GameStop to drop crypto efforts as Q3 losses near $95M

December 9, 2022 Coin Telegraph

GameStop to drop crypto efforts as Q3 losses near M

The gaming company has stopped its cryptocurrency-related focuses but is seemingly still pushing ahead with its NFT and blockchain plans.

Gaming retailer GameStop says it will no longer focus any efforts on cryptocurrencies, after amounting $94.7 million in net losses in the third quarter and laying off staff from its digital assets department.

On a Dec. 7 earnings call GameStop CEO, Matt Furlong, said it “proactively minimized exposure to cryptocurrency” over the year and “does not currently hold a material balance of any token,” adding:

“Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not and will not risk meaningful stockholder capital in this space.”

Earlier this year the company said it was looking at crypto, along with nonfungible tokens (NFTs) and Web3 applications, as avenues for growth calling these spaces "increasingly relevant for gamers of the future."

Going forward it will shift focus to collectibles, gaming and pre-owned items.

Its moves in the NFT space are still seemingly going ahead as it says its “also pursuing, and plan to continue to pursue, other business and strategic initiatives associated with digital assets and blockchain technology,” according to a Dec. 7 filing with the Securities and Exchange Commission (SEC).

Cointelegraph contacted GameStop to confirm that it would continue efforts on its NFT marketplace but did not receive a response.

GameStop has pushed numerous Web3-related products, the most recent being its NFT marketplace that went live on ImmutableX, an Ethereum layer-2 blockchain, on Oct. 31 following a July public beta.

Prior to its NFT marketplace, in May the company launched a beta self-custody crypto wallet and beta NFT marketplace on Loopring in March, Loopring is another Ethereum-based layer-2 protocol.

It also partnered with the now bankrupt crypto exchange FTX US in September aimed at bringing more customers to crypto and working together on e-commerce and online marketing initiatives. It ended ties with the exchange on Nov. 11 soon after it filed for bankruptcy.

It’s Q3 losses slightly narrowed compared to the second quarter however, which saw losses of $108.7 million. It’s also a year-on-year improvement for GameStop, which posted a $105.4 million loss in Q3 2021.

Staff cuts reportedly hit crypto department

On Dec. 5 GameStop cut multiple staff in its third round of layoffs for 2022 which Furlong confirmed in the earnings call.

Earlier reports suggested that the team working on the company's blockchain and NFT projects was the most impacted, however, Furlong did not specify where the staff cuts were concentrated during the call.

Earlier posts from people claiming to be former employees have shed some light. Daniel Williams, lead software engineer at GameStop wrote in a Dec. 5 LinkedIn post:

“Another big round of layoffs from GameStop currently in progress… E-commerce Product and Engineers... Lots of them.”

Other posts from those claiming to be affected by the cuts also appeared on LinkedIn at the time. Brandon Jenniges, a former iOS and blockchain engineer posted he “had a great time getting a deep dive into Ethereum and learning about many new things in the crypto space.”

“I and the rest of the mobile team were let go,” wrote former developer Christopher Fields.

In July, the company terminated its CFO Michael Recupero and a number of staff at its video game-focused magazine Game Informer.

Goldman Sachs’ bearish macro outlook puts Bitcoin at risk of crashing to $12K

September 18, 2022 Coin Telegraph

Bitcoin

Bitcoin derivatives data also shows sentiment shifting in favor of a massive crash below $20,000, the current psychological support.

A sequence of macro warnings coming out of the Goldman Sachs camp puts Bitcoin (BTC) at a risk of crashing to $12,000.

Bitcoin in "bottom phase?"

A team of Goldman Sachs economists led by Jan Hatzius raised their prediction for the speed of Federal Reserve benchmark rate hikes. They noted that the U.S. central bank would increase rates by 0.75% in September and 0.5% in November, up from their previous forecast of 0.5% and 0.25%, respectively.

Fed's rate-hike path has played a key role in determining Bitcoin's price trends in 2022. The period of higher lending rates — from near zero to the 2.25-2.5% range now — has prompted investors to rotate out of riskier assets and seek shelter in safer alternatives like cash.

Bitcoin has dropped by almost 60% year-to-date and is now wobbling around its psychological support of $20,000. Some analysts, including a pseudonymous trader Doctor Profit, believe BTC's price has entered the bottom phase at current levels. However, the trader warned:

"Please consider FEDs next decisions. 0.75% [rate hike] already priced in, 1% and we see blood."

*BTC/USD price performance comparison between 2012-2016 and 2020-2022. Source: Doctor Profit/TradingView*

On the other hand, Bitcoin's consistently positive correlation with the U.S. stock market, particularly the tech-heavy Nasdaq Composite, poses deeper correction risks.

Sharon Bell, a strategist at Goldman Sachs, suggests the recent rallies in the stock market could be bull traps, echoing her firm's warning that equities could crash by 26% if the Fed gets more aggressive with its rate increases to fight inflation.

Interestingly, the warnings coincide with a recent rise in Bitcoin short positions held by institutional investors, according to CME data highlighted in the Commodity Futures Trading Commission's (CFTC) weekly report.

*CME Bitcoin derivatives held by smart money. Source: CFTC/Ecoinometrics*

"Definitely a sign that some people are counting on a risk asset meltdown this fall," noted Nick, an analyst at data resource Ecoinometrics.

Options consensus see BTC at $12K

Bitcoin options expiring at the end of 2022 show most traders betting on the BTC price dropping all the way down to the $10-000-12,000 area.

*BTC options open interest by strike price. Source: Coinglass*

Overall, the call-put open interest ratio was 1.90 on Sep. 18, with call options for the $45,000 strike price carrying the maximum weight. But strike prices between $10,000 and $23,000 showed at least four puts for every three calls — which is perhaps a more realistic, interim evaluation of market sentiment.

From a technical perspective, Bitcoin's price could drop by roughly 30% to $13,500 as the price forms a convincing inverse up-and-handle pattern.

*BTC/USD daily price chart with inverse cup-and-handle breakdown setup. Source: TradingView*

Conversely, a decisive rally above the 50-day exponential moving average (50-day EMA; the red wave) near $21,250 could invalidate this bearish setup, positioning BTC for a rally toward $25,000 as its next psychological upside target.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Report: Legal Experts Say Nigeria in Need of ‘Clear-Cut Guidelines’ for Crypto Industry

September 8, 2022 Bitcoin.com

UK Parliamentary Group Seeks Views of Crypto Industry Players

August 6, 2022 Bitcoin.com

11% of US insurers invest — or are interested in investing — in crypto

June 2, 2022 Coin Telegraph

CFO

Of the 328 CFOs and CIOs representing around half of the global insurance industry, 6% responded their firm was either already invested or considering an investment into cryptocurrencies.

United States-based insurers are the most interested in cryptocurrency investment according to a Goldman Sachs global survey of 328 chief financial and chief investment officers regarding their firm’s asset allocations and portfolios.

The investment banking giant recently released its annual global insurance investment survey, which included responses regarding cryptocurrencies for the first time, finding that 11% of U.S. insurance firms indicated either an interest in investing or a current investment in crypto.

Speaking on the company’s Exchanges at Goldman Sachs podcast on Tuesday, Goldman Sachs global head of insurance asset management Mike Siegel said he was surprised to get any result:

“We surveyed for the first time on crypto, which I thought would get no respondents, but I was surprised. A good 6% of the industry respondents indicated that they’re either invested in crypto or considering investing in crypto.”

Asia-based insurers were next in line, with 6% interested or currently invested, and European insurers came in at only 1%.

The report found cryptocurrencies were in fifth place for the asset class insurers expect to deliver the highest returns over the next 12 months, with 6% ranking it as their first choice, beating United States and European equities.

Around 2% of firms indicated a current crypto investment, and while it’s a small number of firms indicating investment or interest, Goldman Sachs analysts wrote that this level of interest “is still notable.”

On the podcast, Siegel discussed a follow-up survey conducted of crypto-interested firms to understand their motivation behind purchasing:

“We did some follow-up questions on that, and generally, the companies that are either invested or considering crypto are doing so to understand the market and to understand the infrastructure. But if this becomes a transactable currency, they want to have the ability down the road to denominate policies in crypto and also accept premium in crypto, just like they do in, say, dollars or yen or sterling or euro.”

Only 1% of the total surveyed firms said they would increase their crypto position over the next 12 months; 7% said they would maintain their current position; and 92% said they would not invest in crypto over the next year.

Despite the growing interest, there are still those pessimistic about crypto as 16% said it was an asset class they expected to deliver the lowest returns over the next 12 months. Overall, crypto was the third-lowest ranked asset class on this measure.

Mathew McDermott, the bank’s global head of digital assets, wrote in the report:

“As the crypto market continues to mature, coupled with growing regulatory certainty, a cross-section of institutions are becoming more confident to explore investment opportunities as well as recognizing the disruptive impact of the underlying blockchain technology. I have been positively surprised by the rising adoption by global Asset Managers, who clearly recognize the potential of this market.”

New York digital media company the latest to add Bitcoin to balance sheet

May 11, 2022 Coin Telegraph

bitcoin business

Whilst the purchase won’t cast a shadow on the billions worth of Bitcoin owned by other firms, the company said it could have made $1.2 million if it sold its holdings at the end of the first quarter.

Townsquare Media, a New York based digital marketing and radio station company is the latest business to back the original cryptocurrency with its addition of $5 million worth of Bitcoin (BTC) to its balance sheet.

A filing with the Securities and Exchange Commission (SEC) disclosing Townsquare’s purchase of Bitcoin was first picked up by Macroscope, a Twitter account which focuses on institutional trading who posted the find on May 10.

In an SEC filing today, Townsquare Media (NYSE: TSQ), based in New York, stated:

"During the first quarter of 2022, the Company invested an aggregate of $5.0 million in Bitcoin. The Company believes in the long-term potential of digital assets as an investment."

The company...
— MacroScope (@MacroScope17) May 10, 2022

As per the filing the company “invested an aggregate of $5 million into Bitcoin” during the first quarter of 2021 and provided an explanation for why it chose a crypto investment, stating:

“The Company believes in the long-term potential of digital assets as an investment. The Company may increase or decrease its holdings of digital assets at any time based on our view of market conditions.”

Whilst the price of Bitcoin at the time of purchase wasn’t disclosed Townsquare said it recorded an impairment loss of $400,000 resulting from “changes to the fair value” of its digital asset holdings over the quarter.

The so-called loss appears to be due to the unusual way companies need to report on crypto holdings. Townsquare also stated it could have sold its Bitcoin for $6.2 million total on March 31, the price of Bitcoin that day closed at a price of around $45,500. The company stated it views its Bitcoin investment as liquid due to the ease of converting it to cash using a crypto exchange.

Whilst the purchase is small in comparison to MicroStrategy’s nearly $3 billion stash worth of Bitcoin, Townsquare Media is around the middle of the list in terms of the amount of the crypto held by publicly traded companies.

According to Bitcoin Treasures, a site tha measures Bitcoin held by companies, Townsquare would sit somewhere around the Bitcoin mining companies Cleanspark Inc which holds around $4.3 million and Cathedra Bitcoin Inc. who holds just over $5 million worth of Bitcoin.

With the price of Bitcoin sliding this year and recently hitting 10-month lows, other companies with big positions in the world’s first cryptocurrency have reported losses due to having the asset on their balance sheet.

Earlier in May crypto investment manager Galaxy Digital Holdings reported a $111.7 million loss in the first quarter of 2022 due to unrealized losses on its cryptocurrency portfolio. MicroStrategy CEO and Bitcoin advocate Michael Saylor also had to assure investors that the company could cover its debts if asked due to a Bitcoin backed $205 million loan it took out in March.

ETH price hits $3K as major crypto fund adds over $110M Ethereum to Lido’s staking pool

March 22, 2022 Coin Telegraph

<div>ETH price hits K as major crypto fund adds over 0M Ethereum to Lido's staking pool</div>

Coin Telegraph

Later, the hedge fund manager reportedly purchased more than $22.50 million worth of ETH tokens from FTX and Deribit.

Ethereum's native token Ether (ETH) rose above $3,000 on March 22 as fresh data suggests Three Arrows Capital staked at least $110 million worth of ETH into Lido's liquidity pools.

The Singapore-based hedge fund manager provided liquidity worth 36,401 ETH to Lido's "Curve stETH pool" using a third-party Ether wallet, data from Etherscan shows. As a result, it became eligible to receive at least 36,401 stacked Ether (stETH) tokens from Lido: to ensure low slippage when un-staking those tokens for real ETH plus staking reward.

*Third-party Ethereum wallet that received ETH from Three Arrow Capital. Source: Etherscan.io*

Almost an hour later, another Ether address, marked with the word "fund," sent 6,993 ETH (worth $21.12 million) to the Curve stETH pool, hinting that Three Arrows Capital was adding more liquidity to the Lido's coffers. If correct, the fund may have already staked more than $130 million worth of Ether on March 22.

Participating in ETH 2.0?

The Three Arrows Capital's massive Ether inflow into Lido staking pools came ahead of the launch of Ethereum's new validation system in summer 2022.

Ethereum will switch its network protocol from energy-intensive proof-of-work to proof-of-stake, which lets users validate transactions and add blocks to the Ethereum blockchain by staking 32 ETH or its multiples for at least one year to earn annual yields.

*Ethereum total number of validators as of March 21, 2022. Source: Glassnode*

But only 8% of the current ETH supply has been staked into ETH 2.0 contracts since its introduction in December 2020, underscoring that average Ether users are reluctant to lock 32 ETH — about $100,000 at March 22's price — for a year. That has created opportunities for liquidity mining providers like Lido.

Notably, Lido allows users to lock any amount of Ether to participate in running the ETH 2.0 chain without lock-ups. As a result, it now represents more than 80% of the Ethereum liquid mining space, holding nearly $8.25 billion worth of ETH in its pools at March 22's prices.

*Lido versus other Ethereum liquidity mining pools. Source: Defi Llama*

Hence, Three Arrows Capital's looks intent to become a validator on the Ethereum network via a less risky alternative like a liquidity staking pool. Meanwhile, the fund appears to have also been accumulating more Ether.

Accumulation after staking

Three Arrows Capital's address received about $22.50 million worth of Ethereum tokens from wallets associated with crypto exchanges FTX and Deribit on March 22, less than an hour after it staked 36,401 ETH into the Lido's pool.

The Three Arrows Capital address (0x4862733B5FdDFd35f35ea8CCf08F5045e57388B3) has inflowed 7,500 ETH in the past seven hours, with a total value of about $22.43m; of which 5,500 ETH was withdrawn from FTX and 2,000 ETH was withdrawn from Deribit. https://t.co/27A1u6o4su
— Wu Blockchain (@WuBlockchain) March 22, 2022

It wasn't clear whether Three Arrows purchased the coins anew or merely withdrew them for holding or further staking. But in either case, the firm contributed to what appears like a constant depletion of Ether reserves across the crypto exchanges, considered by many ETH traders a bullish signal.

Nonetheless, PostyXBT, an independent market analyst, highlighted $3,000 as a key inflection zone for ETH price, noting that only flipping above it decisively could have Ether eye a move toward $3,500.

*ETH/USD 12-hour price chart. Source: PostXBT, TradingView*

"I think we see a further +10% move towards key resistance," he wrote.

Treasury to launch financial education initiative around crypto investments

March 9, 2022 Coin Telegraph

Coin Telegraph

More education and awareness for crypto asset investing “would be helpful” according to Treasury officials.

The United States Treasury Department is launching a new initiative to raise awareness of the risks involved in investing in digital assets.

The move comes as the asset class transitions from a niche market into mainstream investment according to a top Treasury official, potentially drawing in less sophisticated investors.

The Department’s “Financial Literacy Education Commission” is developing educational materials designed to inform the public how crypto assets operate and how they differ from traditional assets.

Treasury undersecretary for domestic finance, Nellie Liang, told Reuters that the target demographic is people that have limited access to mainstream financial services. She stated:

“We’re hearing more and more about investors and households who are purchasing crypto assets, and we recognize the complexity of how some of these assets operate.”

Liang added that it was an area where more education and awareness “would be helpful.”

Better education and financial literacy are obviously of public benefit, as there has been criticism that the focus from regulators to date on “protecting” consumers has actually led to the exclusion of disadvantaged communities from accessing crypto wealth-building opportunities.

Cleve Mesidor, founder of The National Policy Network of Women of Color in Blockchain, told Cointelegraph Magazine recently:

“If they were more focused on financial literacy and skills training and workforce training, that would be acceptable, but they are mostly focused on consumer protectionism.”

The new education division comprises 20 different agencies, including the Securities and Exchange Commission. The initiative may ease concerns that regulators have over the risks associated with crypto investing and could bolster their ongoing mission to protect investors from industry scams.

The Treasury Departmentappears to be taking a proactive approach to the problem, acknowledging that digital assets could offer additional benefits for cross-border payment or financial inclusion. Liang added:

“We’re just trying to raise awareness without trying to stamp out new technology and new innovation.”

This week, U.S. President Joe Biden is expected to sign an executive order summarizing the government strategy for dealing with crypto assets. Treasury Secretary Janet Yellen inadvertently revealed details of the order today, which will also direct the Justice Department, Treasury, and other agencies to study the legal and economic impacts of developing central bank digital currency (CBDC).

Educational initiatives are not just limited to governmental departments. In January, basketball superstar LeBron James partnered with Crypto.com to launch an education initiative to teach students in his hometown of Akron about cryptocurrency and blockchain technology.

In February, Cointelegraph reported that P2P platform Paxful launched “La Casa Del Bitcoin,” a new educational and training center in El Salvador to provide free learning opportunities related to Bitcoin and cryptocurrencies.

The education drive also goes both ways as leading crypto firms have increased their lobbying on Capitol Hill over the past year. Companies such as Ripple Labs and Coinbase have been increasing efforts to “educate” policymakers on the industry and its underlying technology.