According to recent research conducted by Nickel Digital Asset Management, nearly 75% of institutional investors and wealth managers stated that the security of virtual currencies is a “significant” hurdle stopping many individuals from entering the crypto space.
Low Confidence among Institutional Investors
The UK-based investment manager – Nickel Digital Asset Management – asked 100 global institutional investors and wealth managers to determine their biggest concerns related to crypto. The research included participants from well-developed economies such as the USA, the UK, the UAE, France, and Germany, who collectively own $275 billion in AUM.
The vast majority of them, with 76%, responded that concerns about the security of custodial services are the main factor that stops investors from jumping on the crypto bandwagon. Anatoly Crachilov – co-founder and CEO of Nickel Digital – noted:
“Whilst many forward-looking institutional investors are increasing their exposure to digital assets, our findings show that concerns around security and custody of these assets remain a top concern for many other allocators.”
A relatively smaller percentage of the respondents cited the regulatory environment for the crypto market as a major issue, while others opined that the lack of transparency and the volatile nature of the digital assets are significant obstacles.
Despite the negative statistics, Crachilov reminded that many large institutions had entered the space recently, which should lead to an increased level of security:
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“We are now seeing Fidelity, BNY Mellon, and State Street entering the market, thus further reinforcing market infrastructure. All of this increases the confidence levels in the sector and lead to ever-growing allocations to this fast-developing asset class.”
High Hopes on Crypto on The Previous Survey
Earlier this month, Nickel Digital Asset Management conducted similar research, but that time the company asked if the institutional investors expect to increase their crypto exposure. The participants were again from the same countries as the aforementioned survey.
Per the results, 82% of the respondents who have already invested in digital assets will expand their crypto exposure between now and 2023. Asked whether they expect to “dramatically increase their holdings,” 40% said “yes.”
Nickel Digital Asset Management revealed that the main reason why the participants would invest more in cryptocurrencies is their long-term capital growth prospect – an explanation supported by 58% of the respondents. Interestingly, 37% stated they would copycat a giant corporation and allocate funds into the crypto market only if they see such an example.
Those who would sell their entire digital assets position were just 1% of the respondents, while 7% believe they should reduce their exposure.
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Bitcoin and cryptocurrencies have surged this week after two technology giants signaled their support for crypto (subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and discover crypto blockbusters poised for 1,000% gains).
The bitcoin price has added almost 10% over the last week, helped by a hotly-anticipated live discussion on bitcoin and crypto between Tesla billionaire Elon Musk and Twitter’s Jack Dorsey—with the meme-based dogecoin and the second-largest cryptocurrency ethereum arguably the event’s surprise winners.
Now, as the dogecoin price nears 20 cents per doge token after crashing under the psychological level earlier this month, Musk has shared a dogecoin theory that proclaims the memecoin isn’t a speculative asset but rather “dogecoin is money.”
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MORE FROM FORBESCrypto Price Surge: Surprise Tech Giant Support Suddenly Sends Bitcoin, Ethereum, BNB, XRP And Dogecoin Sharply HigherBy Billy Bambrough
Tesla CEO Elon Musk has adopted dogecoin as his pet project in recent months, helping its price to … [+]soar, but remains supportive of bitcoin.
AFP/Getty Images
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“I’m trying to tell you dogecoin is money,” the meme, shared by Musk on Twitter, reads; a twist on a popular Matrix movie quote that asks whether dogecoin could make someone “a lot of money.”
Musk’s tweet briefly sent the dogecoin price over 20 cents per doge token on popular U.S. crypto exchange Coinbase—which added dogecoin support just last month—but it quickly fell back, trading in line with today’s more-or-less flat bitcoin and cryptocurrency market.
After soaring to over 70 cents in May, riding a Musk and influencer-fueled rally, the dogecoin price has crashed almost 75%. However, dogecoin’s still up a staggering 6,000% on this time last year due to speculators piling into the Shiba Inu dog-based cryptocurrency.
This week, speaking during the Crypto Council for Innovation’s ₿ Word event, Musk elaborated on ideas that had previously been floated to upgrade dogecoin via ethereum to “max transaction rates and lower transaction costs.”
“There may be some merit in combining something like ethereum and dogecoin,” Musk said, revealing he owns some ethereum tokens in addition to his bitcoin and dogecoin.
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MORE FROM FORBESCrypto Price Prediction: Bitcoin ‘To Overtake’ The Dollar By 2050 And Soar To $66,000 By The End Of 2021By Billy Bambrough
The dogecoin price has fallen over the last month, finding a floor this week thanks to support from … [+]Tesla billionaire Elon Musk and rally back toward 20 cents per dogecoin token.
Coinbase
“Bitcoin by itself simply cannot scale to become the monetary system for the world at base layer,” Musk said, arguing bitcoin will “struggle to become peer-to-peer cash” without the adoption of a second layer network.
“There’s some merit in considering something that has higher max transaction rate and lower transaction cost and seeing how far you can take a single-layer network with exchanges acting as a de facto second layer,” Musk said. “I think you could take that further than people realize and as bandwidth increases over time latency decreases.”
A long-time supporter of dogecoin, Musk has this year fully embraced the somewhat satirical cryptocurrency that was created in 2013 as a “joke,” issuing calls for upgrades and promising his rocket company SpaceX will put a “literal dogecoin on the literal moon.”
During this week’s online chat between Musk, Twitter’s Jack Dorsey and Ark Invest’s Cathie Wood, it was also revealed SpaceX has joined Tesla in holding bitcoin, though Musk didn’t say how much.
Bitcoin’s (BTC) recovery is facing stiff resistance near the $35,000 mark but Bloomberg Intelligence senior commodity strategist Mike McGlone remains bullish. In his latest analysis, McGlone said that the probability of Bitcoin hitting $60,000 is greater than the price dropping to $20,000.
Institutional investors seem to be using the weakness in Bitcoin to build their positions. Cathie Wood’s Ark Invest added more than 450,000 shares of Grayscale Bitcoin Trust in two separate buys in the past week, increasing their holdings to more than 9 million shares. In addition, Edge Wealth Management and Rothschild Investment Corp also added GBTC shares to their portfolio.
Crypto market data daily view. Source:Coin360
However, not everyone is so bullish on Bitcoin. Analysts at Delphi Digital have pointed out that Bitcoin is testing the support at the 12-month moving average and a break below it could result in further downside. Kevin Kelly, a certified financial analyst at Delphi Digital, said a break below $30,000 could prove to be bearish for Bitcoin.
If Bitcoin remains range-bound, traders are likely to shift their focus on select altcoins, which may surprise to the upside. Let’s study the charts of the top-5 cryptocurrencies that may continue to attract buying interest in the short term.
BTC/USDT
Bitcoin rallied and closed above the 20-day exponential moving average ($32,974) on July 23, indicating that the selling pressure is reducing. The bulls are currently attempting to push the price above the 50-day simple moving average ($34,301).
BTC/USDT daily chart. Source:TradingView
If buyers succeed, the BTC/USDT pair could challenge the critical short-term resistance at $36,670. A breakout of this resistance could attract further buying, clearing the path for a possible rally to the $41,330 to $42,451.67 resistance zone.
The 20-day EMA has started to turn up and the relative strength index (RSI) has risen above 54, indicating a minor advantage to the bulls.
If the price turns down from the 50-day SMA but rebounds off the 20-day EMA, it will suggest that the sentiment has turned bullish. The buyers will then make one more attempt to clear the hurdle at the 50-day SMA.
Alternatively, a break below the 20-day EMA will indicate that bears continue to sell at higher levels. The pair could then retest the support at $31,000.
BTC/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows that bears are aggressively defending the overhead resistance near $35,000. The pair could now drop to the 20-EMA where buyers are likely to step in. If the price rebounds off the 20-EMA, it will suggest that the short-term sentiment has turned bullish.
The buyers will then again try to clear the hurdle at $35,000. If they succeed, the pair could rally to $36,670 where bears may again pose a still challenge. If the bulls do not give up much ground from this resistance, it will suggest that short-term traders are not booking profits at this level.
This will improve the likelihood of a break above $36,670. This bullish view will invalidate if the price turns down and breaks below the 20-EMA.
ETH/USDT
Ether (ETH) reached the 50-day SMA ($2,165), which is likely to act as a strong hurdle because the bears had stalled the previous rally at this resistance on July 7.
ETH/USDT daily chart. Source:TradingView
If the price turns down from the current level but finds support at the 20-day EMA ($2,046), it will suggest that the sentiment has turned bullish. A strong rebound off the 20-day EMA will enhance the prospects of a breakout of the 50-day SMA.
If that happens, the bulls will try to push the price to the downtrend line. A breakout and close above this resistance will signal a possible change in trend. The gradually rising 20-day EMA and the RSI above the midpoint suggest a strong comeback from buyers.
Contrary to this assumption, if bears pull the price below the 20-day EMA, it will suggest that bears are in no mood to relent. The pair could then plummet to the strong support at $1,728.74.
ETH/USDT 4-hour chart. Source:TradingView
The bears are aggressively defending the psychological level at $2,200. The pair could now correct to the 20-EMA where the buyers may step in. If the price rebounds off the 20-EMA, the bulls will make one more attempt to push the pair above $2,200.
A breakout and close above this overhead resistance will open the doors for a possible rally to $2,400. Contrary to this assumption, if bears pull the price below the 20-EMA, the decline could extend to the $2,000 support. A break below the 50-SMA could result in a decline to $1,728.74.
ICP/USDT
Internet Computer (ICP) dipped below the $28.31 support on July 20 but the bears could not capitalize on this weakness. This suggests that bulls are accumulating at lower levels.
ICP/USDT daily chart. Source:TradingView
The bounce off $26.92 picked up momentum and the bulls pushed the price above the 20-day EMA ($38.53) on July 24. This is the first indication that the bearish sentiment could be ending. The 20-day EMA has flattened out and the RSI has risen to the midpoint, which also suggests that the selling pressure could be easing.
If bulls drive the price above the 50-day SMA ($47.33), the ICP/USDT pair could rise to the overhead resistance at $59.42. A breakout and close above this resistance will complete a double bottom pattern, indicating the start of a new uptrend.
The pattern target on the upside is $90.53. This positive view will invalidate if the price turns down from the current level and breaks below $26.92.
ICP/USDT 4-hour chart. Source:TradingView
Both moving averages have turned up on the 4-hour chart and the RSI is in the positive zone, suggesting that bulls are in control. The buyers are likely to defend the 20-EMA on the downside.
If the price rebounds off the 20-EMA, the pair could rise to the psychological level at $50. This level may act as resistance but if bulls do not give up much ground, the up-move may continue and the pair may rise to $59.42. Conversely, a break below the 20-EMA could pull the price down to the 50-SMA.
AAVE/USDT
Aave rebounded off $212.54 on July 20 and rose above the horizontal resistance at $280 on July 23, which suggests strong buying at lower levels. The price is currently stuck inside a symmetrical triangle.
AAVE/USDT daily chart. Source:TradingView
The moving averages are on the verge of a bullish crossover, indicating that bulls are attempting a comeback. If the price rebounds off the moving averages, it will suggest a change in sentiment from sell on rallies to buy on dips.
A breakout and close above the downtrend line will complete the symmetrical triangle pattern. The AAVE/USDT pair could then rally to $347.53 and later to $400.
On the contrary, if bears pull the price below the moving averages, the pair could again gradually slide to the support line of the triangle. A break below the triangle may turn the tables in favor of bears.
AAVE/USDT 4-hour chart. Source:TradingView
The bulls are facing stiff resistance at the psychological level at $300 but if they do not allow the price to sustain below the 20-EMA, it will increase the possibility of a break above the downtrend line. If that happens, the pair may move up to $347.53 in the short term.
Alternatively, if the price sustains below the 20-EMA, the pair could drop to $268 and then to the 50-SMA. A strong bounce off this level will indicate buying on dips. The bulls will then again try to push the price to the downtrend line. A break below the 50-SMA will signal that bears have overpowered the bulls.
Related:Powered by the people: 3 altcoins whose tweet volume spiked before a strong rally
LUNA/USD
Terra protocol’s LUNA token has bounced back sharply from $5.58 and reached the overhead resistance zone at $7.96 to $8.72. The bears had halted the previous recovery attempt by the bulls in this zone on July 11.
LUNA/USD daily chart. Source:TradingView
If bulls push the price above $8.72, the momentum could pick up. The gradually rising 20-day EMA ($7.03) and the RSI above 59 suggest the path of least resistance is to the upside. The LUNA/USDT pair could then rally to the downtrend line.
This level may again act as a resistance but if bulls do not give up much ground, the pair could attempt to break above the downtrend line.
This positive view will invalidate if the price turns down from the current level and breaks below the 20-day EMA. Such a move will indicate that buying dries up at higher levels. The pair could then drop to $5.58.
LUNA/USD 4-hour chart. Source:TradingView
Both moving averages on the 4-hour chart are sloping up and the RSI is in the positive territory, indicating that bulls have the upper hand. If bulls can sustain the price above $7.96, the possibility of a retest of $8.72 increases.
If bulls can drive the price above $8.72, the short-term uptrend may pick up momentum and the pair may rise to $10. This level may act as resistance but if bulls can flip $8.72 to support, the uptrend may continue.
Contrary to this assumption, if bears pull the price below the 20-EMA, it will suggest weakness in the short term. The pair could then drop to the 50-SMA.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
A suspect accused of masterminding a $330,000,000 crypto scheme says he might be able to repay his victims if the courts will allow him to leave prison.
Javier Biosca, a Spanish national, allegedly promised hundreds of investors 25% weekly returns through a firm he ran called Algorithmics, which supposedly traded Bitcoin, Ethereum and Litecoin.
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In October of 2020, however, payments to investors halted completely, and Biosca disappeared before being arrested in Malaga on June 6th.
According to a report from Confi Legal, Biosca says he never had any intention of defrauding investors. He also claims that investors were not paid due to difficulties converting crypto into fiat at his bank.
According to Biosca, he traveled to Guinea and attempted to buy his own bank in order to make the exchanges. When that failed, he says, so did his business.
The complaint against Biosca was filed on behalf of investors by La Asociación de Afectados por Inversiones en Criptomonedas (The Association of People Affected by Investments in Cryptocurrencies). It alleges that victims were deprived of roughly €280,000,000, or about $329,500,000, and that Biosca’s firm lacked certification.
Per the Confi Legal report, Biosca assures that his investors’ money is safe, but is sitting in bank accounts he can no longer access. Biosca says that if the courts allow him to be released for three to four weeks, he can gain access to the accounts and repay the investors.
Spain’s National Court has not indicated any plans to accept Biosca’s offer.
Biosca is scheduled to make a court appearance next week.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Following a year of major revenue growth, Amazon is hunting for a digital currency and blockchain lead.
The online retailer and information technology giant is looking for a product leader with at least 10 years of experience in product or program management, product marketing, business development or technology to join the company’s payments acceptance and experience team.
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According to the listing, the successful candidate will develop the company’s digital currency and blockchain strategy and product roadmap.
“You will leverage your domain expertise in Blockchain, Distributed Ledger, Central Bank Digital Currencies and Cryptocurrency to develop the case for the capabilities which should be developed, drive overall vision and product strategy, and gain leadership buy-in and investment for new capabilities.”
The digital currency and blockchain lead will also work with other teams across the company, including the Amazon Web Services (AWS), to develop the roadmap that includes customer experience and technical strategy.
The new job opening comes months after Amazon quietly removeda job advertisement stating that the company is working on a digital currency project slated for an initial roll-out in Mexico.
Amazon revenue increased significantly in 2020 as shoppers on lockdown due to the Coronavirus pandemic turned to the e-commerce giant for deliveries.
Market and consumer data company Statista details Amazon’s 2020 revenue.
“In 2020, online retail platform Amazon reported a net income of 21.33 billion U.S. dollars, up from a 11.6 billion U.S. dollar net income in the previous year. During the same fiscal period, the company’s revenue amounted to more than 386 billion U.S. dollars.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Fresh off its massive funding round last week, FTX Trading, one of the world’s busiest cryptocurrency exchanges, has decided to curb risky trading by limiting investments that take on too much debt, following in the steps of exchanges clamping down on high-margin trading amid massive market volatility and growing regulatory scrutiny.
Sam Bankman-Fried, a 29-year-old crypto billionaire, called the move “a step in the direction the … [+]industry is headed.”
In a tweet thread Sunday morning, FTX chief Sam Bankman-Fried revealed the Antigua-based company is removing high leverage starting Sunday by capping margin trading at 20 times invested capital, significantly lower than the exchange’s previous limit of 101x.
Bankman-Fried said the decision was made in light of FTX’s efforts to “encourage responsible trading” and acknowledged it as a “step in the direction the industry is headed” following similar moves by its peers, such as China’s Huobi Global, which reportedly dropped its maximum allowed leverage from 125x to less than 5x last month due to concerns about increased crypto regulation in the country.
Bankman-Fried, the 29-year-old billionaire who founded FTX in 2017, also said the restrictions would only impact a “tiny fraction” or “way less than 1%” of the company’s trading volume, which over the past 24 hours totaled more than $876 billion (making it the world’s fourth-busiest crypto exchange).
Despite saying many critics “miss the mark” in their arguments against high leverage, he went on to say the company doesn’t believe “it’s an important part of the crypto ecosystem,” or “in some cases a healthy part of it” before disclosing FTX’s average leverage is only 2x.
The move comes less than a week after FTX raised a record $900 million from investors at an $18 billion valuation (15 times the company’s valuation a year ago), and it’s likely to help the exchange tread regulatory waters in the United States more easily as Bankman-Fried eyes “an enormous amount of potential growth in the states.”
Crucial Quote
“An effective margin system is integral to an efficient economic system. There are limits to everything, though,” Bankman-Fried tweeted Sunday. “And so, after lots of back and forth, we’re going to be the ones to take the first step here: a step in the direction the industry is headed, and has been headed for a while… It’s time, we think, to move on from it.”
Key Background
Record levels of margin trading have fueled wild price swings in the cryptocurrency market this year, forcing billions of dollars in liquidations during bouts of increased volatility. Though it offers greater profit potential than traditional investing, margin trading can spur big losses because brokerages often require investors sell their positions or deposit money into an account if investments fall beyond a certain threshold. ″As you hit a certain collateral level, firms will automatically sell your bitcoin and send the collateral to the lender,” BKCM founder and portfolio manager Brian Kelly told CNBC after a crypto crash in June. “This adds to the massive cascade effect—there was so much volume that most of the exchanges broke.”
Big Number
$8.3 billion. That’s how much Bankman-Fried was worth in June, according to Forbes. Last week’s funding deal will likely boost his net worth by nearly $8 billion.
Surprising Fact
The crypto market is currently worth $1.4 trillion, nearly five times higher than its value one year ago but down about 40% from an all-time high in May.
Further Reading
Bitcoin Alert: Biggest Private Crypto Deal Ever Is Closed (Forbes)
Tom Brady And Gisele Bündchen Partner With FTX In A Bid To Drive Crypto Adoption (Forbes)
Crypto Price Surge: Surprise Tech Giant Support Suddenly Sends Bitcoin, Ethereum, BNB, XRP And Dogecoin Sharply Higher (Forbes)
An anonymous source within Amazon has reportedly told London business newspaper City A.M. that the e-commerce giant is planning to accept Bitcoin (BTC) payments by the end of 2021, possibly setting the stage for broader mainstream acceptance of crypto transactions.
“This isn’t just going through the motions to set up cryptocurrency payment solutions at some point in the future – this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work,” the anonymous source told City A.M., according to a report published on Sunday
She indicated that, while Bitcoin is the first step in Amazon’s crypto ambitions, executives at the company were keen to add other established cryptocurrencies in the future. The “directive is coming from the very top,” referring to Jeff Bezos, she said, adding:
“This entire project is pretty much ready to roll.”
Speculation about Amazon’s entry into the cryptocurrency market has been raging for days after a new posting for “Digital Currency and Blockchain Product Lead” appeared on the company’s job board last week. As per the job description, the new hire will help develop Amazon’s digital currency strategy and product roadmap. The position requires strong domain expertise in blockchain, distributed ledgers, central bank digital currencies and crypto more generally.
Related:Countries representing over 90% of global GDP are exploring CBDCs
This isn’t the first crypto-focused job posting at Amazon. As Cointelegraph reported, the e-commerce giant in February recruited for a technical lead to help develop its new “Digital and Emerging Payments” platform.
Related:Bringing the crypto payments ecosystem around the world: Ray Youssef
The massive cryptocurrency boom during the latter half of 2020 and the first half of 2021, coupled with a wave of institutional investors betting billions of dollars on the growth of the ecosystem, helped raise optimistic expectations around the approval of a Bitcoin ETF in the United States.
But one of the previous (unsuccessful) applicants for a Bitcoin ETF believes the odds of this happening anytime soon are very low.
Want a Bitcoin ETF? Better Wait
According to Wilshire Phoenix co-founder William Cai, the SEC does not intend to approve a cryptocurrency ETF anytime soon, despite pressure from prominent investors, entrepreneurs, and even influential politicians.
Speaking with the financial outlet Business Insider, Cali commented that his expectations would be set around 2022 or even as long as 2023. Cali thinks that despite the current wave of new ETF applications, none are likely to prosper.
“We think they’re all going to get stuck … I’ve seen nothing that suggests there’s been a switch in their thinking,”
According to the ETF tracking site, ETFTrends, there are currently 8 Bitcoin applications actively lobbying for a favorable response from the SEC.
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Interested parties range from longtime players like VanEck – which is among the first to launch a Bitcoin ETF – to Mike Novogratz’s Galaxy Digital.
Even the famous Grayscale Bitcoin Trust – the closest thing to a Bitcoin ETF currently available to U.S. traders – could mutate into a Bitcoin ETF should conditions be conducive. As Cryptopotato previously reported, Grayscale CEO Michael Sonnenshein believes this is only a matter of time.
The SEC Has Other Priorities
Despite the heated interest in the crypto business, efforts to have a Bitcoin ETF approved have been in vain. The reason, as Cai explains, lies in the SEC’s concern of possible market manipulation scenarios due to high volatility, low trading volume, and lack of clear regulations:
“The major thing is manipulation, and they’re focused on the cash market, [which] is not regulated and does not trade on regulated exchanges,”
Cai explains that not much has changed between Jay Clayton’s tenure and Gary Gensler’s current administration. He explained that a Bitcoin ETF is not really a priority for Gary Gensler, who is focused on protecting investors and regulating phenomena like meme stocks, Robinhood, and the like.
However, even though there is a long time to wait, Cai is not 100% pessimistic. Ultimately, he acknowledges that he hopes that at some point, some applicant will be able to satisfy the SEC:
We believe a bitcoin ETF is good for the market, and it is going to happen,
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Blockchain analytics firm Santiment says Litecoin (LTC) is experiencing a strong wave of accumulation from whales, or wallets with at least 1,000 to 100,000 LTC.
In a new report, Santiment says that Litecoin whales have increased their holdings by roughly 270,000 LTC, or about $30,000,000 since the beginning of July.
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The crypto insights firm also observes that the activity on the Litecoin network is surging despite the grinding bearish price action.
“Despite a -13.8% drop in price, the amount of unique addresses interacting with LTC has grown by +47.5% over the last 10 days. Potential bullish divergence?”
Source: Santiment
Santiment points out that Litecoin’s MVRV (market value to realized value), which aims to pinpoint market bottoms and tops, is at the same level it was at when LTC bottomed out in 2019 and 2020.
Source: Santiment
“Historically speaking, there’s still more room to the downside, but it’ll be interesting to see if -40% gets confirmed as a de-facto ‘bounceback’ zone in days to come…
…Still early to tell, but I’d keep an eye on Litecoin’s daily addresses this week. If the growth proves sustainable, it would be a rare example of network strength among crypto’s top caps.”
As for Bitcoin, the firm notes that the world’s leading crypto by market cap is near an all-time low in terms of BTC on exchanges, indicating an increasingly limited supply.
“Bitcoin is inching close to the then 18-month low of its supply on exchange ratio, which was hit back on Jan 2, 2021. As BTC continues moving off exchanges during these suppressed prices, it’s a promising sign that markets have decreased selloff risk.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Vermont has joined the ranks of New Jersey, Alabama and Texas in raising regulatory concerns over BlockFi’s high-yield interest account.
State regulators argue BlockFi’s interest account amounts to an unregistered security.
The company denies these claims.
Vermont is the fourth state to issue an order against crypto lending firm BlockFi’s high-interest savings accounts for offering unregistered securities.
Details of the notice served by Vermont’s financial regulator aren’t yet available but BlockFi informed customers about its existence on its website.
BlockFi and the State of Vermont’s Securities Division did not immediately respond to Decrypt’s request for comment.
Over the past week, regulators in New Jersey, Texas and Alabama have opened investigations against BlockFi and two of its subsidiaries, BlockFi Lending and BlockFi Trading.
Regulators allege that BlockFi’s interest accounts, which advertise high returns for customers that deposit crypto, amount to unregistered securities.
Securities are investment contracts. Sales of them in the U.S. have to be registered with the country’s Securities and Exchange Commission.
The regulators argue that BlockFi’s lending accounts amount to securities because when BlockFi’s customers deposit their crypto, they expect BlockFi to earn them interest.
BlockFi denies that these accounts constitute securities offerings. In a tweet on July 23, the company said it’s discussing things with regulators.
2/ BlockFi is fully operational for all existing clients everywhere in the world, and clients will continue to have access to all products, services, and assets on BlockFi.
— BlockFi (@BlockFi) July 22, 2021
“BlockFi is fully operational for all existing clients everywhere in the world, and clients will continue to have access to all products, services, and assets on BlockFi,” the company said.
BlockFi’s troubling week
It all started on Monday when the Attorney General of New Jersey ordered BlockFi to stop accepting new customers in the state, where the four-year-old company is also headquartered. The order didn’t stop BlockFi from serving existing customers in the state.
On Wednesday, Alabama regulators demanded that BlockFi defend itself against a potential cease-and-desist order. The company has 25 days to put together a compelling argument.
And on Thursday, Texas State Securities Board (TSSB) served the company with a cease-and-desist order that could take effect following a hearing on October 13.
BlockFi has $15 billion assets under management, according to the TSSB notice. $691 million of these assets are from Texas residents.
BlockFi stores customers’ assets in the vaults of third-party custodians like Gemini, BitGo, and Coinbase, which held 43% of its customers’ assets as of 2021 Q1. The rest is in liquid investments or loans. The company says it doesn’t owe customers anything if it loses their crypto due to operational or technical difficulties.
