A Very Happy New Year to all the readers!!
After an unexpected and unprecedented 2020, we have now ushered in 2021. How will this year be, we cannot predict. Similarly, how high will the price of the Bitcoin grow this year – we don’t know. But, the bull run is still on as the price inches close to a historic US $30K mark. This one and many more in this week’s newsletter.
Bitcoin Continues to Soar
After shattering $20K and $25K barriers in consecutive weeks, the Bitcoin price is steadily rising to the next milestone – US $30,000. Late last week, the price reached US 25,000 and interestingly climbed to US $26K on Dec 26 and 27K on Dec 27. Such a development naturally led to speculations that the price will breach 30K by the end of the year. However, the premier digital currency faced some resistance on its way, and the price frequently dipped to 26K before rising again. Finally, Bitcoin rose to 28K on Dec 30, followed by a jump of another 1K when the year ended. At the time of writing, Bitcoin was cruising at US $29,517.50.
When Bitcoin hit the historic milestone of US $25,000, its market cap surpassed that of Visa, making it further attractive for institutional investors. Meanwhile, the amount of lost or held Bitcoins that have been skyrocketing since the bull run started has now fallen to historic low volumes. As per reports, $209 billion worth of Bitcoin was believed to be either lost or held by the crypto community before Dec 2020. Of this, over $7 billion has made its way back to circulation.
Ether Follows
Buoyed by the meteoric rise of the Bitcoin price, the altcoins soon found their new highs. Ether, the second most valuable cryptocurrency by market cap, rose to US $750 on the last day of the year. It is the first time since early 2018 that Ether has reached this mark. At the time of writing, one Ether was US $733.15.
White Hat Hack Reveals Vulnerable Flaws in Cover Protocol
On Dec 28, a suspected hack drained the DeFi insurance project, Cover Protocol, of millions of dollars worth of crypto. The hacker launched an infinite printing scheme that created over 40 quintillion COVER tokens and sold US $5 million worth of them. Additionally, the attacker cashed out over US $4 million worth of crypto – 1,400 Ether, a million DAI, and 90 WBTC. This attack resulted in a sharp decline in the price of the COVER token. According to reports, the price plummeted over 97 percent in 24 hours.
However, it was soon revealed that the attack was perpetrated by a whitehat hacking group named Grap.Finance. On Twitter, they claimed responsibility for the act. They reported that they had returned the funds to Cover protocol.
Following the incident, Cover Protocol revealed that it would soon launch a new COVER token through a snapshot to compensate the affected token holders and liquidity providers. Meanwhile, the crypto exchange Binance announced its own compensation plan that would reimburse the customers whose COVER tokens became worthless following the exploit. Binance revealed that the affected customers would get $10 million from its SAFU Fund in the form of Binance USD and Ether.
Digital Asset Brokerage Firm Suffers Cyberattack
In yet another attack launched on Dec 28 (this time, a real one), the digital asset brokerage firm Voyager took down its services after being alerted of an attack by its tracking system. Stephan Ehrlich, its CEO, emphasized that such a tough decision was made as the safety and security of the customers’ assets and information is paramount for Voyager. According to Voyager, no customer funds or their personal information was compromised. The firm also announced that the app was up within 24 hours.
Turkey’s Imminent CBDC Trial
A surprising announcement from the Governor of Turkey’s Central Bank puts Turkey ahead of several countries contemplating a digital equivalent of their nation’s sovereign currency. This week, Governor Naci Ağbal announced that Turkey would start the pilot phase of digital Lira, the country’s CBDC, in the second half of 2021. However, the critics feel this move will not solve the problems embroiling Lira, which has tanked over 23 percent against the US Dollar in 2020.
A Spanish City Embraces Digital Currency
The Spanish city of Lebrija has launched a digital currency to support the economy hit by the unceasing pandemic. Named ‘Elio’ the virtual coin can only be used to pay the small and medium-sized businesses. One Elio is equivalent to one Euro. As per the city council, the city with 600 families will receive between 20 to 200 Euro.
A Stablecoin Pegged to Japanese Yen
On Tuesday, the New York Department of Financial Services approved Tokyo-based GMO Internet to issue the stablecoin pegged to Japanese Yen. As per the trust charter, GMO can sell and redeem stablecoins pegged to Yen and USD. Often the price of the stablecoins is matched with that of the US Dollar. It makes the Yen driven stablecoin first of its kind.
Serbia Legalizes Digital Assets Trading
This week, the Digital Asset Law that legalizes trading and issuance of digital assets came into effect in Serbia. According to the law, those who intend to offer the digital assets can operate after obtaining permission from the authorities. The Securities Commission and the country’s national bank are tasked with the application of the law.
XRP Continues to Get Delisted and Trade Suspension on Exchanges as Ripple Preps for SEC Lawsuit
The pretrial of the SEC’s case against Ripple is scheduled for Feb 22. This preliminary hearing will be held virtually on a telephonic conference. The parties involved in the case have to submit a joint letter a week before the pretrial, with the legal basis for the claim and the defending arguments. The letter should also delineate the planned motions and settlement expectations.
Meanwhile, several major crypto exchanges have continued to delist or suspend the trading of XRP. eToro would not allow its US customers to trade XRP after Jan 3. Binance US will delist the beleaguered currency from Jan 13. Bittrex says it will remove all XRP pairing on Jan 15. Coinbase will suspend trading XRP from Jan 19.
The Coinbase suspension led to a steep decline in the price of XRP. The currency fell as much as 31 percent on Dec 29. As a result, XRP is no longer the fourth-largest cryptocurrency by market cap, with Litecoin taking over its position.
Simplex Partners With Visa for a Crypto Debit Card
Israel-based fiat on-ramp service provider for crypto, Simplex, has partnered with Visa. As per the announcement, Simplex is now the principal member of the Visa network in Europe. It would mean over 200 partners of Simplex can offer crypto debit cards powered by Visa to their customers.
SantaGochi Beneficiary Receives US $11K
A couple of weeks back, a user accidentally sent Chainlink (LINK) coins worth close to US $50,000 to the address of the DeFi game Aavegotchi. Aavegotchi was not able to return the original tokens as its smart contract does not support LINK. Instead, in the spirit of Christmas, the gaming platform set up a special ‘SantaGotchi’ wallet for other crypto patrons to donate. Donations amounting to $11,000 worth of crypto was given to the crypto user who called it ‘A Christmas Magic.’
Demand for ASIC Miners Grow
The recent Bitcoin price surge has brought forth an increased demand for crypto mining. This week, Marathon Group, one of the largest bitcoin mining firms in North America, announced that it had pre-ordered a whooping 70,000 Antminer S-19 ASIC miners from Bitmain. The order reportedly will cost Marathon US $170 million. For Bitmain, it is the single largest order for the S-19 ASIC miners. Bitmain supposedly will ship an initial batch of 7,000 miners in July this year and the rest by the end of 2021.
And Finally, Convert Carbon Waste to Electricity and Power the Mining Rigs
Bitcoin mining is a resource-intensive process that requires enormous amounts of electricity. Oil drilling is not environment-friendly either. The CO2 unleashed during the drilling process, when released into the atmosphere, has dire effects on the climate. What if the carbon waste from the drilling is used to power the mining rigs? Gazpromneft, the Russian Oil Drilling giant, is currently exploring this option. It has opened a location near its oil field in the Khanty-Mansiysk region of Siberia for crypto mining. Here the gas released from the nearby oil field will be transformed into electricity that will be used to power the mining farm in the region.
Web3, 2, 1...Tech 