With bitcoin's environmental issues affecting its price and adoption, the community needs to reach across boundaries to develop sustainable solutions, says CoinDesk's chief content officer Michael J. Casey May 29, 2021 at 12:12 a.m. Updated May 29, 2021 at 12:21 a.m. Money Reimagined: Crypto Winter Again? Time to Regroup Bitcoin got its Consensus bump. But is it enough? Not only did CoinDesk’s blockbuster Consensus 2021 conference deliver big news and insights this week, it also gave the bitcoin market what it hoped for: a repeat of the price rally that typically occurs during this important annual event. (See this newsletter’s “Off the Charts” section.) That bump may have been helped by Bridgewater Associates founder Ray Dalio declaring that he prefers bitcoin over bonds and by a host of other sector-friendly developments during Consensus. But let’s be clear: the 9% gain for bitcoin makes but a tiny dent in the market’s prior losses. We are still down 44% from the all time high of $64,829. So, contrary to the upbeat mood of our own conference, this Debbie Downer is here to tell you we may face a long haul before returning to the highs of this year. This week’s column is about crypto entering another consolidation phase, during which the community will need to engage in a more constructive debate about blockchain tech’s impact on the planet. Of course, energy and bitcoin were far from the only topics discussed in the “big tent” experience that is Consensus, with a speaker list numbering more than 300. Another matter was the outlook for central bank digital currencies, which became the focus of a special edition of our “Money Reimagined” podcast, this one recorded inside the conference. For that, Sheila Warren and I talked to Christian Catalini, chief economist of the Diem project (formerly Libra), and Benedicte Nolens, who heads up the Bank of International Settlements’ innovation hub in Hong Kong. Have a listen after reading the column. Crypto Winter Again? Time to Regroup I didn’t want to write these words: I think we’re entering Crypto Winter II. It’s not about the price decline per se. It’s that, after a period when the outside world – the “mainstream” – seemed finally to get crypto, those outsiders are now having second thoughts, as they did during the Crypto Winter of 2018. Crypto people might not like to admit it, but they crave acceptance – more so, perhaps, than adoption. They want to be understood. This time, the rejection flows from a rising narrative, one that’s proving extremely difficult for the community to contain, about the supposedly negative environmental impact of crypto generally and bitcoin specifically. It’s bigger than Musk The price-destroying impact of Elon Musk’s negative turn on bitcoin two weeks ago had nothing to do with the immaterial monetary impact of Tesla no longer accepting bitcoin payments. It reflected the realization that even Musk, once a crypto-booster, felt compelled by forces bigger than his giant ego to fall in line with the bitcoin-is-bad-for-the-planet narrative. You’re reading Money Reimagined, a weekly look at the technological, economic and social events and trends that are redefining our relationship with money and transforming the global financial system. Subscribe to get the full newsletter here. Large financial institutions are rapidly becoming sustainability-conscious, with investment committees that demand compliance with ESG objectives. That means anyone in need of capital, including Tesla, has to signal that they are, too. Given that bitcoin’s price rallies this year were fueled by Wall Street institutions buying it as a hedge against fiat monetary expansion, the idea that those same institutions are now more reluctant to do so on ESG grounds will weigh on the bitcoin price, possibly for some time. That shift from mainstream support to mainstream disapproval offers an echo of Crypto Winter I, when the collapse of the initial coin offering bubble left newby retail investors burned and disillusioned with that era’s crypto promise of fast token riches. On the other hand, the runup before this collapse seemed more legitimate than that one, as the entrance of institutional investors was founded on a solid assessment of bitcoin’s value proposition in the context of a challenging macroeconomic outlook. But even if the circumstances are different, the first Crypto Winter offers lessons in how a quieter period in markets might, ironically, enable the development of the technology. As with that previous lull period, developers of crypto projects are now presented with an opportunity to focus on “building” – or BUIDLing, as the meme went back then. A ton of important development occurred in 2018-2019, fostering projects that are now integral to the crypto ecosystem. It’s when the most serious advances were made in non-fungible token (NFT) trailblazer project CryptoKitties, in MakerDAO’s dai token – which spawned the decentralized finance (DeFi) revolution – and in the Lightning network and other layer 2 technologies now helping solve scaling problems. Similar engineering work is now needed – to reduce transaction costs, to improve privacy while addressing identity challenges, and to continue to scale while optimizing decentralization. But we also need a different kind of development: that of relationships, with governments, with large companies and with the public at large. If we are going to get ahead of the debate around sustainability, the crypto community needs to engage with these stakeholders. It needs to BUIDL relationships and foster a narrative of shared interest in place of the us-versus-them divisions that are the community’s own worst enemy. Strategic engagement When faced with sometimes simplistic criticisms that bitcoin “wastes more energy than Sweden consumes,” crypto supporters often engage in whataboutism (“but how much energy does the petro-dollar financial system consume?”) or ask philosophical questions about what constitutes “waste.” And, yes, if they can convince everyone that bitcoin will solve all their problems in the fiat financial system cannot, they’ll also convince them that all this energy consumption is worth it. But it should be clear by now, after years of engaging in these debates, the argument won’t be won with “I’m smarter than you” responses. In fact, it probably turns public opinion more negative because it leaves the impression that the bitcoin community believes its carbon footprint is something to ignore. Dismissing bitcoin’s greenhouse emissions is naive and, frankly, untenable. The reality is that subsidies for fossil fuels worldwide continue to make them a profitable option for miners, which means that, as bitcoin’s hashrate increases, it will continue, for now, to grow its carbon footprint. Per my column last week, there’s an opportunity to bring a variety of stakeholders to the table to move bitcoin mining from being a net polluter to becoming a force multiplier for renewable energy that underwrites the development of green, decentralized electricity infrastructure. That’s the kind of BUIDLing we need. Bitcoin miners and others in the crypto community must work with other actors with an interest in green energy solutions to devise collaborative plans that meet both sides’ needs. Go out and talk to city grid operators about variable mining contracts to help manage the “duck curve” problem caused by unused solar capacity. Partner with investors and companies with a direct interest in expanding decentralized electricity grids to deploy mining operations as a funding mechanism for solar, wind and mini-hydro solutions around the world. Sit down with national energy policy makers and strike deals on supportive tax, subsidy and community reinvestment incentives to align miners’ interests with sustainability and energy needs. I, for one, think the new Bitcoin Mining Council, formed by a group of North American bitcoin mining firms with the support of Musk and MicroStrategy CEO Michael Saylor, is a fine idea – unlike a few bitcoiners, who worry about it being a centralized “cabal.” This is precisely the kind of coordinated actions among deep-pocketed stakeholders with common interests that’s needed to not only move the conversation forward. At the top of some special ESG-themed programming for “Money Reimagined” on CoinDesk TV Monday and Tuesday, my podcast co-host, Sheila Warren of the World Economic Forum, floated a separate multi-stakeholder initiative: an umbrella organization housed at the WEF to create a framework for environmental, social and governance-focused innovation in blockchain and crypto technologies. The Crypto Impact and Sustainability Accelerator, which CoinDesk is supporting as a media partner, will bring together interested entities from finance, accounting, industry, tech, government and NGOs to find consensus around a framework with which the otherwise unfettered process of blockchain development should ideally seek to comply. The point is to ensure the open-source tech projects are interoperable and align with overarching planetary goals such as the Paris Climate Accord. Without this kind of high-level coordination among a cross-section of invested global stakeholders, there can be no common design parameters for ESG-targeting crypto technology. While it’s important to allow innovation to freely emerge on its own, we cannot solve the world’s problems within the current, chaotic mix of contradictory metrics and tech standards that make it impossible to collectively determine whether we’re actually saving the planet or not. Without common standards, markets in ESG digital assets cannot emerge, for example. This WEF initiative may be one of those rare occasions when a high-level talk group is actually necessary. The bigger point is that the collective needs of society will not be fixed by the crypto community on its own. It must start forming real-world alliances. It needs a seat at the table with those who control the capital and who set the policies that will solve those problems. Right now, Crypto Winter or not, is the time to do it. Off the charts: The Consensus bump through history As mentioned at the opening, it does appear that Consensus 2021 saw a repeat of the “Consensus Bump” phenomenon. The bitcoin price rose with the launch of the conference and more or less held its gains into the end of the conference. How real is this effect, though? It might depend on what you use as your benchmark. Some people refer to the bump being a runup in prices in the days and weeks preceding the conference, others refer to the price performance during Consensus week itself. We figure we’ll stick with the latter and see how it has compared over seven years of Consensus conferences, from the one-day affair on Sept. 10 of 2015 and the three-day event of 2016 to the now four-day conferences that we’ve seen ever since 2017. The charts below capture each of those seven events, with the red line signifying the date on which the conference began. I gotta say, I think there might be a little more myth and wishful thinking in this than reality. Sure, from 2017, there have been one-day “bumps” of varying size at the very start of the event. But it didn’t always last throughout the week. The Conversation: A mining cabal? One of the big stories of the week that did not emerge directly from Consensus came when a group of North American bitcoin mining companies met with Elon Musk and Michael Saylor to form a council committed to transparency around how much of the sources of energy they use. It started out innocent enough – as a feel-good alternative to the negative press for bitcoin generated a week earlier by Musk’s dunking on the cryptocurrency’s environmental harm. Saylor and Musk did the honors on Twitter in a tweet/retweet routine: This was welcomed by some people, signaling Musk’s return to a pro-bitcoin stance and a positive effort to make bitcoin greener. Others had a different take: This was a dangerous cabal, a secret agreement to differentiate coins that would render some better than others and destroy bitcoin fungibility. But, really, all this was an agreement among these miners to keep publicly reporting the stuff they are already reporting. They’re providing transparency. And that’s a bad thing? As Nic Carter alluded to, some of this just reflects how easy it is to push certain narratives in a bitcoin community willing to hear them. Relevant reads: Consensus highlights Some of the highlights of this year’s spectacularly successful conference. I had the great privilege of interviewing a man I’ve long wanted to talk to: Ray Dalio. And the Bridgewater Associates founder didn’t disappoint. The headline that caught everyone’s attention was Dalio’s statement that he owns bitcoin. But what resonated for me was his big-picture take on the 75-year debt cycle that’s now coming to an end and pointing to an age of uncertainty. CoinDesk’s Adam B. Levin’s debuted his new “NFT All-Stars” podcast with spectacular results: a stunning, inventive new piece of living digital art from trance music legend BT. Jose Fernandez da Ponte, the head of PayPal’s blockchain operation, dropped a bit of crowd-pleasing news, telling a Consensus panel that, as well as allowing users to buy and sell crypto, it will now allow users to withdraw that crypto to their own wallets. Who can forget U.S. football legend Tom Brady, whose whitest of white teeth were somewhat disturbing, telling us in a surprise late Thursday presentation that he is invested in crypto?

Police have warned students in the UK against using a website that they say lets users "illegally access" millions of scientific research papers. The City of London police's Intellectual Property Crime Unit says using the Sci-Hub website could "pose a threat" to students' personal data. The police are concerned that users of the "Russia-based website" could have information taken and misused online. The Sci-Hub website says it "removes all barriers" to science. It offers open access to more than 85 million scientific papers and claims that copyright laws should be abolished and that such material should be "knowledge to all". It describes itself as "the first pirate website in the world to provide mass and public access to tens of millions of research papers". University 'threat' But Max Bruce, the City of London police's cyber protection officer, has urged universities to block the website on their networks because of the "threat posed by Sci-Hub to both the university and its students". "If you're tricked into revealing your log-in credentials, whether it's through the use of fake emails or malware, we know that Sci-Hub will then use those details to compromise your university's computer network in order to steal research papers," he said. The City of London Police, which is the national lead for fraud, has warned that students studying online at home might be vulnerable. "Students should be aware that accessing such websites is illegal, as it hosts stolen intellectual property," said Det Insp Kevin Ives. He warned that visitors to the website, whose Twitter account has been suspended, are "very vulnerable to having their credentials stolen". 'Access to research' The police warning says scientific papers could have been obtained by a "variety of malicious means, such as the use of phishing emails to trick university staff and students into divulging their login credentials". But the Sci-Hub website has previously told the BBC that it provides students with access to research papers for which the subscriptions are "very expensive". Andrew Pitts, chief executive of the PSI Registry, which highlights "academic piracy", has warned that users "may inadvertently download potentially dangerous content from this illegal site and put the security of their organisations at risk". The National Cyber Security Centre, part of the GCHQ intelligence service, has warned of the threat of cyber-attacks against universities. Last autumn the cyber-agency warned of online attacks attempting to "derail" the start of the academic year in universities.

Bitconnect collapsed in 2018 after state regulators in Texas and North Carolina filed cease-and-desist letters against its lending and exchange platform. Nikhilesh De Kevin Reynolds May 29, 2021 at 1:07 a.m. Updated May 29, 2021 at 2:19 a.m. SEC Sues 5 Over $2B Bitconnect Ponzi The U.S. Securities and Exchange Commission filed charges against five individuals for their alleged involvement in the Bitconnect crypto platform that collapsed in 2018. According to the SEC’s complaint, filed in the United States District Court for the Southern District of New York, from about January 2017 to January 2018, Bitconnect used a network of promoters to offer and sell over $2 billion in securities without registering the offering with the SEC, and without being registered as broker-dealers as required by the federal securities law. “We allege that these defendants unlawfully sold unregistered digital asset securities by actively promoting the Bitconnect lending program to retail investors,” said Lara Shalov Mehraban, associate regional director of SEC’s New York office. “We will seek to hold accountable those who illegally profit by capitalizing on the public’s interest in digital assets.” Bitconnect collapsed in 2018 after state regulators in Texas and North Carolina filed cease-and-desist letters against its lending and exchange platform. The SEC’s complaint charges promoters including U.S.-based Trevon Brown (aka Trevon James), Craig Grant, Ryan Maasen and Michael Noble (aka Michael Crypto) with violating the registration provisions of federal securities laws. The complaint also charges U.S.-based Joshua Jeppesen with aiding and abetting Bitconnect’s offer and sale of securities. The promoters touted the benefits of investing in Bitconnect’s lending program to prospective investors, including the use of testimonial style videos and publishing them on YouTube, the SEC said in its release. According to the complaint, the promoters received commissions based on their success in soliciting funds. The complaint seeks injunctive relief, disgorgement plus interest and civil penalties. After the complaint was made public, Brown tweeted “I just became a villain again.” While no criminal complaints were filed, the FBI has been investigating Bitconnect for the last three years. Brown said in March 2018 that he had spoken with FBI agents, and the federal investigator posted a notice in 2019 asking for investors to reach out. A representative of the criminal division at the Department of Justice’s Southern District of New York office said no criminal charges were anticipated today. Promotors of the project have been arrested in other countries as well: Indian police arrested promotor Divyesh Darji in 2018, while Australian authorities filed charges against John Bigatton last year.

Bearish news is causing the crypto market to dip and uncertainty reigns as to when prices might pick up again. Bitcoin (BTC) trading around $35,889 as of 21:00 UTC (4 p.m. ET). Slipping 7.6% over the previous 24 hours. Bitcoin’s 24-hour range: $35,453-$39,053 (CoinDesk 20) Ether (ETH) trading around $2,506 as of 21:00 UTC (4 p.m. ET). In the red 9.3% over the previous 24 hours. Ether’s 24-hour range: $2,443-$2,784 (CoinDesk 20) Bitcoin dumps on doubt Bitcoin’s hourly price chart on Bitstamp since May 25. Source: TradingView Bitcoin, the world’s largest cryptocurrency by market capitalization, was down Friday by 7.6% as of press time. BTC was below the 10-hour moving average and the 50-hour, a bearish signal for market technicians. The price of BTC fell from $39,053 at 22:30 UTC (6:30 p.m. ET) Thursday to as low as $35,453 by 12:00 UTC (8:00 a.m. ET) Friday, a 9.2% slip based on CoinDesk 20 data Fundamental crypto market bearishness, including uncertainty about bitcoin as an inflation hedge after U.S. President Joe Biden’s administration released a $6 trillion budget plan as well as continuing concerns about bitcoin mining causing damage to the environment likely led to selling Friday. “It could be a difficult weekend for crypto investors,” said David Russell, vice president of market intelligence at brokerage TradeStation Group. “The mid-May sell-off left some technical scars that may need time to heal. Bitcoin is under $40,000 and dragging on the space.” On May 23, bitcoin fell to a one-month low of $33,140, according to CoinDesk 20 data. In the bitcoin derivatives market, the top positioning on bellwether options venue Deribit is at a looks-pretty-far-from-here $100,000 strike price. Over 8,000 calls with a notional value of $305 million are at that six-digit strike, according to Deribit data. Diving deeper, data aggregator Genesis Volatility provides implied volatility metrics based on Deribit data of expirations. On the June 11 expiration, for example, the skew is bearish, seen by a large amount of implied volatility oriented at the $20,000 strike price. However, when looking deep into the future, implied volatility skews mega-bullish at a $400,000 strike for the March 23, 2022 expiration. The second-largest cryptocurrency by market capitalization, ether, was trading around $2,506 as of 21:00 UTC (4:00 p.m. ET), slipping 9.3% over the prior 24 hours. The asset is below the 10-hour moving average but above the 50-hour, a sideways signal for market technicians. Ether dipped from $2,784 at 22:00 UTC (6:00 p.m. ET) Thursday to $2,443 by 12:00 UTC (8:00 a.m. ET) Friday, an 8.2% dump based on CoinDesk 20 data. ETH has since gone up and down but settled higher, $2,506 as of press time. Spot ether volumes were higher than bitcoin for the third straight day on Thursday, based on the last available data from CoinDesk Research. BTC’s $40 million tally Thursday was 8% lower than ether’s $44 million in trading volume, a sign traders are continuing to find highly liquid crypto opportunities outside of bitcoin. Bitcoin and ether spot volumes on major exchanges. While this development might concern some long-term bitcoin holders, Nick Mancini, a research analyst for signals firm Trade the Chain, pointed out that BTC dominance, or its share of the overall cryptocurrency ecosystem, is steady – it’s actually up by 0.30% as of press time Friday. Bitcoin dominance so far in May. “If bitcoin dominance continues to rise we expect BTC to lead the way for ETH and other large-caps,” Mancini said. “And we expect both ETH and BTC sentiment and price action to stay correlated through the weekend.” A use case for bitcoin: Ethereum Various bitcoin tokens on Ethereum since the start of 2020. Over 230,000 BTC as of press time is “wrapped” on Ethereum, a record high. Wrapped bitcoin is held in escrow in a custody wallet, and tokens are created on the Ethereum network to represent that value and deployed across various decentralized finance, or DeFi, applications like lending, trading and derivatives. At over 184,000 bitcoin, the most popular wrapped project is wBTC. It’s a joint effort of BitGo, Kyber Network and Republic protocol, according to the white paper. Brian Mosoff, chief executive officer of Ether Capital, says wrapped bitcoin is hitting records because of BTC’s continuing digital gold and treasury narratives, and that this particular technology could become of interest to financial incumbents over time. “These are brand-new systems and pieces of software,” said Mosoff. “Watching a global community address these issues in a decentralized way, making the tooling more robust, will lead to prime time when traditional finance is ready to plug in their infrastructure and bridge the two worlds.”

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The support by Google's BigQuery platform is said to simplify analysis of the network's blockchain data. Google Cloud Now Provides Blockchain Insights for Polygon Network Blockchain data for Polygon, an Ethereum scaling solution, has arrived on Google’s Cloud platform. An integration with Google BigQuery enables developers to analyse on-chain data on Polygon (formerly called Matic) in a more simple way, according to an emailed announcement Friday. With the BigQuery support, Polygon's datasets have now been listed in the Google Cloud Marketplace under the public financial services category. Potential benefits of the integration are said to include the monitoring of gas fees and smart contracts, and determining the most popular tokens or applications on the network. Google BigQuery is an information warehouse that acts as an indexer allowing powerful data analysis. This can be performed across multiple blockchains, enabling comparison between networks or the tracking of interoperable tokens. Polygon said that being able to gain insights from the 6 million-plus daily transactions on its blockchain "will go a long way towards growing and building the Polygon and Ethereum ecosystems." The platform was recently the recipient of an undisclosed investment from billionaire entrepreneur Mark Cuban, confirmed by Cuban in an email to CoinDesk Tuesday.

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The clarification from the Dubai government comes days after a fake press release claimed that DubaiCoin has been approved as the 'de-facto digital currency' of the city. A website, included in the press release, asked users to book the virtual currency at a price of $0.17 per coin. The DubaiCoin cryptocurrency was "never approved" as the official digital currency, the Dubai government clarified on May 28. The website promoting Dubaicoin is an "elaborative phishing scam", an official statement said. The clarification from the Dubai government comes in the backdrop of DubaiCoin soaring by 1,000 percent in its value, owing to a fake press release - published on the PR Newswire on May 24 - which described it as "the de-facto digital currency" of the city. "Dubai Coin cryptocurrency was never approved by any official authority. The website promoting the coin is an elaborate phishing campaign that is designed to steal personal information from its visitors," the Dubai Media Office - the official media arm of the government - tweeted. The fake press release, which has now been unpublished by the PR Newswire, was issued in the name of Arabian Chain Technology - which is considered to be a legit blockchain firm based in Dubai. The company promotes its own virtual currency named DubaiCoin (DBIX). The fake press release went on to maliciously claim that the Dubai government is making Dubaicoin "its own digital currency", and added that the virtual currency could be bought online via "dub-pay.com" for $0.17 per coin. On May 26, Arabian Chain Technology attempted to disassociate itself from the controversy by confirming that it had not released the press release. "We haven't made such an announcement, please be cautious. Also this website : http://dub-pay.com/en/ is fake and scam. Please be careful," it had tweeted. The above website, which has now turned inaccessible, asked the visitors who were interested in buying DubaiCoin through their platform to submit a form that asked for their name, phone numbers, address and email. After filling the form, the website stated that an agent would call and change their money to Dubaicoin, shows the archived version of the portal. Between May 24 and May 25, the value of real DubaiCoin - promoted by Arabian Chain Technology - surged to $1.50, marking a 1,000 percent rise. However, after the company and Dubai government clarified, the value has dropped to $0.32, according to Trading View.

BTC is down about 37% month to date and has experienced a series of sharp drawdowns similar to 2017 which preceded a bear market. Damanick Dantes Bitcoin Remains in Corrective Phase Below $40K; Further Downside Expected Bitcoin (BTC) failed to sustain moves above $40,000 resistance on Thursday as the broader uptrend weakens. The cryptocurrency was trading around $36,000 at the time of writing and upside appears limited into the weekend. A bearish trend reversal is on watch after months of slowing momentum, consolidation and a downside break below $50,000 .Bitcoin is down about 37% month to date and has experienced a series of sharp drawdowns similar to 2017 which preceded a bear market. 1) The relative strength index (RSI) on the daily chart has been oversold over the past week as price held support around $30,000. However, the RSI is not yet oversold on the weekly chart which suggests price upside should remain limited around $40,000. 2 Bitcoin is below the 100-day and 200-day moving averages. This indicates the corrective phase that began earlier this month remains in effect. 3) On intraday charts, bitcoin failed to hold support. Further downside towards $33,000 could encourage short-term buyers and stabilize the current decline. Despite signs of a broader trend reversal, there are still short-term opportunities for active traders. “BTC can be very volatile, especially compared to assets in traditional markets,” wrote Justin Chuh, senior trader at Wave Financial, in an email to CoinDesk. “No one is borrowing to short spot BTC, we sill have an upward sloping forward curve, and downside protection remains relatively light,” said Chuh, who added that support will need to hold above $30,000, or otherwise bitcoin would be down on the year.

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The crypto asset market in India is worth $15 billion, and currently has about 6 million users The last few days have seen extraordinary volatility when it comes to the values of cryptocurrencies on multiple exchanges across the world. Although the champions of the cause have stated that this drop is not unprecedented and, in the past, cryptocurrencies have recovered from similar falls, the bigger question is should reliance just be placed on the historical performance or should checks, and balances be introduced in the system? The above issue has become more pertinent in India as increasingly, citizens are attracted to crypto-trading as investment options as the volumes continue to increase on a daily basis. Let’s look at the government’s efforts in trying to regularise this market, the predicaments it faces and the ideal policy that may suit a democracy like ours. The Current Policy While cryptocurrencies are not illegal, India does not have a regulatory framework to govern cryptocurrencies. In the past, the Reserve Bank of India (RBI) and the Centre have warned against the potential misuse of the technology and have displayed proclivities towards a blanket ban on the use of cryptocurrencies in India. The key takeaways from RBI’s annual report Dubai gets into crypto game, DubaiCoin rises 1,000% on debut The RBI had issued a circular preventing banks from doing business with crypto-trading platforms but that was stuck down by the Supreme Court. Thereafter, we have not seen any other regulation announced by the government. In February, the RBI Governor announced that the RBI was working on its own digital currency. In March, Finance Minister Nirmala Sitharaman said that all windows on cryptocurrencies will not be closed. All in all, the future of the legality of cryptocurrency in India is uncertain in light of the inconsistent positions taken by central authorities so far. Ideal Regulations The crypto asset market in India is worth $15 billion. As per a recent analysis, the Indian crypto community may consist of over 6 million users or approx. 0.5 percent of the population. Stakeholders in the industry have made a strong case for regulation for reasons including — lack of clear classification of cryptocurrency in India, need for disclosure to generate investor awareness, need for creating an information infrastructure, reducing cyber security risk, business uncertainty, exposure to avoidable frauds and to address money laundering concerns. A regulatory framework for crypto assets in India could take two possible approaches. For the first, suitable amendments may be introduced in the existing legal framework. This would entail making appropriate amendments in the existing laws and regulations. For example, the Information Technology Act, 2000 should be amended to include crypto assets in the definition of ‘data’, the Payment and Settlement Systems Act, 2007 should include systems enabling crypto asset operations under the definition of ‘payment systems’. Similarly, SEBI should recognise digital assets as securities and laws applicable to stock exchanges should also be made applicable to digital asset exchanges. Under the Prevention of Money Laundering Act, 2002, the definition of ‘reporting entity’ should include digital asset exchanges. This elaborate process would also include making relevant amendments to several other laws including inter-alia the Indian Penal Code, the Indian Contract Act, tax laws and FEMA Regulations. Alternatively, the government may also introduce an exhaustive code — that is a separate dedicated legislation to govern the crypto assets in India with an independent regulatory body at the central level to manage the market in India. The code must take cognisance of the potential obstacles and plausible dangers in dealing in cryptocurrency in India — for example, hacking of exchanges, fraud, money laundering, tax evasion, trade manipulation and other illicit activities, and make appropriate laws and regulations to deter the same. In the meantime, the government may also consider issuing notifications/guidelines to existing market participants to ensure that safeguards are immediately put in place. Conclusion The instantaneous need for regulation cannot be denied — with introduction of appropriate compliances, disclosures and applicable penalties for non-compliance, the market players in the crypto industry shall be more at ease and be able to operate to their full potential. India should not fall behind other countries by delaying the introduction of policies and regulations in the crypto space. Creating accountability and instilling trust in the crypto asset market by way of regulation is the need of the hour and the responsibility of the government. Stakeholders are keenly awaiting a definitive response. RASHMI DESHPANDE is Partner, Khaitan & Co. Views are personal.

A decentralised publishing infrastructure on the Cosmos blockchain, LikeCoin, is being used to preserve the archives after public broadcaster Radio Television Hong Kong said it will erase content over a year old. Hong Kong media is using blockchain to preserve its coverage of 2019 pro-democracy protests that rocked the autonomous region claimed by China as its own. A decentralised publishing infrastructure on the Cosmos blockchain, LikeCoin, is being used to preserve these archives as 'Hong Kong Connection,' city's current affairs programme, as public broadcaster Radio Television Hong Kong announced earlier in May that it will erase archive content over a year old, Quartz reported. One such episode '7.21 Who Owns The Truth' reportedly showed Hong Kong police tactics and attacks against the protestors, which helped in raising awareness, was backed at LikeCoin. The report said the infrastructure of LikeCoin is that of a repository not of content but of metadata—details like author, title, publication date and location, as well as a distinctive fingerprint. This metadata is unique immutable and generated the first time a piece of content is published. LikeCoin uses a digital registry protocol called the International Standard Content Number (ISCN) to catalogue metadata, which is similar to a unique International Standard Book Number (ISBN) of a published book. ISCN can flag any change made to the content. Authorities have arrested and charged most of the city's pro-democracy advocates, who include Joshua Wong, a student leader of the 2014 protests. Hong Kong media tycoon and outspoken pro-democracy activist Jimmy Lai was also sentenced to more jail time on May 28 over his role in an anti-government protest in 2019, as authorities crackdown on dissent in the city. U.S. Secretary of State Antony Blinken in a statement called on Hong Kong authorities to drop charges filed against people merely for standing for election or for expressing dissenting views.

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Why isn't the prospect of more U.S. stimulus boosting bitcoins price? U.S. President Joe Biden Omkar Godbole May 28, 2021 at 3:39 p.m. Updated May 28, 2021 at 3:43 p.m. Bitcoin Drops, Stocks Rally Ahead of Biden’s Budget Announcement Bitcoin is nursing losses on Friday despite hopes of more inflation-boosting U.S. stimulus to come. On Friday, President Joe Biden is set to release his first full budget, seeking $6 trillion in federal spending for the fiscal year 2022 and $8.2 trillion by 2021, The New York Times reports. The proposal shows the Biden administration remains undeterred by recent inflation fears and is unlikely to close the liquidity tap anytime soon, having already pumped trillions of dollars into the system to counter the economic effects of the coronavirus pandemic since March 2020. That’s potentially a bullish development for bitcoin (BTC, -9.63%), which is widely touted as digital gold. However, the leading cryptocurrency is changing hands near $35,800 at press time, representing a 7% drop on the day. The decline comes a day after buyers failed to establish a foothold above the $40,000 mark. However, the prospect of more liquidity is pushing stocks higher. The pan-European Stoxx 600 index is trading 0.43% higher at new record highs above 445 points, according to Investing.com. Futures tied to the S&P 500 are also hinting at a positive start to trading on Friday with a 0.5% gain. Bitcoin’s adverse reaction to talk of more stimulus appears confounding, given it rallied from $5,000 to over $60,000 in the past 12 months, alongside a steady rise in the U.S. 10-year breakeven rate, the bond market’s forecast of long-term price pressures. The cryptocurrency has received validation as an inflation hedge from Wall Street bigwigs and several listed companies. “Personally, I’d rather have bitcoin than a bond,” in an inflationary scenario, Bridgewater Associates founder Ray Dalio said during an hour-long conversation with CoinDesk Chief Content Officer Michael J. Casey earlier this week. Increasing concerns about the environmental impact of cryptocurrency mining and China’s recent regulatory announcements could be keeping buyers at bay. “Retail appears to be slowing down while regulatory concerns and ESG FUD [fear, uncertainty and doubt] from China has taken center stage,” Matthew Dibb, co-founder, and COO of Stack Funds, said. “Many market participants are covering positions in light of anticipated news that (might) come to light.” ESG stands for “environmental, social and corporate governance,” a term used to refer to companies’ sustainability and impact on society. Bitcoin fell sharply from $58,000 to nearly $30,000 earlier this month after Tesla suspended vehicle purchases with bitcoin, citing environmental concerns. “Environmental concerns will get bigger with time. This will represent a major long-term headwind for bitcoin, and help push dominance down,” trader and analyst Alex Kruger tweeted. Also read: Ark’s Cathie Wood Blames Crypto Crash on ‘ESG Movement’ Additionally, fears that the Federal Reserve may raise the interest rate to counter inflation could be keeping the cryptocurrency under pressure. That’s because rate hikes dilute the appeal of the store-of-value assets like bitcoin. According to Bloomberg, rates traders have boosted bets that the Fed will raise borrowing costs next year, much earlier than policymakers have indicated. “The Fed’s broad support of the economy since the onset of the pandemic has provided support for higher asset prices including stocks and cryptocurrencies,” Ariel Zetlin-Jones, associate professor of economics at Carnegie Mellon University’s Tepper School of Business, told CoinDesk in an email earlier this month. “Ultimately, the removal of this support is likely to provide new headwinds for asset price growth.” The rate hike fears may amplify, if the core personal consumption expenditure (core PCE) – the Fed’s preferred measure of inflation – blows past expectations. That could lead to a deeper drop in bitcoin. The April data is scheduled for release at 12:30 UTC today. However, analysts expect the cryptocurrency to see range play in the short term. “From a technical point of view, BTC is in a consolidation phase. We expect that there will be choppy trade between $30,000–40,000 for the next two weeks,” Dibb said.

A lot of institutional buying went on pause” due to concerns about mining’s environmental impact, the influential fund manager said at Consensus 2021. Ben Schiller May 28, 2021 at 4:50 a.m. Ark’s Cathie Wood Blames Crypto Crash on ‘ESG Movement’ Elon Musk and the “ESG movement” are responsible for the recent drop in cryptocurrency prices, an influential fund manager told CoinDesk’s Consensus 2021 conference today. Cathie Wood, the founder of Ark Investment Management, said bitcoin – which has lost up to 50% of its value in the last few weeks – has come under pressure from institutional investors concerned about its environmental profile. “It was precipitated by the ESG [environmental, social and governance] movement and this notion, which was exacerbated by Elon Musk, that there are some real environmental problems with the mining of bitcoin. A lot of institutional buying went on pause,” she told Nathaniel Whittemore in a pre-recorded interview broadcast Thursday. Musk, who had buoyed markets by saying Tesla would buy bitcoin for its treasury and accept it as payment for its cars, reversed course on the latter, sending prices downwards. “Elon probably got a few calls from institutions,” Wood said. “I noticed that BlackRock is [Tesla]’s number three shareholder and Larry Fink is the CEO. He is focused on ESG and especially on climate change. I’m sure BlackRock registered some complaints and perhaps there are some very large holders in Europe who are extremely sensitive to this.” Cathie Wood: Ahead of the Curve (Most Influential profile) Wood, a storied innovation investor, remains confident in the future of Bitcoin, which she described as the first rules-based “global monetary system in the world.” Recently, speaking to Bloomberg, she forecast the cryptocurrency will go to $500,000. In her Consensus appearance Thursday, she predicted central banks will begin buying crypto assets for their balance sheets and that Musk will prove positive for bitcoin in the long term, improving its environmental profile. “He has encouraged a lot more conversation, a lot more analytical thinking. And I do believe he’s going to become a part of the process,” she said. Deflationary environment Prominent figures like Lawrence Summers and Ray Dalio have recently warned that government and central bank spending could push up inflation this year. But Wood, who is known for bucking conventional wisdom, said deflation is more likely. She predicted a “significant” fall in commodity prices and that technology like artificial intelligence and blockchain will serve to hold down business costs. “As time goes on here, we are thinking that the much higher probability is deflation. I know most people think that’s crazy, given what’s going on. But we have seen a crack in some commodity prices already,” she said. That, in turn, could lead some policymakers in emerging markets, or even the eurozone, to adopt hard money, including bitcoin. “In emerging markets, if commodity prices come down, a lot of them are linked to commodity prices [and] their currencies will come under pressure,” she said. “I wouldn’t be surprised if some of these emerging market central banks start accumulating bitcoin … because they know their currencies are going down, and that they will be under attack as reserves go down.” In his own appearance at Consensus this week, Dalio said bitcoin could become a victim of its own success: that governments will try to ban it as it becomes a competitive threat. But Wood said governments have learned that innovation is key to long-term growth and that technology, be it cryptocurrency and the internet before it, can’t really be stopped. Read more: Cathie Wood: Secrets of the World’s Best Innovation Investor “They’re all trying to say, ‘Let’s have a better regulatory footprint here so that we attract more innovation.’ And I think that is going to happen with, or already is happening with, cryptocurrencies,” she said. Wood said she was “very happy” to see Gary Gensler, who is known to be open-minded toward cryptocurrency, installed as the new head of the Securities and Exchange Commission, alongside Valerie A. Szczepanik, who leads the body’s Strategic Hub for Innovation and Financial Technology. Wood said bitcoin has proved itself as a store of value and a way to protect against wealth confiscation. She said it had the potential to be a settlement network following the introduction of layer 2 solutions like the Lightning Network. But Ark is increasingly focused on ethereum, having invested in Grayscale’s Ethereum Trust and hired an Ethereum miner to its fintech analysis team. (Grayscale is a unit of Digital Currency Group, the parent company of CoinDesk.) “We’re intrigued by stablecoins and [decentralized finance], of course, and [non-fungible tokens]. And we’re also very interested that developers are migrating very, very quickly [to Ethereum]. I always say to our analysts, ‘Follow the developers, let’s see what they’re doing.’ Because that’s a very loud signal,” Wood told Whittemore. As for Musk, Wood said he would help bitcoin miners to “green” their operations. “This auditing of what miners, certainly in North America, are willing to do around how much of their electricity usage is generated by renewables is going to bring that topic into stark relief. It will encourage an acceleration in the adoption of renewables beyond which otherwise would have taken the place.” As described in a recent Square-Ark white paper, mining and renewables can grow in tandem, with bitcoin acting as a “battery” to soak up excess electricity produced from intermittent sources like solar and wind, Wood said. In effect, mining can help fund renewables and make solar more attractive to innovation investors including Ark. Previously the firm didn’t see the potential to make big returns from solar and wind, but now that might change. “I’m actually quite excited about it,” she said.

Regulators are getting more involved in crypto, or so they said at this year's Consensus event. Federal Reserve Governor Lael Brainard detailed the policy considerations around a digital dollar on Monday. May 28, 2021 at 7:00 a.m. State of Crypto: What Regulators Said at Consensus 2021 CoinDesk’s Consensus 2021 ended today, but the conversations will continue (I hope, or else I’m going to need a new job). If you missed it, you can catch up on all of the coverage here, but I wanted to briefly dig into some of the regulation-related panels and sessions from this week. You’re reading a special Consensus 2021 edition of State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions. CBDCs and innovation CoinDesk’s annual conference usually features a host of policymakers and regulators explaining how they’re approaching crypto and how that approach has changed over the past few years. Here are some of this year’s highlights. Federal Reserve Governor Lael Brainard: The U.S. central bank official opened Consensus with a breakdown of how exactly the Boston Fed is looking at a digital dollar from a policy perspective. Wyoming Governor Mark Gordon: The governor of Wyoming revealed he owns cryptocurrencies, and said he’s concerned about government-issued digital currencies. International Monetary Fund Division Chief Tommaso Mancini-Griffoli: The IMF division chief said that, hypothetically, a world with multiple reserve currencies would be fairly stable. He was responding to a question about China’s digital yuan. U.S. Sen. Cynthia Lummis: The crypto-friendly lawmaker’s Financial Innovation Caucus officially launched on Tuesday, with Sen. Cynthia Lummis (R-Wyo.) and Sen. Kyrsten Sinema (D-Ariz.) spearheading the effort. SEC Commissioner Hester Peirce: The growth of digital assets might force the Securities and Exchange Commission to modernize its custody rules more quickly than it might otherwise, SEC Commissioner Hester Peirce said. Colorado Gov. Jared Polis: Jared Polis, previously a congressman who co-founded the Congressional Blockchain Caucus, said he wants to work with his state’s policymakers to help it accept crypto for taxes. Christian Catalini: The diem co-creator and chief economist and MIT professor said the original Facebook-led vision for the libra stablecoin project was “naive.” C’est possible. Bank of Mauritius Governor Harvesh Seegolam: Mauritius’ central bank plans to launch a central bank digital currency by the end of the year, Harvesh Seegolam said. He previously teased there’d be research into a CBDC at Consensus: Distributed last year. National Security Council Director of Cybersecurity Carole House: White House adviser Carole House said a lack of controls may require the U.S. government to create some regulations to limit fundraising by malicious actors. Acting FinCEN Director Michael Mosier: Michael Mosier, who took office earlier this year after former FinCEN Director Kenneth Blanco stepped down, said a controversial rule proposal that would require crypto exchanges to collect counterparty data for transactions to private wallets is still being evaluated.

"We're kind of seeing the community build this out," Hayden Adams said at Consensus 2021. Brady Dale May 28, 2021 at 6:21 a.m. Updated May 28, 2021 at 7:57 a.m. Liquidity Mining Will Return to Uniswap ‘Very Soon,’ Founder Says Uniswap, the leading automated market maker (AMM) on the Ethereum blockchain, should be running a liquidity mining program again in short order, its founder said. “I think it’s going to be very soon,” Hayden Adams said in a prerecorded interview broadcast Thursday to wrap up Consensus 2021. “One thing that we’ve seen in the past couple of weeks is basically a grant from the Uniswap grants program, which comes from governance, that was … issued to someone who’s working on liquidity mining smart contracts. And so we’re kind of seeing the community build this out.” Liquidity mining is a kind of yield farming in which users of a decentralized finance (DeFi) product earn an additional token on top of the regularly expected yield just for putting assets into a liquidity pool – hence the term, “liquidity mining.” When the money market Compound announced a liquidity mining program for its governance token, COMP, last year, it kicked off the boomlet known as DeFi Summer 2020. Toward the end of that heady period, Uniswap airdropped, or distributed, its governance token, UNI (+3.34%), to eligible stakeholders and then ran a very brief liquidity mining program across a few key liquidity pools. Since then there has been no way for users to earn new UNI (except the Uniswap grants program). However, at the launch of UNI, Uniswap reserved 430 million units for distribution in several different ways, including liquidity mining. Laying the foundations for this moneymaker’s return, Omar Bohsali, the entrepreneur-in-residence at Paradigm Capital, the fund founded by Coinbase co-founder Fred Ehrsam, has been working on a staking system for the newest version of Uniswap’s software. Adams announced on Twitter on May 18 that Bohsali’s work had earned the support of the grants program, which is run by six people approved through Uniswap’s governance system. Third time's the charm Uniswap released the third version of its software this month, and it quickly became the most popular decentralized exchange on Ethereum. Previous versions of automated market makers could be knocked out of line with the market by large trades and wasted liquidity. The new version allows sophisticated market makers to lock their deposits in within the band in which traders are likely to want to trade. This improves efficiency for traders. “There was sort of a lot of speculation, when we first announced v3, because it was much more complex and liquidity isn’t all identical. There were some open-ended questions from people as well. Would it be possible? And the answer is yes. It’s completely possible. And it’s being built,” Adams said at Consensus. Uniswap gives any asset holder on Ethereum (the second-largest blockchain, based on the market cap of its native token, ETH (-1.07%)) a way to participate in making markets, something that has only been possible for people with very deep pockets in traditional finance. Any two Ethereum tokens can be placed in a Uniswap pool, which improves liquidity for that trading pair. A liquidity pool serves as a sort of stockroom for a decentralized exchange, ensuring that when someone offers to buy or sell a token, the asset they want is available. “Uniswap is basically a protocol for trading digital currencies,” Adams said. “It makes useage of the decentralized nature of Ethereum in a new way.” In the prior liquidity mining run, users who deposited funds in various Uniswap pools were rewarded with UNI tokens. Governance Approving the grants program is the only action Uniswap governance has taken since UNI was released. Only two prior measures have reached a final vote, and both failed, including a bid led by Dharma, a DeFi portal for mobile devices, to make retroactive airdrops to more past Uniswap users. “Definitely, I would say it is a conservative approach,” Adams said of Uniswap governance. “From day one, we were kind of committed to it being as decentralized as possible and have it sort of fully on-chain. And so it was like a little bit of a slower process with a higher threshold for things passing.” Adams argued that with the grants program funding new projects, activity will speed up. “It’s kind of it’s slow and it’ll be slow, and then it will be very fast as some of the infrastructure comes into place,” Adams said. DeFi to come Ehrsam, a Uniswap investor and co-panelist with Adams at Consensus, predicted many more financial services will enter the space. “If there’s a periodic table of all of the financial primitives that one needs in a financial system, what are all the elements on the table? Which exist today in DeFi and which do not yet exist? And I think what we’re seeing is just the natural kind of progression of basic financial building blocks from simple to complicated,” Ehrsam said. He said he expects the number of financial services to proliferate potentially as fast as the kinds of media content proliferated with the invention of the internet. Adams agreed. “Not only will it be kind of one by one, replacing all the TradFi [traditional finance] stuff, but I think that beyond that we might be discovering some new elements as well. Things that kind of simply weren’t possible in traditional financial systems might be made possible in DeFi,” he said. “I think it applies to financial products, and probably also financial assets as well. I’m expecting [a] many, many orders of magnitude increase in just the number of assets that exist.”

Bitcoin’s 30-day volatility has been dropping the past two days. So has gold's. CoinDesk XBX Index Daniel Cawrey May 28, 2021 at 2:24 a.m. Market Wrap: Weak PayPal Pump Leaves Market Mostly Flat With BTC at $38K, ETH $2.7K Hype around PayPal allowing users to move their crypto to other venues led to a market jump before tepidity set in. Bitcoin (BTC) trading around $38,814 as of 21:00 UTC (4 p.m. ET). Gaining 0.75% over the previous 24 hours. Bitcoin’s 24-hour range: $37,317-$40,372 (CoinDesk 20) Ether (ETH) trading around $2,756 as of 21:00 UTC (4 p.m. ET). In the green 0.60% over the previous 24 hours. Ether’s 24-hour range: $2,888-$2,650 (CoinDesk 20) Bitcoin volatility dips Bitcoin’s hourly price chart on Bitstamp since May 24. Source: TradingView Bitcoin, the world’s largest cryptocurrency by market capitalization, was up Thursday by at 0.75% as of press time. BTC was below the 10-hour moving average and the 50-hour, a bearish signal for market technicians. BTC rose from $37,317 at 03:15 UTC (11:15 p.m. ET Wednesday) to as high as $40,372 by 13:30 UTC Thursday (9:30 a.m. ET Wednesday), an 8.1% increase based on CoinDesk 20 data. Bitcoin has since fallen somewhat, however, settling at $38,814 as of press time. One possible explanation for the rise: PayPal executive Jose Fernandez da Ponte saying during a Wednesday Consensus 2021 panel that the payments firm will allow its crypto users to move balances to different wallets. This could be a way for retail traders to get into crypto by using PayPal’s existing banking rails, and then push increased liquidity into venues like exchanges. Henrik Kugelberg, a crypto over-the-counter trader, told CoinDesk he has been seeing increased bitcoin buying as of late. He thinks bitcoin’s gold-like store-of-value properties in uncertain times will prompt many people to continue to scoop up BTC. “There is a veritable rush for gold, no question about it,” said Kugelberg. “However, the big players in bitcoin are also very active in buying.” BTC volatility drops Bitcoin and gold 30-day volatility in 2021. Source: CoinDesk Research, St. Louis Fed, Yahoo Finance Bitcoin’s 30-day volatility has been dropping the past two days, down to 88.4%. Gold’s volatility has been dipping, too, at 12.2%, according to CoinDesk Research data. “The macro perspective has not changed,” added Kugelberg. The U.S. dollar’s “buying power is diminishing and reserves are being exchanged for gold and bitcoin.” Read More: Billionaire Carl Icahn Eyes Potential $1.5B Crypto Investment Lots of bitcoin puts at $40K Bitcoin options open interest by strike. Source: Skew After the $50,000 strike price, where there’s 16,000 BTC in open interest in the options market, the $4JUdGzvrMFDWrUUwY3toJATSeNwjn54LkCnKBPRzDuhzi5vSepHfUckJNxRL2gjkNrSqtCoRUrEDAgRwsQvVCjZbRyFTLRNyDmT1a1boZVthat might seem bearish at first look, George Clayton, partner at investment firm Cryptanalysis Capital, thinks this orientation is more about hedging. “It’s impossible to ascertain if traders are oriented short from $4JUdGzvrMFDWrUUwY3toJATSeNwjn54LkCnKBPRzDuhzi5vSepHfUckJNxRL2gjkNrSqtCoRUrEDAgRwsQvVCjZbRyFTLRNyDmT1a1boZVor are delta hedged and simply long volatility, just as much as it could mean they are bearish.” Crypto’s roller coaster-type price changes are why smart derivatives traders are holding options at $4JUdGzvrMFDWrUUwY3toJATSeNwjn54LkCnKBPRzDuhzi5vSepHfUckJNxRL2gjkNrSqtCoRUrEDAgRwsQvVCjZbRyFTLRNyDmT1a1boZVdigital asset firm Two Prime. “Because traders and investors are still spooked by recent volatility, they will likely continue to favor downside protection,” Cox said. “Recency bias tells them they need to manage downside risk.” Ether open interest still popping Ether’s hourly price chart on Bitstamp since May 24. Source: TradingView The second-largest cryptocurrency by market capitalization, ether, was trading around $2,756 as of 21:00 UTC (4:00 p.m. ET), gaining 0.60% over the prior 24 hours. The asset is below the 10-hour moving average and the above the 50-hour, a sideways signal for market technicians. Ether slid from $2,888 at 00:15 UTC (8:15 p.m. ET Wednesday) to $2,650 at 03:45 UTC Wednesday (11:45 p.m. ET Wednesday), an 8.2% fall based on CoinDesk 20 data. ETH has since gained, settling at $2,756 as of press time. After a precipitous drop from an all-time high of $598.4 million in ether futures open interest (OI) on CME, that market has steadily increased this week. Climbing from a $366 million valley on Sunday, OI has peaked to $522 million Wednesday, a 42% gain on a venue known for institutional hedging. Ether might be winning the 'green' bet Ether futures open interest on CME the past month. Source: Skew Vishal Shah, founder of crypto derivatives exchange Alpha5, thinks the problematic environmental and social governance (ESG) factors around bitcoin mining may be creating a narrative that ether might be “greener,” prompting the rise in ether futures. “I think the ideological narrative is shifting a bit more in favor of ETH and Ethereum’s leadership has also been vocal about it,” Shah said. “Though ESG is a scapegoat, it may be enough of a buzzword to cause at least a temporary shift in sticky capital allocations.” It’s important to note that Ethereum also uses proof-of-work mining, at least until the shift to ETH 2.0 occurs. “For bitcoin, there’s a tug-of-war at the moment between crypto natives and the mainstream regarding extreme energy consumption,” said Brian Mosoff, chief executive officer of Ether Capital. “Whether this is right or wrong, it’s left a lot of investors hitting the brakes on going all in on bitcoin and instead turning to alternatives like ether.” Ether spot volume higher than bitcoin once again Bitcoin and ether volumes over the past month. Source: CoinGecko On Wednesday, the latest day for closing metrics from CoinDesk Research, ETH spot volumes again beat bitcoin based on major exchange data. Ether’s volumes were at $52.3 billion Wednesday, while the amount of BTC changing hands tallied $45.4 billion. The potential of decentralized finance, or DeFi, is one factor causing increased trading of ether, noted Misha Alefirenko, co-found of crypto market maker VelvetFormula. “The main heat right now is in DeFi,” said Alefirenko. “So blockchains that support smart contracts are having stronger ‘use case’ propositions.” Over the past month, ether’s spot trading volume has been higher than bitcoin’s eight times, with four of those days occurring in the past week. “Ethereum has a lot of momentum behind it right at the moment,” added Ether Capital’s Mosoff. “There’s a lot to be excited about in this ecosystem.”

DBIX was launched by UAE-based Arabianchain Technology, which claims to be the first public blockchain-based in the Arab world. With cryptocurrencies garnering mainstream attention, the city of Dubai, the preferred destination for shoppers, has launched its own digital token DubaiCoin (DBIX). The cryptocurrency rose more than 1,000 percent over the last 24 hours after debuting at a price of $0.17. DBIX was listed on a number of trading platforms. Since then, most have apparently removed it, including market-leading CoinMarketCap, reported Dubai-based Khaleej Times. However, at the time of writing this copy, Crypto.com has listed DBIX at $1.13, indicating a whopping increase of 1,114 percent, with a supply of 4.26 million and a market capitalisation of $4.84 million. According to media reports, DBIX is based on a public blockchain system, which means that the blockchain-ledger behind the currency will be maintained by the public and new coins can be created by mining them. DBIX was launched by UAE-based Arabianchain Technology, which claims to be the first public blockchain-based in the Arab world. “DubaiCoin will soon be able to be used to pay for a range of goods and services both in-store and online, with the clear intention for the coin to be used in place of traditional bank-backed currencies. Circulation of the new digital currency will be controlled by both the city itself and authorised brokers,” the company said in a press release.

Gold is back with a vengeance this month just as the crypto rally falls apart, refueling the Wall Street debate over the link between the two putative hedging assets. Bullion funds have seen the biggest two weeks of inflows since October and prices are edging closer to $1,900 an ounce. In contrast, Bitcoin has plunged by almost 40% from a $63,000 peak and funds are recording outflows. Yes, the weaker dollar and falling inflation-adjusted yields are big reasons for the gold revival. Elon Musk-spurred volatility, meanwhile, has snuffed out some of the speculative euphoria in Bitcoin, while undermining its ambition to attract the institutional crowd. Yet, all this fascinates a market cohort that point out the parallels between digital gold and the real deal. They’re both viewed as inflation hedges, commodities in scarce supply and capture the cultural divide between young, tech-obsessed traders and boomer traditionalists Meanwhile, the likes of JPMorgan & Chase & Co. and ByteTree Asset Management say gold’s recent ascent appears to have come at least partly expense of Bitcoin as investors rotate between the two. In a report on shifting gold and Bitcoin trends, Morris suggested that fund flows are having an unusually large impact in boosting the gold price, and vice versa Bitcoin’s outgoing flows are depressing prices. Past may be prologue: Earlier this year, Bitcoin funds pulled in institutional cash as money managers extolled a case for digital currencies to creep into gold’s spot in a portfolio. With the economic growth in full swing, more than $20 billion then left bullion-backed ETFs in the For some strategists, the bullion market is a starting place to divine their price forecast for Bitcoin. In a world where investors allocate gold and Bitcoin evenly to their portfolios and the two assets converge in volatility, it would imply a valuation of Bitcoin at $140,000, JPMorgan has previously estimated. “Needless to say such convergence or equalization of volatilities or allocations is unlikely in the near future,” strategists led by Nikolaos Panigirtzoglou wrote. Since the Covid-19 vaccine breakthrough triggered an economic rebound in November, exchange-traded funds tracking gold sold almost 12 million troy ounces through to the start of May, worth about $22.5 billion at today’s price. Investors pulled almost $14 billion from the SPDR Gold Shares ETF (ticker GLD) in the period, helping cut total assets in the world’s largest gold ETF by 29%. Some $1.6 billion has flowed back into the fund to put May on course for the best month since July. In day-to-day action, the direct link between gold and Bitcoin is hard to pin down, suggesting the connection is more about market psychology than real-money flows. The threat of price pressures and weakening dollar are good reasons for the metal’s current rally. And while predictions for Bitcoin prices have been chastened by the selloff, the enthusiasm hasn’t gone away. Bloomberg Intelligence strategist Mike McGlone, who has a price target of $100,000 for Bitcoin, says there’s still a chance crypto can become a digital reserve asset and that makes it worth the risk. “Gold may be losing its significance, so it may be simply prudent to diversify,” wrote McGlone. “The human nature of acknowledging a new asset class is what we see as a primary Bitcoin support.

Facebook and Google are building a fiber-optic undersea cable market to carry data across the world. In this report, Facebook says encryption will protect data, though experts raise questions. Facebook and Google now are the biggest players in the undersea fiber-optic cable market, investing heavily in multiple subsea networks and raising concerns about private ownership of vital global infrastructure — as well as the potential threats to data privacy. The internet giants’ emergence in the subsea cable sector comes amid insatiable global demand for content, bandwidth and storage — and as underwater networks increasingly are recognized as essential for the world’s governments and economics, not to mention millions of everyday people. Silicon Valley’s involvement in cables also comes as the Colonial Pipeline ransomware attack earlier this month highlights the risks of privately owned infrastructure. “Our approach is to build state-of-the-art, secure subsea cables — where all data moving through them would be encrypted to the highest industry standards,” Monica Wik, a Facebook spokesperson, told Digital Privacy News. “On subsea cables that we are developing, like Echo and Bifrost, Facebook’s traffic is physically separated from other parties,” she said. “We use advanced encryption to ensure our data remains secure.” Google did not respond to emailed questions about its undersea cables. Linking Data Centers Echo and Bifrost are two of the 13 undersea cables Facebook owns outright or has a financial stake in, according to TeleGeography, an industry research group. These new cables — Echo is a collaboration with Google — will connect data-hub Singapore and population-dense Indonesia to California by way of Guam. Wik said the application for Echo was filed with the Federal Communications Commission (FCC) at the end of March and other applications were in various stages of approval, including for Bifrost. Echo, she said, was expected to be completed in late 2023 and Bifrost in late 2024. Facebook said the cables would increase overall transpacific capacity by 70%. Tom Uren, a senior analyst at the Cyber Policy Centre of the Australian Strategic Policy Institute, noted to Digital Privacy News: “Spending on cable infrastructure isn’t a decision made in isolation — but is a balancing act on all the other infrastructure required to run a service, especially data centers, with a whole series of different trade-offs involved. “Data centers for the internet giants can cost billions, whereas cables cost hundreds of millions. “In the case of an underdeveloped market, it makes sense to pay for cables that would allow you to grow the market when the demand to justify a data center doesn’t yet exist. “Put another way,” Uren added, “the investors are certainly choosing the cheapest way to get what they want for the future of their business.” What Are the Risks? Kyung-Sin Park, director of the American Law Center at Korea University and head of Open Net Korea, said the new, more powerful undersea cable networks would help American companies keep all the personal data of their users in the United States. “Instead of putting cache servers in local countries, they can service content by storing it in U.S. and distributing directly from the U.S.,” he said. “The undersea cable network has always had a set of big players,” she told Digital Privacy News. “And before it was Google and Facebook, it was the nationally affiliated telecom companies, carriers such as AT&T. “So, even if there are new forms of equity in terms of data control, this is not an entirely new form of organization in the industry.” Starosielski said the cables themselves were not the most vulnerable part of the undersea network. “It is technically possible to tap into submarine cables, but there are a lot of factors that make that a very slim likelihood,” she said. “It is infinitely easier to tap into other points of the network. “It would be like doing a ‘Mission Impossible’-style entrance through the ductwork of a building when the front door is wide open. “The undersea cable network has always had a set of big players,” she told Digital Privacy News. “And before it was Google and Facebook, it was the nationally affiliated telecom companies, carriers such as AT&T. “So, even if there are new forms of equity in terms of data control, this is not an entirely new form of organization in the industry.” Starosielski said the cables themselves were not the most vulnerable part of the undersea network. “It is technically possible to tap into submarine cables, but there are a lot of factors that make that a very slim likelihood,” she said. “It is infinitely easier to tap into other points of the network. “It would be like doing a ‘Mission Impossible’-style entrance through the ductwork of a building when the front door is wide open.