Crypto Guides, Knowledge & Insights

Crypto Derivatives Exchange BitMEX Says All Users Are Now Verified

BitMEX, the cryptocurrency derivatives exchange that found itself in hot water with U.S. regulators last year, announced Thursday that its customer verification program has now been fully implemented across active users.　　Since Dec. 4, BitMEX users have been required to become verified in order to deposit, trade or withdraw funds.　　The Seychelles-based company said the programs completion makes it one of the largest crypto derivatives exchanges in the world with a fully verified active user base.　　The know-your-customer compliance effort comes after regulatory scrutiny in the last two years.　　In 2019, the U.S. Commodity Futures Trading Commission (CFTC) opened an investigation into BitMEX over whether the exchange had allowed U.S. traders to use its platform.　　Then in October 2020, the CFTC and federal prosecutors charged BitMEX with facilitating unregistered trading and other violations.　　Since then, the exchange has shaken up its executive team and brought on its first compliance chief.

2021-01-08Deep Dive

Institutional Custody Will Challenge Retail-Oriented Crypto

The institutions are coming. The herd is arriving. Institutional participation in the digital asset market is imminent.　　As this happens, its worth considering how the entry of highly regulated financial companies will change the marketplace infrastructure for crypto, which, until now, has been largely oriented to retail investors. Institutions will have different and higher requirements across the transaction chain, notably in the custody of digital assets.　　Phil Mochan is the co-founder and head of Strategy $1,000). Its design and architecture leave it too vulnerable, and no technological improvements, however innovative, will ever resolve this challenge. “Better” is never going to be “sufficient.”　　One alternative model is the account structure where a trusted third party takes control of the assets and separates the authorization processes from the private key management. This is how a bank works and it requires trust, regulation and governance, most of which are anathema to the progenitors of the cryptocurrency world.　　The second problem arising from the bearer nature of digital assets is proving unique ownership. The only solution is to ensure (and prove) that no humans ever come into contact with a private key. Given that cold stores (the most common form of long-term storage for digital assets) require humans

2021-01-08Deep Dive

Coinbase Acquires Routefire to Beef Up Institutional Bitcoin Offering

Leading U.S. crypto exchange Coinbase has acquired trade execution startup Routefire. The terms of the deal were not disclosed.　　“While well no longer be supporting the Routefire platform, we are very excited to continue on our mission of bringing advanced trading infrastructure to the rapidly developing cryptocurrency markets by joining Coinbase,” Routefire wrote in a blog post Thursday, adding:　　“We remain deeply committed to this ecosystem and are excited to help develop Coinbases market-leading suite of institutional products, which provides the true end-to-end solution that we believe best meets our customers needs.”　　A Coinbase spokesman confirmed the deal but declined to comment.　　By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.　　Additional resources in the trading infrastructure realm couldnt come soon enough for the San Francisco-based crypto exchange. Coinbase has seen intermittent outages in recent days as bitcoin (BTC, +2.52%) has surged to unprecedented highs currently near $40,000 per coin.　　It is Coinbases first acquisition of the new year, albeit likely a small one. The website of the San Francisco-based Routefire shows a team of seven led by CEO Jason Victor.　　In 2020, Coinbases acquisition of crypto prime broker Tagomi helped the exchange execute mega

2021-01-08Deep Dive

Bitcoin Goes Institutional, Ethereum Spreads Its Wings: CoinDesk Q4 2020 Review

The latest CoinDesk Quarterly Review looks at the data and timelines behind these two strong narratives, and what they mean for asset prices.　　Bitcoin goes institutional　　While the 2017 bitcoin rally was largely driven by retail frenzy, the 2020 rally was driven mainly by institutions. The accelerating rhythm of large institutional investors publicly talking about and investing in bitcoin as a portfolio asset has not only lent validation to bitcoins role in portfolios, it has also attracted the attention of other investors. This self-reinforcing loop is likely to continue into 2021, especially given the mounting uncertainty around currencies and inflation.　　Source: CoinDesk Research　　Bitcoin‘s strong rally in the last few days of December crowned an already strong year and produced an annual performance of 300%, way ahead of most macro assets, although behind ETH’s spectacular 470%.　　Source: CoinDesk Research, St. Louis Fed, Yahoo Finance　　One metric that hints at growing institutional involvement is the number of addresses that hold large balances. The number of addresses with over 1000 BTC, known as “whales,” is over 30% higher than at the end of 2017, the height of the last crypto bull run, indicating the growing presence of deeper pockets in the market.　　Source: Coin Metrics　　Another indicator that institutional involvement

2021-01-08Deep Dive

Story from Markets ‘Bitcoin Rich List’ Rebounds to Hit All-Time High

The number of addresses holding over 1,000 bitcoin (worth of approximately $37.5 million at the current price) is now at 2,334, a new all-time high, after the number dropped at the end of December by 3.7% to 2,221. This is an indication “whales” (large bitcoin holders) have been bullishly accumulating more bitcoin and driving the price higher.　　The 2,334 addresses each holding more than 1,000 bitcoin represents a gain of more than 30% compared with the end of 2017, the height of the previous crypto bull market, according to on-chain data site Glassnode. The metric has been on the rise since mid-October 2020, but suffered a temporary 4% drop between Dec. 18 and Dec. 26.　　The number of addresses holding more than 1,000 bitcoin. Source: Glassnode　　“The dip and renewed increase at the end of December shows relatively little interest in profit taking on the part of these large holders, even though almost all holdings are currently in profit,” according to CoinDesk Researchs quarterly review report published on Jan. 7.　　By signing up, you will receive emails about CoinDesk products and you agree to our terms it has also attracted the attention of other investors. This self-reinforcing loop is likely to continue into 2021,

2021-01-08Deep Dive

Bitcoin Lightning Startup Zap Goes Global, Adding Multiple Fiat Pairs, Stablecoins

Strike – the Chicago-based startups Bitcoin wallet and banking service – is rolling out native support for the euro, pound and Swiss franc, soon to be followed by the Australian and Canadian dollar after partnering with cryptocurrency exchange Bittrex Global, according to Zap founder Jack Mallers in a phone interview with CoinDesk.　　Described by Mallers, as a “Bitcoin neo-bank,” Strike leverages the Bitcoin network and scaling technology the Lightning Network to move fiat fast from point A to point B. Zap plans on providing banking services in up to 200 countries via the international exchange.　　By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.　　“We can move any physical value anywhere in the world for no variable cost,” Mallers said. “Transaction finality from one point to another for free.”　　Moreover, Strike will also list popular stablecoins tether (USDT, +0.09%) and USD coin (USDC (+0.14%)), beginning with a pilot program in El Salvador. Stablecoins were one of the crypto industry‘s breakout products in 2020. The market cap of dollar-pegged tokens rose some from around $7 billion to over $30 billion by the year’s end, according to Messari.　　Mallers said Bittrex Global will handle the

2021-01-07Deep Dive

ShapeShift Takes on 1Inch, Matcha and Becomes DEX Aggregator

The Swiss cryptocurrency exchange ShapeShift has announced a newly revamped platform to integrate popular decentralized exchanges (DEXes).　　The soon-to-be-launched trading service will aggregate order books from multiple decentralized exchanges (DEXes) in a single interface.　　ShapeShift Begins Its DeFi Journey　　As a DEX aggregator, ShapeShift will source market liquidity from several DEXes, offering users better token swap exchange rates than available on any single DEX.　　The move puts the company in direct competition with other aggregators such as 1Inch and Matcha.　　According to Voorhees, Shapeshift will integrate Uniswap, Balancer, Curve, Bancor, Kyber, 0x, mStable, and half a dozen other DEXse. The exchange will get paid a portion of the trading fees that each DEX charges.　　In 2019, ShapeShift had first launched a non-custodial trading platform, allowing users to retain private keys to their funds. However, the platform did not find enough traction due to stringent KYC requirements.　　However, the company says its revamped trading service will not require KYC from traders.

2021-01-07Deep Dive

Here’s why stablecoins like USDC going ‘legal’ is bullish for DeFi

A landmark announcement for USDC. Unending social euphoria. Observers calling it bullish for DeFi. But whats the whole deal really about.　　The day the US government supported crypto　　Monday saw one of the biggest ever announcements to be made by the US regulators with regards to cryptocurrencies: That of the countrys banks and financial providers getting the green light to settle transactions on stablecoin and even act as validator nodes on a public blockchain.　　Circle founder Jeremy Allaire, who took to Twitter to explain the act and ignited a frenzy among that part of town, said the judgment was a huge win for crypto and stablecoins—with the news potentially impacting the regulated stablecoin his company issues, the USDC, the most.　　Allaire noted the new interpretive letter suggested that national banks could now treat public chains as infrastructure similar to SWIFT, ACH, and FedWire—the current settlement networks in the country—and treat stablecoins like USDC as “electronic stored value.” “The significance of this cant be understated,” he said in the regard, adding:　　“We are on a path towards all major economic activity being executed on-chain.”　　For Allaire, the move means dollar-pegged stablecoins, or cryptocurrencies that are backed bu the US dollar on a 1:1 basis and redeemable in

2021-01-07Deep Dive

Ethereum & Bitcoin Locked in DeFi Plunge; ETH Staked Rises

Ethereum (ETH) locked in decentralized finance (DeFi) has seen a significant drop of 30%, while more than 50% of bitcoin (BTC) left DeFi during past several months as both cryptoassets have been rallying. At the same time, the number of coins staked in the Ethereum 2.0 (ETH 2.0) deposit contract is increasing.　　On September 17, 2020, the amount of ETH locked in DeFi had reached its peak, recording an all-time high of ETH 9.771m, according to DeFi Pulse data. At the time of writing, its ETH 6.845m, or 30% less.　　Source: defipulse.com　　Furthermore, a significant number of BTC has left DeFi as well over the past two months or so. Looking at the DeFi Pulse chart, we see the number of BTC locked at DeFi peaking at 64,993 on October 22, 2020. It then began a steady downward course, with a few minor spikes along the way, reaching BTC 30,918 on January 6. This means that it dropped by 52% in total since its all-time high less than three months ago.　　Source: defipulse.com　　However, as both BTC and ETH have been rallying, this exodus has been compensated. The two largest cryptoassets now have a 44% share in the total value locked in USD in DeFi.

2021-01-07Deep Dive

Ethereum Crosses $1,200 in Push for All-Time High

Ethereum (ETH) is trading above $1,200. The second largest cryptocurrency by market cap hit a high price of $1,207 on multiple exchanges today, its first time at the price level since January 2018.　　 Ethereums Latest Run　　Its been a bullish few days for Ethereum supporters. This most recent run started on the weekend, when ETH hit $800, following a wild Bitcoin run the previous day. The price of ETH soared 40% over the course of Sunday, surpassing $1,000 later that day.　　Source: TradingView　　The last time Ether made a run at this price level was in January 2018, towards the end of cryptos most fabled bull run. Bitcoin topped out at around $19,600 the previous month (December 2017) before ETH surged to a high of $1,448.　　Now Ethereum is nearing its all-time high once again. After todays milestone, Ethereum is only 17.4% away from reaching its peak price. Its market cap is now approximately $137 billion.

2021-01-07Deep Dive

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