Bitcoin Crosses $15K

November 5, 2020

By Daniel Kuhn

If you were forwarded this newsletter and would like to receive it, sign up here.

Top shelf

Bitcoin’s price keeps climbing amid election uncertainty. Wasabi Wallet will offer automatic, privacy-preserving CoinJoins in its coming upgrade. A major Russian power provider is entering into a bitcoin mining joint venture.

Fat-fingered
Reddit user "ProudBitcoiner" accidentally paid 23.5172 ETH (approximately $9,400) fee on a $120 transaction, the person disclosed in a post. The costly mistake occurred while manually entering a “Gas Price” while executing a swap on the DeFi liquidity protocol Uniswap rather than a “Gas Limit.” Mining pool Ethermine processed the transaction and collected the windfall fee, which was way higher than the current average of 0.0022 ETH ($1.07), though ProudBitcoiner has contacted the miner for assistance in potentially recovering the fee.

Mining co-venture
One of the largest aluminum and power producers in the world will begin crypto mining through a joint venture with BitRiver, which already owns the largest mining venue in Russia and is looking to expand. En+, whose largest shareholder is Russian billionaire oligarch Oleg Deripaska, owns four major hydropower plants in Siberia that produce about 7% of the country’s electricity. The joint venture (an 80/20 split between En+ and BitRiver) will offer 10 megawatts of power for miners to host ASICs, with the potential to expand to 40 megawatts. En+ was sanctioned by the U.S. in 2018, though these prohibitions have since been lifted.

Exchange expansion
Coinbase is hiring in Japan, with renewed plans to launch. While the U.S.-based exchange has not received a mandatory operating license from Japan’s Financial Services Agency (FSA), in March it became a second-class member of the Japan Virtual Currency Exchange Association, a self-regulatory organization approved by the regulator. IT, data, finance and accounting, legal, marketing and communications, customer experience, and international expansion roles are currently open. CoinDesk’s Sebastian Sinclair reports Coinbase has had plans to expand into Japan since 2016.

Super donor
Sam Bankman-Fried, the CEO of cryptocurrency derivatives platform FTX, made the second-largest donation to Joe Biden’s presidential campaign, according to details revealed in The Wall Street Journal on Oct. 28. The Hong Kong-based CEO gifted Biden's campaign a total of $5.2 million, behind New York Mayor Michael Bloomberg's $56 million donation. Bankman-Fried is a member of the wealthiest Democratic super PAC, Future Forward, which includes Facebook co-founder Dustin Moskovitz and former Google CEO Eric Schmidt.

Privacy preservation
Wasabi Wallet is looking to overhaul its privacy-focused bitcoin software wallet with user-centric design and privacy improvements including automatic, default CoinJoins. (A CoinJoin is a method of mixing BTC transactions from multiple users to better conceal identities). Separately, Blockstream engineers will roll out improvements to bitcoin multi-signature transactions, with privacy benefits. The “MuSig2” design builds on previous multi-signature schemes – a way to authorize transactions using more than one private key – while reducing the technical complexity and amount of communication between parties to operate.

CoinDesk's upcoming virtual event Bitcoin for Advisors, on two half days Nov. 9-10, aims to equip investment advisors with tools to better understand bitcoin, talk to their clients about it and work it into their business.

In close cooperation with professional advisors, CoinDesk is showcasing a program tailored to the financial advisor community. Through a series of keynotes, panels and interactive roundtable sessions, we will discuss investment theses for bitcoin, why younger demographics are turning to this asset and how it fits into the current global macroeconomic picture.

We will also walk through the practicalities: how to answer client questions about bitcoin, how to talk to your compliance department about bitcoin, how can bitcoin can help grow your book. Apply for Bitcoin for Advisors, Nov. 9-10.

Quick bites

Market intel

Bitcoin’s stimulus
Bitcoin crossed $15,000, the first time since January 2018. The cryptocurrency is now up 7.8% over the past 24 hours and over 108% on a year-to-date basis, with little sign of slowing. CoinDesk’s Omkar Godbole notes this recent rally is represents a ~40% climb in the last four weeks alone. Buoyed by an imminent sense of monetary stimulus, indeterminate of who wins the U.S. presidential election, analysts predict this rise to continue. "We may not know what a post-election [fiscal] stimulus may look like, but investors continue to believe that the [Federal Reserve] will keep printing money at a pace that favors bitcoins finite supply," John Kramer, a trader at crypto liquidity provider GSR, told CoinDesk.

Webinar: How to Value Ethereum

In this 30-minute webinar, the first of the four-part series How to Value Ethereum, CoinDesk Research looks at accounts – a concept that sounds familiar to blockchain addresses, but involves novelties and complexities that are critical to understanding how Ethereum works.

Register to join How to Value Ethereum on Nov. 11.

At stake

Anyone's bet

Prediction markets are still buzzing with activity amid the uncertainty of the current U.S. presidential election process. Yesterday, decentralized predictions platform Polymarket became the fourth-highest fee-generating blockchain project, according to Cryptofees, only behind Bitcoin, Ethereum and DeFi protocol Uniswap.

Currently, perhaps obviously, the largest pool on Polymarket is “Will Trump win the 2020 U.S. presidential election?,” with nearly $8.8 million in trading volume. While predictions flipped in President Donald Trump’s favor on the first night of ballot counting, most bettors now see former Vice President Joseph Biden as favored to win.

“I think us being top 4 of fee-generating blockchain apps, literally anything blockchain-related, is insanity,” Shayne Coplan, Polymarket CEO, told CoinDesk’s Sebastian Sinclair. “Just in this election cycle alone, we have seen our volume surpass $10 million which is a lot higher than we expected in such a short time frame.”

Of course, prediction markets are not the only way for people to take bets out on election results. It’s likely most markets are, in some way, processing the current moment of anxiety and uncertainty.

For instance, trading in Chicago Mercantile Exchange (CME) bitcoin futures during the U.S. election has spiked 75% above the 2020 average. The CME is routinely one of the largest, and most institutionally-driven crypto options exchanges. Average daily open positions, which allow traders the option to buy bitcoin between a specified period, was up 20% in just the first two days in November compared to October.

Making sense of bitcoin’s current three-year high, Bill Noble, chief technical analyst at Token Metrics, said that no matter the electoral outcome, monetary stimulus is to be expected. This strengthens one of bitcoin’s core narratives (the things people believe about the oldest cryptocurrency) as a hedge against inflation.

“If there is social disorder because of a Trump win, the Fed prints. If the election result is a blue wave and taxes rise, the dollar falls because the Fed prints more, and more and more," Noble said.

Going back to predictions markets: Anthony Sassano wrote, “I’ve long thought that one of the major reasons prediction markets hadn’t taken off yet was due to little to no interesting markets being available to bet on.”

That’s not to say predictions markets are any better or worse than traditional ways of measuring risk. Cami Russo’s The Defiant publication said Ethereum prediction markets are the “best or worst answer” to uncertainty, while Decrypt found FTX’s platform largely mirrors FiveThirtyEight's model.

With election headlines currently dominating the discourse, the stakes are high and the bets are on.

Who won #CryptoTwitter?

ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is.

Blockchain Bites

A newsletter from CoinDesk

See Previous Editions

Copyright © 2020 CoinDesk, All rights reserved.

250 Park Avenue South New York, NY 10003, USA

You can manage your preferences here or unsubscribe from all CoinDesk email.