This is a big week for crypto.
After bitcoin’s surge back above $5,000, the eyes of the world are once again focused on the bitcoin price, and a number of major institutions are set to open up the crypto market to their customers.
We’re also likely to see some major stories come out over the next few days from Paris Blockchain Week.
I’m flying over to Paris tonight with Sam Volkering to attend, and I’ll be reporting from there all week.
Last year’s London Blockchain Week had presentations from many of the biggest names in crypto and great presentations from IBM and other mainstream companies about their crypto plans.
And this year’s Paris Blockchain Week looks set to be just as good.
Here are some of the key figures giving talks:
- Arthur Breitman, co-founder of Tezos
- Dominik Schiener, co-founder of IOTA
- Binance’s CFO
- The head of global banking at Ripple
- The COO of OKEx
- The president of Ledger
- The former CEO of SWIFT.
Everything useful that I learn there I will be sharing with you. So if you have any interest in crypto, this promises to be a great week.
But before everything gets underway, let’s take a look at what’s happening in crypto at the moment.
Bitcoin confidently crosses the $5,000 level – hope returns to the market
Bitcoin, and crypto as a whole are – at time of writing at least – in recovery.
Over the last few months, bitcoin has been steadily climbing, and setting higher lows in price. Then a couple of weeks ago it smashed through the fabled $4,200 mark and didn’t look back.
As I write, it’s sitting around the $5,000 level.
There have been a number of pullbacks since its breakout, but these lows have crucially closed higher than previous lows.
Last week saw a big pullback, but bitcoin remained about $5,000.
Of course, crypto being crypto, bitcoin could surprise everyone and fall through the floor once again. But that is looking less likely with every passing day.
As my colleague Eoin Treacy said, “Crypto hasn’t been this interesting in over a year.”
Coinbase launches crypto debit card in the UK – which you need to 100% avoid unless our tax laws change
It’s unclear if this was just good timing, or if Coinbase was waiting for a change in sentiment, but either way, last week Coinbase announced its crypto debit card.
Basically Coinbase has teamed up with VISA to let users spend the crypto in their Coinbase account as though it was a bank account.
The conversions from your crypto to GBP happen on the fly and Coinbase takes a 2.49% fee.
On the surface of it, this is a great development. But in reality it’s going to get a lot of people into a lot of tax trouble. And Coinbase won’t be there to help them when it does.
There is no mention of tax implications on the new Coinbase card website or in its FAQ.
This is completely irresponsible because in the UK – the only place the card is currently available – every crypto trade is a taxable event.
Every time you spend crypto on this card you need to note down the transaction amount, the fee, the cost basis for your original crypto purchase, and the date you purchased it on.
Then at the end of the tax year you need send it all off to HM Revenue & Customs to calculate how much capital gains tax you owe. Every penny you spend on that card is a taxable event and will need filing away.
When I asked Coinbase about any tax implications I needed to watch out for with this card, I got the following reply:
The link that chatbot sent me to landed here:
Basically Coinbase is washing its hands of any responsibility it has when you use the card.
My advice is, unless there is a UK tax change in regard to cryptocurrency, avoid this card at all costs! It’s not worth the tax headache.
And this goes for any kind of spending using cryptocurrency. Until our tax laws change, cryptocurrency does not work as a currency in the UK.
And investment, yes. A currency, no way.
Fidelity and Bakkt poach top talent
Bakkt, ICE’s foray into crypto is still in “limbo”, awaiting regulatory clarification. But in the meantime, it’s been making some impressive hires.
Bitcoin futures exchange Bakkt has hired a PayPal and Google veteran as its new chief product officer.
The firm announced Thursday that it had hired Mike Blandina, who at various points in his career served as head of payments and credit engineering at PayPal and director of engineering for Google Wallet. Most recently, Blandina was chief technology officer and head of product and engineering at OneMarket, Bakkt CEO Kelly Loeffler wrote in a blog post.
“As our CPO, Mike will lead our efforts to converge a trusted ecosystem for digital assets with payments use cases, two elements of Bakkt that help bring real world applications to bitcoin and other cryptocurrencies,” she wrote.
As to the firm itself, Loeffler acknowledged that Bakkt is currently in a state of limbo as it awaits regulatory approval to launch, but likened the firm’s development to a marathon.
“As a former marathoner, this point in time recalls the stage in the training regimen when you’re putting in long runs with your training team,” she wrote.
Bakkt still has no official launch date after multiple delays, though Loeffler hinted that the exchange might provide more clarity soon, writing “race day is approaching.”
Meanwhile Fidelity is taking a leaf out of Bakkt’s book and poaching top talent from Coinbase.
Back in October Bakkt took one of Coinbase’s top team. From Fortune:
A prime architect of America’s largest trading platform for digital currencies is changing teams. Adam White, who helped build Coinbase into a crypto-colossus with 25 million customers, is joining Bakkt, the venture launched in August by a consortium led by Intercontinental Exchange (market cap: $42 billion), parent of the New York Stock Exchange, as chief operating officer.
Bakkt, with its deep ties to Wall Street’s institutional investing titans, is pitching itself as the venture with an inside track at bringing Bitcoin mutual funds and ETFs to America’s 401(k)s.
The announcement came on the morning of October 15 via a post on the blogging platform Medium from Bakkt CEO Kelly Loeffler. For sixteen years, Loeffler worked alongside ICE’s founder and chief Jeff Sprecher, who’s also her husband, to assemble a highly regulated, mainstream trading empire for equities, ETFs, and commodities ranging from Brent crude to cotton. The ICE exchanges are go-to venues for Wall Street.
And now Fidelity is following suit.
From Business Telegraph:
Coinbase’s director of institutional sales, Christine Sandler, has left the cryptocurrency startup for Fidelity Investments, one of the world’s largest financial services providers, according to multiple industry sources.
Sandler, a long-time executive in the financial space, held positions with NYSE Euronext and Barclays Investment Bank before joining Coinbase in March 2018 to head up its institutional sales division.
It is not clear which part of Fidelity she is joining, but a logical candidate would be the recently launched Fidelity Digital Assets (FDAS), a cryptocurrency custody and brokerage service for institutional investors.
As I said, there is a lot happening in crypto right now, and I’ll be bringing you more stories about it all this week while I attend Paris Blockchain Week.
Until next time,
Editor, Exponential Investor