Trump launches new crypto platform with scant detail

NEW YORK, United States - Former US president Donald Trump along with his sons and entrepreneurs late Monday launched a cryptocurrency platform but provided few details.

Little was revealed about the Trump family crypto project during a two-hour online presentation other than an offer to let people buy digital "tokens" giving them a vote in platform decisions. The event went ahead as planned despite an apparent assassination attempt against Trump on Sunday at his golf club in West Palm Beach, Florida.

World Liberty Financial intends to offer services based on so-called decentralized finance, a mechanism that eliminates the need for an intermediary such as a bank to carry out transactions with a third party, the politics-laced discussion indicated.

The former president's son Donald Trump Jr. touted this as "the start of a financial revolution," during a session streamed on X, formerly Twitter. Zachary Folkman and Chase Herro, the linchpins of the project and established cryptocurrency entrepreneurs, said the platform would primarily use "stablecoins", which are backed by a traditional currency, most often the dollar.

As a result, they are free from the sometimes brutal fluctuations experienced by digital currencies untethered to real-world money. World Liberty Financial wants to attract the masses to cryptocurrencies, creating a platform easily accessible to people, Folkman said.

Project leaders said they would sell tokens that give owners the right to take part in governance of the platform, with 63 percent of them offered to the public, 20 percent going to the founding team and the rest set aside as rewards for users.

No timetable for the project was disclosed.

During his presidency Trump referred to cryptocurrencies as a scam, but has since radically changed his position, presenting himself as a "pro-bitcoin president" if elected in November. In so doing, he is standing in opposition to the Biden administration, which is seen as a proponent of regulating the sector.

Agence France-Presse

Art market pushes on with rocky crypto romance

PARIS - The closest most people get to owning a world-famous artwork is to buy a cheap poster from a gallery, but art dealers are determined to harness technology to draw in new collectors.

Anaida Schneider, a former banker based in Switzerland, is among those promoting new ownership schemes -- for a small fee, investors can buy a digital chunk of a painting and share in the profits when she sells.

"Not everyone has $1 million to invest," she told AFP. "So I came up with the idea to split, to make like a mutual fund but on the blockchain."

Each buyer gets an NFT, the unique digital tokens created and stored on the blockchain, the computer code that underpins cryptocurrencies.

Although cryptoassets have been routed this year with plunging values, collapsing projects and widening scandals, the NFT art sector has weathered the storm better than other parts of the crypto world.

NFT artworks accounted for some $2.8 billion in sales last year and the rate has declined only slightly in the first half of this year, according to analyst firm NonFungible.

Collectors and artists are among the most eager experimenters with the technology, even if it means owning only a slice of a digital copy of a painting.

A fifth of 300 collectors surveyed by the website Art+Tech Report said they had already engaged in so-called fractional ownership.

Schneider's Liechtenstein-based company Artessere offers squares of paintings by Soviet artists including Oleg Tselkov and Shimon Okshteyn for 100 or 200 euros ($100 or $200) a piece.

She is giving herself 10 years to resell them. 

Schneider owns the paintings she sells, thus avoiding legal complications, but attempts to offer novel digital ownership schemes for publicly owned works is proving more tricky.

'Complex and unregulated' 

Thirteen Italian museums recently signed deals with Cinello, a firm that sells limited edition digital reproductions, to offer ownership of digital replicas of masterworks.

The buyer gets a unique, high-resolution digital copy to project onto a screen and a certificate from the museum, which gets half the proceeds.

The company held a splashy London show in February displaying digitised works by Renaissance masters including Raphael, Leonardo and Caravaggio. It has since sold a handful of them.

But the Italian culture ministry was reportedly irked that a replica of Michelangelo's "Doni Tondo" sold for around 240,000 euros but Florence's Uffizi gallery got less than a third of the proceeds.

A spokesman for the ministry was quoted in several outlets last month as saying the issue was "complex and unregulated" and asked museums not to sign any new contracts around NFTs.

Cinello boss Francesco Losi was not pleased with the characterization, telling AFP: "We don't sell NFTs."

Buyers can ask for an NFT to go with their image, but the firm said they had their own patented system to secure ownership, which they call DAW.

Mixed blessing 

Cinello said it had digitized more than 200 works and its sales had generated 296,000 euros in extra revenue for Italian museums.

But the firm's difficulties in Italy underline the mixed blessing of NFTs -- they bring publicity but also suspicion.

The NFT sector -- which covers anything from avatars in computer games to million-dollar cartoon apes -- is replete with scams, counterfeit works, thefts and wash trading.

Losi said he was well aware that NFTs could be used "in the wrong way" and was unsure what future they had in the art world. 

Anaida Schneider stressed that her project was protected by law in Liechtenstein, the tiny principality being among the first jurisdictions to pass a law regulating blockchain companies in 2019.

Beyond that, she said her insurance would cover damage to the artworks and she had also factored in the possibility that the paintings would fall in value, though she declined to give exact details.

"I hope it never happens," she said. "For me, it's very important to put this idea in the market."

Agence France-Presse

Crypto clients beg for their cash back after lender's crash

WASHINGTON, United States - An Irishman at risk of losing his farm. An American having suicidal thoughts. An 84-year-old widow's lost life savings: People caught in the meltdown of crypto lender Celsius are pleading for their money back. 

Hundreds of letters have poured in to the judge overseeing the firm's multi-billion-dollar bankruptcy and they are heavy with anger, shame, desperation and, frequently, regret.

"I knew there were risks," said a client whose letter was unsigned. "It seemed a worthwhile risk."

Celsius and its CEO Alex Mashinsky had billed the platform as a safe place for people to deposit their crypto currencies in exchange for high interest, while the firm lent out and invested those deposits.

But as the value of highly volatile crypto currencies plummeted -- bitcoin alone has shed over 60 percent since November -- the firm faced mounting troubles until it froze withdrawals in mid-June.

The company owed $4.7 billion to its users, according to a court filing earlier this month, and the endgame is unclear.

The letters -- posted to a public online court docket -- come from around the world and recount tragic results of users' money being frozen.

"From that hard-working single mom in Texas struggling with past-due bills, to the teacher in India with all his hard-earned money deposited in Celsius -- I believe I can speak for most of us when I say I feel betrayed, ashamed, depressed, angry," wrote one client who signed their letter E.L.

While the letters vary in their level of sophistication about the crypto world -- from self-confessed novices to all-in evangelists -- and the monetary impacts range from a few hundred dollars to seven-figure sums, nearly all agree on one thing.

"I have been a loyal Celsius customer since 2019 and feel completely lied to by Alex Mashinsky," wrote a client who AFP is not identifying to protect his privacy. "Alex would talk about how Celsius is safer than banks."

Many of the letters point to the CEO's AMA (Ask Mashinsky Anything) online chats as key to their confidence in him and the platform, which presented itself as stable until days before it froze users' funds.

"Celsius has one of the best risk management teams in the world. Our security team and infrastructure is second to none," the firm wrote on June 7. 

"We have made it through crypto downturns before (this is our fourth!). Celsius is prepared," the firm wrote.

The message also said the company had the reserves to pay its obligations, and withdrawals were being processed as normal. 

One client, who reported having $32,000 in crypto locked up at Celsius, noted the impact.

"Right up until the end, the retail investor received assurance," the client wrote to the judge.

But that changed quickly, and on June 12 Celsius announced the freeze: "We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations."

Some clients got the news in a message from the company.

"By the time I finished the e-mail, I had collapsed onto the floor with my head in my hands and I fought back tears," wrote one man who had about $50,000 in assets with Celsius.

The clients who said they were hardest hit, including a man who said he placed $525,000 he got from a government loan on Celsius, disclosed they had considered killing themselves.

Others reported heavy stress, lack of sleep and feelings of deep shame for putting their retirement savings or their children's college money into a platform that was far riskier than they knew.

"As a private unregulated company, Celsius does not come under any requirement for disclosure," is how the Washington Post summarized the situation.

Celsius did not reply to a request for comment on the clients' letters.

For people like one 84-year-old woman, who only had her roughly $30,000 in crypto savings on Celsius for a month, their hope lies in the bankruptcy proceedings.

"It's just not unusual for people to come out of something like this with zero," said Don Coker, an expert witness on banking and finance.

"Obviously I feel sorry for anyone who loses an investment like this, but it is just something where they need to be aware of the risks," he said.

Agence France-Presse

Bitcoin falls below $30,000, lowest since July 2021

TOKYO - Bitcoin slumped below $30,000 for the first time since July 2021 on Tuesday as cryptocurrencies track sinking markets with investors spooked by aggressive US monetary tightening and surging inflation.

The world's largest cryptocurrency by market value fell as low as $29,764 in Tuesday trade, before recovering above $30,000, extending a recent collapse in price as investors desert assets viewed as risky.

Bitcoin's value has more than halved since a November surge that saw the token hit a record of nearly $69,000.

While crypto enthusiasts view bitcoin as a hedge against inflation, an influx of more traditional investors tend to view it as a riskier asset.

They have been offloading bitcoin and other digital tokens along with other volatile assets like tech stocks as the US Federal Reserve moves to hike interest rates to tackle decades-high inflation.

"Bitcoin is breaking below some key technical levels as the never-ending selloff on Wall Street continues," said Edward Moya, senior market analyst for the Americas at Oanda.

"The institutional investor is paying close attention to bitcoin as many who got in last year are now losing money on their investment," he added.While the token's "long-term fundamentals have not changed in months", concerns about growth and a possible recession are creating "a very difficult environment for cryptos", Moya said.

"No one is looking to buy the crypto dip just yet and that leaves bitcoin vulnerable here."

The slump in crypto follows dives on US equities and other markets, with the tech-rich Nasdaq closing down 4.3 percent on Monday, the S&P 500 declining 3.2 percent and the Dow ending off 2.0 percent.

Agence France-Presse

Crypto-curious corporations struggle to find right recipe

Four years ago, fried-chicken chain KFC tweeted from its Canadian account that it would accept bitcoin as payment for its "buckets".

The company told AFP its tongue-in-cheek campaign -- "digital tender for chicken tenders" -- sold out in an hour and the chain has not taken crypto payments since, but online articles regularly recycle the claim that KFC "accepts" bitcoin.

Many other companies have tried to harness crypto payments before abandoning their efforts, Tesla and Dell among them.

Bitcoin will almost certainly never be practical for everyday purchases because its value fluctuates wildly, and each transaction is expensive, energy-hungry and takes at least half an hour.

"No one's going to walk into a KFC to buy a chicken burger and then have to wait 30 minutes for a payment," South African developer and crypto expert Andre Cronje told AFP.

But there are now thousands of smaller cryptocurrencies with faster processing times and more stable prices.

Analysts say the total market value of cryptocurrencies has now topped $2 trillion, roughly half of which is bitcoin.

Companies are gagging to get in on the act and developers like Cronje are building the infrastructure to enable the virtual coins to be used to pay for everyday items.

But public buy-in is crucial, and corporations seem to be struggling to find the perfect formula.

'Watch the jockeying'

Microsoft typifies the emerging pattern of big companies dabbling in crypto.

The first rule: keep it at arm's length from the core business.

The tech giant has stressed that shareholders will not be exposed to the ups and downs of crypto prices.

PayPal and Apple, two other crypto-curious corporations, have made similar pledges to their shareholders.

To keep crypto off its balance sheet, Microsoft partnered with a firm called Bakkt that allows clients to convert crypto assets into products like gift cards for Xbox, or charge their Starbucks payment card.

Bakkt, which has received investments from Microsoft's venture capital fund M12, went public last year and a flurry of big partnership announcements with the likes of Mastercard sent its share price soaring.

But then came the nose-dive as it reported widening losses and its business came under scrutiny.

The firm had said it expected to have nine million customers by the end of 2021, yet its executives gave a figure of 1.7 million transacting accounts late last year.

PayPal, meanwhile, garnered a lot of publicity for a "checkout with crypto" feature launched in the US and UK last year.

PayPal's system converts users' cryptoassets into money before passing on payment to the vendors.

But it is unclear how popular any of these services are -- none of these companies responded to AFP requests for details of the uptake.

Market watchers say it is too early to tell how these forays into crypto will play out.

"My view is to not get too excited yet but just watch the jockeying," said analyst John Freeman of CFRA research, accepting the hot air made it difficult to predict what would happen next.

'When, not if'

The barriers to widespread adoption of direct crypto payments for everyday items are considerable -- perhaps even unsurmountable.

Developer Cronje said he functioned largely without the need for regular cash or banks by using services like BitPay and BitRefill, which allow crypto to be spent anywhere from Amazon to Uber.

But he accepted his less tech-savvy friends "would be broke very quickly" if they tried to rely on the blockchain, the technology that underpins cryptocurrencies.

Instead, he envisages a future where people will continue to use credit cards and banks but back-end tasks will be largely automated on the blockchain.

"This is a technology that conservatively is going to save them between 20 percent and 25 percent of their overheads and their costs," he said. 

"So it's not a matter of if, it's a matter of when."

Meanwhile, non-financial businesses will continue to throw themselves into the crypto space, often to emerge slightly wiser but no richer.

The Pavilions hotel chain, for example, partnered with a payments firm last year to allow customers to use crypto but found it made little difference to its business.

"It turns out no one likes to spend their bitcoins, even on holidays!" Pavilions spokesman Tim Sargeant told AFP in an email.

"It has shown us that bitcoin is more an investment tool than something people wish to part with for payment."

Agence France-Presse

Rouble-crypto trading soars as sanctions hit Russian currency

Trading volumes between the Russian rouble and the Tether cryptocurrency spiked sharply on Monday as the local currency tumbled to a record low on Western sanctions, data shared with Reuters showed.

Rouble-denominated trades with the Tether - a so-called stablecoin - hit $29.4 million, their highest this year and around three times more than a week earlier, according to Arcane Research, an Oslo-based digital asset researcher.

Stablecoins are a type of cryptocurrency designed to avoid the wild fluctuations that plague bitcoin. In theory, their steady value allows users to protect funds or savings in times of economic stress.

The figures suggest surging interest in crypto among Russians after Western sanctions imposed on Moscow for its invasion of Ukraine took a toll on the local currency.

The Russian rouble tumbled to a record low in volatile trade on Monday, losing a third of its value so far this year, after the West ramped up sanctions including blocking banks from the SWIFT global payments system. 

Trading between the rouble and bitcoin (BTC), whose 13-year history has been peppered with wild price swings - was more muted, the data showed.

Rouble-bitcoin trading on Thursday topped $16 million, its highest this year, as Russia launched its invasion. On Monday it totalled about $8.5 million.

"People with the rouble are trying to get out of it due to the drastic devaluation after all the sanctions," said Arcane's Bendik Norheim Schei.

"Under the current market conditions, I'm not surprised to see investors, at least those in Russia, seeking stablecoins and not taking on the market risk of BTC. This is about saving their funds, not investing."

-reuters-

Bitcoin tops $60,000 on US fund approval hopes

Bitcoin breached the $60,000 mark for the first time since April on growing optimism that American regulators will greenlight the first US futures exchange-traded fund for the cryptocurrency.

The digital currency was up more than 40 percent from a month ago, reaching $62,253 at 2050 GMT, according to Bloomberg News data, which reported that the US Securities and Exchange Commission could allow the ETF to trade next week.

The SEC has rejected attempts to create a Bitcoin ETF since 2013.

"An SEC Bitcoin ETF approval is a watershed moment for the crypto industry as this could be the key driver for getting the next wave of crypto investors," said Edward Moya, senior market analyst at OANDA.

An ETF is a financial instrument that can include different assets and be traded on an exchange like other securities. A futures ETF means the product will be bought or sold at set price at a later date.

The SEC fuelled speculation of the imminent approval after writing the following advice on one of its accounts on Twitter: "Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits."

The ETF would add to an eventful year for the world's leading cryptocurrency, which hit a record high at $64,870 in April and became a legal tender in El Salvador, the first country to adopt it officially.

China, meanwhile, has cracked down on trading and mining cryptocurrencies, which are created through solving complex equations— an endeavor that consumes enormous amounts of energy.

SEC U-turn 

Bloomberg, which cited unidentified people familiar with the matter, reported that unlike past Bitcoin ETF applications that the SEC rejected, the proposals made by financial firms ProShares and Invesco are based on futures contracts.

The proposals were filed under mutual fund rules that SEC Chairman Gary Gensler has said provide "significant investor protections," the news agency reported.

"This is a key development for the crypto space as it would allow many investors who were on the fence to enter the market in more traditional ways," said Walid Koudmani, analyst at XTB online trading.

An ETF would reassure investors "about previously associated risks such as lack of regulations and the possibility of having their wallet hacked," Koudmani said.

There are ETFs that include Bitcoin in other countries but getting one in the United States would take the cryptocurrency to another level.

"In America's case, it's the largest, most important market. To date, they (traditional investors) haven't had a simple vehicle in which to invest in Bitcoin," Charlie Erith, CEO of ByteTree Asset Management, which specializes in cryptocurrencies, told AFP.

Erith cautioned that "the impact on the market might be overblown. You might see a short selloff but it won't be meaningful."

But, he added, "long term, it's an important development. It signals that authorities are getting more comfortable with people owning cryptoassets."

Agence France-Presse

New money: Central banks lay out operating manual for digital cash

LONDON - A group of central banks sketched out a potential operating manual for digital cash on Thursday as they aim to strike a balance between keeping up with cryptocurrencies and concerns that the new technology could upend commercial lenders.

Worried that the explosion of bitcoin and its ilk could weaken their control of money, policymakers from Beijing to Washington are exploring central bank digital currencies, known as CBDCs.

And while a widely-used digital dollar or euro may still be years away, work by central banks is gathering pace as consumers increasingly ditch coins and notes in favor of digital payments on debit or credit cards and mobile phones.

The seven central banks - including those in the United States, Britain and the ECB in the euro zone, but not China - said publicly-used "retail" CBDC must harness both public and private players to mesh with existing payment systems.

The tech should be useable with existing domestic payments systems, with strategies for adoption tailored to on-the-ground economic conditions, said the central banks, working alongside the Bank for International Settlements.

The existing financial system must be given time to adjust to the introduction of CBDC, they said, flagging risks of what could amount to slow-motion bank runs if commercial bank customers suddenly shifted savings to the new tech.

"Regardless of the design, developing and running a CBDC system would be a major undertaking for a central bank," they said, stressing the involvement of private operators must be closely monitored to ensure public trust in the tech.

STABILITY RISKS

Unlike cryptocurrencies like bitcoin that are usually run by private actors, CBDCs would be equivalent to cash, issued and backed by central banks. They differ from the electronic money used in billions of transactions daily that is mostly funnelled via commercial banks.

The People's Bank of China is the most advanced among major economies on CBDCs, and is planning its biggest digital yuan trial at the 2022 Beijing Winter Olympics.

Meanwhile, the US Federal Reserve will "soon" release research examining the costs and benefits of a CBDC, Fed Chair Jerome Powell said last week.

Commercial banks, fretting that a retail-focused CBDC could cannibalize their deposit bases, are trying to exert influence on their design.

The central banks sought to downplay the threat of retail-focused CBDC to lenders' business models.

"Our analysis suggests the impacts on bank disintermediation and lending could be manageable for the banking sector," they said, with any impact likely limited in "plausible" levels of adoption.

-reuters-

Bitcoin bruised after chaotic debut as legal tender in El Salvador

TOKYO - Bitcoin licked its wounds on Wednesday, a day after its heaviest losses in 2-1/2 months as El Salvador's historic adoption of the crypto asset as legal tender caused chaos online and on the street.

The coin last traded at $46,560, having endured wild trade the day before in which it hit a near four-month high of $52,956 before plunging 11.1 percent, its largest fall since June 2.

Analysts said the sharp retreat was partly due to investors who had bought the rumour of El Salvador's move now selling the fact.

"I think there was some anticipation building ahead of that event (El Salvador), similar to what we saw ahead of Coinbase listing on Nasdaq," said Henrik Andersson, chief investment officer at Apollo Capital, a crypto asset fund in Melbourne, Australia.

At one point on Tuesday, the digital currency fell as much as 18.6 percent, wiping out more than $180 billion from the market.

It was a historical day for bitcoin as El Salvador's experiment of making it legal tender got off to a bumpy start.

Technological glitches hampered its use while street protests by mistrustful citizens broke out in the Central American country.

As bitcoin wobbled, Salvadoran President Nayib Bukele said his government purchased an additional 150 bitcoins on Tuesday, worth around $7 million.

"That has underscored the difficulty in trying to protect the value of bitcoin as its own currency," said Nana Otsuki, chief economist at Monex Securities. "The buying didn't seem to be effective in halting its fall."

Amid the trading frenzy, major U.S. cryptocurrency exchanges Coinbase Global Inc, Kraken and Gemini struggled with delays in some transactions. All of them said their systems have since been restored.

Separately, the U.S. securities regulator has threatened to sue Coinbase Global if the crypto exchange proceeds with plans to launch a programme allowing users to earn interest by lending crypto assets. 

(Reporting by Hideyuki Sano, Anushka Trivedi; Editing by Sam Holmes)

-reuters-

Bitcoin jumps above $50,000 for first time since May

HONG KONG - Bitcoin broke back above $50,000 on Monday for the first time in three months as investors piled back into the cryptocurrency on bargain-buying.

The unit climbed around two percent to a peak of $50,249.15, its highest level since mid-May.

Agence France-Presse

Meme-based cryptocurrency Dogecoin soars 40 percent to all-time high

LONDON - Meme-based virtual currency Dogecoin soared on Wednesday to an all-time high, extending its 2021 rally to become the fourth-biggest digital coin.

Dogecoin, launched as a satirical critique of 2013's cryptocurrency frenzy, has climbed 41 percent in the last 24 hours to a record $0.68, according to CoinMarketCap.

This year alone it has soared over 14,000 percent, from $0.00468 on Dec. 31, taking it past more widely used cryptocurrencies such as the Tether stablecoin and XRP to become the fourth-largest by market capitalization.

Dogecoin - whose logo features a Shiba Inu dog at the center of the meme - remains little used in commerce or payments. Like other digital coins, it is highly volatile and its price is heavily influenced by social media users.

On Tuesday, the New York crypto exchange Gemini said it would start letting users trade and custody the token.

Some cryptocurrency market players said its volatility was its main draw, with a mixture of retail investors and market makers fuelling its trading volumes.

"The ugly truth is that a lot of crypto valuations are divorced from reality anyway," said Joseph Edwards, head of research at crypto brokerage Enigma Securities.

"Right now, (Dogecoin) is being seen as it's always been seen - an asset with surprising staying power that provides opportunities to take advantage of volatility every year or so."

Dogecoins are now cumulatively worth $88 billion, compared to bitcoin's $1 trillion and ethereum's $391 billion. 

-reuters-

Bitcoin hits record high of $62,575

LONDON - Bitcoin hit a record of $62,575 on Tuesday, extending its 2021 rally to new heights.

The world's biggest cryptocurrency has more than doubled in price this year amid growing mainstream acceptance as an investment and a means of payment, and as investors seek high-yielding assets amid low interest rates.

Major firms including BNY Mellon, Mastercard Inc., and Tesla Inc are among those to have embraced or invested in cryptocurrencies. 

-reuters-

New York Times digital 'NFT' article sells for $563,000

NEW YORK, United States - A New York Times columnist on Thursday sold one of his articles in digital form for $563,000, the latest example of the craze surrounding "non fungible tokens," which collectors are snapping up.

Keven Roose's article entitled "Buy This Column on the Blockchain" was itself aimed at trying to test the market as to what sort of items would sell in the form of an "NFT."

A non-fungible token (NFT) is a digital object, such as a drawing, piece of music, photo, or video, with a certificate of authenticity created by blockchain technology.

This authentication by a network of computers is considered inviolable. 

The virtual object, which is actually a computer file, can be exchanged or sold with its certificate.

NFTs have become popular in the past 6 months, as wealthy collectors turn to the digital market during the pandemic.

On Monday, the first message ever posted on Twitter sold for $2.9 million when its sender, Twitter co-founder and chief Jack Dorsey, accepted the winning bid at auction.

Earlier this month, a digital collage by American artist Beeple sold for $69.3 million at Christie's, setting a new record for an NFT.

"Why can't a journalist join the NFT party, too?" asked Roose in his column.

At the end of the 24-hour auction, a collector calling himself Farzin won the article with 350 Ethereum, a major cryptocurrency, worth $563,000. 

"Fully just staring at my monitor laughing uncontrollably," Roose, a tech columnist, wrote on Twitter after the sale.

Roose had indicated that the proceeds, after the 15 percent fee deducted by the Foundation platform on which the auction was organized, would go to charities supported by The New York Times. 

Agence France-Presse

Bitcoin collector MicroStrategy fills its wallet with another $1 billion

Major bitcoin corporate backer MicroStrategy Inc said on Wednesday it bought another 19,452 bitcoin, worth around $1.03 billion, swelling its holdings of the cryptocurrency and sending the company's shares 8 percent higher in premarket trading.

The company, whose Chief Executive Officer Michael Saylor is one of the most vocal proponents of bitcoin, bought the cryptocurrency in cash at an average price of about $52,765 each.

MicroStrategy, the world's largest publicly traded business intelligence company, spent last year steadily amassing bitcoin after making its first investment in August.

The company earlier this month engaged in an almost $1 billion convertible note offering with the proceeds used for buying bitcoin.

Bitcoin's price has recently scaled record highs as major firms, such as BNY Mellon, asset manager BlackRock Inc and credit card giant Mastercard Inc, backed certain cryptocurrencies, with Tesla Inc investing $1.5 billion in bitcoin.

Square Inc Chief Executive Jack Dorsey promised on Tuesday to "double down" on the payment firm's commitment to bitcoin, the world's biggest cryptocurrency.

MicroStrategy owns close to 90,531 bitcoin, which were acquired at an aggregate purchase price of about $2.17 billion and an average purchase price of around $23,985 per bitcoin, it said on Wednesday.

The company's bitcoin holdings are valued at about $4.48 billion, according to a Reuters calculation.

"We will continue to pursue our strategy of acquiring bitcoin with excess cash," MicroStrategy's Saylor said.

-reuters-

Bitcoin smashes through $50,000 as it wins more mainstream acceptance

LONDON - Bitcoin soared above $50,000 on Tuesday for the first time, adding steam to a rally fueled by signs that the world's biggest cryptocurrency is gaining acceptance among mainstream investors and companies.

Bitcoin hit a record $50,603 and was last up 0.83% at $48,351. It has risen around 67% so far this year, with most of the gains coming after electric carmaker Tesla said it had bought $1.5 billion in bitcoin.

The move by Tesla, which also said it would accept bitcoin as payment, was the latest in a string of large investments that have vaulted bitcoin from the fringes of finance to company balance sheets and Wall Street, with US firms and traditional money managers starting to buy the coin.

"The rally in bitcoin in part reflects the recent buoyancy of market confidence but also headlines suggesting an increase in corporate acceptability," said Jane Foley, head of FX Strategy at Rabobank.

Such mainstream moves, some investors said, could help bitcoin become a widespread means of payment - which it has so far failed to achieve at any large scale - and in turn bolster prices further.

"The more people that adopt it and use it as money, then the greater the chances of it perhaps being taken on board as a mainstream currency," said Russ Mould, investment director of AJ Bell. "That would feed further speculative interest."

The rush in 2021 by retail and institutional investors comes on top of a 300% rise last year as investors searched for high-yielding assets and alternatives to the dollar amid rock-bottom or even negative interest rates across the globe.

The meteoric rise of bitcoin, which traded at a few hundred dollars only five years earlier, has also led major investment banks to warn of a speculative bubble.

Bitcoin's rise "blows the doors off prior bubbles," BofA said last month.

Even as bitcoin enters the mainstream, cryptocurrencies remain subject to patchy oversight around the world, with the lack of regulatory clarity and associations with crime keeping many larger investors leery of exposure.

US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde both called last month for tighter oversight of bitcoin due to concerns over its use for criminal activities such as money laundering.

Some believe the extreme volatility is a cause for concern.

"We feel that, due to its volatility, bitcoin lacks many of the established qualities that make up 'money', such as being a stable store of value and unit of account," said George Lagarias, chief economist at Mazars.

DIGITAL GOLD?

Also boosting bitcoin's rise have been analyst suggestions that its limited supply of 21 million could boost further gains for the virtual asset.

A narrative of bitcoin becoming "digital gold" has gained traction as investors predict looming inflation with central banks and governments opening the stimulus taps to counter COVID-19.

St. Louis US Federal Reserve President James Bullard told CNBC in an interview on Tuesday that bitcoin's claim to be rival to gold would not threaten the dollar's dominance.

"Investors want a safe haven, they want a stable store value and then they want to conduct their investments in that currency," he said. "It's very hard to get a private currency - it's really more like gold - to play that role."

JPMorgan said in January that bitcoin emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.

"The fundamental view that bitcoin as a viable store of value amongst investors and as a treasury asset for corporations is continuing to gain traction," said James Butterfill, investment strategist at digital asset manager CoinShares.

US business intelligence software firm MicroStrategy Inc , whose CEO has become one of bitcoin's most visible proponents, on Tuesday said it would issue $600 million of debt through convertible notes to buy additional bitcoin.

Meanwhile, smaller cryptocurrency ethereum fell 2.42%, after earlier rising to $1,826, which was just shy of its record high price of $1,875.

With value of cryptocurrencies close to $1.5 trillion, some investors caution about the value in owning bitcoin or other cryptocurrencies.

"As an intangible asset with no yield or practical use, save for a few organizations who accept it as payment, it is really just demand (against a predictable supply) which determines its price," said Mazars' Lagarias.

"But whereas the price of bitcoin has risen to the skies, what value one gets from holding it in a long-term portfolio still remains subject of much debate."

-reuters-

After dizzying gyrations, what's bitcoin really worth?

LONDON - After the latest wild ride took the poster child of cryptocurrencies above $40,000 before a stomach-churning plunge, the million dollar question won't go away: how much is bitcoin actually worth?

The virtual currency barreled to new highs to rise more than 400 percent over the past year, before promptly sliding some 20 percent and then settling around $36,000.

When it started life in 2009 as open-source software, bitcoin was essentially worth zero -- though within a year it had reached the heady heights of eight cents.

At today's market rates, bloated by a surge in institutional demand, the digital unit's market capitalization is worth some $670 billion with myriad other crypto coins such as ethereum lifting the sector nominally close to the trillion mark.

Although that's small potatoes compared to the $68 trillion or so swilling around world stock markets, it is nonetheless the sort of financial territory staked out by Wall Street tech royalty such as Google, Apple or Tesla. 

One tech site, AssetDash.com, notes that bitcoin is currently worth around as much as Facebook and a little more than Chinese e-retail giant Alibaba.

CURSE OF THE FORGOTTEN PASSWORD

Although deep-pocketed investors have recently become enthusiasts, crypto was in its early days the preserve of geeky amateur investors.

It is the latter who have mainly suffered as an estimated four million of the roughly 19 million bitcoin units currently in circulation have been lost.

"Lost" does not mean the coins have fallen down the back of the sofa or through a hole in a trouser pocket: they have been electronically zapped from the record, often because their owner has forgotten a password to coins hoarded on a USB stick.

One US developer mislaid his password after storing 7,002 bitcoins on one such flash drive, forcing him to wave goodbye, on paper (or rather, the trading screen), to around $280 million.

This week, Welshman James Howells desperately offered his local authority a quarter of his fortune to dig up a landfill site where he believes a hard drive he accidentally tossed away -- and which has since soared in value to around $270 million -- is buried. The council refused, citing the cost and logistical restrictions. 

According to analysts at JP Morgan, bitcoin may be highly volatile but could go as high as $146,000 per unit, putting it in competition with gold as an asset class in terms of private sector investment.

That volatility, as well as the unregulated and decentralized nature of the bitcoin beast, are key reasons why many seasoned financial observers are scared off -- as well as the risk of "losing" their stash.

"Most of the lost bitcoins were acquired in the early days," said Philip Gradwell, economist with Chainalysis.

Gradwell said that around one in five bitcoins in circulation today have not budged from their location in five years -- since days when the unit was worth not much more than $100.

"One or two million of those belong to Satoshi himself," added Gradwell, referring to the creator of the coin, whose identity remains unknown.

He added that the bulk of investors are not day-to-day traders, but people making a long-term punt -- and he estimates that the spectacular price boom of recent weeks has involved only around five millions units.

Patrick Heusser, head of trading at Swiss trader Crypto Broker, said that following the trading volumes of a variety of cryptocurrencies, rather than just bitcoin, would give a better idea of how the market is faring.

"Ethereum has a lot of activity on the chain, but on the litecoin side there is almost nothing going on," said Heusser, with the former valued at some $138 billion currently, and the latter at $10 billion.

Heusser suggested the rises have been largely a bitcoin slipstream effect, and he cautioned against drawing parallels with gold.

"To be honest I don't believe that it is a very powerful or insightful metric inside what's going on in the crypto market," Heusser concluded.

After years of experience on traditional currency markets, he judged that it was early days for the crypto equivalent.

"We're still a small fish," he said.

Agence France-Presse

Bitcoin climbs towards all-time high after topping $19,000

LONDON - Bitcoin moved to within a whisker of its all-time high on Tuesday, after hitting $19,000 for the first time in nearly three years.

The world's most popular cryptocurrency was last up 4.8 percent at $19,225, just shy of its all-time record of $19,666 hit in December 2017. Bitcoin has gained around 25 percent in the last two weeks alone, and is up around 160 percent this year.

Fuelling its rally has been the demand for riskier assets amid unprecedented stimulus programs to counter the COVID-19 hit; hunger for assets perceived as resistant to inflation; and expectations cryptocurrencies will win wider acceptance as a method of payments.

Bitcoin's 12-year history has been peppered with vertiginous gains and equally sharp drops. Its markets and price discovery is highly opaque compared with traditional assets such as stocks or bonds.

"My base-case scenario is that we will break the 2017 high and hold above it," said Fawad Razaqzada, an analyst at FX brokerage Think Markets. "But if you get an immediate rejection above the all-time, that would raise the possibility of a correction."

Smaller digital currencies such as ethereum and XRP - which often move in tandem with bitcoin - took a breather after gaining sharply in recent days.

Crypto markets have matured since bitcoin's December 2017 peak, attracting a greater number of large investors such as family offices and hedge funds.

Its 2020 gains have prompted some investors to claim the cryptocurrency could more than quintuple in price to as high as $100,000 in a year, drawing eye rolls from sceptics who say it is a purely speculative asset.

Analysts say bitcoin's limited supply of 21 million makes it a good hedge against inflation. Some investors think the value of traditional currencies will fall as governments and central banks unleash massive stimulus packages to support economies hit by COVID-19.

Yet bitcoin's gains have continued even as gold - traditionally a go-to hedge against inflation - has slipped, with a resurgent pandemic making global growth and inflation recovery a more distant prospect.

Gold has shed 3.6 percent this month, versus bitcoin's 40 percent gain.

Bullish investors cited expectations that bitcoin would achieve mass use as a means of payment - something it has so far failed to do - as a reason for the divergence.

Mainstream companies such as PayPal have embraced cryptocurrencies, sparking hopes bitcoin would become widely used and thus more valuable.

"With BTC one is also long a global currency which is now not just a easily accessible store of value but also a convenient payment mechanism," said Michael Hall at Nickel Digital Asset Management, a crypto fund in London.

(Reporting by Saikat Chatterjee; Additional reporting by Tom Wilson; Editing by Thyagaraju Adinarayan and Alex Richardson)

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PayPal to open up network to cryptocurrencies

LONDON - PayPal Holdings Inc said on Wednesday it will allow customers to hold bitcoin and other virtual coins in its online wallet and shop using cryptocurrencies at the 26 million merchants on its network.

The new service makes PayPal one of the largest U.S. companies to provide consumers access to cryptocurrencies, which could help bitcoin and rival cryptocurrencies gain wider adoption as viable payment methods.

The San Jose, California-based company hopes the service will encourage global use of virtual coins and prepare its network for new digital currencies that central banks and companies may develop, President and Chief Executive Dan Schulman said in an interview.

"We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role," he said.

U.S. account holders will be able to buy, sell and hold cryptocurrencies in their PayPal wallets over the coming weeks, the company said. PayPal plans to expand the service to its peer-to-peer payment app Venmo and some other countries in the first half of 2021.

The ability to make payments with cryptocurrencies will be available from early next year, the company said.

Other mainstream fintech companies, such as mobile payments provider Square Inc and stock trading app firm Robinhood Markets Inc, allow users to buy and sell cryptocurrencies, but PayPal's launch is noteworthy given its size.

The company has 346 million active accounts around the world and processed $222 billion in payments in the second quarter.

PayPal's shares were up 4% at 1418 GMT, set for their best day in a month.

Bitcoin hit its highest since July 2019 on the news. It was last up 4.8% at $12,494, taking gains for the original and biggest cryptocurrency above 75% for the year.

Cryptocurrency market players said the size of PayPal meant the move would be a plus for bitcoin prices.

"The price impact will be positive overall," Joseph Edwards of Enigma Securities, a cryptocurrency brokerage in London, said.

"There's no comparison with regards to the potential exposure between the upside of PayPal offering this, and the upside of any similar previous offering."

VOLATILITY

Bitcoin and other virtual coins have struggled to become established as widely used forms of payment despite being around for more than a decade. Cryptocurrencies' volatility is attractive for speculators, but poses risks for merchants and shoppers. Transactions are also slower and more costly than other mainstream payment systems.

PayPal believes its new system will address these issues as payments will be settled using traditional currencies, such as the U.S. dollar. This means PayPal will be managing the risk of price fluctuations and merchants will receive payments in virtual coins.

"We are going about it in a fundamentally different way to make sure we provide the maximum amount of safety to our merchants," Schulman said.

PayPal's service comes as some central banks have announced plans to develop digital versions of their currencies, following a Facebook-led cryptocurrency project Libra in 2019, which was met by strong regulatory pushback..

PayPal was among the founding members of this project but dropped out after a few months.

PayPal has secured the first conditional cryptocurrency licence from the New York State Department of Financial Services. The company will initially allow purchases of bitcoin and other cryptocurrencies called ethereum, bitcoin cash and litecoin, it said.

PayPal is teaming up with cryptocurrency firm Paxos Trust Company to offer the service. 

-reuters-

Singapore proposes to regulate bitcoin futures

HONG KONG - Singapore's central bank plans to bring bitcoin and other similar cryptocurrency futures traded on approved exchanges under its regulation in response to interest from international institutional investors, it said on Wednesday.

Market watchdogs worldwide have been debating whether and how they should regulate the cryptocurrency industry. Many have focused their attention initially on investor protection issues given concerns about market manipulation and cryptocurrencies' volatility.

In a consultation document, the Monetary Authority of Singapore (MAS) said that it had seen interest from institutional investors in trading "payment tokens" like bitcoin and ether, who "have a need for a regulated product to gain and hedge their exposure to the payment tokens."

The consultation will close on Dec. 20.

Derivatives products are a particular concern for regulators looking to protect investors, and MAS said that it did not consider bitcoin and other similar derivatives to be suitable for trading by retail investors.

"The underlying payment tokens tend to exhibit high volatility and are intrinsically difficult to value. ... Losses also amplified due to the leveraged nature of derivatives, and investors may even lose more than the whole amount they had put in," MAS said.

Some U.S.-based exchanges including the Chicago Mercantile Exchange and ICE Futures US, already allow trading of bitcoin futures.

However, Hong Kong's Securities and Futures Commission said earlier this month that exchanges allowing trading of bitcoin futures "may well be conducting an illegal activity."

MAS only proposes to regulate futures traded on exchanges it already regulates. It warned investors it did not regulate token derivatives not traded on approved exchanges.

"The inclusion of these products in the approved exchanges will certainly provide new opportunities for all regulated exchanges. This may create liquidity for these products," David Gerald, president of the Securities Investors Association (Singapore), said in a statement, but warned retail investors of the high risk involved in investing in these products. (Reporting by Alun John and Anshuman Daga; Editing by Susan Fenton)

source: news.abs-cbn.com

Bitcoin holds ground after China voices support for blockchain

LONDON - Bitcoin held ground on Monday near a one-month high scaled over the weekend after China's President Xi Jinping said the world's second biggest economy should accelerate the development of blockchain technology.

Blockchain, a digital ledger that forms the backbone of many cryptocurrencies such as bitcoin, should be the core for innovation in China, Xi said on Thursday.

Bitcoin surged 24% between Friday and Saturday after Xi's comments, touching $10,350 in its biggest two-day jump since the height of its retail-driven bubble in December 2017. Other major cryptocurrencies including ethereum and Ripple's XRP also soared.

In early London trading, bitcoin - the largest cryptocurrency by market capitalization - was down 1.6% at $9,403.

Cryptocurrency exchanges are banned in China, though trading is popular on over-the-counter venues, and Chinese buyers account for major volumes on platforms elsewhere, market players say.

"The positive comments from the Chinese leader will continue to support the broader crypto prices to maintain at current levels, as China remains a major player when it comes to global crypto trading," said Andy Cheung, head of operations of OKEx, a Malta-based exchange popular among Chinese, in an email.

China-based Google searches for bitcoin and blockchain also spiked after Xi's comments, suggesting that the remarks had piqued intense interest in cryptocurrencies.

"There have definitely been more conversations since the weekend," said Anthony Wong of Hong Kong-based crypto investment firm Orichal Partners.

Bitcoin has slumped in recent months as politicians and regulators across the world have criticized Facebook's planned Libra cryptocurrency. It had lost a third since it touched its highest this year in June on hopes that Libra would hasten the mainstream acceptance of virtual coins. (Reporting by Tom Wilson; Editing by Alison Williams)

source: news.abs-cbn.com