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Bitcoin’s ascent will cost gold market share, according to a research report by investment banking giant Goldman Sachs. 

In a note to clients dated January 4, the bank said that the market capitalization of the largest cryptocurrency will likely grow as “a byproduct of broader adoption of digital assets, and possibly due to Bitcoin-specific scaling solutions.”

Looking at bitcoin’s float-adjusted market capitalization, the cryptocurrency accounts for about 20% of the total “store of value” market, which is currently dominated by gold. Proponents of bitcoin—ranging from Paul Tudor Jones to Anthony Scaramucci—have backed bitcoin as a store of value and inflation hedge asset akin to gold. 

According to Goldman Sachs, the price of bitcoin could possibly increase to more than $100,000 if it were to command 50% of the so-called “store of value” market. The bank added that use-cases outside of store of value could serve as a tailwind for the crypto. 

“Bitcoin may have applications beyond simply a “store of value”—and digital asset markets are much bigger than Bitcoin—but we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns,” the bank said. 

Goldman previously noted that bitcoin was among the best performing assets of the year in 2021, despite underperforming relative to other assets considering its volatility. 

© 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 Securities and Exchange Commission (SEC) has delayed on another spot bitcoin exchange-traded fund (ETF), as an extension notice for NYDOG’s Bitcoin ETF hit the register today.

“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised in the comments that have been submitted in connection therewith,” said the order.

The Commission designated an additional 60 days. NYDIG can now expect an answer on its proposal by March 16. NYSE Arca first filed to list the product on June 30, 2021, putting the SEC on the decision clock. This is the latest in a series of extensions from the securities regulator. 

After multiple extensions and taking the full time available, the SEC also recently delivered rejection orders to VanEck, WisdomTree, Kryptoin and Valkyrie’s proposed products. 

© 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

• Eric Adams has gone out of his way to broadcast his enthusiasm for cryptocurrency.
• Here are the things he can actually change now that he’s mayor of New York City.

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Quick Take

• Major Chinese Bitcoin miner manufacturers have been contracted to deliver at least 1 million units of ASIC miners in 2022. 
• We break down their market shares based on known purchase orders by institutional Bitcoin mining companies, most of which are publicly listed in North America.
• In theory, these pre-orders could add at least 100 EH/s of computing power to the Bitcoin network. But there are several factors that could affect that progress.

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Metaversal, an investment firm and venture studio focused on non-fungible tokens (NFTs), announced Tuesday that it raised $50 million in Series A funding. 

CoinFund, a US-based crypto-focused investment firm, and the investment partnership Foxhaven Asset led the funding round, which had additional participation from Dapper Labs, Rarible, Digital Currency Group, Collab+Currency, Franklin Templeton, Galaxy Vision Hill, Narwhal Ventures, NGC Ventures and others. 

Metaversal intends to use the new funding to bolster NFT-related business strategies such as acquiring digital collectibles, funding NFT-focused projects and partnering with others in the NFT industry like Rarible and Dapper Labs’ Flow blockchain. 

CoinFund revealed its bid to create Metaversal last year. The idea was to let investors bet on the NFT market and help develop NFT-focused firms, as The Block previously reported. CoinFund also previously invested in Rarible and Dapper Labs. 

The NFT trading volume surpassed $13 billion in 2021, and their potential use cases expanded to include being used as collateral in loans and including additional assets upon sale such as a business.

© 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.

J. Christopher Giancarlo, the former chairman of the Commodity Futures Trading Commission, has an idea for unifying cryptocurrency regulation in the U.S.

On January 4, the American Enterprise Institute, a D.C.-based policy think tank, hosted a panel including Giancarlo and representatives from Coinbase, Coin Center and the DeFi Education Fund.

Representing Coinbase was Kara Calvert, who joined the crypto exchange as Head of Policy in November. During the panel, Calvert restated Coinbase’s earlier proposal for a single regulator for digital assets. “It’s not crazy to think about a single regulator,” she said, though seemed to back down from the earlier sentiment to make such a regulator de novo. 

 “They’re absolutely right that there should be a single regulator,” Giancarlo followed up. “At the end of the day, you can’t have multiple regulators.” 

His proposal? As Giancarlo put it: “Take the ad-hoc cryptocurrency working group that I and Jay Clayton created between the CFTC and SEC and develop it into a bureau, a crypto bureau, which would have joint parentage of the SEC and the CFTC. But it would have its own authorization and its own financing coming from the two committee structures [of the Banking and Agriculture Committees].” 

Giancarlo further envisioned that that bureau would combine the respective mandates of the two commissions and feature a leader of that crypto bureau who, like leadership of those two commissions, is appointed by the president rather than hired by the commissions.

The CFTC and the larger Securities and Exchange Commission have been fighting a turf war over crypto market regulation for years. It has only intensified under the Biden administration, where SEC Chair Gary Gensler has asserted an ever-widening circle of authority over crypto products.

Meanwhile, Giancarlo’s recently confirmed successor Rostin Behnam is fighting to maintain the CFTC’s respective claim to jurisdiction over crypto. As Giancarlo phrased it, “That battle’s not going away. The SEC’s not going to run from this. The CFTC is not going to yield.”

Indeed, there has been growing talk of expanding the CFTC’s regulatory authority — typically reserved for futures markets — into spot markets for cryptocurrencies. Recent legislation has also aimed to formalize and mandate such a working group between the two agencies. 

© 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

• The US now has 7 crypto-native banks operating under state or federal charters
• Since OCC regulation on digital banking in July 2020, 2 Wyoming and 3 OCC charters approved
• Crypto-native banks lead in offering custody, real-time payment and OTC trading solutions

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Stablecoin issuer Tether froze over $1 million worth of USDT last week, according to on-chain data.

The amount is significant, given it belongs to a single blockchain address. Tether called the “AddedBlacklist” function on December 30 to block this address within this transaction.

This address now won’t be able to move the frozen funds. When Tether blacklists an address, it freezes the USDT balance of it, as The Block has reported previously.

It is unclear who owns this address, which holds many other tokens in the low five-figure ranges that it hasn’t transferred out. When contacted, a Tether spokesperson declined to share those details to maintain the owner’s privacy but said Tether regularly works with regulators and law enforcement agencies worldwide, including on any cases related to hacks and scams, for freezing addresses.

“Through the freezing of addresses, Tether has been able to help recover funds stolen by hackers or are compromised,” said the spokesperson.

Tether began banning blockchain addresses in 2017 and has blocked over 500 addresses to date on Ethereum, according to The Block’s Data Dashboard.

Tether also has a “recovery” mechanism in place, meaning it can freeze USDT and reissue them in certain cases. For example, if a user sends USDT to the wrong address, it can help recover it by freezing the USDT sent to the wrong address and reissuing new USDT to the user.

In the latest blacklisting case, however, the funds remain in the frozen address. Such cases usually mean that a frozen address is under dispute or being investigated by a law enforcement agency, said the Tether spokesperson.

© 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.

© 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.

Cion Digital, a crypto infrastructure startup building tools for traditional financial institutions, has raised $12 million in a seed funding round.

Green Visor Capital and 645 Ventures co-led the round, with Cota Capital, Epic Ventures, Hourglass Capital Partners, BAT Ventures, Greycroft, and Ulu Ventures also participating.

Cion’s founder and CEO Snehal Fulzele told The Block that he plans to use the capital to expand its team and launch its infrastructure platform. The firm’s current headcount is 20, and Fulzele expects to grow the team to 45 by the end of this year. Cion is planning to open a research and development center in Pune, India, and hire engineers.

As for the platform, its first version is expected to be launched in the first quarter of this year, said Fulzele. It is aimed at helping non-crypto native organizations such as traditional financial institutions and registered investment advisory firms to offer crypto services.

Cion is currently piloting its platform with “half-a-dozen customers,” including a fintech lender and a vehicle dealer, according to Fulzele. The fintech lender wants to allow its customers to invest in crypto and eventually offer fiat loans against crypto. The vehicle dealer, on the other hand, wants to enable crypto financing for millennials and generation Z who typically don’t qualify for traditional financing, said Fulzele.

As for its business model, Cion will charge a fixed monthly platform fee and a transaction fee based on the volume of digital assets processed (bought, sold, received, sent) by the platform, said Fulzele.

The seed funding round is Cion’s first capital raise and an equity round. The lead investors Green Visor Capital and 645 Ventures have also joined Cion’s board of directors.

© 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.