Blockchain Bites: Aave’s Advance, BitMEX’s Block, Turkey’s Bitcoin Trot
A branch of the Fed is looking at 30 blockchain networks to possibly support a âdigital dollar,â Turkey is experiencing aÂ bitcoinÂ bull run and the Aave protocol has taken a leap forward for DeFi.
Youâre readingÂ Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why theyâre significant. You can subscribe to this and all of CoinDeskâsÂ newsletters here.Â
âCanât stop the nodlâ
Turkey is experiencing a dollarization crisis andÂ a bitcoin bull run, exchange volume data reveals. BTCTurk, the largest crypto exchange in Istanbul, has seen volumes roughly quadrupled over the past year, attracting roughly 100,000 active monthly users by July 2020 out of nearly one million accounts, CoinDeskâs Leigh Cuen reports. âAugust might be the highest volume ever and the highest level of registrations in any month this year,â CEO Ozgur GÃ¼neri said. âThis also correlates to the volatility in prices.â
The Federal Reserve Bank of Boston, one of 12 regional Federal Reserve banks operating under the U.S. central bank, isÂ evaluating more than 30 different blockchain networksÂ to determine if they would support a digital dollar, CoinDeskâs Nikhilesh De reports. This follows on news from earlier this month the Boston Fed is actively testing a tokenized version of the U.S. dollar with the Massachusetts Institute of Technologyâs Digital Currency Initiative, looking at how it might complement the existing greenback.Â
Crypto derivatives exchangeÂ BitMEX will block users in the Canadian province of OntarioÂ beginning in September. Without going into detail, the exchange said it was âmandatedâ by the stateâs securities regulator, the Ontario Securities Commission. Existing positions may run till Jan. 4, 2021, but no new contracts will be filled. The news comes as the sometimes controversial exchange moves to become more compliant with regulators, having brought in compulsory âknow-your-customerâ verification procedures earlier this month, CoinDesk News Editor Daniel Palmer reports.Â
Chinaâs central bank said experiments of its digital yuan projectÂ only involve small retail transactions. The statement, from a Peopleâs Bank of China employee, came after rumors of a Shenzhen house sale conducted through the DCEP (digital currency, electronic payment). The seller had been paid with a large amount of the digital currency, but was unable to convert it into the traditional version of the currency, Chinese news source Global Times reported. The PBoC employee later told news source Sina scenarios involving larger-sized transactions during the pilot period are not yet being addressed.
Enegix may become one of the largest bitcoin mining facilities in the world if it opens in September. The 180 megawatt (MW) data center will be able to support 50,000 mining rigs, according to sales director Dmitriy Ivanov. Assuming full capacity with Bitmainâs AntMiner S19 series or MicroBTâs WhatsMiner M30, they could produce mining power of about 5-6 EH/s âÂ approximately 4% of bitcoinâs current hashrate, CoinDeskâs Paddy Baker reports. The $23 million project would draw as much electricity as 180,000 U.S. homes and employ about 160 people in Kazakhstan. Separately, Nasdaq-listed Marathon Patent Group has deployedÂ two shipments of mining machines, increasing the companyâs hashrate by 130 petahash per second to 186 petahash per second.
- Barstoolâs Dave Portnoy IsÂ Bad at TradingÂ Cryptocurrency (Zack Voell/CoinDesk)
- Money Reimagined:Â DeFi-ing HistoryÂ (Michael Casey/CoinDesk)
- People Arenât Buying the âGreat American RecoveryâÂ Narrative (Nathaniel Whittemore/The Breakdown)
- âYield farmingâÂ is flashy, but in some ways it resembles whatâs happening in traditional markets (Frank Chaparro/The Block)
- BinanceÂ Taps DeFi ExcitementÂ to âFuelâ Expansion Strategy in India (Leigh Cuen/CoinDesk)
Aave, a DeFi money market protocol,Â has brought unsecured borrowing to decentralized financeÂ (DeFi). CoinDeskâs Brady Dale reports the protocolâs credit delegation function is live, allowing users with collateral on Aave to delegate their credit line to a third party they trust, earning a cut of the interest. Aave, like most other DeFi protocols, had allowed users to earn interest on cryptocurrency and borrow against it. Unsecured borrowing represents âa significant shift for DeFi lending, which until now has been predicated on only one of the traditional âfour Câsâ of credit: collateral,â he writes, (âcapacity,â âcapitalâ and âcharacterâ were the remaining three).Â
What people are saying:
âI think itâs healthy and natural to experiment around these models. But they do have a lot of risks around them, for obvious reasons, if the assets canât be recovered in time for the primary owner,â Joseph Kelly, CEO of Unchained Capital, a company that writes loans against bitcoin collateral.
Bitcoin up, dollar down
Bitcoin wasÂ up slightly at about $11,776 early Monday, rising along with European equities, stock futures, gold, copper and oil amid market optimism, CoinDeskâs First Mover reports. The dollar weakened. Prices have now spent 27 straight days above $10,000, the third-longest period in the five-digit zone in bitcoinâs 11-year history. According to Cryptoslate, the streak suggests â$10,000 as strong support, which typically is a positive medium-term sign.âÂ
Bearish bets inÂ bitcoin futures from leveraged funds hit record highsÂ on the Chicago Mercantile Exchange (CME), CoinDeskâs Omkar Godbole said. Last week, leveraged funds increased their short positions by 110% to a record high of 14,100 contracts, according to a Commitment of Traders (COT) report published by the U.S. Commodity Futures Trading Commission (CFTC) on Friday. Crypto derivatives research firm Skew suggests these short positions are âa function of attractive cash and carry levels,â an arbitrage strategy.
Crypto Long & Short
It wasnât just Coinbase alum Brian Brooks, now head of the U.S. Office of the Comptroller of the Currency (OCC), who wanted to open the possibility for banks to custody crypto â the OCC had been looking at this for some time. CoinDesk Head of Research Noelle Acheson looks at the growing number of regulators and politicians â including from the Commodity Futures Trading Commission and Congress â trying to âsupport crypto innovation while protecting investors for longer than many realize.â Thus, âthe OCCâs recent bold move is probably not the only welcome surprise weâll see from an official body this year,â she writes.Â
On the latest Long Reads Sunday podcast, Nathaniel Whittemore looks at marketsâ reaction to Federal ReserveÂ minutes suggesting yield curve control is off the table.Â
Who won #CryptoTwitter?
- Blockchain Bites: Bitcoinâs Weary Bulls, ETCâs Action Plan, INXâs IPO
- Blockchain Bites: Ethereumâs Fees, Bitcoinâs Pullback, Renâs Great Week
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.