While Robert Leshner seemed to briefly threaten users with the IRS, the reality is that he – and the rest of the Compound Labs community – are now relying on the goodwill of users.

By Andrew ThurmanOct 1, 2021 at 9:51 p.m.Updated Oct 1, 2021 at 11:18 p.m.




Compound founder Robert Leshner (Robert Leshner)


If a decentralized finance (DeFi) protocol accidentally gave you millions of dollars in tokens, are you obligated to give it back?

In an interview with CoinDesk following an $80 million exploit, Compound Labs founder Robert Leshner is arguing users should do just that.

On Wednesday night, a bug in money market Compound’s code led to an erroneous disbursement of COMP tokens intended for long-term liquidity mining rewards.

0 seconds of 6 minutes, 21 secondsVolume 90% Read more: DeFi Money Market Compound Overpays Millions in COMP Rewards in Possible Exploit; Founder Says $80M at Risk

The Compound Twitter handle acknowledged the bug shortly after, saying that no user funds were at risk. The bug only applied to Compound’s Comptroller Contract, which is responsible for distributing liquidity mining rewards earned over time.

Nearly the entirety of the Comptroller Contract has now been drained, with 280,000 COMP distributed to users incorrectly, according to Leshner.0 seconds of 6 minutes, 21 secondsVolume 90% Despite the eye-popping sums lost to the bug, however, the community is now captivated by a debate as to what users should be obligated to do with their funds.

“This has been, without a doubt, the worst day in the history of the Compound protocol,” Leshner told CoinDesk.

He went on:“What makes it way worse is that I and most folks are completely powerless to do anything besides sit back and watch this moral dilemma play out.”

IRS threats

In a Tweet on Thursday night, Leshner seemed to warn recipients of the erroneous tokens that there could be real-world consequences for keeping them – namely, that the U.S. Internal Revenue Service (IRS) might want to hear about it:

Some members of the DeFi community interpreted the comments to mean that Compound Labs was planning to report recipients to relevant tax authorities. Leshner apologized for the tweet shortly after.

Threats of “doxxing” have proven to be effective in dealing with exploits in the past – last month, a non-fungible token (NFT) team memorably threatened to call in the FBI and ordered soup to a hacker’s address. The hacker relented, returning stolen funds.

However, in this instance even if an organization wished to pursue claimants, in practicality it may be an empty threat.

Compound Labs is a real-world entity that is working on the protocol, but there’s no clear basis for it to pursue legal action – the structure of the decentralized autonomous organization (DAO) is such that it is now just another member of the community, according to a Compound Labs representative.

The representative also said the Compound interface is hosted on distributed file storage protocol InterPlanetary File System (IPFS) and there’s no reportable information about users collected in any way.

However, due to the nature of the bug, many of the recipients of the tokens are not sophisticated hackers – they just happened to hit the jackpot.

Their operational security, or opsec, isn’t hacker-grade. Some addresses that claimed large sums of the tokens have interacted with centralized exchanges where their real-world information is stored, and the claims could have an impact on their taxes.

Claiming the funds required no knowledge of the bug, and some users might not have been aware there was an exploit underway – they may have received millions while intending to harvest much smaller sums as rewards.

Leshner said the DeFi community has rallied around the protocol in an effort to find solutions. Yearn.Finance and MakerDAO representatives have been active in community channels in finding short- and long-term solutions.

However, Compound has an “extremely rigid” and slow governance process by design – architecture intended to make the protocol more resilient is now acting as a barrier to a fix. It will take another five days before the community can approve any updates to the contract code.

Technical solutions to the initial bug aside, however, the protocol now faces an even bigger problem: trying to convince users who received tokens to return them to the community.

“In my opinion, this is a bank error in a couple people’s favor,” said Leshner.He went on:

“I think it’s harder because there was nothing deliberately criminal. If there was a hacker who deliberately exploited the code, people would celebrate going after them with every means possible. These users weren’t initially malicious.”

Moral dilemma

The question now turns to whether a moral obligation, rather than a legal one, can incite users to return funds – a question that has prompted significant debate in the crypto community.

One popular take is that “code is law” – regardless of intention, the protocol disbursed the funds and now users can spend them as they please.

However, others are appealing to the notion of “public goods” – that taking ill-gotten money from an on-chain bank, where anyone in the world can take out a loan regardless of who they are, is a violation of DeFi’s highest ideals.

In an interview with CoinDesk, Leshner said the moral dilemma can be split roughly into two camps.

“There’s a lot of members of the community that view protocols like Compound as benefitting the entire ecosystem,” he said. “And there are some users that don’t necessarily care. The builder mindset is, ‘This adds value, this is crucially important,’ and the trader mindset is ‘Money is money,’ and that’s the only ethos of crypto.”

He went on:

“I’m personally hopeful users will return funds to the community. It’s not my property, it’s not their property, it’s the community’s property.”So far, two users have returned a total of 37,493 COMP tokens worth over $12 million at the time of writing.

“There are ideas to further incentivize people to return the COMP that they received,” Leshner said, but even with some incentive program “it’s still going to be relying on people doing the right thing.”

Read more: ‘Free Money’ Bug Hits DeFi Platform Alchemix

Some potential incentives have already been proposed, including non-fungible tokens (NFT) redeemable for a meeting with Leshner, to which he enthusiastically agreed:

“I want to hear other people’s views on this, because it’s not my decision,” he said. “This is a decision every user has to make themselves, and I think most of them are taking the view of, ‘Haha, f**k you guys, it’s your problem.’”

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.

CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Daily trading volume on the top NFT marketplace has dropped by more than 80% over the past month.

Daily trading volume on OpenSea, the largest non-fungible token (NFT) marketplace, has fallen dramatically from the $323 million peak in August to about $52 million Thursday, according to Dune Analytics.


Daily trading

volume on OpenSea (Dune Analytics)

The staggering drop could affirm thinking in some corners that the NFT market is a bubble that has popped. But several market observers say the market remains vibrant and far from finished.

“This doesn’t mean the NFT season is just over yet,” Ong Joo Kian, research analyst at Delphi Digital, wrote in a market commentary to clients. “There’s still a lot of attention on the space.”

Ong said that a few hyped projects such as Mutant Apes Yacht Club caused “a massive uptick” in NFT trading volume at the end of August and that a subsequent slowdown was not unexpected.

Others say the NFT market has merely hit a temporary plateau, as it looks for the next big project to generate more cash and new users.

“It’s possible we’re experiencing a top in certain NFT categories like PFP [profile pics] or avatar NFTs,” Messari Senior Research Analyst Mason Nystrom said. “But it only takes one new and exciting project to help the market reach a new top.”

But observers do not know what new NFT themes will spur a market resurgence. A number of recent projects have covered roughly the same ground.

“The number of projects with similar ideas – such as those Loot copycats – has increased, but we are not seeing more new participants coming into the NFT sector,” Martha Zhang, founder of NFT platform StarryNift, told CoinDesk.

The top NFTs by trading volume were Loot, CryptoPunks and Bored Ape Yacht Club, according to OpenSea, which is a secondary marketplace for bidding on and trading NFTs.

The daily trading volume for CryptoPunks declined by more than 90%. The floor price for CryptoPunks, according to NFT Price Floor, is currently at around 90 ether, down from an August peak of 132 ether. Floor price refers to the lowest price of any NFT within a certain category (in this case, the CryptoPunk collection).

OpenSea logged record-high trading volume a month ago amid the launch of Pudgy Penguins and a slew of other popular NFT projects. The hype around these projects dramatically increased activity on OpenSea.

Sales volumes of CryptoPunks, one of the most popular NFT projects, broke NFT daily sales records on Aug. 23, not long after credit-card giant Visa entered the market and purchased one.

Delphi’s Ong said that as the Ethereum blockchain has become congested, some NFT activities have spilled over to other layer 1 blockchains such as Solana.

That trend could consequently slow NFT growth on the Ethereum blockchain. OpenSea continues to rank first with over 1,560 ether ($5,467,148) for gas consumption to pay transaction fees on Ethereum over the past 24 hours, according to Dune Analytics.

Many layer 1 blockchain projects such as Solana provide faster, lower-cost transactions compared to Ethereum, which can be attractive for the NFT market. Crypto exchange FTX’s U.S. version recently announced the launch of a minting platform for NFTs that’s built on both Ethereum and Solana.

“The NFT market will certainly continue to grow, [and] it’s just a matter of how fast and how volatile the growth will be,” Messari’s Nystrom said.

This content is for informational purposes only and should not be construed as investment advice. Nothing mentioned in this article constitutes any type of solicitation, recommendation, offer or endorsement to buy and sell any crypto asset.

Trading in any financial market involves risk and can result in loss of funds. Before investing any money, one should always conduct thorough research and seek professional advice.



Muyao Shen

Muyao is a reporter on the markets team. She is based in Brooklyn, New York.Follow @MuyaoShen on Twitter

The highest bid for a non-fungible token (NFT) collection of 101 bored-looking apes has fetched $19 million at Sotheby’s, surpassing the auction house’s original estimate of $12 million to $18 million.

The auction – set to close in just under two days – features NFTs from Yuga Labs’ Bored Ape Yacht Club (BAYC). They’re among the 10,000 algorithmically generated images on the Ethereum blockchain featuring cartoon apes with a range of traits, outfits and accessories, from bunny ears to fezzes and 3D glasses.

The lot also contains six rare “serums” that, when applied to an existing Bored Ape, will mutate its characteristics, thereby increasing its uniqueness and value. (Think face-melting.)

The Sotheby’s auction also includes a second lot of Bored Ape Kennel Club (BAKC) NFTs, a collection of unique digital dogs bred as companions to the Bored Apes. At press time, the highest bid for the BAKC collection reached $550,000, below Sotheby’s estimated $1.5 million to $2.0 million.

The Bored Ape Yacht Club took the NFT world by storm earlier this spring, selling out all 10,000 original Bored Apes upon launch and touting celebrities and athletes as collectors.

The project highlights the community-building aspect that has become increasingly important to new NFT projects. Each Bored Ape doubles as a “Yacht Club” membership card, granting the holder to members-only benefits, including access to the BAYC Bathroom, a “dive bar bathroom” where each ape-holder will be able to paint a pixel on the digital bathroom wall every 15 minutes. BAYC envisions the Bathroom as “a members-only canvas for the discerning minds of crypto twitter.”

Read more: The Value of NFTs Is Belonging

“The power of the Bored Ape Yacht Club is in its members and how relentlessly creative, supportive, aligned, and f**king funny our community is,” a Yuga Labs founder who goes by Gargamel wrote in a Discord post. “It’s what has made it possible to go from inception to the biggest auction houses in the world in just four months.”

Individual Bored Apes are currently selling at a “floor price” – the minimum for which one can be had – of 40 WETH, or approximately $140,000 on OpenSea.It’s not just Sotheby’s. Next, the BAYC will be featured in the rival auction house Christie’s No Time Like Present online auction running from Sept. 17 to Sept. 28.

The auction will also include a group of Larva Labs’ CryptoPunks and will mark the very first NFT sale in Asia offered by an international auction house.

FTX.US, the U.S. affiliate of crypto exchange FTX, has signed a $17.5 million, 10-year agreement with Cal Athletics, the athletic department of the University of California, Berkeley, for the naming rights to the field at California Memorial Stadium.

• The field will be known as the “FTX Field” at the California Memorial Stadium and is FTX.US’ first college-related cryptocurrency naming rights sponsorship. The Berkeley campus is the flagship campus of the University of California system.
• Cal Athletics’ multimedia rights holder Learfield will accept the payment in cryptocurrency on behalf of the university. 
• FTX has been on a sports and e-sports sponsorship spending spree this year. In March, the exchange secured the naming rights to the home arena of NBA team Miami Heat for a reported $135 million, while in June, the exchange paid $210 million to acquire the naming rights for e-sports organization TSM.
• The latest deal involves FTX featuring its branding on press backdrops and launching a platform with Cal Athletics to support philanthropic projects. 
• FTX has a connection to Cal Athletics through Chief Operating Officer Sina Nader, who is a Cal alumnus and was a walk-on member of the football team. "We're excited to partner with one of the world's great universities  and expand crypto's presence into the collegiate athletics landscape," Nader said in a press release.

U.S. Senators Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.) announced a compromise involving Democrats, Republicans and the Treasury Department over a contentious tax provision in the Senate’s infrastructure bill on Monday that would exempt crypto transaction validators from a broadened definition of “broker.

”The full text of the compromise was not immediately available, but Toomey said it would specify who has tax reporting obligations within the digital asset sector. Software developers, node operators and validators would not be required to carry or report transaction information, but brokers would be.

“We’re not proposing anything sweeping or anything radical – [the compromise] makes clear that a broker means only those persons that conduct transactions where consumers buy, sell and trade digital assets,” Toomey said in a press conference Monday.

Related: Senate Advances Infrastructure Bill Without Amending Crypto Provision

The text itself would define a broker as “any person who (for consideration) regularly effectuates transfers of digital assets on behalf of another person,” and would exclude entities that validate transactions (meaning miners or stakers) without providing other services, or entities that sell hardware or software that allow customers to control private keys, according to screenshots shared by Coin Center’s Jerry Brito.

However, the compromise comes after the Senate conducted a number of procedural votes late Sunday to advance the bill’s original text. Unless the Senate can achieve unanimous consent on the compromise before a final vote by Tuesday, the legislative body will send the original provision to the House of Representatives.

The bill, which has been held up repeatedly for a number of issues including the crypto provision, seeks to fund $1 trillion in both infrastructure maintenance and new initiatives like electric vehicle charging stations. Part of the bill expects to pay for these initiatives through $28 billion raised over the next 10 years through expanded crypto tax reporting requirements. 

However, the crypto industry pushed back against the wording of this provision amid concerns that the revised definition of a “broker” would capture miners or other types of validators, hardware manufacturers, software developers and other network participants that don’t have customers or otherwise any ability to comply with the information reporting rules.

Related: 2 Senators Propose Exemptions to Crypto Tax Reporting Required by US Infrastructure Bill

Senators Ron Wyden (D-Ore.), Lummis and Toomey introduced an amendment to exempt non-broker type entities from the legislation. Earlier on Monday, Wyden said, “I don’t believe the cryptocurrency amendment language on offer is good enough to protect privacy and security, but it’s certainly better than the underlying bill.

Majority Leader [Charles] Schumer says he won’t block a unanimous consent request on it.”Senators Ron Portman (R-Ohio), Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.) also introduced an amendment, which would only exempt validators from proof-of-work or proof-of-stake networks.

The White House previously announced its support for this amendment.All six senators support the new compromise, Toomey said.Crypto isn’t the only issue that held up passage of the overall infrastructure package.

Rather, it has been one of a handful.It was non-crypto issues that held up debate and votes on Sunday, according to multiple reporters in Washington, D.C.UPDATE (Aug. 9, 2021, 16:00 UTC): Adds text from the bill.

Key Points

• A $1 trillion infrastructure bill in the Senate proposes to raise $28 billion by taxing crypto transactions.
• This bill is likely to pass a Senate vote today or tomorrow.
• A new, powerful crypto lobby opposes reporting requirements in the bill and will continue fighting to limit them.

What happened
Cryptocurrency prices roared higher in Monday-morning trading, with Ethereum (CRYPTO:ETH) up 3.7% since midnight Sunday, Bitcoin (CRYPTO:BTC) up 4.4%, and Dogecoin (CRYPTO:DOGE) doing best of all -- up 5.9% as of 10:45 a.m. EDT.And you may have Washington, D.C., to thank for it.


IMAGE SOURCE: GETTY IMAGES.

So what
For the past few weeks, cryptocurrency investors have been riveted by goings-on in the capital city, where the United States Senate is pondering passing a $1 trillion infrastructure bill.

The bill contains a provision designed to raise $28 billion by taxing cryptocurrency transactions, to help pay for all the new infrastructure.

As if that weren't bad enough, there's a serious argument over who, precisely, will be required to pay this tax after reporting their cryptocurrency transactions to the IRS.

Last week, Senate leaders such as Democrat Ron Wyden of Oregon and Republican Pat Toomey of Pennsylvania began trying to pass amendments to ensure that only actual "financial intermediaries" would be required to report crypto transactions under the definition of "brokers" subject to this requirement -- and that crypto miners, software developers, and transaction validators would not have to so report.

At last report, the infrastructure bill had passed a procedural vote without these amendments, and it is headed for a final vote on Monday or early Tuesday.  

Now what
Now, that all sounds pretty bad for cryptocurrency investors -- so why are Bitcoin, Dogecoin, and Ethereum prices heading higher?Because, as Politico reports today, the real importance of what (almost) happened in the Senate last week isn't that the cryptocurrency lobby didn't (quite) win its battle over legislative language.

It's that it was able to provoke "an intense infrastructure bill brawl between Bitcoin advocates, Congress and the White House," proving that all of a sudden, cryptocurrency is "a new power player in Washington," and one that now has powerful allies on Capitol Hill.  

Plus, all is not lost in the battle over the definition of what constitutes a cryptocurrency "broker." The fight over this definition in the Senate has drawn in powerful allies outside Washington, ranging from public corporations to venture capital firms to Square (NYSE:SQ) boss Jack Dorsey, who on Sunday rallied his 5.6-million-follower Twitter (NYSE:TWTR) army to lobby legislators to fix the infrastructure bill's "'Crypto Tax Reporting' provision":

That lobby-army may have lost a battle in the Senate Sunday night, but as Politico points out, even if the infrastructure bill is passed as-is by the Senate, it still must survive a House vote and probably reconciliation between the two legislative bodies -- two more chances to get the "broker" definition tightened up.

With cryptocurrency now recognized as "more of a force than anybody ever anticipated," argues Politico, you shouldn't count the crypto lobby out just yet.

The chair of the US Securities and Exchange Commission (SEC) has called on Congress to give the agency more authority to police cryptocurrency trading, lending and platforms, a “wild west” he said was riddled with fraud and investor risk.

Gary Gensler said on Tuesday that the crypto market involved many tokens that may be unregistered securities and left prices open to manipulation and millions of investors vulnerable to risks.

“This asset class is rife with fraud, scams and abuse in certain applications,” Gensler told a global conference.

“We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks.“Cryptocurrencies reached a record capitalization of $2tn in April as more investors stocked their portfolios with digital tokens, but oversight of the market remains patchy.

The industry has been waiting with bated breath to see how Gensler, a Democratic appointee who took the SEC helm in April, will approach oversight of the market, which he has previously said should be brought within traditional financial regulation.

On Tuesday, Gensler provided more insight on his thinking, saying he would like Congress to give the SEC the power to oversee cryptocurrency exchanges.

He also called on lawmakers to give the SEC more power to oversee crypto lending and platforms like peer-to-peer decentralized finance (DeFi) sites that allow lenders and borrowers to transact in cryptocurrencies without traditional banks.

“If we don’t address these issues, I worry a lot of people will be hurt,” he said.The Democratic senator Elizabeth Warren has been pressing regulators to get a grip on the market, which she described in a July letter to Gensler as “highly opaque and volatile”.

Gensler responded by asking Congress to consider granting him more autonomy to regulate the sector.

On Tuesday, he also underscored that “stock tokens, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities ... are subject to the securities laws”.

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said he believes the vast majority of crypto tokens and initial coin offerings (ICOs) violate U.S. securities laws.

In a speech at the Aspen Security Forum on Tuesday, Gensler said he agreed with Jay Clayton, his predecessor at the SEC, who once famously said that in his view, “every ICO I’ve seen is a security.”

“Generally, folks buying these tokens are anticipating profits, and there’s a small group of entrepreneurs and technologists standing up and nurturing the projects,” Gensler said in prepared remarks.

“I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight.”

Read more: 

SEC Boss Gensler Eyeing Robust Regulation of Crypto Market: Report


These tokens may allow markets to be manipulated, which in turn could harm investors, the regulator said.

Subscribe to State of Crypto, our weekly newsletter on policy impact.

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Gensler reiterated earlier comments that stock tokens and “stable value tokens backed by securities” qualify as securities in his view, meaning they must be registered and their issuers must abide by existing federal law.

“A typical trading platform has more than 50 tokens on it. In fact, many have well in excess of 100 tokens.

While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that, with 50 or 100 tokens, any given platform has zero securities,” Gensler said.

Gensler also briefly hinted at how his agency might approach exchange-traded funds (ETFs). More than a dozen industry participants have filed applications to launch a bitcoin (BTC, -2.03%) ETF over the past year.

Gensler noted that investment vehicles with exposure to crypto, including mutual funds, already exist. While Gensler didn’t comment on the proposals themselves, he called out the importance of having investor protections codified into law.

“Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded bitcoin futures,” he said, referring to the Chicago Mercantile Exchange.

Nonfungible tokens, or NFTs, are known by the mainstream as digital assets that represent real-world objects such as art, music and fashion, among others.

Yet, while most of the world may be enamored by the high selling prices of NFTs launched by celebrities, athletes and other famous individuals, nonfungible tokens are starting to pique the interest of corporations for business use cases.

Enterprises embracing NFTs was a point discussed during the Enterprise Ethereum Alliance, or EEA, anniversary event that took place virtually on July 29, 2021.

During a keynote session, entitled “The future of Ethereum and Web3,” Joe Lubin, CEO and founder of ConsenSys — a blockchain software company — mentioned that “NFTs are doing a tremendous job of getting enterprises excited.

”Following the EEA event, Lubin told Cointelegraph that from a broader perspective, NFTs have become a revolution that will transform how the software will be built and delivered:

“We’re now moving into a world where we have these nonfungible software objects that have unique identities that can actually accept money, pay money and can participate in governance, either in decentralized autonomous organizations or potentially other kinds of governments that can govern themselves.”

As such, Lubin believes that NFTs won’t just encapsulate content through digital artwork or music, but that nonfungible tokens will eventually evolve into entire businesses with their own rights.

The future of NFTs for enterprise use

Although Lubin is very much aware that self-governing NFTs will be a profound transformation, he explained that artists and content creators who have launched nonfungible tokens have already demonstrated that this technology is capable of solving common business problems:

“NFTs are enabling artists and content owners to recognize that their intellectual property can have different rights and different rates if they wish. These can then be monetized and sold to different people in really flexible and programmatic ways. It’s really about the artist not having to sell their soul to make a living, which is really exciting from the enterprise perspective.”

Specifically speaking, Lubin remarked that every media company in the world is thinking about or is already in the process of launching its own NFT platform.

To Lubin’s point, Media Publishares — publishers of Vogue, Esquire and other major magazines — announced a partnership earlier this year with decentralized ad network Vidy to launch and develop an NFT platform for the fashion, art and music industries.

Media Publishares’s nonfungible platform is expected to launch in Q3 of 2021 to enable a virtual environment to showcase digital art, fashion, music and design. The platform will also support the minting, trading and auctioning of NFTs through a tokenized system.

Yet, NFTs are not only poised to disrupt the media industry. Lubin added that traditional financial service sectors shifting toward decentralized finance (DeFi) concepts will also leverage nonfungible tokens.

According to Lubin, NFTs are going to be a major part of DeFi going forward since the traditional financial world consists of fungible token shares, deeds and other financial instruments that are uniquely associated with an asset.

This being the case, Lubin explained that a “nonfungible financial world” is a massive opportunity that will likely be centered around automated market makers, stable coin systems and lending/borrowing protocols:

“These will look very similar to fungible tokens, but they’ll need to be built somewhat uniquely to accommodate nonfungible tokens."Based on this, it’s important to point out that enterprises leveraging a nonfungible financial world will, in turn, solve a major business problem: ensuring that invoices are paid.

Dan Burnett, executive director of the Enterprise Ethereum Alliance, told Cointelegraph that just as computers and the internet have helped companies lower costs and increase speeds, Ethereum and blockchain technology are enabling trust for how people will get compensated:

“The whole point of blockchain technology is that we don't need a trusted human for business processes. Organizations can now set things up not only for how people get paid now, but how people can get paid in perpetuity.”

Shifting from corporations to community

As enterprises begin to apply nonfungible concepts to traditional business models, Lubin further remarked that this demonstrates a shift from an age of corporations to an age of community: “DeFi protocols are about sharing governance.

We are going to eventually organize all our business activities in decentralized autonomous organizations.”Lubin noted that the billion-dollar gaming sector is already demonstrating how NFTs can impact real-world economies.

For instance, Lubin mentioned the Ethereum-enabled blockchain project Axie Infinity, which allows players to earn income through nonfungible tokens. In particular, Axie Infinity has had an impact in the Philippines, a region hit hard by the COVID-19 pandemic.

Related: The ethics of hiring cheap Filipino staff: Crypto in the Philippines


The play-to-earn blockchain-based video game has already allowed several Filipino people to earn NFTs and cryptocurrencies by breeding, battling and trading digital pets called Axies. Lubin explained:

“Many of the 350,000 to 400,000 people that are playing the game are living in the Philippines. They are earning income that’s five times what they would be making at minimum wage. They’ve built a real economy and are building a metaverse with property. This is a phenomenon to watch.”

Recent data from Axie World shows that the Axie Infinity virtual environments have a total revenue close to $120 million in July 2021, which is up significantly from the $1.92 million seen at the beginning of this year.

Although impressive, Burnett pointed out that proper regulations are still required in order for nonfungible systems for enterprises to come into fruition: 

“One of our goals at the EEA is to work with regulators to ensure a proper engagement.

This isn’t about shutting down the technology or community, but rather about understanding that the world has changed.

”While regulations are still underway, Lubin optimistically remarked that “the enterprise herd is already coming to the Ethereum mainnet.”

 Business analytics firm MicroStrategy, which owns more bitcoin than any other corporation in the world, posted its biggest loss ever Thursday as a result of the cryptocurrency's massive crash last quarter, but the company's longtime CEO Michael Saylor said the company will continuing buying more of the volatile asset amid strong support from institutional investors.

Longtime CEO Michael Saylor said MicroStrategy intends to continue buying more bitcoin despite its ... [+] GETTY IMAGES

KEY FACTS

In an after-market release Thursday, Virginia-based MicroStrategy reported a second-quarter loss of $299.3 million, compared to a $3 million profit in last year's second quarter, on approximately $125 million in sales, up 13.4% from a year earlier.

Fueling its overall losses, the company disclosed a $424.8 million impairment loss due to the declining value of its bitcoin holdings in the quarter, during which the cryptocurrency's prices plummeted 40%. 

The impairment loss reflects a decline in bitcoin’s carrying value, but it can effectively be recouped if prices recover—not out of the question given the coin’s volatility and past resurgence.

In a statement alongside earnings, Saylor touted the company's successful debt offering in June, after which the firm purchased an additional 13,005 bitcoins for $489 million in cash.

As of June 30, MicroStrategy owns about 105,085 bitcoins, worth nearly $4.2 billion based on Thursday prices of about $39,760.

SURPRISING FACT 

Last month, MicroStrategy raised a greater-than-expected $500 million through the sale of bonds in order to acquire more of the world's largest cryptocurrency. In a sign of massive interest from institutional investors, the company received more than $1.5 billion in orders for the offering, which was announced while bitcoin prices were at a one-month low of about $33,400.

CRUCIAL QUOTE 

“We continue to be pleased by the results of the implementation of our digital asset strategy," Saylor said Thursday, noting the company's latest capital raise and adding: "Going forward, we intend to continue to deploy additional capital into our digital asset strategy.”

KEY BACKGROUND

Given its outsized crypto investment, MicroStrategy's stock tends to ride bitcoin's incredibly volatile price wave. Shares have plunged more than 50% since February, when bitcoin sank after Tesla CEO Elon Musk, a vocal crypto supporter who's fueled volatility in the space this year, said prices seemed “a little high.

” The cryptocurrency is down about 30% over the same period, but like MicroStrategy, whose stock has skyrocketed 410%, its prices have surged 260% over the past year.

MicroStrategy's second-quarter loss is its greatest since the dot-com era in 2000, when the data-mining company posted a third-quarter loss of $168 million. That year, the stock soared nearly 2,500% before plunging more than 95% when the broader market crashed.

TANGENT

MicroStrategy owns more bitcoin than any publicly traded company, but in its namesake bitcoin fund, investment manager Grayscale owns 654,885 tokens—worth more than $26 billion on Thursday.



Jonathan Ponciano

I'm a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism… Read More

A report from City A.M. alleged that an anonymous insider at Amazon had news that it would start to accept Bitcoin and other cryptocurrencies by the end of the year. This rumor quickly spread across news sites and social media.

Amazon has since denied the rumors via an email statement to Bloomberg.  Amazon denied the report from City A.M., according to Zero Hedge.

It added that it has no plans to launch a crypto by 2022 and will not accept Bitcoin this year but that it will continue to explore cryptocurrencies and blockchain. 

“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon," said the Amazon spokesperson.

City A.M.'s source said that Amazon had a fully-fledged plan to allow crypto payments and that it would be an integral part of the company going forward. 

"This isn’t just going through the motions to set up cryptocurrency payment solutions at some point in the future – this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work," said the source. 

Don’t miss out on how smart money is playing the crypto game. Subscribe to our premium newsletter - Crypto Investor.

The source even said that this project had come down from Jeff Bezos himself.“It begins with Bitcoin – this is the key first stage of this crypto project, and the directive is coming from the very top… Jeff Bezos himself.

”The Amazon insider said that the company was looking to add far more than just Bitcoin and that they have been working on this since 2019. “Ethereum, Cardano and Bitcoin Cash will be next in line before they bring about eight of the most popular cryptocurrencies online. 

It won’t take long because the plans are already there, and they have been working on them since 2019. This entire project is pretty much ready to roll.

”The source also added that Amazon is looking to develop its own native token after all the big cryptos are integrated. “When all these crypto ducks are lined up, there’s another twist to push things even further into Amazon’s favor – a native token," explained the source. 

Amazon starting to accept Bitcoin and even going as far as to make its own token lit the crypto community on fire and Bitcoin pumped nearly 11% on the day, only to drop back down after it denied the rumors.

This is the second time Amazon has been in the news for cryptocurrency in the last week.

The company caused a stir last week after it published a new job listing for a digital currency and blockchain product lead that would "own the vision and strategy for Amazon’s Digital Currency and Blockchain strategy and product roadmap.

"While Amazon has apparently denied the reports from the City A.M. insider, the company's new job listing shows that it does have some level of interest in cryptocurrency or blockchain. This story is developing.

Global health experts have condemned Boris Johnson’s lifting of most Covid-19 legal restrictions in England on Monday as “a threat to the world”, as daily case numbers in the UK rose to more than 50,000.


 The UK now has the third highest number of cases of any country in the world — only Indonesia and Brazil have more — and some scientists fear it could become a breeding ground for new Covid variants.


 Ministers have warned that daily cases could soon hit 100,000 and have in recent days shown growing signs of nerves as July 19 — described by tabloid newspapers as “Freedom Day” — approaches.


 Health secretary Sajid Javid declared this month that there was “no going back”, but now ministers admit restrictions may have to be reintroduced as they brace themselves for a huge spike in cases.


 “Of course if we get into a situation where it’s unacceptable and we do need to put back further restrictions then that of course is something the government will look at,” Lucy Frazer, solicitor-general, told Sky News.


 As the UK reported 51,870 cases — the highest figure since January 15 — global scientists at an “emergency international summit” urged the Johnson government to “urgently reconsider its proposed actions”.


 The online event, organised by UK scientists opposed to ending the restrictions, attracted current and former government advisers from New Zealand, Italy, Israel, South Africa, Australia and Taiwan.


 They signed a declaration saying Johnson’s decision would have “a profoundly damaging impact in England” and added:

“The UK is one of the world’s leading travel hubs — any variant that becomes dominant there is likely to spread to the rest of the world.

”

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Stephen Duckett, former secretary of Australia’s health department, said:

“There is no reputable public health adviser of any kind who would recommend opening up at a time when the virus is spreading rapidly.

”

British officials say Johnson will not retreat at the last minute. Nightclubs will reopen on July 19, limits on social gatherings will end and people will no longer be legally required to wear masks in crowded places.


 Chris Whitty, chief medical officer, has argued that it is better for England to suffer a Covid wave in the summer — when health systems are under less pressure and schools are off — than in the winter.


 Johnson, who has been under intense pressure from Tory MPs to end Covid restrictions, also believes that the country’s “defensive wall” will be reinforced over the summer as more people are vaccinated and infected people — particularly the young — develop antibodies.


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But in recent days the government’s once bullish tone has evaporated. Where ministers once boasted about throwing away their masks, Johnson is now urging people to exercise “extreme caution”.


 Some fear the Covid “wave” that Whitty is prepared to see wash over England over the summer could become a tsunami, despite the fact that the link between cases and hospitalisations has been severely weakened.

Whitty said on Thursday, referring to individual hospitals:

“I don’t think we should underestimate the fact that we could get into trouble again surprisingly fast.”

Grant Shapps, transport secretary, said he “wanted” Sadiq Khan, London mayor, to require mask-wearing on public transport in the capital, even though the government has scrapped the legal requirement to do so.


 Meanwhile Covid certificates, which only weeks ago were being dismissed by ministers as unnecessary, are now being recommended for use at nightclubs and other venues.


 Bosses complain that they are being confronted with difficult legal issues over what to expect from customers and staff, as Johnson shifts responsibility for fighting Covid to the businesses and individuals.


 Meanwhile companies and public services are being disrupted as hundreds of thousands of staff are “pinged” by the NHS Covid-19 app and told to self-isolate after coming into contact with someone with the virus.

 The prime minister is now caught in a political vice, with Tory MPs and rightwing newspapers urging him to strike out for “freedom”, while public opinion wants him to be far more cautious.


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Mark Harper, chair of the lockdown-sceptic Covid Recovery Group, said Whitty was right to say that the country had to learn to live with the virus and that it was right to trust the public “to balance the risks of life”.


 He criticised the chaotic government messaging of the past week, suggesting it smacked of the description by Dominic Cummings, Johnson’s former adviser, of a prime minister veering unpredictably on policy issues.


 “The government must govern in a way that avoids giving credence to the ‘shopping trolley’ critiques of the PM’s former senior adviser,” Harper told the Financial Times.


 Meanwhile senior Tories admit that opinion polling on Johnson’s policy is “very bad”, highlighting the political risk to the prime minister if it starts to unravel.


 An Ipsos Mori poll this week found that four in 10 adults supported compulsory face masks in public indefinitely, while a third of workers were “uncomfortable” about returning to the office. A quarter thought nightclubs should never reopen.

While the short-term market outlook for many NFT projects look uncertain, and multiple new releases struggle to gain traction, one gardening-themed drop may have set some records by selling 8,888 nonfungible tokens (NFTs) in just under an hour.

Nonfungible token studio Zenft released a line of 8,888 unique bonzai NFT plants that quickly sold out on Tuesday, with the studio selling each digital tree for 0.08 Ether (ETH), or roughly $220 at the time of publication.

The bonsais have augmented reality/virtual reality functionality, and their 3D design is a step up from previous pixelated, 2D projects. The studio celebrated the nearly $2,000,000 sale with a tweet:

The success is somewhat of a surprise, given that NFTs remain mired in a slump following explosive growth earlier this year. New drops like Crypteriors struggle to sell out completely, making the one-hour mark a particular feat.However, some collectors suspect that the success may be due in part to clever marketing.

“I like the way they look but it feels like people are trying to recreate what happened with the Bored Apes money printing machine,” said one prominent collector who spoke to Cointelegraph on the condition of anonymity. “Been feeling a little exhausted seeing the space devolve into celeb pump and dump.

”Bored Ape Yacht Club, another recent success amid the market dip, managed to attract a fervent community in part on the back of outreach to prominent investors and collectors in the NFT space — and as one collector put it, where whales go, smaller collectors, or “plankton,” follow (sometimes to their detriment).

In an interview with Cointelegraph, “8ncient Gardener,” one of the three Zenft “gardeners” (or developers), said that marketing played a role — 8ncient “took painstaking care around crafting our giveaways,” in particular — but ultimately, the quality of the art is what made the bonsais such a hit. “I think our art speaks for itself quite honestly.

And everyone can unify around a bonsai. We had Apes, Punks, Voxo, Sandbox, Camels — all these NFT factions all rallying around bonsai,” he said. “In a world of pixel art we made gorgeous 3D bonsai.”

The on-chain evidence is somewhat mixed. There are currently 1,736 different holders of the nearly 9,000 bonsais, with over 22% of the supply concentrated in two NFT whale addresses.

From there, there’s a steep drop-off, however, with a broad range of addresses holding smaller quantities of the bonsais.While it’s impossible to tell the exact source of the success, Zenft “Grove Councilor” “Justsomebonzai” argued that the digital trees are ultimately spreading joy:

“People genuinely like Bonsai, they're beautiful IRL and they're beautiful as an NFT.”

The regulator has suggested that a dedicated market regulator would offer some protection against fraud and manipulation.

DeFi and crypto lending may pose issues for investors, SEC Chair Gary Gensler said.

Decentralized finance (DeFi) could pose fresh challenges for U.S. investors, Securities and Exchange Commission (SEC) Chair Gary Gensler said Wednesday.

The cryptocurrency sector poses various risks to investors in the markets and challenges to the securities regulator, Gensler said in prepared testimony before the House Appropriations Committee. He pointed to volatility in the market and novel products as some examples of these issues.

“Crypto lending platforms and so-called decentralized finance (‘DeFi’) platforms raise a number of challenges for investors and the SEC staff trying to protect them,” Gensler said.

SEC Chairman Gensler: SEC Should Be ‘Ready to Bring Cases’ Involving Crypto

U.S. Securities and Exchange Commission (SEC) chief Gary Gensler said Thursday federal financial regulators should “be ready to bring cases” against bad actors in crypto and other emerging technologies. “The Hash” team weighs in.
 The crypto market had an overall market capitalization of $1.6 trillion on Monday after losing over one-third of its value in under two weeks, he said. While bitcoin (BTC, +1.51%) grabs most headlines, he noted that more than 80 tokens have a $1 billion market cap, while more than 1,500 had a market cap of over $1 million.

Gensler previously told the House Financial Services Committee that stronger regulation around crypto exchanges could help protect investors. In particular, he suggested a dedicated market regulator for the crypto markets would provide some protection around fraud and manipulation, two concerns the SEC has often cited in rejecting bitcoin exchange-traded fund (ETF) applications.The regulator repeated the concern on Wednesday.

“Tokens currently on the market that are securities may be offered, sold, and traded in non-compliance with the federal securities laws. Furthermore, none of the exchanges trading crypto tokens has registered yet as an exchange with the SEC.

Altogether, this has led to substantially less investor protection than in our traditional securities markets, and to correspondingly greater opportunities for fraud and manipulation,” he said.

Read more: BlockFi Botches Promo With Outsized Bitcoin Reward Payments

Even the crypto market’s current volatility is suspect, Gensler seemed to say.“In recent weeks, the reported trading volume has ranged from $130 billion to $330 billion per day.

These figures, however, are not audited or reported to regulatory authorities, as the tokens are traded on unregistered crypto exchanges. That is just one of many regulatory gaps in these crypto asset markets,” Gensler said.

He also indicated that the SEC would be willing to bring enforcement actions against parties that don’t comply with federal securities laws.

The regulatory agency has already brought 75 such actions, and “has been consistent” in how it describes its approach, he said. He said the SEC “should be ready” to bring further actions in a speech to the Financial Industry Regulatory Authority last week.

• Traders taking excessive risk in the bitcoin market being forced to sell when the price goes down were the bigger culprits for last week’s 30% drop in bitcoin prices, according to analysts.
• Bitcoin traders liquidated roughly $12 billion in levered positions last week as the price of the cryptocurrency spiraled, according to bybt.com, a cryptocurrency futures trading platform.
• “Selling begets more selling until you come to an equilibrium on leverage in the system,” says JMP’s Devin Ryan.

Slow Ventures’ Jill Carlson on fears surrounding bitcoin mining councilBitcoin’s aggressive moves are being driven by much more than the next China crackdown or Elon Musk headline.

Traders taking excessive risk in the unregulated cryptocurrency market being forced to sell when prices go down were in large part responsible for last week’s 30% drop in prices and outages for major exchanges, according to analysts.

A burgeoning bitcoin lending market is also adding to the volatility.The price of cryptocurrencies tanked last week, with bitcoin losing roughly a third of its value in a matter of hours. Bitcoin popped to nearly $40,000 on Monday but is still down about 33% from its high.



When traders use margin, they essentially borrow from their brokerage firm to take a bigger position in bitcoin. If prices go down, they have to pay the brokerage firm back in what’s known as a “margin call.

” As part of that, there’s often a set price that triggers selling in order to make sure traders can pay the exchange back.Brian Kelly, CEO of BKCM, pointed to firms in Asia such as BitMEX allowing 100-to-1 leverage for cryptocurrency trades.

Robinhood does not allow traders to use margin for cryptocurrency, and Coinbase only allows it for professional traders.
Bitcoin bull says the volatility could lead to a big breakout

“You get this crowd factor — everybody’s liquidation price tends to be somewhat near everyone else’s-- when you hit that, all of these automatic sell orders come in, and the price just cascades down,” Kelly, told CNBC.Bitcoin traders liquidated roughly $12 billion in levered positions last week as the price of the cryptocurrency spiraled, according to bybt.com. This mass exodus wiped out about 800,000 crypto accounts.

“Selling begets more selling until you come to an equilibrium on leverage in the system,” said JMP analyst Devin Ryan. That selling begins to “compound” as leveraged positions are liquidated, because they can’t meet those margin requirements, he said.

“Leverage in the crypto markets — particularly on the retail side — has been a big theme that accentuates the volatility,” Ryan added.As the crypto market expands, Ryan said he expects leverage to become less of an influence, especially as more institutional capital comes in.Investors, both retail and institutional, have poured into bitcoin and other digital assets in 2021.

The world’s largest cryptocurrency exchange — Coinbase — said trading volume in the first quarter of the year was $335 billion, of which approximately $120 billion was retail and $215 billion was institutional.

Trading volumes totaled about $30 billion in the first quarter of 2020.Mark Cuban weighed in on the leverage aspect for ether, the world’s second largest cryptocurrency, on
Twitter last week.

“De-Levered Markets get crushed. Doesn’t matter what the asset is. Stocks. Crypto. Debt. Houses. They bring forced liquidations and lower prices. But crypto has the same problem that [high-frequency traders] bring to stocks, front-running is legal, as gas fees introduce latency that can be gamed,” Cuban said in a tweet last week.

Lending

The other behind-the-scenes cause for selling may have come from the growing bitcoin lending market.Crypto companies such as BlockFi and Celsius allow bitcoin holders to store their crypto with the firm, in exchange for an interest rate of between 6% and 8%. On the back end, those firms lend bitcoin out to hedge funds and other professional traders.

They also allow people to use their bitcoin holdings as collateral for loans.For example, if someone took out a $1 million loan backed by bitcoin and the price drops by 30%, they may owe 30% more to the lender.

″As you hit a certain collateral level, firms will automatically sell your bitcoin and send the collateral to the lender,” BKCM’s Brian Kelly said. “This adds to the massive cascade effect -- there was so much volume that most of the exchanges broke.”

Regulation

The fact that bitcoin is not regulated by a central bank is part of what makes it so valuable to its investors.But that lack of a central authority, and increased adoption has put a target on its back from some in Washington. The Treasury Department announced Thursday it will require any transfer worth $10,000 or more in crypto to be reported to the Internal Revenue Service.

“The market does not have the same backstops that other more traditional markets do,” said Ryan. “In some ways the crypto markets are cleaner and they’re not being influenced by a buyer of last resort.

”Still, Ryan said regulation can be viewed as validation of the crypto market, and could be a positive for the digital asset.

“The crypto markets are still in their early days relative to other asset classes and so they’re going through a maturation phase where they are scaling and adoption in increasing, its still relatively nascent,” he said. “Volatility is a feature here just as the market develops,” Ryan said.

Bitcoin plunged below $39,000 for the first time in more than three months Wednesday after China said cryptocurrencies would not be allowed in transactions and warned investors against speculative trading in them, despite the country powering most of the world's mining.

The comments sent the unit diving more than 10 percent and dealt it another blow soon after being battered by comments from tycoon Elon Musk and his Tesla car company.

Trading in cryptocurrencies has been banned in China since 2019 to prevent money laundering as leaders try to stop people from shifting cash overseas. The country had been home to around 90 percent of the global trade in the sector.

And in a statement, three state-backed industry associations said "cryptocurrency prices have skyrocketed and plummeted, and cryptocurrency trading speculation activities have rebounded".

The price fluctuations "seriously violate people's asset safety and disrupt normal economic and financial order", said the statement, which was posted to social media by the People's Bank of China.

The notice warned consumers against wild speculation, adding that the "losses caused by investment transactions are borne by the consumers themselves", since Chinese law offers no protection to them.

It reiterated that providing cryptocurrency services to customers and crypto-based financial products was illegal for Chinese financial institutions and payment providers.

Linghao Bao, analyst at Trivium China, said despite the ban Chinese investors can still find ways to buy cryptocurrencies through illegal vendors."There will always be a way to circumvent regulations," he said.

"The point of this order is to tell financial institutions to up their game to detect these crypto-related transactions.

"Bitcoin tumbled Wednesday from $45,600 to $38,570, its lowest since early February, and well off the record high of $64,870 seen last month. It later edged back above $40,000 but analysts have warned it could test as low as $30,000.

"This is the latest chapter of China tightening the noose around crypto," Antoni Trenchev, managing partner and co-founder of London-based crypto lender Nexo, said.- 'Here to stay' -Adam Reynolds, of Saxo Markets, added that avoiding use of cryptocurrency, which can be transferred out of the country, is "essential to maintaining capital controls" in China.

Bitcoin has had a torrid few days. It took a heavy hit at the start of the week after Musk appeared to suggest Tesla was planning to sell its huge holdings of the unit. And that came days after the electric car giant said it would halt using it in transactions because of environmental concerns.

"Elon Musk started the ball rolling," Germany-based crypto analyst Timo Emden told AFP. "It will take some time for them to recover from this shock."Mining cryptocurrency is a hugely energy-intensive process requiring large amounts of electricity in giant data centres.

China, which powers nearly 80 percent of the global cryptocurrency trade, relies on a particularly polluting type of coal, lignite, to power some of its mining.

"If bitcoin was a country, it would use around the same amount of electricity a year to mine as Switzerland does in total," Deutsche Bank analysts said in a note.

However, some Chinese enthusiasts remained unfazed."This has happened before and it happens every year... Crypto is here to stay," said trader and ex-tech industry worker Zeng Jiajun.

The Hong Kong Bitcoin Association tweeted, "It is customary for the People's Bank of China to ban bitcoin at least once in a bull cycle.

"China is in the midst of a wide-ranging regulatory crackdown on its fintech sector, whose biggest players -- including Alibaba and Tencent -- have been hit with big fines after being found guilty of monopolistic practices.

The central bank has also sought to promote its own heavily regulated digital yuan, which it is testing across the country in pilot schemes.-- Bloomberg News contributed to this story --

Bitcoin fell sharply on Tuesday, continuing a major sell-off that began a week ago.The digital currency fell over 13% to hit an intraday low of $38,585.86 at around 12:54 a.m. ET, according to CoinDesk data. It was the lowest level since Feb. 9, the last time it dropped below $40,000.

As of 4:30 a.m. ET, bitcoin was trading above $40,000 again, but still down by about 12%.

Negative news over the past week has dampened sentiment for bitcoin.On May 12, Tesla CEO Elon Musk said the electric carmaker had suspended vehicle purchases using bitcoin, citing environmental concerns over the so-called computational “mining” process.

This is where high-powered computers are used to solve complex mathematical puzzles to enable transactions using bitcoin.Musk’s comments caused over $300 billion to be wiped off the entire cryptocurrency market that day.

The announcement to suspend bitcoin payment came just three months after Tesla revealed that it bought $1.5 billion worth of bitcoin, and would start accepting bitcoin in exchange for its products.

Early this week, the Tesla CEO suggested the company may have sold its bitcoin holdings but later clarified that it has “not sold any Bitcoin.

”Then on Tuesday, three Chinese banking and payment industry bodies issued a statement warning financial institutions not to conduct virtual currency related business, including trading or exchanging fiat currency for cryptocurrency.

China’s hard line on digital currencies is not new. In 2017, authorities shut down local cryptocurrency exchanges and banned so-called initial coin offerings (ICOs), a way for companies in the space to raise money through issuing new digital tokens.

Traders in China once accounted for a huge share of the bitcoin market but after the crackdown, their influence was reduced significantly. Chinese cryptocurrency operations have moved abroad.

Bitcoin is still up 40% year-to-date and more than 300% in the last 12 months.Other cryptocurrencies also plunged. Ether, the digital currency that powers the Ethereum blockchain, was down nearly 16% at $2,960.29 at 4:30 a.m. ET.

Dogecoin, a cryptocurrency that started as a joke and has been talked up by Musk, fell 16% to $0.4189.Around $270 billion had been wiped off the entire value of the cryptocurrency market in 24 hours as of 4:30 a.m. ET.

Close to a bottom for bitcoin?

Bitcoin is off by about 38% from its all-time high of $64,829.14 which was hit in mid-April.Vijay Ayyar, head of business development at cryptocurrency exchange Luno, said that a 30% to 40% pullback is “normal” during bitcoin bull markets.

“So this is very much expected after we topped out at 64K ($64,000),” he said.

Ayyar pointed to a roughly 35% correction in January as well as similar falls during the huge run-up in bitcoin’s price in 2017.“We are definitely close to a bottom” around $38,000 to $40,000, he said.

Galaxy Digital CEO Novogratz on bitcoin, crypto and ESG concernsBitcoin bull Mike Novogratz told CNBC on Tuesday that he sees $40,000 as a buying level for the digital currency.

The investor, who runs cryptocurrency financial services and investment management Galaxy Digital, said he expects bitcoin to consolidate in a trading range between $40,000 to $55,000.

“Then we’ll have another leg up. And I say that not just by guessing. We see institutions moving in, and it takes them a while,” Novogratz said.

EBay EBAY, -1.64% users can now buy digital tokens on the e-commerce giant’s platform.

Senior Vice President of eBay Jordan Sweetnam announced in a blog post Tuesday the company will now permit sales of non-fungible tokens, or NFTs, from approved eBay sellers, with plans to expand the pool of sellers in the future.

“In the coming months, eBay will add new capabilities that bring blockchain-driven collectibles to our platform,” Sweetnam said. 

See also: Here’s where Jeff Bezos’s superyacht ranks among the world’s most expensive boats

Prior to today, selling on eBay was limited to physical items, with some exceptions.

“All listings on eBay must offer either a physical item or a service for sale,” according to the site’s policy.An NFT is a verifiable digital asset vouchsafed by blockchain technology.

NFTs are not exchangeable like currencies, as each is unique and can’t be replicated.

NFTs use blockchain, the technology ledger backing cryptocurrencies like bitcoin BTCUSD, -0.81%  and ethereum ETHUSD, -0.12%,  which are databases of linked information to record ownership or transactions of a product.

See also: Golden State Warriors become first pro sports team to release its own NFTs

NFTs have exploded in popularity of late, spearheaded by the support of celebrity business figures such as Mark Cuban and Gary Vaynerchuk.

In the past few months, people have spent hundreds of millions of dollars in totality on these digital assets, such as the “Disaster Girl” meme, NBA Top Shot and digital art like one from the artist known as Beeple, which sold for $70 million.

For anyone who still thinks Dogecoin is a joke, there are some 90 billion reasons that say it’s not.That’s how much the digital token is nearly worth in dollar terms after jumping again in Wednesday trading. Useless or not, the coin has been swept up in the crypto mania that’s gripped markets awash in central bank largesse.

KEEP READINGFor the ruined, Turkey’s crypto crackdown comes too lateWho let the Doge out? Crypto frenzy crashes Robinhood appSotheby’s links up with Coinbase to accept crypto for BanksyMove over Bitcoin, Ether tops $3,000

It’s the latest milestone in a year of speculative excesses for a market Nouriel Roubini once described as “the mother of all bubbles”.

While in the past, trillions of dollars in stimulus by governments and central banks might have triggered a rush into gold for the inflation-wary and risky stocks for the intrepid, a deluge of cash this time round is flooding into the nascent crypto market.

Few illustrate this better than Dogecoin, a so-called memecoin that’s become the destination for a horde of day traders egged on by Internet buzz and a self-propelling buying frenzy.

A potential trigger for the latest leg up: Tesla Inc. co-founder and crypto fan Elon Musk is appearing on Saturday Night Live this weekend, spurring speculation he may talk up Dogecoin again on the comedy show.

“When you think about the full spirit of what this crypto revolution is, there’s something pure in what Dogecoin has done,” Mike Novogratz, founder of Galaxy Digital Holdings, said on CNBC.

“I worry that once the enthusiasm rolls out, there are no developers, there’s no institutions coming in. But it’s got the moniker of the people’s coin right now and it’d be very dangerous to be short.

”The overnight gain took Dogecoin’s one-week advance to 118% and its value to $87 billion in Wednesday trading, according to CoinMarketCap.com data, eclipsing the largest exchange-traded gold fund and even stocks like Fedex Corp. and Snap Inc. A year ago, the asset was worth just $315 million.

It’s all the more remarkable given that other retail favorites from bullish stock options to Cathie Wood’s tech fund have all seen activity dip from the highs earlier this year.

Now, cryptomania might even be hurting gold, according to some analysts. The precious metal has suffered outflows in recent months even as a deluge of stimulus cash drove the value of the world’s crypto market to a $2 trillion record.

“At some point, something is just real,” said Sam Bankman-Fried, the Hong Kong-based chief executive officer of the FTX crypto exchange.

“If Dogecoin is stupid and valueless, it shouldn’t be worth $90 billion. How about gold or Bitcoin or euros? Our collective imagination has given them value, and now we just think about them having value.

”Dogecoin, started in 2013 as a joke based on the Shiba Inu breed of dog, may become so accepted by the mainstream it might evolve into a payment option at retailers, Bankman-Fried said.

At Blockfolio, a firm owned by FTX that helps users manage their crypto portfolios, trading volumes are spiking with Dogecoin’s every gain, a sign it’s become essential to the whole ecosystem.

Dogecoin buying got so fevered Tuesday, Robinhood’s trading app briefly crashed. Other so-called altcoins surged, with Dash spiking 11% over a 24-hour period through the New York morning on Wednesday and Ethereum Classic rising 25%.

While it’s difficult to assign firm reasons to Dogecoin’s ascent, a few factors have fueled the gains. On April 20, a day normally associated with pot, some users got #DogeDay trending to push up the price. Celebrities from Musk to the Dallas Mavericks’ billionaire owner Mark Cuban also jumped on the bandwagon.

The Gemini crypto exchange backed by the Winklevoss twins announced Tuesday it will soon enable trading of the coin.

“As the economy reopens, a lot of these Covid-related movements in various assets will experience some volatility,” said Tony Bedikian, head of global markets at Citizens Bank.

“But I think they are going to become a permanent part of the currency markets as central banks have continued to print money at astronomical levels.”(Adds context throughout and comments from Novogratz, Bedikian)

–With assistance from Yakob Peterseil, Vildana Hajric, Claire Ballentine and Anchalee Worrachate.

Dogecoin, the cryptocurrency that began as a joke when it launched in 2013, is now worth more than General Motors (GM), the American carmaker founded in 1908, based on market cap value.

On Wednesday, Dogecoin's market cap value—the total market value of the circulating supply of a cryptocurrency—hit a reported $87.1 billion, according to CoinMarketCap.

The meme cryptocurrency's market cap value was higher than that of GM, which was recorded to be around $80.3 billion on the New York Stock Exchange (NYSE)/Nasdaq at the time of reporting.

Dogecoin (listed as DOGE on the cryptocurrency market) was priced at around $0.66, marking around a 53 percent rise in the last 24 hours. The price reached as high as just over $0.69 at one point in the same time period, according to CoinMarketCap.

NEWSWEEK NEWSLETTER SIGN-UP >The graphic below, produced by Statista, shows the price changes of selected cryptocurrencies in 2021.



STATISTAREAD MORE

• Dogecoin Price Hits New High After eToro Exchange Lists Crypto
• Dogecoin Spikes After Elon Musk Tweets, Mark Cuban Endorses Crypto on Ellen
• Petition Asking Amazon to Accept Dogecoin as Payment Hits 200K Signatures

Its 24-hour trading volume was at over $52.3 billion on Wednesday, marking a 271 percent increase in the same timeframe, according to CoinMarketCap.NEWSWEEK SUBSCRIPTION OFFERS >


Dogecoin's latest market cap value was also more than double that of Twitter. The social media platform's market cap was listed at around $43.4 billion on NYSE at the time of reporting.

The joke cryptocurrency ranked 138th in a list of top assets by market cap on AssetDash, a leaderboard for assets. GM ranked 155 and Twitter ranked 290.

The price of dogecoin has seen a series of surges in recent months, including in mid-April.

The cryptocurrency hit a new all-time high, as the value of a single dogecoin surpassed 20 cents for the first time on April 15.Its value soared from late January, rising by more than 800 percent at one point.

The price flattened out from mid-February and climbed on a sharp incline from early April, according to data from CoinMarketCap.Its price surge has been helped by social media buzz, with nods from public figures such as Tesla CEO Elon Musk and several celebrities, as well as more recently from Slim Jim, the American snack brand.


Dogecoin's price hike on April 15 reportedly came after a shout-out from the CEO of Conagra Brands, the parent company of Slim Jim. The meat stick brand has been tweeting about Dogecoin from early March.

The Twitter account of Slim Jim saw a 160 percent increase in followers after it began engaging with Dogecoin content. Its tweet impressions also soared, receiving 35 million impressions in 25 days, according to Conagra CEO Sean Connolly, CoinDesk first reported on April 15.

"We've seen a market uptick in audience interaction, including direct engagement and advocacy from the person that created Dogecoin," Connolly said on an earnings call at the time.