Blockchain firm Ripple sees no fallout in Asia Pacific from SEC lawsuit

TOKYO – Blockchain payments firm Ripple has not experienced any fallout in its Asia Pacific business after being sued by the U.S. Securities and Exchange Commission (SEC), the company’s chief executive officer said on Friday.

In late December, the SEC charged Ripple, which is associated with cryptocurrency XRP, with conducting a $1.3 billion unregistered securities offering.

After that, the top U.S. cryptocurrency exchange Coinbase shut down trading in XRP, which is the world’s seventh-largest cryptocurrency by market value.

“It (the lawsuit) has hindered activity in the United States, but it has not really impacted what’s going on for us in Asia Pacific,” Brad Garlinghouse, Ripple’s chief executive officer, told Reuters in a video interview from California.

“We have been able to continue to grow the business in Asia and Japan because we’ve had regulatory clarity in those markets,” he said, adding that he did not know of any exchange outside the United States that had halted XRP trading.

“XRP is traded on over 200 exchanges around the world. It’s really only three or four exchanges in the United States that have halted trading,” he said.

Garlinghouse was one of two of the firm’s executives alleged by the SEC in December of personally gaining about $600 million received from the unregistered offering.

Financial regulators around the world are looking to decide how they should regulate the cryptocurrency industry.

The outcome of their assessments could determine whether cryptocurrencies will grow into mainstream assets or remain niche products.

Gary Gensler, President Joe Biden’s nominee to lead the SEC, promised during his congressional confirmation hearing to provide “guidance and clarity” to the cyptocurrency market.

While bitcoin is considered a commodity by U.S. financial regulators, most other cryptocurrencies have yet to be classified as commodities or securities.

Ripple has signed more than 15 new contracts with banks globally since the SEC brought its lawsuit, Garlinghouse said, adding that he believed the lack of clarity in the United States has been a “hindrance” to innovation.

“We’re seeing the activity of XRP liquidity has grown outside the United States and continue to grow in Asia, certainly in Japan,” he said.

Bitcoin is at a ‘tipping point” – Citi Analysts

Bitcoin is at a “tipping point” and could in the future become the preferred currency for international trade or face a “speculative implosion,” Citi analysts said.

With the recent embrace by the likes of Tesla Inc and Mastercard Inc, bitcoin could be at the start of a “massive transformation” into the mainstream, Citi said in a report.

The growing involvement from institutional investors in recent years contrasts with heavy retail-focus for most of the past decade, it added.

If businesses and individuals gain access via digital wallets to planned central bank digital cash and so-called stablecoins, bitcoin’s global reach, traceability and potential for quick payments would see it “optimally positioned” to become the preferred currency for international trade, Citi said.

Bitcoin, designed as a payment tool, is little used for commerce in major economies, hampered by high volatility and relatively costly transactions. Still, it has over the past year gained traction in some emerging markets such as Nigeria.

Such a dramatic transformation for bitcoin to the de facto currency of world trade – a status currently held by the dollar – would depend on changes to its market to allow wider institutional participation and closer oversight by financial regulators, Citi said.

Still, shifts in the macro-economic environment may also make the demand for bitcoin less pressing, it added.

The recent surge in interest in bitcoin, sparked by a narrative that it can act as a hedge against inflation, has driven the cryptocurrency to a record high of $58,354 and a $1 trillion market capitalisation.

But it has pulled back more than $11,000 from those levels in the last week on questions over the sustainability of such high prices.

“There are a host of risks and obstacles that stand in the way of Bitcoin progress,” Citi’s analysts wrote. “But weighing these potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point.”

Bitcoin was trading 4.5% higher at $47,284 on Monday, up over 60% so far this year.

(Graphic: Bitcoin’s surge from March lows: )

Reuters Graphic

Bitcoin extends retreat from record high to hit lowest in 20 days

Bitcoin fell to its lowest since Feb. 8 in thin on Sunday, down 3.7% from Friday’s close as the pullback from a record high near $60,000 continued.

The world’s biggest and best-known cryptocurrency has risen as much as 70% since the start of the year, hitting a record high of $58,354.14 one week ago amid increasing confidence that it will become a mainstream investment and payments vehicle.

Bitcoin hits fresh high

(Reuters) – Bitcoin continued gaining on Sunday, rising to a fresh high and extending a two-month rally that took its market capitalization above $1 trillion on Friday.

The world’s most popular cryptocurrency rose to a record $58,354, taking its weekly gain to around 20%. It has surged around 100% this year.

Bitcoin’s gains have been fueled by evidence it is gaining acceptance among mainstream investors and companies, such as Tesla Inc, Mastercard Inc and BNY Mellon.

Bitcoin is ‘economic side show’ and poor hedge against stocks: JP Morgan

TOKYO (Reuters) – Bitcoin is an “economic side show” and a poor hedge against a decline in equity prices, analysts at JP Morgan said in a sobering assessment that could undercut the cryptocurrency’s rise to record highs.

Current prices are well above JP Morgan’s estimates of fair value and the mainstream adoption of bitcoin increases its correlation with cyclical assets, which reduces the benefits of diversifying into bitcoin, the investment bank said in a memo.

Bitcoin, the most popular cryptocurrency, last traded at $51,116 on Friday, down from a record high of $52,640 reached on Wednesday. Rival cryptocurrency ether traded near a record of $1,951 reached earlier on Friday.

Bitcoin has surged by 45% so far this month, fuelled by signs it is winning acceptance among mainstream investors and companies, such as Tesla, Mastercard and BNY Mellon, but many observers remain sceptical of the unregulated and highly volatile digital asset.

“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,” analysts at JP Morgan said.

Some of bitcoin’s supporters argue that the cryptocurrency is “digital” gold that can hedge against inflation and declines in the dollar.

Based on that logic, bitcoin would need to rise to $146,000 in the long-term for its market capitalisation to equal total private-sector investment in gold via exchange-traded funds or bars and coins, according to JP Morgan.

Tesla’s chief executive Elon Musk said on Thursday that owning bitcoin was only a little better than holding cash. He also defended Tesla’s recent purchase of $1.5 billion of bitcoin, which re-ignited mainstream interest in the digital currency.

Elon Musk says bitcoin is slightly better than holding cash

(Reuters) – Tesla Inc CEO Elon Musk on Thursday said that owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold.

“However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere,” Musk said in a tweet. “Bitcoin is almost as bs as fiat money. The key word is ‘almost’.”

He also defended Tesla’s action to invest in bitcoin, saying that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency.

Tesla’s $1.5 billion bitcoin purchase set the cryptocurrency soaring toward this week’s record peak above $50,000 while Musk’s recent promotion of dogecoin on Twitter also lifted the price of that cryptocurrency.

Bitcoin was steady just below a record peak of $51,284 on Friday.

Cryptocurrency Ethereum hits record high, lifted by bitcoin, institutional demand

NEW YORK (Reuters) – Ethereum, the second largest cryptocurrency in terms of market capitalization and volume, hit a record high on Thursday, lifted by growing institutional interest in the space, and more than a week after its futures were launched on the Chicago Mercantile Exchange.

The virtual currency reached an all-time peak of $1,938 and was last up 4.6% at $1,936.94.

The CME last week launched futures on ether, the digital currency or token that facilitates transactions on the ethereum blockchain. In the crypto world, the terms ether and ethereum have become interchangeable.

Increasing institutional participation in cryptocurrencies also propelled bitcoin, the largest and most popular crypto asset, to an all-time peak of $52,640 on Wednesday.

“Ethereum is really undervalued, and I believe it has been … due to its more complex narrative,” said Luis Cuende, co-founder of Aragon, a decentralized application on the ethereum blockchain.

“A global computing network for Web3 (internet 3.0) is extremely exciting and new. I would say over the next three months, we could see ethereum hit $2,500.”

Bitcoin, on the other hand, is currently in consolidation mode after hitting a record high. It was last down 0.3% at $52,000. Among the mainstream investors and companies that have recently jumped on bitcoin’s bandwagon were Tesla, Mastercard, and BNY Mellon.

Jeffrey Gundlach, the billionaire chief executive of investment firm DoubleLine Capital, is the latest of the traditional investors who seemed to have a change of heart on bitcoin. He said in a tweet on Thursday that bitcoin may be the stimulus asset, not gold, adding that “lots of liquid poured into a funnel creates a torrent.”

Last month, Gundlach said he was neutral on bitcoin due to its volatility, which was a downgrade of his outlook from overweight.

Another beneficiary of bitcoin’s climb as a mainstream asset was the surge in trading volume for Purpose Bitcoin ETF, the world’s first bitcoin exchange traded fund, which was approved by Canadian regulators. Purpose started trading on Thursday.

More than C$80 million of Purpose were traded in the first few hours after its launch. By comparison, volume for the Bitcoin Fund, a closed-end investment fund, was about C$30 million.

CME data, meanwhile, showed nearly 1,900 ETH futures contracts were traded for the first five days after last week’s launch or about 92,800 ether, equivalent to roughly $160 million.

Around 27% of volume came from outside the United States and more than 33% traded during non-U.S. trading hours.

(1 U.S. dollar = C$1.2698)

Crypto wallet Blockchain.com raises $120 million in latest funding round

(Reuters) – Blockchain.com, a provider of cryptocurrency services, has raised about $120 million in its latest funding round, which included investments from Alphabet Inc’s venture capital unit, GV, the company said on Wednesday.

The company did not disclose the valuation at which the funds were raised.

London-based Blockchain.com said about 28% of all bitcoin transactions since 2012 have been routed through its platform, making it one of the major players in the cryptocurrency market.

Bitcoin, the world’s most popular cryptocurrency, rose above $50,000 on Tuesday for the first time, adding steam to a rally fueled by signs that it was gaining acceptance among mainstream investors and companies.

Its latest surge has also been powered by Tesla Inc after the electric carmaker said it had bought $1.5 billion in bitcoin and would accept the cyrptocurrency as mode of payment.

Other investors in the funding round included hedge fund manager Kyle Bass, industrial group Access Industries and investment firms Moore Strategic Ventures, Rovida Advisers and Lightspeed Venture Partners, the company said. (bit.ly/3pubFaa)

Bitcoin within a whisker of $50,000

(Reuters) – Bitcoin hit a new record high $60 shy of $50,000 on Tuesday, extending a sharp rally that has been mostly fuelled by big investors beginning to take digital assets seriously.

The first and most famous cryptocurrency, bitcoin hit $49,938 and has gained roughly 70% this year, most of that after electric carmaker Tesla said it bought $1.5 billion in bitcoin and would accept the currency as payment.

Tesla’s move was the latest in a string of large investments that have vaulted bitcoin from the fringes of finance to company balance sheets and Wall Street dealing desks, as U.S. firms and traditional money managers have started to buy a lot of it.

The soaring cryptocurrency, which was near worthless a decade ago when software developer Laszlo Hanyecz paid 10,000 bitcoins for two pizzas, surpassed $20,000 only in mid-December, but has so far struggled to crack $50,000 after a few attempts.

“Bitcoin has been range bound for the past four or five days, suggesting either stalling momentum or a consolidation period,” said Justin d’Anethan, sales manager at digital asset company Diginex in Hong Kong.

“We believe in the latter,” he said, since strong recent demand has been drawing down bitcoin’s finite supply.

Bitcoin last traded just short of its new record at $49,045 while rival cryptocurrency ethereum also held near its own record top of $1,879 made last week.

Besides Tesla, bitcoin has drawn unprecedented flows from big and small investors in recent months and posted new milestones on the path to greater takeup as a mode of exchange.

The cryptocurrency was created by the mysterious Satoshi Nakamoto, whose real identity is unknown and is based on blockchain technology which acts like public ledger of transactions. It began circulating in 2009, mostly among speculators – something which is beginning to change.

Business software firm MicroStrategy made the first of several multimillion-dollar bitcoin purchases in August and a number of Wall Street fund managers, such as billionaire Stanley Druckenmiller, now sound positive on the asset.

PayPal is allowing customers to use bitcoin at its merchants and Mastercard preparing to do likewise, moves which bring both opportunity and risk.

“The more mainstream the digital currency becomes, the more we should expect regulators to pay attention,” said Mike O’Rourke, chief market strategist at JonesTrading.

Darknet crypto kingpin JokerStash retires after illicit $1 billion run: research

(Reuters) – The kingpin or kingpins of the world’s biggest illicit credit card marketplace have retired after making an estimated fortune of over $1 billion in cryptocurrency, according to research by blockchain analysis firm Elliptic shared with Reuters.

The “Joker’s Stash” marketplace, where stolen credit cards and identity data traded hands for bitcoin and other digital coins, ceased operations this month, Elliptic said on Friday, in what it called a rare example of such a site bowing out on its own terms.

Criminal use of cryptocurrencies has long worried regulators, with U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde calling last month for tighter oversight.

While terrorist financing and money laundering are top of law-enforcement concerns, narcotics, fraud, scams and ransomware are among the chief areas of illegal use of digital currencies, according to Elliptic co-founder Tom Robinson.

Joker’s Stash was launched in 2014, with its anonymous founder “JokerStash” – which could be one or more people – posting messages in both Russian and English, Elliptic said. It was available on the regular web and via the darknet, which hosts marketplaces selling contraband.

The darknet, or darkweb, is a part of the internet that isn’t visible to regular search engines, and requires a form of browser that hides a user’s identity to access.

Elliptic, whose clients include law-enforcement agencies and financial firms, estimates that JokerStash raked in more than $1 billion in profits in cryptocurrencies over the years, at current prices. Bitcoin has soared from just over $300 in 2014 to hit a record $49,000 on Friday, pulling up other coins in its wake.

The blockchain firm reached the over $1 billion figure by analysing the marketplace’s revenue and the fees it charged, and said it was at the lower end of its estimates.

In December, Interpol and the FBI seized the domain names used by the site, but it continued operating via the darknet, Elliptic said here. Cyber-security firm Digital Shadows also said in December that the darknet site remained live after the seizure.

Interpol did not respond to a request for comment. The FBI could not be reached outside regular business hours.

Trading illegal credit cards is “a billion-dollar business,” said Robinson. “It’s also providing a means of cashing out other types of cyber-criminality.”

On Jan. 15. Joker’s Stash posted a message announcing it would close permanently on Feb. 15. In fact it went offline on Feb. 3, Elliptic said.

“Joker goes on a well-deserved retirement,” said the message, which Reuters saw a screenshot of. “It’s time for us to leave forever.”

Accompanying it was a picture of the 1862 painting “Stańczyk” by Polish artist Jan Matejko, which depicts a court jester sitting forlornly in a bedroom as a party goes on in the background.