Monthly Archives: June 2021

Football star Tom Brady, who recently came out as a bitcoin bull, acknowledged that prices have dropped since he revealed his support for the cryptocurrency publicly.

The seven-time Super Bowl champion in early May changed hisTwitterprofile photo to include "laser eyes," which is what many bitcoin enthusiasts do to show their "laser focus" to push prices higher. Bitcoin's price has fallen nearly 40% to $34,665 on Monday from $56,245 on the day Brady changed his avatar, according to Coin Metrics.

"Alright the laser eyes didn't work. Anyone have any ideas?" Brady said in a twitter post on Monday.

Bitcoin has experienced wild volatility amid heightened regulatory scrutiny after a solid start to the year that drove its price to an all-time high of nearly $65,000 in April. The digital coin has almost wiped out all of its triple-digit gains and turned flat on the year.

Tom Brady

Charles Krupa | AP

At the end of May, Brady said he was a "big believer" in cryptocurrencies, confirming that he had bought digital coins.

"I don't think it's going anywhere," Brady said at theCoinDesk Consensus 2021 forum. "I'm still learning so much. It's definitely something I'm going to be in for a long time."

China hasstepped up efforts to stamp out crypto speculation, ordering digital currency miners to cease operations in a number of regions and urging banks and payment firms not to offer crypto-related services.

Meanwhile, cryptocurrency exchange Binance has been banned from operating in the U.K. by the country's markets regulator.

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Tom Brady admits his 'laser eyes' didn't work on the bitcoin trade - CNBC

Billionaire bitcoin owner Mircea Popescu has reportedly died, leaving behind a cache of virtual currency and a controversial crypto legacy.

The bitcoin BTCUSD, -0.07% pioneer, who was believed to own over $1 billion in the worlds No. 1 crypto, making him, at the time, one of the assets larger single-holders, died off the coast of Costa Rica, according to a Spanish-language publication, Teletica.com, which reported last week that a foreigner had drowned at Playa Hermosa de Garabito, Puntarenas, in Costa Rica, describing the victim as a 41-year-old of Polish origin. However, Popescu is a well-knowned name in Romania and he has been described on some sites as a Romanian entrepreneur and blogger.

Popescu was viewed as a pioneer in digital assets and one of the earliest adopters. An article in Bitcoin Magazine written by Pete Rizzo said that Popescu was known for starting MPEx, a bitcoin securities exchange, around the same time as Coinbase Global COIN, +9.86% launched.

At its mid-April peak this year, Popescus bitcoin holdings would have been worth nearly $2 billion.

Read: Feds Quarles says digital dollar could pose considerable risks to financial system

At last check, bitcoin prices were changing hands at around $34,295, up 3.2% on the day, and Ether ETHUSD, -0.59% on Ethereums blockchain was trading at $2,079, up over 13%, even amid reports that the worlds largest crypto trading platform Binance was facing a regulatory crackdown in the U.K., and a separate report noting that the platform has been compelled to pull out of doing business in the Canadian province of Ontario.

Word of Popescus reported death was circulating in crypto circles, with some wondering where his holdings would go.

The latest news also comes as crypto continues to wrestle with Chinas ban on bitcoin mining and crypto trading in the worlds second-largest economy and the biggest crypto miner.

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One of the largest owners of bitcoin, who reportedly held as much as $1 billion, is dead at 41: reports - MarketWatch

1. South African crypto founders vanish along with billions of dollars worth of bitcoin

Ameer and Raees Cajee, the founders of Africrypt, the largest cryptocurrency exchange in South Africa, have vanished, along with billions of dollars worth of bitcoin, Bloomberg reported on Wednesday.

In April, when bitcoin was trading at a peak of around $60,000 per coin, Africrypt warned clients of a hack with about 69,000 bitcoins missing, according to Bloomberg. At the time, the value totaled about $3.6 billion, but Africrypt asked clients not to alert law enforcement.

If it is unable to be recovered, it would be the biggest loss in a cryptocurrency scam to date.

Andreessen Horowitz, aSilicon Valley venture capital firm founded by Marc Andreessen and Ben Horowitz, announced its new $2.2 billion cryptocurrency-focused fund on Thursday.

"The size of this fund speaks to the size of the opportunity before us: Crypto is not only the future of finance but, as with the internet in the early days, is poised to transform all aspects of our lives," the firm said in a blog post.

On Thursday, Nayib Bukele, the president of El Salvador, announced the country's recently passed law to make bitcoin legal tender will take effect on Sept. 7, Reuters reported.

"This law is made to generate employment, to generate investments," Bukele said.

As part of his effort to push bitcoin adoption, Bukele also offered each adult citizen $30 worth of bitcoin for free. To receive the free bitcoin, citizens will need to sign up for the country's sponsored cryptocurrency wallet app, Chivo.

On Thursday, Twitter and Square CEO Jack Dorsey promoted an event called "The B Word," which will aim to encourage companies and institutional investors to adopt bitcoin, according to its website. The event is scheduled to take place on July 21, with speakers including Dorsey and ARK Invest's Cathie Wood.

In response to Dorsey's tweet of the event, Tesla and SpaceX CEO Elon Musk responded and seemingly agreed to chat with Dorsey about bitcoin at the event.

Musk has continued his support of altcoins like dogecoin, a meme-inspired cryptocurrency that began as a joke. On Monday, Musk tweeted in support of a dogecoin fee proposal by the digital coin's lead developers, which reportedly boosted dogecoin's price.

On Saturday, the U.K. markets regulator announced it's banning Binance, the world's largest cryptocurrency exchange by trading volumes. This comes after Binance did not meet the anti-money laundering requirements of the U.K. Financial Conduct Authority, or FCA, CNBC reported.

The FCAsaid Saturdaythat Binance Markets Limited, the U.K. division of Binance, "is not permitted to undertake any regulated activity in the U.K."

Despite this, Binance could still offer crypto trading through its website in the U.K., as nonregistered firms can still interact with consumers in the country.

"Providing access to cryptocurrencies itself is not a regulated activity, but offering derivatives is, which is presumably the activity the FCA is clamping down on," Laith Khalaf, financial analyst at AJ Bell, recently told CNBC.

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Jack Dorsey and Elon Musk will discuss bitcoin at an upcoming event, and 5 other key crypto moments from the past week - CNBC

Bitcoin climbed more than 15% over the weekend as its price bounced from four-day lows after a sharp sell-off last week.

Prices Monday were slightly higher, with one bitcoin fetching about $35,000 at press time, CoinDesk 20 data show. One expert said more is needed to continue driving gains in the current climate of fear, uncertainty and doubt (FUD).

On Friday, the worlds first cryptocurrency fell more than 8% despite rallying 5% during the Asian trading session, bolstered by news of El Salvadors confirmed date of its bitcoin law and a $30 bitcoin airdrop to every Salvadoran adult who downloads bitcoins app.

An unprecedented stream of FUD has resulted in bitcoin struggling to keep above water, Jehan Chu, managing partner at Hong Kong-based crypto investment firm Kenetic Capital, told CoinDesk via WhatsApp on Monday.

Chu also said the short-term outlook remains choppy and uncertain, despite the recent bounce back above $34,000. With retail investors on the sidelines licking their wounds, volumes will struggle until the next price catalyst.

Indeed, daily trading volume for bitcoin has remained low, particularly during the weekend. Thats been the trend for most of the month.

The weak trading volume points to a lack of institutional and retail interest, Chu said, citing undisclosed trading teams he has had conversations with.

Meanwhile, other notable cryptos are coasting in bitcoins slipstream, with ether and internet computer both advancing over a 24-hour period.

In traditional markets, Asian equities were mostly up, with the exception of Japans Nikkei 225 Index, Hong Kongs Hang Seng Index and the Australian All Ordinaries Index, which were all down by less than half a percent.

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Bitcoin Investors Sit on Sidelines 'Licking Their Wounds' Despite 15% Bounce Over the Weekend - CoinDesk - CoinDesk

El Salvador is becoming a proving ground for Bitcoins biggest ideas.

I really see El Salvador as being the Switzerland of Latin America, if this experiment goes successfully, Ray Youssef, CEO of peer-to-peer crypto exchange Paxful, said over Zoom.

On Sept. 7, El Salvador will become the first country in the world to adopt bitcoin as legal tender. That could open a new age for the struggling Latin American economy, President Nayib Bukele, the prime mover behind the so-called bitcoin law, said. It also opens a new frontier for bitcoiners looking to test their economic and social theories.

Bitcoin will not just be a companion currency to the U.S. dollar, but a cornerstone of the nations efforts to modernize and digitize its economy. Bukele wants El Salvador to become a bitcoin mining hub potentially tapping into its rich geothermal resources as well as a center for blockchain software development and a paradise for the crypto rich.

Why create this law? Because bitcoin has a $600 billion market capitalization globally, and if we do this, investors and tourists who own bitcoin will come to the country and benefit Salvadorans and the economy, Bukele said at a national address on Thursday.

Hes making an attractive offer for outsiders and citizens alike by eliminating a capital gains tax on the cryptocurrency and building a state-backed wallet, which will come pre-loaded with $30 worth of BTC for adult citizens. The plan is a leap forward for humanity, not just Bitcoin, he told Peter McCormack when the podcaster traveled to El Salvador recently.

Although the nations plans are still being drafted, a series of interviews with Bitcoin startups and founders suggest that bitcoiners are ready to invest their time and money to help El Salvador (population 6.5 million) establish the first bitcoin standard.

Youssef, an evangelist for bitcoin in the developing world, is one of a growing number of crypto entrepreneurs who have made their way to the country looking for opportunities to expand their businesses and assist the government in setting up a parallel monetary system.

Blockstream, a Bitcoin infrastructure company, is one of the most ambitious in this pursuit. On June 5, it pledged provisions to connect El Salvador with its Blockstream Satellite program, a way to synchronize with the Bitcoin network during times of internet outages or shutdowns, and it announced plans to open bitcoin mining facilities.

Samson Mow, chief strategy officer at Blockstream, told CoinDesk the company has shipped two satellite kits to the country and said early-stage but high-level conversations are happening around volcano mining (or mining powered geothermal power).

It doesnt end there. Mow said Blockstream Financial, a new corporate division, is working to structure a few potential bond offerings on the Liquid network, a bitcoin scaling system backed by Blockstream.

That project is also in its infancy, and details of what may be the first state-backed, blockchain-based securities offerings are scant. One particular: The bonds might be floated to finance the states mining operations, which would tap into currently stranded geothermal energy, Mow said. Volcano mining is capital intensive.

The bond offerings were proposing will be a critical component of the bitcoin development of El Salvador, Mow said. It seems like they can get this done quickly.

This is a key theme in the story so far: El Salvador is ripe with potential. It has a motivated government (which passed the bitcoin bill with a supermajority) and the support of the global bitcoin community, though some of these ideas appear founded on shaky ground.

The bitcoin bill is an experiment that could go terribly wrong, economists and media pundits have warned. In a report, Fitch Ratings said the countrys plans would increase regulatory risks for financial institutions. The International Monetary Fund and World Bank have also voiced disapproval.

Volcano mining, crypto in space and the widespread use of the Bitcoin Lightning network sound like science fiction. But those efforts are real and hyperbitcoinization is a real goal. The El Salvador experiment, Mow said, will serve as a blueprint for the world.

El Salvador is a key point in that battle. If they can succeed, it paves the way for much broader bitcoin adoption in the world, he said. And for making things like the IMF and the World Bank obsolete.

Payments

Youssef went to El Salvador as part of an official delegation of Bitcoin ambassadors, organized by Brock Pierce, a former child movie star and a co-founder of Block.oone, a blockchain software company. Youssef spent only a few hours with that delegation, shaking hands and speaking with government officials, but said Bukeles cabinet is of a younger, progressive breed, hyper-focused on the goal of bitcoinization.

Youssef spent the majority of his two-day stay in El Salvador at Bitcoin Beach, a small coastal community that has experimented with bitcoin payments. (Bukele pointed to the privately funded project as a microcosm for what bitcoin adoption across the nation could look like.)

It was there that Youssef made his first Lightning transaction in the country. While bitcoin has largely functioned as a speculative store of value in wealthier nations, he thinks the path to mass adoption is paved through peer-to-peer payments. Its also where his business opportunity lies, albeit indirectly.

The first challenge is getting bitcoin into the country and thats something that we did in Africa, he said, referring to Paxfuls footprint in countries like Nigeria and Kenya. Consumers typically pay more per satoshi using a P2P exchange, because they are often buying from a small pool of sellers, but fees are often lower and its a quicker way to take direct possession of your coins. (On the day I spoke with Youssef, for instance, there was a $10,000 premium on BTC in El Salvador.)

Paxful already has an active market in El Salvador, but Youssef says hes looking at the country as a potential base for further expansions in the region. His company has hired an associate of growth for South America and is searching real estate for an office. Paxful has about 450 employees globally, Youssef said.

All I want to do is build the kind of street team that can go around beyond Bitcoin Beach to the capitol city, to the malls, to universities, and just educate people face-to-face about what Bitcoinis, Youssef said. In particular, he is interested in teaching people about using BTC as an actual currency. Thats the narrative we find truly drives adoption, he said.

Swan Bitcoin, a bitcoin exchange, has a similar plan. The company is looking to rent or buy a Swan House in El Zonte to serve as a base for its marketing efforts in the region. CEO Cory Klippsten sees that as a place for bitcoiner friends to stay and work when traveling to El Salvador and a chance to create great content and educate the world about bitcoin by being on the ground.

There isnt a direct way to monetize the effort. Swan makes its money from selling bitcoin to people with a lot of fiat, Klippsten said, but its a price worth paying to spread the word of Bitcoin. It looks like altruistic education, and it is, but thats our marketing, he said

Like Youssef, Klippsten envisions a world where bitcoin will make the transition from being primarily a store of value into a widely used, global currency. Education paves the way to that reality, which eventually means more people buying bitcoin on Paxful and Swan.

Home grown?

Before Bukele came on the scene, El Salvador was not the first place people would associate with Bitcoin. Remittances, which make up more than a quarter of the nations economy, were rarely sent in the cryptocurrency. And while Bitcoin Beach was proving to be a successful experiment, the crypto economy in the country was still small.

Matias Goldenhorn, director for Latin America at U.S.-based Athena Bitcoin, a crypto ATM company that operated some of El Salvadors only crypto ATMs, told CoinDesk the company decided to pursue countries south of the border to take bitcoin to the people who need it the most.

The company recently received a $1 million investment to expand its fleet of ATMs from two to 1,500 in the country. That would make El Salvador one of the most saturated markets for crypto ATMs.

Mexico-based Bitso, one of the largest cryptocurrency exchanges in Latin America, is also apparently looking to expand its operations. The company declined an interview, but offered this statement:

We have made a commitment to work with the people of El Salvador on supporting and building the vision of Bitcoin for the country and are looking forward to being part of this evolution. We believe Bitcoin can in El Salvador and Latin America have a positive impact on the lives of millions, and recognize that there are many more beneficial Bitcoin developments to come.

I dont want to pretend to be too altruistic, Justin Newton, CEO of software security firm Netki, said. What we do is we provide KYC and AML tools, right? We help customers with know-your-customer, anti-money laundering. If theyre successful down there, it creates a great market for us.

Newton, another one of Brock Pierces delegates, was in and out of the country for a single day of meetings. His firm, which was founded in 2014, provides compliance tools for companies. About 70% of its clients are in crypto, and almost of those are private companies. He didnt go to El Salvador with a plan to court the government or any one business in particular.

If I go down there and I can help them be successful, it creates the environment that allows my company to be successful, he said.

Excerpt from:
El Salvador Wants to Attract Bitcoin Talent. Its Strategy Is Working - CoinDesk - CoinDesk

The reflection of bitcoins in a computer hard drive.

Thomas Trutschel | Photothek via Getty Images

Bitcoin continued to rebound from its lows for the year on Wednesday.

The cryptocurrency sank below the key $30,000 threshold Tuesday, at one point briefly erasing all its 2021 gains. It later recovered to turn positive for the day.

On Wednesday, bitcoin surged 18%, climbing back above the $34,000 mark in early morning trading, according to Coin Metrics data. It last changed hands at $33,641.27, up 3% on the day.

Smaller rivals also surged, with ether rising 6% to $2,014 and XRP up 9% at a price of 64 cents. The reason for the moves higher wasn't clear, but cryptocurrencies are known for their volatility.

Bitcoin had a solid start to the year, rallying to an all-time high of almost $65,000 ahead of crypto exchange Coinbase's blockbuster debut and as institutional investors appeared to be warming to it.

But the world's biggest digital coin has been on a roller-coaster ride since, almost halving in value amid a slew of negative news.

In China, authorities have been clamping down on bitcoin mining, the power-intensive process for validating transactions and generating new bitcoins. Over the weekend, Beijing's crackdown on crypto mining extended to the hydropower-rich Sichuan province.

Then, the People's Bank of China on Monday said it had urged financial institutions including Alipay and major banks not to provide services related to cryptocurrency activities.

Investors have also become more concerned about bitcoin's environmental impact, after Tesla CEO Elon Musk decided to stop accepting bitcoin as a method of payment for his company's vehicles.

At the time, Musk said he was worried about bitcoin's huge energy consumption and the "rapidly increasing use of fossil fuels" in mining the digital asset. However, he later said Tesla would accept bitcoin when at least half of bitcoin mining is confirmed to be powered by clean energy.

Critics of the cryptocurrency have long been wary of its impact on the environment. That could threaten the adoption of bitcoin by institutional investors, which are under growing pressure to invest in cleaner, more ethical assets.

Meanwhile, there have also been concerns about tether, a so-called stablecoin whose price is meant to be pegged to the U.S. dollar.

Tether is now the world's third-largest digital currency with a market value of more than $60 billion. But some investors are worried tether's issuer doesn't have enough dollar reserves to justify its peg to the greenback.

Last month, the company behind tether broke down the reserves for its stablecoin, revealing that around 76% was backed by cash and cash equivalents but just under 4% of that was actual cash, while about 65% was commercial paper, a form of short-term debt.

It comes after the New York attorney general's office reached a settlement with Tether and Bitfinex, an affiliated digital currency exchange. The state's top law enforcement official had accused the firms of moving hundreds of millions of dollars to cover up the loss of $850 million in commingled client and corporate funds. Tether and Bitfinex agreed to pay $18.5 million in the settlement and were barred from operating in New York state, however the companies didn't admit to any wrongdoing.

CNBC's Tanaya Macheel contributed reporting.

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Bitcoin surged as much as 18% after a wild day that saw the cryptocurrency briefly drop below $30,000 - CNBC

Bitcoin continued its volatile streak on Tuesday, starting the day with a tumble below the key $30,000 level and then a rally completely back into positive territory. It briefly turned negative for 2021 at one point Tuesday before recovering.

Near its low of the day, bitcoin fell more than 11% to about $28,911, below the $29,026 level where it ended 2020, according to Coin Metrics. The cryptocurrency then bounced and was up 0.43% after 4:00pm EST to $32,637.54 on the session, according to Coin Metrics.

Technical analysts had been watching the $30,000 level as a key support level on the charts after the cryptocurrency had fallen to near that low during its May crash.

Galaxy Digital CEO Mike Novogratz had noted on CNBC's "Squawk Box" Tuesday morning that bitcoin could still rebound after the early decline and if it didn't recover, there was significant downside to the next support level.

"Thirty-thousand, we'll see if it holds on the day. We might plunge below it for a while and close above it. If it's really breached, $25,000 is the next big level of support," Novogratz said. "Listen, I'm less happy than I was at $60,000, but I'm not nervous."

Bitcoin has been struggling to reclaim its highs from earlier in the quarter. It fell dramatically in May following some market-moving tweets by Elon Musk about bitcoin-related environmental concerns, and then even further in early June around fears of the cryptocurrency's use in the Colonial Pipeline ransomware attack.

It's been on a roller-coaster ride since then, battered by a stream of headlines out of China, where regulators have imposed new restrictions on energy-intensive mining and ordered financial institutions like Alipay to stop doing business with crypto companies. The price briefly touched $40,000 last week and fell again Monday.

With Tuesday's losses, bitcoin has been cut in half from its all-time high of more than $64,000 in mid-April, taking other cryptocurrencies along with it. Ether fell 5.6% and dogecoin dropped 12%.

Significant pullbacks have happened before in the cryptocurrency market, with bitcoin falling about 80% from its late 2017 highs at one point. Professional crypto investors have warned that the space should continue to be volatile in the years ahead.

"The only guarantee with the cryptocurrency space is volatility, and obviously that's what we have right now," Fairlead Strategies founder Katie Stockton told CNBC. "It's not new, we've had days like this before, it's just a matter of navigating through this noise."

Crypto investment product providers, such as CoinShares, Grayscale and Bitwise, are experiencing their sixth consecutive weeks of outflows, though some providers are seeing inflows, according to CoinShares. Bearish sentiment is more focused on bitcoin, with outflows for the week totaling $89 million and totaling $487 million for the year, or 1.6% of assets under management. Ether outflows, by contrast, are at $1.9 million for the week and $14.6 million for the year, or 0.14% of AUM.

Novogratz also noted that despite previous pullbacks, crypto market infrastructure is only becoming more mature, which has helped usher in more institutional support over the past year, with major hedge fund managers, pension funds and banks jumping into crypto, while registered investment advisors seek ways to get clients exposure to cryptocurrencies in ways that are compatible with their current workflow and wait for custody banks to introduce crypto services.

The price of bitcoin rose nearly 500% between mid-September and its April peak. Even with the recent decline, the cryptocurrency is still up more than 200% over the past 12 months.

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Bitcoin turns positive on day in wild session where it briefly dropped below $30,000 - CNBC

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Dont believe the Bitcoin bounce. The U.K.s decision to block Binance from engaging in regulated activity in that country is bad news for cryptocurrencies.

The U.K. government announced that Binance, a crypto exchange, is not allowed to engage in regulated activities and must make that clear on its website. Its not a banBinance can still offer crypto trading on its websitebut a limit placed on what it can do.

In an email to The Wall Street Journal, U.K. regulators highlighted that a significantly high number of crypto businesses are not meeting the required standards under money-laundering regulations as the reason for its actions.

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Thats not a surprise. Traditional banks and brokers are required to check on the legitimacy of their clients. Ultimately, crypto brokers and exchanges might have to do the same, require them to know their clients, something that isnt really part of the crypto ethos.

Bitcoin is rallying, up almost 5% Monday. The gain, however, doesnt matter much. It gets the worlds leading crypto to where it was on Thursday, before a 7.8% drop.

Bitcoin remains stuck at the lower end of its $30,000 to $40,000 trading range its been bouncing around in for more than a month.

It might have trouble gaining momentum and breaking out as global governments take a closer look at all things crypto.

Al Root

*** In this weeks Barrons Streetwise podcast, columnist Jack Hough talks with Pfizer CEO Albert Bourla about vaccines, cancer treatments, rising drug prices, and more. Listen here.

Sen. Joe Manchin (D., W.Va.) said Sunday he could support an additional spending bill of up to $2 trillion that could include a corporate tax rate increase to 25%, as GOP senators told the morning talk shows they were reassured by President Joe Bidens comments about the $1.2 trillion bipartisan infrastructure deal.

Whats Next: Democrats hope to pass a broader anti-poverty bill under a special budget process known as reconciliation that requires only a simple Senate majority vote. Senate Majority Leader Chuck Schumer (D., N.Y.) plans to address both bills in July.

Janet H. Cho

India confirmed more than 395,000 Covid deaths, but public health officials, statisticians and families believe the actual figure is much higher. That may affect the worlds understanding of the scope of the highly infectious Delta variant discovered in India, The Wall Street Journal reported.

Whats Next: The Delta variant made up 20.6% of U.S. cases as of June 19, including 29% of cases in Missouri and 10% of cases in Colorado, according to the CDC. In California, the Delta variant is 14.5% of the states cases and is growing rapidly.

Janet H. Cho

Unemployment is falling in the states where extra federal pandemic assistance is ending early, according to The Wall Street Journal, suggesting the move is forcing people to find jobs.

Whats Next: The governments report on job creation in June is slated for Friday, and Wall Street is looking for a somewhat bigger increase. Economists predict almost 700,000 new jobs were added this month, and the unemployment rate is expected to slip to 5.7% from 5.8%.

Liz Moyer

Didi Global, the Chinese ride-hailing company, is expected to raise $4 billion in an initial public offering this week on the New York Stock Exchange, while anticipation is also growing over Krispy Kremes return to the public market.

Whats Next: The listings illustrate the renewed vigor of the IPO market as investors try to take advantage of rising markets and generous valuations.

Pierre Brianon

The U.S. military said Sunday it had carried out defensive precision airstrikes against Iran-backed militia groups in the Iraq-Syria border region.

Whats Next: U.S. officials are concerned by the increasing use of drones by the militias in the region. But Biden is still trying separately to revive the 2015 nuclear deal with Iran.

Pierre Brianon

Whats the difference between a vacation home and a rental property, and what does the answer mean for your taxes?

A MarketWatch correspondent will answer this question soon. In the meantime, send any questions you would like answered to thebarronsdaily@barrons.com.

Newsletter edited by Liz Moyer, Stacy Ozol, Matt Bemer, Ben Levisohn

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Dont Believe the Bitcoin Bounce. The U.K.s Binance Restrictions Are Bad News for Cryptocurrencies. - Barron's

Cathie Wood's Ark Invest filed with the Securities and Exchange Commission on Monday to create a bitcoin exchange-traded fund.

Wood a longtime bitcoin bull has been buying up proxies for the digital asset in names such as Coinbase and Grayscale Bitcoin Trust. Now, the innovation investor is seeking to own the actual asset itself.

The ETF's investment objective is to track the performance of bitcoin, according to the SEC filing. The fund would trade under the ticker symbol "ARKB," if approved by the SEC. Ark Invest is working in partnership with 21Shares to launch the ETF.

Bitcoin has hovered around $34,000 for the past couple of weeks as it struggles to reclaim its May highs. Many in the trading community have kept a watchful eye to see if it would hold at $30,000 as it continued its decline. Some still say it could drop as low as $20,000 before rebounding.

However, the digital asset has nearly been cut in half since its all-time high of about $63,000 in April. China's bitcoin crackdown, Tesla CEO Elon Musk's decision to stop accepting bitcoin for its electric vehicles, and excessive risk taking by crypto traders have all contributed to recent price swings.

Ark Invest acknowledged the volatility associated with the digital asset in the "risk factors" section of the filing.

"The market value of bitcoin is not related to any specific company, government or asset. The valuation of bitcoin depends on future expectations for the value of the Bitcoin network, the number of bitcoin transactions, and the overall usage of bitcoin as an asset. This means that a significant amount of the value of bitcoin is speculative, which could lead to increased volatility. Investors could experience significant gains, losses and/or volatility in the Trust's holdings, depending on the valuation of bitcoin," the S1 filing stated.

The SEC last week again postponed a decision to approve the first bitcoin ETF. The latest action comes as SEC Chairman Gary Gensler has called for more regulation of cryptocurrency exchanges and greater investor protections.

So far, there have been eight other bitcoin ETFs filed with the SEC.

Coinbase, the world's largest cryptocurrency exchange, is a top 10 holding in Wood's flagship fund Ark Innovation. Grayscale Bitcoin Trust is a top 10 holding in Ark Next Generation Internet ETF.

Wood has said she sees a future where bitcoin is part of a balanced investment portfolio. Ark Invest estimates that if 1% of the corporate cash of every company in theS&P 500 were converted into bitcoin, then the asset's price would balloon by more than $40,000 from its current levels. If the cash level increased to 10% from each company in the broader stock index, bitcoin's price would increase by more than $400,000, the firm said.

With Gensler a longtime financier who taught a digital currency class at the Massachusetts Institute of Technology being nominated to lead the Securities and Exchange Commission, the watchdog could warm to crypto during the Biden administration, Wood told CNBC earlier this year.

Wood's disruptive innovation funds have recently turned a corner after months of underperformance amid a rotation into value stocks. Shares of Ark Innovation are up more than 16% in June.

CNBC's Tanaya Macheel and Yun Li contributed to this report.

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Cathie Wood's Ark Invest files to create a bitcoin ETF - CNBC

Getty Images, Illustration by Forbes

David Gerard has not a kind word to spare for any part of the $1.4 trillion cryptocurrency market. Its dumb nerd money that nerds use to try to rip each other off, he says. Bitcoin in particular earns his ire. Its history is a series of get-rich-quick schemes, says Gerard, a 54-year-old IT administrator in London. He does not even have anything nice to say about the widely applauded technology underlying crypto, the digital ledger system known as the blockchain. A pile of nonsense, he concludes.

He has amassed a modest Twitter following spouting off like this (13,300 followers) and has self-published several books on the subject (Attack of the 50 Foot Blockchain and Libra Shrugged: How Facebook Tried To Take Over the Money). When Gerard wants to commune with other crypto haters, he heads over to a burgeoning corner of the web: a Reddit forum called Buttcoin, the name a suggestion that cryptocurrencies are, well, a waste of time. He often posts there several times a day and spends more time commenting on what the groups other 63,000 members publish. Every other Reddit about cryptocurrency is full of cultists! Or marketing shills. Or both, he says.

Cryptocurrencies including Bitcoin have made millions for investors large and small and become popularized by such mainstream figures as Jack Dorsey, who has said hed be working in cryptocurrency if he wasnt running Twitter and Squareand, of course, Elon Musk. The Tesla CEO made a $1.5 billion Bitcoin investment earlier this year that prompted a spike in the currency's value and later sold some of his holdings to help his electric-vehicle company report a first-quarter profit. Crypto has legions of devoted fans but also an army of critics. And sometimes those lines blur: Musk turned on Bitcoin last month and triggered a plunge in its price by saying Tesla would no longer accept the currency as payment for its vehicles, citing "the rapidly increasing use of fossil fuels" by miners who create the currency with banks of computers that create blocks of verified transactions which are then added to the blockchain.

Crypto foes on Reddit cheered Musk's retreat and trumpet any such negative news to fuel their own strident criticism of Bitcoin and other currencies, pointing out that they are underpinned by little other than hype of the kind initially inspired by Musk. Like those true believers, the denizens of Buttcoin tend to be men interested in technology who are constantly online and enjoy communicating through things like memes. (The group motto: Buttcoin: backed by gold, comedy gold!) But rather than devote themselves to talking up an asset, Buttcoin does the opposite, schadenfreude firmly established as the groups lingua franca.

Some of the most popular posts over the past week: a screenshot from a pro-crypto Reddit of someone losing $35,000 on DogeCoin; a photo of red and green chiles tracing out Bitcoins trading chart; and one simply headlined 30k finally broken , a reference to Bitcoins recent descent from all-time highs earlier this year. This type of thing is what Amy Castor, a Buttcoin fan and online crypto pundit, calls shitposting. Within the crypto world, there are a lot of ridiculous things that happen, so ButtCoin is a place where you go to poke fun at all that, she says. As you can tell, Buttcoiners arent any more buttoned-up online than their idealist counterparts, and much of the thinking on both sides tends to be pretty simplistic, accepting little nuance. But Buttcoins antics at least arent gyrating financial markets.

Despite two decades of steadily increasing mainstream acceptance, crypto remains an undeniable easy targetsomething that some people love to hate, like say, the tax man and the New York Yankees. Owning it requires a remarkable leap of faith many cannot justify: Theres nothing backing it. It has no value tied to a physical object. Plus, the stuffs super volatile, its value seeming to ping-pong madly on a consistent basis. (Bitcoin, for instance, was worth over $60,000 at one point this year. Today it fetches around half that.) The combination of these elements makes crypto even easier to ridicule than an aging retail chain or an ailing movie-theater business.

McCormicks actions get at the real weightiness of these social media-led financial manias. He didnt believe what he was saying at all. But other people did.

Its not real, actual finance, declares Stephen Brown, 40, a software engineer in Portland, Oregon, one of the moderators of the Buttcoin Reddit group. No one is sure who created Buttcoin almost 10 years ago; Brown and the seven other moderators represent as much authority as it has known since. Theyre just trying to build this other system and replace it with something thats either a joke or a huge bubble.

Brown can seem like something of an anomaly within his own group. He admits to having dabbled in short term trades of crypto over the years, though insists he would never buy and hold for the long haul. Most Buttcoiners are more like another group moderator who would only identify himself by his handle, AmericanScream, or by his preferred pseudonym, Adam Smith. (Since the latter seems rather like unearned aggrandizement, lets refer to him by the former.) AmericanScream attests to never owning any cryptocurrency, and his complaint about the asset class is a familiar one: That it lacks fundamental value, and it can only increase in price if enough people successfully convince more people into buying: Once you hold Bitcoin, PR is all youve got.

AmericanScream, who says he is a 50something semi-retired software engineer, is a near-constant presence on ButtCoin, talking about upcoming changes to Ether, the death of crypto proponent John McAfee and the recent vanishing of two South African crypto-preneurs, whose disappearance could represent the largest scam in the industrys history. Youll see me post at 8 in the morning, sometimes 11 at night, sometimes at 3 a.m., he says, proudly. His prolific publishing has had consequences, he says, and its why he studiously refuses to give his name. He claims to fear that if he did, pro-crypto Redditors would read this, track him down and punish him for his many contrary comments, perhaps by doxing him. Were the little guys saying the emperor has no clothes, he says. People want to shut us up.

Buttcoiners by nature arent afraid to go poke the bear. And Jim McCormick, a 28-year-old from Houston, is another of those types. McCormick discovered Buttcoin only recently, but in one of his first actions to amuse the group, he pulled a prank on a rival crypto-supporting Reddit, publishing several wildly ludicrous posts on the pro-crypto page going bullish on Bitcoin. (In one, McCormick purported to have found a rare Iron Gremlin movement on Bitcoins stock chart, a surefire sign to buy; to be clear, such a thing does not exist.) Not exactly to my surprise but still to my dismay, a lot of people believed it and supported it without a hint of irony or skepticism, he says. Afterward, he posted screenshots of their enthusiastic responses to Buttcoin.

McCormicks actions get at the real weightiness of these social media-led financial manias. He didnt believe what he was saying at all. But other people did, and possibly after reading his faux posts and taking them at face value, they went out and bought more crypto. Now imagine what else has been said across the web over the past yearand whos said it and who has chosen to believe itto get the markets behaving as schizophrenically as they have recently. It was kind of a brief experiment to see if people would be able to distinguish mockery of what they believe in from the actual thing, McCormick says. And to their demerits, I guess they couldnt.

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Inside The Reddit Forum That Wants To See Bitcoin Die - Forbes