As the week draws to a close, we recall Bitcoin’s rally to a new all-time price high, Coinbase’s filing for an IPO by the largest U.S. crypto company, and the ongoing inflows of institutional money into the industry.
Bitcoin hits a new high
During the week the price of Bitcoin set a new all-time high, breaking through $24,000 on Saturday, December 19. On the Bitstamp exchange, the price rose above $24,200.
Data: TradingView.
On Wednesday, December 16, Bitcoin surpassed the $20,000 level, and then, in just a day, the price rose above $23,000.
Against the rally, daily Bitcoin options trading volume for the first time surpassed $1 billion, according to Skew.
#bitcoin options first $1bln day pic.twitter.com/UFJkatPVXk
— skew (@skewdotcom) December 17, 2020
Trading volume of futures for the December 17 session reached a record $86 billion.
Data: Skew.
At the time of writing, Bitcoin is trading just below $24,000.
Over the past seven days, prices of all major cryptocurrencies, except Chainlink (LINK), have shown double-digit percentage gains. The standout was Litecoin (LTC), which rose nearly 1.5x.
Market capitalization stands at around $650 billion, and Bitcoin’s dominance index rose to 64.8%.
The week’s all-time highs were accompanied by new price forecasts for the leading cryptocurrency. Best-selling author of Rich Dad Poor Dad and entrepreneur Robert Kiyosaki said he was glad he bought Bitcoin earlier, urged others to follow his lead, and forecast a rise to $50,000 amid inflows from institutional investors.
Scott Minerd, Guggenheim Partners’ chief investment officer, predicted the price of “digital gold” around $400,000.
Insider co-founder and businessman Henry Blodget did not rule out Bitcoin reaching $1 million per coin.
The rally sparked increased interest in Bitcoin among internet users.
Coinbase files for IPO
The largest U.S. cryptocurrency company Coinbase has filed with the U.S. Securities and Exchange Commission (SEC) its S-1 registration for an initial public offering.
Under the S-1 form, companies must disclose basic information about assets and business; information about management and financial statements audited by independent accountants. Registration documents typically also include information about the total number of shares offered and the price per share.
Rumors about Coinbase preparing for an IPO surfaced in the press as early as October 2018. At that time, Chief Operating Officer and platform President Asiff Hirji indirectly confirmed them, indicating that it would not be a near-term affair. The exchange was then valued at $8 billion.
In July this year, speculation on the topic resurfaced. Reuters, citing its own sources, reported that the company’s IPO could take place this year via a direct listing.
Messari analysts estimated a potential Coinbase market capitalization after the IPO at $28.2 billion. For the calculations they used publicly available information.
Media: Ukrainian oligarch Kolomoyskyi organized Bitcoin mining at a plant in the US
In the premises of CC Metals & Alloys (CCMA) steel plant in Kentucky, owned by Ukrainian oligarch Ihor Kolomoyskyi and his business partners, appeared a data center where a third party mines cryptocurrencies. The financial terms of the deal were not disclosed, Radio Free Europe/Radio Liberty reported.
The 70-year-old plant halted operations in July and plans to lay off the remaining workers by year-end. The only activity on the vast site is Bitcoin mining farms, according to plant workers. One warehouse is filled with mining equipment while the main production line sits idle.
“Computers were brought in by truckloads,” said one anonymous plant worker.
Crypto mining operates independently of the plant itself, and the reductions have not affected it, workers say.
A CCMA spokeswoman said in July that the plant invited a third party to host a computer center on the plant’s premises, focused on AI and blockchain technology, to diversify income. She did not specify who the third party was, nor disclose financial details of the arrangement.
Mt. Gox trustee submits plan to reimburse creditors of Bitcoin worth $2.6 billion
On Tuesday, December 15, Nobuaki Kobayashi, the trustee of the Mt. Gox exchange, filed with the Tokyo District Court a plan to reimburse creditors.
The text of the document is not disclosed. In the statement Kobayashi noted that he would explain the details to interested parties in a timely and proper manner.
“The Tokyo District Court will consider the proposed civil rehabilitation plan and decide whether to proceed with further procedures,” wrote the Mt. Gox trustee.
Currently the exchange’s wallet holds 137,891 BTC (about $2.6 billion at the time of writing).
CME to add Ethereum futures
The Chicago-based futures exchange CME, aimed at institutional players, will add Ethereum futures, the company said.
Trading of the new product will commence on February 8, 2021. Settlements will be based on the ETH/USD spot rate.
Representatives said that adding Ethereum contracts was driven by demand and the market’s “sustained growth” of Bitcoin futures.
In 2018, CME managing director Tim McCourt spoke of plans to test the possibility of launching Ethereum futures. There was no talk of actual listing at that time.
Rising institutional inflows into Bitcoin
Asset manager with £20.3 billion (~$27.3 billion) under management, British investment company Ruffer Investment confirmed that it has taken a position in Bitcoin worth more than $740 million.
The prior day, in a note to shareholders with $27 billion in assets, the company announced a 2.5% allocation to Bitcoin as a hedge against “devaluation of world currencies.”
“Bitcoin diversifies Ruffer’s portfolio investments in gold and inflation-linked bonds and acts as a hedge against certain risks we see in a fragile monetary system and distorted financial markets,” the statement read.
In a response to a journalist’s request, the company confirmed that its Bitcoin position amounts to £550 million (~$743.7 million) or 2.7% of assets under management.
A volatility-focused hedge fund, operating privately purchased Bitcoin worth more than $600 million and joined forces with Brevan Howard Asset Management co-founder billionaire Alan Howard.
One River Asset Management founder and CEO Eric Peters said he created a new company amid growing institutional interest in cryptocurrencies.
According to him, One River Digital Asset Management completed its Bitcoin and Ethereum purchases in November, before Bitcoin reached $16,000. The firm intends to grow its digital-asset holdings to about $1 billion by early 2021; Peters added.
Howard invested in the firm’s funds and took a stake in the business. His Elwood Asset Management provides trading and analytics services and technical support.
The funds One River Digital is administered by Northern Trust. Coinbase serves as execution partner and custodian.
New York–based Jefferies made a bet on Bitcoin in its global pensions portfolio, marking a partial departure from gold after many years.
“For the first time in several years, the 50% share of physical gold in the portfolio will be reduced by five percentage points, and that money will be invested in Bitcoin. If there is a meaningful pullback after the historic move above $20,000, we intend to deepen this position,” wrote Kris Wood, head of investment strategies at Greed & Fear, in a weekly investor letter.
As of August 31, 2020, Jefferies Financial Group’s total assets under management stood at $51.774 billion, per Macrotrends.
Family offices, pension funds and other large investors could channel up to $600 billion into Bitcoin. That view was expressed by JPMorgan Chase & Co analysts.
Analysts say $600 billion in Bitcoin investments would be the equivalent of just 1% of the capital of the largest insurers and pension funds in the US, Europe and Japan in digital gold. However regulatory frictions constrain their capacity.
Paxos raises $142 million from PayPal Ventures and other investors
Paxos announced the closing of its Series C funding round, in which raised $142 million.
The round was led by Declaration Partners, backed by the family office of Carlyle Group co-founder David Rubenstein. Mithril Capital (Peter Thiel), Alua Capital and PayPal Ventures joined the round.
“Earlier investors also participated in the round, including RRE Ventures and Liberty City Ventures. To date, Paxos has raised more than $240 million,” the statement said.
The company plans to use the funds to develop infrastructure solutions and create new products.
ForkLog also wrote:
- In Russia, proposals were made to allow transfers via anonymous wallets.
- American Express invested in a cryptocurrency company.
- A hacker breached the personal address of the founder of a DeFi protocol for $8 million.
- Pornhub added Monero after suspending operations with Mastercard and Visa.
- The legendary Bitcoin meme HODL turned seven.
- Elon Musk’s Twitter account posted odd jokes about Bitcoin. A breach is possible.
What else to read and watch
ForkLog told about the first serious clash among Bitcoin developers, which erupted in early 2012 over the first upgrade after Satoshi Nakamoto’s departure.
The CEO of IOVLabs, the Argentine startup building RSK — an open-source smart-contracts platform linked to Bitcoin with a two-way peg — answered questions in an AMA session. Diego Saldivar spoke about the project’s aims, DeFi services on the Bitcoin network, and plans to create a Russian-speaking community.
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