Hundreds Of Billions Lost As Major Cryptocurrencies Including Bitcoin, Ethereum, Solana, Cardano Tumble In Crypto Crash

Hundreds of billions has been wiped from the cryptocurrency market Tuesday amid a market-wide crash that has seen the prices of major cryptocurrencies—including bitcoin, ethereum, cardano and solana—plummet and fall sharply from near record highs this week.

The price of bitcoin plummeted to around $60,500 Tuesday morning, down 8% from 24 hours before, according to CoinGecko.

Most major tokens—including ethereum, XRP, cardano, solana and dogecoin—experienced similarly steep drops over the last 24 hours, falling between 7% and 10%.

Of the four most valuable cryptocurrencies by market capitalization—excluding the biggest, bitcoin, and tether, a stablecoin pegged to USD—ether fell 9.6% to around $4,300, Binance’s BNB 8.9% to $590, solana 7.5% to $225 and cardano 9% to $1.90.

XRP, polkadot, dogecoin and shiba inu coin—the next largest cryptocurrencies by market cap, excluding another stablecoin, USD Coin—fell 9.3%, 12.4%, 8.8% and 6%, respectively.

The losses come as part of a wider rout in the cryptocurrency market, which is now worth some $2.76 trillion, according to CoinGecko, down 8.6% from the day before.

The crash comes less than a week after bitcoin hit a new record high, jumping just above $69,000. This came as part of a wider rally following a market crash earlier this year, a response to an intensifying regulatory crackdown in China and growing concerns over bitcoin’s environmental impact.

The crash wiped many of the gains made throughout the pandemic, when the volatile market thrived due to numerous factors including an influx of retail investors, more options to trade digital currencies and the popularity of meme stocks and tokens driven by online forums on sites like Reddit and celebrity endorsement.

It’s not clear why the cryptocurrency market is crashing, though there are several factors that could contribute. Chinese authorities renewed efforts to crackdown on cryptocurrency mining Tuesday, slamming the energy consumption and carbon footprint of the process. China’s earlier crackdown on mining saw cryptocurrency miners flee the country en masse, many of whom landed in the U.S. Another possible reason could be responses to President Joe Biden’s infrastructure bill, which includes provisions for potentially regulating and taxing cryptocurrency.

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Source: Hundreds Of Billions Lost As Major Cryptocurrencies—Including Bitcoin, Ethereum, Solana, Cardano—Tumble In Crypto Crash

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Bitcoin Hits First Record High In More Than Six Months After Historic Fund Debut (Forbes)

Elon Musk Shows How Crypto May Start Ruining Stock Traders’ Weekends (Bloomberg)

U.S. Claims Top Spot For Bitcoin Mining As Miners Flee China Crackdown — Here Are The World’s Biggest Mining Hubs (Forbes)

Costelloe, Kevin (November 29, 2017). “Bitcoin ‘Ought to

“Central banker takes stab at bitcoin ‘bubble

Silcoff, Sean (February 13, 2018). “OMERS-affiliated Ethereum Capital offering pinched, but not pulled, following choppy markets and cryptocrash”. The Globe and Mail. The Woodbridge Company.

Crypto And Digital Asset Platform Bakkt Releases First Earnings, Lays Out Bold Partnership Strategy To Growth

Today Bakkt, a mobile wallet provider and digital asset platform founded in 2018 released its first earnings as a public company. The firm began trading on the New York Stock Exchange (NYSE) on October 18th following a SPAC merger with VPC Impact Acquisition Holdings (VIH).

Casual observers may find the results underwhelming. After all, the company, whose backers include NYSE parent firm Intercontinental Exchange, and which had completed a $300 million Series B round of funding in March 2020 brought in just $9.1 million in revenue this quarter.

Granted it is up 7% from Q2 and 38% year over year, and the company reports having 1.7 million transacting accounts, but the firm still had a net loss of $28.8 million. In contrast, cryptocurrency exchange Coinbase earned $1.2 billion in revenue and Square’s Cash App, which offers an easy way for users to buy bitcoin, brought in $1.87 billion in crypto revenue and $42 million in gross profit. PayPal, which offers a simple interface for users to buy and make purchases with Bitcoin, Ethereum, Litecoin, and Bitcoin cash opened 13.3 million accounts last quarter despite disappointing revenues.

However, according to Bakkt CEO Gavin Michael, who spoke exclusively to Forbes prior to the earnings release, this is all part of his plan for the company that has evolved from primarily being a bitcoin custodian and futures exchange to a much more comprehensive platform. Michael, who previously served as a technology executive for banks such as Citi, JPMorgan and Lloyds, intends for Bakkt to become the hub of an extensive ecosystem of business to business and consumer retail activity, with loyalty points and digital assets such as Bitcoin and Ethereum in the center of it all.

“We see businesses leveraging our platform to drive loyalty, and to deepen their customer relationships…they’re also able to innovate with crypto services and crypto rewards, appealing to a growing segment of digitally savvy customers.”The company’s merger also brought in a war chest of more than $480 million to use for future partnerships and acquisitions.

Also not reflected in these numbers is the steady stream of brand-name partnerships brought onto the platform, starting with Starbucks this past March and growing to include Choice Hotels, Fiserv, Finastra, Wells Fargo, United Airlines and Mastercard. These tie-ups are intended to do everything from helping community banks and credit union clients invest in crypto to allow merchants on the Mastercard network to offer crypto rewards to users.

“We enable these companies to really deliver consumer choice, [offer] convenience with alternate payment methods that allow consumers to spend the value of their digital assets across merchants and enable businesses to gain access to this increased spending power.”

The market responded particularly well to the MasterCard partnership, announced on October 25th. The firm’s stock rose 400% in a week. It has since surrendered over half of those gains, but it remains up over 160% since the merger was finalized.

In addition, the firm is looking to onboard more digital assets, though Michael says that given the platform’s comparatively conservative nature compared to traditional cryptocurrency exchanges,  “It’s fair to say that we are probably a platform that will have several, rather than several 100.” Regarding stablecoins and central bank digital currencies (CBDCs), which are increasingly becoming a focal point for regulators and entwined in global commerce and trading, Michael noted “We’re obviously watching closely what happens with stablecoins and CBDCs, because we’re an obvious choice, particularly with the partners that we’re working with…to really bring them to life.” Bakkt does not support any at this time.

With those integrations likely to wait until 2022 at the earliest, Q4 is shaping up to be an early test for Bakkt’s future. Unlike exchanges such as Coinbase, whose fortunes are highly dependent on the volatile nature of cryptocurrency prices to drive trading fees, Bakkt is more dependent upon retail spending to facilitate user growth and engagement on the platform. Q42020 was its most lucrative from a revenue standpoint in the company’s brief history, which Michael attributed in the interview to the seasonality of retail commercial activity, stating that he expects a similar trend again this year.

However, this trend could be upended, to some degree, by today’s challenging economic climate. Already retail establishments are reporting issues finding temporary staff for the holiday season, and October’s inflation numbers, which saw a 6.2% increase from a year ago, the highest jump in 31 years, may limit customer purchasing power over the next couple of months. More worrying is a growing belief among consumers and policymakers that inflation remains stickier than they would like, even if they still believe it is transitory.

That said, the silver lining could be that two industry segments not experiencing massive inflation are travel and lodging, which Bakkt supports through its partnerships with United Airlines and Choice Hotels. Airline fares actually fell 0.7% on the month and is down 4.6% year on year. The index for lodging away from home increased just 1.4%. As more of the world becomes vaccinated, travel restrictions loosen, and cross-border commerce recovers to pre-pandemic levels, Bakkt could see more engagement with its platform.

One final challenge will be convincing clients to part with their bitcoin and ethereum in exchange for goods and services. Both cryptocurrencies, which each hit new all-time highs on November 10th of $68,721 and $4,851 respectively, are seeing reductions in their circulating supply.

This trend is due to multiple factors, pre-eminent among them is the fear of someone finding in the future that they bought a $1000 cup of coffee in 2021 when they needed a quick boost. Of course, when asked about this challenge, Michael and the team are quick to point out that Bakkt is not necessarily a crypto platform, but a universal ecosystem for all digital assets.

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Source: Crypto And Digital Asset Platform Bakkt Releases First Earnings, Lays Out Bold Partnership Strategy To Growth

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Metaverse Tokens Soar Following Facebook’s Rebrand

Metaverse-related tokens took off shortly after Facebook FB +2.1% announced Thursday it would rebrand itself as Meta in a bid to reorient itself around augmented and virtual reality-charged future. The category’s market cap shot up by 262.9% in the past 18 hours and now stands at $13.4 billion, according to cryptocurrency data aggregator CoinGecko.

Half a dozen coins, including some of the largest like MANA, Ethereum token powering the Decentraland virtual reality platform, and STARL, a native asset of the namesake decentralized virtual space project, are up by more than 50% on the day. The largest gainer of the day is ETHV (Ethverse), token of a virtual universe built using the Minecraft gaming engine and Ethereum blockchain, with a 112.8% increase.

Token of popular NFT-based online video game Axie Infinity, which has generated more than $7.5 billion in sales, has risen 11%. Facebook’s stock closed with a modest 1.5% increase after the social media giant announced it would change its name to Meta, reflecting its bet on the next iteration of the internet centered around virtual experiences. ​​The rebranding comes amid a barrage of reports related to the company’s lack of control over the spread of misinformation and inflammatory content on its platform.

In the day leading up to the announcement, Facebook sai​​d it would spend at least $10 billion this year to develop its metaverse division and hire 10,000 people in the European Union over the next five years to help scale the effort. The company will begin trading under the ticker MVRS on December 1.

What has happened?

After plenty of speculation, Facebook, the company that owns platforms including Facebook, Instagram and WhatsApp, rebranded as Meta on 28 October. CEO Mark Zuckerberg told attendees at the company’s annual Connect conference: “Right now, our brand is so tightly linked to one product that it can’t possibly represent everything that we’re doing today, let alone in the future. Over time, I hope that we are seen as a metaverse company, and I want to anchor our work and identity on what we’re building toward.”

It is important to note that Facebook, WhatsApp and Instagram will all be keeping their names. But the company that produces and maintains them will now be called Meta – similar to Google’s 2015 corporate restructuring into a parent company called Alphabet. Facebook (the company) even changed the logo outside its building on 28 October.

Sorry, what is a metaverse?

The name was chosen to echo the key product that Zuckerberg hopes Facebook – now Meta – will be represented by: the metaverse, the name for a shared online 3D virtual space that a number of companies are interested in creating as a sort of future version of the internet.

“In this future, you will be able to teleport instantly as a hologram to be at the office without a commute, at a concert with friends, or in your parents’ living room to catch up,” Zuckerberg wrote in a letter announcing Facebook’s rebranding as Meta.

But it is in the future. Not now. The metaverse unveiled by the company in August looks like The Sims or another, older immersive world: the 2003 video game Second Life.

Why is Zuckerberg doing this?

For one thing, Meta doesn’t want to be known solely as a social media platform. My suspicion is that this is about owning the operating system of the future, and Facebook’s experience of being an app on other people’s – rivals’ – operating systems,” says Anupam Chander at Georgetown University Law Centre in Washington, DC. “They don’t want to be prisoner on other people’s platform. They want others to be prisoner on their platform.”

Meta did make oblique references to Apple in its announcement, saying it wanted to avoid a single company restricting what you can do and charging high fees, but Max Van Kleek at the University of Oxford is sceptical that Meta itself will wield control over its metaverse.

“Is Meta going to simply provide the tools rather than be the gatekeeper? I doubt that they would relinquish anything that might compromise their position as the definitive advertisement provider of the metaverse, for instance,” says Van Kleek.

One issue with Meta trying to be the sole company underpinning the metaverse is the pivotal role it would play in our lives if its vision of the future becomes a reality. The company has struggled with outages on its key apps that removed the ability to communicate for large parts of the world in recent months – and if such a thing were to happen in an all-pervasive VR universe like the metaverse, the consequences could be huge.

“The whole presentation of the metaverse is so utopian and naive,” says Bucher. “It makes a lot of sweeping assumptions about how people live their lives. I’m sure not everybody would be so thrilled about [having it in] the home space.”

“This is yet another world that they want to conquer,” says Chander. “Having conquered the Earth, they now want to conquer the virtual metaverse.”

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I report on cryptocurrencies and other applications of blockchain. A Russia native, I am a graduate of NYU Abu Dhabi and Columbia University’s Graduate School of Journalism.

Source: Metaverse Tokens Soar Following Facebook’s Rebrand

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The IRS Goes Undercover As A Bitcoin Trader In $180,000 Sting

On the hunt for tax cheats, fraudsters, money launderers and dark web drug dealers, the Internal Revenue Service (IRS) has sent an undercover agent to work on a market for trading bitcoin, ether and other cryptocurrency.

In a search warrant reviewed by Forbes, the undercover IRS agent went by the name of “Mr. Coins” on LocalCryptos.com, a platform exchanging cryptocurrency for dollars and other fiat currencies. Mr. Coins’ profile, still live at the time of publication, had 100% positive feedback after shifting up to $200,000 in digital money.

But his biggest success may have been to take down an alleged dark web drug dealer, tricking him into sending more than $180,000 in cash to the IRS in exchange for cryptocurrencies, according to the warrant.

In June of last year, Mr. Coins put up an advertisement offering to buy bitcoin via cash by mail and above market prices. All sellers had to do was get in touch over encrypted messaging apps Wickr or WhatsApp.

Shortly afterward, a person going by the name “Lucifallen21” got in touch to inquire about the ad, according to the search warrant. The IRS, without saying how, determined that Lucifallen21 was actually Evansville, Indiana, resident Chase Hite. By July, he’d agreed to buy from Mr. Coins, wrapping up $15,040 in cash in clothes, putting the money in a box and posting it to the agent in exchange for approximately 1.59 bitcoin, according to the government’s account.

More payments came in, with nearly $20,000 posted in August, in exchange for approximately 1.34 bitcoin and 45.2 monero, another cryptocurrency that promises better privacy protections than its rivals, the government said, adding that nearly $65,000 was sent to the agent over following months.

Come March this year, investigators were getting ready to home in on the conclusion to the sting operation. A $28,000 cash package from Hite was intercepted and marked as lost by the Postal Service, according to the IRS, which then monitored calls to the post office, waiting for the suspect to call and complain. Investigators linked this call with a phone number that was paid for by Hite.

Further messages over Wickr indicated Hite was involved in dark web drug sales, claiming to sell “pills and opioids,” as well as cocaine and marijuana, the IRS claimed. As they deepened their relationship, the undercover officer agreed to provide Hite with a loan, by which the suspect would send $54,000 in cash and get $79,000 worth of cryptocurrency in return, according to the search warrant. When that last package arrived, forensics took fingerprints and linked them to Hite, the government added.

Hite was arrested in July and has not yet filed a plea. The charges were filed in the Eastern District of New York. His lawyer declined to comment. LocalCryptos hadn’t responded to requests for comment. The IRS declined to provide more information than what had been filed in court.

The tax collecting agency has a track record of going undercover to snare cryptocurrency-using criminals. Earlier this year, it was revealed that the agency had organized a payment to a service called Bitcoin Fog, which offered to launder money.

The agents said they wanted to launder cryptocurrency they’d earned by selling Ecstasy, according to a criminal complaint, first reported by Wired, in which a Russian-Swedish administrator was charged. And in March, the IRS pretended to be a seller of counterfeit Gucci products sourced from China, asking the defendant in that case to convert bitcoin that they claimed to have acquired in selling the merchandise.

But this latest sting is a rare case where the IRS set up a profile on a cryptocurrency trading platform and created what amounts to a watering hole, with agents just waiting for criminals to dive in.

This story is part of The Wire IRL feature in my newsletter, The Wiretap. Out every Monday, it’s a mix of strange true crime and real-world surveillance, with all the relevant search warrants and court documents for you to pore over. There’s also all the cybersecurity and privacy news you need to read. Sign up here.

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I’m associate editor for Forbes, covering security, surveillance and privacy. I’m also the editor of The Wiretap newsletter, which has exclusive stories on real-world

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Bitcoin Beach: The Cryptocurrency Experiment In El Salvador’s El Zonte

Last week, El Salvador’s legislature voted to become the first country in the world to adopt Bitcoin as legal tender. While the U.S. dollar will still be El Salvador’s official currency, all businesses in the country will have to start accepting Bitcoin barring extenuating circumstances (like lack of technological resources), and citizens will be able to pay their taxes and debts with the cryptocurrency.

The government is hoping that this futuristic economic policy will attract investment from cryptocurrency businesses, provide transformative financial resources for the 70 percent of El Salvadorans who are unbanked, and facilitate remittances, which amount to about 20 percent of the country’s gross domestic product. And, true to the madcap spirit of the Bitcoin community, El Salvador’s President Nayib Bukele has already directed a state-owned geothermal electric firm to start constructing Bitcoin mining facilities that will be powered by heat from the country’s volcanoes.

At the same time, critics have pointed out that the plan is very light on details and that Bitcoin is notoriously difficult to use as a day-to-day currency partly due to its volatility. In addition, there’s a good chance that a large swath of businesses in the country won’t even be able to feasibly accept the cryptocurrency; El Salvador has lowest rates of internet penetration in Latin America. Bukele, however, has been pointing to a small Salvadoran beach town called El Zonte where residents have been using Bitcoin for nearly two years as evidence that the cryptocurrency could help power the economy nationwide.

El Zonte is a village on the Pacific coast that has a population of about 3,000 people and is popular for surfing and fishing. While a beach town might sound affluent, El Zonte is not: According to Reuters, “El Zonte is visibly poor, with dirt roads and a faulty drainage system,” In 2019, an anonymous donor in the U.S. reportedly began sending Bitcoin to nonprofits in the area with the aim of finding ways to build a sustainable cryptocurrency ecosystem in the community.

Then nonprofit workers in El Zonte, in consultation with the donor, launched Bitcoin Beach, an initiative that injected the cryptocurrency into the local economy, set people up with digital wallets, and helped businesses set up systems to accept Bitcoin payments. Residents use a Venmo-like app payment system for exchanging Bitcoin, which was developed by a tech company in California called Galoy Money. Using the app, people can see which businesses accept Bitcoin and look one another up by username.

“This was just the perfect laboratory,” said Chris Hunter, co-founder of Galoy, of El Zonte. Hunter says El Zonte was a prime location for test-driving a Bitcoin payment system because of the lack of regulatory and tax burdens, the fact that most merchants and people don’t have credit cards, and dollarization of El Salvador’s economy. (El Salvador is one of around a dozen countries and territories that use the U.S. dollar as their official currency.)

He admits, though, that trying to get cryptocurrency systems up and running for an entire country is going to be exponentially more difficult than doing so for a 3,000-person village, and expressed skepticism that the government will meet its goal of getting the infrastructure in place by early September. “To support millions of people not just holding Bitcoin but spending it too, it’s certainly technically feasible. But to figure that out in 90 days is a pretty tight timeline,” Hunter said.

Although there has been some success in integrating Bitcoin into El Zonte’s economy—about 90 percent of families in the town have made a crypto transaction, according to Bitcoin Beach, to pay for things like groceries, utilities, and medical care—the project has not been without its obstacles. Reports indicate that some residents have struggled to access the payment system because of limited data plans and lack of access to more advanced smartphones.

Hunter claims that most people in the town seem to have lower-end Android phones that can support Bitcoin transactions, though he admits developers did run into some issues with getting the lower-resolution cameras on the devices to detect QR codes at local businesses. He also said that the local cell network in El Zonte is good enough for transactions.

But the reasons why crypto investors were drawn to El Zonte do not hold true throughout the country. Only 45 percent of the population in El Salvador has internet access.  It remains to be seen how exactly the national government thinks it will improve connectivity, particularly in rural areas, and get powerful enough devices into peoples’ hands to support a bitcoin economy. Bukele has floated the idea of building a network of satellites to improve coverage, but that obviously would take quite a while to implement.

Volatility remains a concern as well. In May, Bitcoin prices took a 30 percent dive after China implemented new digital currency restrictions and Tesla announced that it would no longer be accepting the cryptocurrency as payment. Around that time, Hunter says there was a corresponding decrease in the number of Bitcoin transactions in El Zonte. By all appearances, people were waiting for the value to go up again before using it.

Steve Hanke, professor of applied economics at Johns Hopkins University and director of the Cato institute’s Troubled Currencies Project, worries that average consumers and business owners won’t want to constantly engage in this sort of speculation when deciding whether to use their money. “Businesses tend to unload Bitcoin as fast as they can because of the fluctuating exchange rate. If you receive it in the morning, it could easily be down 5 or 10 percent by the close of business,” said Hanke. “Are you running a business in which you’re speculating in Bitcoin, or are you running a business where you’re selling clothes or shoes?”

Bukele has said that the government will set up a $150 million fund so that people can immediately cash out their Bitcoin for dollars, thus shielding them from some of the volatility. The details of this part of the plan are also scant, however, and Hanke notes that there’s a danger in El Salvador establishing itself as a country with permissive financial regulations that’s willing to exchange dollars for Bitcoin at any time.

For criminals who are in possession of large amounts of Bitcoin, El Salvador could be an attractive place to cash out. In the worst-case scenario, Hanke says, “You could essentially have Bitcoin holders who want greenbacks that are in a position to basically vacuum up all of the greenbacks that exist in El Salvador, and the place would collapse without it.”

By Aaron Mak

Source: Bitcoin Beach: The cryptocurrency experiment in El Salvador’s El Zonte

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