New SEC Chairman Also Serves as Senior Lecturer on Bitcoin at MIT

Jenson Nunez
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New SEC Chairman Also Serves as Senior Lecturer on Bitcoin at MIT

The executive serves as a teacher and bring classes about the impact of Bitcoin on the financial world.  He considers cryptocurrencies without a central authority as an innovative alternative.

The newly nominated candidate to head the United States Securities and Exchange Commission (SEC), Gary Gensler, serves also as a senior lecturer on Bitcoin, cryptocurrencies, and blockchains at the Massachusetts Institute of Technology (MIT).

The executive teaches economics and brings lessons to improve management at the institute’s Sloan School of Business.

Gensler also serves as an advisor to the MIT Media Lab cryptocurrency initiative and lead research that guards a close relationship to bitcoin and its impact on finances. In 2018, the executive also conducted a free multimedia course under the name of “Blockchain and money”.

About a training program like the one Gensler leads, he highlights the relevance of the potential uses of blockchains, decentralized applications, and smart contracts and the impact each one of these procedures has on the current economy. The course is set in 24 videos on which the economist explains in detail all the above-mentioned topics.

The academic is one of those who consider that a form of digital money such as cryptocurrencies, without a single central authority, can be an innovative step that could empower the current economy. In discussions with students, Gensler points out those crypto-assets serve as bridges to achieve a more secure system of payments.

Gensler’s Thoughts about Bitcoin

“Satoshi Nakamoto’s white paper ‘Bitcoin, a peer-to-peer electronic cash system’ and associated blockchain technology, will be studied in the context of the long history of money and ledgers,” Said Gensler at the end of his second video.

During the Barack Obama administration, Gensler served as the former chairman of the Commodity Futures Trading Commission (CFTC) and now he awaits the ratification of the Senate to reach his spot as the leader of the SEC.

With Gensler as the leader of the SEC, there is a more favorable scenario for setting a conciliatory tone between the regulator and companies that work in the bitcoin environment. There is probably a chance to approach, establish, and promote innovation rather than bans.

The potential ratification of Gensler in the position precisely come to light after the SEC filed a formal complaint with a cost of 1.3 billion dollars to the company Ripple Labs, the issuer of the crypto active XRP.

This legal action also aims at its cofounders, Christian Larsen and Bradley Garlinghouse for trading securities without consent. In its defense, the entity states that XRP is not a security but a cryptocurrency.

In his classes, Gensler made special points to talk with his students about the nature of XRP and its behavior. Gensler has also addressed this debate on the nature of XRP together with the students in his classes.

The executive assured in 3 years ago that both currencies (ether, the native cryptocurrency of the Ethereum network), and XRP have the potential to be used as financial securities.

By: Jenson Nuñez

Ether’s Price Breaks Its All-Time High above USD 1,400

Alexander Salazar
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Ether’s Price Breaks Its All-Time High above USD 1,400

In the last few days, the price of ETH has increased by almost 30%. Compared to Bitcoin, the Ethereum cryptocurrency is a long way from its all-time high.

About a month ago, the price of Bitcoin managed to break its all-time high of 2017. Likewise, the Ethereum cryptocurrency, Ether (ETH), exceeded its all-time high of January 2018.

In recent days, the price of ETH reached USD 1,435, according to data from LiveCoinWatch. In this way, the cryptocurrency exceeded the USD 1,420 mark, which had been its maximum price.

It remained above USD 1,400 momentarily, since it then traded at USD 1,391, according to the same source. An increase of more than 10% in just 24 hours and almost 30% in just one week led it to break its previous all-time high.

Trading Volumes of Ether and Bitcoin

Ether’s trading volumes have recently been among the highest in the cryptocurrency’s history. Data from LiveCoinWatch indicates that ETH trading has been over USD 14.5 billion for 24 hours. However, it is still below the high of USD 17.5 billion, which it recorded in March 2020.

Even though Ether reached a new all-time high in US dollars, its situation is very different from that of Bitcoin (BTC). One unit of Ether is currently equivalent to 0.038 BTC.

The best equivalence for ETH for BTC has occurred since August 2018. However, it remains more than 70% below its maximum price in Bitcoin of 0.141 BTC per ETH. That value is currently equivalent to more than USD 5,000.

Beginning of the Altcoin Season

There has been a stir among crypto enthusiasts beyond the fact that the price of ETH has broken its all-time high. Many consider it a sign of the beginning of the “altcoin season”, that is, a dominance of alternatives to Bitcoin. In early 2018, the top 40 altcoins outperformed Bitcoin for the last time to date.

That season is a long way from happening since BTC currently outperforms most major cryptocurrencies by capitalization.

The altcoin season index, from the Blockchain Center, is the only one that currently shows a greater closeness to the performance of that season. In the last 90 days, 39% of the major altcoins have improved the percentage increase of BTC.

Bitcoin’s Supremacy over Altcoins

In contrast to the prices of Bitcoin and other cryptocurrencies during the bullish run of 2017 and 2018, the current situation does not favor the latter. During that period, they did not only reach their respective all-time highs in US dollars but also in Bitcoin.

Even approaching their highs in US dollars, the best altcoin levels compared to those of Satoshi Nakamoto’s cryptocurrency look a long way off.

The level of trust that the pioneering cryptocurrency has earned since its birthplaces is well above other cryptocurrencies. The all-time high for Bitcoin’s price is above the one that it reached in December 2020. However, Ether’s is well below its all-time high of March last year.

By Alexander Salazar

Goldman Sachs Plans to Explore Crypto-Custody

Jenson Nunez
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Goldman Sachs Plans to Explore Crypto-Custody

The bank reportedly issued a request to explore cryptocurrency custody. This kind of service receives the support of the US by the Office of the Comptroller of the Currency.

The Goldman Sachs Group, one of the world’s largest investment and security banking groups, sets a plan to begin a new crypto-journey, this time through the custody service in the United States. Although managing the brokerage is not what the group intends.

The measure intends to provide custody services and would receive support from the Office of the Comptroller of the Currency (OCC), which since July 2020 permits federal banks in the United States the carriage of cryptocurrency custody services.

Goldman Sachs issued a request for information (RFI) to explore the fields of cryptocurrency custody. It also ensures that the bank’s plans will become “apparent soon”, according to an unspecified source.

The First Provider of Crypto-asset Custody Funds to its Clients

According to the expert of the commercial bank that in the year 2019 obtained revenues of USD 36.55 billion, Goldman Sachs will avoid the creation of the offering regarding cryptocurrency brokerage services that come in pair with a series of exchanges that operate in the United States, such as Coinbase and Geminis.

“Anchorage, Bitgo, and Coinbase have pretty big plans in cryptocurrency brokerage, and we would not look to duplicate them,” the Goldman Sachs source confirmed.

In August 2018, the Goldman Sachs bank started to consider the holding of funds in cryptocurrencies. This was a strategy that aims at commercial goals, although the skepticism about the crypto-market still ruled over its decisions.

Since that date, Goldman Sachs is circling the possibility of becoming the first provider of crypto-asset custody funds to its clients. This finance company, which remains skeptical about a successful future for a currency like bitcoin in the short-term, is looking for new paths and directions regarding the crypto-economy and bitcoin’s volatile behavior.

At this time, the representatives of Goldman Sachs remain silent on this matter, but users expect that the company will make its move very soon to clarify the veracity of this information.

Anchorage is a Qualified Custodian of Cryptocurrencies

In a conference call this week on cryptocurrency custody, San Francisco-based Anchorage acquired conditional approval from the OCC to operate as a national digital bank and “undisputably” receive its range as a “qualified custodian.”

About this, the president of this cryptocurrency platform, Diogo Mónica, stated that this regulatory approval will raise the interest of many institutional and risk-averse players from the crypto- environment.

Monica also clarified they are sustaining various conversations with Goldman with a high probability of setting an offering of something similar to the main brokerage services that cryptocurrencies involve. However, the Goldman expert confirmed that the bank is evaluating custody, but there is no interest in the main brokerage.

This project may take part in a global digitalization plan, which is also under the eye and developed by the European Central Bank through a recent consultation on the adoption of the digital euro, which culminated in a record level of 8,000 responses received.

By: Jenson Nuñez

Bitcoin’s Bullish Boom Becomes Sustainable Thanks to Demand from Large Investors

Alexander Salazar
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Bitcoin’s Bullish Boom Becomes Sustainable Thanks to Demand from Large Investors

The scenario turned sharply bullish when Bitcoin achieved the planned consolidation. A large number of wealthy investors are reportedly entering the Bitcoin market.

Well-known analyst Willy Woo recently stated that strong demand from large investors is what makes Bitcoin’s current bullish rally sustainable. He noted that this increasing flow of capital will allow the consolidation of the price in the short term. However, the analyst believes that “we are still in an early stage of the bullish market.”

One of the key drivers of the recent Bitcoin’s boom has been the rapid growth in the number of whales, according to Woo. “High Net Wealth Individuals (HNWI) have been massively arriving after institutions validated Bitcoin,” said the analyst.

There was a coincidence between the accelerated growth of Bitcoin’s price in January 2020 and the pronounced increase in the number of whales. In a few days, the number of investors holding more than 1,000 BTC grew by 10%, thus reaching over 2,100.

The analyst talked about the recent correction of close to 22% and its subsequent recovery. He stated that, after the price decline on January 11th, it would fluctuate between USD 30,000 and USD 42,000.

“The partial crash of Coinbase with the delayed execution of purchase orders led to an unusually high increase in sales. This allowed the pressure of sales to dominate over purchases. Bitcoin’s price on Coinbase was even USD 350 lower than on other exchanges,” stated Willy Woo.

According to Woo, the Coinbase incident involved a significant part of the buying momentum. “People know about much of the latest action of the price through exchanges. For that reason, no one was able to predict the extent of the intensive sales through on-chain capital movements,” said Woo.

Expected Consolidation of Bitcoin’s Price

The strong buying momentum for whales is what led to the aforementioned consolidation, concludes Woo. The analyst said that one of his price models has been accurate “for 12 years, during bullish markets for Bitcoin.” He uses the model to determine the “floor price” of Bitcoin, which is at USD 29,000.

The analyst makes it clear that he does not think that Bitcoin’s price can reach that level. However, he advises that traders should prepare for it and consider it “the worst scenario”.

Investors currently move high amounts of coins but there is/are usually discrete impulses to buy. In the last twelve months, the highest level corresponds to the crash of the markets in March. The current one seems to be the same as that of March, but there have been successive peaks of BTC transfers.

Woo explains that the amount of the USDC stablecoin funds entering exchanges, while BTC coins are exiting them, allows verifying sales. “This is a bullish situation and should provide more fuel for additional increases once the consolidation is complete,” the analyst states.

There are also market participants who tend to trade their bitcoins, in contrast to HODLers. When the price of BTC reaches a high, there usually tend to be more inflows on exchanges. Despite the most recent price increase, there have not been significant BTC inflows on exchanges, suggesting that large buyers are holding on to BTC.

By Alexander Salazar

Study Reveals that over USD 17,000 worth of Bitcoin Left China in 2020

Alexander Salazar
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Study Reveals that over USD 17,000 worth of Bitcoin Left China in 2020

Chinese citizens withdraw their cryptocurrencies to exchanges outside the country. In 2020, the flight of cryptocurrencies abroad exceeded that of 2019 by 51%.

According to a report, users withdrew USD 17.5 billion worth of Bitcoin (BTC) and other cryptocurrencies from China to overseas exchanges in 2020. This represents an increase of 51%, compared to more than USD 11.4 billion the previous year, according to Peckshield.

This blockchain security consultancy used the CoinHolmes browser to trace addresses that they consider high risk. The firm estimated the volume of China’s “flight of cryptocurrencies” through the balance between the world’s major exchanges.

The analysis of the flow of transactions between high-risk addresses and exchanges is possible through this relationship. Peckshield noted that this happens quite often.

They marked some of the addresses as high risk since the transactions allegedly come from illegal platforms. Among these are gambling websites and dark web markets, among others. They also include withdrawals to overseas exchanges to avoid tax payments, tax garnishment, bank account closings, and financial blockades. In other cases, Chinese users simply seek to protect their identity against KYC policies.

Estimated Volume of Bitcoin Withdrawals

The current Chinese law prohibits cryptocurrency exchanges that can facilitate cash withdrawal of national foreign fiat currencies. “Regardless of the number of transactions, this type of transaction violates China’s foreign exchange regulations. For that reason, they are suspected of money laundering,” according to the report.

The highest volume of Bitcoin withdrawals (172,115 BTC) from Chinese exchanges occurred in March 2020. The peak of withdrawals of US dollars occurred in December 2020, when BTC reached its highest price until then (above USD 29,000). Therefore, the total transfers amounted to almost 120,000 BTC, equivalent to USD 20,000 million.

Peckshield says that it used a broad sample of exchanges, including OKEx, Bitfinex, Bitfinex, Kucoin, Bitstamp, Bittrex, and Coinbase, among others. They monitored a total of 100 million exchanges, in addition to data from the World Bank.

However, they say that the results are conservative since the volume of withdrawals abroad could exceed their estimates.

China Joins Cryptocurrencies

The Chinese authorities hinder foreign exchange operations with other national fiat currencies in the country. However, they have become a cryptocurrency powerhouse. The country has many markets and exchanges, as well as great processing power in cryptocurrency mining.

China recently completed a digital yuan test, in which they distributed 200 digital yuan to 100,000 citizens. They are also testing the first ATMs and debit cards for their future national cryptocurrency.

However, China should not issue a national cryptocurrency while still limiting the trading of other cryptocurrencies. This would lead to an increase in withdrawals, as a consequence of the disappearance of incentives to continue operating in the country.

In addition to investors and money changers, the mining industry in China would also flee. They would seek the regulatory, tax, and geographic advantages that countries like the United States and Russia provide.

By Alexander Salazar

President of CSW sues Apple for not Removing Telegram from its App Store

Jenson Nunez
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President of CSW sues Apple for not Removing Telegram from its App Store

Marc Ginsberg denounces that extremist behavior is promoted through Telegram. The claim is about how the platform violates Apple’s policies.

Marc Ginsberg, Former US ambassador and President of the US nonprofit group, Coalition for a Safer Web (CSW), filed a federal lawsuit on Sunday, January 17; in demand to the Apple Company to remove from its App Store the Telegram application for being a sharing source of violent, extremist and racist messages.

The diplomat and CSW assure that extremist groups, white supremacists and neo-Nazis, which broke into the United States Congress on January 6, used said app to send messages of violence and racism once they committed the violent events in the capitol.

According to the lawsuit of the organization that makes life in Washington, Telegram “promotes extremist behavior in violation of both state and federal laws.”

Likewise, in the complaint, they assure that the application “connects members of these groups and facilitates the ability of these groups to communicate, and make an easier recruit of members as well as to plan and carry out attacks and instill fear in their enemies.”

Ginsberg Believes that the Platform Transgressed Apple’s App Store Review Policies

Ginsberg has attacked Apple over Telegram before. In July last year, he sent a letter to the CEO of the company, Tim Cook, where he asked to “keep Telegram’s financial feet against the fire”.

This statement appeared after an investigation that led to the conclusion that there is a nest for anti-semitic groups across all Europe that spread propaganda in that application.

Coalition for a Safer Web, the Coalition that Ginsberg rules, is a non-partisan organization that is in charge of denouncing and demanding the elimination of content that incites violence, extremism, and terrorism on social media platforms.

Is Parler Affecting Telegram’s Content?

The lawsuit that involvesTelegram seeks to emulate the same effect as the complaints against Parler, which is a US-based microblogging and social media service that was used to call for violence and other extremist purposes, which set the scenarios for the invasion of the US Congress that took place earlier this month.

Supporters of President Trump also menaced through Parler to lead extremist actions tomorrow at the inauguration of President-elect Joe Biden.

After the complaint against Parler, companies such as Apple and Google removed the social network from their platforms. The coalition is trying to achieve the same goal against Telegram, but this may represent quite a challenge since it is outside their jurisdiction, according to the Washington Post.

What we Know about the Actual Lawsuit and which Effect will it Has over Telegram

The CSW complaint is blocked by section 230 of the Communications Decency Act, which exempts communication platforms from legal responsibilities for the content they host.

For her part, Daphne Keller, a researcher on platform regulation at Stanford Law School thinks that the complaint could carve too deep.” However, Keller thinks that it shares similarities with previous lawsuits that seek to force platforms to retract their decisions to remove applications and social media accounts,” the US media reported.

By: Jenson Nuñez

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