Day: April 30, 2024

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On April 23, three days after the Bitcoin halving event, an impressive 1.6 million unique Bitcoin transactions were recorded, according to data from Blockchain.com and Glassnode. This notable increase in transactions indicates a growing interest in using Bitcoin for everyday transactions, expanding its conventional role beyond being merely a store of value.

Bitcoin Runes Lead Daily Transactions

According to Blockchain.com data, the launch of Bitcoin Runes, an alternative to Bitcoin Ordinals, directly correlates with the surge in daily Bitcoin payments. On April 23, Runes accounted for 68% of all Bitcoin transactions, showcasing rapid adoption within the community.

By April 29, BTC had reclaimed its dominance, representing 77.8% of Bitcoin transactions, while Runes maintained a strong second position with an 18.8% share. Other protocols, including Ordinals and BRC-20 tokens, also contributed to the network activity.

Impact on Miners and Market Opportunities

The ascent of Bitcoin Runes has resulted in over 1,200 BTC in transaction fees for miners since the Bitcoin halving event, offering a substantial incentive for miners and highlighting the economic feasibility of this emerging protocol.

However, some experts caution against excessive optimism. On April 17, pseudonymous DeFi researcher Ignas, cautioned on X (formerly Twitter), suggesting that while Runes appear promising, they could face a similar fate to NFTs.

The Rise of Bitcoin DeFi (BTCFi)

BRC-20 and Runes tokens symbolize the emergence of a new standard known as Bitcoin DeFi (BTCFi). These fungible token standards aim to enhance Bitcoin’s utility beyond its existing capabilities, paving the way for DeFi applications built on the Bitcoin blockchain.

This evolution is poised to unlock fresh opportunities for Bitcoin holders and stimulate the growth of the BTCFi ecosystem. As developers delve into BTCFi’s potential, investors can anticipate further innovation and diversification in Bitcoin payments and applications.

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Major U.S. crypto stocks, including bitcoin stockpiler MicroStrategy and leading exchange Coinbase, experienced significant losses in Tuesday’s trading session. MicroStrategy reported a 5% year-over-year decrease in first-quarter revenue, contributing to a sharp decline in its share price.

MicroStrategy’s shares plummeted by as much as 17% on Tuesday following news of its missed earnings and the downturn in the price of bitcoin. Although the shares recovered slightly, they were still down by 15.8% at $1,086 as of 1:45 p.m. ET. Last month, the company’s shares also experienced a notable decline of up to 16%.

Similarly, fellow U.S. crypto stocks such as Coinbase, Marathon Digital, and Riot Platforms faced losses in midday trading. Coinbase saw a drop of as much as 6%, while Marathon Digital and Riot Platforms experienced declines of 9% and 7%, respectively.

These mining stocks have witnessed fluctuations throughout the year, influenced by changes in bitcoin’s price. CleanSpark, Bitfarms, and Hut 8 also shed value, falling by 9%, 6%, and 5%, respectively.

MicroStrategy’s first-quarter revenue of $115.2 million, representing a 5% decrease year-over-year, contributed to the negative sentiment surrounding the stock. As MicroStrategy’s primary strategy for creating long-term value involves accumulating bitcoin, its shares often act as a proxy for the cryptocurrency’s performance.

Bitcoin itself experienced a 4.5% decline, trading at $60,093 at the time of publication. The downturn in bitcoin’s price has led to corresponding drops in other crypto-related stocks, reflecting the interconnectedness of the cryptocurrency market.

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Roger Ver, an early investor in Bitcoin, has been arrested and charged with mail fraud, tax evasion, and filing false tax returns. The U.S. Department of Justice announced the charges, revealing that Ver allegedly concealed Bitcoin ownership from the U.S. Internal Revenue Service (IRS), leading to an estimated loss of $48 million.

The indictment, recently unsealed, outlines three charges against Ver, who was arrested in Spain over the weekend with potential extradition to the United States. According to the DOJ statement, Ver’s alleged actions include concealing Bitcoin ownership and profiting from the sale of tens of thousands of Bitcoins on cryptocurrency exchanges for approximately $240 million in cash in November 2017.

Despite not being a U.S. citizen at the time, Ver was legally obligated to report certain distributions, such as dividends from U.S. corporations MemoryDealers and Agilestar, where he held ownership interests. However, he allegedly failed to disclose these distributions to the IRS, resulting in his 2017 tax return not reporting any gain or paying tax related to the distributions.

Furthermore, Ver is accused of using legal services to prepare and file false tax returns, undervaluing the two companies, concealing their Bitcoin holdings of 73,000 BTC, and omitting his personal Bitcoin ownership.

Ver, who renounced his U.S. citizenship in 2014 after reportedly gaining citizenship in St. Kitts and Nevis, had previously been a resident of Santa Clara, California. Known online as “Bitcoin Jesus,” Ver was the former CEO of Bitcoin.com, a digital wallet developer.

The arrest and charges against Roger Ver underscore the increasing scrutiny faced by individuals in the cryptocurrency space regarding tax compliance and financial transparency.

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Coinbase, the largest crypto exchange in the United States by trading volume, has initiated support for the Lightning Network starting today, marking a significant step towards enabling faster and more cost-effective bitcoin transactions for its users. The integration follows seven months after Coinbase confirmed its decision to incorporate the Lightning Network protocol, aligning with competitors like Bitfinex, Kraken, and Binance.

Previously, bitcoin transfers on Coinbase were processed on-chain, leading to transaction times ranging from 10 minutes to two hours and incurring high fees during network congestion periods. The Lightning Network, introduced in 2017, operates as a Layer 2 protocol built atop the Bitcoin blockchain. It addresses scalability concerns through bi-directional payment channels, facilitating near-instant and low-fee transactions off-chain without immediate settlement on the base layer.

Viktor Bunin, the protocol specialist and Lightning integration lead at Coinbase, conveyed his excitement about the launch, noting that the increasing adoption of Bitcoin contributes to economic freedom globally. He expressed his satisfaction with the live implementation of the Lightning integration, emphasizing its role in enhancing the utility and accessibility of Bitcoin on a global scale.

Fees on the Lightning Network comprise a flat rate base fee as low as one satoshi (the smallest unit of bitcoin, equivalent to less than $0.01) and a liquidity provider fee or fee rate as a percentage charged on the payment value. Coinbase applies a 0.1% processing fee for Lightning transactions on sends only, with transactions expected to be processed within seconds. Initially, users will be limited to withdrawing a maximum of $2,000, resulting in a maximum withdrawal fee of $2, a conservative measure aimed at enhancing user experience.

In a statement, Coinbase asserted that its Lightning Network integration reduces the cost for users to send bitcoin globally, claiming it is 20 times lower than the average 2% charged on credit card transactions and a fraction of the $30 incurred for wire transfers.

The collaboration with Lightspark, a Lightning Network infrastructure firm led by CEO David Marcus, underscores Coinbase’s commitment to offering innovative solutions for internet payments. Marcus hailed the partnership as a pivotal milestone, enabling millions worldwide to access fast and affordable Bitcoin transactions.

While the Lightning Network integration initially targets specific regions, Coinbase plans to expand support based on user feedback and network liquidity. Although Lightning support for Coinbase Wallet and other services is not currently planned, the team remains open to future integration opportunities as Lightning adoption grows.

Coinbase’s decision to incorporate Lightning Network support follows a thorough evaluation of the protocol’s growth and maturity, emphasizing the company’s dedication to enhancing economic freedom through Bitcoin adoption. With Lightning Network adoption on the rise, the collaboration between Coinbase and Lightspark signals a significant advancement in the scalability and accessibility of Bitcoin transactions globally.

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The launch of crypto exchange-traded funds (ETFs) in Hong Kong fell short of expectations, with trading volumes significantly lower than anticipated.

Trading volume for Hong Kong’s crypto ETFs totaled just over $11 million, with bitcoin ETFs accounting for $8.5 million and ether ETFs for $2.5 million. This figure paled in comparison to initial projections, which had suggested volumes exceeding $100 million, as reported by local media.

While Hong Kong allows ether ETFs in its market, regulators in the Chinese territory do not share the same concerns about ether being classified as a security, unlike their counterparts in the U.S.

In contrast, the launch of a U.S. ether ETF faces delays due to regulatory uncertainty. The Securities and Exchange Commission (SEC) has not provided clarity on whether ether qualifies as a security, causing postponements in listing such ETFs.

Ether ETFs are already listed on the Toronto Stock Exchange through issuers like Evolve and Purpose Investments.

On the first day of trading in the U.S., the total volume for ether ETFs reached $655 million. Meanwhile, bitcoin prices experienced a slight decline of over 1%, trading near $62,100, according to CoinDesk Indices data.

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Switzerland-based Backed has successfully closed a $9.5 million fundraising round, with Gnosis leading the investment charge.

According to one asset management company’s forecast, the tokenized real-world asset market could reach a staggering $10 trillion by the decade’s end.

Backed, a tokenized asset issuer, announced on Tuesday that it secured $9.5 million in funding, with Gnosis at the helm of the investment. Other participants in the fundraising round included Exor Seeds, Cyber Fund, Mindset Ventures, Stake Capital Ventures, Blockchain Founders Fund, Blue Bay Capital, and Nonce Classic.

The company plans to utilize the investment to accelerate its private tokenization offering and onboard asset managers onto blockchain platforms, as stated in the press release.

The fundraising round comes at a time when the tokenization of real-world assets  is emerging as a prominent trend in the digital asset industry. Crypto firms and global banking and asset management giants are actively vying to tokenize traditional financial instruments like bonds, funds, or credit on blockchains.

Tokenization offers several advantages over traditional financial systems, including enhanced trade settlement efficiency, broader investor access, and reduced administrative burdens. According to a report by asset manager 21.co, the market for RWAs could potentially reach $10 trillion by the end of the decade.

Backed, headquartered and regulated in Switzerland, specializes in tokenization services and has already issued over $50 million worth of tokenized RWAs. These include ERC-20 compatible token versions of exchange-traded funds and individual stocks such as Coinbase (NASDAQ:COIN) and Tesla (NASDAQ:TSLA), as listed on its website.

“Youbin Kang, CEO of Nonce Classic, one of the investors in the round, commented, “Global financial markets are fragmented, hindering accessibility and efficiency. Backed aims to solve these issues by bringing RWAs on-chain.”

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In response to mounting regulatory pressure, Wasabi Wallet and Phoenix have ceased operations for customers in the United States. The companies behind these wallets, zkSNACKs and ACINQ respectively, announced the suspensions following recent actions taken by U.S. authorities against similar cryptocurrency services.

zkSNACKs has taken proactive measures to block access to its services from U.S. IP addresses, including Wasabi Wallet. Meanwhile, ACINQ intends to remove Phoenix Wallet from U.S. application stores by May 3.

These decisions underscore the companies’ efforts to comply with potential regulations that could classify self-custody wallets as money services businesses, subjecting them to stringent regulatory oversight.

The regulatory crackdown on cryptocurrency services intensified following the arrest of two individuals associated with Samourai Wallet on charges of money laundering, including funds derived from illicit sources such as the Silk Road marketplace.

The U.S. government’s enforcement actions against Samourai Wallet led to the seizure of its web servers and domain, along with the removal of its app from the Google Play Store in the U.S.

Keonne Rodriguez, co-founder of Samourai Wallet, was granted release on a US$1 million bond after pleading not guilty to charges of money laundering and operating an unlicensed money-transmitting business at the U.S. District Court for the Southern District of New York.

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