The Next El Salvador? These Are the Regions Witnessing a ‘Gravitation’ Towards Bitcoin, Says Grayscale CEO

September 11, 2021 The Daily Hodl

Forgotten Bitcoin Catalyst Could Ignite Massive Year-End Rally, According to Popular Crypto Trader

August 19, 2021 The Daily Hodl

Digital insurer Metromile follows through with $1M Bitcoin purchase

August 11, 2021 Coin Telegraph

Digital insurer Metromile follows through with M Bitcoin purchase

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In May, the company said it intended to allocate $10 million towards Bitcoin in the second quarter of 2021.

San Francisco-based technology firm Metromile has used 10% of the funds it previously said would be allocated towards crypto to buy Bitcoin.

According to an Aug. 10 filing from the U.S. Securities and Exchange Commission, or SEC, Metromile reported it had purchased $1 million in Bitcoin (BTC) in June. However, the firm recorded a loss of $100,000 in the original crypto buy, holding roughly $900,000 in Bitcoin as of June 30, or 25.6 BTC at the time.

Metromile’s financial report for the second quarter of 2021 says the company held $202.6 million in cash and cash equivalents as of June 30, meaning its Bitcoin investment was roughly 0.5% of funds available. Some experts advocate allocating from 1% to 3% of one’s net worth into crypto.

The SEC filing follows the company saying in May it intended to allocate $10 million towards Bitcoin in the second quarter of 2021. At the time, Metromile said it would allow its policyholders — it offers pay-per-mile car insurance — to pay for its services and receive compensation from claims in Bitcoin.

In the second quarter of 2021, Metromile announced the number of its policies in force had been “roughly flat” compared to that of Q1 due to “industry-wide unexpected regulatory delays.” However, the firm’s insurance revenue increased more than 22% over that of the same period last year.

Shares of Metromile stock trading under the Nasdaq ticker MILE dropped sharply on Monday, having stayed above $7.00 since May. The price fell roughly $25% in the last two days from $6.97 to reach $5.24 at the time of publication, making its market capitalization now $660 million.

VanEck takes new approach with SEC, files for Bitcoin Strategy ETF

August 10, 2021 Coin Telegraph

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SEC chair Gary Gensler recently hinted he would be more open to accepting ETFs based on crypto futures rather than through direct exposure.

Asset manager VanEck is filing for a Bitcoin Strategy exchange-traded fund after it unsuccessfully attempted to launch a similar fund four years ago.

According to U.S. Securities and Exchange Commission, or SEC records, VanEck filed a prospectus for a Bitcoin Strategy exchange-traded fund, or ETF, on Aug. 9. Unlike its Bitcoin (BTC) or Ether (ETH) ETFs currently under review by the federal agency, the proposed fund would not invest in BTC directly, but provide exposure through Bitcoin future contracts, pooled investment vehicles, and other exchange-traded products.

VanEck said the Bitcoin Strategy ETF would allow exposure through crypto ETFs listed and traded in Canada — purportedly including those from Purpose Investments and Evolve Funds Group. A Cayman Islands-based subsidiary of the asset manager will make the investments.

Though VanEck filed a similar prospectus for a Bitcoin Strategy ETF in 2017, SEC chair Gary Gensler recently hinted he would be more open to accepting ETFs based on crypto futures rather than through direct exposure. Some companies filed similar "strategy" ETFs with the government body following Gensler’s announcement — investment firm Invesco announced its own plans to launch a Bitcoin ETF without direct exposure on Aug. 5.

The SEC has yet to approve any Bitcoin ETF in the United States. However, VanEck, Valkyrie Digital Assets, Fidelity Investments, and others have filed their own proposals for crypto ETFs. The commission has historically extended the deliberation window or opened the matter to public comments to seemingly avoid reaching any decision on a fund.

NCR Corporation plans to purchase Bitcoin ATM company LibertyX

August 2, 2021 Coin Telegraph

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LibertyX currently services 20,000 retail stores in the U.S. with 9,500 crypto ATMs.

Enterprise technology provider NCR Corporation has announced an agreement to buy LibertyX, the company that launched one of the first retail Bitcoin ATMs.

In a Monday announcement, NCR said it expected to purchase LibertyX later this year depending on regulatory licensing consents and approvals. The firm said it planned to offer LibertyX’s capabilities as part of its solutions for banks, retailers and restaurants, implying NCR clients could see crypto withdrawals, purchasing, and payment features after the deal is finalized.

“Our customers require a complete digital currency solution, including the ability to buy and sell cryptocurrency, conduct cross-border remittance and accept digital currency payments across digital and physical channels,” said NCR chief technology officer Tim Vanderham.

LibertyX has allowed users to make purchases with crypto at a variety of retailers in the United States using its mobile app or through its network of Bitcoin (BTC) ATMs. According to the firm, it currently services 20,000 retail stores in the U.S. with 9,500 crypto ATMs.

According to data from CoinATMRadar, there are more than 24,481 crypto ATMs in the world at the time of publication, with the market having experienced exponential growth in 2021. Bitcoin Depot, one of the largest holders of the Bitcoin ATM network, recently announced a partnership with Circle K, resulting in the installation of more than 700 Bitcoin ATMs in the U.S. and Canada.

GoldenTree Asset Management is reportedly investing in Bitcoin

July 30, 2021 Coin Telegraph

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At least three executives at the $45 billion firm have participated in a funding round for the blockchain-focused VC group Borderless Capital.

New York-based asset management firm GoldenTree has reportedly added Bitcoin to its balance sheet, though the amount of this supposed investment remains unknown.

According to a Friday report from financial news outlet The Street, the firm with roughly $45 billion in assets under management has purchased some Bitcoin (BTC) but has seemingly shied away from other cryptocurrency investments. Citing two sources with knowledge of the matter, the publication reported the BTC purchase followed discussions between executives regarding hiring staffers familiar with crypto investments.

Executives at the firm, including founder Steven Tananbaum and partners Deeb Salem and Joseph Naggar invested in a funding round this month for Borderless Capital, which previously helped launch an accelerator program from Algorand. Borderless also participated in a funding round for the Coinbase-backed digital asset securities firm Securitize.

Other asset management firms have begun to delve into the crypto space as well, either through direct investments or by offering investment vehicles for Bitcoin and other tokens. Last week, Stone Ridge Asset Management filed a prospectus with the U.S. Securities and Exchange Commission to add BTC to its open-end mutual fund. On Wednesday, Contrarian investment firm Horizon Kinetics advised investors to seek exposure to crypto assets to protect themselves against currency debasement.

Cointelegraph reached out to GoldenTree, but did not receive a response at the time of publication.

BIT Mining steps up Bitcoin mining operations in Kazakhstan

July 28, 2021 Coin Telegraph

Bit Mining

The mining firm's expansion into Kazakhstan follows plans to introduce new energy fees for crypto miners starting in 2022.

Crypto mining firm BIT Mining, which recently announced it would be expanding out of the Chinese market, plans to purchase 2,500 Bitcoin miners for deployment in Kazakhstan.

In a Wednesday announcement, BIT Mining said it had entered a $6.6 million agreement to buy 2,500 Bitcoin (BTC) mining rigs. The firm has already put 3,819 BTC miners into operation at data centers in Kazakhstan, with another 4,033 machines on the way. Once all are deployed, the addition of the recent mining purchase is expected to increase BIT Mining’s hash rate capacity to roughly 458 petahashes per second.

Though based in the city of Shenzhen, BIT Mining has said it plans to expand its operations outside of China in response to the recent government crackdown on mining. Many Chinese firms have reportedly faced shutdowns following the State Council’s Financial Stability and Development Committee announcement, curtailing BTC mining amid financial risk concerns.

Some mining firms including BIT Mining have been eyeing other countries to conduct operations as the regulatory environment in China becomes seemingly less favorable. BTC maximalist and Ballet CEO Bobby Lee recently told Cointelegraph the crackdown could be an indication that the government is testing the waters for a larger crypto ban. Crypto firms may be picking up on this regulatory backlash as well — OKEx and Huobi both plan to dissolve Chinese-based business entities.

While some of the miners driven out of China may be turning to Texas for solutions, lawmakers in Kazakhstan seem to be making themselves more attractive to crypto firms by allowing local banks to open accounts for cryptocurrency transactions. Major mining firm Canaan announced last month that it had begun mining BTC in Kazakhstan. Despite this, or perhaps because of the scramble to establish new operations, the country has said it plans to impose higher taxes on miners starting in January.

IMF issues veiled warning against El Salvador’s Bitcoin law

July 26, 2021 Coin Telegraph

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Making any cryptocurrency a national currency “is an inadvisable shortcut” to more inclusive financial services, according to two IMF officials.

The International Monetary Fund is warning that some of the consequences of a country adopting Bitcoin as a national currency “could be dire.”

According to IMF marketing department financial counsellor and director Tobias Adrian and legal department general counsel and director Rhoda Weeks-Brown, a cryptocurrency like Bitcoin (BTC) may catch on in countries without stable inflation and exchange rates, and provide unbanked people with the means to make payments. However, the cost to an economy could be significant.

The two IMF officials alleged that countries adopting cryptocurrencies as national currencies or “granting cryptoassets legal tender status” risked domestic prices becoming highly unstable, and assets being used contrary to anti-money laundering and combating the financing of terrorism measures, in addition to having issues surrounding macroeconomic stability and the environment.

“If goods and services were priced in both a real currency and a cryptoasset, households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities,” said Adrian and Weeks-Brown. “Government revenues would be exposed to exchange rate risk if taxes were quoted in advance in a cryptoasset while expenditures remained mostly in the local currency, or vice versa.”

They also claimed that monetary policy in general “would lose bite,” implying widespread crypto adoption lessens the credibility of any country adopting an asset like BTC or another token, and pointed to the “massive fluctuations in cryptoasset prices.” The price of Bitcoin has already moved between roughly $65,000 and $30,000 this year, and reached more than $40,000 today before dipping to the $37,000s.

Though the IMF blog did not specifically call out El Salvador, which is set to start accepting Bitcoin as legal tender starting in September, Adrian and Weeks-Brown said making any cryptocurrency a national currency “is an inadvisable shortcut” to more inclusive financial services. The pair included claims of environmental risks for mining cryptocurrencies, though El Salvador President Nayib Bukele has said he plans to take advantage of the country’s abundant geothermal energy to generate Bitcoin blocks.

Expressing seemingly negative views on countries adopting crypto is nothing new for the IMF. Spokespeople have previously said smaller nations like the Marshall Islands recognizing a digital currency as legal tender “raise risks to macroeconomic and financial stability as well as financial integrity.” In that case, the IMF said the islands’ local economy had been strained by the economic fallout of the pandemic and likely wouldn’t be fixed with the introduction of a digital currency.

Weekly roundup: Ark Invest, Edge Wealth Management, and Rothschild Investment accumulate crypto

July 23, 2021 Coin Telegraph

Asset Management

Cathie Wood's Ark Invest purchased more than 450,000 GBTC shares in two separate buys this week.

As the price of Bitcoin returned to more than $32,000 this week, some major firms announced they had increased their exposure to cryptocurrencies through Grayscale’s crypto trusts.

According to a Friday filing with the U.S. Securities and Exchange Commission, or SEC, New York-based investment firm Edge Wealth Management currently holds 54,134 shares of Grayscale’s Bitcoin Trust (GBTC), valued at $27.13 at the time of publication, and 25,280 shares of the company’s Ethereum Trust (ETHE). The crypto holdings are worth almost $2 million at $1,468,655 and $466,668, respectively, roughly 0.3% of the $703 million total assets under management the company reported on Feb. 2.

Grayscale’s crypto trusts are not new investment opportunities for Edge. The investment firm held 37,605 GBTC and 17,300 ETHE shares in April, representing increases of 44% and 46%, respectively.

Some institutions’ exposure to Bitcoin (BTC), Ether (ETH), and other cryptocurrencies through Grayscale have increased as digital currencies seemingly play a larger role in the global economy. Similar filings with the SEC show Rothschild Investment Corp quadrupled its exposure to Bitcoin through Grayscale, owning 38,346 GBTC shares in April and 141,405 GBTC as of June 30. With a reported more than $1 billion in assets under management as of April 8, the Bitcoin trust shares represent less than 0.09% of the investment firm’s holdings.

However, Cathie Wood's Ark Invest is continuing to purchase GBTC shares at higher rate than the two aforementioned companies. This week, the investment firm reported it purchased more than 450,000 shares of Grayscale Bitcoin Trust in two separate buys, bringing its combined holdings to more than 9 million shares, or roughly 0.5% of its portfolio. At its peak in March, GBTC represented 0.9% of Ark’s portfolio.

“The investment community continues to express interest in the digital currency asset class, and the crypto ecosystem more broadly, and as these assets gain mainstream adoption, we anticipate investors will seek new ways to access digital currencies to further diversify their portfolios,” said Grayscale CEO Michael Sonnenshein in a letter to investors.

The reports of GBTC purchases come the same week Grayscale unlocked 16,240 BTC worth of its Bitcoin Trust shares after six months. Though there was some speculation the price of the crypto asset could be adversely affected by such a large release in a single day, BTC saw a roughly 2.9% increase in price week-over-week and reached $32,457 at the time of publication.

El Salvadorians take to the streets to protest Bitcoin law

July 23, 2021 Coin Telegraph

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Those who marched against Bitcoin this week claimed the cryptocurrency was too volatile and would allow businesses to "launder ill-gotten money."

Protesters calling themselves the Popular Resistance and Rebellion Block have come out against El Salvador’s government passing a law making Bitcoin legal tender.

A Tuesday tweet from local news outlet El Mundo shows El Salvadorians carrying banners saying “no to Bitcoin” in the streets of San Salvador demanding a repeal of the country's Bitcoin law. Legislative assembly members Anabel Belloso and Dina Argueta addressed the protesters after first meeting the group separated by a barrier of razor wire.

RT @SusanaPenate: Miembros del Bloque de Resistencia y Rebeldía Popular llegaron a presentar una propuesta de derogar la Ley Bitcoin. Salen a recibirlos Dina Argueta y Anabel Bellosopic.twitter.com/CXFLDW4tsr
— Diario El Mundo (@ElMundoSV) July 20, 2021

In a letter made available at the protest, the Popular Resistance and Rebellion Block group claimed that President Nayib Bukele passed the law making the cryptocurrency legal tender in the country without proper consultations with the people. It also cited the volatility of Bitcoin (BTC), comparing investing in the cryptocurrency to playing the lottery: “betting on the lottery is a voluntary act, while Bitcoin is required by law.”

However, the group’s main grievance around the Bitcoin legal framework seemed to be centered around a perceived disparity in the cryptocurrency’s usage by the government when compared with the average resident in El Salvador. Protesters said Bitcoin “only serves some large businessmen, especially those linked to the government, to launder ill-gotten money.”

“Entrepreneurs who put their capital in Bitcoin will not pay taxes on their earnings,” said the letter. “In addition, to apply Bitcoin the government will spend millions of dollars of the taxes paid by the people.”

They added:

"Bitcoin would facilitate public corruption and the operations of drug, arms and human traffickers, extortionists and tax evaders. It would also cause monetary chaos. It would hit people's salaries, pensions and savings, ruin many MSMEs, affect low-income families and hit the middle class."

Though passed by El Salvador’s government and signed into law by Bukele in June, the law recognizing Bitcoin as legal currency in the country will not go into effect until Sept. 7. The Popular Resistance and Rebellion Block’s protest was aimed at government officials to demand the law be repealed. In addition, the World Bank has also refused to help El Salvador transition to a Bitcoin-friendly framework, given its “environmental and transparency shortcomings.”

During a scheduled visit by the U.S. State Department earlier this month, Under Secretary of State for Political Affairs Victoria Nuland suggested El Salvador ensure Bitcoin is well regulated and transparent, but did not explicitly say anything against the country’s move to a more digital economy. Some proponents of the law including Bukele have suggested Bitcoin could help facilitate remittance payments from El Salvador citizens living abroad and lessen the country’s reliance on the U.S. dollar.

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