Why Near-Zero Interest Rates Matter for Bitcoin
Trump’s ‘Go After Bitcoin’ Order, Ebang Losses and Wirecard Resignation: Crypto News of the Week
OKEx Insights presents the top five crypto news stories of the past week.
Newly-revealed comments reinforce Trump’s anti-Bitcoin attitude
U.S. President Donald Trump specifically instructed Treasury Secretary Steven Mnuchin to “go after” Bitcoin, according to an upcoming book by former Trump staff member John Bolton titled The Room Where It Happened.
As originally reported by the Washington Examiner — which received an advanced copy of the soon-to-be-published memoir — Trump made the comment to Mnuchin in May 2018 in a conversation regarding tariffs and sanctions on China, stating: “Don’t be a trade negotiator. Go after Bitcoin [for fraud].”
- Trump’s reported comments came at a time when the price of Bitcoin had rallied an impressive 33% — though the rally was short-lived. The leading cryptocurrency would see its price fall substantially in Q4 2018.
- The comments also came at a time when speculation surrounding how the U.S. would regulate cryptocurrencies was reaching a fever pitch.
- Furthermore, Trump’s newly-revealed comments reinforce his already-established attitude towards Bitcoin.
Former CFTC chairman claims XRP is not a security
XRP is not a security — at least, according to former chairman Christopher Giancarlo of the CFTC, one of the major U.S. financial regulators.
The opinion from the past head of the U.S. derivatives market regulator comes via a co-written op-ed with Conrad Bahlke, his current colleague at law firm Willkie Farr & Gallagher. The article states that Ripple’s cryptocurrency is neither an investment contract nor falls under the Howey Test that is used by the SEC, the U.S. securities regulator.
“[XPR] cannot be an investment contract as there is no contract or arrangement to speak of between Ripple and the overwhelming majority of XRP holders. To the contrary, the contracts that Ripple has entered into explicitly exclude general XRP holders as third-party beneficiaries.”
However, it should be noted that the Willkie is counsel to Ripple and received “certain factual information” to back up the authors’ claims.
- The discussion surrounding XRP’s status as a security is far from new and a decision from authorities has been long pending.
- Giancarlo’s opinion may provide insight into how current regulators view Ripple’s crypto asset.
Majority of existing bitcoins held as long-term investments
The majority of the 18.6 million bitcoins currently in existence are being held long-term, according to a new report from blockchain analytics firm Chainalysis.
More specifically, less than 20% of the total outstanding supply of bitcoins are used for trading.
Furthermore, an additional 20% of minted bitcoins are presumed “lost,” as they have not been transferred in five or more years — through, as we recently learned, this may actually be long-term “hodlers.”
- As the amount of available bitcoins becomes increasingly scarcer, the large supply of bitcoins being held long-term may become an important liquidity source.
- The majority of bitcoins that exist today are held by individuals or parties who have never sold more than ¼ of their holdings — meaning most bitcoins are, indeed, being held by hodlers.
Bitcoin miner manufacturer Ebang incurs $2.5 million loss
Ebang, a prominent Chinese manufacturer of Bitcoin mining hardware, has taken a net loss of $2.5 million in Q1 2020.
The news comes via an official financial disclosure posted this week in an IPO prospectus update with the SEC.
- The filing that illustrates Ebang’s net loss indicates that the firm is closer to becoming the second publicly-traded bitcoin miner manufacturer on the Nasdaq exchange, after Canaan.
- Ebang’s net loss follows Canaan’s share price dropping from its initial $9 per share price to a recent low of $2.
Wirecard CEO resigns following €1.9 billion loss of cash
One day after the news released that Wirecard lost €1.9 billion in cash, the German payment processor’s chief executive, Markus Braun, resigned.
James Freis, the company’s chief compliance officer who was hired on Thursday, will take over as interim CEO.
Wirecard’s misplaced funds have sent investors scrambling with the German stock exchange-listed financial services company’s share price collapsing 80 percent in two days.
- Wirecard Card Solutions, a subsidiary of Wirecard, has notably partnered with crypto payment card providers Crypto.com, TenX and an unofficial developer of Telegram’s ill-fated blockchain, TON Labs.
- The crisis at Wirecard has been likened to Enron on social media.
OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.