Tag Archives: Bitcoin News

#Blockchain Understanding Cryptocurrency Options – An Alternative Way to Trade Crypto

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Crypto proponents have been excited by the launch of bitcoin futures and options, but many are unfamiliar with the fundamentals. Bitcoin options are a popular way to take advantage of a volatile market by strategically hedging some of the risk. To clear up the jargon associated with the most common form of derivatives trading, analysts here explain the role played by cryptocurrency options. 

Also Read: Options Giant CME Launches Bitcoin Futures — Here’s What to Expect

What Are Cryptocurrency Options?

Understanding Cryptocurrency Options – An Alternative Way to Trade CryptoIn traditional finance there are two types of options that can be bought. These are known as a ‘call’ and a ‘put’ option. A call option will give the holder the right to buy an asset at the strike price. A put gives the holder the right to sell an asset at a predetermined price.

Alexey Markov, a trader at United Traders based in Moscow, Russia, told news.Bitcoin.com that options are one of the most important tools in traditional markets and widely used for speculation by traders on U.S. sites. “Trading volumes on an option contract often exceed the volumes on the underlying asset, such as stocks for example,” he explained. “Also various options are used to hedge risks for those participants who have large portfolios on their balances.”

Markov explained the crypto market has not escaped that phenomenon, but it is worth noting that at this current stage of the market the demand for options is not very high. Primarily, this is due to the rapid decline in BTC/USD trading volumes.

Aditya Das, an analyst at market data firm Brave New Coin, told news.Bitcoin.com that cryptocurrency options are financial instruments or contracts that give holders rights to purchase or sell a cryptocurrency for a predetermined price at a future date. “Often, cryptocurrency options can intimidate new participants because of the use of idiosyncratic terminology that differs from legacy options market jargon that is already complicated,” said Das.

He explained that an ‘upside profits’ contract is equivalent to a European-style call option, right to buy, whereas a ‘downside profits’ contract works like a European-style put option, right to sell.

Where Can Investors Trade Crypto Options?

Understanding Cryptocurrency Options – An Alternative Way to Trade CryptoDas explained how cryptocurrency options are generally designated between bitcoin-settled and cash-settled trading markets. 

According to Das, Bitmex is the most popular bitcoin-settled market currently, with Okex and Okcoin being popular alternatives.

He observed that the Chicago Mercantile Exchange (CME) is the most popular cash-settled cryptocurrency options platform, with the Chicago Board Options Exchange (CBOE) being a lover volume alternative. “The soon-to-be-launched Deribit ‘vanilla’ options platform has also been gaining attention because it advertises cheaper fees, and fewer maintenance shutdowns,” said Das.

Alexey Markov, meanwhile, highlighted Deribit and Ledgerx as other exchanges that give the opportunity to trade options. “Both offer ‘put and call options’ only for BTC. Currently, the earliest and latest expiration date available on these exchanges is 1 day and 238 days respectively, which is not bad, but at the same time the liquidity leaves much to be desired and the spreads are quite wide,” said Markov. 

Looking ahead, traders are confident that with the growth of the overall capitalization of the cryptocurrency market, an increasing number of derivatives will also be developed, including options. These will give traders greater power than ever to buy and sell bitcoin where and how they want.

What are your thoughts on futures and options? Let us know in the comments section below.

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#Blockchain Florida Appeals Court Defines Bitcoin as Money as Espinoza Ruling Reversed

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Espinoza Ruling Reversed, Florida Appeals Court Defines Bitcoin as Money

In 2016, Judge Teresa Mary Pooler of the Eleventh Judicial Circuit of Florida made headlines for a ruling she made during the Michell Espinoza trial. Judge Pooler ruled Espinoza could not be charged with illegal money transmission offenses because bitcoin was not considered legal tender. However, a motion filed with the Florida appeals court has overturned the decision and Espinoza may face the state’s trial courts for an alleged crime back in 2014.

Also read: A Look at Openbazaar’s Multi-Currency Wallet and Vendor Listings

Bitcoin Was Not the Equivalent of Money According to a Florida Judge in 2016 – the State Disagrees

Five years ago Michell Espinoza was arrested for illegal money transmission for selling bitcoins to Miami police officers and other federal law enforcement officials. The February 2014 arrest of Espinoza and Pascal Reid was the state’s first big case that involved illegal money transmission and laundering charges coupled with bitcoins. However, after two years of legal battles, Espinoza’s charges were ultimately dismissed by Judge Pooler and in her dismissal verdict she detailed bitcoin was not considered money.

Florida Appeals Court Defines Bitcoin as Money as Espinoza Ruling Reversed

“Bitcoin[s] may have some attributes in common with what we commonly refer to as money, but differ in many important aspects — While bitcoin[s] can be exchanged for items of value, they are not a commonly used means of exchange,” Judge Pooler’s ruling explained on July 22, 2016.

Pooler’s verdict continued:

It is very clear, even to someone with limited knowledge in the area, that bitcoin has a long way to go before it is the equivalent of money.

Florida Appeals Court Defines Bitcoin as Money as Espinoza Ruling Reversed
Michell Adber Espinoza (left), and Pascal Reid (right) were arrested in February 2014 for illegal money transmission and money laundering charges. In 2016 a Florida Judge dismissed the case on grounds that bitcoin was not money.

Judge’s Ruling in the Espinoza Case Reversed and Requires Further Action

After the dismissal two weeks later in August, the state of Florida gave its notice of appeal towards the dismissed charges in an effort to reverse the decision. The dismissal appeal made its rounds through the district court system and two years later the appeals court overturned the ruling and Espinoza may still stand trial. The appellate court’s filing on Jan. 30 explains that Pooler’s understanding of the state’s money transmission statutes wasn’t up to snuff and the state took issue with most of the dismissed charges.

“The trial court erred in dismission Count 1 (illicit money transmission) because Espinoza acted as both a money transmitter and a payment instrument seller and, as such, was required to register with the State of Florida as a money services business,” it ruled.

Furthermore, the state of Florida and prosecutors believe bitcoin is in fact money as the filing continues by emphasizing:

Based on the undisputed facts, Espinoza was acting as a payment instrument seller or engaging in the business of a money transmitter, either of which require registration as a money services business under Florida law — Given the plain language of the Florida statutes governing money service businesses and the nature of Bitcoin and how it functions, Espinoza was acting as both.

Even if the trial court doubts the sufficiency of the state’s evidence, it cannot grant a motion to dismiss the appellate court, the ruling further explains. The filing reverses the trial court’s order granting Espinoza’s motion to dismiss and the state is demanding further action. “Reversed and remanded with instructions,” the court filing concedes. The latest filing on Wednesday details the decision is not final, however, until disposition of a timely filed motion for rehearing commences.

What do you think of the state of Florida appealing the Michell Espinoza dismissal? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Pixabay, and David Ovalle.

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#Blockchain Florida Appeals Court Defines Bitcoin as Money as Espinoza Ruling Reversed

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Espinoza Ruling Reversed, Florida Appeals Court Defines Bitcoin as Money

In 2016, Judge Teresa Mary Pooler of the Eleventh Judicial Circuit of Florida made headlines for a ruling she made during the Michell Espinoza trial. Judge Pooler ruled Espinoza could not be charged with illegal money transmission offenses because bitcoin was not considered legal tender. However, a motion filed with the Florida appeals court has overturned the decision and Espinoza may face the state’s trial courts for an alleged crime back in 2014.

Also read: A Look at Openbazaar’s Multi-Currency Wallet and Vendor Listings

Bitcoin Was Not the Equivalent of Money According to a Florida Judge in 2016 – the State Disagrees

Five years ago Michell Espinoza was arrested for illegal money transmission for selling bitcoins to Miami police officers and other federal law enforcement officials. The February 2014 arrest of Espinoza and Pascal Reid was the state’s first big case that involved illegal money transmission and laundering charges coupled with bitcoins. However, after two years of legal battles, Espinoza’s charges were ultimately dismissed by Judge Pooler and in her dismissal verdict she detailed bitcoin was not considered money.

Florida Appeals Court Defines Bitcoin as Money as Espinoza Ruling Reversed

“Bitcoin[s] may have some attributes in common with what we commonly refer to as money, but differ in many important aspects — While bitcoin[s] can be exchanged for items of value, they are not a commonly used means of exchange,” Judge Pooler’s ruling explained on July 22, 2016.

Pooler’s verdict continued:

It is very clear, even to someone with limited knowledge in the area, that bitcoin has a long way to go before it is the equivalent of money.

Florida Appeals Court Defines Bitcoin as Money as Espinoza Ruling Reversed
Michell Adber Espinoza (left), and Pascal Reid (right) were arrested in February 2014 for illegal money transmission and money laundering charges. In 2016 a Florida Judge dismissed the case on grounds that bitcoin was not money.

Judge’s Ruling in the Espinoza Case Reversed and Requires Further Action

After the dismissal two weeks later in August, the state of Florida gave its notice of appeal towards the dismissed charges in an effort to reverse the decision. The dismissal appeal made its rounds through the district court system and two years later the appeals court overturned the ruling and Espinoza may still stand trial. The appellate court’s filing on Jan. 30 explains that Pooler’s understanding of the state’s money transmission statutes wasn’t up to snuff and the state took issue with most of the dismissed charges.

“The trial court erred in dismission Count 1 (illicit money transmission) because Espinoza acted as both a money transmitter and a payment instrument seller and, as such, was required to register with the State of Florida as a money services business,” it ruled.

Furthermore, the state of Florida and prosecutors believe bitcoin is in fact money as the filing continues by emphasizing:

Based on the undisputed facts, Espinoza was acting as a payment instrument seller or engaging in the business of a money transmitter, either of which require registration as a money services business under Florida law — Given the plain language of the Florida statutes governing money service businesses and the nature of Bitcoin and how it functions, Espinoza was acting as both.

Even if the trial court doubts the sufficiency of the state’s evidence, it cannot grant a motion to dismiss the appellate court, the ruling further explains. The filing reverses the trial court’s order granting Espinoza’s motion to dismiss and the state is demanding further action. “Reversed and remanded with instructions,” the court filing concedes. The latest filing on Wednesday details the decision is not final, however, until disposition of a timely filed motion for rehearing commences.

What do you think of the state of Florida appealing the Michell Espinoza dismissal? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Pixabay, and David Ovalle.

Want to create your own secure cold storage paper wallet? Check our tools section. 

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#Blockchain European and South American Localbitcoins Markets Show Strength

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In recent peer-to-peer (P2P) market action, Latin American Localbitcoins trade has continued to show strength after producing record volume last month. In other news, P2P trade between the euro (EUR) and BTC has posted its strongest volume in 10 months.

Also Read: Wikipedia Now Accepts Bitcoin Cash Donations via Bitpay

European P2P Trade Posts Strongest Activity Since March 2018

EUR/BTC trade on Localbitcoins has recorded its strongest week since posting record trade when measured against fiat currency at the end of March 2018.

European and South American Localbitcoins Markets Show Strength

During the week of Jan. 26, approximately 985 BTC were traded for EUR, equating to more than 3.11 million euros (roughly $3.58 million) worth of trade.

European and South American Localbitcoins Markets Show Strength

Hungarian P2P trade also spiked during the week of Jan. 19, producing the fifth strongest week on record when measured in Hungarian forint (HUF), with 5.41 million HUF (roughly $19,750) worth of trade taking place.

European and South American Localbitcoins Markets Show Strength

The week also comprised the strongest for Hungarian P2P trade since July 2017 when measured in cryptocurrency, with 5 BTC changing hands.

European and South American Localbitcoins Markets Show Strength

When measuring in cryptocurrency, the Turkish Localbitcoins markets also recorded the strongest week of trade activity since Nov. 2017 this past week, with 35 BTC worth of trade.

European and South American Localbitcoins Markets Show Strength

Latin American Localbitcoins Markets Continue to Show Strength

After producing record volume during Dec. 2018, the Latin American P2P markets have continued to see strong trade activity.

This past week saw the Venezuelan Localbitcoins markets post record volume for the eighth time in the last 10 weeks when measured in fiat currency, with 16 billion Venezuelan bolivar (VES) worth of trade taking place.

European and South American Localbitcoins Markets Show Strength

The week also comprised the second strongest on record for Venezuelan trade when measured against cryptocurrency, with 1,806 BTC changing hands.

European and South American Localbitcoins Markets Show Strength

 

For Localbitcoins trade between the Colombian peso (COP) and BTC, the weeks of Jan. 19 and Jan. 26 produced the second and third strongest volume on record, with nearly 700 BTC being traded during each seven-day period.

European and South American Localbitcoins Markets Show Strength

When measured in fiat currency, the preceding two weeks have comprised the fifth and seventh strongest in the market’s history with more than 7 billion COP worth of BTC trade taking place during both weeks.

European and South American Localbitcoins Markets Show Strength

 

Indonesian P2P Trade Spikes

Indonesian Localbitcoins trade also spiked this past week, with the week of Jan. 26 comprising the third strongest in the market’s history when measured against fiat currency with nearly 804 million Indonesian rupiah (IDR) (roughly $57,500) worth of trade.

European and South American Localbitcoins Markets Show Strength

When measured against cryptocurrency, this past week posted the strongest trade activity since March 2017, with 17 BTC changing hands.

European and South American Localbitcoins Markets Show Strength

What is your response to the strength of the European, Latin American, and Indonesian Localbitcoins markets? Share your thoughts in the comments section below!

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#Blockchain The Daily: New Institutional Crypto Wallet, Korean Won Stablecoin

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The Daily: New Institutional Crypto Wallet, Korean Won Stablecoin

In today’s edition of The Daily, we feature a couple of new offerings in the cryptocurrency market including a wallet made for exchanges and token issuers as well as the latest fiat-backed stablecoin. Additionally covered are an exchange that underwent an auditor’s inspection and a crypto CFDs provider that got FCA authorization.

Also Read: Wikipedia Now Accepts Bitcoin Cash Donations via Bitpay

Knox Custody for Digital Securities

Tokensoft, a U.S.-based digital asset security platform, has announced the beta launch of its new Knox Wallet, a mobile-first, cold storage, self-custody system for enterprises. It is designed for issuers of asset-backed tokens for equity, debt, or real estate, and it can also hold multiple cryptocurrencies. The wallet is said to incorporate three levels of security: offline cold storage, role-based access control and cryptographic authentication. The developers expect that different types of companies will want the Knox Wallet, including exchanges that could use it to manage and administer assets trading on their platform.

The Daily: New Institutional Crypto Wallet, Korean Won Stablecoin
Historic Fort Knox, Penobscot River, Maine, USA

“As real-world assets enter the blockchain world, it’s important to protect them with the same level of security we treat traditional digital assets,” said CEO Mason Borda. “We built Knox for our clients of all types who are launching asset-backed tokens and collectively are planning to place over $1 billion in digital securities on to the blockchain in 2019. As these assets arrive on the blockchain, there should be adequate solutions to secure them.”

South Korean Won-Backed Stablecoin

Bxb Inc. has announced the launch of KRWb, a stablecoin backed by the South Korean won (KRW). This reportedly followed an initial capital deposit of 400 million Korean won ($360,000 USD) that has collateralized an equivalent volume of newly minted tokens. The issuers promise that each token generated will be matched with an equivalent fiat deposit stored in a bank, and that an independent auditor will perform regular checks on the KRW reserves to ensure that a minimum of 1:1 matching with KRWb liquidity is continuously maintained.

The Daily: New Institutional Crypto Wallet, Korean Won Stablecoin

Singapore-based crypto-asset trading firm QCP Capital has been selected as the first KRWb ‘issuance partner’ for ensuring market liquidity. “Korea has always been a strategic but challenging market for us. KRWb is a great solution to many of the problems faced by market participants both onshore and offshore. Beyond crypto liquidity, we are excited to be part of a project that is pioneering new ‘fiat-to-crypto’ solutions in Asia,” said Darius Sit, Managing Partner at QCP Capital.

Exchange Completes Auditor’s Examination

New York-based trading platform Gemini has announced it completed a SOC 2  Service Organizations Type 1 examination. Auditing firm Deloitte has performed an evaluation of Gemini’s security controls which were inspected to meet the criteria set by the American Institute of Certified Public Accountants (AICPA). This reportedly included a review of the exchange application, infrastructure, and underlying customer database, as well as its cryptocurrency storage system. The company also promises to undergo a SOC 2 examination on an annual basis from now on.

The Daily: New Institutional Crypto Wallet, Korean Won Stablecoin

“Providing you with a safe and secure platform to buy, sell, and store your cryptocurrency is paramount to our mission to build the future of money,” stated Yusuf Hussain, Head of Risk at Gemini. “In the traditional financial and technology industries, SOC 2 reviews have become an industry standard for demonstrating security compliance. Our SOC 2 review  — coupled with our digital asset insurance  —  is another step we’ve taken towards raising the bar for consumer protection, safeguards and industry best practices.”

Crypto CFDs Provider Receives UK Authorization

Cryptocurrency liquidity provider B2C2 has announced that its British subsidiary, B2C2 OTC Ltd, is now authorized and regulated by the U.K. Financial Conduct Authority (FCA) to deal in Contracts for Difference (CFDs) with those defined as ‘eligible counterparties and professional clients.’ The company will use this new FCA approval to offer cryptocurrency-based CFDs to its clients.

The Daily: New Institutional Crypto Wallet, Korean Won Stablecoin
Entrance to FCA building

Max Boonen, CEO of B2C2, said: “We are excited to have received authorisation from the FCA to introduce a cryptocurrency CFD product. Eligible counterparties and professional clients can now gain derivative exposure to the cryptocurrency markets, benefiting from the competitive pricing and liquidity they’re accustomed to receiving from B2C2 while avoiding the risks associated with crypto custody.”

What do you think about today’s news tidbits? Share your thoughts in the comments section below.

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#Blockchain Indian Government Invites Law Firm to Present Suggestions for Cryptocurrency Regulation

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Indian Government Invites Law Firm to Present Crypto Regulatory Proposal With Self-Regulation

The Indian government has invited lawyers from Nishith Desai Associates to present their suggestions for the country’s crypto regulation. This is in response to the firm’s submission of a proposed regulatory framework for cryptocurrencies. The suggestions include avoiding prohibition, taking a balanced approach, options for licensing, and self-regulation for the industry.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Suggestions for Crypto Regulation

The Indian government invited lawyers from Nishith Desai Associates to present their suggestions for the country’s crypto regulation early this month. The invitation came after the firm submitted a paper with a proposed regulatory framework for cryptocurrencies.

Lawyer Jaideep Reddy, one of the three authors of the paper, told news.Bitcoin.com on Monday that “The government is not legally bound to respond to or accept suggestions from the public.” However, he added:

Our submission was responded to by the Finance Ministry which was kind enough to invite us to present our suggestions. The presentation mainly consisted of us explaining the suggestions made in the paper … They listened to our proposals with interest.

The paper was “prepared in an independent capacity and purely in public interest,” it reads. The document was submitted to the government committee chaired by the Secretary of Economic Affairs, Subhash Chandra Garg. This committee is currently developing a regulatory framework for cryptocurrencies, the Indian Ministry of Finance previously confirmed to Parliament.

Nishith Desai Associates represents the Internet and Mobile Association of India (IAMAI) in its writ petition in the supreme court against the Reserve Bank of India (RBI) circular which banned banks from providing services to crypto businesses.

Indian Government Invites Law Firm to Present Suggestions for Cryptocurrency Regulation

Balanced Approach and Licensing

The paper emphasizes “Regulation not prohibition.” It asserts that “An outright ban on crypto-asset activity should not be considered for several reasons,” noting:

History has taught us that such technologies [blockchain] should be regulated and not banned, since banning is likely to be counter-productive and may also suffer from legal infirmities.

The authors proceeded to describe that “a balanced regulatory approach should be taken to promote the various benefits of the technology and mitigate the risks,” in line with international consensus.

Indian Government Invites Law Firm to Present Suggestions for Cryptocurrency Regulation

The report also outlines a number of ways to license crypto businesses. “This may be done either by introducing new legislation or framing administrative regulations under existing legislations,” Reddy explained to news.Bitcoin.com. He noted that one example “is to introduce a simple government notification bringing crypto-asset business activity under the Prevention of Money Laundering Act. With one fell swoop, that would bring crypto asset activity within a well-established AML regime, operating on par with the financial sector and the jewellery industry, for instance.”

Types of Crypto Assets

The authors propose classifying crypto assets into three types. They wrote:

For the purpose of legal analysis, all crypto-assets are not alike, and the implications of each should be assessed on a case-by-case basis. Broadly, crypto-assets can be considered to be of three types: payment tokens, security tokens, and utility tokens.

Security tokens “will be regulated by the Securities and Exchange Board of India (SEBI) and under the Companies Act,” the paper states.

Moreover, the lawyer explained that “Trading activity with regard to all other crypto-assets falls in something of a regulatory vacuum, although existing laws like the Consumer Protection Act continue to apply to a significant extent.” This vacuum should be addressed by introducing a know-your-customer (KYC) and anti-money laundering (AML) regime as well as “a licensing regime, for crypto-asset business activity,” they suggested.

Indian Government Invites Law Firm to Present Suggestions for Cryptocurrency Regulation

Self-Regulation

One of the proposed measures is the self-regulatory approach which the authors originally submitted in July 2017 to the previous government committee on crypto assets, chaired by Shri Dinesh Sharma. “However, the previous committee’s report was not made public … Therefore, we don’t know how that committee responded to the suggestion for self-regulation,” Reddy told news.Bitcoin.com.

The code of conduct for self-regulation was originally prepared for the Digital Asset and Blockchain Foundation of India (DABFI), an industry body formed by Zebpay, Unocoin, Coinsecure and Searchtrade. “DABFI has since then been subsumed into the Internet and Mobile Association of India (IAMAI) as of November 2017,” the report explains.

Indian Government Invites Law Firm to Present Suggestions for Cryptocurrency Regulation

The suggestions are based on multiple sources as well as “the ULC Model Law, with suitable changes for the Indian context,” the report details. The authors have offered to update the draft for the Indian government. “The Committee may consider self-regulation backed by a statutory mandate in order to provide statutory backing to the norms, and in turn, facilitate a system of government oversight of the industry,” the authors wrote, concluding:

These include mandating compliance with KYC/AML norms … and net worth requirements based on those prescribed by the RBI for regulated entities. The draft creates a certification regime and mandates various consumer protection features including capital adequacy, audits, and disclosures.

Do you think the Indian government will incorporate some of these suggestions into the regulatory framework for cryptocurrencies it is developing? Let us know in the comments section below.

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#Blockchain Genesis Capital Processed $1.1B of Cryptocurrency Loans in 2018

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Bitcoin Lender Genesis Capital Processed $1.1Bn Digital Asset Loans in 2018

Cryptocurrency lender Genesis Capital provided $500 million worth of digital asset loans in the fourth quarter of 2018 alone, soaring almost 100 percent from six months earlier, when the company started its lending business. Altogether, loans reached $1.11 billion for the whole of last year.

Also read: Iran in Talks With 8 Countries for use of Cryptocurrency in Financial Transactions

Crypto Loans Rose Sharply in Q4 Despite Falling BTC Price

According to the U.S. company’s Q4 Digital Asset Lending Snapshot published Jan. 30, the loans were issued to corporate borrowers such as hedge funds and trading firms mainly in the form of BTC, ETH and other virtual currencies.

The lender said despite the price of BTC falling 44 percent during the review period, it has $153 million in active loans, up $20 million from the previous quarter. That’s thanks largely to institutional investors actively “utilizing spot borrow” between November and December, as well as the launch of a new business line: lending cash for crypto collateral.

Genesis Capital Processed $1.1B of Cryptocurrency Loans in 2018

Fourth quarter loan originations climbed about 100 percent in the last three months of 2018 to more than $500 million, Genesis Capital stated. That compares with Q1 and Q2 originations, which totalled $553 million.

About 75 percent of the total loan portfolio is denominated in bitcoin core, while 0.4 percent comprises bitcoin cash loans. Ethereum borrowing rose sharply between the third and fourth quarters, but still only accounts for 8.1 percent of the company’s loan book.

The decline in BCH-based borrows resulted from the calling of “most of our outstanding loans prior to the hard fork on Nov. 15. Managing forks is a precarious process when lending digital assets,” Genesis said. A few other cryptocurrencies, including XRP and LTC, accounted for the remainder of the loans advanced throughout Q4.

 Investors Borrow to Hedge Investments, Short Cryptocurrencies

The registered over-the-counter digital currency dealer said that borrowers typically use its loans to fund their business operations, hedge derivative investments, or to bet that the price of certain cryptocurrencies will fall.

“Prior to Q4, 98 percent of BTC on loan was used exclusively for hedged use cases such as arbitrage, basis capture, and remittance,” detailed the lender. However the BTC price fell 16 percent in a single day on Nov. 14, prompting “many of the borrowers … [to] leverage the synergies between our lending and trading businesses and shorted directly through Genesis.”

Genesis Capital Processed $1.1B of Cryptocurrency Loans in 2018
Genesis’ asset composition for 2018

Most of the funds that Genesis Capital provides as loans are borrowed from elsewhere at interest rates of between 5 to 7 percent. The company then goes on to charge rates of 10 to 11 percent when it lends, Michael Moro, chief executive officer of Genesis Capital, has previously elaborated.

By the end of December, patterns between loan originations and price movements involving ETH borrowing had started to emerge, even though the currency accounted for a very small fraction of Genesis’ loan book. Short-term borrowing in ETH, mainly due to active hedge funds putting on short positions during waves of volatility in a bear market, increased markedly.

“This indicates a lot of short-term momentum shorting, where borrowers would continue to bet against ETH, even after major declines in price,” said the lender.

Genesis Launches Fiat Currency Lending

Meanwhile, Genesis Capital launched a fiat cash lending business during the last three months of 2018, supposedly in “response to client demand to borrow USD against crypto collateral.”

Genesis Capital Processed $1.1B of Cryptocurrency Loans in 2018

Genesis claims reception to the new operation “has been quite strong”. It said: “Long-term digital currency investors sitting on appreciated assets can borrow against their crypto holdings to get cash liquidity without triggering a taxable event.”

Cryptocurrency loans are emerging as an increasingly viable alternative to borrowing fiat. For example, data from Genesis Capital shows that interest in bitcoin-denominated loans has risen largely on account of the currency’s use as an asset for non-speculative purposes.

What do you think about the cryptocurrency lending business? Let us know in the comments below.

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#Blockchain The Wrapped Bitcoin Project Has Officially Launched on Ethereum

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The Wrapped Bitcoin Project Has Officially Launched on Ethereum

On Jan. 30, a group of cryptocurrency developers and organizations officially launched a project called Wrapped Bitcoin (WBTC) on the Ethereum network. The ERC20 token is a coin backed by bitcoin core (BTC) reserves and has started trading on several exchange platforms.

Also read: A Look at Openbazaar’s Multi-Currency Wallet and Vendor Listings

The Introduction of Wrapped Bitcoin

Last October, a joint initiative by Bitgo, Kyber Network, and Ren (formerly Republic Protocol), revealed the creation of a new ERC20 token called WBTC. The new tokens are meant to bring more liquidity into the decentralized ecosystem between both chains, while also enhancing decentralized applications. Wrapped bitcoin (WBTC) is the first ERC20 token backed 1:1 with BTC. The organizations that developed the protocol believe WBTC is the beginning of a multi-institutional framework for tokenizing any asset.

The Wrapped Bitcoin Project Has Officially Launched on Ethereum

“WBTC will allow the Ethereum network to be leveraged to enable new applications and use cases for itcoin — WBTC standardizes itcoin to the ERC20 format, so dapps such as Compound, Dharma, Dydx, Gnosis, Maker, Set protocol and more can leverage bitcoin for decentralized lending, margin trading, and derivative markets,” explain the creators of WBTC.  “Further compelling new applications and use cases will be identified, explored and implemented as the ecosystem continues to grow and actively innovate.”

The Wrapped Bitcoin Project Has Officially Launched on Ethereum

Initially, eight merchants will be facilitating conversion between WBTC and BTC. There is a required Know Your Customer (KYC) process involved with obtaining WBTC through these merchants. Initial merchants dealing with WBTC will include Airswap, Dharma, Ethfinex, Gopax, Kyber Network, Prycto, Ren, and Set Protocol. The developers also say that WBTC will be integral to the development of decentralized exchanges.

“WBTC also makes it possible for traders to use bitcoin value for token trades on decentralized exchanges (DEXs) such as Airswap, Ddex, Ethfinex, Idex, Kyber Swap, Loopring, Radar Relay, Renex, Switcheo Network, and the Ocean,” the WBTC announcement detailed.

The WBTC representatives added:

Wallet providers and exchanges will now be able to reduce overheads with the ability to support multiple currencies while maintaining only the one Ethereum node.

The Wrapped Bitcoin Project Has Officially Launched on Ethereum

Proof of Reserve

The community-backed project is also centralized to a degree by a chosen custodian. Bitgo will hold the keys to mint tokens and the project will be very similar to stablecoin projects that use proof of reserves. The WBTC whitepaper details that there are many cryptocurrency assets and government issued bonds that use the reserve method. “This is the case with tether, trueusd, USDC, digix (gold), globcoin (a mix of fiat currencies), and AAA reserve (governmental bonds),” the whitepaper details. Additionally, the WBTC creators emphasize that the system’s smart contracts have been audited by several reputable third-party audit firms such as Coinspect, Solidified Technologies, and Chainsecurity.

“The first WBTC on the main Ethereum chain have been minted and burnt which can be observed onchain on Ethereum  — The proof of reserve is onchain, which shows the exact 1:1 between minted WBTC tokens and bitcoin stored by the custodians,” the WBTC announcement notes.

The Wrapped Bitcoin Project Has Officially Launched on Ethereum

The WBTC topic has been a hot discussion on social media and forums since the protocol launched. The crypto economy has seen many newly introduced stablecoins and other types of smart assets like RSK Labs’ smart bitcoins, and Blockstream’s federated system Liquid. Besides stablecoins backed by fiat, the Maker protocol has produced a stablecoin called dai that’s bolstered entirely by the backing of collateralized cryptocurrencies. WBTC will add a different flavor to the world of proof of reserve based coins that have entered the economy in the last few years.

What do you think about wrapped bitcoin (WBTC)? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Bitcoin.com, the WBTC website, and white paper.

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#Blockchain Currency.com Allows Crypto Traders to Buy Leveraged Equities, Indices and Metals

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Currency.com Allows Cryptocurrency Traders to Buy Leveraged Stocks and Metals

The worlds of traditional finance and cryptocurrency have always been divided, for regulatory and technical reasons. Until recently, it was difficult for cryptocurrency traders to gain exposure to stocks and commodities. Currency.com is looking to remedy that through launching the “Bitmex of stocks,” a crypto-friendly platform that promises high leverage and low barriers for entry.

Also read: Wikipedia Now Accepts Bitcoin Cash Donations via Bitpay

Currency.com Launches With 150 Tokenized Assets and Another 10,000 to Come

Currency.com Allows Crypto Traders to Buy Leveraged Equities, Indices and Metals
Ivan Gowan

In mid-January, news.Bitcoin.com reported on Currency.com, a Belarus-based trading platform for tokenized securities. Unlike other platforms of this nature, Currency.com promises entry to retail investors and a marketplace of readily tradable assets from day one. What’s more, these comprise globally recognizable assets such as Microsoft stock, gas, oil, and the Nasdaq 100. The platform is now live in invite-only mode, with around 1,000 traders putting it through its paces. Another 113,000 and counting are on the waiting list.

This week, news.Bitcoin.com spoke to Currency.com CEO Ivan Gowan to learn more about the interest the exchange has received, and the regulatory logistics of launching such an operation from Belarus. Gowan explained how much of that interest has come from the English and Russian speaking worlds, with 70 percent of those on the waiting list hailing from Eastern Europe. Western Europe, Japan, and Korea account for the remaining regions that have shown strong interest in the exchange. U.S. citizens, however, are unable to sign up at this time.

“I think there’s a lot of excitement where people see this kind of merging of cryptocurrencies, blockchain and capital markets and they see tokenized assets as a big part of that future,” began Gowan. “We’re not setting ourselves up to be focused on the institutional market – we’re focused on people who want to trade with us directly, people who value simplicity and ease of use.”

Currency.com Allows Crypto Traders to Buy Leveraged Equities, Indices and Metals
Assets can be filtered by a range of metrics on Currency.com

Institutional Assets for a Retail Audience

The ease of use that Ivan Gowan speaks of is evident when accessing the exchange. While professional traders might balk at its simplicity, it has clearly been designed with a retail audience in mind, introducing them to a world of tokenized assets while retaining the familiarity of the crypto exchanges they’re accustomed to trading on.

For traders raised on the volatile thrills of the crypto markets, stocks, which typically move no more than a couple of points a day, can seem dull. Currency.com has found a way to inject some fun into these tranquil “nocoiner” markets by adding leverage. “On the one side, you’ve got the more deliverable side of tokenized assets without leverage,” explained Gowan, “and then on the other side, you can use your cryptocurrencies as collateral for trading with leverage.”

With 20x margin trading available for equities, and up to 100x for other assets, even the slightest movements can generate major wins – or losses – for traders. While it is the responsibility of traders not to get carried away in this marketplace of maximum leverage and multiple possibilities, there are at least some general safeguards built in.

Currency.com Allows Crypto Traders to Buy Leveraged Equities, Indices and Metals
The Currency.com exchange

“If you run low on margin, the client protection systems kick in so you don’t go into debt,” explained Gowan.” Because Currency.com purchases the underlying assets or their derivatives, there are limitations on the extent to which traders can get rekt. “If you did have a trade open on Facebook and it dropped by 10 percent overnight because they missed an earnings call, say, then we would take on some of that risk, and we would give negative balance protection.”

Proactive Regulation From the Belarusian Government

Currency.com Allows Crypto Traders to Buy Leveraged Equities, Indices and Metals
Twitter stock can be leveraged up to 20x on Currency.com

CEO Ivan Gowan divides his time between London and Belarus, where Currency.com has a large technical team operating out of the country’s High Technology Park. He speaks warmly of the “innovative legislation” that’s been created to incubate cryptocurrencies and blockchain in Belarus in a bid to drive economic growth, and of the quality talent pool that includes highly proficient programmers with a strong work ethic.

Although getting regulated in the U.S. is on Currency.com’s long-term roadmap, there are significant hurdles that must be overcome to gain SEC approval. In the meantime, there is work to be done onboarding the tens of thousands of users on the waiting list. Once through the exchange’s virtual doors, they will be free to deposit funds with BTC or ETH, as well as fiat currency, and there are plans for other crypto assets to be added in future including BCH and LTC. There will also be a mobile app rolled out in February. The gulf between the traditional finance and cryptocurrency worlds is gradually narrowing. Currency.com may be one of the first crypto exchanges to provide a bridge, but it is unlikely to be the last.

What are your thoughts on tokenized securities? Would you trade stocks and metals using a platform like Currency.com? Let us know in the comments section below.

Images courtesy of Shutterstock and Capital.com

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Readers should do their own due diligence before taking any actions related to the mentioned company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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#Blockchain PR: MoneyToken Is Launching Its Own Exchange – in Collaboration With Huobi Cloud

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MoneyToken Is Launching Its Own Exchange – in Collaboration With Huobi Cloud

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

MoneyToken, one of the leading global crypto-lending platforms offering crypto assets-backed loans, has announced the launch of their new MoneyToken Exchange platform in a collaboration with Huobi Cloud.

This gives MoneyToken the ability to leverage Huobi’s technical expertise and security know-how, plus gives users access to the liquidity that Huobi Cloud has to offer.

The Exchange has been launched at 1:00 PM UTC today, and the team has also announced that a lottery with a 200 ETH prize fund is in the pipeline, as a way to engage and thank all of MoneyToken supporters.

MoneyToken is one of 2018-19s top ventures, with a thriving community of more than 50,000 active users and a number of well-known advisors and supporters such as Roger Ver.

With the launch of their Exchange, MoneyToken is starting to fulfill the dream of their founders and developers, creating a financial ecosystem that revolutionizes the finance industry and opens the door to new opportunities for their customers.

MoneyToken’s current user base will be crossing over to join the Huobi Cloud ecosystem while getting unique access to one of the biggest liquidity pools in the world. If we were to make a prediction, then in our opinion this will dramatically accelerate MoneyToken’s growth potential.

MoneyToken users can expect all kinds of new opportunities from the partnership between Huobi Cloud and MoneyToken – right away:

  • Lending platform users will have the unique ability to trade their collateral, not only gaining access to liquidity through the loan process, but also getting the chance to work their crypto-assets and gain potential growth.
  • MoneyToken will be able to liquidate collateral much quicker, accelerating a service already known for its speed of operation.
  • More features, like derivatives contracts, margin trading, OTC, withdrawal to fiat and short selling will become available on the MoneyToken Exchange as it is rolled out to users.

With MoneyToken Lending platform combined with MoneyToken Exchange the opportunities are endless. By sharing one order book with Huobi Cloud, MoneyToken ensures sustainable volume to make smoothly processing unlimited orders possible.

It seems that initiatives like MoneyToken and Huobi Global are leading the way to a bright future for cryptocurrency. Why not join them on the journey? To participate in the MoneyToken Exchange beta test, go to exchange.moneytoken.com and find out what the future looks like…

Contact Email Address
james.hendersonmt@gmail.com
Supporting Link
http://exchange.moneytoken.com

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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