Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
A godsend to drug dealers. More dangerous than 9/11. A global economic threat. Congress was given two days to grill the head of Facebook’s Calibra wallet, David Marcus, over the upcoming Libra cryptocurrency, and it didn’t hold back. The Senate Banking Committee went first on Tuesday, with lawmakers describing the social network as “dangerous” and unfit to handle financial data given past scandals. Politicians also demanded to know why Facebook had chosen to base Libra in Switzerland rather than the United States. Wednesday was the House Financial Services Committee’s turn. In a four-hour grilling, Marcus was asked whether the tech giant will delay Libra’s launch until regulatory concerns are addressed — and he ducked a question about whether the coin would be available to people banned from Facebook’s platforms.
Surprisingly, Marcus wasn’t uploading selfies of his trip to Washington on Instagram and telling his followers how much fun he was having. That’s because he was probably navigating questions he rather wouldn’t answer — and trying to convince Congress that Facebook will have “no special privilege” and no control over Libra and Calibra. Alas, this was easier said than done — with politicians unwilling or unable to hide their skepticism. Marcus insisted that Facebook was committed to cooperating with U.S. regulators, and stressed Libra’s Swiss headquarters has “nothing to do about evading responsibilities.” And, after constant cajoling from one senator, he said he would be willing to get his entire salary paid in the stablecoin. Aside from the theatrics of it all, Marcus’s main point was this: If the U.S. fails to embrace digital currencies, others will — and their values “could differ radically.” China’s going to be thrilled with that not-so-subtle dig.
It’s been another tumultuous week for Bitcoin. From July 10 to July 16, prices slumped from $13,200 to $9,684. Major exchanges reported a 26.6% drop in just seven days. While some analysts have blamed the decline on technical issues, others believe the downfall is linked to seemingly never-ending criticism of Libra. But it isn’t all doom and gloom. In an interview on Wednesday, U.S. Rep. Patrick McHenry said he thinks BTC cannot be killed — and said corporations such as Facebook were trying their hardest to replicate the success of its decentralized, open-access network. Saturday saw the market briefly crack $11,000 once again for the first time since Monday, potentially signalling that the storm clouds are starting to part after a turbulent week.
Derivatives giant BitMEX has been a naughty boy, if reports from Bloomberg are to be believed. It’s claimed the exchange is being investigated by the Commodity Futures Trading Commission amid allegations it allowed U.S. residents to use its Seychelles-based platform for trading. That would fly in the face of current laws that prevent American citizens from using such crypto-based financial services. Earlier this month, BitMEX CEO Arthur Hayes and Bitcoin naysayer Nouriel Roubini had a ding-dong at the Tangle in Taipei — and the only thing they could agree on was that Libra isn’t a cryptocurrency. After a bitter battle over releasing the tape from that debate, Roubini, also known as Dr. Doom, alleged this week that BitMEX insiders had told him the platform is “used daily for money laundering on a massive scale by terrorists and other criminals.”
Ethereum’s co-founder Vitalk Buterin has come up with a novel short-term approach for tackling the network’s scalability issues: using the Bitcoin Cash blockchain to deal with its backlog. An Ethereum 2.0 could be many months away, and at present, good ol’ Ethereum 1.0 is only capable of handling a measly 15 transactions per second. In contrast, archrival Ripple can reportedly muster 1,500. Buterin’s Road to Damascus moment didn’t necessarily attract the rave reviews he was hoping for. Some crypto commentators warned that it would speed up the demise of both Ethereum and Bitcoin Cash, while others said Buterin’s remarks amounted to proof that his project had failed. Rather awkwardly, the idea has also put Buterin at odds with fellow co-founder Joseph Lubin, who recently said Ethereum has “already scaled quite significantly.” Taxi!
Winners and Losers
At the end of the week, Bitcoin is at $10,590.46, Ether at $225.99 and XRP at $0.33. The total market cap is at $289,810,601,474.
The top three altcoin gainers of the week are CyberFM, BitCoal and PWR Coin. The top three altcoin losers of the week are Decentralized Crypto Token, Regalcoin and Claymore.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“We can agree Facebook is not really a company anymore, it’s a country.”
John Kennedy, Republican senator for Louisiana
“Who can use a $20 bill? [...] This $20 bill doesn’t discriminate on anything you can be a murderer say horrible things, you can say great things. This $20 bill can be used by every single person that possesses it. With regard to your network, can Milos Yianopolous and Louis Farrakhan use Libra?”
Sean Duffy, Republican congressman for Wisconsin
“If cryptocurrency is used to finance the next horrific terrorist attack, 100 lawyers standing in a row, charging $200,000 an hour, are not going to protect his [Zuckerberg’s] rear end from the wrath of the American people.”
Brad Sherman, Democratic congressman for California
“Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity, like cybercrime, tax evasion, extortion, randomware, illicit drugs, human trafficking […] This is indeed a national security issue.”
Steven Mnuchin, U.S. Treasury Secretary
“I’m for the least amount of regulation. I don’t know what’s gonna happen to cryptocurrencies. I think it’s a great idea.”
Ron Paul, former Republican congressman
“As for the search traffic for bitcoin being low, I also think that is a good sign. It means the rise in Bitcoin has not been accompanied by massive hype.”
Tom Lee, Fundstrat Global Advisors co-founder
“Following 2001-02 tech collapse, dotcoms with real value exploded. The ‘alt’ .coms went bankrupt.”
Peter Brandt, veteran trader
“People behaving badly! India's government banned Bitcoin, a currency providing great hope for prosperity in a country that desperately needs it. Shame on India leadership. Pathetic and corrupt.”
Tim Draper, American venture capitalist and Tezos investor
Prediction of the Week
“Laughing my f*****g ass off.” That was John McAfee’s reaction to the pessimism surrounding BTC’s performance on Monday. According to the U.S. entrepreneur currently exiled in Cuba, crypto enthusiasts should stop relying on weekly fluctuations and look at the bigger picture. Pointing to BTC’s progress over the last few months, he doubled down on his prediction that prices of $1 million were possible by the end of 2020. That would mean Bitcoin has just 17 short months to be worth 100 times more than it is now. McAfee shared some of his other predictions during an interview with Cointelegraph last week. Ten years from now, he believes “there’ll be no fiat anywhere in the world. [...] Everything will be cryptocurrency.” Okay, John!
FUD of the Week
Joining BitMEX on the (alleged) naughty step this week is a former Microsoft employee who has been arrested on suspicion of being involved in a scheme to steal crypto worth $10 million. Volodymyr Kvashuk is accused of using the ill-gotten gains to splash out on a $160,000 Tesla and a $1.7 million lakefront home. Investigators believe the 25-year-old Ukrainian national was in possession of stolen crypto gift cards that could be redeemed against Microsoft products and then sold for a profit on the web.
British crypto holders spat out their tea in outrage this week (I’m allowed to say this, I’m British) when it emerged that U.S. exchange Coinbase had suddenly imposed a minimum deposit amount of 1,000 British pounds (about $1,250). To add insult to injury, Faster Payments — a settlement system that, er, delivers faster payments — has been suspended. This means that Brits will have to use (not so) SWIFT, the standard international transfer option that takes up to 10 days to clear. Coinbase says Faster Payments will resume in the next few months, but it’s not exactly clear when. We also don’t know why the abrupt change was made, and with Brexit around the corner, further complications could be on the horizon. In other unexpected news, the major exchange suddenly announced on Friday that it has discontinued its Coinbase Bundle crypto investment offering. (Fun fact: In chemistry, the element of surprise is Ah!)
British crypto holders also needed a decent glug of whisky in their tea this week when it emerged that a gang of masked men had attempted to raid a Bitcoin embassy in Birmingham, England’s second-largest city. Footage showed the bumbling burglars ransacking the building as sirens blared, but local police later confirmed that they left empty-handed. Reports suggested that the rookie robbers (running out of alliteration now) had attempted to steal a Bitcoin ATM using a rope attached to their car. Ooh! One more! Incompetent intruders! Okay, let’s move on.
Best Cointelegraph Features
I love this headline (I didn’t write it.) This week, Cointelegraph explored how coded conversations and secret languages, things that have been around for centuries, are being implemented in the cutting-edge blockchain world. It goes a lot deeper than hodl, Lambos, FUD and Bitcoin whales. Have a read to find out how transaction signatures are being used to initiate under-the-radar conversations.
There’s been a streak of hacks targeting Japan-based exchanges. In recent days, Tokyo-headquartered Bitpoint revealed it had lost $32 million following a security breach. But here’s the kicker: The exchange was one of 16 local platforms licensed by regulators. Stephen O’Neal investigates whether such scrutiny might actually be causing exchanges to lose focus on security, or whether it’s merely teething problems in a burgeoning market.
Deciphering the rhyme and reason behind President Donald Trump’s tweets, and determining what they mean and whether they amount to policy, can be a hopeless task (you could argue it would be easier if his tweets were written in Dalmatian, a Croatian language that has been extinct since 1898). Nonetheless, we’ve had a go of figuring out the rationale behind his off-the-cuff remarks.
Cappuccino, crypto issues, and Cointelegraph’s Olivia Capozzalo and Molly Jane Zuckerman. What could be better? The debut episode covers all the latest news. It’s worth watching for Olivia’s sarcastic response to Trump’s tweets, and staying for the epic story of her brother’s Bitcoin adventures. The very satisfying clinking of their coffee cups and the gentle instrumental piano music are also big pluses.