FreeCryptoCurrency.Me

Just as the price of bitcoin has steadily declined from highs of near $70,000 to around $42,000 today, so too have the share prices of the biggest crypto mining companies fallen.

But the decline of those mining stocks — which experts believe represent a kind of turbo-charged proxy for the price of bitcoin — has been even sharper than bitcoin’s. Several of the largest crypto miners have seen their share prices halve since the highs of November.

Based on The Block Research’s data, the market capitalization of Nevada-based Marathon Patent Group has dropped from $7.65 billion in early November to roughly $3 billion today. Colorado’s Riot Blockchain has fallen from $4.25 billion to $2.05 billion. And Toronto-based Hut 8 mining is down from $2.33 billion to $1.19 billion.

The share prices of Hive, Argo Blockchain and Canaan have also plummeted — albeit less sharply than their larger rivals.

Headwinds ahead

The performance of these stocks is hardly surprising given the headwinds that crypto miners have come up against in recent months. Authorities in China have become increasingly adept at snuffing out mining operations following a blanket ban, despite the evasive efforts of China’s crypto miners.

Other countries have followed in China’s footsteps. Only yesterday, Kosovo moved to outlaw crypto mining amid rolling blackouts enforced because of the country’s energy crisis. Tumult in Kazakhstan has also hindered bitcoin mining efforts.

Dilution is another key factor here. Crypto mining is a capital-intensive business and operators have been forced to raise significant amounts from public markets investors.

Analysis from The Block Research underscores the extent to which this constant need to raise money has diluted shareholders.

In the fourth quarter of last 2020, Marathon had 51,599,792 shares in circulation. By the fourth quarter of 2021, it had 102,630,637 shares — a 98.9% increase. The story is similar for most of the big miners, as the table below shows.

Proxy leverage 

But perhaps more relevant than these external factors in the decline of the bitcoin mining stocks is the simple fact that this is exactly how experts expected such stocks to behave.

In March last year, Ethan Vera, COO at Luxor Tech, described mining stocks as similar to “a levered play on bitcoin.”

The reason is that, beyond simply investing in and holding bitcoin, miners must invest heavily in infrastructure that will produce more bitcoin in the future.

“Public mining stocks act as a high beta play to bitcoin price, so when the bitcoin price decreases the mining companies will feel extra pain,” said Vera. “Not only do most of them hold bitcoin as treasury, but their ASIC fleets [crypto mining machines] fluctuate in value with the price and are increasingly leveraged with USD denominated debt.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

MoonPay, the crypto payments firm valued at $3.4 billion, has this morning splashed 900 ether (roughly $3 million) on a rare item from the CryptoPunks collection. 

The pixelated punk in question — CryptoPunk #2681 — is a purple cap-wearing zombie with blue ‘clown eyes,’ all rare traits.

MoonPay acquired the piece through an account linked to its ‘concierge’ service, which The Block unearthed in November.  Through this setup, the startup has been industriously brokering big-ticket NFT purchases on behalf of celebrities — including the likes of Snoop Dogg, Martin Garrix, Diplo and Jimmy Fallon.

So far, MoonPay has dealt primarily in items from the Bored Ape Yacht Club (BAYC) collection. Its modus operandi has been to acquire apes and then transfer them to addresses belonging to celebrity clients, and later invoicing them for the trouble. The concierge service has also offered celebrities like Post Malone assistance with investments in cryptocurrency.

Now, MoonPay appears to be gearing up for punk action. OpenSea data shows that it also acquired CryptoPunk #4222 roughly one month ago, and it now has a second punk after today’s 900 ether purchase. 

The CryptoPunks collection is perhaps the most sought-after set in the non-fungible token (NFT) market, having generated close to $1.9 billion in sales to date, according to data site CryptoSlam.

The sale of punk #2681 is the twelfth largest in the collection’s history, according to data from DappRadar. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Curve is the largest DeFi protocol by value locked, and liquidity providers (LPs) on Curve are rewarded with CRV tokens.
• CRV can be locked to boost LP rewards, earn protocol revenue, and vote on proposals related to reward allocation.
• Convex and Votium are tools built on top of Curve that increase the economic efficiency of locked CRV tokens.
• More than 80% of value locked on Curve originates from Convex.

This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.

The Securities and Exchange Commission has charged an Australian man for allegedly making false claims related to an unregistered initial coin offering (ICO).

The US securities regulator charged Craig Sproule and his two companies, Crowd Machine and Metavine, over an ICO of the firms’ Crowd Machine Compute Tokens (CMCTs). The offering occurred from January to April of 2018. 

The SEC claims Sproule publicized that the ICO proceeds would go to new technology development for Metavine, enabling the firm to run its app-development software on a decentralized network. Instead, the SEC claims Sproule and Crowd Machine diverted the $5.8 million to gold mining entities in South Africa without alerting investors.

Furthermore, the SEC claims that the CMCT sale constituted an unregistered securities offering, and that Sproule and his firms knowingly sold the tokens without determining if the investors were accredited. 

The SEC filed its complaint in the United States District Court for the Northern District of California, charging Sproule and Crowd Machine with violating antifraud and registration provisions in federal securities laws. Metavine is acting as a relief defendant, meaning the firm is considered an innocent party despite being named in the case, but holds funds on behalf of the accused party, in this case CrowdFund. 

The defendants have neither admitted or denied the allegations, but they have consented to judgments that would bar them from future violations or participation in future securities offerings and would require them to permanently disable and seek delisting of the CMCT tokens. Sproule also cannot serve as an officer or director of a public company and must pay a fine of $195,047.

Any disgorgement or civil penalties will be determined by the court in the future. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A Thursday report from the Wall Street Journal offered new details on the nascent non-fungible token (NFT) platform being pursued by the publicly traded gaming retailer GameStop.

Last May, GameStop teased its NFT plans, declaring its intention to hire staff for the effort. According to the Journal, citing sources with knowledge of the process, GameStop has hired “more than 20” and aims to strike deals with cryptocurrency industry startups to support the effort.

As previously reported, signs that time indicated that GameStop was looking to Ethereum as a potential platform for technology applications. Indeed, today Ethereum is the largest network for NFTs, and its advertisement identified the Ethereum-centric Solidity language as a desired skill among would-be engineers.

Per the Journal, GameStop “is close to signing partnerships with two crypto companies to share technology and co-invest in the development of games that use blockchain and NFT technology, as well as other NFT-related projects.” 

“The retailer expects to enter into similar agreements with a dozen or more crypto companies and invest tens of millions of dollars in them this year,” the report continued.

The Journal’s report framed the GameStop NFT initiative as one aimed at boosting its overall financial performance, in light of the COVID-19 pandemic’s impact on its physical storefronts. Even still, GameStop was one of a number of so-called meme stocks that surged in January 2021. 

At press time, the price of GameStop’s stock is up nearly 20 percent in after-hours trading, appearing to have spiked sharply on the Journal’s report. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The cryptocurrency market has shed billions of dollars in aggregate market cap amid a macro-driven rout, but traders are worried that an overheated futures market suggests that prices could fall further.

The total market capitalization fell from a high Wednesday above $2.2 trillion to a low of $2.02 trillion early Thursday morning, with bitcoin falling more than 7% and ether sinking more than 12%. These moves were potentially driven by broader macro forces, specifically The Federal Reserve’s indication that it may raise interest rates sooner than previously expected. 

“The market is basically being driven by outside forces more so than crypto-specific positioning and fundamentals,” commented GSR’s Richard Rosenblum. 

Still, despite the market gyrations, liquidations were relatively muted compared to other market drawdowns that have seen a cascade of liquidations push the price down even further. Will Clemente, a well-followed commentator in the crypto market, mused: “What is this, a liquidation cascade for ants?”

Indeed, data from The Block shows there were just $75 million in long liquidations on Wednesday. 

The juxtaposition of low liquidations and high open-interest (the amount of outstanding futures positions in the market) suggests there’s “tons more OI to wipe out,” according to one trading source.

Indeed, open interest across futures markets slid modestly between the fifth and sixth of January, falling to $17.28 billion. 

Still, high open interest and muted liquidations don’t necessarily mean the market “nukes further,” but a macro catalyst could trigger a market event that drives the price down, hitting traders’ stops and liquidating them. 

“We’re seeing [traditional finance] firms capitulating on the Kazakstan news while crypto native firms continue to live in fear of Fed hikes,” said Josh Lim, head of derivatives for Genesis. “Although $1bn of open interest was liquidated on the move to $43k, there will be far more damage below $40k where more levered long stops live.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Konami, the Japanese entertainment and gaming firm, announced Thursday that it is releasing a non-fungible token (NFT) collection to celebrate the 35th anniversary of its hit video game franchise Castlevania. 

Castlevania is a long-running gothic horror game franchise originally launched in Japan in 1986 and North America in 1987. The NFT collection includes memorabilia such as the songs “Vampire Killer,” scenes from gameplay and pixel art drawn specifically for the collection. These NFTs will be auctioned off between January 12 at 5 p.m. ET to January 14 at 9 p.m. ET. 

The auction will occur within the United Kingdom and Japan in addition to the United States. To bid on Castlevania NFTs, users must have wrapped ETH in their wallet and be of legal age within their country. 

Konami follows other video game giants like Square Enix and Ubisoft in entering the NFT space. And as with these two gaming firms, Konami has faced backlash from video game enthusiasts who dislike NFTs. Other titles from Konami include Frogger, Metal Gear, Yu-Gi-Oh and Silent Hill.

Image from the Castlevania 35th Anniversary NFT Collection official webpage. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The New York State Department of Financial Services has hired Promontory’s former director of digital asset strategy as its new virtual currency chief.

Peter Marton announced on LinkedIn in a Wednesday evening post that he accepted the position with New York’s financial regulator. His profile indicates he began the job in December. 

Marton spent more than six years at Promontory Financial Group, a financial services company owned by IBM. In his final year, he took on a digital assets-focused position. 

“Crypto supervision should be a marathon not a sprint, and I look forward forward [sic] to continue this effort in earnest,” he said in his LinkedIn post.

The NYDFS first began its search for a deputy superintendent focused on crypto in 2019. The position resides in the regulator’s Research and Innovation Division, which oversees licensing for crypto firms. The so-called Deputy Superintendent of Virtual Currency will provide expertise on crypto policy decisions, as well as guide the staff overseeing the review of licensing applications, including the BitLicense, New York’s gold standard for crypto businesses. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Crypto advertising has become increasingly prolific on London’s transport network, according to data released to The Block via a freedom of information request.
• Luno appears to have splashed out the most on inner-city transport ads in the last two years. 
• Others that advertised in 2021 included Hakuna Matata, Floki, eToro, Coinbase, Crypto.com, Coinfloor and BOTs.

This feature story is available to
subscribers of The Block Daily.
You can continue reading
this Daily feature on The Block.

New data from the blockchain analytics firm Chainalysis shows the highs and lows of crime-related cryptocurrency transactions across 2021. 

The volume of crime-related crypto transactions hit a record high at $14 billion in 2021, up 79% since 2020. But since the number of cryptocurrency transactions grew 567% that same year, crime-related activity comprised 0.15% of all cryptocurrency transactions — the lowest that rate has been since 2017. 

Chainalysis concludes that the growth rate for legitimate crypto transactions far exceeds crime-related ones, chafing against the persisting belief that cryptocurrency is primarily used for criminal activity. 

Crypto scams and funds stolen in decentralized finance were the biggest areas of crypto-related crime in 2021. Victims lost $7.8 billion worth of crypto due to scams – a yearly increase of 82% in 2021. Of the $3.2 billion worth of crypto stolen that same year 72% of it came from decentralized finance (DeFi) protocols, according to Chainalysis. 

The firm notes that its data for crypto-related crime is likely to increase as it retroactively identifies illicit transactions.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.