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Serena Williams Invests in Coinbase

Serena Williams Invests in Coinbase

American tennis superstar Serena Williams has just announced an investment into cryptocurrency exchange giant Coinbase, further cementing the reputation of blockchain and crypto-related businesses among savvy investors.

Posting to her tens of thousands of followers on Instagram, Williams shared that her investment company, Serena Ventures, had already invested in at least 21 companies, based on their respective logos in a slideshow. The Coinbase logo was nestled among the “few brands” in the firm’s portfolio:

While celebrity affiliation with cryptocurrency is not new, with even more popular global sports figures such as Lionel Messi and Cristiano Ronaldo already affiliating themselves with branded cryptocurrency, this announcement comes with a slightly more significant flavor. While others were simply promoting a particular crypto-themed product, Serena Ventures has actually invested in startups and companies that “embrace diverse leadership, individual empowerment, creativity and opportunity”. Clearly, the Coinbase selection goes far beyond cryptocurrency and blockchain, and proves that it can show its mettle alongside more easily understood industries.

Launched in 2014, the fund has now invested in 30 startups. The official website shows that invested firms now have a combined market cap of over USD 12 billion. The exact amount invested in Coinbase was not revealed. Williams, who has won four Olympic gold medals, has so far received over 27,000 likes on Instagram for the post after only five days.

 

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Coinbase Adds Latin America and Southeast Asia to Its Expanding Client Base

Coinbase Adds Latin America and Southeast Asia to Its Expanding Client Base

US cryptocurrency exchange giant Coinbase is to add 11 new markets in Latin America and Southeast Asia as part of its current global expansion programme.

This is hot on the trail of its expansion in the UK market seeing revenue growth of 20% to USD 173 million, and the recent announcement of its new Coinbase card. In 2018, the exchange recorded USD 520 million in revenue according to Reuter’s latest figures.

The Visa card, linked with the Coinbase Card app for iOS and Android, is only available to UK account holders, although there are plans to add support for other European countries in the future. The card will allow worldwide purchases where crypto payments are available online or in store.

Latin America has been in Coinbase’s sights for some time, so the access to trading services in Argentina, Mexico, Peru, Colombia, and Chile won’t come as a huge surprise to those in the region, given the company’s desire to spread its services to all corners of the globe.

Southeast Asia has a booming cryptocurrency market with Japan and South Korea leading the way, so a move towards capturing a piece of the market in the region is a sound move with India, Hong Kong, South Korea, Indonesia, the Philippines, and New Zealand customers now having access to Coinbase services.

With 53 countries now using Coinbase services including the recently added Andorra, Gibraltar, Guernsey, Isle of Man, Lithuania, and Iceland, the San Francisco-based company has thrown down the gauntlet to other major exchanges in its bid to become the globally dominant cryptocurrency exchange.

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Study Says Lone “Committed Actor” Responsible for April Bitcoin Surge

Study Says Lone

Fresh research by crypto analytics firm CoinMetrics has added to speculation that the sudden hike in Bitcoin price in early April, that prompted the current revival of the cryptocurrency market, is all down to the actions of a single trader.

According to the company, among the many theories surrounding the event, one of the most plausible ones was that of a single entity that placed an order for about USD 100 million worth of Bitcoin across several exchanges. It said that “a single committed actor”.

It then proceeded to provide evidence to back up its theory by posting a series of Tweets on its official Twitter account, beginning with the assertion that there was no news of significant impact during the one hour of the event, a time that was also normally very low in trading volume.

On April 2, 2019, Bitcoin’s price increased from roughly $4,200 to $5,000 in a span of one hour. There was no impactful news released during this time.

— CoinMetrics.io (@coinmetrics) April 17, 2019

It observed that most of the volume happened on HitBTC exchange on the BTC/USDT market. It also, however, does not rule out HitBTC’s action could have been due to wash trading. The large trading amounts were then observed on Coinbase, followed by Bitfinex. All three are among the world’s most active exchanges for Bitcoin.

It provides several charts to support their claim:

The large price movement on April 2, 2019 occurred during the window of lowest global liquidity. It began at 04:30 UTC and lasted until 05:30 UTC. This time may have been deliberately chosen so that a committed actor could maximize price impact when trading. pic.twitter.com/vktxpGBwlQ

— CoinMetrics.io (@coinmetrics) April 17, 2019

A video showing the full history across all exchanges also shows a remarkably similar pattern happening on all three platforms:

Here’s a fuller history of those three exchanges pic.twitter.com/j3KJxtr60h

— CoinMetrics.io (@coinmetrics) April 17, 2019

CoinMetrics concluded that a bull run could very well be on the cards, but that it was too early to say if a rally was already underway.

 

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2020 Democratic Presidential Candidate Andrew Yang Hits Out at BitLicense

2020 Democratic Presidential Candidate Andrew Yang Hits Out at BitLicense

Pro-Bitcoin Presidential Candidate Andrew Yang is calling for more clarity in regulating cryptocurrencies slamming BitLicence as “onerous”.

BitLicence, the business license of virtual currency activities issued by the New York State Department of Financial Services, has again come under fire in the 2020 Democratic presidential candidate’s latest comments.

Yang is an American entrepreneur, philanthropist and the founder of Venture for America. He worked in startups and early-stage growth companies as a founder or executive from 2000 to 2009. He is one of the few presidential candidates in history to accept crypto donations.

One of the concerning factors of BitLicence that many exchanges cite is its dictatorial approach to regulating the market, even to the extent of instructing exchanges exactly which cryptocurrencies they are permitted to trade. When the BitLicense was first enacted at least ten major cryptocurrency companies shuttered their doors to New York customers, and some people have called this the Great Bitcoin Exodus. Ripple gained their license in 2016 and Coinbase in 2017.

Yang is pushing for much clearer regulation, a well-trodden path by many industry players, arguing that has the US will fall behind due to conflicting regulation measures and such introductions as the Token Taxonomy Act, pointing to Wyoming as a beacon of sensible legislation regarding cryptocurrency. He said:

“It’s time for the federal government to create clear guidelines as to how cryptocurrencies/digital asset markets will be treated and regulated so that investment can proceed with all relevant information.”

Wyoming continues to build legislative bridges between the cryptocurrency system, its underlying blockchain technology, and legacy financial laws of the state. Efforts so far have been channeled towards innovation and improved economic activities of digital assets. Its most recent bill aims to identify and classify digital assets into three categories: digital consumer assets, digital securities, and virtual currency.

The bill mentioned that virtual currency is “intangible personal property and shall be considered money”.

 

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Reuters: Coinbase 2018 Revenue Over Half Billion Dollars

Reuters_ Coinbase 2018 Revenue Over Half Billion Dollars

A Reuters report has estimated that US-based cryptocurrency exchange Coinbase raked in a staggering USD 520 million in revenue in last year alone. The figure was based of UK revenue which grew by about 20% to USD 173 million, according to its most recent filing with the British corporate registry.

Despite the warnings from various regulators about digital assets, against a badly-performing market throughout 2018, Coinbase UK CEO Zeeshan Feroz told Reuters that the latest branch of Coinbase brought in a third of the company’s revenue, with a net profit of USD 7.4 million in 2018.

The pace of investment into financial technology (fintech), including in blockchain and distributed ledger tech, has continued in an upwards trend, despite misgivings from some segments of the traditional finance and banking industry.

PitchBook, researching for Reuters, believes that some USD 850 million has already been poured into the industry with less than four months gone for 2019, while venture capital (VC) participation in 2018 grew five-fold to a record USD 2.4 billion.

For instance, the London Stock Exchange Group led a USD 20 million funding round for capital markets blockchain startup Nivaura just recently, while London has been touted as likely to overtake competitors as a unicorn-producing capital.

Signs of slowdown are there, though, with 2019 recording average of USD 6.5 million per deal, down from USD 8 million witnessed in 2018.

 

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Forbes “Blockchain’s Billion Dollar Babies” List Released

Forbes “Blockchain’s Billion Dollar Babies,” List Released

Forbes has released its high flyer list of blockchain users which indicates which of these companies has valuations or revenues of USD 1 billion.

The usual high flyers are as expected including Amazon, Walmart, Facebook, ING, Mastercard, Microsoft, and Nestle, with crypto-companies such as Coinbase, Ripple, and Bitfury putting in a show.

Interestingly Forbes goes a bit further on the blockchain front by flagging the use of blockchain in the non-crypto domain. The list points to where the action is and who the players are when it comes to blockchain protocols, with a nod to companies such as the Depository Trust & Clearing Corp (DTCC) which records a mammoth 90 million transactions daily.

Firms using R3’s Corda protocol and the Ethereum network are also listed on Forbes’ breakdown, and blockchain based solutions utilized across many different sectors including food companies, supply chain management firms and others including banking. R3 itself leads a consortium of more than 200 financial institutions in research and development of DLT usage in the financial system and other commercial sectors.

Corda was designed for dealing with complex transactions and security and is expected to have many of the benefits of the blockchain. A new version of Corda was released earlier this year aimed specifically at businesses, called Corda Enterprise, it includes a blockchain applications firewall.

It was unsurprising to see Walmart on the list. The US retail giant has applied for numerous blockchain patents and has become a leader in applying new technology to the supply chain sector. Both Walmart and IBM have been at the forefront of DLT supply chains since its conception and both companies are eager to promote the use of the new technology in sectors including business and commerce.

 

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Crypto Companies Should Focus on Insurance for Value in Flight

Crypto Companies Should Focus on Insurance for Value in Flight_ Crypto Companies Should Focus on Insurance for Value in Flight

Cryptocurrency market as an emerging risk market requires insurance on multiple layers, according to a blog post by Coinbase chief information security officer Philip Martin.

As the cryptocurrency industry matures, so does the need for increased financial security. One way to achieve this is through a contingency system like an insurance program. Martin explained Coinbase’s approach in securing the confidence of its customers if exposed to loss due to the hacking of its hot wallet.

“The data is clear that today, the most likely consumer loss scenario for any cryptocurrency company is hot wallet loss due to hacking. We secured our first policy to address that risk at the end of 2013… If the worst happens and Coinbase loses customer funds, customers deserve certainty that they will be made whole.”

Coinbase insurance program covers both fiat deposits and cryptocurrency holdings in hot wallets, with the fiat deposits covered by the Federal Deposit Insurance Corporation (FDIC). Meanwhile, the cryptocurrencies in the hot wallet are insured by multiple partners. “We currently hold a hot wallet policy with a USD 255 million limit placed by Lloyd’s registered broker Aon and sourced from a global group of US and UK insurance companies, including certain Lloyd’s of London syndicates,” Martin explains.

“Significant programs like ours, especially in emerging areas of risk, are generally put together using a large number of insurance companies who each take positions of loss in a ‘tower’.”

Martin finds misinformation around insurance to be one of the hindrances to adopting insurance. Where companies are rather puzzled by the nature of insurance to adopt, bundled with how much insurance should a crypto company have, and what should it cover? Martin suggested that “companies should focus on insurance for value in flight”, which caters for crime due to hacking, insider theft, and fraudulent transfer of both cryptos and fiat.

Circle and Gemini, as well as most financial companies, use institutions like the FDIC to cover for losses exclusively resulting from insolvency. However, losses due to the hacking of hot wallets are not covered by the institutions due to the nature of cryptocurrency’s unregulated status, hence the need for multiple insurers with sufficient knowledge-base on the risk nature of cryptocurrencies. “[Coinbase has] maintained a commitment to educating and growing the cryptocurrency insurance market,” Martin clarified.

Despite the level of risk in the cryptocurrency industry, and lack of transparency of insurance protocols for most companies, it is clear that insurance companies are indeed warming up to the cryptocurrency markets, though at a very slow pace.

Last year, Bitcoin News reported a new decentralized exchange UnitedCoin’s approach to insurance, where it disclosed a USD 100 million coverage on its hot wallet containing only 2% of the exchange’s funds. Moreover, in South Korea, insurance providers are willing to offer insurance products against hacking to crypto exchanges.

The importance of insurance in the cryptocurrency exchange marketplace cannot be overemphasized, and while many exchange businesses still suffer from the lack thereof, it may, however, soon be a defining factor for customers’ preference in the near future as the industry expands beyond retail cryptocurrency investors and traders. Yusuf Hussain, Gemini’s Head of Risk puts it this way:

“Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions.”

 

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Japanese Crypto Unicorn Tops $1 Billion Valuation

Japanese Crypto Unicorn Tops  Billion Valuation

Unicorns — the term given to a startup which achieves a valuation of over a USD 1 billion — are rare in Japan but this week has seen the birth of another as Liquid Group Inc joined the exclusive club.

The Tokyo-based crypto startup made the announcement on Wednesday that it had reached the magic USD 1 billion valuation, securing funds from investors including venture fund IDG Capital and crypto mining giant Bitmain Technologies Ltd.

How it has achieved this aggressive valuation is not totally clear, and as yet Liquid hasn’t indicated how much money it has raised to date, but indications are it may have commitments of about USD 50 million in its ongoing C round. Initially, co-founders Mike Kayamori and Mario Gomez Lozada raised over USD 20 million in prior rounds from investors including Jafco Co and also raised a further USD 100 million through an ICO in 2017.

However, Liquid has got history with teeth, having been able to successfully hook a crypto exchange license from Japan’s regulator, the Financial Services Agency. It also handles over a USD 50 billion cumulative trading volume and has also received anchor investment from IDG a Chinese-owned, American-based media, data and marketing services and venture capital organization — a company which has also funded Coinbase and Bitmain. Jihan Wu, the co-founder of Bitmain sees the new funds as enabling Liquid to be more competitive at an international level:

“Japan is one of the leading nations in putting [the] crypto industry under proper regulations, and Liquid Group has proven itself to be the exemplary player within such compliant rules. This is a very important and unique moat amid global competition.”

Past aggressive valuations at startup include Coinbase which raised USD 100 million in 2017 at a valuation of USD 1.6 billion and mobile payments and crypto trading platform Circle which raised USD 110 million with a massive valuation of USD 3 billion. As of January of this year, Japan was home to just one unicorn, Preferred Networks Inc, compared to 165 in the US.

 

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Hamas Bid for Bitcoin Donations Struggles to Get Off Ground

Hamas Bid for Bitcoin Donations Struggles to Get Off Ground

The fundamentalist Palestinian organization Hamas is to continue its call for cryptocurrency donations which has only resulted in a meager few thousand dollars since its call for funding two months ago.

Hamas, the de-facto ruling authority of the Gaza Strip in Palestine, is regarded by several countries, including the US and the EU, as a terrorist organization. Russia, Turkey, and China are among those major world powers who do not subscribe to the definition.

The original Hamas request for Bitcoin funds in February was made as a result of Israeli Prime Minister Benjamin Netanyahu’s decision to freeze millions of dollars in Qatari aid – including USD 15 million a month to pay the salaries of Hamas civil servants. Gazan journalist and lecturer Hussam Al-Dajany has reiterated the need for support in another call for funding this week but this time claiming this “just Palestinian cause… can indirectly participate in the liberation of the Al Aqsa Mosque”.

Former CIA analyst Yaya Fanusie has suggested that Hamas has made some progress in setting up its donations project despite having struggled to raise the funds it needs and says that the Hamas website is currently “generating unique (bitcoin) addresses for each site visitor”. He adds:

“This method will make it harder for authorities to identify and track donations, and shows that Hamas is more careful about cryptocurrency operational security.”

Despite these moves, Hamas has numerous hurdles to overcome in raising cryptocurrency funding. Coinbase and other major exchanges have been put on alert to ensure that known Hamas addresses are not used for transactions, although this in itself won’t be simple as fresh addresses are likely to be created by Hamas to confuse the exchanges.

Bitcoin does have traceability issues though, which is certain to make the Hamas call for funds challenging. The creation of a unique address on the Hamas website will shield the recipient, but won’t anonymize the sender. This is sure to make potential donors wary, as it appears to have done so far.

 

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Coinbase 48x More Expensive to Use Than Stock Exchange

Coinbase 48x More Expensive to Trade than Traditional Stock Exchange

Self-proclaimed market analyst Alex Krüger has drawn the attention of the crypto community to a rather bizarre comparison between cryptocurrency exchanges and traditional stock markets, claiming “maker fee + taker fee” for crypto exchanges could be far more expensive at higher volume tier trading.

1/ Are crypto exchanges overcharging customers?

The average “Maker Fee + Taker Fee” in crypto SPOT exchanges (excluding Gemini) for the lowest volume tier (where most users fall into) stands at 0.33%. pic.twitter.com/tZOmGSsAzO

— Alex Krüger (@krugermacro) March 28, 2019

Krüger queried the fees levied on crypto traders as he explains in a series of Tweets how legacy financial institutions often have a flat rate cut per trade, while a typical fee cut by cryptocurrency exchanges only remains fair for lowest volume tier, and according to him, this is where most users fall into. He illustrated how brokers like Fidelity charge a flat rate of USD 4.95 flat per trade, putting the sum maker and taker fee at 0.02% for a USD 50,000 trade, and at 0.33% for a USD 2,900 trade, which can further be reduced should a trader consider brokers who charge per share rather than per trade.

According to the data he shared, Gemini exchange stands out with a sum maker and taker fee set at an exorbitant 2.00%, followed by Bittrex and Bitstamp with 0.5%, whereas Bitmex being a derivative market only charges 0.05%. Meanwhile, major US cryptocurrency exchange Coinbase Pro takes 0.40%.

In a comparison with foreign exchange markets, Krüger further cited how “an FX trader at Oanda would pay 0.008% for a round trip (in and out of a position)”, concluding that:

“Trading on Coinbase is 48x more expensive, while trading on Bitmex is 6x more expensive.”

Moreover, Krüger opined: “A cross-asset trading costs analysis should also account for spreads and relative volatility,” which invariably should impact fees levied, however, “crypto fees are generally high even after adjusting by relative volatility”.

In recent times, institutional investors have been targeted with offshoot market solutions to further attract this class of investors to the burgeoning digital asset industry. However, considering Krüger’s analyses, crypto exchanges second to huge volatility index of cryptocurrency markets may indeed be a huge deterrent for currency traders from the traditional market.

In February, Marketing consultancy Edelman published a report noting an unwavering millennials’ support for cryptocurrency exchanges, further corroborating eToro’s findings of a generational shift in trust suggesting a concrete trust in cryptocurrency market exchanges as well as a fading faith in the traditional stock market exchanges. However, while cryptocurrency trading appears to be more rewarding due to high volatility, the practical aspects of trading come with hidden fees that make it a trying first-experience for newcomers into the industry.

Blockchain technology may appear to solve certain constraints in legacy financial institutions and reduce the cost of transactions between clients, however, cryptocurrency exchanges may end up constituting a clog to the furtherance of the decentralized ecosystem as it reinvents the centralized systems obtainable in the traditional markets.

 

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