Blockchain and Cryptocurrency News Roundup

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  • December 21, 2020
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21 December 2020.

Dive into a short summary of some of the biggest headlines in Crypto this week. Bitcoin price caps best week in 20 months with 23% gain, Ledger hacker dumps hardware wallet users’ personal info on public server, Coinbase reportedly taps Goldman Sachs for IPO & the side effect of Bitcoin’s bull run: transactions now cost an average of $12.

Bitcoin price caps best week in 20 months with 23% gain

Bitcoin has gained 23% since Monday, ending the week trading just below $23,500 with its best weekly performance since April 2019, measured by percentage increase. Throughout its monster weekly rally, bitcoin (BTC, +0.29%)’s price set new record highs in four of the past five days, reaching the current record high of $24,273 Sunday afternoon, per CoinDesk’s Bitcoin Price Index (BPI). Only nine other times in the past five years has bitcoin seen a weekly gain larger than the one posted this week. As the new trading week starts, CME bitcoin futures opened at $23,600, just over 3% higher than their close on Friday. Strong weekend buying pressure has caused CME bitcoin futures to open Sunday trading at higher prices than the previous Friday’s close for 10 of the past 12 weeks, per TradingView market data. Bitcoin’s strong weekly performance coincides with the latest flurry of institutional investor activity in Bitcoin. Christopher Wood, global head of equity strategy at investment firm Jefferies, is said to have trimmed 5% of his gold exposure and allocated it to bitcoin. Scott Minerd, chief investment officer at Guggenheim Partners, told Bloomberg his firm’s analysis shows bitcoin should be worth $400,000. Goldman Sachs was also reportedly picked Friday to lead the Coinbase public offering. Year to date, the bellwether cryptocurrency has gained 226%, per Messari data.


Ledger hacker dumps hardware wallet users’ personal info on public server

Ledger, the leading cold wallet providing company, appears to be reaping the consequences of an earlier hack that saw its e-commerce database compromised. Earlier in June, Ledger’s e-commerce and marketing database was hacked, and as a result, millions of clients’ confidential information secured on the company’s servers were compromised. Confidential information, such as phone numbers, email addresses, and physical addresses were stolen, and it appears that the hacker has now exposed it all on an online data-sharing platform dubbed Raidforum. The dump that recently occurred has served to anger many Ledger customers, who threaten to pursue the company in a legal class-action lawsuit. Although no cryptocurrencies were reported to be stolen in the process, as the storage was offline, the exposure of such a large-scale database could still pose severe risks to Ledger customers, according to cybersecurity expert Alon Gal. He said that this could potentially trigger cyber and physical harassments and explained: “This leak holds major risk to the people affected by it! Individuals who purchased a Ledger tend to have a high net worth in cryptocurrencies and will now be subject to both cyber harassments as well as physical harassments on a larger scale than experienced before.” Ledger has since apologized for the breach and advised customers against phishing attacks that may potentially occur in the near future. Its team said it was investigating the incident to confirm whether the leaked client information was from the earlier hack in June, but clues seem to point towards the indication that it was. With the confidential information in its possession, the hacker (or hackers) may potentially impersonate Ledger executives through emails in an attempt to extract cryptocurrency funds. Ledger advised: “STAY VIGILANT OF ONGOING PHISHING SCAMS! Never share the 24 words of your recovery phrase with anyone, even if they are pretending to be a representative of Ledger. Ledger will never ask you for them. Ledger will never contact you via text messages or phone call.”

Coinbase reportedly taps Goldman Sachs for IPO

The exchange’s ties to Goldman Sachs go all the way back to Fred Ehrsam, who co-founded Coinbase in 2012 with Brian Armstrong. Digital currency exchange Coinbase has reportedly approached Goldman Sachs to lead its upcoming initial public offering — a move that could bolster the appeal of cryptocurrencies to a broader mainstream audience. Citing two sources familiar with the matter, Business Insider reported Friday that Coinbase is looking to Goldman Sachs to handle its public filing. No additional details were provided. Coinbase has for years been linked to Goldman Sachs through Fred Ehrsam, the exchange’s co-founder who previously worked at the bank as a trader. Business Insider reports that Ehrsam worked at Goldman between 2010 and 2012 before quitting to establish Coinbase with current CEO Brian Armstrong. Ehrsam left the exchange in 2017 but maintains a board position. The report surfaced a day after Coinbase confirmed its intent to go public in a draft registration sent to the Securities and Exchange Commission, or SEC. Based on its latest valuation in 2018, Coinbase was worth $8 billion. Crypto analytics company Messari says Coinbase could be valued at $28 billion after its public offering. Coinbase is the preferred exchange of many newcomers to the digital currency space. The platform has also raked in billions of dollars in institutional capital since the spring, which broadly coincides with the arrival of so-called smart money. Institutional investors have likely been the primary catalyst behind Bitcoin’s (BTC) record-breaking rally thus far. The flagship cryptocurrency catapulted toward $24,000 on Thursday en route to new highs. With crypto valuations rising to their highest levels since early 2018, Coinbase is launching its IPO at an opportune time in the market’s evolution. Rumors of a Coinbase public offering have been circulating for some time, though plans were never formalized until this week. Like other financial institutions, Goldman Sachs is much more open to the idea of cryptocurrencies than it was a few years ago. The company recently appointed a global head of digital assets and is planning to use JPMorgan’s blockchain for overnight repo agreements. On Friday, the investment bank told its clients that Bitcoin and gold can coexist under the same macro hedge strategy. Although the bank said Bitcoin’s popularity isn’t an “existential threat to gold’s status as the currency of last resort,” it admitted there is “some substitution occurring.”


The side effect of Bitcoin’s bull run: transactions now cost an average of $12

Not again! The average cost of sending a Bitcoin transaction has risen to $12, per BitInfoCharts, its highest price since November 5, when Bitcoin had just started its bull run. On Sunday, December 13, the average cost of sending a Bitcoin transaction was just $2.7. That marks an increase of 344% in less than a week. Rising Bitcoin fees are an unfortunate side effect of Bitcoin’s record-breaking week, in which Bitcoin’s price reached a new all-time high of $23,643 on Thursday, and rose by 26% in the past seven days. Bitcoin’s current price is $23,575, up 5% in the past 24 hours. Bitcoin fees rise whenever there is a surfeit of activity on the blockchain. There is a finite supply of miners willing to process transactions, and they hike the fees up whenever demand for processing transactions outstrips supply. That means that only those who desperately need to transact Bitcoin shall pay the high prices required to send the currency between wallets. Joe DiPasquale, CEO of BitBull Capital, told Decrypt, “Bitcoin’s transaction fees are based on miners’ availability (supply) and the amount of movement of the crypto asset (demand). With the rapid spike in usage and transfers, and miner capacity growing more slowly, Bitcoin’s transfer price has elevated.” The simple explanation for high Bitcoin fees, therefore, is Bitcoin’s price. Lots of people want to trade Bitcoin, whether buying with expectations that it’ll reach yet higher prices, or cashing out due to fears that Bitcoin will soon go bust, just like it did following its bull run in 2017. The last time average Bitcoin fees increased to the levels observed today was in early November, when Bitcoin’s price had begun its ascent, climbing by about $2,000 in just a few weeks. December 2017 holds the record for the highest Bitcoin fees. During the peak of Bitcoin’s bull run, average fees hit highs of $50. And all that for a measly $19,500!

One explanation for why Bitcoin’s fees haven’t risen to such exorbitant levels (yet!) this bull run is that there are far more Bitcoin miners available to process transactions today than there were three years ago.


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