Apple Should Buy Bitcoin, Launch Crypto Exchange, Says RBC

In brief

  • Investment bank RBC Capital Markets believes Apple should buy Bitcoin and launch a crypto exchange.
  • The remarks come following Tesla’s $1.5 billion Bitcoin purchase earlier today.
  • RBC suggests that getting into crypto would be less risky than Apple’s rumored electric car project.

Apple is one of the most valuable companies in the world thanks to the success of its iPhones, Mac computers, and software products. Long-simmering rumors about its work on an electric car project have heated up again recently, but at least one bank believes the company turn its attention to something else: Bitcoin.

RBC Capital Markets, an investment bank which is part of the Royal Bank of Canada, told clients in a note today that it believes Apple is poised to take advantage of rising interest in cryptocurrency. RBC suggests that the tech giant should build a crypto exchange within its existing Wallet service for the iPhone, and that getting into crypto would be less risky and costly than making electric cars.

”The wallet initiative appears to be a clear multi-billion dollar opportunity for the firm (potential for well over $40 billion in annual revenue with limited R&D),” wrote RBC analyst Mitch Steves, according to Bloomberg.

Additionally, Steves suggests that Apple should purchase and hold Bitcoin or other cryptocurrency as a reserve asset, much like electric car maker Tesla announced today. Tesla purchased $1.5 billion of Bitcoin, following the example of business intelligence firm MicroStrategy, which bought $250 million in August 2020 and continued adding more over the past six months.

According to Steves, the gains realized from Apple investing just four to five days of cash flow, roughly $1 billion, would essentially cover the costs of the company developing its “crypto wallet/exchange.”

“This would send even more users to ‘Apple Exchange,’” Steves wrote, suggesting that it would also boost the price of Bitcoin in the process. Following this morning’s Tesla announcement, Bitcoin’s price jumped approximately $5,000 today to set a new all-time high of $44,127, according to CoinGecko.

MicroStrategy has seen enormous impact from its unconventional decision to buy large amounts of Bitcoin as a reserve asset. As explored in another article today, MicroStrategy has spent just $1.145 billion on its Bitcoin holdings since August 2020, and it’s now worth more than $3 billion. Furthermore, the firm’s stock price has skyrocketed some 667% percent since the firm first announced its Bitcoin strategy.

MicroStrategy CEO Michael Saylor believes that an “avalanche of companies” will follow its model, and Tesla validated the idea in a big way today. Could Apple really be one of the next companies to follow suit?

Apple has given no public indication of crypto interest to date, but at least RBC believes it could be mutually beneficial for both the tech giant and Bitcoin alike.


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


Tagged : / / /

Market Wrap: The ‘Elon Effect’ Blasts Bitcoin to $44.8K While Ether Moons

Bitcoin’s price is getting closer to Mars thanks to Elon Musk while ether moons to a new record. Investors are pulling BTC out of DeFi, likely to diversify their profits.

  • Bitcoin (BTC) trading around $44,023 as of 21:00 UTC (4 p.m. ET). Climbing 14.5% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $38,051-$44,801 (CoinDesk 20)
  • BTC well above the 10-hour and the 50-hour moving average on the hourly chart, a bullish signal for market technicians.

Bitcoin trading on Bitstamp since Feb 5.

Source: TradingView

Bitcoin’s price hit a record-high price Monday, soaring to $44,801 at around 13:00 UTC (8 a.m. ET). It’s one month to the day since hitting the previous record of $41,375, according to CoinDesk 20 data.

Bitcoin’s historical price the past month.

Source: CoinDesk 20

One catalyst for the price run-up: Entrepreneur Elon Musk’s Tesla (TSLA) plowed $1.5 billion into the cryptocurrency. The company also said it would accept bitcoin for goods and services rendered. 

Read More: Tesla Invests $1.5B in Bitcoin, Plans to Accept Crypto Payments

“All bets are off the table now. I was worried that [at] around $35,000-$40,000 we were not seeing a huge amount of institutional flows, and over the weekend the market moved higher in a fairly weak fashion,” noted Chris Thomas, head of digital assets for. Swissquote Bank. “But Tesla would have bought over the last few weeks, a little every day.”

Since the start of 2021, bitcoin spot exchange volumes by eight major exchanges tracked by the CoinDesk 20 have been higher than its six-month average. 

This year so far, average trading on these exchanges has been $4.4 billion per day; going back to Aug. 8, 2020, the daily average has been $1.7 billion. As of press time Monday, volume is also higher than that 2021 average, at over $6.7 billion.

Major spot bitcoin volumes by exchange the past six months.
(Shuai Hao)

Source: CoinDesk Research

“Bitcoin is at new highs today in ‘frenzied’ buying, clearing minor resistance from January,” said Katie Stockton, a technical analyst at Fairlead Strategies. Stockton also noted bitcoin has lost steam since its Musk-motivated rally, at $44,023 as of press time. “Signs of exhaustion are associated with today’s steep rally from an overbought/oversold perspective,” she said.

However, the trend remains bullish, Stockton added. “Despite the potential for additional short-term volatility, the long-term uptrend appears healthy behind bitcoin from a momentum perspective.“ 

While some may be skittish about bitcoin’s rise in 30-day volatility over the past three months, other types of traders are certainly enthusiastic about it.

30-day bitcoin volatility over the past three months.
(Shuai Hao)

Source: CoinDesk Research

“Tesla buying bitcoin was a mostly predictable move, given the vocal support it has seen from CEO Elon Musk,” said Guy Hirsch, U.S. managing director at eToro.

Read More: Ex-OCC Chief Brooks Calls Tesla’s Bitcoin Buy a Bit ‘Scary’ for Rest of World

“If more companies begin making similar announcements, $50,000 could potentially be within reach during the next few months,” Hirsch added. 

“We think we’re only just scratching the surface when it comes to corporate and institutional participation in the world of bitcoin and cryptocurrencies,” Joel Kruger, cryptocurrency strategist at LMAX Digital, told CoinDesk. “We suspect that moves from visionaries like Tesla will only serve to reinforce the tremendous value proposition that decentralized assets have to offer.”

Ether at new high as BTC investors pull out of Ethereum protocol

Meanwhile, ether (ETH) is also hitting records and the asset’s correlation with bitcoin has cropped back up to levels not seen since December. 

Bitcoin and ether 90-day correlation the past six months.
(Shuai Hao/CoinDesk Research)

Source: CoinDesk indexes

The second-largest cryptocurrency by market capitalization was up Monday trading around $1,720 and climbing 8.5% in 24 hours as of 21:00 UTC (4:00 p.m. ET). The price hit a fresh all-time high Monday, hitting $1,776, according to CoinDesk 20 data. 

Read More: Ethereum Futures Are Now Trading on CME

The amount of bitcoin held in Ethereum-based decentralized finance, or DeFi, has dropped almost 3.5% Monday, going from over 50,000 to 48,344 BTC as of press time, according to data aggregator DeFi Pulse.

Bitcoin locked in decentralized finance the past three months.

Source: DeFi Pulse

Swissquote’s Thomas notes that Monday may be a day for larger players to start moving some bitcoin around because a fresh bitcoin price high might induce some investors to diversify their profits. 

“Larger hedge funds, etc., [that] had got into bitcoin between $15,000-$20,000 would naturally want to take profits around $45,000-$50,000″ for a profit of 2.5-3x. “I’ve always viewed that as a hard challenge,” Thomas told CoinDesk.

Other markets

Digital assets on the CoinDesk 20 are all in the green Monday. Notable winners as of 21:00 UTC (4:00 p.m. ET):


  • Oil was up 1.9%. Price per barrel of West Texas Intermediate crude: $58.03.
  • Gold was in the green 0.95% and at $1,830 as of press time.
  • Silver is gaining, up 1.9% and changing hands at $27.32.


  • The 10-year U.S. Treasury bond yield climbed Monday to 1.169 and in the green 0.15%.

The CoinDesk 20: The Assets That Matter Most to the Market



Tagged : / / / / / / / / / / /

Asset DNA: Explaining Bitcoin’s Speculative Attack On The Dollar

Performance Of Various Asset Types Over Time

Not all assets are created equal. Some appreciate in value, some lose value over time. This is obvious with things we consume, like the groceries we eat or the clothes we wear. But the same is true of assets that don’t visibly deplete but nevertheless lose value over time through wear and tear, like a car accumulating miles or a building without active maintenance.  

Less obvious is how assets that are not depleted by consumption or depreciated through use also vary in their performance over time. Traditionally scarce assets like gold or land do a good job of maintaining their value and growing in relatively fixed proportions to the global economy. Ownership shares in successful companies typically generate additional yield by putting scarce capital to work.  

Ultimately, it’s about the DNA of the asset: its inherent properties dictate how the value of the asset will trend over time. If we put all of these different asset types into one image that characterizes their respective natures, it would look something like this:

Fiat Currency: Decay By Design

This high-level image is missing something: modern currencies. Gold was currency until not too long ago, only losing its link to paper currencies in 1971. Since 1971, we have been in a truly anomalous era of human history — a 50-year departure from the 75,000 years of documented use of hard money. For the first time ever, we are engaged in a monetary experiment where money is fiat currency, currency by decree alone — no asset-backing whatsoever.  

Of greatest relevance to our focus, however, is the guiding principle at the heart of fiat currency: decay by design. Central bankers and governments believe it is best for the economy that you spend or invest your money, rather than store your earnings as savings, and they have designed the currency to lose 2 percent of its value per year in order to impose that assumption.    

As Paul Tudor Jones phrased it, “If you own cash in the world today, you know your central bank has an avowed goal of depreciating its value 2 percent per year.” Quite simply, this math means that the dollar’s value is designed to exponentially decay over time as a result of monetary inflation:

If we take this exponential decay trend and fit it into our logarithmic view of the various asset classes, we get something like this:

Bitcoin: The Only Thing They’re Making Less Of

The newest entrant into the set of global money competitors is bitcoin. Bitcoin’s performance over time is not linked with either global economic production or with a policy goal of losing 2 percent of value every year. 

Instead, bitcoin’s performance is linked to increasing scarcity, which is to say that its design is predicated on a simple mathematical concept of decreasing issuance over time. To borrow the common simplification of what gives land its value (“it’s the only thing they’re not making any more of”), we can say about bitcoin: “It’s the only thing they’re making less and less of.”

You might think that it’s better to own something that they’re not making any more of, rather than something that they’re making less and less of. And indeed, it would not be inaccurate to say that land is a larger store-of-value asset than bitcoin today because they are making less of it than they are of bitcoin. But, what matters more to individuals than what is the largest asset today, is how the assets they hold will perform over time — to borrow Tudor Jones’ words again, an investor’s goal is to be on the fastest horse.

When a great painter dies, the value of their existing work tends to shoot upwards. Why? Because investors are guaranteed that the painter will be producing less work. There will be no more newly-added supply at all. As such, all market demand must bid for existing supply, and everyone knows it, creating willingness to pay to increase for a slice of the newly scarce body of work.  

At its core, this is the concrete economic advantage of bitcoin. No other asset in history has leveraged math to deliver a credible guarantee of steadily reducing supply into the future. The simple reality of this is that bitcoin’s design gives it the scarcity of gold today, with the added rocket fuel of increasing scarcity that a famous painter’s death lends to their life’s work. Except the supply shock happens every four years, so there’s even stronger incentive for holders to keep holding through each successive Halving.

In short, increasing scarcity causes bitcoin’s value to go up exponentially over time. When we view bitcoin’s price history in linear terms, the trend is so dramatic that it’s hard to make sense of:

By viewing this same data in logarithmic terms, and tracking how price seems to jump upwards following each Bitcoin Halving event, Plan B was able to come up with his compelling stock-to-flow model. This model suggests that the Halvings themselves (and the increase in scarcity that they cause by definition) are at the heart of Bitcoin’s exponential rise to date, and ostensibly into the future:

When we reduce the red line above into a simplified version for our big picture of asset types, we get something like this:

Speculative Attack: Harnessing Currencies’ Diverging Nature

The two types of modern currencies we’ve now looked at have very different DNA. The first, fiat currency, is designed to exponentially decay in purchasing power over time. The second, bitcoin, is designed to exponentially appreciate in purchasing power over time.

This ultra-simplified representation of the nature of the U.S. dollar and bitcoin also contains the implications of a world-changing economic reality.

In 2014, Pierre Rochard penned “Speculative Attack”, in which he outlined how the diverging nature of the value of dollars and the value of bitcoin over time creates fertile ground for bold individuals to borrow dollars in order to buy bitcoin, and repay that debt in the future:

Importantly, this is not a recommendation or a guarantee that the mechanics above will play out accordingly. However, if the logic in the earlier sections of this piece is sound and the economic realities that underpin bitcoin and the dollar deterministically set them on diverging paths into the future, the option is there.  

Indeed, that’s what MicroStrategy has already acted on. In December 2020, having already deployed the public company’s entire treasury into bitcoin, MicroStrategy issued $650 million in convertible debt in order to purchase more bitcoin. In an environment with dramatic dollar printing and investors desperate for any kind of yield, the terms of the deal were attractive to lenders and MicroStrategy quickly secured the debt and deployed the funds, buying 29,646 Bitcoin at an average price of $21,925 per bitcoin. One month later, MicroStrategy is up more than 50 percent on its “speculative attack.”

If the mechanics described here are accurate, more individuals and entities will leverage the opportunity contained therein — not as a gamble, but as an informed strategic move to leverage the fundamentally different designs of the two currencies.

The entire world faces a massive economic incentive to borrow dollars, buy bitcoin and settle the debt when a sufficient amount of time has passed that the value of the bitcoin holdings and borrowed dollars have meaningfully diverged. Acting on this comes with considerable risk, and requires that an individual or entity is prepared to service the debt they take on, either for the years before the purchasing power divergence manifests, or in the event of unexpected total disaster (e.g., losing keys). That said, if the representation of reality in this article is correct, the highest and best use of a dollar of debt may simply be to buy bitcoin. Any more individuals and entities will leverage this asymmetry for personal gain into the future.  

The logical conclusion of this trend is that eventually, nobody will be willing to lend dollars when they can just buy bitcoin with those dollars themselves. And once the world has reached that level of understanding of bitcoin, it’s game over — fiat currencies simply cannot withstand the economic reality that bitcoin imposes upon them.  

Bitcoin will continue appreciating while fiat currencies will continue decaying. It’s in their DNA.

This is a guest post by Croesus. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.


Tagged : / / / /

Wall Street Shifts Focus from Blockchain Infrastructure to Crypto Assets

News that Goldman Sachs, JPMorgan and Citi are considering entering the crypto custody market likely surprised many who haven’t followed the blockchain tech or digital asset moves of major U.S. financial institutions over the last half-decade. However, analysis based on publicly available blockchain initiatives data clearly shows that many institutions – some more than others – are slowly de-prioritizing blockchain tech and shifting their focus to native crypto assets.

To assess how institutions are adapting to blockchain technology, we surveyed their initiative announcements. We looked at credible media, such as CoinDesk and the Financial Times, and defined an initiative as a reported “investment, internal or external-facing company project, or consortium participation event primarily involving the company.”

Guido Molinari is the managing partner at Prysm Group, an economic advisory focused on the implementation of emerging technologies. He is a member of the Economic Advisory Committee at the Algorand Foundation.

We can see a clear shift. In 2015 and 2016, financial institutions tended to have a technology-first focused strategy. They were founding members of consortia like R3 and the development of the Corda protocol. More recently, as you can see in our matrix, leaders in the space have shifted away from this earlier positioning to focus their efforts more towards digital assets (at least in terms of the number of total initiatives).

The shifting focus is marked. Up until 2018, blockchain and distributed ledger technology (DLT) dominated the hype pushed by major consortia formations, which also came at the time where blockchain-without-crypto startups raised financing in the tens of millions of dollars from major financial institutions. The landscape has since changed significantly.

Goldman Sachs exemplifies the change. Whether through investments, exploring the launch of its own digital token or the previously mentioned entry into custody, the bank has shifted from technology to a balanced and diverse approach across technology and assets, which, per our graph, place them in the lead, ahead of the rest of the market.

See also: Guido Molinari – Enterprise Blockchain Is at a Private-Public Crossroads

JPMorgan, which for years had led a strong technology-first approach with its development of Quorum and its long-held bearish public voice on digital assets, has begun to reverse course. From 2018 to 2020 on the graph above, we can see JPM trending upwards to become more asset-focused. In part, this has been driven by JPM divesting itself of Quorum to ConsenSys and a change of tone in its position on bitcoin.

In 2020, Fidelity saw a great acceleration of its asset-focused strategy launching an “incredibly successful” bitcoin custody business and continuing to invest in various crypto-related startups. Its competitors, such as Schwab, are also entering the market and taking positions in crypto mining stocks. Meanwhile, the largest asset manager of them all, BlackRock, recently signaled that it will soon be “getting into the bitcoin game.”

Source: Prysm Group

Looking at the middle of the lower-left quadrant, we see that in 2016 Citi took an early lead, participating in more initiatives than any other major U.S. financial institution. This continued into 2018 as Citi added more initiatives and moved horizontally to the right on the graph while remaining focused on technology.

However, perhaps due to limited success in those initiatives, the bank has slowed its earlier blockchain and crypto exploration. Since 2018, apart from a digital asset initiative related to central bank digital currencies (CBDC), it has been associated with few new development in the institutional space. 

Other financial institutions such as Morgan Stanley, Bank of America and Wells Fargo are clear followers, lagging in the shift from technology-centric to assets-centric. Morgan Stanley’s recent announcement that it has boosted its stake in MicroStrategy may be an early indication these firms are starting to catch on to the ways of their competition.

Towards the lower-right quadrant of this graph, this shift has hit the industry like a tsunami. As we have written before, this is far from an isolated phenomenon. 

See also: Michael Casey – Money Reimagined: Enterprise Blockchain Isn’t Dead

Enterprise efforts focused on the underlying technology of blockchain have, by and large, fallen short of expectations. Having said that, there are still firms at various levels of progress that remain staunchly focused on the technology side of the industry. R3, which was previously in a precarious situation, saw a major boost in its financial standing from the Ripple settlement. Digital Assets raised $150 million, but prominent executives departed and general doubts have been raised about its initiatives. Axoni has been the one getting the most initial traction.

Enterprise efforts focused on the underlying technology of blockchain have, by and large, fallen short of expectations.

Recent developments among major financial institution-driven consortia are further evidence that technology-first plays are fading. Over the last 12 months, few have announced additional members. Türk Reasürans joined B3i, but the leading insurance blockchain network still counts just 21 shareholders with only five of the top 25 insurers and just seven of the top 50 reinsurers.

Even Fnality, the leading network of distributed financial market infrastructures, hasn’t announced a new member since September 2019. The largest global blockchain network convener, IBM, has found limited success in the financial services space and, at times, its initiatives have been found to not even require blockchain at all.

What have banking executives said publicly in recent months relating to blockchain consortia or DLT? Hardly anything. On the assets side, however, we have very promising signals such as Goldman’s new head of Digital Assets who envisions “a future in which all of the world’s financial assets reside on electronic ledgers.”

See also: IBM Blockchain Is a Shell of Its Former Self After Revenue Misses, Job Cuts: Sources

Financial institutions may demonstrate to the enterprise world that perhaps blockchain’s greatest value is not in the underlying technology but its native digital assets. Initiatives that find the right mix are challenging to implement, but we believe this exploration may be justified by its high potential reward.

As we have written in the past, enterprise blockchain plays have failed mostly due to challenges related to economic incentives. Given that, it may be time for financial institutions to leave the technology-first approach aside. Instead, future initiatives should focus on identifying the economic value at play, whether that’s in digitizing existing financial assets or existing digital assets such as stablecoins. Those who think asset-first will chart the course towards the fast-approaching native digital economy.

Prysm Group Associate Johnny Antos contributed to this article.



Tagged : / / / /

Armor Finance Denies User $1.6 Million Insurance Claim

Key Takeaways

  • DeFi user Kferretcrypto has accused Armor Finance of denying a $1.6 million insurance claim.
  • The CEO of Armor Finance allegedly made false promises to the user in a private conversation.
  • Armor Finance says the claim is still active.

The DeFi news category was brought to you by Ampleforth, our preferred DeFi partner

Share this article

DeFi insurance service Armor Finance has been accused of backing out of a $1.6 million insurance claim, according to one of its pseudonymous clients.

User Claims He Was Defrauded

Kferretcrypto, who says he was defrauded, attempted to settle an insurance claim concerning a Nexus Mutual investment. The user claims that his purchase, which he originally made for 13 ETH, is “now likely worth a 1000 ETH payout” ($1.6 million) due to a Yearn Finance hack that affected prices.

However, Kferretcrypto does not have direct access to the investment, as he turned it into an arNFT and staked it with Armor Finance to obtain insurance on his purchase.

Kferretcrypto has requested that Armor release his funds, claiming that he should be “free to withdraw and claim the cover as promised.” He also offered $125,000 to help reimburse Armor’s losses.

He claims that Armor initiated the withdrawal but eventually “backtracked” to keep the investment amount for themselves.

Armor Replies to Kferretcrypto

So far, Armor Finance has denied Kferretcrypto’s insurance claim. It says that during the relevant hack, “there was only 1 eligible arNFT that was submitted worth 1000 ETH.”

Armor’s decision-makers maintain that since none of its users incurred a loss in the hack, the claim amount belongs to its treasury. The team will add the 1000 ETH reward to its treasury reserve and acquire lost NXM due to the claim to preserve their stake. The Armor Treasury Reserve will also cover all or part for the 400 ETH claim pending Nexus Mutual’s approval.

Armor Finance has also introduced a new reinsurance scheme providing “coverage for coverage providers” for greater protection. However, according to Armor Finance, the claims are “owned by and owed to Armor,” giving it ultimate control over such matters.

That said, Armor Finance has also indicated that Kferretcrypto’s insurance claim is still active. It also says that conversations between Kferretcrypto and Armor CEO Azeem Ahmed were informal. As such, its stance on the matter might change in the future.

This is not the first controversy related to Anchor Finance. Previously, Ahmed was involved in the early sell-off of SAFE liquidity token, which caused Nexus Mutual to run out of DeFi coverage. 

Disclosure: The author held Bitcoin at the time of publication.

Share this article


Tagged : / / / /

Bitwise files intent with SEC to launch ‘Crypto Innovators ETF’

Bitwise, one of the world’s largest cryptocurrency fund managers, has filed a new prospectus with the United States Securities and Exchange Commission, or SEC, to launch an exchange-traded fund for so-called “crypto innovators.” 

The fund manager filed Form N-1A with the securities regulator on Feb. 5, where it outlined its intent to offer the Bitwise Crypto Innovators ETF. The proposed ETF will track the performance of the Bitwise Crypto Innovators Index.

The proposed Index will be comprised primarily of companies that derive more than 75% of their revenue from the crypto sector or that have more than 75% of their net assets held in cryptocurrency. The remainder includes large-cap companies that have a “dedicated business initiative” focused on crypto.

According to the prospectus, crypto innovators include digital trading platforms, custodians and wallets; financial service providers leveraging crypto assets or blockchain technology; financial institutions serving clients involved in the digital asset space; and blockchain infrastructure service providers.

The document states:

“The term “Crypto Innovators” generally refers to companies that service and transact in the segment of the economy dealing with crypto assets and distributed ledger technology.”

Notably, the proposed ETF will not invest in crypto assets directly or through derivatives. The fund will also avoid any dealings with initial coin offerings. 

For years, Bitwise has been at the forefront of the crypto ETF debate. In Jan 2020, the fund manager shelved its long-standing Bitcoin ETF application, following a similar move from VanEck. At the time, Bitwise told Cointelegraph that it plans to re-file the application “at an appropriate time.”

That time could be approaching as more institutions hop on board the Bitcoin bandwagon. The digital asset has been in rally mode for months thanks to a new wave of corporate and institutional buyers. On Monday, Tesla confirmed that it had allocated a large portion of its balance sheet to BTC, becoming perhaps the most high-profile buyer in history.