Wednesday, May 27, 2020

📌 More Craig Wright Drama, Crypto Prime Brokers, and Texas Pays to NOT Mine Crypto

May 27, 2020 | Issue #119

 MUST READS 

This Week in Crypto Prime Brokers


The race to become crypto's leading prime brokerage is on with a series of recent acquisitions. Prime Brokerages offers institutional clients easier access to liquidity, custody, lending and other products and are a positive sign for the overall crypto industry.

Rather than building prime brokerages from scratch, companies seem to be taking a M&A approach.

Recent movement includes:
  • Coinbase acquiring Tagomi today for ~$100mm
     
  • Genesis acquired Vo1t last week
     
  • BitGo launches BitGo Prime today
     
  • Similarly, FalconX ($17mm) and Omniex ($14mm) just raised some large rounds
     

Another Twist in the Loopy Craig Wright Saga...


Backstory: Craig Wright – the self-proclaimed creator of Bitcoin (that nobody really likes or believes) claims to own some 1.1M BTC (~$9.77B) in a series of addresses known as the "Tulip Trust."

Currently, Wright is battling a lawsuit in which he must prove he is the creator of Bitcoin – as he claims. To prove he is Nakamoto, he must prove access to those addresses.

After much delay, Wright provided the court with a list of those addresses...

Just In: Over the weekend, the actual owner of 145 of those addresses used them to sign a snarky message.

Here's what it says.
 

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 DEEP DIVE 

Polkadot Goes Live


After nearly four years of development, the Web3 Foundation has launched the first mainnet chain candidate for Polkadot.

Why it matters? Polkadot is one of the more well-funded and well-known Ethereum competitors racing into the increasingly saturated smart contract platform market. They now join Solana, NEAR, and Celo – all of which, have launched since the start of the year.

At least 7 more "Ethereum Killers" are expected to launch in 2020. Talk about competition...
 

The Texas Grid Pays Layer1 to NOT Mine Crypto


Deep in West Texas, crypto mining firm Layer1 has been taking advantage of a huge supply of natural gas and wind turbines. Prices are so cheap that Layer1's cost to mine is less than $1,000 per Bitcoin.

But now, CEO Alex Liegl is excited to stop mining. Why? It turns out that running a brigade of Bitcoin miners is a great way to arbitrage wholesale electricity prices. Layer1 has entered into so-called "demand response" contracts with Electricity Reliability Council of Texas. (Find out exactly how it works here)

Layer1 is simply acting as an insurance policy for the grid. The best part, they get paid whether a grid emergency occurs or not. Just for their willingness to shut down if necessary, Layer1 collects an annual premium of $19/mwh of their expected power demand — or about $17 million. Not bad.
 

Gold and Cryptoasset Index


After two years in the making, CoinShares just launched its Gold and Cryptoassets Index (CGCI).

The goal of the index (now live on Bloomberg Terminals and Refinitiv) is to give investors the opportunity to leverage the risk-off attributes of gold and Bitcoin's propensity for higher returns.

More importantly, CoinShares hopes that its index will bring more professional investors...

"Robustly researched and documented index products were the catalyst for institutional adoption of commodities in the late '90's... this crypto and gold index aims to do the same, by using academic research and its benchmark regulated status to pass muster with even the most stringent investment committees."

The index comprises of 31.75% cryptocurrency in 5 equally weighted constituents, with the remaining 68.25% consisting of gold.

Currently, the 5 cryptoassets are BTC, ETH, BCH, LTC, and XRP.

Related news: Bitcoin Suisse adds precious metals trading.
 

Coinbase Listing Pumps OMG


The good ol' Coinbase listing pump is back. OmiseGo (OMG) pumped ~200% in nearly 15 minutes after it was announced that it was getting listed. As expected, this raised some eyebrows after the dust settled.

Don't get too much FOMO, though. According to IntoTheBlock, ~94% of addresses that hold the OMG token are still "out of the money" (in loss).
 

 REGULATORY FRONT 

Louisiana State Senate to Consider Crypto Business Licensing Bill


The Louisiana State Senate is about to consider a bill to regulate and license virtual currency businesses. If passed, the legislation would establish Louisiana's first crypto licensing regime.
 

Kin Foundation Publishes First Transparency Report Amid SEC Court Fight


The Kin Foundation is offering a peek under the hood after publishing a transparency report which lays out its structure and operations.

The report comes amid Kik's ongoing legal fight with the U.S. Securities and Exchange Commission (SEC), which sued the company last year on allegations the kin token sale was an unregistered securities offering.
 

 TWEET OF THE WEEK 

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