Day: February 3, 2021

NYSE-listed Chinese Lottery Outfit Expands Bitcoin Mining Investment

by Btcmanager

500.com — a New York Stock Exchange (NYSE)-listed Chinese sports lotto company is expanding its investment outlay in the Bitcoin (BTC) mining arena. The firm is the latest to increase its hardware inventory as the global Bitcoin mining hash race continues to intensify following the halving that occurred back in May 2020.

500.com Acquires More Bitcoin Mining Machines

According to Asia Times, 500.com has announced the procurement of 5,900 Bitcoin mining rigs for 55.2 million yuan (about $8.5 million). The new inventory is expected to be delivered before the end of the Summer.

As part of the purchase, the Chinese sports lotto company agreed to pay a performance bond to the tune of 2,000 yuan (~$310) for the first 5,000 rigs. This payment schedule rolls up to almost 10 million yuan (around $1.5 million) in total.

Apart from the 5,900 rigs, the company also has a planned outlay for 10,000 additional Bitcoin mining machines scheduled for 2021. However, this part of the inventory expansion is subject to product availability.


If 500.com successfully acquires all 15,900 rigs, the company’s Bitcoin mining capacity will grow by about 1,000 petahashes per second.

The Bitcoin mining space is currently facing a shortage of rigs amid the ongoing global chip scarcity. Indeed, crypto miner maker giant Bitmain has seen its products sold out through August with rig prices also rising to significant premiums.

Apart from the Bitcoin mining space, other industries have also been impacted by the global semiconductor shortage. Automobile manufacturers like Ford have been forced to shut down plants as the chip scarcity continues to bite harder.

On the Bitcoin mining scene, Chinese miners are reportedly being squeezed out by the North American counterparts for the few available rigs. Indeed, mining operations in North America have been aggressively acquiring new inventory, expanding their Bitcoin mining presence which could significantly reduce China’s global hash rate dominance.

According to data from the Cambridge Centre for Alternative Finance (CBECI), China still accounts for over 65 percent of the global hash rate distributions. Outside China, the U.S. is the next major Bitcoin mining hub owing to the massive expansion of establishments in the country.

As previously reported by BTCManager, Nasdaq-listed Bit Digital, Inc. swapped 4,000 shares for mining machines back in November 2020. Meanwhile, countries like Iran are seeing significant government involvement in the Bitcoin mining arena as a way of generating revenue amid ongoing economic difficulties.


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Crypto Investment Firm Grayscale Reveals How It Values Ethereum

by Decrypt

In brief

  • Asset manager Grayscale has released a new guide for investors looking to get into Ethereum.

  • It’s similar to Grayscale’s guide to Bitcoin, published last summer.

  • Grayscale manages over $4 billion in Ether (ETH), Ethereum’s native token.

Grayscale, crypto’s most dominant asset manager, has released a new guide for investors looking to get started with Ethereum.

Valuing Ethereum is a paper from Grayscale’s research arm, which puts out reports on different aspects of the broader crypto ecosystem; last summer, Grayscale released a similar guide called Valuing Bitcoin.

The timing makes sense—the crypto market is still buzzing from Ethereum’s breaking through its previous all-time high earlier this week. It’s up 26% over the past seven days, and set a new all-time high of $1,644 about three hours ago.

The paper characterizes the methodology for valuing Ether, Ethereum’s native asset, as “opaque and changing.” It suggests that you can either look at Ether as money; as a kind of commodity intrinsic to the Ethereum network; or as an “interest bearing asset” in the context of Ethereum 2.0, which involves proof-of-stake rewards as opposed to the traditional proof-of-work rewards that incentivize Bitcoin mining.

The firm suggests that the later stages of Ethereum’s 2.0 upgrade, which are still potentially years away, could be a net positive for the value of ETH. “Between the enormous amount of activity on Ethereum, the economic improvements to Ether, and the promise of increased scalability with Ethereum 2.0, there is a lot for the Ethereum community to be excited about,” wrote Grayscale’s research director Phil Bonello. “We can observe from the data that the price of Ether tends to move with underlying activity on the network.”

Grayscale’s most popular investment vehicle remains the Grayscale Bitcoin Trust (GBTC), which works a little like a Bitcoin ETF, with a few crucial differences. Since there are still no true Bitcoin ETFs in the US, Grayscale’s option tends to be seen as the next best thing; it represents over $23.6 billion in Bitcoin, as of today.

Grayscale has seven other single-asset trusts, two of which are in Ethereum and Ethereum Classic, and a diversified large cap fund. The firm has $4.7 billion in Ethereum already, and it’s added even more over the past few days.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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River Financial Launches Mobile App for Boomer Bitcoin Investors

by Decrypt

In brief

  • Upstart crypto exchange River Financial today launched a mobile platform for iOS.

  • It wants to make buying crypto easier for clients aged over 50.

  • River Financial says it’s a conventional bank—but with crypto.

Boomers looking for a way to buy Bitcoin from their mobile phones just got another option. Designed for high-net worth individuals, upstart crypto exchange River Financial today launched a mobile platform for iOS. It aims to make buying crypto easy for older investors. 

River Financial is a company that says it works like a conventional bank—but with crypto. In 2019, the firm raised $6 million in a seed funding round that included investments from Polychain and Castle Island Ventures. It claims to cater to older investors who want the same service as traditional financial institutions.

Its mobile app will be competing with big exchanges that already have popular platforms for phones—Coinbase, Kraken and Binance—but the company said that signing up to it and making purchases will be quicker than competitors. 

River’s Co-Founder & CEO, Alex Leishman, said: “We believe that there is tremendous untapped potential with the mobile form factor and are investing heavily in bringing a high-end mobile experience to our clients.”

“We are excited to push the boundaries of high-tech, high-end financial services with our mobile-first design strategy,” he added. 

The app is only available on iOS and will make use of Apple’s security features—such as face ID—and allow clients to instantly buy Bitcoin without waiting for fiat funding to settle. 

River said that the app was launched because more boomers are using mobile-first products than ever before and many older investors are turning to Bitcoin as an alternative to stocks and bonds. 

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Saylor, MicroStrategy Offer Playbook for Corporate Bitcoin Adoption at Annual Summit

by Coindesk

Michael Saylor, the MicroStrategy CEO-turned-king of bitcoin treasuries, called upon fellow business executives Wednesday to avoid the path of financial “serfdom” at his virtual WORLD.NOW bitcoin-themed conference.

In his solo address, Saylor detailed the cryptocurrency playbook that propelled his three-decade-old data firm to newfound relevance in less than a year.

Largely eschewing the near-mystical rhetoric that has punctuated his public crypto musings since August, Saylor focused on hardline business strategies, procedures and dollar-sense language in a calibrated appeal to corporations.


“There’s a macroeconomic wind blowing – big – it’s gonna impact $400 trillion of capital. That capital is sitting in fiat instruments that are being debased. That capital is going to want to convert into strong money,” said Saylor. 

Saylor’s goal remained the fomenting of monetary revolution. For months now he’s tweet-preached the gospel of a harder, faster, stronger “monetary network,” namely bitcoin, which Saylor became enamored with at the height of COVID-19 shutdowns and a disciple of when fiat printers started going into overdrive. 

While the notoriously brash CEO’s past declamations in support of bitcoin played to retail traders, his sermon at the conference targeted a far larger buy-side force: corporations. MicroStrategy was the first U.S. corporation to invest its dollarized treasury in bitcoin, and now boasting a 71,079 bitcoin reserve, Saylor seemed determined his company won’t be the last.


Accountants, lawyers and company executives joined Saylor’s effort. Their attempts to front-run corporate what-abouters detailed the practical whys and hows of BTC accumulation in, at times, excruciating detail. But even at its most pro-bitcoin moments, lawyers reminded viewers to be wary of OFAC sanctions violations.

MicroStrategy’s show could not be separated from the CEO at its ring master. Saylor’s anchoring hour set the tone for reams of corporate bitcoin programming that followed.

“Every company has to make one of two choices” when faced with a world of belligerent money printing, Saylor said. “You either have to decapitalize, which is kind of like self destruct… or you have to recapitalize with an asset which is going to appreciate faster than the rate of monetary supply expansion. This is where bitcoin comes in.”

And this is where the dollar goes out. In Saylor’s world view, there’s no scenario in which the dollar retains its global reserve status. To the man who shepherded over $1 billion of MicroStrategy’s reserve dollars into bitcoin, that cryptocurrency is the only viable way for companies to survive the coming debasement apocalypse.

Listen: Michael Saylor’s Mission to Get 1,400 Corporations Into Bitcoin 

The shepherd said “fiat derivatives” offer treasuries a false respite from “the road to serfdom.” Bonds, stocks and real estate are just a placeholder for fiat, he said. They will yield increasingly diluted returns so long as that underlying fiat continues to debase. The answer: convert them all to bitcoin.

Saylor offered debt raises, equity issuances and cash flow conversions as alternate balance sheet strategies for establishing a corporate bitcoin trove.


“Every company on earth can do that. Right? Every company has some amount of treasury assets,” Saylor said.

ARK Investment Management projects that if every company in the S&P 500 invested 1% of its assets into bitcoin the crypto’s price would increase $40,000.

Saylor also offered a playbook to companies approaching BTC as a business. He said firms can start by developing bitcoin tools, building bitcoin software, offering bitcoin services providing bitcoin infrastructure – “all of these things will drive revenues and they’ll drive cash flows.”

“If you want to maximize shareholder value, you want to preserve or create shareholder wealth, then you can either work on a balance sheet strategy for bitcoin, or you can work on a P&L strategy for bitcoin,” he said.

MicroStrategy’s corporate deputies followed up Saylor’s talk with a point-by-point of the challenges companies might face in adopting bitcoin. Referring to MicroStrategy’s own path, company President Phong Le and Jeremy Price, the financial planning executive, laid out the stakes and methods of getting one’s company on board.

Read more: Cathie Wood: More Tech Companies Will Adopt Bitcoin Treasury Reserves

For “some it takes minutes, some it takes hours, some it takes days some it takes weeks, usually not months, but when that flip switches, you’ll have a team of advocates who are ready to move forward and really just change how you look at your business strategy,” Price said.


Then it was the legal department’s turn. MicroStrategy’s legal counsel addressed questions in corporate governance, regulatory concerns and policy that underpin every decision in corporate America. The admittedly dry presentation outlined a concrete roadmap to implementation.

Policies to staunch insider-trading shore up the company’s ethical front, they said. For example, MSTR employees are prohibited from front-running company bitcoin buys with allocations of their own.

Le then returned to the stage with two tax experts to walk through bitcoin’s financial implications. 

Together, the back-to-back-to-back-to-back talks offered MicroStrategy’s strongest case yet that its 2020 flirtation with bitcoin is no passing fad. With over $1 billion in bitcoin and and almost assuredly more bets to come, the company is now positioning itself to lead a massive corporate charge.

The conference’s lineup (which also featured panels on the actual business: building data intelligence products) was unabashedly blunt in its goal. Thursday, WORLD.NOW will trot out 10 crypto service providers in a marathon industry roadshow of firms vying for the corporate bitcoin allocations Saylor aims to seed.

“All of the vendors you’ll hear from tomorrow want you as a customer,” Le said.

MicroStrategy’s crew of bitcoin can-doers spent Wednesday publicly outlining the backroom how-to’s of a strategy that’s made Saylor one of the most influential bitcoiners to emerge from corporate America.


“We’re at the beginning of a very very long trend here,” said Saylor. “And so, with that, I have more stuff to say, I don’t have time to say it, but, you know, follow me on Twitter, and stay tuned.”



Disclosure

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Ether Prices Reached A Fresh All-Time High—What’s Next?

by Forbes

Ether surpassed $1,600 today, climbing to a record level as the broader cryptocurrency market pushed higher.

The native token of the Ethereum network rose to as much as $1,651.27 this afternoon, according to CoinDesk data.

By reaching this level, the digital asset had gained more than 1,700% in under a year, increasing from less than $100 in March, additional CoinDesk figures reveal.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

After the cryptocurrency’s impressive rally, several market observers weighed in on where it might go next.

“ETH/USD finally broke above the key psychological level of $1,400 and has been able to maintain its bullish momentum in the past 2 days,” said Kiana Danial, CEO of Invest Diva.

“However, due to its volatile nature and the fact that institutional investors may start taking profit soon, we could see pullbacks again.”

Danial provided more specific information, stating that:

“The current all-time-high level is around $1,650. Based on Fibonacci retracement levels tracing the most recent uptrend that started at the end of December 2020, the key psychological support levels are at $1,400, $1,229, and $1,100 respectively.”

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“The same length Fibonacci calculated the next resistance levels to be at $1,907, $2,092, and $2,233.”

Tim Enneking, managing director of Digital Capital Management, also offered his point of view, stating that:

“$1,600 automatically turns into support, but it won’t be very strong unless it holds for a while (which it probably won’t).”

“There is some serious support just above $1,500 (more specifically, 1520-1540) and again just above 1400 (same levels).”

However, he emphasized that “Resistance above is much tougher to call. On the way up to break $1,600, every $100 was tough and that will almost certainly continue to be the case.”

“$2k will present strong resistance and, once the price hits that level, there will probably be a significant pause for consolidation,” he added.

Edul Patel, cofounder and COO of crypto startup Mudrex, provided another perspective on the cryptocurrency’s price movements.

“Ether has grown rapidly in the last few days and is very likely to hit $2,000,” he predicted, describing that price level as “the big psychological resistance.”

“Before that, we will see it struggle a bit with $1,750 as well,” added Patel.

“On the support side there is strong buying pressure around $1,300,” he noted, emphasizing that “Breaching that will trigger a further nose dive.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.

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PayPal to offer crypto payments for merchants, limited trading on Venmo

by Cointelegraph

After a limited buy/sell/hold crypto trading launch that “exceeded expectations,” PayPal CEO Dan Schulman said on the company’s Q4 earnings call today that the payments giant is ready to double down on cryptocurrencies. 

“We also saw an exceptional response from our crypto launch,” said PayPal CEO Dan Schulman. “[…] The volume of crypto traded on our platform greatly exceeded our expectations.”

Schulman said that crypto would be accepted “as a funding source when [users] shop at any of our 29 million merchants” late first quarter, and that 2021 will feature an “extensive roadmap around crypto, blockchain and digital currencies.”

Schulman added that PayPal is actively working with regulators and central banks “to shape the future of” a post-physical cash world. 

“We are significantly investing in our new crypto, blockchain, and digital currencies unit,” he said.

Analysts expected a 3.87% increase in total accounts to 375 million, as well as $266.8 billion in total payments processed, a 8% increase over Q3; the company beat both expectations with $277 billion processed and 377 million in total accounts. The company also reported $21.45 billion in revenue. 

The company’s Q4 investor update materials likewise promised “digital currencies” as a “key focus area.”

Additionally, the company said that their “Buy, Hold, and Sell Cryptocurrencies” initiative would expand to “Venmo and select international markets” in 2021. The company also noted that users of their crypto services become more active users of PayPal generally after purchasing crypto, logging in twice as often.

Finally, PayPal’s materials echoed Schulman’s statements, saying that a “commerce experience” would launch in 2021 which would provide “cryptocurrency as a funding source to pay at PayPal’s 29 million merchants around the globe.” These integrations would be settled in fiat, and would relieve merchants of conversion fees.

In November, PayPal took a major step towards adoption of digital assets by allowing its U.S. users to purchase crypto directly through the app. Customers based in the United States are limited to trading $20,000 per week. Since that time, crypto trading volume on the platform has reached record highs, peaking at $242 million in transactions on Jan. 11.

The platform also announced plans for customers to use cryptocurrencies to shop at any of the 26 million merchants in its network starting in 2021, a goal reaffirmed during the firm’s Q3 2020 earnings call. At that time, PayPal execs indicated central bank digital currencies were “a matter of when and how they’re done, and not if.”