Rick Rieder, BlackRock’s chief investment officer of global fixed income, told CNBC Wednesday that the investment giant has “started to dabble” in bitcoin—it’s the latest instance of a major financial player dipping its toes into digital assets.
Reider did not elaborate on BlackRock’s cryptocurrency strategy, but last month the investment giant filed documents with the Securities and Exchange Commission showing that it wants to include cash-settled Bitcoin futures as eligible investments for two of its funds.
BlackRock is the world’s largest asset manager—it managed some $8.7 trillion at the end of the fourth quarter.
Rieder told CNBC that he believes bitcoin’s recent rally is gaining momentum in part because of stronger regulations and better technology.
“My sense is the technology has evolved and the regulation has evolved to the point where a number of people find it should be part of the portfolio, so that’s what’s driving the price up,” he said.
Big Number
$51,000. That’s the new record price bitcoin hit early on Wednesday morning. The most popular cryptocurrency started the year with prices around $30,000.
Key Background
A spate of major corporations and financial institutions including MicroStrategy, BNY Mellon, and MasterCard,and PayPal have announced cryptocurrency initiatives this month, and there are reports that a $150 billion investment division at Morgan Stanley is considering investing in bitcoin. A portion of bitcoin’s recent gains are likely attributable to a surprise announcement from Tesla that the electric car maker had invested $1.5 billion into the cryptocurrency and has plans to start accepting it as payment.
Bitcoin surges to hit NEW all-time high on Christmas day as BlackRock, the world’s largest asset manager, looking to cryptocurrency in 2021! Altcoin Daily, the best cryptocurrency news media online! Follow us on Twitter: https://twitter.com/AltcoinDailyio Follow me [Austin] on Instagram here: https://www.instagram.com/theaustinar… TimeStamps: 00:00 Intro 00:17 Bitcoin and BlackRock 05:39 NEW SEC Chairman Appointed! 07:14 XRP Delistings 09:38 1inch vs Uniswap vs Sushi 11:31 Final Thoughts
Volume on the peer-to-peer (P2P) Bitcoin exchange LocalBitcoins has hit an all-time-high in Argentina as it has recently on the Paxful P2P exchange, as the country’s economy minister considers defaulting on $65 billion worth of sovereign debt.
While this does translate into an increase in volume on these platforms, the falling value of the Argentine peso must be factored into the equation.
Circling Vultures
The Latin American country, no stranger to currency crises, has been hit hard by the economic turmoil caused by the COVID-19 lockdowns and thus unable to make payments against some of its sovereign debt. Already in a grace period, these payments are due no later than May 22.
The main private holders of Argentine debt are so-called “vulture funds” like BlackRock, Fidelity and T. Rowe, made infamous in the financial press for swooping in to buy defaulted assets during previous of the country’s economic crises. (However, the largest creditor is the IMF.) These creditors have so far been staunch in their collective refusal to alter the terms of Argentina’s debt repayment.
If the vulture debt is allowed to go unpaid or a deal not reached to restructure the debt, Argentina will likely lose access to international credit lines and foreign investment it needs to keep keep the country afloat.
Skewed Lines
Repeated currency crises have led to a seemingly terminal decline in the value of the Argentine peso.
At the same time, we have also seen a consistent and huge rise in the amount of trading volume on P2P crypto exchanges in Argentina (and other Latin American countries). Volume on LocalBitcoins in Argentina, on the chart pictured above, seems to have tripled just during 2020.
It is easy to assume that uncertainty and fear in Argentina, especially surrounding the peso’s falling value, is driving crypto trading there. But it is important to also remember that these data are also priced in the local currency.
Therefore, it would be possible for the national volume to appear to be dramatically rising; but if that local currency is refactored into a more stable one like the dollar or euro, the rise in trading volume would look more modest.
If we look only at the peso’s value against the US dollar from the start of 2020, we see that it has steadily dropped for 11% at time of writing. Taking this into consideration, we can temper the charts of peso-denominated volume that we saw earlier. But even given this adjustment, volume in Argentina seems to be rising far faster on P2P exchanges than the rate at which the peso is losing value.
Looking at the volumes again in a Bitcoin denomination, we see a different picture. Here, we see that volume is nowhere near the all-time-highs — but then we must take into consideration how much Bitcoin’s price has changed since those highs were set in 2015-16.
Ultimately, the most important area to look at is within 2020, and we see something like a doubling of trade volume on BTC-denominated trade volume on LocalBitcoins, just during the year so far (inset below). Bitcoin’s price has fluctuated about $6,000 during the year, breaching $4,000 on the downside and touching $10,000 on the upside. But volume has gone up overall, even when Bitcoin has traded on the higher side of its 2020 range.
Ultimately, we do see a healthy rise in volume on P2P trading in Argentina, roughly 2x during 2020. Whether or not this increase is directly associated with the debt crisis is another matter.
Everyone should see it! Click here! http://youtube.com+watch=@3162039724/… Best cryptocurrency exchanger: https://700.by/101 Best cryptocurrency trading platform: https://700.by/102 Bitcoin (BTC) weekly trading volumes on peer-to-peer (P2P) trading platform LocalBitcoins in Venezuela and Argentina have hit new all-time highs in their respective national currencies. Cryptocurrency data website CoinDance shows that LocalBitcoins trading volume in local fiat currency in Argentina and Venezuela have hit new record highs. According to the website’s data, the week ending on Dec. 21 saw over 32.6 million Argentine pesos (equivalent to about $544,905) traded on the platform, or 34% more than the record registered two weeks before. LocalBitcoins weekly trading volume in Argentina in Argentine pesos | CoindanceIn Venezuela, on the other hand, over 248 billion bolivars (about $24.8 million) were traded on LocalBitcoins during the same week, nearly 15.6% more than the record volume registered during the previous week. LocalBitcoins weekly trading volume in Venezuela in bolivars | CoindanceAs Cointelegraph reported in early November, P2P trading volumes in Venezuela have started setting records after measures taken by the local central bank to curb Bitcoin inflows. Specifically, the regulator decided to ban Argentines from buying BTC with credit cards after also banning buying more than $200 per month. The capital control measures came after in mid-September the bank announced the intention to increase the peso’s monetary base by 2.5% per month over the following two months. Venezuelan citizens, on the other hand, apparently use Bitcoin to escape the extreme inflation of the bolivar. The increasing volume may also be spurred by late-September reports that the local central bank that it is exploring the possibilities of holding Bitcoin and Ether (ETH) in its coffers. All data is taken from the source: https://cointelegraph.com/ Article Link: https://cointelegraph.com/news/venezu…#trading#redditcryptocurrency#bitcoincurrentvalue#cryptocurrencynews#cryptocurrencyexchange#cryptonews#cryptoexchange Venezuela, Argentina Set New Weekly P2P Bitcoin Trading Volume Records: https://www.youtube.com/watch?v=5LSff…
Now, amid warnings that the “fragile” fiat currency system will be put under strain in years ahead, Germany’s troubled Deutsche Bank has asked, “will fiat currencies survive,” in what it calls the “multi-trillion dollar (or bitcoin) question.”
“The forces that have held the current fiat system together now look fragile and they could unravel in the 2020s,” Deutsche Bank strategist Jim Reid wrote in a report looking at 24 alternative ideas for the next 10 years.
“If so, that will start to lead to a backlash against fiat money and demand for alternative currencies, such as gold or crypto could soar. The demand for alternative currencies will therefore likely be significantly higher by the time 2030 rolls around.”
Central banks are still struggling to offset the effects of the global financial crisis that birthed bitcoin, with worries another so-far-unidentified crisis could be looming on the horizon.
“Will fiat currencies survive the policy dilemma that authorities will experience as they try to balance higher yields with record levels of debt,” Reid asked. “That’s the multi-trillion dollar (or bitcoin) question for the decade ahead.”
Bitcoin is often touted as an antidote to the central bank, debt-based monetary system, picking up the moniker “digital gold” for its built in scarcity. There will only ever be 21 million bitcoin, with the supply drying up in the distant year of 2140.
Deutsche Bank, which has seen its value cut by 90% in the ten years since bitcoin was created, has also predicted corporate and government banked cryptocurrencies will drive crypto adoption.
“Assuming governments back cryptocurrencies, and consumers want them, adoption rates will drive the timeline for mainstream use,” Reid wrote. “If current trends continue, there could be 200 million blockchain wallet users in 2030.”
Deutsche Bank has forecast there could be more than 200 million bitcoin and cryptocurrency users … [+]
Deutsche Bank
Meanwhile, other banks are warning that the year ahead could bring an overhaul of the “status quo.”
“We see 2020 as a year where at nearly every turn, disruption of the status quo is an overriding theme,” Saxo Bank’s chief economist Steen Jakobsen wrote this week in a report titled “10 Outrageous Predictions for 2020.”
“The year could represent one big pendulum swing to opposites in politics, monetary and fiscal policy and, not least, the environment. In policy making, it could mean that central banks step aside and maybe even slightly normalize rates, while governments step into the breach with infrastructure and climate policy-linked spending.”
I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com. Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.
Researchers from cloud security-as-a-service provider Armor’s Threat Resistance Unit (TRU) have been taking a deep dive into a dozen dark markets and forums. Analysis of the data compiled from trawling these English and Russian-speaking criminal marketplaces has been published in the annual Armor Black Market Report. As well as the usual tracking of the prices for stolen credit cards, bank account credentials and Distributed Denial of Service (DDoS) for-hire operators, there was one surprising new trend: a Bitcoin to cash conversion scheme that offers criminal buyers the opportunity to buy cash for pennies on the dollar. Paying $800 (£647) in Bitcoin gets you $10,000 (£8,095) in cash.
The Black Market Report
The Armor Black Market Report is the result of researchers from the Armor TRU trawling through underground internet markets and criminal forums. These “dark markets” are notorious for selling just about anything that can be stolen online, from personal and financial data to illicit services such as articles of incorporation for creating shell companies, the distribution malicious spam and even hackers for hire who will scrub your credit history.
The TRU research team analyzed and compiled data from twelve dark markets and criminal forums visited between February and June 2019. It came as no surprise to me that they found cybercriminal after cybercriminal selling credentials for as yet “unhacked” Windows remote desktop (RDP) servers. These are often used by ransomware actors looking for an entry point into corporate networks. That these credentials were being sold for as little as $20 (£16) was unexpected though. The cost of entry, quite literally, to the ransomware threat sector has never been cheaper.
Neither, for that matter, has the cost of cold, hard cash. The TRU researchers found that, partly to get noticed in a crowded market and partly to offset the risk of monetizing stolen banking and credit card accounts, entrepreneurial threat actors are selling cash for between 10 and 12 cents on the dollar. This isn’t, as you might have guessed, a case of criminal philanthropy.
Instead, it’s a method for criminals to offload the risk of monetizing stolen account credentials by transferring the funds available rather than taking possession of them. It’s still money laundering, and it’s illegal, but it puts the most significant weight of risk onto the buyer.
Here’s how the buy cash for Bitcoin scheme works
The seller offers bundles of cash in various amounts, from $2,500 (£2,020) to $10,000 (£8,095) in exchange for a pre-paid fee in Bitcoin. That fee varies between 10% and 12%. Which means that $10,000 of cold cash can be bought for $800 in Bitcoin.
The buyer makes the payment and then chooses how they would like to collect the cash. This can be a straightforward transfer of funds to a bank or PayPal account or wired via Western Union. As well as getting a significant return on their illicit investment, the purchaser no longer has to worry about monetizing online bank account or credit card credentials. It’s a turn-key service; there’s no risky logging into compromised accounts, no money mules to worry about, just the (totally illegal) collection of cash.
“For those scammers who don’t possess the technical skills and a robust money mule network to monetize online bank account or credit card credentials, this is an offer that can be very attractive,” Chris Hinkley, head of Armor’s TRU team said, “the threat actors are still selling financial account and credit card credentials outright, but this clever service gives them an additional channel for monetizing the large amounts of financial data available on the underground.”
Money mules served well by dark market documentation
One of the other interesting things to come out of this analysis was the fact that cybercriminals are selling articles of incorporation and sole proprietorship papers on the dark market. Not shocking, but interesting. While the cash for Bitcoin transactions gets rid of the money mule requirement, there are still plenty of people who adopt that role, and these papers are aimed at them. A money mule is someone who transfers stolen money between accounts in exchange for a fee of between 10% and 20% of the value. For a money mule to be successful, they need to open business bank accounts that don’t trigger fraud alerts on larger transfer volumes. To open these accounts, they need an Employer Identification Number (EIN) assigned by the U.S. Internal Revenue Service, and that’s where the documentation to create shell companies enters the equation. The documentation does not come cheap, however. Sole proprietorship papers complete with EIN were found on sale for $1,611 (£1,298), and Articles of Incorporation with EIN were $811 (£653).
I’m a three-decade veteran technology journalist and have been a contributing editor at PC Pro magazine since the first issue in 1994. A three-time winner of the BT Security Journalist of the Year award (2006, 2008, 2010) I was also fortunate enough to be named BT Technology Journalist of the Year in 1996 for a forward-looking feature in PC Pro called ‘Threats to the Internet.’ In 2011 I was honored with the Enigma Award for a lifetime contribution to IT security journalism. Contact me in confidence at davey@happygeek.com if you have a story to reveal or research to share
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Committee chairman Sen. Mike Crapo (R-ID) listens to ranking member Sen. Sherrod Brown (D-OH) during a hearing before Senate Banking, Housing and Urban Affairs Committee July 16, 2019 on Capitol Hill in Washington, DC. (Alex Wong/Getty Images)
Getty Images
Those who have been longtime critics of Bitcoin usually have one key theory in common, which is that governments will eventually ban Bitcoin and cryptocurrency will then cease to exist in any meaningful form. For examples of this point of view, just look at economist Nouriel Roubini and JPMorgan Chase CEO Jamie Dimon.
That said, implementing such a ban is no easy task. After all, Bitcoin was built by cypherpunks as a form of digital money that would be unaffected by the desires of politicians and regulators around the world.
Lately, it appears that lawmakers in the United States are starting to realize the difficulties associated with a potential Bitcoin ban.
Bitcoin Ban Deemed Unlikely During Congressional Hearings
On Tuesday, the U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing on cryptocurrency and blockchain technology regulation. During that hearing, Senate Banking Committee Chairman Mike Crapo (R-ID) shared his belief that the United States would not be able to succeed in banning Bitcoin.
“If the United States were to decide — and I’m not saying that it should — if the United States were to decide we don’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we couldn’t succeed in doing that because this is a global innovation,” said Crapo.
This statement came in the form of a question to Jeremy Allaire, who is the co-founder and CEO of global financial services company Circle. In his response, Allaire explained the new reality created by the creation of Bitcoin.
“I think the challenge that we all face with this is some of these cryptocurrencies — they’re literally just a piece of open-source software,” said Allaire. “There’s nothing else. It exists on the internet, it’s open-source software, anyone can implement it, it runs wherever the internet runs, and these have a monetary policy where these assets are algorithmically generated . . . That is a challenge that every government in the world now faces — that money, digital money, will move frictionlessly everywhere in the world at the speed of the internet.”
These remarks made during Tuesday’s hearing follow comments made by U.S. Congressman Patrick McHenry (R-NC) from earlier in the month when he stated “there’s no capacity to kill Bitcoin” during an interview with CNBC.
Back in May, Congressman Brad Sherman (D-CA) claimed that Congress should implement a ban on Bitcoin, but Sherman did not share specific details as to how such a ban could be effectively achieved.
The difficulties associated with implementing a ban on Bitcoin are behind one economist’s theory that the best way to kill the cryptocurrency would be for governments to become more competitive in terms of monetary policy and financial freedom.
On the other hand, more centralized cryptocurrency systems like Facebook’s Libra project, which is really a cryptocurrency in name only, would be much easier for governments to control.
I’m a writer who has been following Bitcoin since 2011. I’ve worked all over the Bitcoin media space — from being editor-in-chief at Inside Bitcoins to contributing to Bitcoin Magazine on a regular basis. My work has also been featured in Business Insider, VICE Motherboard, and many other financial and tech media outlets. I’m mostly interested in the use of Bitcoin for transactions that would be censored by the traditional financial system (think darknet markets and ransomware) in addition to the use of bitcoin as an unseizable, digital store of value. Altcoins, appcoins, and ICOs don’t make much sense to me. Find all of my work at kyletorpey.com. Disclosure: I hold some bitcoin.
