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Bitcoin rallies, McAfee compares prison to Hilton, digital yuan airdrop

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Coming every Sunday, Hodler’s Digest tracks every important crypto news story from the previous week. Essential reading for all Hodlers!

 

Top Stories This Week

 

$12,000 Bitcoin price back on the table after BTC rallies above $11,400

At last. Bitcoin rallied to $11,448 on Friday, finally breaking above the symmetrical triangle where the price had been compressing for the past 30 days.

Earlier in the week, BTC had dropped to $10,528 when Donald Trump suggested negotiations on a second stimulus package wouldn’t happen until after the election.

But there were reasons to be cheerful. In a surprise move, Square announced it had acquired 4,709 BTC, describing it as an “instrument of economic empowerment.” This helped Bitcoin turn bullish — bringing $12,000 back into view.

DeFi tokens followed BTC’s bullish trend, with Yearn.finance surging by 58% in a 72-hour period. Also this week, Wrapped Bitcoin topped $1 billion in total value locked after a 900% increase in two months.

All eyes now are on the U.S. election, and whether it’ll impact Bitcoin’s price. One trader, “BigCheds,” told Cointelegraph a clear winner won’t affect crypto too much, but he believes “we should see a bounce in risk-off assets like gold and Bitcoin” if the result is contested.

 

SEC’s conservative approach to crypto needs to change, “Crypto Mom” says

Hester Peirce — the SEC commissioner affectionately known as “Crypto Mom” — has said the regulator’s conservative attitude to crypto needs to change.

In an interview with Cointelegraph, she admitted that the Securities and Exchange Commission has been “very slow” in giving guidance, even though interest in digital assets is growing.

“I think we’re going to be forced to confront that more and more in the coming years,” Peirce said.

In other regulation news, U.S. Attorney General William Barr published official guidelines for keeping crypto markets accountable and said the space could “fundamentally transform” society. His framework gives examples of crypto being used legitimately and illegally and sets out a game plan for the future.

Meanwhile, the Department of Justice said it has jurisdiction over foreign crypto companies that touch U.S. servers and warned “rogue states” such as Russia, Iran and North Korea could use crypto to fund cyberattacks designed to undermine national security.

You can watch Hester Peirce’s interview with Cointelegraph here.

 

BitMEX founder and ex-CTO out on $5 million bail bond until court appearance

BitMEX’s former chief technical officer, Samuel Reed, has been released from custody after signing a $5-million bond.

He was arrested on Oct. 1 after being accused of flouting money-laundering rules in violation of the Bank Secrecy Act, as well as illegally offering derivatives trading to U.S. retail customers.

Reed has deposited $500,000 in cash with the court as part of the agreement, and his bond will be forfeited if he fails to appear in court or doesn’t surrender to serve any sentence the court may impose. His passport has also been seized.

His fellow co-founders and colleagues — Arthur Hayes, Ben Delo and Gregory Dwyer — are all indicted with the same charges and remain “at large.”

BitMEX announced sweeping changes to its top leadership this week, meaning the exchange’s three co-founders will no longer hold executive roles. But David Carman, a former Chicago Board Options Exchange trader, told Cointelegraph that the damage may already have been done, and the legal drama could scare off mainstream institutions.

Shenzhen to hand out 10 million digital yuan in currency giveaway

Even central bank digital currencies can have an airdrop.

The Chinese city of Shenzhen is distributing 10 million digital yuan (worth $1.5 million) to 50,000 lucky recipients through a lottery system.

Winners will have one week to spend their prize at more than 3,300 merchants in the city’s Luohu District.

All of this comes as the Chinese government continues to promote the digital yuan to the public — and a pilot program is currently taking place in nine cities.

In other CBDC news this week, seven central banks joined the Bank for International Settlements in producing a report that sets out how these digital assets should be designed

But in a rather curious development, BIS admitted that none of the central banks involved in the research have actually decided whether they’ll issue a CBDC of their own.

John McAfee arrested in Spain on tax evasion charges

John McAfee has been arrested in Spain on tax evasion charges, and he is now awaiting extradition to the United States.

He faces five counts of tax evasion covering the years 2014 to 2018, and if convicted, he could face a sentence of five years in prison and a $250,000 fine for each count. McAfee has also been charged with five counts of willful failure to file taxes.

On the same day, the U.S. Securities and Exchange Commission filed a suit against McAfee for allegedly promoting ICOs without disclosing he had been paid to do so. It’s claimed that he earned $23 million as a result.

In a message conveyed through his wife, Janice, McAfee said: “Hello from prison my friends. I am having a fascinating time. Spanish prison is not that bad. We can wear whatever clothes we want. We can smoke and socialize. It’s like the Hilton without turn down service.

Winners and Losers

 

 

At the end of the week, Bitcoin is at $11,372.62, Ether at $373.51 and XRP at $0.25. The total market cap is at $358,488,544,443.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are UMA, Ren and Storj. The top three altcoin losers of the week are PumaPay, Hyperion and SushiSwap.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

Most Memorable Quotations

 

“If we have a clear winner and an easy transition of power, I do not see much of an impact on the price per coin. On the other hand, if we have a close and/or contested election, we should see a bounce in risk-off assets like gold and Bitcoin.”

BigCheds, trader

 

“Some are betting on blue, some betting on red, and I’m betting on gold.”

Frank Holmes, U.S. Global Investors CEO

 

“Andre said he won’t be tweeting anymore. People got what they asked for … Crypto community at large has always been childish and irresponsible, which is the reverse of what Andre has been preaching. This witch hunt is something else, the last week has been very demoralizing.”

Banteg, Yearn developer

 

“There are many reasons why the price of Bitcoin can rise or fall, but S2F is not one of them.”

Charlie Morris, ByteTree co-founder

 

“There is more hype around NFTs right now. To some extent it’s an extension of the DeFi excitement. We have seen with DeFi that once a trend starts it creates a snowball effect.”

Ilya Abugov, DappRadar project manager

 

“The crypto market has been engulfed in a sea of red this week, with most DeFi blue chips recording double digit losses over the past 7 days.”

Santiment

 

“What’s BitMEX thinking of? What are any of these companies thinking of that they can operate like this and not be above board and be honest and have a high level of integrity, and be transparent. What do they think is going to happen here?”

David Carman, former CBOE trader

 

“I’ve never been this excited about the potential of #Bitcoin for significant price appreciation in the short term (less than 18 month time frame.)”

Bill Barhydt, Abra CEO

 

“Conservative. I’d say #bitcoin likely sees $1 trillion market cap within 2 years, probably sooner. $1 trillion is about BTC $50k.”

Adam Back, Blockstream CEO

 

Prediction of the Week

Bitcoin pioneer predicts $1 trillion Bitcoin market cap by 2022 or “sooner”

Adam Back has said it is “conservative” to think that Bitcoin will hit a $1-trillion market cap by 2025 — and believes it could happen within two years.

This would result in Bitcoin surging to a price of approximately $50,000 per coin.

For the Blockstream CEO’s prediction to come true, Bitcoin’s market cap would need to increase by almost 400%, given how it currently has a valuation of about $210 billion.

Other crypto executives also believe there’s a lot to get excited about.

Bill Barhydt, the CEO of the payments gateway Abra, tweeted this week: “I’ve never been this excited about the potential of #Bitcoin for significant price appreciation in the short term (less than 18 month time frame.)”

He believes that we could see a retest of all-time highs at $20,000 — sparking “a run to $50,000 and beyond.”

FUD of the Week

 

Coinbase hemorrhages employees following controversial culture stance

At least 60 Coinbase employees are planning to leave the exchange after controversial adjustments were made to the company’s policies.

Coinbase’s CEO, Brian Armstrong, had said that staff would be expected to avoid political and social distractions and focus on building “an open financial system for the world.” Employees who felt uncomfortable with this direction were invited to accept a “generous exit package” worth between four and six months’ pay.

Armstrong has now revealed that about 5% of Coinbase’s workforce has decided to accept the offer, and additional workers have expressed an interest in leaving as well.

Some had feared that the cultural shift would affect the company’s “under-represented minority population.” But according to Armstrong, people from such groups have not taken the severance package in disproportionate numbers.

In an email to the staff left standing, he wrote: “While having team members leave is never easy, I think we will emerge as a more aligned company from this. From time to time we need to rearticulate and clarify our cultural norms as we continue scaling.”

Multimillionaire Dick Smith threatens to sue The Guardian over Bitcoin scam ads

One of Australia’s best-known entrepreneurs has threatened to sue The Guardian after it hosted ads that linked to fake articles suggesting he is promoting a fake Bitcoin investment scheme.

Dick Smith has vowed to start defamation proceedings against the media outlet within 14 days unless his legal team receives a satisfactory response.

Although The Guardian has been taking down ads once notified, Smith’s lawyer warned “that does not prevent Australian readers from falling victim to this prolific cryptocurrency scam.”

Smith has been battling the ads on various platforms for months. In his case, the fake articles were about “how to make money easy” and “get rich in a few days” using cryptocurrency.

Several high-profile individuals — including the Dutch billionaire John de Mol and the British financial expert Martin Lewis — have also taken legal action after scam ads featuring their image were found on Facebook.

 

75 crypto exchanges have closed down so far in 2020

Crypto exchanges are disappearing at a fast rate this year. At least 75 of them have shut down due to hacks or scams, with some simply vanishing into thin air.

According to research by the Crypto Wisser Exchange Graveyard, five of the exchanges are believed to have been scams, four were hacked, 31 were shut down voluntarily, and 34 were labeled “MIA” for disappearing with no explanation. Two were shut down by governments.

There are some macro trends that help explain why so many smaller exchanges are failing. The growth of DeFi and the rise of decentralized exchanges in 2020 have put the final nail in the coffin for many smaller operations.

Regulatory pressure has also increased since the early days of the industry, and many exchanges simply haven’t been able to keep up with the requirements. 

 

Best Cointelegraph Features

 

North Korean crypto hacking: Separating fact from fiction

How do North Korea’s hacking groups operate, how serious is the issue, and what can be done to stop them? Cointelegraph Magazine’s Alex Cohen takes a look.

 

These are the end days for crypto criminals, and good riddance

Nobody who believes in crypto wants it to be a sector beholden to criminality or poor commitment to security, Paul de Havilland argues.

 

NFTs take on DeFi? Nonfungible tokens push to be the next crypto craze

NFTs have been gaining traction in the background, but where is the industry headed? António Madeira takes a look. 



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BTC crash, DOT crushes XRP, man risks losing $262M: Hodler’s Digest, Jan. 10–16

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Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Bulls buy Bitcoin’s $35,000 support retest as altcoins push higher

Scream if you want to go faster. The crypto markets have been a rollercoaster ride this week — with Bitcoin’s price falling by more than $10,000 to lows of $30,549.60 on Monday.

Analysts maintained that the correction was “healthy and necessary,” with the sharp sell-offs prompting the total crypto market cap to fall by more than $200 billion

ExoAlpha CIO David Lifchitz said the crash “would purge the excessive growth of the past 10 days, allowing Bitcoin to build a new base toward $50,000 and above.”

And indeed, Bitcoin refused to die. Just three days after the sudden downturn, BTC reached $40,000 on Coinbase once again, amid fresh evidence of new large buys on exchanges. Tyler Winklevoss had a clear message: “Don’t listen to the noise, stay focused.”

Alas, it seems like $40,000 is now shaping up to be a tough nut to crack. Despite Joe Biden unveiling an eye-watering stimulus package worth $1.9 trillion, there was not a surge to be seen in Bitcoin’s price. Indeed, BTC actually fell under $35,000 at one point.

 

eToro warns users it is running out of crypto to trade due to unprecedented demand

An email sent out by eToro suggests that the exchange is struggling to keep up with users who are clamoring to snap up Bitcoin.

In a message to customers, it warned that “unprecedented demand for crypto coupled with limited liquidity” meant limits on crypto buy orders may need to be enforced over the weekend.

It seems the company has been a victim of its own success. The email came a day after eToro marketing manager Brad Michelson revealed that 380,000 users had opened accounts in the first 11 days of January — with crypto trading volumes running 25 times higher than they were last year.

Quantum Economics founder Mati Greenspan — formerly a market analyst for eToro — told Cointelegraph that the warning notice was “a symptom of a potential upcoming liquidity crunch” and advised users against trying to move funds off the platform.

An eToro spokesperson told Cointelegraph: “Our experience of the 2017 crypto rally means that we understand the possible consequences of extreme volatility in crypto markets. We want to ensure that our clients fully understand the possible risks.”

DOT flip: Polkadot overtakes XRP to become the fourth-largest cryptocurrency

There have been some big movers as the crypto market rally resumes and Polkadot’s DOT token is among them.

DOT has flipped Ripple’s XRP in terms of market capitalization following a massive gain of 29% over the past 24 hours. This makes it the new fourth-largest cryptocurrency, with a market cap of $15.6 billion at the time of writing. Over the past week, DOT has surged by an impressive 83.26%.

Polkadot is a fully interoperable platform that allows other blockchains to connect to the network, and it has been described as an “Ethereum killer” because of how it can process thousands of transactions per second.

The most recent update, which may be driving momentum, was the launch of its Rococo parachain testnet, which went live in late December.

Other factors driving momentum include the issues with DeFi on Ethereum as demand for scaling intensifies.

 

Programmer has two password guesses left to avoid losing $262 million in Bitcoin

Two gut-wrenching stories emerged this week — both with a similar theme.

One man told The New York Times that he has forgotten the password to a hard drive holding 7,002 BTC — a crypto haul that’s worth a jaw-dropping $262 million at the time of writing.

Stefan Thomas has just 10 guesses before the hard drive is encrypted forever… and so far, he has used eight of these attempts to no avail.

Meanwhile, on the other side of the Atlantic, a Welshman is offering the city of Newport a staggering $72 million for help in tracking down a hard drive storing 7,500 BTC. There’s just one problem: It was thrown away several years ago and is languishing in a landfill. Unfortunately for James Howells, the council has said it isn’t prepared to help over concerns that the search would be damaging for the environment. That means he’s going to miss out on a $280-million fortune.

Thankfully, it isn’t all bad news. A student has claimed that they have found private keys that they accidentally Hodled as early as 2011, unlocking $4 million in the process.

 

ECB president Lagarde renews calls for global regulation of Bitcoin

The president of the European Central Bank has doubled down on calls for Bitcoin to be regulated globally.

Speaking at the Reuters Next conference, Christine Lagarde said: “[Bitcoin] is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

During the interview, Lagarde did not reportedly refer to any specific instances of money laundering involving Bitcoin but alluded to her awareness of criminal investigations into illegal activities connected with its use. 

She told reporters: “There has to be regulation. This has to be applied and agreed upon […] at a global level because if there is an escape that escape will be used.”

 

Winners and Losers

 

At the end of the week, Bitcoin is at $37,271.25, Ether at $1,255.16 and XRP at $0.28. The total market cap is at $1,038,320,969,138.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are HedgeTrade, Voyager Token and IOST. The top three altcoin losers of the week are Bitcoin SV, EOS and Verge.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

 

Most Memorable Quotations

“They said #Bitcoin died on Monday, but now it’s above 37k. Don’t listen to the noise, stay focused.”

Tyler Winklevoss, Gemini co-founder

 

“Did nocoiners really think #Bitcoin wouldn’t bounce back? This is the year of the Metal Bull. $100k is inevitable.”

Samson Mow, Blockstream CSO

 

“This whole idea of being your own bank — let me put it this way: Do you make your own shoes? The reason we have banks is that we don’t want to deal with all those things that banks do.”

Stefan Thomas, locked out of 7,002 BTC 

 

“The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support BUY orders over the weekend.”

eToro

 

“[Bitcoin] is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

Christine Lagarde, European Central Bank president

 

“I look at the asset value of Bitcoin versus the asset value of all things traded and Bitcoin is still a nothing burger — a giant nothing burger.”

Kevin O’Leary, businessman

 

 

Prediction of the Week

Pantera Capital CEO doubles down on $115,000 Bitcoin prediction for 2021

Dan Morehead has maintained his bullish prediction for 2021, with the Pantera Capital CEO claiming that Bitcoin is on track to have surged 800% by August and hit $115,000.

The exec initially made this prediction in August 2020, when Bitcoin was trading at about $11,600. At the time of writing, it is now worth $37,000.

Setting out why Bitcoin has plenty of room for growth, he added: “Is Bitcoin overvalued? I would say no. […] Bitcoin has spent three years well below its long-term compound annual growth trend line, it’s still below it, and although Bitcoin has rallied a great deal over the last six months, I think it is fairly valued.”

 

FUD of the Week 

 

British financial adviser calls on the government to ban crypto transactions

A veteran financial advisor has called on the British government to ban crypto transactions.

Neil Liversidge started a petition urging local financial authorities to stop Bitcoin payments in the United Kingdom.

He argued that digital assets have no intrinsic value, adding they can have a “destabilizing influence on society, and are often used for criminal activity.”

In an interview with Professional Adviser, Liversidge urged retail investors to cash out immediately, adding: “If the UK government takes a lead by banning transactions on cryptos as my petition requests, that will set off a chain reaction, crashing cryptos overnight.”

Liversidge needs 10,000 signatures for a response from the government. At the time of writing, he’s got just 112.

Ledger owners report chilling threats after 20,000 more records leaked

Ledger users are receiving threatening emails in the wake of the hardware wallet manufacturer reporting that 20,000 more of its customers have been affected by another massive data breach.

One Reddit user said his father, who owns a Ledger wallet, received a message including his name, home address and phone number. The extortionist demanded 0.3 BTC or 10 ETH, worth roughly $12,000, or he would face physical violence.

The Redditor wrote: “I know that those scammers sending emails by hundreds are just trying their luck by creating fear, but when it comes to the safety of your family it’s another story.”

In another email, the scammer wrote: “Are you able to imagine all the possible consequences that can occur to you and your loved ones? I hope you do not ruin every little thing for yourself by making the wrong choice.”

Bitcoin payments are the “second stupidest idea I’ve heard,” says Stephen Colbert

Stephen Colbert, the charismatic host of CBS’ The Late Show, isn’t holding back his punches or his jokes when it comes to Bitcoin.

He referenced a recent Vice report that revealed how hackers had taken control of internet-connected chastity cages — devices worn by men to prevent them from engaging in any sort of sexual activity — and demanded Bitcoin to unlock them.

With a wry smile, he said: “Getting paid in Bitcoin? That’s the second stupidest idea I’ve heard.”

Colbert first covered Bitcoin on his show in April 2014 when Bitcoin was fluctuating between $50 and $300. Since then, BTC has risen by more than 40,000%.

 

Best Cointelegraph Features

Bitcoin has become nothing but the new Che Guevara T-shirt

Cassio Gusson argues Bitcoin promised to create a new normal in finance, but it turned out to be nothing but the old normal with a new face.

Here’s how institutional investors ignited Bitcoin’s rally to $40,000

In this article by Benjamin Pirus, experts weigh in on the main events from 2020 that impacted Bitcoin’s price the most.

Strap in: New institutions wait for Bitcoin price rollercoaster to end

Bitcoin market volatility is scaring off new institutional investors, but meanwhile, old ones continue to buy up the BTC dips. Here’s Shiraz Jagati.



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Four cryptocurrency block reward halvings to look out for in 2021

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Block reward halvings cut the rate at which new coins are generated on a given blockchain by 50%. Such events, known jokingly as “halvenings,” have long been anticipated by cryptocurrency traders as catalysts for pushing up the price of their cryptocurrency holdings.

Past attempts to predict when Bitcoin’s (BTC) price would increase in relation to halvings have proved inconsistent at best. However, few would be willing to quickly discount the mechanisms described in the law of supply and demand. All things being equal, as the number of coins available on the market decreases, the demand for those coins — and thus the price of each — increases.

With that in mind, here are four cryptocurrency projects that are due to undergo block reward halvings in the coming year, when their issuance rate will be cut in half.

Verge (XGV)

Verge is set to undergo a halving on Jan. 25 when its chain reaches a block height of 4,700,000. At this point, the current reward of 200 XVG which is issued to miners every 30 seconds will be cut to 100 XVG.

With just over 11 days to go before the halving, it may be assumed that the opportunity to get ahead of the reduction in Verge’s supply has already passed. However, capitalizing on block reward halvings has never been an exact science, and often times a coin fails to react to the event until after the fact.

The XVG price hit an all-time high of $0.30 back in December 2017, before suffering a near three-year slide down to the $0.001 mark by 2020. Since the winter surge, which sent Bitcoin to a new all-time high, however, Verge’s fortunes have reversed. The coin recorded growth of 219% between November and the time of writing.

Tomochain (TOMO)

Tomochain’s halving will occur on Feb. 7, when the number of TOMO coins issued yearly will be reduced from 2 million to 1 million.

The Tomochain blockchain features block times of two seconds, and every 900 blocks make up an epoch. For each epoch, a total of 250 coins are issued to miners at the current time. This figure will be halved to 125 coins in February.

Launched in 2017, Tomochain uses a Proof-of-Stake consensus mechanism and is compatible with the Ethereum Virtual Machine. The upcoming halving will be only the second in the coin’s history, and also its last. From here on, the TOMO issuance rate will remain the same until the coin’s total supply of 100,000,000 has been reached.

Vertcoin (VTC)

Vertcoin’s block reward halving is scheduled for Dec. 8, at which point the number of VTC issued to miners will be reduced from 25 to 12.5 per block.

Vertcoin was forked from Litecoin (itself a Bitcoin fork) in 2014, as a response to the application-specific integrated circuit (ASIC) machines that were invented for Litecoin mining the same year. Vertcoin aims to remain ASIC resistant and can be mined with a GPU.

Once a feature of the top hundred coins by market capitalization, Vertcoin now finds itself ranked in the mid-500s after a 98% decline from its all-time high in December 2017.

Ravencoin (RVN)

Although not technically scheduled to take place until January 2022, Ravencoin’s first block reward halving is just 12 calendar months away and will see the issuance rate cut from 5,000 to 2,500 RVN per block.

Launched in 2018, Ravencoin is geared towards the registration and trade of real-world assets on the blockchain. In 2018 the then little-known project received a surprise investment of “millions of dollars” from online American retail giant, Overstock.

Ravencoin reached an all-time high in the $0.08 range in June, 2019. Today the coin trades at a price of $0.016 — a 48% increase since recent lows in November 2020.