weekly roundup – BLINC Countdown | Twitter Hack | CBDCs | DeFi $
It was the week of the twitter hack when a wide array of Twitter accounts owned by popular figures, large companies and crypto exchanges were targeted on Wednesday. The Twitter attackers managed to defraud people of more than $100,000 worth of bitcoin but data from some the world’s biggest bitcoin exchanges shows they could have got a lot more, with at least $300,000 worth of bitcoin held back by exchanges.
Here’s our weekly roundup of the industry news and big reads.
COUNTDOWN TO BLINC: IT’S COMING SOON
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TWITTER HACK – TIMELINE
Wednesday’s twitter attack started with the takeover of the account of one of BitMEX’s leading traders, and eventually spread to at least 30 high-profile Twitter accounts. According to Twitter, the attackers targeted 130 Twitter accounts and were able to initiate a password reset for 45 of those accounts. Check out this comprehensive timeline of events surrounding the Twitter hack.
Although some of the mainstream press called this a bitcoin scam, in the wake of the hack, the talk coming out of Washington is not about bitcoin. The concern is the centralisation of platforms. If regulators were going to jump on the ban-bitcoin bandwagon, given the media frenzy, now would be the time. The fact that they have not done so is a strong sign of acceptance.
Twitter is under scrutiny much more than bitcoin. Overall, the consensus seems to be that the hack is good for bitcoin, and not from a media attention point of view, either. Finally, the market didn’t seem to worry, as we saw the bitcoin price hardly moved after the furore.
INSTITUTIONAL DEMAND FOR BITCOIN SOARS AS GRAYSCALE REVEALS RECORD-BREAKING NEAR $1 BILLION QUARTER IN Q2 REPORT
Crypto asset fund manager Grayscale Investments released its Q2 report, which revealed new investment of over $900 million over the quarter, its largest quarterly inflow to date, and 80% more than the previous quarterly high in Q1.
Institutional investors, primarily hedge funds, accounted for 84% of Grayscale bitcoin and cryptocurrency fund investment in the second quarter of 2020, which was nearly double the previous quarterly high of $503.7 million in the first three months of this year. New investors represented 57% of the Grayscale investor base during the quarter, up from 49% – though they only accounted for $124.1 million of the inflow into the Grayscale digital asset products.
A16Z ALUMNUS LAUNCHES A VC FUND FOCUSED ON PLATFORMS YOU CAN ‘OWN’
An Andreessen Horowitz (a16z) alumnus is launching a new venture firm focused on building a crypto-powered “ownership economy.” Jesse Walden, who focused on blockchain investments at a16z, announced his Variant Fund in a blog post published on Tuesday. Walden said the new fund is focused on the idea that the people who make platforms and products strong can share in their growth.
HOW COINBASE PRE-IPO ECONOMICS COULD GET A $15 BILLION VALUATION
Lex Sokolin, the CMO and Global Fintech Co-Head at Ethereum laboratory ConsenSys, published an analysis of the rumoured upcoming listing of Coinbase. One difficulty for analysts honing in on what a listing valuation could mean is the lack of available data at the current time, but in this analysis, Lex does an impressive job of gathering available information from public sources.
CENTRAL BANK DIGITAL CURRENCIES: BANK OF JAPAN, BANK OF ENGLAND
The Bank of Japan is warming to central bank digital currencies and now has a team dedicated to researching a possible digital yen.
While details are limited, the new team will likely follow up on the BOJ’s 2019 research into CBDCs, as well as the additional research it has been conducting with other central banks since January. The team will form part of the central bank’s payment and settlement department.
Deputy governor Masayoshi Amamiya previously said that it would be hard for central banks to make negative interest rate policies more effective through the issuance of their own digital currencies. He reasoned that it would force individuals and businesses to pay to hold a CBDC and, as such, would motivate people to not use the digital form of money. But the BOJ is shifting its thinking on the technology as regional rival China’s digital currency enters testing with commercial entities. Japan’s government is set to examine the possible launch of a digital yen as part of this year’s policy agenda, per a report last week.
Speaking during an online event, Bank of England Governor Andrew Bailey told a group of U.K. students on Monday the bank is discussing the possibility of launching a digital currency, as reported by Bloomberg on Tuesday. Bailey said ongoing investigations would look at a central bank digital currency, which would have implications across “payments and society.”
DEFI DOLLAR BACKED BY CRYPTO-COLLATERAL POOL
Last week, Meltem Demirors, Coinshares’ Chief Strategy Officer, wrote about the insatiable thirst for dollars, the Race for Global Reserve Currency Status, and how a crypto-synthetic-dollar could play a role. Now Curve have announced the launch of their DeFiDollar backed by a crypto-collateral pool.
PODCAST: THE RISE OF STABLECOINS
Nate Maddrey, senior research analyst at Coin Metrics, joins the On the Brink podcast to discuss the recently published report, The Rise of Stablecoins. He talks through the report and analyses some of the charts in depth and covers:
- Why the auditability of public blockchains is so useful for evaluating stablecoins.
- Why fiat backed stablecoins have different price dynamics from ‘native crypto collateral’ backed ones.
- How the arbitrage growth cycle works for fiat-backed stablecoins.
- What the distribution of ownership and addresses for USDT tells us.
- Liquidity for USDT versus USDC and BUSD.
- Distinguishing stablecoins based on median transfer value.
- Stablecoins as wholesale rather than retail value transfer networks.
- What velocity of stablecoins relative to bitcoin and ether tells us.
Nate Maddrey also joined Bitstamp’s Three Crypto Questions show last week to talk about this.
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