Blockstream has raised $210 million in a Series B funding round that values the bitcoin technology firm at $3.2 billion and will fund an expansion into manufacturing mining chips.  

U.K. investment management firm Baillie Gifford and iFinex, the parent company of cryptocurrency exchange Bitfinex and stablecoin issuer Tether, participated in the round, Blockstream said Tuesday. No other investors were mentioned.

Blockstream also said it had acquired the intellectual property and key employees of Israeli bitcoin mining hardware manufacturer Spondoolies for undisclosed terms.

The move paves the way for Blockstream, based in Victoria, British Columbia, to build out a business line making specialized mining chips known as ASICs, the Canadian company said.

The acquisition, together with the additional funding, will advance Blockstream’s crypto mining products and services, including its recently announced Blockstream Energy service.

The new capital will also further the firm’s Bitcoin-focused financial products as well as its Liquid sidechain network, according to the company.

ASIC ambitions

Now is a “most opportune time” to accelerate growth, Blockstream Chief Strategy Officer Samson Mow told CoinDesk via Telegram on Monday.

“The fresh infusion of capital will allow us to launch more products under Blockstream Finance, as well as bring our new bitcoin ASIC miner to market next year,” said Mow.

Blockstream was founded in 2014 with a focus on building infrastructure and applications based upon the Bitcoin network. The firm was co-founded by CEO Adam Back (inventor of Hashcash, a system for discouraging spam emails that influenced Satoshi Nakamoto’s proof-of-work consensus mechanism design for Bitcoin) and nine others, including Bitcoin Core developer Gregory Maxwell.

The firm’s Series A round, completed in 2016, was led by AXA Strategic Ventures, the venture capital arm of French multinational insurance firm AXA Group; Digital Garage, the Tokyo-based online payments firm co-founded by Joi Ito; and Hong Kong VC firm Horizons Ventures. AME Cloud Ventures, Blockchain Capital and Future\Perfect Ventures also participated in that earlier round.

Bitcoin Price Might Not Be Boosted By The Halving

Bitcoin’s halving is perhaps one of the most widely discussed upcoming events in the cryptocurrency community. Since it will slash the block reward in half, the supply of freshly minted bitcoins on the market will be substantially reduced. This causes a lot of people to believe that the event will have a positive effect on Bitcoin’s price.

Meltem Demirors, CSO at CoinShares, however, isn’t particularly thrilled about the notion. “There is a very real possibility that the price of bitcoin does not go up after halving.” – she said in a recent Twitter thread.

The main reason for this is the growing influence and impact of the Bitcoin derivatives market. According to Demirors, most of the firms are looking to trade derivatives, rather than the underlying asset.

She also drew a comparison between Bitcoin and traditional markets such as oil. She explained that derivatives are dominating the trading, and most firms use paper contracts to speculate on the price of oil, hence making the entire market driven by speculation.

Building up to the point, she explained that the more Bitcoin becomes an investable asset, “the more it’s price becomes decoupled from its value and its supply and demand.”

The Merit In Her Point

There’s a lot of merit in Demirors’ point. Bitcoin derivatives, those that are settled in cash in particular, represent an option for investors to receive exposure to its price without having to own Bitcoin. They don’t have to worry about storage and safekeeping.

This, however, diminishes the demand. Because people can trade it without owning it, they don’t have to buy actual bitcoins, which might render the principles of basic supply and demand obsolete.

But it’s also worth noting that we’ve already seen strides in physical delivery of bitcoins as well. Bakkt was the first major venue to do so in a regulated way, allowing investors to work with physically-delivered Bitcoin futures. Of course, the volume on those contracts is practically non-existent compared to the volume of cash-settled Bitcoin futures on exchanges such as CME, BitMEX, Binance, OKEx, and so forth.

But There’s Another Side To It

While all of the above is undoubtedly a legitimate point to consider, it’s also worth noting Bitcoin’s scarcity. Indeed, derivatives trading halts the effects of the supply and demand, but there’s more to Bitcoin than just that.

For once, hoarding physical commodities such as oil and gold is expensive in terms of redelivery, insurance, and storage. The cost of holding Bitcoin or other digital commodities, for that matter, is almost non-existent. As such, as BTC’s demand grows, investors would have to go through barriers that are considerably lower to acquire and safe-keep it.

Bitcoin’s finite supply is also something to be considered. It’s the world’s first scarce digital object, and this has to be accounted for. After all, there are more than ten cities in the world where if one person wanted to own a whole bitcoin, he wouldn’t be able to because the population of those cities is higher than the number of bitcoins that would ever be in existence.

NewsSource

A post published on Monday, the Ethereum Foundation has alerted developers and miners that the “Muir Glacier” upgrade is set to occur at 9.2 million blocks, which is currently on pace for New Year’s Day. The upgrade follows less than a month after Ethereum’s highly anticipated “Istanbul,” update, and marks a series of upgrades for the network as it transitions to Ethereum 2.0.

The official post states, 

The Ethereum network will be undergoing a scheduled upgrade at block number 9,200,000, which is predicted to occur on Wednesday, January 1, 2020. The exact date is subject to change due to variable block times and timezones.

According to a previous post detailing the upgrade, Muir Glacier will serve to delay the planned increase in Ethereum’s mining difficulty by an estimated 611 days. 

Ethereum Cat Herders provided an explanation for the delay,

Once the difficulty increase of the difficulty bomb is too great for the block time retargeting mechanism, it results in an increase in block times for the network. This results in a degradation in the usability of Ethereum due to waiting for confirmation for transactions and Dapps as everything takes longer throughout the network.

Node operators and miners will be required to download the updated client software in order to be in compliance with the network, which some users are bemoaning given the New Year’s Day holiday launch.

Uzbekistan Bans Cryptocurrencies

According to a local report, the former Soviet republic is set to place a ban on cryptocurrency purchases within the borders of the country. It also states that investors owning digital assets can actually still sell them; however, in order do to so, the citizens would need to prove that they have previously acquired the assets legally. If they fail to do so, any transfers or sells will be illegal, due to the new amendment.

What may come as a surprise now is that Uzbekistan has been somewhat friendly towards cryptocurrencies in the past. Last year, the country made a move for potentially luring crypto exchanges by providing them with several different tax benefits. Those exchanges running within the country would not be subject to existing foreign currency regulations. Moreover, the report said that income from cryptocurrencies will not be taxed.

Political Situation in Uzbekistan

Protests and public discontent is a rare thing in Uzbekistan, due to the authoritarian’s way of operation. However, after President Mirziyoyev was elected a few years ago, the citizens began forming quiet online protests that grew to public ones in the fall of 2019.

The reason behind those protests appears somewhat unusual at first glance – the declining weather temperatures. But the citizens are claiming that this is just what put the on the street, as they cannot meet basic needs for electricity and natural gas.

Actions against the government reportedly began in the country’s least developed region, Nukus, as people blocked a road and burned car tires in a protest to demand the resumption of natural gas supply in their homes. Bakht city citizens followed after a major methane station was unexpectedly closed. Since those initial acts, Fergana and Ellikqala regions have also taken a stand on the streets. Be the first to know about our price analysis, crypto news and trading tips: Follow us on Telegram or subscribe to our weekly newsletter.

The United States-based Fidelity Investment, a leading financial services company has is Ready to Take over the Europe market. , On 17 December 2019 – Fidelity Investments, one of the world’s most diversified financial services firms, announced that it is establishing a new entity to serve European institutions investing in digital assets, Institutional clients will enjoy a range of services, including trade execution and custody services.

Besides institutions, the entity will also deal with Europe based hedge funds, market intermediaries and more. The company already has a long list of U.S. clients.

Investors were awaiting Fidelity Digital Assets Europe division

Head of Corporate Business Development for Fidelity Investments and president of Fidelity Digital Assets,  Tom Jessop says that ever since the company tasted huge success in the US market, it planned to enter Europe as well.

Tom Jessop Said “SaysSince launching Fidelity Digital Assets in the U.S. over a year ago, we’ve seen significant interest and engagement by the institutional community, which show no signs of slowing We’re also encouraged by continued corporate and venture investment in market infrastructure companies as well as the entry of traditional exchanges into the digital assets ecosystem. Continue Read…

Fidelity Digital Assets Has Interesting Plans For Europe.

Fidelity Digital Assets Europe will provide myriad services to its European clients well. The range of services will focus on foundational solutions that will act as building blocks for these financial institutions.

The key services entail custody service, providing institutions secured and compliant storage solutions. Also, it Will offer vaulted cold storage, cyber controls, and multi-level physical storage solutions. and trade execution services that help clients carry out high-speed trades on a liquidity-rich platform. As Well as It will include its time-tested smart order router and internal crossing engine, Chris Tyrer will head the Fidelity Digital Assets Europe operations.

In a recent interview, Tom Jessop, the president of Fidelity Digital Assets spoke about Fidelity’s plans.

During it, the host asked him about the company’s attempt to provide custody for other digital currency like Ethereum.

Jessop answered that the firm carried out a lot of work on it. He also said that if client demand exists, then Fidelity Digital Assets could support Ethereum in 2020.

Obstacles to institutional crypto adoption

The digital asset launched earlier this year, Fidelity Digital Assets (FDAS) offers cryptocurrency custody. As well as trading tools for institutional investors and traders. However, the firm only supports Bitcoin which some analysts say keeps FDAS from challenging crypto-native firms like Coinbase and BitGo.

At the same time, Jessop cited obstacles to institutional crypto adoption. He mentioned factors like price volatility, lack of regulatory clarity.

Also, Jessop said that the lack of a track-record serves as one of the biggest obstacles to institutional adoption of a given cryptocurrency. He noted that Bitcoin holds the longest track record. Thus, the cryptocurrency gets a stronger appetite from institutional investors to allocate capital to the crypto, as compared to cryptocurrencies like Ethereum. Hence, the reason Fidelity isn’t supporting it at the moment, he added.

Quoting Jessop: “How do I know that if I buy this thing, it’s gonna be around tomorrow?. Like what indication of durability or longevity exists based on the fact that the history of this asset is 10 years old?”

“I think many of these things solve themselves with time,” he added.

Custody should be a base requirement

In the interview, Jessop also spoke about how custody should be a base requirement on the hierarchy of needs. He referred to custody as a service that needs to be delivered to people to create a sense of safety and soundness. He believes other factors like trading builds on custody.

Quoting him: “We’re an organization that’s been around for decades. We’re also not necessarily thinking about the next 18 to 24 months, we’re thinking about three-plus years in terms of the evolution of the space, and what the potentials for financial services at large.”

ByteDance, the owner of the popular video-sharing service TikTok, is focusing on new business lines.

These lines apparently have to do with blockchain and artificial intelligence. Thus, together with Shanghai Dongfang Newspaper Co, the owner of the digital news resource The Paper.cn, it established a new company worth $1.4 million.

While the details of the partnership remain obscure, Twitter users seem to be skeptic. Particularly, because the media group is a state-owned one. A user that goes by the name, @933Aidan, is highly critical of the partnership saying “so the real headline and story is “Chinese government merges two departments under its control to help spy better on other departments in other governments.” #fixedit.”

ByteDance and its successful apps

Founded in 2012, ByteDance focuses predominantly on the development of mobile applications. Its main product is the Toutiao news feed aggregator, which enjoys an audience of 120 million people per day.

In 2016, ByteDance launched the TikTok application. Currently, it is the most popular short video platform in Asia that has is rapidly gaining popularity all over the world. By February 2019, 1 billion users had already downloaded TikTok. More downloads occurred throughout the year: 614 million times, which is 6% more than last year.

Interestingly, in 2019, only WhatsApp and Messenger managed to perform better than the platform. Concurrently, Instagram and Facebook are lagging behind.

It is noteworthy that 31% of all application downloads take place in India. The second-largest market for TikTok is China (11.5% of downloads) closely followed by the United States (8.2% of downloads).

According to Reuters in January-June 2019, ByteDance revenue amounted to about $7-8.4 billion. In 2018, the company value stood at $75 billion.

All in all, China is becoming increasingly interested in blockchain. It is expected that investments in this technology will reach $2 billion by 2023.

What do you think about the latest partnership? Do you use TikTok? Do you think China is at the forefront of the blockchain revolution? Let us know your thoughts. Drop a comment below.