1. Market Wrap: Bitcoin Drops as Indicators Show Extreme Optimism
The price fell from an all-time high of almost $67K as bullish traders took profits. That may continue, but not for long.
Bitcoin’s price slipped to the $62,000 area on Thursday as indicators suggest bullish sentiment is near extreme levels, which typically precedes a price pullback.
The cryptocurrency’s price was down about 5% over the past 24 hours after failing to sustain an all-time high of almost $67,000 on Wednesday.
The crypto Fear & Greed Index remained elevated in “extreme greed” territory, suggesting that investors who accumulated positions around the $30,000 BTC price could start to take profits.
Analysts also noted signs of excessive optimism in the bitcoin futures market, although some expect price pullbacks to be short-lived.
“Despite the recent setback, we remain very bullish about the current crypto cycle for at least another five to six months,” James Cox, CEO of Taipan Trading and Investments, wrote in a Thursday investment memo. The firm reduced trading during the September crypto sell-off and later deployed a large cash position to BTC in October.
Looking ahead, traders and analysts will be monitoring Valkyrie Investments’ bitcoin futures exchange-traded fund (ETF), which will begin trading in the U.S. on Friday under the ticker BTF.
Bitcoin (BTC): $62,700, -5.54%
Ether (ETH): $4,079, -0.69%
S&P 500: $4,549, +0.30%
Gold: $1,784, +0.17%
10-year Treasury yield closed at 1.67%
BITO trading activity surges
The ProShares Bitcoin Strategy ETF (NYSE: BITO) had significantly higher trading volume over the past two days relative to other large exchange-traded funds (ETF). This reflected strong investor demand for BITO, an ETF focused on bitcoin futures, and achieved nearly $1 billion in assets in just its second day of trading.
“The introduction of this product is a net positive for the [crypto] industry. Since ETFs are traded in all traditional brokerage accounts, BITO creates a frictionless avenue for thousands of professional financial advisors to achieve liquid exposure to bitcoin without needing to endure a learning process,” global advisory firm FundStrat wrote in a Thursday newsletter.
2. Almost $7M in Bitcoin Held by Colonial Pipeline Attacker Is on the Move
Elliptic has linked the activity to ransomware group REvil, with which DarkSide has close ties, being hacked and forced online by a U.S. government-led operation.
Bitcoin now worth nearly $7 million held by the DarkSide ransomware group involved in the Colonial Pipeline attack in May is on the move, according to blockchain analytics firm Elliptic.
Following the attack, which threatened the petroleum supplies of five eastern states in the U.S., DarkSide’s share of the amount paid in ransom remained dormant until Oct. 21, Elliptic said Friday in a blog.
The developer of “ransomware as a service,” DarkSide, maintained a wallet to hold its share of the funds, which included 11.3 BTC. That was identified by Elliptic using its intelligence collection and analysis of blockchain transactions.
DarkSide subsequently said the wallet had been claimed by an unknown third party, sending 107.8 BTC ($6.8 million) to a new address.
These bitcoin have now been sent through a series of new wallets over a period of several hours, with small amounts being ejected at each step — a common money laundering technique to make funds harder to track.
Elliptic has linked this activity to ransomware group REvil, with which DarkSide has close ties, being hacked and forced online by a U.S. government-led operation.
3. Spanish Banks Are Preparing to Offer Crypto Services
The Bank of Spain said in June it would provide instructions for entities wishing to register to provide crypto services. They’re still waiting.
Banks in Spain are getting ready to offer crypto services to their clients, but are being frustrated by the lack of clarity from their central bank.
The Bank of Spain said in June it would provide instructions for entities wishing to register to provide crypto services.
The corresponding registry is meant to be operational by Oct. 29, but the banks are still waiting for instructions, Spanish newspaper El Pais reported Tuesday.
Specifically, there is uncertainty as to whether the registry — which aims principally to combat money laundering — is designed for financial institutions that are already regulated entities.
“It would not make sense for a bank to have to go through the requirements imposed, since these entities are already directly supervised,” Gloria Hernández Aler, a partner at regulatory advisory firm finReg, said.
“However, it does make sense for them to notify that they are going to provide this type of service and, probably, they will need to change their money laundering policy to adapt it to the dynamics of crypto assets.”
Lacking firm direction from the central bank, several of the large financial institutions’ compliance departments have set about finding out whether they have to be registered to offer crypto services, El Pais reported.
4. Walmart Has Quietly Begun Hosting Bitcoin ATMs
The retail giant is offering bitcoin through 200 of its Coinstar kiosks in a tie-up with crypto ATM firm Coinme. We made sure it’s real.
Walmart, the world’s largest company by revenue, is letting customers buy bitcoin at dozens of its U.S. stores.
Shoppers can purchase the cryptocurrency at Coinstar machines inside the retailer’s cavernous big box stores. An editor verified that the service works, buying a small amount of BTC at a Pennsylvania Walmart on Oct. 12.
“Coinstar, in partnership with Coinme, has launched a pilot that allows its customers to use cash to purchase bitcoin,” Walmart communications director Molly Blakeman told. “There are 200 Coinstar kiosks located inside Walmart stores across the United States that are part of this pilot.”
Coinstar is best known for allowing consumers to exchange coins for paper bills or gift cards. The ability to buy bitcoin is enabled by Coinme, a crypto wallet and payment firm that specializes in bitcoin ATMs (BTMs).
“Clean coins only”: The Coinme interface for buying bitcoin at Walmart.
After inserting bills into the machine, a paper voucher is issued. The next stage involves setting up a Coinme account and passing a know-your-customer (KYC) check before the voucher can be redeemed. The machine charges a 4% fee for the bitcoin option, plus another 7% cash exchange fee, according to the Coinstar website and verified.
We tested the service out of an abundance of caution following a hoax last month, when a fake press release claimed that litecoin (LTC) would be accepted as payment at Walmart stores. This time, the bitcoin-Bentonville connection is real. A source with knowledge of the pilot said the Litecoin debacle had put Walmart, which is based in Bentonville, Ark., off from issuing a press release.
5. Worldcoin, Now Valued at $1B, Has Grand Plans to Get You to Gaze Into the Orb
A16z and Coinbase Ventures are betting big billions of people will line up to gaze into “The Orb” in exchange for crypto. Over 130,000 already have.
Would you let a chrome, volleyball-sized sphere scan your retinas in exchange for crypto?
That’s the interesting — and controversial — premise behind Worldcoin, a new project co-founded by former Y Combinator President Sam Altman.
Depending on whom you ask, Worldcoin’s plan might sound futuristic and cool, a little silly, or like a dystopian nightmare ripped from science fiction. When news of the project leaked to Bloomberg in June, the media response was critical.
Silicon Valley, however, is excited about the project.
Worldcoin announced Thursday it raised $25 million from investors including Andreessen Horowitz (a16z), Coinbase Ventures, Digital Currency Group (the parent company of CoinDesk) and angel investors including crypto billionaire Sam Bankman-Fried and Reid Hoffman, the co-founder of LinkedIn. The company is currently valued at $1 billion.
According to some of the company’s prediction models, Worldcoin thinks over a billion people will have gazed into the Orb by 2023.
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October 22, 2021