has come close to overtaking Tesla. The jaw-dropping rally has helped the total market cap of all cryptocurrencies exceed $1 trillion for the very first time.
ETH en route to overtake its 2018 all-time high
Bullish fervor surrounding Ether intensified this week, with the world’s second-largest cryptocurrency breaking above $1,200 for the first time in three years.
The gains were largely driven by a confluence of fundamental factors, including Bitcoin’s parabolic rally, the anticipation of ETH futures contracts and a surging DeFi sector.
Year-to-date, ETH has surged by a staggering 66.5%, continuing last year’s theme, where it handsomely outperformed BTC.
Google searches for “Ethereum” have now hit an all-time high, prompting some optimistic pundits to suggest that ETH could smash its previous record of $1,432.88 between Jan. 10 and 16.
So… what would be the key levels to watch if ETH is propelled into uncharted territory? Cointelegraph Markets analyst Michaël van de Poppe says the Fibonacci extension finds potential top structures at $1,800 and $2,700–$2,800. However, he cautioned investors and traders to expect a potential correction soon, as nothing goes up in a straight line.
XRP price soars 55% to “crucial” level, despite legal problems at Ripple persisting
One of the most head-scratching developments in the crypto markets this week saw XRP abruptly come back from the dead.
Having lost a substantial amount of its value due to legal issues at Ripple, a curious renaissance occurred for the embattled No. 4 cryptocurrency — with prices rising from $0.23 to $0.35 in a single day.
Michaël van de Poppe has said $0.35 represents the make-or-break level for bulls to hold in order to continue their gains, which come despite no real movement in legal proceedings.
In other news this week, crypto exchange Uphold said that it won’t delist XRP until the lawsuit filed by the U.S. Securities and Exchange Commission is resolved — and urged rival platforms to avoid “rushing to judgment ahead of the court’s decision.” Meanwhile, Revolut warned its users to “constantly reassess” their crypto holdings, including XRP.
Ripple CEO Brad Garlinghouse also broke his silence to answer five key questions about the SEC lawsuit. Slamming the “regulatory chaos” in the U.S., he revealed that the company has tried to reach a settlement with the SEC and said new attempts will be made once Joe Biden is in power. He also warned that the legal process can be slow.
Can Coinbase keep up with the crypto rally?
Coinbase has been under the microscope this week, not least because the U.S. crypto exchange is known for experiencing serious connectivity issues during periods of peak trading activity.
The disruption has occasionally prevented traders from taking advantage of price gains and dips — robbing them of profit-taking and reentry opportunities.
Coinbase is not the only major exchange to suffer issues during price rallies. Binance also routinely goes offline when BTC clocks up big gains. Commenting on the problem back in December 2020, Binance CEO Changpeng Zhao remarked that a 5% BTC surge is often accompanied by a 30x increase in trading volumes.
On Jan. 7, it was announced that Coinbase has acquired the Routefire platform for enhanced trade execution — a move that could go some way to restoring confidence.
Morgan Stanley now holds 10% stake in Michael Saylor’s MicroStrategy
MicroStrategy’s massive push into Bitcoin is paying off, with the firm securing a huge investment from Morgan Stanley. The bank has acquired 792,627 shares in the crypto-friendly company, representing a stake of 10.9%.
The purchase apparently happened on Dec. 31. MicroStrategy shares have had a colossal month — with shares moving from $289 on Dec. 8 to $531 by Jan. 8.
MicroStrategy has made Bitcoin its primary reserve asset and has made a concerted effort to raise funds so it can buy even more. As of Dec. 21, the company had stockpiled 70,470 BTC, with a staggering valuation of $2.9 billion.
Institutional investors like Morgan Stanley have warmed up to crypto assets considerably over the past year. Many have attributed Bitcoin’s recent bull market to renewed interest.
Winners and Losers
At the end of the week, Bitcoin is at $40,599.80, Ether at $1,220.34 and XRP at $0.32. The total market cap is at $1,077,848,908,371.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are IOST, Bitcoin SV and Avalanche. The top three altcoin losers of the week are Enjin Coin, Solana and Nano.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“The next correction is absolutely going to be painful for all the #FOMO buyers.”
Michaël van de Poppe, Cointelegraph Markets analyst
“A lot of that [stimulus] will find its way into the markets. Certainly, when it comes into young people’s hands, they’re going right to their Robinhood accounts. One of the most unique things last time was seeing how many people bought Bitcoin with the exact amount of stimulus. Boom, boom.”
Mike Novogratz, Galaxy Digital CEO
“While the narrative is institutional money, this phase, IMO, it’s really institutions have given Bitcoin validation, and now we have family offices serving the wealthy rushing in needing exposure. There’s a lot of requests for $1m+ buys happening.”
Willy Woo, statistician
“FYI, Coinbase outflow on Jan 2 was an all-time high. It seems institutions bought $BTC when the price above 30k. $BTC bull market isn’t over.”
Ki Young Ju, CryptoQuant CEO
“A #bitcoin now buys you a Tesla. So, when will you accept it, @elonmusk?”
“Would be a shame to buy Model 3 now, when you can buy a Roadster for 1 BTC later this year.”
Juri Bulovic, Fidelity director of Bitcoin mining
“I was wondering what to do for the rent, for a week now. And just remembered I had over 14000 Moons here in r/Cryptocurrency. Sold them and made my rent. It was like a stone lifted out of my chest. Not able to find the right word for this feeling.”
Satoshinakamoto7, Reddit user
“A crowding out of gold as an ‘alternative’ currency implies big upside for Bitcoin over the long term.”
“It’s important that you constantly reassess your crypto holdings, specifically XRP, and whether you remain comfortable with the associated risks.”
“#Ethereum gas fees soaring again, basically making #defi unusable.”
Lark Davis, YouTuber
“On the 1st business day of 2021, #Bitcoin takes its rightful place atop the Financial Times.”
Michael Saylor, MicroStrategy CEO
“A vital part of the SEC’s remit is the protection of consumers. It is hard to see how a judgment rendering XRP essentially worthless and inflicting billions of dollars of losses on retail investors who purchased XRP in good faith would square with that remit.”
“Where maybe we thought maybe $50,000 made sense, this number is definitely going to be a little bit higher than that in my opinion. I think we’re going towards $75,000 to $100,000 for Bitcoin by the end of 2021.”
Catherine Coley, Binance US CEO
“The number of unique Twitter accounts tweeting about #Bitcoin has just hit an all-time high of 66,832, surpassing the previous high of 64,652 set on 12/27/2017.”
Prediction of the Week
Mike Novogratz predicts young people will buy Bitcoin with their stimulus checks
Joe Biden has said he is working on a multi-trillion-dollar package that will deliver $2,000 stimulus checks to U.S. citizens, helping them to weather the economic repercussions of COVID-19.
And according to Mike Novogratz, such measures could be further good news for the markets. He said: “When it comes into young people’s hands, they’re going right to their Robinhood accounts. One of the most unique things last time was seeing how many people bought Bitcoin with the exact amount of stimulus. Boom, boom.”
The Galaxy Digital CEO argued that there’s still plenty of “speculative excess” on Wall Street, pointing to Tesla’s dramatic surge as an example.
However, Novogratz says that the disconnect between the markets and the economy is likely to spell trouble at some point. In his interview with CNBC, he added: “You’ve got to watch for the cracks. One day we’ll wake up, and markets will be reversing, and then they’ll reverse hard. I just don’t know when that is.”
FUD of the Week
Rapper Hiiikey confirms YouTube channel hack, fake crypto giveaway steals $70,000
A YouTube page belonging to U.S. rapper Hiiikey was hacked this week and taken over by fraudsters promoting a fake Bitcoin and Ether giveaway.
Hiiikey, whose real name is Keyshawn Butler, has 249,000 subscribers on the video-sharing site. His page was rebranded as “[Ethereum FUND]” and a livestream featuring an old video of Ethereum co-founder Vitalik Buterin was launched.
At one point, the livestream had more than 56,000 viewers, and the hackers received at least 39.1 ETH, which was worth almost $50,000 at the time of writing.
Worryingly, the fraudulent livestream was active for several hours before being taken down.
Bitcoiner loses almost $100,000 of BTC in wallet transfer bungle
A crypto enthusiast has issued a warning to “overconfident” hodlers after losing the password to their wallet by not acting cautiously enough.
Reddit user Onnar said they had lost access to 2.6 BTC while attempting to transfer a wallet to a new computer purchased over the holidays. The user claimed they formatted the drive of their old system without double-checking whether the password manager still contained the password needed to access the private keys.
Onnar wrote: “I’ve spent the past week and a half going through all my remaining disk files and notes, the password is nowhere to be found.”
Many Reddit users were sympathetic to Onnar’s plight, and some stepped up with advice to avoid similar accidents in the future.
“The standard now is to use a hardware wallet and write down the seed on paper plus on a metal plate. The standard is not to encrypt your seed words in a computer file for very good reasons,” one wrote.
Trump bans Chinese payment apps, including Alipay and WeChat Pay
With less than two weeks left in office, President Donald Trump has sent out a new executive order targeting Chinese payment apps
The order bars United States citizens or people located in the U.S. from using nine apps — including Alipay and WeChat Pay.
The executive order takes effect in 45 days, by which time Trump will already have been out of office. Given that his earlier order to get ByteDance to divest from TikTok was stonewalled in court while he was still in office, there’s not a ton of reason to believe that Trump will get his way here.
Biden’s transition team had not responded to Cointelegraph’s request for comment as to whether the new administration plans to see Trump’s order through.
The focus on payment apps is particularly significant. Recent moves from the U.S. national security apparatus have definitely indicated concern over China’s payments systems, particularly its upcoming central bank digital currency.
Many in crypto, as well as the broader tech industry, have warned of a cold war in technology between China and the U.S., including Facebook’s Mark Zuckerberg and several leaders of Ripple Labs.
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