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Square’s bitcoin business is continuing its rapid growth, with Q2 revenue up 600% year on year.

  • Announced Tuesday, the San Francisco payments company said revenue made from selling bitcoin to its Cash App customers in Q2 came to a total of $875 million, six times the amount in the same period in 2019.
  • Square stresses it only takes a “small margin” selling bitcoin to customers, but Q2’s results still mean it made $17 million profit – up 711% year over year.
  • Square released its results ahead of schedule after someone gained “early external access.” It hasn’t provided any further details on what happened.
  • Since Square first enabled bitcoin buying through its Cash App in November 2017, it has grown to become a dominant part of the business.
  • While bitcoin made up only 5% of its revenue at $34 million in Q1 2018, it came to $65.5 million in the same quarter in 2019.
  • By Q4 2019, Square’s bitcoin revenue reached $178 million and $306 million in Q1 2020, $100 million more than the revenue generated from its fiat services.
  • But Tuesday’s results represent one of the biggest increases in quarter-to-quarter revenue to date. The company attributes the rise to a surge in customer demand and volumes as well as an increase in bitcoin’s circulating supply.
  • Square excludes bitcoin revenue from its total figures, saying that incorporating something so unpredictable and volatile into its results would make it hard to gauge the company’s overall performance.

Author: Paddy Baker

Source: Coin Desk: Square Reports 600% Increase in Quarterly Bitcoin Revenue

Newly launched derivatives platform EQUOS.io is set to become the United States’ first publicly-traded crypto exchange later this year through a “backdoor listing” on the Nasdaq.

Its operator, Hong Kong-based Diginex, announced Thursday it is combining EQUOS.io with Singapore’s 8i Enterprises Acquisition Corp – a special-purpose acquisition company (SPAC) listed on the Nasdaq.

SPACs are shell companies that use funds from their initial public offerings (IPOs) to acquire target companies, bringing them public through the “backdoor.” Around since the 1990s, they’ve experienced something of a renaissance in recent years, with the total amount raised hitting a record $13.6 billion in 2019 – more than four times the $3.2 billion in 2016.

Diginex CEO Richard Byworth told CoinDesk that SPACs were faster and cheaper than traditional listings. In addition, they fix valuations in advance, avoiding the possibility of WeWork-like devaluations at the last minute, he noted.

EQUOS.io will be the first publicly-traded cryptocurrency exchange in the U.S. once the acquisition is completed in September, Byworth said.

Newly launched, EQUOS.io is an institutional-oriented exchange with a team from the traditional derivatives space. The ambition is to expand the still-nascent crypto derivatives scene to hundreds of times the size of the spot market – just like traditional markets.

Diginex had planned to move ahead with the listing much earlier. The U.S. Securities and Exchange Commission (SEC) approved the acquisition back in late February with a shareholder vote confirming the deal planned for March 20, around the time global equity markets were in a tailspin.

“If you remember, that was the day when the S&P 500 was down 12.5%,” Byworth said, “so the conclusion was probably not the best day to go to market.”

EQUOS.io isn’t the only crypto company heading to the public market. Ant Group, one of the principal issuers for China’s digital yuan, announced a dual listing in Hong Kong and Shanghai earlier this month. Crypto exchange Coinbase is also said to be considering a direct listing for 2021.

Chinese mining chip manufacturer Canaan Creative held a $100 million IPO in November 2019. Since listing, its share price has fallen by two-thirds, from $9 to $3 at press time.

After filing again with the SEC and being re-approved in June, everything is now set for the Nasdaq listing. Although U.S. citizens will be able to purchase shares in EQUOS.io, Byworth said that the exchange itself will not actually operate in the country.

So why list on the Nasdaq? CoinDesk asked.

“The Nasdaq listing is more about the credibility and trust,” Byworth said, adding that it remains the foremost stock exchange for tech stocks anywhere in the world.

With the bull run in tech stocks showing no signs of slowing and that the company will become one of the very first cryptocurrency firms to trade on the Nasdaq, Diginex has a compelling investment case for its derivatives exchange, he said.

Author: Paddy Baker

Source: Coin Desk: A Crypto Derivatives Exchange Is Getting a Nasdaq Listing in Q3

Employers struggling to meet the conditions set by the U.S. government’s loan program may find salvation in an unlikely place: a new bitcoin 401(k) plan from Bitwage.

Calling the product a world first, the crypto payroll company said Tuesday it had successfully trialed its bitcoin 401(k) employee pension account and would start offering the plan to companies – especially those trying to meet the 75% payroll requirement in the federal Paycheck Protection Program (PPP).

The PPP has proven to be a lifeline for U.S. businesses struggling in the coronavirus pandemic. A total of $660 billion has been lent out nationwide by the Small Business Administration (SBA). To incentivize staff retention, the program offers 100% loan forgiveness if employers spend at least 75% of funds received on payroll expenses.

Crucially, the SBA includes things such as retirement benefits in the bucket of payroll expenses, says Bitwage. It adds that devoting some of the loans into 401(k) plans can count towards hitting the crucial 75% target.

“This gives companies an opportunity to provide matching or profit sharing contributions to employee 401k accounts in order to help close the gap to receive full loan forgiveness,” Bitwise said in a press release. “Together with the PPP program, the Bitwage Bitcoin 401(k) Plan allows employers to get more out of their PPP loans, while providing their employees new and innovative investment options.”

Based in San Francisco, Bitwage wants to integrate cryptocurrencies into everyday life. Company clients can use Bitwage to offer their employees the option to have their wages paid in crypto. Although its primary focus remains on the U.S. it has set its sights on a more global clientele, offering fiat support in more than eighteen different currencies.

The Bitcoin 401(k) plan is a collaboration with three other firms: crypto exchange Gemini, the custodian service Kingdom Trust, as well as the established pension provider, Leading Retirement Solutions, who keep records for the 401(k) plan with the Department of Labor and the Internal Revenue Service (IRS).

“Our vision includes integrating the Gemini trading engine directly inside of the 401(k) Plan so institutional as well as retail investors have access to the same Gemini trading tools inside of tax-incentivized retirement accounts,” Bitwage said.

Although Bitwage’s plan is geared toward employers interested in offering bitcoin, employees can also choose to gain exposure to traditional asset classes too, including equities and bonds, via its link-up with Leading Retirement Solutions.

Author: Paddy Baker

Source: Coindesk: Bitwage Rolls Out Bitcoin 401(k) Plan With Help From Gemini

Google Pay users can now make payments with cryptocurrencies, thanks to a tie-up with Coinbase’s debit card offering.

The cryptocurrency exchange announced Tuesday that Coinbase Cards can now be added to users’ Google Pay wallets, enabling crypto-backed payments from Google Pay-enabled devices, such as phones or smartwatches, apparently for the first time.

Based in San Francisco, Coinbase launched its new Visa debit card for U.K. and European customers in April 2019. Holders can purchase everyday goods and services – up to £10,000 ($12,100) per day – with cryptocurrencies held in their exchange accounts that are instantly exchanged into the relevant fiat currency.

The card initially only supported payments in bitcoin (BTC), ether (ETH), litecoin (LTC) and bitcoin cash (BCH). In November, this was expanded to include digital assets including XRP, basic attention token (BAT) and stellar lumens (XLM).

The new Google Pay feature will be available to users based in some European countries including the U.K. and Ireland, as well as Spain, France, Italy and Sweden. Neighboring countries will be added sometime later this year.

Card users will even be able to use the Google Pay integration before their physical card arrives, Coinbase added.

Author: Paddy Baker

Source: Coin Desk: Coinbase Card Users Can Now Make Crypto-Backed Payments With Google Pay

A digital currency could see widespread adoption within the next few years, a new report by Deutsche Bank suggests.

Published Monday, the Deutsche Bank report said digital currencies, while only a decade old, have already been shown to have the “potential to radically change payments, banking, central banking and the balance of economic power.”

“We believe a new digital currency could become mainstream within the next two years,” according to the report, with both China’s digital yuan initiative and Facebook’s Libra project expected to launch this year. The report said that could make digital currencies available to more than 1.5 billion Chinese citizens and 2.5 billion Facebook users – combined, more than half of the world’s population.

At its current adoption rate, cryptocurrencies are running parallel to the internet during its early years, the report reads. Should this continue, there could be more than 200 million blockchain wallets by 2030, up from the 50 million in 2020.

Monday’s report is the third in Deutsche Bank’s series that examines the future landscape for payments. As the first paper highlights, many existing cryptocurrencies, such as bitcoin, are too volatile to be used as a viable means of payment or as a store of value. The second in the series indicated the inherent benefits of cash mean it would endure as a payments method possibly for decades to come.

Although many of these same sentiments are echoed in the third paper, researchers also highlighted that digital currencies could combine the convenience of electronic payments with the privacy of cash payments. In the case of central bank digital currencies (CBDCs), they present new solutions for dealing with problems systemic in the global economy.

If CBDCs were fully rolled out, Deutsche Bank said, central banks could make interest-bearing accounts available to every citizen. That could “resolve many problems caused by the current fractional reserve banking system,” the report reads, and commercial banks would not be “vulnerable to bank runs”: governments would not be forced into a position where they have to bail out the “too big to fail” institutions as they had to do in 2008, researchers said.

As part of its research, Deutsche Bank surveyed 3,600 bank clients. Although restricted to a smaller percentage of the population, the report noted a “stark contrast” in attitudes between older and younger respondents.

While a larger share of the older generation had never held cryptocurrencies or understood how they worked, the report found a “large majority” of millennials – those born between 1981 and 1996 – had already traded cryptocurrencies and believed they would be beneficial for the overall economy.

Deutsche Bank said in 2017 the opportunities presented to businesses by blockchain technology were “huge,” predicting as much as 10 percent of global GDP could be tracked or regulated using the blockchain by 2027. In September 2019, the bank joined the Interbank Information Network (IIN), a blockchain-based payments initiative that uses JPMorgan’s JPMCoin stablecoin.

Author: Paddy Baker

Source: Coindesk: Deutsche Bank Says Digital Currencies Could Be Mainstream in 2 Years

Bitcoin’s hash rate reached record highs this week amid rising prices and anticipation of the miner reward halving later this year.

Based on a rolling seven-day average, the hash rate has risen sharply from approximately 93 exahashes per second (EH/s) on Dec. 30 to more than 106 EH/s on Jan. 5. The best day overall was Jan. 1 when the hashing power exceeded 119 EH/s, surpassing the previous record of 114 EH/s set back in October.

Bitcoin’s hash rate has increased considerably over 2019, rising from a weekly average of 40 EH/s at the beginning of the year to 80 EH/s by September.

That shift corresponded with the rise in bitcoin’s price from roughly $4,000 to more than $10,000 over the same timeframe. The hash rate first crossed the 100 EH/s milestone on Sept. 26, but it wasn’t until late October that it stayed above 100 EH/s for more than a day.

A plus-100 EH/s rate has become an increasingly frequent sight, with only one day so far this year reporting under the new benchmark.

Hash rate is a measure of the processing power dedicated to a blockchain. A high hash rate means more miners are working on the bitcoin network, suggesting it is increasingly economically viable at both the current bitcoin price and difficulty level. A report published in September predicted bitcoin’s two-week average hash rate would cross 100 EH/s at the end of 2019.

Bitcoin’s difficulty level automatically adjusts to ensure block time stays broadly at around the 10-minute mark, regardless of how many miners are working on the network. It adjusts every two weeks, the last being on Jan. 1 when it increased by 6.75 percent, the largest since September.

Plummeting cryptocurrency prices in 2018 forced many miners to shut up shop, with only the largest able to remain profitable. The industry faced an existential crisis as recently as last April when a government agency in China – home to more than two-thirds of all bitcoin mining operations – called mining “undesirable.”

However, the situation looked brighter for miners last year as the bear market faded. More than half a million new application-specific integrated circuit (ASIC) rigs are estimated to have come online in Q3 2019, following a summer in which the bitcoin price more than doubled.

In recent days, bitcoin prices have taken an upturn, rising nearly 10 percent from lows near $6,850 seen on Friday. The rise may have set the cryptocurrency up for a bullish trend shift, charts suggest, further encouraging miners.

2020 is set to be a crucial year for many miners looking to increase their capacity. Bitcoin’s block reward is expected to halve to 6.25 BTC in the coming months. While Bitmain is expected to make job cuts in anticipation of a drop in revenue, according to Chinese media, other companies are significantly scaling their operations.

U.K.-listed mining firm Argo Blockchain announced Thursday it had acquired more than 3,600 new bitcoin ASICs, more than quadrupling its total mining capacity. The news caused the company’s share price to rise by 6 percent on the London Stock Exchange.

Author: Paddy Baker

Source: Coin Desk: Bitcoin Mining Power Hits Fresh All-Time High

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