Cryptos Face Criticism at the World Economic Forum and CBOE Withdraws the Much-anticipated Bitcoin ETF Filing
The World Economic Forum Annual Meeting entered its second day in which cryptocurrencies came under fire from some of the big shots in finance, politics, and governance. A top crypto investor has claimed that Bitcoin’s price will nosedive to zero. Malta-based crypto exchange OKEx has launched OTC trading for its customers in Thailand and Britain. Another exchange, Seed CX has launched spot trading for institutional investors. In a surprise move, CBOE has withdrawn its application for a Bitcoin ETF possibly in fear of automatic rejection as the U.S government shutdown drags on.
Davos proceedings: Bitcoin could nosedive to zero, says expert
Jeff Schumacher, a top investor in the crypto space and the founder of BCG Digital Ventures said the price of Bitcoin could nosedive to zero. He said so during a CNBC panel at the ongoing World Economic Forum (WEF) annual meeting in Davos, Switzerland.
He was speaking at a debate focusing on the future of blockchain, the technology underpinning cryptocurrencies such as Bitcoin. He was joined by Brad Garlinghouse, the CEO of Ripple, Edith Young, and Glenn Hutchings, the chairman of North Island.
“I do believe it will go to zero. I think it’s a great technology but I don’t believe it’s a currency. It’s not based on anything,” said Schumacher.
The price of Bitcoin is known for its constant swings but is so far in a prolonged bear market that has left mixed feelings about its future. The entire market lost more than $400 billion in 2018 and is now in a slow recovery mode.
Hutchings predicted that Bitcoin could have a new role of holding value while investors hold tokens that have other use cases.
“It might be that the role of bitcoin in the system could be to bring value back, to hold your value there while you have tokens that have other use cases that you aren’t using at the moment,” Hutchins said.
Garlinghouse said that he expects the widespread adoption of blockchain technology to happen in five years.
OKEx launches two new currencies – Thai Baht and British Pound – to its OTC trading platform
OKEx, one of the world’s leading digital assets exchange based in Malta, the Blockchain Island, announced on Jan. 23 that it is launching two new fiat currencies – Thai Baht (THB) and British Pound (GBP) on its existing Over-the-counter (OTC) trading platform.
Users in Great Britain and Thailand are only eligible to trade on the platform if they successfully complete KYC verification.
The THB and GBP OTC trading market are currently open to a few digital assets which include BTC, stablecoin USDT, ETH, and LTC.
OKEx’s trading platform enables users “to place orders with self-selected exchange rate and payment methods” to buy or sell digital assets with fiat currencies. The users of the platform enjoy low volatility and free transactions.
The platform has already been facilitating global digital asset trading with the Vietnamese Dong (VND) and Chinese Renminbi (CNY) and expects to add more currencies in the future.
“Our mission is simple at OKEx. We aim to offer flexibility and convenience to our traders. Thailand and the UK own the fastest growing crypto communities in the world,” said Andy Cheung, OKEx’s Head of Operations.
“We see great potential in these two markets and want to support the needs there. Because of the increasing trading volume and [the] number of traders in these two countries, we decided to launch the new THB and GBP trading services on our OTC trading platform. Wherever the market potential locates, we will expand there. In 2019, you can expect more currencies will be supported on OKEx,” added Cheung.
Chicago-based cryptocurrency exchange Seed CX launches spot trading for institutional investors
U.S based cryptocurrency exchange Seed CX announced on Jan. 23 that it has launched spot trading for institutional investors.
In the official press release, the crypto firm said investors who may have shied away from “trading digital assets due to concerns about regulatory oversight, technical reliability and conflicts of interest” are now able to enter the market with confidence because of Seed CX’s spot trading.
The co-founder and CEO of Seed SX Edward Woodford said, “There is no shortage of digital asset spot trading markets, but none have our vision for creating an institutional-grade experience across technology, operations, and compliance. We are getting very positive feedback from recently onboarded customers, and we are quickly onboarding more investors and trading firms from around the world.”
The firm has introduced spot trading of BTC/USD pair and plans to launch other USD pairs with ETH, LTC, and BCH later this month.
In the future, the firm plans to offer a market for digital assets derivatives regulated by the U.S Commodities and Futures Trading Commission (CFTC).
CBOE withdraws Bitcoin ETF filing as U.S government shutdown continues
The ripple effects of the U.S government shutdown have arrived at the shores of the cryptocurrency market.
The U.S Securities and Exchange Commission (SEC) published a notice stating that CBOE BZX Exchange has withdrawn a Bitcoin exchange-traded fund (ETF) supported by Van Eck and SolidX.
The proposal was filed in June last year when the investment firm Van Eck partnered with SolidX, a financial service provider to provide Bitcoin ETF to the market.
The SEC did not provide any reasons for the withdrawal of the application but it could possibly be due to the ongoing U.S government shutdown. The CBOE may have done so to avoid an automatic rejection due to lack of staff to review the application.
In an email to CoinDesk, Gabor Gurbacs, the director of digital asset strategy for Van Eck said the filing has been temporarily withdrawn.
He said, “We are actively working with regulators and major market participants to build appropriate market structure frameworks for a Bitcoin ETF and digital assets in general.”
Symbiont raises $20 million in Series B funding from Nasdaq Ventures, Galaxy Digital, and more
The blockchain platform for financial markets, Symbionts.io has a closed a Series B funding rounding led by Nasdaq Ventures in which it raised $20 million. The funding round saw the participation of new investors that include Galaxy Digital, Citi, Raptor Group, and more.
The founder and CEO of Symbiont, Mark Smith said the funds raised enable the firm to accelerate the development of its platform.
“Closing this round of funding enables us to accelerate investments in our platform and team,” said Smith.
He added that “Leveraging our financial markets and blockchain technology experience, our anchor partners like Vanguard, Lewis Ranieri, and Nasdaq will benefit from developing new distributed applications on Assembly, our enterprise blockchain and smart contract platform. Assembly provides the opportunity for new participants to enter the digital asset market and offers existing participants a superior infrastructure on which to build the future of financial markets.”
Head of Nasdaq Ventures Gary Offner said the investment allows Symbiont to integrate its products into the Nasdaq Financial Framework.
“Our investment will also include the integration of Symbiont’s enterprise blockchain and smart contract platform into the Nasdaq Financial Framework. We are pleased to support this important, growing area for creating unique institutional applications of blockchain technology,” he said.
Andreessen Horowitz-backed custody solution Anchorage finally goes live
The Andreessen Horowitz-backed crypto custody provider, Anchorage has come out of hiding after almost a year and a half to offer a crypto storage solution designed for big investors. The crypto firm raised $17 million from investors such as Max Levchin, Mark McCombe (BlackRock), Elad Gil, and Naval Ravikant to build its business.
The firm was co-founded by Nathan McCauley and Diogo Monica who formerly worked for Docker and Square as part of the security team.
In Medium blog post, the co-founders wrote, “Today we are excited to introduce Anchorage, the most advanced digital asset custodian for institutional investors. Each of the last two years has taught the world an important lesson about digital assets: the bull run of 2017 proved that crypto assets have tremendous potential value, and the backslide of 2018 showed us that the financial system surrounding these assets is far from maturity.”
The two co-founders claim that institutional demand and technological advances make this the perfect time to introduce a new approach to digital asset custody design using the best security engineering principles. The pair said that their model enables “active on-chain participation that offline cold storage historically hasn’t supported.”
With an impressive list of crypto investors, the firm still has to fend off competition from experienced and somewhat trusted providers such as Coinbase, BitGo, Gemini, etc.
PayPal CEO unsurprisingly bashes Bitcoin, again
In an interview on CNBC’s Squawk Box, PayPal CEO Dan Schulman said that Bitcoin does not qualify to be called a currency but is instead, a reward mechanism for the implementation of its underpinning technology known as blockchain.
Bitcoin is the world’s first and most successful application of blockchain technology.
“I have always thought that crypto was more of a reward mechanism for implementing blockchain as opposed to really a currency. And we are not seeing many retailers at all accept any of the cryptocurrencies. But I think the underlying technology is still very interesting,” he said.
Schulman’s remarks, however, do not come as a surprise because he has a long history of attacking Bitcoin. He has previously stated that Bitcoin is not viable as transactional currency because of its volatility. The executive further claims that retailers will not use Bitcoin because its volatility could turn the retailers’ profits into losses.
Bitcoin and PayPal are two competing brands, and Schulman’s attack on Bitcoin should be expected and treated as normal. Most importantly, these critics point to the core pain points that the crypto market must overcome before mass adoption can begin.
Crypto startup Blockstack taps former BlackRock executive
Crypto startup Blockstack PBC announced on Jan. 23 via blog post that Saurabh Pathak, a former senior executive at the world’s largest asset management firm BlackRock has joined the crypto firm as a financial controller.
Pathak has an impressive record as he has previously worked at respected firms such as Ernst & Young and Deloitte. While at BlackRock, he oversaw $4 trillion in assets under management when he was the controller for America’s region. He also had a stint as the CFO of BlackRock Canada.
“Saurabh will lead our financial controls and take ownership of accounting, financials, and reporting for Blockstack PBC and all of its subsidiaries. He will work closely with the executive team in overseeing the Blockstack PBC treasury, reporting financials to 800+ investors, and implementing quality standards for financial procedures, record keeping, and control,” said the blog post.
BlackRock gave the crypto market a little boost in July last year after the asset manager commissioned a working group to look into cryptocurrencies and blockchain technology.
Economics Professor at the WEF: cryptocurrency is a classic bubble
The ongoing annual meeting of the WEF has not disappointed in terms of key figures slamming Bitcoin or cryptocurrencies.
Ken Rogoff, a Professor of Economics at Harvard University said cryptocurrency is a bubble and many papers will be written on it.
“I think its transparently a bubble and there will be many papers on it,” he said at the WEF panel called ‘Building a Sustainable Crypto-Architecture.’
The Professor reduced investing in cryptocurrencies to nothing more than a lottery ticket. He said he doesn’t see cryptocurrencies taking over fiat money like the USD or GBP. Rogoff stated that “in the history of currency, the private sector advanced everything.”
“I promise you that’s the endgame here. I think if you take the crypto out of the cryptocurrency, so you can do anonymous transactions, there’s just not value-added compared to fiat,” he said.
However, he pointed out that he doesn’t think cryptocurrencies are worthless and could have a number of use cases in a dystopian future.
A while ago, his then 13-year old daughter mined 24 Bitcoins and he advised her to get rid of them.