Current State of The Crypto Market (August 26th, 2019)

Hackers:  A British judge has ordered the confiscation of $1.1 million worth of cryptocurrency from a hacker who used phishing attacks to steal personal data and sell it on the dark web.  Reported on Aug. 23, judge Joanna Korner of Southwark Crown Court ruled that the police could confiscate $1.1 million worth of digital currency from Grant West.   In his cyber attacks, West allegedly operated under the online pseudonym “Courvoisier” and used phishing emails to steal customers’ personal data — including financial data, as well as credit and debit cards details — before selling it on the dark web with cryptocurrency.  West targeted companies including Sainsbury’s — the second largest retail chain in the United Kingdom — general merchandise retailer Argos and Uber. During the investigation, the police seized an SD card containing 78 million individual usernames and passwords, and the information of 63,000 credit and debit cards.

Key Players:   Bitcoin’s most recent price action has been less than satisfactory, unless you’re a bear. To date, the top digital asset is down 32% from it’s 2019 high of $13,739 and short term price action remains overwhelmingly bearish.   Over the past two weeks Bitcoin formed an M-top at $13,739 and $13,177 before dropping to the neckline around $9,600. Earlier this week Coin Metrics released a report showing Bitcoin’s untouched supply reaching a new all-time high of 21%.  The amount of unmoved Bitcoin has increased significantly over the past five years and coins falling into this category have been held in the same wallet address for 180 days to 2 years. This suggests that Bitcoin is increasingly becoming a store of value rather than a medium of exchange. One could assume that if Bitcoin’s price continues to rise, so will the number of unmoved Bitcoin.   Not everyone supports this conclusion, however. Adamant Capital founding partner Tuur Demeester countered saying that:   “I’m not so sure […] 5 years without updating your cold storage method is a long time in Bitcoin. Imo most of these coins are likely lost.”  While Demeester could be right, taking a deeper look at the Coin Metrics chart shows that the number of untouched coins on the 1800-day and 1-year time frame has noticeably increased with compared against longer-time frames. This increase also aligns with Bitcoin’s price increase in U.S. dollars.

Banks & Institutions:  Binance, one of the world’s largest cryptocurrency exchanges by trading volume, has launched a lending business in its bid to attract customer deposits.  The company said in an announcement on Monday that Binance Lending will be available for customer subscription starting from 6:00 UTC on Aug. 28, on a first-come, first-served basis.  Initially, users will be able to lend their U.S. dollar-pegged USDT, ethereum classic (ETC) and Binance’s BNB cryptocurrency in order to earn interest, payable from Aug. 29 to Sept. 11.  The annualized interest rate for the initial lending products with a 14-day fixed maturity term, has been set at 15 percent, 10 percent and seven percent, for BNB, USDT, and ETC, respectively.  Binance puts out a total subscription cap of 200,000 BNB, 5 million USDT and 20,000 ETC. If all the initially planned products get fully subscribed, Binance would pay out interests of 1,150 BNB, 19,178 USDT and 53 ETC, which worth about $50,000 as of press time.

Adoption: The major digital asset services platform Coinbase has recently announced the long-anticipated completion of a deal that has been in progress since at least May: the acquisition of Xapo’s institutional business. The move projects Coinbase Custody to the status of the world’s largest institutional digital asset custodian, securing more than $7 billion on behalf of over 120 clients globally. According to some estimates, Coinbase could now be holding over 5% of all Bitcoin in circulation.