Crypto Pirates

Bitcoin has a slew of outspoken and effective detractors. Initially, Bitcoin was a scam; now, the bitcoin (BTC) currency is likely to become one of El Salvador's national currencies. Then it aided criminal activity, but money is still a lawyer's best friend. Another flimsy argument advanced by a small but vocal minority is that it is an environmental scourge.

Finally, emissions can be traced back to the use of fossil fuels. We don't outlaw cars because of their emissions; instead, we power them with cleaner energy sources. Bitcoin is following the same trend towards cleaner energy production. Many people want to despise Bitcoin, but their causes are running low.

Bobby Lee is the founder and CEO of Ballet, a cryptocurrency wallet company, as well as the author of the Wall Street Journal best-selling book "The Promise of Bitcoin."

The concept that Bitcoin is contributing disproportionately to the current international environmental disaster is currently the most widely disseminated piece of misinformation about Bitcoin. Genuine public concern about climate change and environmental security is being exploited by those who are deeply entrenched within the outdated financial system, such as Bill Gates, Warren Buffett, and Charlie Munger.

On the ground, the Bitcoin-induced local weather change speculation appears logical. Electrical energy is required for computer systems to operate. Because Bitcoin is a globally decentralised community of thousands of computer systems, it consumes a significant amount of electricity. As BTC becomes more useful, the amount of electricity consumed to secure the network is expected to rise proportionally.

Enhanced comparability of vitality data

Nonetheless, critics, such as Trinity College Dublin's Professor Brian Lucey, point out that "bitcoin alone consumes the same amount of energy as a medium-sized country." It's a scumbag business, and it's a scumbag currency."

These arguments, however, are based on skewed data and deceptive comparisons. According to Digiconomist's analysis, one Bitcoin transaction consumes the same amount of energy as 453,000 Visa transactions.

However, we must keep in mind that bank card payments continue to rely on current, emission-heavy infrastructures such as ACH, Fedwire, and SWIFT, as well as the United States' military and diplomatic power. The critics' calculations comparing Bitcoin and the traditional banking system do not include these emissions. It's the equivalent of calculating the carbon footprint of your entire espresso trade with a single cafe.

Without a doubt, when we consider these overhead emissions, a singular reality emerges. According to Galaxy Digital's most recent analysis, Bitcoin consumes approximately 113.89 terawatt-hours per year, while the banking industry consumes approximately 263.72 TWh per year, which is more than double.

Instead, we should consider the environmental impact of the banking system from which Bitcoin is about to transition. Modern banking uses a lot of energy to power thousands of economic office buildings and local branches, thousands of employees' daily commutes, and billions of customers who must travel to and from physical financial institution locations for service. Bitcoin will significantly reduce demand for traditional banking companies, thereby reducing the environmental impact of that trade.

Bitcoin consumes a lot of electricity, but we must look at the power sources to fully comprehend the situation. According to a recent survey conducted by the Bitcoin Mining Council, 56 percent of Bitcoin's electrical energy consumption is derived from clean (zero carbon emissions) sources of such vitality, which is the same price as every other major trade. In the United States, only 40% of electricity is generated from renewable sources.

Bitcoin's vision is fundamentally distinct.

Nonetheless, in an atmosphere of climate fatalism, environmental arguments will always have sway over the less informed. When people are convinced that Bitcoin is a threat to their survival, they will believe they have no choice but to stay trapped within the fiat system.

Bitcoin offers a fundamentally distinct vision. Its deflationary value encourages people to save for the long term rather than spend for the short term. In essence, the shelf life of capital under the Bitcoin system is significantly longer.

BTC's worth has increased by more than 100% per year on average, and this rapid growth is anticipated to continue for a long time. Bitcoin imposes a colossal alternative price on unnecessary consumption. When people's money isn't constantly being eaten away by inflation, they have much less incentive to buy the most recent shopper product. Purchasing an iPhone now makes much less sense given that these funds will almost certainly be worth more tomorrow.

Small, voluntary changes in individual behaviours similar to these could be compounded throughout society, with the combined impact being transformative. To protect the environment, it is not necessary to sacrifice liberty and prosperity.

Bitcoin's detractors will continue to scrape the bottom of the barrel in search of new ways to dismiss this revolutionary technology. While instilling local weather fears is the most recent rhetorical tool used by crypto-phobes, it is important to remember that, like their other half-baked arguments, the local weather objection does not stand up to primary scrutiny.

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Twitter adds Ethereum support to its virtual 'tipping' feature, months after adding bitcoin support.

Twitter TWTR, -2.00 percent announced on Wednesday that it is expanding its mobile tipping feature to include support for Ethereum, 0.42 percent.

Twitter's "Tips" service allows users to send money, including cryptocurrency, to accounts they like via the Twitter mobile app. In September 2021, the social media behemoth began accepting bitcoin, -0.05% tips.

"We're continuing to expand ways to get paid on Twitter, including more options for creators and fans who want to use crypto," said Johnny Winston, Twitter's lead product manager of creator monetisation, in a statement. "We're thrilled to allow anyone to add their ETH Address to Tips."

It should be noted that it is unclear whether Twitter Tips will support other Ethereum blockchain tokens, such as ERC-20 tokens and stablecoins, or only ether.

Twitter's announcement demonstrates the company's interest in cryptocurrency and blockchain technology. On Thursday, Twitter began allowing some users to use their non-fungible tokens, or NFTs, as profile pictures, which they began doing earlier this year. (A non-fungible token (NFT) is a certificate of ownership for a one-of-a-kind digital asset that is not intended to be exchanged.)

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Wells Fargo has taken notice of how far the crypto world has progressed. It now predicts that adoption will more than tenfold in the coming years, and it believes that crypto is still in its early stages.

Wells Fargo believes that cryptocurrency will grow in popularity

He stated in a statement:

Looking at technology investing in the mid-to-late 1990s seems reasonable for today's investor trying to determine whether we are early or late to cryptocurrency investing. The internet was in the midst of a hyper-adoption phase at the time, and it hasn't looked back since. Cryptocurrencies appear to be in a similar stage today.

Wells Fargo, in collaboration with digital exchange Crypto.com, has released a report estimating that there are currently more than 220 million crypto users worldwide. This equates to just under three percent of the world's population, so while the figure may appear large at first glance, it demonstrates how much more room there is for the digital currency world to grow.

The report explains:

It only took four months to double the global cryptocurrency population from 100 million to 200 million. If this trend continues, cryptocurrencies, like other technologies, may soon exit the early adoption phase and enter a hyper-adoption inflection point. There comes a point when adoption rates start to rise and don't stop... Aside from precise numbers, there is no doubt that global cryptocurrency adoption is increasing and will soon reach a tipping point.

At the same time, the report implies that it would be foolish for anyone to enter the crypto trading space without first conducting extensive research. It claims that many digital assets are still "maturing" and in their infancy. As a result, there may be issues with these assets in the future, and traders must be patient as all of the kinks are worked out through future regulatory tactics.

Recently, the crypto market appears to be experiencing bearish trends. While bitcoin is back in the mid $40,000 range – a significant improvement from the $37,000 and $38,000 it was seeing just a few weeks ago – the numbers of today are nothing compared to, say, what traders saw in late 2021. During that time, bitcoin was trading at a new all-time high of around $68,000, and Ethereum had also risen above the clouds.

Things Aren't So Bad

Even so, not everyone believes that all hope is lost. Andras Ivan, an analyst at Broker Chooser, explained in an interview:

Even though the current crypto trend appears bearish, we must remember that the structure of crypto investments has changed significantly since the previous peaks at the end of 2017. The market cap is now significantly higher, and institutional investors have joined in the last one to two years. That could help the market avoid the severe drops and waning interest that we saw during the crypto winter of 2018-2019.

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Canadian authorities have ordered the country's regulated financial firms to stop processing transactions from at least 34 cryptocurrency wallets linked to the funding of the "Freedom Convoy" protests.

According to a report, the Ontario Provincial Police and the Royal Canadian Mounted Police, in collaboration with the Financial Transactions and Reports Analysis Centre of Canada, have launched an investigation into crypto-based donations funding protests against Canada's vaccine mandate.

According to the report, at least 29 Bitcoin addressees, one Cardano address, one Ethereum address, one Ethereum Classic address, one Monero address, and one Litecoin address have been listed on the order.

On Wednesday, the list was made public via social media, and CoinDesk confirmed its veracity.

The weeks-long protests, which sparked similar efforts around the world, have been declared illegal by Canadian Prime Minister Justin Trudeau's newly invoked Emergencies Act.

Trudeau's use of the Emergencies Act, which had not been used since it was passed in 1988, allows banks and financial institutions to freeze accounts associated with the "Freedom Convoy" without fear of civil liability or the requirement of a court order.

According to the report, after the GoFundMe account supporting the protest was suspended after receiving more than $9 million, donors turned to cryptocurrencies to subsidise the effort.

According to the report, over 20 bitcoins worth more than $870,000, or CA$1.1 million, were sent to addresses listed on the order.

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Criminal crypto balances increased from $3 billion to $11 billion, owing primarily to a rise in the cryptocurrency market in 2021, but also to an increase in hacks.

According to new Chainalysis data, 4,068 "criminal whales" own cryptocurrency worth $25 billion. Criminal crypto whales, according to the firm, are any private wallet that holds $1 million or more in cryptocurrency and has received 10% or more of that amount through illicit addresses. (In other words, not all of the $25 billion is illegally obtained.)

The data is a preview of Chainalysis' upcoming 2022 Crypto Crime Report, and it follows similar, recent reports on ransomware, NFT fraud, money laundering, and malware.

Two findings stand out in this report: the increase in crypto balances resulting from crime and the reasons for that increase.

Illicit balances (funds obtained through illegal means) totalled $11 billion at the end of 2021, up from $3 billion at the end of 2020.

That increase was due to a surge in cryptocurrency values in 2021, as well as "a surge in the number of hacks that occurred this year, which also contributed to the amount of funds held by hackers following a hacking event," according to Kim Grauer, head of research at Chainalysis.

Stolen funds accounted for 93 percent (or $9.8 billion) of the $11 billion in illicit balances at the end of 2021. According to the report, darknet market funds are followed by scams ($192 million), fraud shops ($66 million), and ransomware ($30 million).

Of course, the seizure of $3.6 billion in Bitcoin last week as a result of the 2016 Bitfinex hack means that the $11 billion in illicit balances at the end of 2021 is already significantly lower for the time being.

In 2021, there will be criminal cryptocurrency whales

Aside from the increase in criminal balances in 2021—and the extent to which stolen funds were featured previously and beyond other metrics—Chainalysis discovered that criminal balances fluctuated throughout the year.

They were at an all-time low of $6.6 billion in July and a high of $14.8 billion in October. According to Chainalysis, these figures emphasise the significance of conducting cryptocurrency-related investigations as soon as possible.

"The fluctuations serve as a reminder of the importance of speed in cryptocurrency investigations, as criminal funds successfully traced on the blockchain can be liquidated quickly," said the analytics firm.

Of course, the inverse is possible. Heather Morgan and Ilya Lichtenstein, who were both arrested earlier this month for allegedly laundering Bitcoin stolen during the 2016 Bitfinex hack, were not arrested until earlier this month.

The stolen bitcoin in question was worth $71 million at the time of the Bitfinex hack. It was worth $3.6 billion when the arrests were made.

What is the number of criminal crypto whales?

According to the analysis, 3.7 percent of all cryptocurrency whales are criminal crypto whales. These whales are typically sources of illicit funds obtained through darknet markets.

Scams, which come in second, and scams are two other sources of revenue for these criminal whales.

Surprisingly, Chainalysis was able to approximate the location of these criminal whales based on timezone. The time zones with the most criminal whales, according to the analytics firm, included major Russian cities like Moscow and St. Petersburg, as well as countries like South Africa, Iran, and Saudi Arabia.

"The ability to track criminal whales and quantify their holdings from a single public data set is a significant difference between cryptocurrency-based crime and fiat-based crime," Chainalysis added.

"In fiat, the wealthiest criminals use murky networks of foreign banks and shell corporations to hide their assets." However, in cryptocurrency, transactions are recorded on the blockchain for all to see," the company concluded.

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Governments all over the world are imposing significant penalties on cryptocurrency firms. Notably, China has already barred cryptocurrency companies from operating in the region. Simultaneously, several other countries are investigating such firms or have already banned them. Notably, Israel's financial regulator will host its first technology hackathon as part of a larger effort to monitor the country's burgeoning fintech industry. It is also announced that the event will be held on March 24, 2022, in Tel Aviv by the Israel Securities Authority (ISA).

The Israeli government wants to attract blockchain ideas

The financial authorities are hoping to attract more blockchain-based ideas in conjunction with the hackathon that will be held next month. Such events and ideas, according to the ISA, would help strengthen their national infrastructure, which supports the Israeli securities and sovereign debt markets.

Anat Guetta, the ISA's chairwoman, stated in a recent interview that the crypto and blockchain hackathon is part of a larger push by Israel's leading financial technology regulator.

The event will help them communicate directly with experts in fintech innovation and begin developing the skills needed for the country's long-term goals of regulating the crypto and fintech industries.

Furthermore, Guetta emphasised that the event's main motivation is to facilitate the transfer of technology from a development environment to applications in a large-scale live environment. In addition, the initiative would bring to light a variety of technological, business, and regulatory concerns.

The Israeli government should encourage cryptocurrency ventures

The chairwomen intend to encourage other national authorities to support crypto ventures by organising the event and focusing on the goal of improving their infrastructure. As a result, these ventures should incorporate new technologies into the nation's current capital market infrastructure.

When it comes to cryptocurrency and blockchain, the ISA's chairwoman admitted that regulators are lagging behind in terms of technology.

ISA is attempting to strike a balance by monitoring and enforcing industry regulations while also staying current on the latest innovative advancements from around the world.

According to Guetta, the ultimate goal is to gain the necessary power to supervise and build the new market for new participants. The regulator believes it understands the regulation, and as in many other fields, regulatory clarity is the licence to operate.

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Analytics company Glassnode sees a lot of signs that investors are bracing for a bad storm because the Fed is going to raise interest rates in March.

On-chain data from Glassnode shows that Bitcoin investors are hedging their bets in order to avoid a rise in interest rates from the Federal Reserve in March, which would be bad for them.

In Glassnode's The Week On-Chain newsletter from Feb. 14, they say that the flat futures term structure through March is the most important thing going on with Bitcoin (BTC). Investors aren't sure how a tighter US dollar will affect the rest of the world's economy.

In the short term, the rate hike has already been taken into account, says Cointelegraph contributor Michal van de Poppe. But it's still not clear what the long-term effects will be. So, Glassnode found that investors are taking steps to protect themselves from the low downside risk.

Investors appear to be cutting back on their debt and using derivatives markets to protect against risk and buy protection against the Fed rate hikes that are expected in March.

While the data clearly shows that the futures term structure curve is flat, it also suggests that investors aren't expecting a big rise in prices through the end of 2022. The annualised premium on futures is only 6% right now, but it's going to go up.

It is the amount that someone will pay for the risk of a futures contract each year in extra money. A higher premium means that the person wants to take more risks.

On-chain data from Glassnode shows that Bitcoin investors are hedging their bets in order to avoid a rise in interest rates from the Federal Reserve in March, which would be bad for them.

Another sign that investors aren't feeling very confident is that they're slowly but surely cutting back on their debt by closing futures positions on their own. Such de-risking has led to what Glassnode sees as a drop in total futures open interest from 2% to 1.76 % of the total crypto market cap. It looks like there is a "preference for protection," "conservative leverage," and a "careful approach to storm clouds on the way."

Tom Lee, the managing partner of Fundstrat, agrees that there are going to be a lot of problems for traditional investments like bonds in the next few years. He told CNBC on Feb. 14 that because of a change in interest rates, "for the next 10 years, you're going to lose money if you own bonds." That's almost $60 trillion of the $142 trillion.

However, Lee said that the $60 trillion is likely to go into crypto, where investors will be able to keep getting a return on their money that matches or may even outperform the return they got from bonds. Then, he said:

Some of the money that comes in from equities is going to be speculative. It's going to come from bonds, and it's going to end up in crypto.

Exchange outflows keep going.

Outflows from exchanges of Bitcoin are still hugely outpacing inflows. This is despite the fact that many people are taking a lot of risk before the Fed raises interest rates. Net outflows have been at a rate of 42,900 BTC per month for the last three weeks. Until last October, this was the highest amount of money that people were taking out. The price of Bitcoin went up to a new all-time high of about $69,000 in November.

Those that have kept their Bitcoins inactive for at least 156 days are still in charge of the circulating supply because they have about 13.34 million BTC. Since the October 2021 high, only 175,000 BTC has been sold by long-term investors, which shows support for the recent $33,000 low and a need for more coins.

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The Terrorist Financing regulations have been expanded to encompass crypto transactions to demonstrators, and the government now has the authority to seize bank accounts.

Prime Minister Justin Trudeau of Canada has invoked the Emergencies Act, authorising him to freeze the bank accounts of Freedom Convoy demonstrators and monitor "large and suspicious transactions," including cryptocurrency.

Deputy Prime Minister Chrystia Freeland stated during a Feb. 14 press conference that this latest tactical manoeuvre against protesters expands the scope of the Terrorist Financing rules. It is directed at "crowdfunding platforms and the payment service providers who facilitate their operations."

"These modifications apply to all types of transactions, including those involving digital assets such as cryptocurrency."

Protesters had together raised more than $19 million using the fundraising platforms GoFundMe and GiveSendGo. However, those monies have been redirected away from the convoy, prompting some to arrange a Bitcoin fundraising round (BTC).

Through the Tallycoin BTC fundraising tool, the HonkHonk Hodl organisation raised 22 BTC worth approximately $1 million. HonkHonk Hodl ceased operations of their Tallycoin page on Feb. 15 after exceeding their fundraising goal. These cash are scheduled to be delivered to demonstrators in the near future.

While GoFundMe cooperated with Canadian authorities and repaid donations, GiveSendGo suffered an information leak that exposed the identities of "thousands of donors to the Freedom Convoy," according to Michael Thalen of The Daily Dot. There is currently no word about the disposition of the Convoy's funds.

Prior to Trudeau's statement, Quebec Premier Francois Legault stated that using the Emergencies Act would "throw gasoline on the flames." Trudeau emphasised, though, that the emergency powers will be used "temporarily and in a highly targeted manner."

The Canadian Civil Liberties Association argued today that by invoking the Emergencies Act, the Prime Minister exceeded his authority. "The federal government has not satisfied the threshold for invoking the Emergencies Act," it stated.

"This law establishes a high and unambiguous criterion for a good reason: the Act enables the government to circumvent normal democratic processes. This standard has been violated."

At the moment, it is unclear which payments will be banned. Freeland stated simply that all crowdfunding sites must report "large and suspicious transactions" to Fintrac, Canada's Financial Transactions and Reports Analysis Centre.

Crypto advocates such as Preston Pysh, founder of Pylon Holding Company, have expressed cynical delight at the adoption potential shown by the Freedom Convoy. Pysh responded to Freeland's tweet today, writing, "What an advertisement for Bitcoin."

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Coinbase, the world's largest cryptocurrency exchange, is under fire after its Super Bowl ad promised free cryptocurrency to the public.

The US$20 million advertisement, which aired during the biggest NFL game of the year and was seen by approximately 200 million people, offered US$15 in free cryptocurrency.

Coinbase's advertisement, which reportedly cost the company around $14 million, simply displayed a QR code that viewers were supposed to scan with their phones. The user was then supposed to be redirected to a different page where they would receive their free cryptocurrency.

However, due to the high volume of traffic, the website was unable to handle the onslaught, resulting in some disgruntled customers.

Despite the disaster, people praised the advertisement's minimalistic approach, which was reminiscent of a DVD player's screensaver, with the code bouncing around the screen.

Some even went so far as to say that the website crash would benefit Coinbase in the long run, as mention of the incident lingered on Twitter long after the game had ended.

Ukraine is tense.

Tensions on the Russia-Ukraine border have remained high as Russia threatens to invade Ukraine.

Conflict between the two countries, which may elicit involvement from the US and its allies, will have an impact on the global economy, on top of rising oil prices, which are already a source of concern.

According to analysts, the conflict is likely to create uncertainty in the crypto market, putting upward pressure on crypto prices.

If the conflict and political instability result in the closure of banks and a drop in the value of currencies around the world, crypto's use case as a transparent peer-to-peer money transfer system may be put to the test.

This is due to the fact that cryptocurrency may provide citizens with access to capital in the event that banks fail.

This has recently been the case in Myanmar, where rebels have attempted to destabilise the militant government that took power in a coup about a year ago.

In this case, funding for the rebels was obtained using cryptocurrency, which is untraceable and anonymous.

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We are pleased to share that today we have reached an agreement with U.S. federal and state regulators – outlining a clear path forward for BlockFi and for Americans to earn crypto interest. Today’s resolution outlines the finer points of that agreement, and we wanted to share some additional context with you all.

At BlockFi, we envision a world where blockchain powered financial products and services accelerate prosperity worldwide by providing more access and better economic outcomes. We are proud to have reached this agreement which creates a foundational path forward for our U.S. clients and the wider crypto industry.

What’s along this path?

Put simply – increased regulatory clarity we’ve been hoping for. We were the first crypto company to receive a state-level license to issue crypto-backed loans to U.S. consumers in 2018 and this is the next major example of how we prioritise cooperation with regulators.

With today’s resolution, we are leading the creation of a new regulatory landscape for crypto and our clients. As we shared earlier, we intend to file or confidentially submit a registration statement to the SEC for BlockFi Yield, a new crypto interest-bearing security.

What does this mean for you – our clients?

Existing U.S. BlockFi Interest Account (BIA) clients will maintain their accounts and will continue to receive interest as they always have. BIA clients based in the United States may not add further assets into their BIAs. Once the BlockFi Yield registration statement is declared effective by the SEC, BIAs of U.S. clients will be exchanged for BlockFi Yield and you will be able to add incremental assets to your account, unless clients instruct us otherwise.

All U.S. clients will receive an email and in-product communications with further details on changes to their client experience. If you have questions, please contact our Client Success team.

Existing and prospective BlockFi clients outside of the U.S. are unaffected by these changes and continue to have full access to the platform, including opening new BIAs and adding assets to existing BIAs.

The path to broad crypto adoption is one that has included some mountain top views (the latest all time high!) and deep valleys (brr… crypto winter) over the years. We have worked tirelessly with regulators on your behalf to chart this exciting path forward, and we look forward to our next chapter of pioneering innovative, crypto-powered products for our clients worldwide.

We thank you for continuing on this journey with us and will continue working hard to deliver more value to you through our products and services.

With gratitude,

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