Blockchain and Cryptocurrency News Roundup

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  • May 25, 2021
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25 May 2021.

Here’s a short summary of some of the biggest headlines in Crypto. Number of Bitcoin holders shoots to record high, HSBC CEO: no plans for launching crypto trading, $8.6B IT firm Globant revealed as Bitcoin’s latest institutional buyer and South Korea to kick off digital currency experiment this summer.

Number of Bitcoin holders shoots to record high

The number of bitcoin addresses in accumulation has risen to a record high as investors with long-term horizons take advantage of the recent price drop to boost their coin stashes.

The count of accumulation addresses climbed to a record for the seventh consecutive day on Monday, taking the total to 545,115, according to Glassnode data. The number has increased by 16,445 since May 8 – a sign of persistent bargain hunting by long-term holders during bitcoin’s slide from $58,000 to $30,000. The balance held in accumulation addresses has jumped by 30,000 during the same time frame, hitting a two-month high of 2.79 million BTC. Glassnode defines accumulation addresses as ones that have at least two incoming non-dust (tiny amounts of bitcoin) transfers and have never spent funds. Essentially, these are long-term holder addresses.

Over-the-counter (OTC) desks have also seen substantial outflows over the past two weeks, signifying dip-demand from institutional investors. On Monday, OTC desks tracked by Glassnode registered an outflow of 11,883, the most since early September. However, inflows to OTC desks wallet also spiked to a 5.5-month high of 12,392 on Monday. Inflows indicate an intention to sell but do not imply immediate liquidation.


HSBC CEO: no plans for launching crypto trading

HSBC revealed that the bank has no plan to offer virtual currency as investments to their clients by starting a cryptocurrency trading desk due to volatility and uncertain transparency, the CEO said Monday.

Noel Quinn, CEO of HSBC, accepted an interview from Reuters on Monday said the bank has no plans or offer digital coins for their clients as investments by using cryptocurrencies as a trading medium.

“Given the volatility we are not into Bitcoin as an asset class, if our clients want to be there, then of course they are, but we are not promoting it as an asset class within our wealth management business”.

Quinn expressed his scepticism towards cryptocurrencies; part of the reasons was the difficulty of assessing the transparency of holders and the risk of its convertibility into fiat money, according to the news agency.

“I view Bitcoin as more of an asset class than a payments vehicle, with very difficult questions about how to value it on the balance sheet of clients because it is so volatile,”

He further explained that the system needs stable coins to reserve to address the stored value concerns. However, it depends on who the sponsoring organisation is, plus the structure and accessibility of the reserve.

However, Quinn said he believes in central bank digital currencies (CBDC), saying that CBDCs can simplify and facilitate international transactions in e-wallets and take out friction costs.

Meanwhile, a senior management member from HSBC- Paul Mackel, said on CNBC’s programme on Monday that Beijing’s recent attempt to tighten crypto regulations was not a “new development”, indicating China took a more “cautious” stance on crypto affairs.

Mackel argued that China’s recent decisions aimed to replace cash in circulation and did not directly conflict with launching its digital yuan.

Three Chinese regulatory units, including NIFA, CBA, and PCAC, prohibited banks and financial firms early from providing cryptocurrencies transaction services early. Last week, China said that tightening crypto regulation was necessary to “crackdown on Bitcoin mining and trading behaviour” for protecting the financial system.

$8.6B IT firm Globant revealed as Bitcoin’s latest institutional buyer

The technology solutions firm revealed it purchased $500,000 worth of BTC during the first quarter of 2021.

Filings with the U.S. Securities and Exchange Commission reveal that major IT conglomerate Globant has become the latest big firm to invest in Bitcoin.

The firm declared its crypto asset purchases for the first three months of the year in a statement to the SEC made on May 25 stating:

“During the first quarter of 2021, the Company purchased an aggregate of [$500,000] in crypto assets, comprised solely of bitcoin.”

The company’s crypto investments and expenses were listed among its “intangible assets,” alongside licenses, customer relationships, customer contracts, and non-compete agreements in the company’s possession.

Globant stated that it declares Bitcoin as an intangible asset because it “lacks physical form and there is no limit to its useful life.” It added that any gains made on digital assets will not be recognized until they are sold.

Globant is an IT and software development company founded in 2003 that operates predominantly in Latin America but also has offices in the U.K. and U.S.

Despite revealing the presence of Bitcoin on its balance sheet, the firm has not revealed the cost-basis paid for its BTC stash. However, with its purchases coming in the first quarter, any BTC buys made from the second week of February onwards would currently be sitting at a loss.

While numerous publicly traded companies have purchased BTC in recent months, many are currently underwater on their BTC buys. According to Bitcointreasuries, six publicly-listed firms are currently in the red on their BTC acquisitions now that Bitcoin has retraced back to its early-February price levels.

Japanese online gaming firm Nexon announced its $100 million BTC purchase on April 28, with the Bitcoin now worth $67 million. Seetee, a subsidiary of Norwegian energy giant Aker, revealed a $58.6 million Bitcoin purchase in early March that has declined in value to $44.9 million today. Chinese tech company Meitu, who announced a $49.5 million in Bitcoin buys during March and April, has seen the value of its crypto holdings shrink to $36 million.

Financial consulting firm Brooker Group is also down $2 million on its $6.6 million BTC buy, while enterprise cloud platform Phunware Inc has seen the value of its $1.5 million Bitcoin stash fall by one-third since purchasing.

Multinational investment firm BlackRock also appears to have lost 33% of its $360,000 BTC acquisition. However, the firm acquired the position in March as profits from a futures trade it entered in January, meaning BlockRock did not spend any fiat to accumulate its crypto.


South Korea to kick off digital currency experiment this summer

The Bank of Korea will launch a pilot program for its central bank digital currency, but actual issuance is still under question.

The Bank of Korea, South Korea’s central bank, has opened bids to fill the role of technology supplier for its upcoming central bank digital currency (CBDC) trial, local news outlet Korea Herald reported on Monday.

The trial, which has been allocated a total of $4.4 million (4.9 billion won), will be conducted in a “virtual environment” in two stages. The first stage is slated to run from August to December 2021.

However, as bank officials stressed, the Bank of Korea currently has no plans to issue its digital currency—the pilot’s goal is to look into its feasibility and overall effectiveness. 

“We are launching the pilot test to see how [a] CBDC could be used as a form of safe asset when the share of cash transactions decline significantly,” said the bank’s official, adding that “the necessity to issue its digital currency is not urgent at the moment.”

CBDCs refer to centralized, digital versions of native fiat currencies, such as the U.S. dollar or the euro, aiming to bring speed and security to monetary systems worldwide.

Two stages of the trial

The first stage of the trial will focus on CBDC’s basic functionalities and include testing its issuance and circulation. 

The second stage, which is scheduled to conclude in June 2022, will explore more detailed aspects of CBDC, such as cross-border transactions and offline payments. Additionally, the Bank of Korea will study the effectiveness of digital currencies in protecting user privacy.

Several tech giants, including Naver, Kakao, and LG, have reportedly expressed their interest in the central bank’s forthcoming trial. Samsung, South Korea’s largest industrial conglomerate, is also expected to decide whether to bid for the pilot program.

For the past several years, central banks and governments across the globe have been researching the feasibility of CDBCs. 

While many of them are still cautious about introducing a new form of digital money, several other countries have already made significant advancements. China is already piloting a digital yuan, and the Bahamas has already launched its Sand Dollar. 


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