Blockchain Bites: Bitcoins “Rich List”, Ethereum’s volatility, DeFis Shakeup

There are more addresses than ever as part of Bitcoin’s “rich list”. The Federal Reserve is trying to change the rate of inflation and another company is putting its cash reserves in bitcoin, not a bank account.

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Top shelf

Rich list
The “Bitcoin Rich List” or the number of wallets with at least 1,000 BTC (~ 11.5 million US dollars) is at a record high. There are roughly 2,190 rich list addresses, beating the previous record of 2,184 as of September 28, 2019. This could reflect the increased interest of institutions and wealthy investors in Bitcoin, reports Muyao Shen of CoinDesk. The total amount of Bitcoin held in accounts of 1,000 or more at the time of going to press was 7,868,823. That’s $ 92.2 billion.

Inflation clock
Federal Reserve Chairman Jerome Powell is expected to signal tolerance for higher inflation during his keynote address at the Jackson Hole Economic Policy Symposium Thursday. According to analysts speaking with CoinDesk, this could ultimately lead to a further decline in the dollar and greater purchasing power for Bitcoin traders and investors, CoinDesk’s Omkar Godbole reports. The central bank has largely missed its inflation target of 2% since 2012. “The main effect of this symposium on crypto would be a change in monetary policy and further devaluation of the US dollar, which could drive Bitcoin higher,” said Matthew Dibb. Co-founder of Stack.

Corporate breach
A hacker stole data from more than 1,000 users of CryptoTrader.Tax, an online service for calculating and filing taxes on cryptocurrency transactions. The hacker broke into a customer service representative’s account on April 7 and downloaded a file containing 13,000 lines of information, including 1,082 unique email addresses, as well as names, payment processor profiles, and messages that sometimes included cryptocurrency revenue. Screenshots of this information were later posted on a dark web forum.

BTC through banks
Ottawa-based software startup Snappa said it will convert 40% of its cash reserves into bitcoin, citing concerns about inflation, global economic uncertainty and the inferiority of traditional bank accounts. The initial allocation of 40% is just the beginning for the seven-person startup, reports Zack Voell of CoinDesk. “We’re still collecting coins and we don’t plan to sell anytime soon,” said co-founder Christopher Gimmer. “If we are right with the development of Bitcoin, our allocation could get very high.”

Blockchain. Governments?
Chinese tech giant Huawei has set up a blockchain-based platform for the Beijing government to better track and manage its citizens’ data in everything from medical records and property registration to real-time parking status of vehicles. This is part of China’s larger New Infrastructure Initiative to transform digital governance with blockchain by making data immutable and transferable. The Beijing government’s project aims to use the blockchain platform to share data from more than 50 authorities within the community, reports CoinDesk’s David Pan.

Quick bites

On the game

Layer1, the US Bitcoin mining startup backed by high profile investors like Peter Thiel, misrepresented the role of a supposed core team member in a recently released pitch deck, the team member said.

The US startup has set itself the task of not only building first-class Bitcoin mining facilities, but also of bringing the USA’s first proprietary mining chips onto the market in order to compete with Chinese miner manufacturers.

Its deck, shared with CoinDesk by an investor who received it from Layer1 in June, shows a slide from the management team in which Layer1 told potential investors that Liu Xiangfu, co-founder and former director of the Chinese bitcoin miner maker Canaan, his is supply chain manager.

However, when asked to comment, Liu said he was not involved in Layer1’s business. “I introduced you to some of my friends. … That helped them when they did [came] to China. But I am not a shareholder [and do] won’t work for them, ”Liu said over WeChat messages.

The discrepancy came to light when Layer1 began working on raising senior secured debt of $ 50 million since June, according to a separate term sheet that CoinDesk reviewed and confirmed by Layer1.

It appears that only a relatively small portion of the funds raised came from outside investors at the time, as the latest pitch deck shows that “Layer1 founders contributed over $ 23 million [their] so far equity for this Series A financing. “

Market information

Volatile assets
According to Omkar Godbole from CoinDesk, investors expect higher volatility compared to Bitcoin (BTC) compared to Bitcoin (BTC). The three-month spread between the volatility of Ether and Bitcoin has increased to 29%, according to data source Skew, the highest level since February 23. “Investors are focused on DeFi and are aware of a possible big step in ETH,” said Emmanuel Goh, CEO of Skew. Implied volatility tells us nothing about the direction of the next big move.

“Negative connotation”
CoinDesk’s first mover delves further into the volatility puzzle. The three-month spread between the implied volatility of Ether and that of Bitcoin has increased to 29%, the highest in six months, they write. On June 28th, the spread was only -2.8%, which means that Bitcoin had the higher implied volatility at that time. Volatility often has a negative connotation as traders often view it as a risk barometer. In this case, the widening spread seems to hint at a wide range of expectations about how DeFi might ultimately affect usage of the Ethereum network and demand for Ether. Get the full story by subscribing here.

Tech pod

Aave outdated
According to DeFi Pulse, the DeFi credit market Aave has preferred the Stablecoin Mint MakerDAO for the title of most of the collateral used on Ethereum. Aave has now deployed various crypto assets worth $ 1.47 billion on lines of credit, while MakerDAO has a Total Value Locked (TVL) of $ 1.45 billion. This is only the second time that a project has had more Total Value Locked (TVL) than MakerDAO, as measured by DeFi Pulse. In the recent surge in interest in DeFi, four projects have now broken $ 1 billion in assets as measured by DeFi Pulse at different times: MakerDAO, Compound, Aave and Curve, reports Brady Dale of CoinDesk.


DeFis downfall?
Donna Redel, board member of the New York Angels and Adjunct Professor of Law at Fordham Law School, and Olta Andoni, Adjunct Professor at Chicago-Kent College of Law and Of Counsel at Zlatkin Wong, think DeFi is a dangerous game. These prominent crypto attorneys cast illusions on the initial boom in coin supply and see the “hottest” sector in the industry flirting with violations of the law. “We believe that the industry needs at least some self-regulation. Without it, it is on the way to serious regulatory scrutiny and reputational risk … Labeling a project as an “experimental game” or “innovation” is not enough to remove it from the regulatory arena, “they write.

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