Ether Soars As Bitcoin Finally Rallies; Banks Get Green Light To Offer Crypto Custody
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Ether rose more than 20% this week.
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CRYPTO MARKETS
Bitcoin rose to its highest price in a month after weeks of stagnancy, but ether stole the headlines this week, soaring more than 20% as the boom in DeFi applications began to pay dividends. After two years of disappointment relative to bitcoin since its early 2018 crash, ether may have found its next killer app.
Bitcoin’s gains were more modest after the European Union agreed to a coronavirus stimulus package early in the week, though its price has still plateaued below $10,000. But Binance CEO Changpeng Zhao told Bloomberg he worries bitcoin is still tied to the stock market and is vulnerable to another crash.
Source: Messari. Prices as of 4:00 p.m. on July 24, 2020.
REGULATION BREAKTHROUGH
The Office of the Comptroller of the Currency, now run by former Coinbase executive Brian Brooks, issued a letter this week allowing national banks to provide fiat bank accounts and cryptocurrency custodial services to cryptocurrency businesses. For an industry that often struggles to find access to traditional banking services, the stamp of approval from the federal government is a significant milestone.
“This opinion clarifies that banks can continue satisfying their customers’ needs for safeguarding their most valuable assets,” Brooks said, “which today for tens of millions of Americans includes cryptocurrency.”
DIGITAL DOLLAR UNCERTAINTY
France’s central bank said it will soon conduct a series of experiments whose lessons could be used to change the way money works, but bitcoin and blockchain were excluded from its statement and the list of eight participants, setting limits on what it envisions a central bank digital currency to look like.
On the other side of the Atlantic Ocean, former CFTC commissioner Sharon Bowen said the U.S. is “falling a little bit behind” in the race for a digital dollar on a webinar organized by Accenture
ACN
. Sheila Warren, the World Economic Forum’s head of blockchain, added that “the U.S. is late to the game.”
TWTR
HACK FALLOUT
With Twitter still reeling from last week’s hack that took over several celebrities’ accounts and scammed people into sending them bitcoin, CEO Jack Dorsey apologized and said he felt “terrible” about the incident on the social media giant’s earnings call. The hackers stole a little over $100,000, but it could have been a lot more—Coinbase says it blocked 1,100 customers from sending almost $280,000 worth of bitcoin to the addresses in question.
Meanwhile, Apple
AAPL
cofounder Steve Wozniak is suing YouTube and Google for allowing fraudsters to use his name and likeness in similar scams. “In stark contrast [to Twitter], for months now, defendant YouTube has been unapologetically hosting, promoting, and directly profiting from similar scams,” the lawsuit says, alleging that “tens of millions of dollars in cryptocurrency” have been lost.
ENTERPRISE
Payments giants Visa
V
, MasterCard
MA
and PayPal
PYPL
are all gearing up to drive the next wave of bitcoin and crypto adoption. In a blog post headlined “Advancing our approach to digital currency,” Visa wrote that “we want to help and support the role they play in the future of money.” MasterCard is also making it easier for cryptocurrency companies to issue their own payment cards, and PayPal has been reportedly preparing to offer crypto purchases to its 325 million users.
If bitcoin’s future plays out as its proponents envision, its partnerships and collaborations with incumbent institutions serves as a big step in the right direction.
ELSEWHERE
Bitcoin Daily Transaction Value Is Set to Fall Below Tether’s [Bloomberg]
How Activist Investors Could Change The Crypto Landscape [Cointelegraph]
Can Purpose-Built Equipment Bring Blockchain Back as a Tech Solution? [National Law Review]
