BlockFi is now the only crypto interest provider in Washington state

BlockFi is a wealth management platform that allows people to earn interest on and borrow crypto assets. Today, BlockFi received a Money Transmitter License from the state of Washington, making them the only regulated crypto lending service in the area.

There are tons of ways to lock up your crypto to earn interest in the decentralized finance space, but BlockFi is going about doing this in a centralized manner. Right now, BlockFi is offering up to 8.6% interst annually for locking up assets like Bitcoin, Ethereum and Gemini’s stablecoin, GUSD. These rates are competitive compared to DeFi options and users might feel comfortable that their operation is regulated and not experimental technology.

A Money Transmitter License is administered by FinCen and allows companies to be in the business of handling money. BlockFi has been capable of offering Washington citizens crypto backed loans since 2018, but they weren’t allowed to deposit crypto and earn interest.

Wherever there is demand for borrowing, there is opportunity for people to earn interest by lending cash or crypto and tons of projects are working hard to make passive interest accessible to everyone.

When will you be able to buy Ethereum on Cash App?

Cash App is one of the most accessible crypto on-ramps for American citizens, and many others throughout the world. Right now, as long as you are willing to give Cash App your personal information, they will allow you to purchase a significant amount of Bitcoin with reasonable fees. This has Ethereum enthusiasts wondering when they’ll be able to buy ETH on Cash App.

Cash App still is figuring out Bitcoin’s business model 

Unfortunately, Square has not said a word about adding support to Ethereum. In fact, they seem to be having trouble finding a profitable business model for Bitcoin. In Square’s quarter 3 earnings reports, it was clear that Bitcoin wasn’t making them much money. Square spent $146 million in operation costs for providing Bitcoin, and only brought in a revenue of $148 million, leaving total profits at $2 million. This was measly in comparison to their total $500 million in net profit.

Statement from Square‘s Q3 2019 shareholder letter:

In the third quarter of 2019, Cash App revenue comprised $159 million in subscription and services-based and transaction-based revenue, and $148 million in bitcoin revenue. During the quarter, bitcoin generated $2 million on gross profit.

Advocates of purchasing Bitcoin through a Cash App account liked to note that fees are significantly lower than on Coinbase for small purchases. Initially, Cash App made money through a price spread, which would cost tenths of a percentage on a $10 purchase in comparison to Coinbase’s 10%. After their 2019 Q3 earnings report was released, they switched over to a fee base model, similar to Coinbase’s but still cheaper for small purchases.

I say all of this to clarify that because they are still figuring out how to make decent money off of Bitcoin, they are unlikely ready to provide access to a less liquid token like Ethereum.

Would Cash App offering Ethereum pump the market? 

When Bitcoin became available to purchase on Cash App, on of the most widespread financial apps in the world, what actually happened to the price? Crypto enthusiasts are always excited when their coin is listed on huge onboarding platforms, like Coinbase or Binance. One of the reasons Ethereum holders are even wondering if Cash App will list their token is because, let’s be honest, it has the potential to increase the value of ETH.Cash App supports Bitcoin Purchases

Bitcoin has been available for purchase on Cash App, in the U.S. since August 2018. During this time, price was ranging between $6.5k and $7k. A few months later, Bitcoin capitulated to its local bottom at around $3k. Basically, after Cash App allowed U.S. Bitcoin purchases, price still decreased by half and never returned to that $7k range until around 10 months later.

This is not to say that Ethereum has no chance of seeing positive price action from a Cash App listing though. Historically, Coinbase listings have had very positive effects on the price of some tokens. LINK, or Chainlink, for instance was listed in June 2019 and there were rumors of a listing dating back to April. During this time, the price of LINK increased to about 9x at its peak and has yet to drop back down to pre-April prices. Still, this type of price action has not been consistent with every coin listed on Coinbase.

If people could predict future values of assets, money would be free. There’s no real way to predict what would happen to the value of Ethereum with a Cash App listing, but it would undoubtedly allow more people to purchase it if they wanted to.

Has Cash App said anything about letting users buy Ethereum?

Jack Dorsey, CEO of Square (who owns Cash App), appears to be what one might call a Bitcoin maximalist. Here are some tweets where he has been transparent about his opinions of other crypto assets:

Dorsey allegedly replied “no” to a tweet recommending that he “Buy ETH” which was later deleted:

Another damning tweet telling a fan that they’ll need to keep Coinbase for non-Bitcoin crypto:

All of these tweets were written around a year ago, and he hasn’t made any comments on Ethereum since. There has been natural growth in Ethereum’s decentralized finance space, which has created tangible value. It’s really up to Ethereum’s community to convince people that their product is worth-while. Maybe as new Ethereum tech releases, Dorsey will become a believer.

Matic, Indian led crypto asset crashes 80%. Racism ensues

Yesterday, Matic, an Ethereum side-chain protocol, saw around a 80% decrease in price after about a month of upside. Afterwards, anonymous traders on crypto Twitter couldn’t help but express racism towards Indians due to the ethnicity of Matic’s leadership.

Racist jokes towards Matic’s Indian leadership

The most noticeable thread where users were stereotyping was on zyzz’s Tweet, a trader with a paid group and frequent of crypto Discord chat rooms. He posted a picture of EtherScan’s records of the Matic Foundation sending MATIC to Binance, implying that they were responsible for the crash, and included a picture of the founders next to it.

Here’s some replies to the thread:

Obviously, these commenters are associating a derrogatory stereotype of Indian people as scammers. A common slur that I’ve seen in crypto Discord groups is to joke about “Pajeet” when talking about a scam. Pajeet is a stereotypical name for Indian people, and apparently the slur started on 4chan.

Here’s another offensive response in the same thread:

Matic Founder’s response

One founder of Matic, Sandeep Nailwal, responded to the racial attacks.

“I m seeing such racial attacks on a hardworking Indian project which hs been striving hard & making an impact even with small resources Entire Indian community needs to unite against this racial slur & fight to prove our worth We hv top Indian teams in all blockchain sectors” – @sandeepnailwal

Racist culture thrives in an anonymous crypto space

While it’s natural for people in the crypto space to be weary of pump-and-dump schemes, and there appears to be reasonable evidence that suggests the Matic Foundation has sent large amount of money to Binance, the immaturity in the crypto space is concerning.

Before, we have covered an anonymous crypto trader with 70,000 followers saying that women should never have been able to vote. It’s possible to have a messed up sense of humor, but the frequency in which this behavior is accepted, and the lack of consequences due to anonymity is a plague to the space.

Crypto is one of the few industries where privacy and anonymity is respected to an extent, but it may be detrimental to the expansion of the space as the culture could deter a large demographic of people. At the same time, it attracts those who desire the ability to spread hatred, ethnocentrism, etc.

 

[Update: New math] Allegedly, Matic sent around $10 million of their supply to Binance, mostly for liquidation

Earlier today, the price of $MATIC dropped around 80% within 24 hours. People are now investigating as to why there was such a huge dump, and some think EtherScan records hold the answer.

Samuel JJ Gosling, Founder of Validity Crypto, posted a link to the Matic Foundation’s records, where they sent around $10 million (calculated at all-time high) to Binance addresses. On first look, the transactions lead to unknown addresses, but tracking them further shows that they were deposited, or possibly sold to known Binance 1, 2, 3 and 4 addresses.

There are 10 trillion Matic Tokens in circulating supply and around 300 billion were sent withdrawn from the foundation.

Matic and Binance’s response 

Sandeep Nailwal, Co-founder of Matic responded to Goslings post very critically.

“FUD account. We will post the exact numbers. This is complete BS, the out amount is from the smart contract lockup account to Foundation account. Amounts sent to Binance or any other accounts are in conjunction with our token release. Why would a project do this deliberately,” tweeted Nailwal

Changpeng Zhao, CEO of Binance backed up his claims.

“Our team is still investigating the data, but it’s already clear that the MATIC team has nothing to do with it. A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people’s trading.” – @cz_binance

FUD is a term that Zhao is notorious for throwing around, and is short for ‘fear, uncertainty and doubt.’ Nailwal calling the linked address a “FUD account” implies that it is not theirs. If this is true, it is unclear how EtherScan picked the address up as the Matic Foundation.

MATIC is a low market cap coin, and if even $10 million worth of a coin that was worth $.05 was sold all at once, it might be able to initiate a crash around the magnitude of what happened today. Observers are waiting for Binance and Matic to come up with more evidence before there is a consensus of no foul play.

Update:

Gosling updated the math and it turns out that only 3% of MATIC supply was sent to Binance, closer to $10 million USD. Originally this post had published that it was $67 million.

 

$MATIC just crashed harder than any coin has in a long time, and people are confused

Matic, a proof-of-stake based side chain network to Ethereum saw massive increases in price throughout the past month, then in 1 day, reverses all progress.

People were under the impression that alt-season might once again have been in fruition with coins like RVN, FETCH and MATIC at least tripling in worth since November. Unfortunately for buyers, those three coins and possibly more had the rug pulled from underneath them. These pairs are all traded on Binance’s leveraged exchange and one veteran trader, DonAlt, pointed out that they were some of the CEO, Changpeng Zhao’s favorites.

https://twitter.com/cryptodonalt/status/1204207941945090048

As I’m writing this, MATIC has bounced back to the top of it’s 200 day simple moving average, after plowing through the 50 day MA like it didn’t exist.

Some are saying that the owners of MATIC control 90% of the coins supply:

https://twitter.com/CryptoWelson/status/1204210798689542144?s=20

Since Binance users are able to short, or make money off of the price going down, some have turned this into profit. Others surely were either liquidated, stopped out or left with down to 25% of what they invested if they bought the top.

Matic creators Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun have not made any statements on Twitter about the coins sudden increase in price, or the drop.

I believe this is the quickest drop in price I’ve seen in a coin since I began observing the crypto space in early 2019. Many exchanges, including Binance, have features called a “stop loss” or “trailing take-profit” which automate the selling process for circumstances like this. I’m hoping this space has matured since 2017 and not many people have been harmed by this decrease in price.

One user on Reddit is already asking “Why is Matic crashing?” Here are some answers that people are giving:

“I’d imagine it’s because it had just gone parabolic. I have it in storage and sit long term, no worries for me.” – u/almondbutter

“Binance exchange hacked” – u/jdbaker82

Nobody can say yet the definite reason behind this sudden price action, but I’m sure more details and conspiracy theories will be voiced soon.

 

UPDATE: 

Reddit user u/McNeiltherealdeal is claiming to have lost $53 million.