This week in crypto: The China Side-Eye Edition

The biggest spate of news actually happened last Friday and it’s China again. Now all cryptocurrency related transactions are effectively banned in China. The effects were immediate:

 

Coinbase Global (COIN.Q) and Robinhood took a 3.5% dive, while MicroStrategy (MSTR.Q) lost 6.7%. Marathon Digital Holdings (MARA.Q) lost %8.1. It didn’t stop there, though.

 

The commentary from the People’s Bank of China brought Bitcoin down temporarily to $41,000 and Ethereum briefly down to $2,864. This was last Friday, though, and they’ve both since seen further price action. Despite China’s best efforts, Bitcoin and Ethereum have since rebounded. Granted, they’re still both deeply in the red compared to where they were, but BTC is rounding the $44,000 mark and ETH is closing in on $3,000.

 

Here are the charts in question – Bitcoin and Ethereum respectively:

And:

 

But if you’re curious as to how some other companies took the hit, here’s a list:

 

Friday include:

• Riot Blockchain (RIOT.Q) is down as much as 7.4% In the ensuing week, the losses have piled up for Riot—reducing their price from $27.93 on Friday’s close to $24.97.¹
• Bit Digital (BTBT.Q) -7.8% to close at $9.44 on Friday, and almost a week later they’re $7.91.
• Ebang International Holdings (EBON.Q) -9.4% to close at $2.17 and now they’re at $1.86.
• Future FinTech (FTFT.Q) -5.7% to close at $2.12 and now they’re at $2.01.
• Diginex (EQOS.Q) -8.8% to close at $3.53 to today’s price of $3.31.
• Mogo (MOGO.T) -6.8% to close at $5.23 to today’s price of $4.38.

¹At the time of writing

 

 

Soon, though, Bitcoin and cryptocurrency will be completely removed from China’s orbit and the what they say won’t mean squat, except maybe to folks still hodling within their borders. Best of luck to them.

 

Grayscale Investments, the digital-asset management firm behind Grayscale Bitcoin Trust (GBTC.Q) and other coin based funds, indicated that DeFi and regulated exchanges in the United states may actually do well after China’s pronouncements. DeFi could theoretically be an alternative place for Chinese crypto enthusiasts to go if it becomes too dangerous to engage in any of the centralized arenas.

 

It will also be a decent test regarding the thesis that decentralization means freedom from government meddling. Here are a few more companies and their responses (or lack thereof) to the China variable.

 

Powerbridge Technologies and their new Singaporean subsidiary aim for the skies

Software as a service solution provider, Powerbridge Technologies (PBTS.Q), is pushing out a Singapore-based subsidiary named Powercrypto Holdings, which will handle their crypto mining adn digital asset operations.

 

The good news about Powercrypto is that they’re going to focus their efforts on green energy powered crypto mining farms for their worldwide operations, which will include both North American and Asian markets. They’ve made a rather bold promise of aiming for a BTC hashrate of 1 million TH/s and an Ethereum hashrate of 698,224MH/s.

 

“We believe this is an opportune time to launch Powercrypto, as we look to expand our global operations of crypto mining and digital assets. Powerbridge is well positioned to accelerate the growth of our crypto businesses and generate promising revenue from it,” according to Stewart Lor, the president of Powerbridge.

 

He’s probably right. The hashrate still hasn’t quite bounced back from China’s opprobrium, and it may be an excellent time for new entrants. Get in while the goods are low, as they say.

 

Hive Blockchain numbers show they’re not worried about China

 

The cryptocurrency and blockchain sector is a turbulent place, with money gained and lost in an instant as the core volatility of the assets in question is directly effected by the geopolitical realities at play. Most companies lose money due to the relative price of the asset—for example, the list above showcases a few companies that have put too much credence on one or two assets.

 

Hive Blockchain (HIVE.V) is an object lesson of a company doing the right things. Lost cost mining in terms of electrical consumption for both maintenance of their operation and the cost of the operation itself, and a diversity of coins mined spells an operation with a lot of cushion against geopolitical factors like China.

“Our focus on ethereum mining in Sweden and Iceland continues to be strong as we spent substantial time and capital in upgrading the majority of our GPU memory cards from four gigabytes to eight gigabytes to continue to remain profitable when the DAG file increased. We also undertook a corporate restructuring in Sweden to become a data centre business with a long-term HPC strategy while remaining true to our roots as an ethereum miner,” said Frank Holmes, CEO for Hive Blockchain.

We haven’t heard from them in a bit, presumably because they’re busy doing the work instead of focusing on the next bit of frothy market meanderings like what media they’re going to make into an NFT, but you can’t listen to one half without getting the rest.

 

Here’s Holmes again on Hive’s plans.

“Going forward, our focus is on improving efficiency and profitability across our mining operations by optimizing cryptocurrency mining output, continuing to lower costs, and maximizing our existing electrical and infrastructure capacity by installing new mining equipment as quickly as possible to leverage our fixed-cost base and improve future mining margins.

Getting the job done.

 

Color Star Technology goes ahead with sports-related NFT at their China office, despite CCP.

 

You have to wonder what goes through some people’s heads sometimes.

 

Color Star Technology’s (CSCW.Q) subsidiary, Color China, intends to launch their sports-related NFT products in October. You have to wonder what the Chinese crackdown would have on this news given that NFT’s are technically blockchain-based products. If I were working at Color Star, I’d be hesitant about opening up a new shop in China.

 

Color Star touts themselves as an entertainment company, and they’re looking to onboard world renowned athletes (they got Shaquille O’Neal this week as well), who will then be featured on the company’s platform and be available to users.

 

But given that China’s most recent moves have been towards a China-first cultural reorientation, one has to wonder how well the CPC is going to take this move.

 

Regardless, it doesn’t seem to be on CEO Basil Wilson’s mind.

“The current and future series of NFT products launched by the Company are all celebrity related. We hope these products will help enrich and diversify the current selection of NFT products in the market. Although many companies are developing NFT products, our NFT products are blessed with a stronger fan base, and the products themselves are more practical and collectible. Color Star will also integrate these NFT products into the entertainment metaverse that is now fully constructed, and promote more cooperation and synergies between the NFT and metaverse spheres.”

BTCS closes debt out and showcases their considerable growth

 

Sometimes when we’re talking about assets like Bitcoin and Ethereum, and the companies that use them for their stock-in-trade, we can lose sight of the fact that real money values matter as well. In this case, we have a company like BTCS (BTCS.Q), which is a company focused on blockchain tech, which managed to unload a $1 million convertible note originally issued in December of last year.

“As our financial position has improved dramatically this year, we were able to capitalize on this opportunity to drive value for our shareholders through the elimination of potential dilution from this note by paying it off in full. With BTCS insiders owning approximately 43% of the outstanding shares of the Company, our interests are very well aligned with that of our shareholders, as evidenced by this action. This note had the potential to convert at a 35% discount to the closing market price on the date of conversion. Given the recent decline in our stock price, repaying this note allowed us to avoid unnecessary dilution and protect our shareholders,” said Charles Allen, chief executive officer of BTCS.

 

The company’s price was $1.60 (after the adjustment for the August 2021 reverse stock split) when they issued in the note, compared to where it is now at $5.71.

“The note provided us the necessary capital to launch our blockchain infrastructure operations, which generated over $450,000 in revenue in the first half of 2021. With the benefit of this capital, we were able to begin securing and powering disruptive next generation blockchains such as Ethereum at advantageous prices before digital assets soared to new all-time highs in the second quarter. Now with our recent Nasdaq listing, we believe we may have improved access to debt financing and other lower cost of capital options to grow operations, drive revenue, and ultimately improve return on equity for our shareholders,” said Allen.

Not bad for a company that was dead in the water at the end of the last crypto-winter.

Now NFT are getting their own channel, because of course they are

 

Axis Technologies Group (AXTG.OTC) which handles decentralized finance businesses, and supports the development of blockchain and DeFi projects is launching NFTtoday.tv, a channel devoted to NFT entertainment, including game tutorials, resources, reviews, movies, music videos and anything else associated with NTFs, DeFi, digital assets and crypto. It’ll be available on Roku TV, Apple TV, Amazon Fire and both iOS and Google application downloads in November.

 

Beyond that, though, the company is opening a new platform called ETHFUND for creating NFT for the entertainment industry. They’re planning to launch the NFT drop for the pilot documentary, called “The NFT Revolution Documentary” on October 18. The documentary will include actors, musicians, artists, movie producers, athletes and celebs, and it’ll be directed by James Hu.

“The process of development for the “NFT Revolution Documentary” pilot using the ETHFUND.io platform was amazingly stress-free and allowed me to understand on the creative side of my future project. As a creative person there isn’t a better situation to be part of this projects to life. ETHFUND is a blessing,” said Dame Leith Eaton, creator, artist, actor and founder of the International Arts Association (IAA).

 

CleanSpark coasts over the one exahash mark en-route to 3.2 EH/s—coming next year

 

Bitcoin miner and energy company, CleanSpark (CLSK.Q) along with Foundry Digital, a subsidiary of Digital Currency Group focused on mining and staking, announced that CleanSpark had completed the transition of all of their bitcoin ming power to Foundry USA Pool.

 

The result was that CleanSpark sauntered over the one exahash mark in terms of Bitcoin mining and they’re not done. They intend to continue to build on their existing fleet until they’re over 2 EH/s by the end of 2021, and over 3.2 EH/s by fall 2022.

“Mining pools historically have not been as transparent in the way they calculate their miners’ earnings,” said Bernardo Schucman, senior vice president of mining for CleanSpark. “Foundry USA Pool is an exception, however. Being an American mining pool with transparent and compliant methods, it provides all stakeholders with full disclosure of their earnings.”

CleanSpark’s decision to direct all of its bitcoin mining computing power to Foundry’s US-based pool is also a step towards greater decentralization of the mining pool landscape, which experts like Schucman say is good for the overall health of the bitcoin network.

Given that countries are beginning to take a greater look at Bitcoin and how it runs, CleanSpark’s decision to direct all of its mining computing power to Foundry’s pool is a step towards greater decentralization, which is good for the whole network, because it disperses power and control over multiple geographic locations. That way, no one country can have any undue effect on how the program operates, like China did earlier this year.

 

Bigg Digital Assets and XinFin partnership gets out ahead of regulators

 

Let’s talk about the XDC network.

 

It’s a global, open-source, hybrid blockchain that uses a delegated proof of stake consensus mechanism to generate new coins. It’s ready for and made for business, as an enterprise blockchain, by XinFin. Now XinFin is trying to get the self-regulatory edge by partnering with Bigg Digital Assets (BIGG.C) to get some of that real-world legitimacy offered by Blockchain Intelligence Group’s compliance tech.

 

“Blockchain Intelligence Group and XinFin share the same values around real-world utility for blockchain, transparency and innovation,” said Lance Morginn, president, Blockchain Intelligence Group. “Blockchain Intelligence Group and XinFin both seek to build a secure future for enterprises looking to benefit from blockchain, crypto and tokenization adoption.”

 

Ultimately, it’s not a bad call. The United States, Canada and other countries, have been circling the wagons for awhile now on cryptocurrency, and it’s only a matter of time before the various government organizations (SEC for securities, FBI for legal recourse, etc) collect a congress enabled mandate to take out non-compliant crypto-companies at the knees. Granted, some can engage in the time honoured tradition of capital-flight and head out for better territory, but if you want to stay in the big-boy markets (especially now that China’s off-limits) then playing the game by house rules is the right move. And the house always wins.

 

What XDC network and Blockchain Intelligence Group are looking to do is create a more scalable, transparent and compliant future for this tech. Their core missions align, and both companies want to bring the benefits of blockchain tech home to global trade markets. Meanwhile, XinFin is using the network to facilitate decentralized finance using tokenized trade finance assets and NFTs within regulatory boundaries.

 

Now that’s an interesting way to use NFTs.

 

Mr Gox, the world’s first crypto-trading hamster, doesn’t care about China

 

The final word on the whole China debacle goes to Mr Goxx, the hamster.

 

 

He runs on his little hamster wheel, where he can choose between dozens of different cryptocurrencies. Then he has two tunnels to choose from—wherein he chooses whether to buy or sell. According to the Twitch account for the hamster, his decision is sent over to a real trading platform — and yes, real money is involved.

 

Not to get pessimistic, but is it really any different than what we all do when lining up a crypto-trade? Granted, he’s (probably) better at it than us.

 

He’s been doing this since June and has seen gains of 16.62% as of last Monday. In comparison, the S&P 500 has gained about 4% over that same period.

 

One thing’s for certain, you can almost guarantee that he’s not paying attention to what China’s doing.

—Joseph Morton