cryptocurrency

Global Cryptocurrency Adoption Doubled Since January Reaching 221 Million Users: Report

31/07/2021 by Idelto Editor

A new report issued by Crypto.com, a cryptocurrency exchange and fintech services firm, discovered that the number of people using cryptocurrencies has more than doubled since January, reaching 221 million last June. The report states that the rise of the defi movement, institutions like Tesla, Visa, Mastercard, and Microstrategy adopting cryptocurrency, and El Salvador establishing bitcoin as legal tender, were important events that helped to popularize crypto even more.

Cryptocurrency Userbase Jumps to 221 Million Worldwide, According to Crypto.com Report

Crypto.com’s “Measuring Global Crypto Users” report found that the number of cryptocurrency users more than doubled during the first half of the year. Cryptocurrency adoption went from 106 million in January to 221 million in June, principally powered by the bull market that took bitcoin (BTC) to all-time highs during Q1. The report included information from the leading crypto exchanges in the market, including Binance, Bitfinex, Gemini, Huobi, Kraken, Okex, and Upbit among others.

The number of Ethereum users increased during the second quarter, as positive news and investor interest grew around the token. However, it was the meme coin boom and the altcoin push that happened during the two last months of the second quarter that catapulted adoption to new highs. Tokens like shiba inu (SHIB) and dogecoin (DOGE) were immensely popular and drove interest from users outside the market, powered by figures like Elon Musk putting them in the spotlight.

Accelerated Growth

The growth of cryptocurrency users has also been accelerating this last year, meaning that more users are learning about these alternatives to fiat money. The first cryptocurrency adoption report, which dates from May 2020, noticed it took nine months to reach 100 million from 65 million users. However, now it only took six months for the userbase to grow from 106 to 221 million.

Altcoins are a big part of this trend. These have started eating the market share of already established cryptocurrencies like bitcoin and ethereum, likely due to the entrance of new users into the market. At the start of the year, altcoins holders accounted for just 20% of the total cryptocurrency users. but at the end of the second quarter, this percentage grew to 38%.

Seeing the big picture, this has been a very good year for cryptocurrency adoption until now, as both institutions and retail holders have turned to crypto. About this, Kris Marszalek, CEO of Crypto.com, stated:

The growth we have seen in the first half of 2021 on our platform and industry-wide is very encouraging, and we will continue investing heavily as we pursue our goal of putting cryptocurrency in every wallet.

What do you think about Crypto.com’s latest cryptocurrency adoption report? Tell us in the comments section below.

Central Bank of Ireland Governor Talks Crypto, Praises ‘Secure, Decentralized’ Technology

31/07/2021 by Idelto Editor

Gabriel Makhlouf, the governor of the Central Bank of Ireland (CBI), has published a blog post in which he shares his views on the digitalization of finance. While echoing concerns expressed by his counterparts regarding cryptocurrencies, the official has also highlighted some of their positives.

Don’t Ignore the Positive Elements of Crypto Technology, Central Bank Governor Says

The article titled “Digital Money” was published on the bank’s website on Thursday. In the post, Gabriel Makhlouf discusses the project to issue a digital version of the common European currency. The European Central Bank (ECB) recently launched its “Investigation Phase” and although a final decision is yet to be taken, the governor believes that it is not a question of “if” but rather “how and when” a digital euro will be introduced.

Besides central bank digital currencies (CBDCs), Makhlouf devotes attention to the rise of decentralized money as a factor in the increasing digitalization of finance. Avoiding the “misleading descriptor” “crypto-currencies” and the “less inaccurate” “crypto-assets,” the banker refers to coins, stablecoins, and tokens simply as “crypto.”

“Risks are increasing as individuals consider putting some of their money into crypto,” Gabriel Makhlouf says, listing the lack of transparency, price volatility, high energy consumption, and exposure to fraud among the threats investors and governments are facing. “As things stand today, the negatives surrounding crypto far outweigh any benefits,” the Irish official concludes. However, he also insists that authorities should not ignore the positive elements of cryptocurrency’s underlying technology. The CBI governor notes:

Distributed Ledger Technology (DLT) is essentially a secure, decentralised record of information stored across a network and is a key piece of architecture for some types of crypto.

Makhlouf emphasizes that DLT can reduce the costs of financial transactions and eliminate intermediaries in certain cases while also praising the opportunity to issue smart contracts. “The use of DLT has increased in recent years – it certainly has potential – although it remains to be seen how widespread that will be,” the governor adds.

The importance of DLT is likely to increase as governments around the world examine options to employ blockchain technology in the design of their digital currencies. A recently conducted experiment with the participation of several central banks from the Eurozone and the ECB has indicated that a blockchain-based digital euro would be highly scalable. The tested CBDC system was able to simultaneously process over 300,000 transactions a second, the central bank of Estonia revealed earlier this week.

Do you expect most central bank digital currencies to be based on digital ledger technologies? Let us know in the comments section below.

Robinhood Raises Almost $2 Billion in IPO, Falls Short of Expected $35 Billion Valuation

29/07/2021 by Idelto Editor

Robinhood, the fee-free cryptocurrency, stock, and options exchange, raised almost $2 billion in its initial public offering, reaching a valuation of $32 billion. While the company is more valuable than Nasdaq itself, the IPO failed to give the company an expected valuation of $35 billion. Robinhood trading will open today, with its shares trading under the HOOD ticker.

Robinhood Misses $35 Billion Valuation Goal

Robinhood, the fee-free investing app, has successfully completed its IPO, raising almost $2 billion. However, the company failed to meet the goal of reaching a $35 billion valuation, as its shares sold at $38, in the low end of the proposed $38-$42 range. The company allowed users of the exchange to acquire a third of the shares available before its launch on the market, something unusual in these processes.

While Robinhood failed to reach its desired target, its valuation was much higher than what it was at its last funding round, when the company reached $12 billion. The company is now in the mid-tier of its rivals, having a better valuation than Interactive Brokers ($26 billion), but falling short of Charles Schwab ($130 billion).

Robinhood capitalized on the interest and growth that the stock and cryptocurrency market saw in the first two quarters of the year, riding its popularity as one of the first exchanges that allowed for zero-fee trading, prompting a change in the industry. But some experts claim this valuation is unsustainable in the long term. Kathleen Smith, of Reinassance Capital, stated:

It seems rich — unless the company can keep up this high growth.

Robinhood’s Crypto Business

While Robinhood’s main revenue comes from options trading (38%), the company has an important part of its earnings coming from cryptocurrency-related trading (17%) as well. In this regard, the growth of Robinhood has been exponential. In its preliminary prospectus filed with the SEC for its IPO, the company stated customers traded $88 billion during the first quarter of the year. This caused Robinhood to custody almost $12 billion in crypto for its users.

Robinhood’s big cryptocurrency trading business has raised concern amongst regulators. According to people said to be familiar with the matter, the SEC delayed Robinhood’s IPO over concerns about how the company conducted this line of business. Robinhood is currently also under the gaze of regulators because its CEO, Vlad Tenev, is not licensed by FINRA, Wall Street’s watchdog. However, Robinhood has declared that Tenev does not need to be registered because he is CEO of Robinhood Markets, not of its trading subsidiary, Robinhood Financial. The probe is ongoing.

What do you think of Robinhood’s IPO performance? Tell us in the comments section below.

New Jersey’s Order Against Blockfi Extended, Vermont Issues Notice to Crypto Lender

29/07/2021 by Idelto Editor

On July 28, Zac Prince, the CEO of crypto finance firm Blockfi, explained that the company has been “engaged in a productive discourse” with U.S. regulators. Prince further said the New Jersey Bureau of Securities had extended the state’s previous order to September 2. Meanwhile, the company also has issues with Vermont’s Department of Financial Regulation (DFR), as the state’s DFR commissioner filed an order against the firm’s Blockfi Interest Accounts (BIAs).

Garden State Regulators Give Blockfi an Extension, Vermont Issues Regulatory Complaints

Four states have taken issue with Blockfi’s BIAs and regulators have issued notices to the company in recent times. Blockfi’s co-founder Zac Prince revealed the company’s issues with New Jersey regulators on July 19. New Jersey’s public notice and complaints about Blockfi’s crypto BIAs cited the “sale of unregistered securities.”

Then on July 22, regulators from Texas and Alabama also sent notice to the company concerning the BIAs. Blockfi now has problems with a fourth state, as Vermont’s Department of Financial Regulation (DFR) has issued a notice to Blockfi as well.

Documents discovered by financial reporter Danny Nelson on July 27, show that Michael S. Pieciak, the commissioner of Vermont’s DFR, has issued a 30-day show cause order. The notice details that Blockfi has to convince the state’s regulator its BIAs are not securities.

“BIAs are not registered or permitted for sale in Vermont, nor do they qualify for any exemption from registration pursuant to the Securities Act,” the notice says. The company is “not registered with the Vermont Department of Financial Regulation to offer or sell securities in Vermont,” Pieciak’s order adds.

Blockfi CEO: Company Is Engaged in Productive Discourse With Regulators

The day after Pieciak’s notice to Blockfi, Prince addressed the public via a company blog post. “We have been engaged in a productive discourse with regulators to protect your interests and expand accessibility to innovative financial solutions for all,” Prince wrote. “This is our commitment to you — to fight for your rights to earn interest on your crypto assets,” the Blockfi executive added.

Prince gave an update regarding the case in New Jersey as well and said the New Jersey Bureau of Securities extended their deadline. Prince said:

One update I want to share with you following these discussions is that the New Jersey Bureau of Securities (NJ BOS) has further postponed the effective date of its previous order to Thursday, September 2, 2021.

Blockfi’s founder said that while the order prevents the creation of new BIAs in New Jersey it does not impact other products and current customers. “Rest assured, your access to Blockfi is completely unimpaired,” Prince stressed. Blockfi co-founder Flori Marquez also shared Prince’s post on Twitter and said the company is working with financial regulators.

“At Blockfi, we are focused on protecting consumers’ rights to earn interest on their crypto,” Marquez said. “Over the last week, we’ve had constructive talks with regulators about why the BIA is appropriate for crypto market participants.”

What do you think about Blockfi’s recent update and the company’s issues in the state of Vermont? Let us know what you think about this subject in the comments section below.

Russian ‘Time Capsule’ to Facilitate Inheritance of Crypto Assets

29/07/2021 by Idelto Editor

Researchers in Moscow are developing a new service that will allow users to transfer digital data to their heirs, including crypto keys. The Russian “time capsule” will be capable of storing and relaying other private information as well such as a record of the whereabouts of valuable items.

Russian Universities to Provide Service Allowing Crypto Investors to Secure the Future of Their Coins

Experts from three Russian universities – Lomonosov Moscow State University, National Research Nuclear University, and Moscow State Institute of International Relations – are working to give crypto holders the peace of mind that their digital assets will not be lost after their death. The service will be based on blockchain technology, RIA Novosti reported quoting Russia’s National Technology Initiative Platform.

The joint team is now creating a website through which people will be able to store the precious information, encrypted and ready to be transferred to the possession of specified persons, the project manager Dmitry Izvekov explained. This can happen only after certain conditions are met and not earlier than six months after the data has been uploaded. The report further details:

[The service] will allow you to securely store digital data and assets – from passwords for social networks to keys to bitcoin wallets.

Subscribers will be able to use the Russian time capsule to also keep photographs, text files, video messages, and even location details for valuable items that can be passed on to heirs in case of an unexpected death, for example. A user will have to send a link to a chosen recipient who must set up their own account in order to gain access to the information. The time capsule will open only on a pre-specified date in the future.

The encrypted data will be stored on Sbercloud, a cloud service developed by one of Russia’s largest banks, Sberbank, and backed up on Dropbox and other platforms. Each user will be allowed to send two capsules free of charge. The creators hope to raise up to 3 million rubles (around $40,000) to finance the project, monetize the service as soon as it gains popularity and offer additional services.

According to a survey conducted last year by the Cremation Institute in the U.S., which has been quoted by the Russian business news portal RBC, 89% of crypto investors worry about what will happen to their assets after they die. Yet, despite concerns that the coins can be lost forever, only 23% of cryptocurrency holders have a plan for their digital money after they pass away.

What do you think about the time capsule service for crypto holders that’s under development in Russia? Share your thoughts on the subject in the comments section below.