bitcoin hash rate

Bitcoin’s Hash Rate Reaches a Three-Month High While Crypto Custody Provider BitGo Diversifies its Portfolio of Income Streams

The hash rate on the Bitcoin network has on the decline as Bitcoin prices plummeted due to the bear market. However, it seems that the wheel is turning as the network has recorded its highest hash rate figures in three months. Cryptocurrency custody service provider BitGo announced a partnership with Genesis Trading in a move that is set to diversify the company’s income streams to supplement the revenue it receives from its custody services.

Crypto custody provider BitGo partners with Genesis Trading to possibly compete with exchanges

BitGo, a cryptocurrency custody service provider announced on Jan. 15 a partnership with Genesis Trading to offer its clients the ability to buy and sell digital tokens on its platform for the first time.

Olivia Lovenmark, BitGo’s writer and the editor said in a blog post, “Today, BitGo announced a partnership with Genesis Global Trading that allows clients to buy and sell digital assets directly from the security of their BitGo Trust cold storage account.”

The blog post further said that this deal underscores the custody provider’s commitment to building institutional-grade cryptocurrency infrastructure. The company is also looking forward to several trading integration partnerships in the future.

BitGo’s partner, Genesis Trading is one of the pioneers in the young industry and leader in Over-the-counter (OTC) cryptocurrency trading.

In an interview with The Block, Michael Moro, the CEO of Genesis Trading said the new offering is novel because it allows users to trade their digital assets without having to move them from secure offline storage facilities.

“BitGo clients, traditionally, would have to put the coins onto [an] exchange. Genesis provides the quote, BitGo turns around and they can effectively segregate the coins and then send it to Genesis and since we have a wallet at BitGo they are never leaving their systems,” said Moro.

Moro further said that large traders prefer to execute their trades on OTC markets because their liquidity is deeper than that of exchanges. Exchanges are also seen as an easy target for hackers. According to JP Morgan’s estimates, a third of all crypto exchanges have been compromised.

This partnership is also an indication that BitGo is keen on diversifying its income streams since crypto custody fees continue to suppress.

“Just since the summer of 2018, we’ve seen the cost of custody decline anywhere between 50 and 100 basis points,” said Sam Jernigan, Co-CIO of Wakem Global Opportunities Fund, a macro hedge fund specializing in trading digital assets.

Users of hacked cryptocurrency exchange try to reclaim lost digital assets

Approximately 40 users have come forward to reclaim their digital assets after a New Zealand cryptocurrency exchange Cryptopia was hacked this week and shut down its website in response to the unfortunate incident, reported New Zealand Radio.

New Zealand authorities are already investigating the case after more than $3 million was transferred from the exchange to an unknown address.

The users who made investments during the Bitcoin bear market are afraid that their digital assets may be gone for good.

Clive Cousins, a Christchurch lawyer was approached last year by investors who wanted more clarity on their cryptocurrencies in a separate incidence.

“We were contacted initially by about three people, including a South African lawyer, who were complaining that they were having trouble transacting using their wallets and couldn’t withdraw funds.”

Cousins further said that 40 more people approached him with the intention to launch a joint a lawsuit. However, the lawsuit has stalled due to lack of funding.

Josiah Spackman, a cryptocurrency consultant explained that Cryptopia’s problem is its focus on lesser-known cryptocurrencies which means that only a few entities are monitoring the digital assets’ transactions.

“Because they were often the exchange that people would go to for these lesser-known currencies – these up-and-comers – they got a bit of a reputation for that and they did, in fact, grow quite significantly from that,” said Spackman. He added that it would be difficult to trace the stolen funds.

Adrian Przelozny from an Australian-based cryptocurrency exchange the Independent Reserve said that some smaller exchanges grow very quickly before they have the right infrastructure to hold and manage their customers’ funds.

Cryptocurrency exchange CEO: Approval of Ether is 50-50 at best

Several cryptocurrency firms are intent on launching Ethereum derivates but the probability that regulators will approve such products in 2019 is slim, according to industry experts.

In an interview, Paul Chou, the CEO of cryptocurrency exchange LedgerX thinks that the possibility that an Ethereum derivate will begin trading this year is not set in black and white. “My personal view is that it is 50-50 at best,” said Chou.

Chou’s firm is waiting for approval from the U.S Commodities and Futures Trading Commission (CFTC) for its ready-to-trade Ethereum option.

The regulatory agency put out a Request-for-Information late last year to gain a better understanding of the Ethereum ecosystem.

“The RFI seeks to understand similarities and distinctions between certain virtual currencies, including here ether and bitcoin, as well as ether-specific opportunities, challenges, and risks,” said the RFI.

Chou added that the infrastructure for Ethereum derivates is ready. “Ethereum futures is as premature as the bitcoin ETF proposals were two years ago. We would love to list as many different crypto products as possible. We have the infrastructure.”

Cryptocurrency firms such as ErisX and Seed CX are both working on launching their own Ethereum derivates.

Jeff Bandman, who runs a consultancy firm in the crypto space and former fintech advisor to the CFTC said the regulatory agency understands “what proof of work network is like because that’s how bitcoin works, but proof of stake raises new questions. Specifically, what are the risks?”

He further added that the agency can wrap things up quickly and anything can happen this year.

Ethereum is trying to move from the Proof-of-Work (PoW) consensus algorithm to the so-called Proof-of-Stake algorithm. The developers of Ethereum have temporarily put on hold the long-awaited Constantinople hard fork.

Bitcoin network’s hash rate reaches a three-month high

The hashrate of the Bitcoin network is on the recovery path in the past few months after hitting a low of just over 32 million TH/s when miners were having a hard time to stay afloat at the height of the brutal bear market.

While the market is yet to completely recover, it appears that miners have a renewed interest in keeping the Bitcoin network running.

Bitcoin’s hash rate was on the decline in November last year as the price of the world’s most popular digital currency fell from around $6,000 to $3,200 by the end of the year. The price drop affected miners who had to turn their machines off.

As Bitcoin’s price fought back and climbed to as high as $4,000 at the beginning of the year, the miners turned their machines on

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