Blockchain Bites: Coinbase Wants to Crowdsource Asset Listings; What’s Up With Tether’s Bank?

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Bitcoin is in the red today after Joe Biden’s $ 1.9 trillion stimulus plan was announced last night.

Top shelf

Stakeholder share
The ETC Group’s exchange-traded Bitcoin (ETP) product (which was recently launched on the Swiss SIX exchange, although it is traded elsewhere) recorded a volume well above any other 1,800 ETPs listed on Deutsche Börse. Bitwise found that the number of financial advisors assigning crypto to client portfolios has increased 49% year over year, according to a survey of 900 money managers.

Coinbase Crowdsources Coins
The popular exchange yesterday announced the Asset Hub, a new issuing portal that allows users to name a cryptocurrency to trade on the exchange. “We know that the growth of the crypto-economy depends on the success of digital asset issuers, and we are determined to support issuers in any way we can,” said one executive.

Money moves
Blockchain mortgage platform Figure says it has closed a $ 100 million financing facility for its mortgage products from JPMorgan. The company also reported that its mortgage business grew nearly 50% in the fourth quarter of 2020 from the previous month. Coinbase’s venture arm has invested in the start-up round of mining company Titan, while commercial bank Galaxy Digital will begin mining Bitcoin and providing financial services to miners.

Fast bites

  • BITCOIN CORE: Bitcoin got an upgrade. Here’s what you need to know. (CoinDesk)
  • DATA PROTECTION COINS: A number of exchanges have removed Dash, Zcash and Monero from their order books. At least they won’t reveal why. (CoinDesk)
  • CFTC INSIDER: What the crypto world can expect from Gary Gensler at the SEC. (CoinDesk op-ed)
  • BIDEN’S $ 1T: Does Biden’s stimulus plan justify Bitcoiner? (First Mover / CoinDesk)
  • $ 1B TRANSFER: It only cost $ 7 to move a major order to Ethereum. (Decrypt)
  • ‘HIGH PRIORITY’: According to Jerome Powell, the Fed is working on stable coin risks. (The block)
  • THE EFFECT: Does Grayscale Trust Affect Crypto Prices? (Medium)
  • NEW ERA: From pro-government Bitcoin miners. (Vice)

Market information

Dot matrix?
With the prices of Bitcoin and other cryptocurrencies rising further this year, many traders are looking for indicators of when – or if – the bull market is coming to an end. Some are convinced they have the answer: They are investigating Polkadot (DOT), the native token of the Polkadot blockchain, as a potential canary in the cryptocurrency coal mine. CoinDesk’s Muyao Shen covers the market maneuver.

On the game

Tied up
It’s been a while since we last covered Tether here, but a recent headline regarding the bank the stablecoin issuer parks its funds in is as good a reason as anyone to check in. In a year-end video recording sent to his clients, and Hugo Rogers, Deltec Bank & Trust’s chief investment officer, recently surfaced on the crypto media and said he was investing some client funds in Bitcoin.

According to the video (which I haven’t seen personally), Rogers said the bank bought Bitcoin for about $ 9,300 before their last attempt. “[S]o This worked very well up to 2020 and we expect it to work well in 2021 as well as the presses continue to run hot, ”said Rogers in the video. The ATMs go brrr.

Aside from discovering that an investment officer at a Bahamian bank is a Bitcoin bull, the quote raised questions about Tether’s reserves. Tether (USDT) is a stable coin tied to US dollars. Issuer Tether, a company that shares executives with the Bitfinex crypto exchange, aims to maintain the stablecoin’s one-to-one relationship with the greenback based on cash or cash equivalents held by Deltec.

Deltec has made it clear that Roger’s statements “had no relation to Tether’s assets in Deltec”. So Tether’s reserves are definitely not covered by Bitcoin. Or at least not Bitcoin, which Deltec’s investment officers bought in the fourth quarter of 2020.

What is backing tether?

There is currently more than $ 24 billion in linen, a five-fold increase from early 2020 when there were less than 5 billion linen. In theory, the Bahamian bank should have around $ 24 billion in holding reserves.

While many are vouching for the company and the mint, Tether has yet to come up with a full review of its reserves. In 2019, Bitfinex and Tether told the New York Courts that Tether is only 74% backed by cash and short-term securities instead of maintaining a full tie, though they backed that claim months later.

In short, no one outside of Tether can be entirely sure of what the popular stablecoin is supporting. Tether is not decentralized like other cryptocurrencies, nor does it have a fixed cap on the amount that can be created.

Tether is the third largest crypto by market cap and probably the most traded crypto in terms of trading volume. Not only is it used as a legitimate means of payment (CoinDesk reported it is widely used to evade sanctions in China and Russia), but also as a common trading pair and a place where investors can park their money in times of volatile markets.

“Tether’s growth in 2020 has been spectacular. We are now talking about tethering trading, with the lion’s share of spot trading volume now being in Tether tokens (USDT), ”Bitfinex and Tether Chief Technology Officer Paolo Ardoino told CoinDesk via an email in December via a spokesman. “As business increases, so too does the use of tether belts,” he continued.

As Ardoino suggests, the amount of leash is based solely on demand for the standout stablecoin. The company mints Tethers based on orders from exchanges, traders, and others, though due to the limited rules for knowing your customers, it’s not always obvious who is calling to turn the coin on.

Some of these questions could soon be answered. As part of an ongoing lawsuit by the New York attorney general, Bitfinex and Tether are required to provide millions of pages of documents on Jan. 15 relating to a loan Tether allegedly provided Bitfinex to cover a $ 850 million hole.

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