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3X as many crypto figures make it onto Forbes 2021 billionaires list as last year

Forbes released their annual billionaires list on April 6, with Amazon overlord Jeff Bezos and his $177 billion topping the list for a fourth consecutive year.

The “digital gold rush” has seen nine new crypto billionaires join the Forbes list, pushing the total up to 12 (depending on whether you count the Winklevoss twins as one or two entries.) That’s up from just four in last year’s Forbes World’s Billionaires list

Sam Bankman-Fried – Newcomer

Sam Bankman-Fried is the wealthiest crypto-billionaire, with a net worth of $8.7 billion. Bankman-Fried founded trading firm Alameda Research and popular derivatives exchange FTX. The 29-year old has made waves in the crypto space, with FTX recently winning the naming rights to Miami Heat’s home stadium for 19 years. Cointelegraph recently ranked Bankman-Fried as the third most influential figure in crypto for 2020.

The Winklevoss Twins – Newcomers

Cameron and Tyler Winklevoss have a net worth of $3 billion each and started investing in Bitcoin in 2012. The brothers famously sued Facebook’s Mark Zuckerberg for IP theft in 2004 and won a $65 million settlement which they used to invest in Bitcoin. They started the crypto exchange Gemini in 2014, and they purchased Nifty Gateway in November 2019.

Chris Larsen – Returnee

Larsen, the co-founder of Ripple Labs saw his net worth grow from $2.6 billion to $3.4 billion over the past year.

Larson and Ripple CEO Brad Garlinghouse have been fighting an ongoing dispute with the SEC in relation to XRP and unregistered securities offerings. However, the SEC’s lawsuit against Ripple hasn’t appeared to affect its token too badly, with XRP increasing by 387% in the last 12 months.

Jed McCaleb – Newcomer

McCaleb is another co-founder of Ripple, and reportedly holds 3.4 billion XRP and 1 billion Stellar Lumens — the cryptocurrency he founded after leaving Ripple — with his holdings adding up to a net worth of $2 billion. Cointelegraph reported that McCaleb sold off $400 million worth of his XRP holdings in 2020 alone.

Michael Saylor – Newcomer

Saylor is the CEO of listed company MicroStrategy and co-founded the software giant in 1989, and now has a net worth of $2.3 billion. Saylor has become the leading advocate for corporations holding Bitcoin on balance sheets. Since its first purchase of Bitcoin in August 2020, Microstrategy has invested $2.226 billion, taking its tally up to 91,579 Bitcoins at an average cost of $24,311 per Bitcoin.

Brain Armstrong – Returnee

Armstrong is the CEO and co-founder of Coinbase and his net worth has gone from $1 billion to $6.5 billion within 12 months. Coinbase also had a successful year, generating $1 billion in revenue, and it’s set for a direct listing in a week. That will value Armstrong’s shares somewhere north of $14B, meaning he may well top the crypto billionaires’ list next year.

Fred Ersham – Newcomer

Ersham co-founded Coinbase with Brian Armstrong in 2012 and left the firm in 2017. He is now a board member of the company, and his 6% stake has an estimated worth of $1.9 billion.

Changpeng Zhao

Zhao is the founder of the largest crypto exchange Binance and owns an estimated 30% stake in the company. Zhao’s net worth is $1.9 billion, and the digital gold rush has been good to the Binance founder, with Binance Coin becoming the second-largest altcoin by market cap. Zhao revealed earlier this week that he holds close to 100% of his portfolio in crypto.

Matthew Roszak – Newcomer

Roszak is the Chairman and co-founder of blockchain technology firm Bloq and is a leading crypto and blockchain investor. Roszak is also a founding member of Tally Capital a crypto-focused private investment firm and has a net worth of $1.5 billion.

Tim Draper – Newcomer

Draper is a crypto evangelist with a net worth of $1.5 billion. He bought $18.7 million worth of Bitcoin in 2014 after it was confiscated from the Silk Road black market. Draper was also one of the primary investors in the Tezos project and co-founded Draper Fisher Jurvetson, a leading investment firm in early-stage tech startups.

Barry Silbert – Newcomer

Silbert founded the crypto conglomerate Digital Currency Group in 2015 and has a net worth of $1.6 billion. The DCG owns asset management firm Grayscale Bitcoin Trust, which currently has $46 billion worth of assets under management.

3X as many crypto figures make it onto Forbes 2021 billionaires list as last year

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Bitcoin bulls eye $50K as data show BTC’s liquid supply in steady decline

On Feb. 12 Bitcoin (BTC) price hit a new all-time high at $48,985 before pulling back to the $46,000 level. 

A quick glance at the 4-hour chart shows the top-ranked cryptocurrency trading in what appears to be a brief phase of consolidation but BTC is still maintaining its bullish momentum through a pattern of higher highs and higher lows.

If BTC can maintain its current pace and structure, a move to the $50,000 level could possibly occur before the weekend ends.

BTC/USDT 4-hour chart. Source: TradingView

A report released by analysts at Decentrader shows that as Bitcoin’s liquid supply has been decreasing, demand for the top cryptocurrency has been increasing as the number of BTC that have not moved on-chain for an extended period of time also rises.

Bitcoin liquid supply. Source: Glassnode

As can be seen on the chart above, BTC currently has a liquid supply of roughly four million coins and the figure has been steadily decreasing since June 2020 as whales and institutional investors increase their exposure to this nascent asset class.

Further evidence of the growth of big-money players can be found by looking at the surge in wallets holding more than 1000 BTC.

Wallets holding at least 1000 BTC vs BTC price. Source: Decentrader

As the number of large wallets grows, the number of smaller wallets has remained flat or decreased, indicating that “larger players are scooping up bitcoin off smaller players.”

PayPal delves deeper into cryptocurrency

Additional bullish news for the cryptocurrency sector came as PayPal announced that it plans to extend its crypto services to residents of the United Kingdom.

This marks the first time users outside of the U.S. will be able to purchase crypto through the platform which should be available on the PayPal and Venmo apps by the end of Q2 2021.

In an effort to keep up with the likes of PayPal and the Cash App, Apple Pay has unveiled a new partnership with BitPay that will allow Apple Wallet users to use their BitPay card to make purchases.

It has also emerged that Grayscale Investments may soon bring a new level of exposure to decentralized finance as a newly filed corporate registration in the State of Delaware shows that the asset manager is considering Yearn Finance as a potential future offering.

Choppy trading sets the tone in traditional markets

Traditional markets faced early pressure on Friday following the Feb.11 announcement that federal regulators have launched probes into Robinhood and Reddit for signs of market manipulation related to the recent wild moves seen in stocks like GameStop and AMC.

After weathering the early downturn, all three major indices managed to climb higher and finish the day in the positive with the S&P 500 and NASDAQ closing out the session at record levels, up 0.47% and 0.50% respectively. The Dow also managed to squeeze out a positive gain of 0.09%.

The wider cryptocurrency market continued its bullish upsurge as multiple projects saw double-digit gains and new all-time highs.

Daily cryptocurrency market performance. Source: Coin360

Ether (ETH) ventured deeper into uncharted territory on Friday by setting and set a new all-time high at $1,863, while Polkadot (DOT) was the best performing top-10 coin, experiencing an increase of 21% overnight for a new high at 29.52.

Other notable performers include the pure proof-of-stake protocol Algorand (ALGO), which increased 38% for a 2021 high at $1.84, and Tezos (XTZ), which saw its price increase 23% for a new record high of $5.41.

The overall cryptocurrency market cap now stands at $1.48 trillion and Bitcoin’s dominance rate is 60.4%.

Bitcoin bulls eye $50K as data show BTC’s liquid supply in steady decline

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How Tax Authorities Should Treat Cryptocurrency Staking Rewards

Let me start with a confession: I am not smart enough to be a tax lawyer, certainly not a US tax lawyer.  The intricacies of the US tax code defy my brain’s attempts to systematize a coherent taxonomy.  The tax code is too complex and varied for me, even though I have spent my nearly 30-year career untangling the complicated schemes of the federal securities laws and financial services regulatory regimes.  And on top of the rules themselves, there are interpretations and lore that compound the difficulty.

Fortunately, there are people like Abe Sutherland, the author of numerous articles on one very particular area of US tax law: the treatment of cryptocurrency staking rewards created on public, permissionless blockchain platforms that use a proof of stake consensus mechanism (described in more detail below).  Most recently, he put together a primer on the question as a way to introduce more people to the correct analysis.  

Abe thinks this issue is easy because the cryptocurrency tokens created through staking, what he calls “reward tokens”, are new property deserving the same treatment as crops grown from seeds, livestock born on the farm, newly mined precious metals, novels, or songs newly written, newly manufactured items, and the idea for a new financial instrument.  As the primer notes:

“New property . . . is never immediate income to its first owner.”  Rather, “[n]ew property gives rise to taxable income when it is sold, not when it is created.”

I quickly grasped this concept because it made sense with my understanding of how proof of stake consensus works on these blockchain platforms.  An alternative to proof of work consensus used in the original Bitcoin blockchain, proof of stake is the means by which the system and certain of its participants agree on updates to the blockchain.  Put another way, it is how the database gets updated with new information.  

IRS Internal Revenue Service

IRS Internal Revenue ServiceAt its core, proof of stake requires numerous tokenholders to “lock” the native system tokens they hold into the platform for the ability to take turns adding the blocks of data that build the blockchain and update its database.  The tokens are “locked” by posting them into the platform’s staking application (part of its programming) that freezes the tokens so they cannot be transferred until removed from the application. The locked tokens form the tokenholder’s “stake,” which the staking application then evaluates in accordance with its programming to determine when the particular tokenholder takes their turn at validating a block (that is, adding the information to the blockchain database).  

The exact methodology used to pick how stakers take turns doing validation is not significant to the tax analysis because for the new property tax analysis it must be true that the validator’s act of forming the latest block simultaneously creates one or more new native system tokens.  These new tokens indicate to everyone that the block has been added to the blockchain and incentivize tokenholders to conduct the important activities of staking tokens and forming blocks in order to secure the network.  That security is achieved by adding new blocks that make the chain too long for an attacker to duplicate with incorrect or manipulated data.  Having lots of staking tokenholders also results in the distribution and decentralization of the network that are required for security and immutability.  The stakers’ job is critical to the survival and integrity of the platform, which in turn is why the forming of a new block results in the creation of new native system tokens.

In addition to the intuitive “new property” analysis, Abe’s primer discusses several other reasons for taxing staking rewards upon sale rather than upon acquisition. 

“To simplify, . . . [t]he practical problems involve the administration of the income tax and the costs of compliance [and t]he economic problem arises from the overstatement of gain – and resulting overtaxation . . ..”  

The primer then explains the practical problems by laying out in detail how difficult or impossible it would be to know when a reward token was created by a staker for purposes of establishing the time at which it would have to be valued under a tax scheme that treated reward tokens as compensation.  Even without the timing question, there are questions about what data source(s) would establish the value.  The primer provides examples of these points utilizing the Tezos, Cosmos and Ethereum 2.0 blockchains.  Both of these problems are solved by taxing reward tokens at the time of sale, when both the correct moment and valuation are easily ascertainable.

The economic problem of overstatement of economic gain stems from the fact that reward tokens do not represent a commensurate increase in the staker’s percentage of all outstanding tokens.  Reward tokens increase the overall token supply and are typically distributed pro rata to all stakers. They, therefore, are not the equivalent of an outsized benefit to the staker who created any particular reward, as one would expect from “compensation.”  As such, the economic benefit to the creating staker is not a payment or income but just a prorated portion of the overall system inflation.

With the analytical framework, practicalities and economic realities supporting his conclusion, Abe continues his quest to make sure everyone understands these issues and sees the proper tax treatment.  With his pleasant demeanor, simple explanation, and dogged determination, the Proof of Stake Alliance (“POSA”), which sponsors his work, has an effective advocate. 

Abe certainly took this scared taxpayer and made me understand.  Perhaps 2021 will be the year that tax authorities agree with him.

Disclosure:  POSA is the leading policy and advocacy organization for proof of stake blockchain networks.  I joined POSA’s Board of Directors effective January 1, 2021, but Abe and I have been discussing his analysis for a good part of 2020.

Lee A. Schneider is General Counsel at Block.one, one of the world’s largest blockchain companies and creator of the EOSIO blockchain protocol.  In that role, Schneider is responsible for various aspects of the legal function as well as the company’s government affairs initiatives. He joined Block.one after leading the blockchain, Fintech, and broker-dealer practices at two major international firms.  Lee has been recognized as one of the leading voices in blockchain-related regulation and compliance and has played a role in structuring several of the largest and most successful blockchain-related projects. Schneider co-hosts the Appetite for Disruption podcast with Troy Paredes and is the contributing editor for the Chambers and Partners Fintech Practice Guide. He is the contributing editor of the Chambers and Partners 2019 Fintech Practice Guide. All views expressed are in his personal capacity and reflect only his personal views and not those of Troy, Chambers, or block.one or its directors, officers or employees. His views do not constitute legal, investment or any other type of advice.

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Top 5 cryptocurrencies to watch this week: BTC, LINK, UNI, XTZ, ATOM

Bitcoin (BTC) price has yet to recapture the $40,000 level and traders who were expecting a quick resumption of the uptrend may have been caught off guard by the recent pullback. This could have led to the liquidation of about $500 million worth of cryptocurrency futures positions in the past 24 hours.

Over leveraged positions provide the necessary ammunition during the uptrend, but they become a liability when the trend reaches an inflection point.

When the markets turn down, leveraged long positions quickly turn into a loss, resulting in margin calls from brokers. When the margin requirements are not met, the brokers dump the positions at market price, leading to a sharp plunge.

Therefore, data indicating a reduction in leveraged Bitcoin positions in the past few days is a positive sign as it decreases the risk of cascading liquidati.

Crypto market data daily view. Source: Coin360

While a sharp fall is usually avoided when the markets are not overleveraged, sustained buying is needed to maintain the higher levels. If that does not happen, the price continues to correct gradually.

Grayscale Investments has been one of the major buyers in the past few months but they now have a new competitor, Osprey Funds, which began quoting in the over-the-counter market on Jan. 15 under the ticker symbol OBTC. The firm is offering a competitive management fee structure compared to Grayscale.

This is a positive sign for crypto markets because if both these firms attract institutional investors, the buying may resume and Bitcoin can reverse course to pursue new highs.

While Bitcoin remains stuck in a range, select altcoins are running hard. Let’s study the charts of the top-5 cryptocurrencies that may be favored by the bulls in the next few days.

BTC/USD

Bitcoin is currently consolidating in an uptrend. The price action of the past few days has formed a symmetrical triangle, which generally acts as a continuation pattern. The long tail on today’s candlestick shows the bulls are buying the dips to the 20-day exponential moving average ($34,241).

BTC/USDT daily chart. Source: TradingView

The upsloping moving averages and the relative strength index (RSI) in the positive territory suggest that bulls are in control. If the buyers can push the price above the triangle, the next leg of the uptrend could begin.

The first stop could be the current all-time high at $41,959.63, but if the bulls can propel the price above it, the BTC/USD pair may rally towards the pattern target at $50,000.

Contrary to this assumption, if the rebound fails to find buyers at higher levels, the bears may try to sink the price below the triangle. If they succeed, the pair may drop to the 38.2% Fibonacci retracement level at $29,688.10.

This level may attract buyers but if the bulls fail to push the price above the 20-day EMA, then the correction could deepen to the 50-day simple moving average ($26,581).

BTC/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the bulls have purchased the drop to the support line of the symmetrical triangle but they may face resistance at the moving averages that are sloping down.

If the price turns down from the moving averages, the bears will try to sink the price below the triangle. If they succeed, a deeper correction is likely.

On the contrary, if the bulls can push the price above the moving averages, the pair may rise to the resistance line of the symmetrical triangle. A breakout of this resistance may start the uptrend.

However, if the price turns down from the resistance line of the triangle, the pair may trade inside the triangle for a few more days.

LINK/USD

Chainlink (LINK) broke above the $20.1111 resistance on Jan. 15 and followed it up with another up-move on Jan. 16, hitting a new all-time high at $22.96. But the long wick on the Jan. 16 candlestick suggests profit-booking at higher levels.

LINK/USDT daily chart. Source: TradingView

The price rebounded off the $20.1111 breakout level today, suggesting that the bulls have flipped this level to support. If the bulls can now push the price above $23, the LINK/USD pair could rally to $27 and then to $30.

The upsloping 20-day EMA ($16.25) and the RSI near the overbought zone suggest bulls are in control.

Contrary to this assumption, if the price turns down and breaks below $20.1111, the next stop is likely to be $17.7777. This is an important support because a break below it will indicate a possible change in trend.

LINK/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the breakout above $20.1111 had pushed the RSI deep into the overbought territory, which may have attracted profit-booking from short-term traders.

However, the positive sign is that the bulls aggressively purchased the dip to the 20-EMA. If the bulls can sustain the price above $21.5709, the pair may retest $22.96. A break above this resistance may resume the uptrend. The upsloping moving averages and the RSI in the positive zone suggest bulls have the upper hand.

This bullish view will invalidate if the bears sink and sustain the price below the 20-EMA. Such a move could pull the price down to $17.7777, indicating the momentum has weakened.

UNI/USD

Uniswap (UNI) is currently in an uptrend but is facing selling above the $9 mark as seen from the long wick on Jan. 16 and today’s candlestick. If the bulls do not give up much ground, it will suggest traders are not rushing to the exit after the recent rally and are buying on dips.

UNI/USDT daily chart. Source: TradingView

The upsloping 20-day EMA ($6.15) and the RSI in the overbought territory suggest bulls have the upper hand. If the UNI/USD pair stays above the 38.2% Fibonacci retracement level at $7.4725, the bulls will try to resume the uptrend.

If they can push the price above $9.3776, the rally could extend to $12.4597 and then to $15.

Contrary to this assumption, if the bears sink the price below $7.4725, the pair may drop to the 20-day EMA. Usually, a deep correction suggests that the momentum has weakened and that may result in a few days of range-bound action.

UNI/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the pair is currently consolidating after the recent sharp up-move. The bulls are buying the dip to the $8 support and the bears are selling above $9.

If the bulls can push the price above the $9 to $9.3776 overhead resistance, the uptrend could resume.

On the other hand, if the bears sink the price below the 20-EMA, the decline could extend to the 50-SMA. Such a move could keep the pair range-bound for a few days.

XTZ/USD

Tezos (XTZ) had been stuck inside the $2.85 to $1.85 range for the past few weeks. The bulls are currently attempting to push the price above the range and start a new uptrend.

XTZ/USDT daily chart. Source: TradingView

However, the long wick on the Jan. 16 candlestick shows that the bulls are finding it difficult to sustain the price above the range. Today, the long wick and the tail on the candlestick indicates indecision among the bulls and the bears.

If the bulls can sustain the price above $2.85, the possibility of the start of a new uptrend increase. The upsloping 20-day EMA ($2.48) and the RSI above 66, suggest the path of least resistance is to the upside.

The first target objective on the upside is $3.90 and then $4.4936. This bullish view will negate if the XTZ/USD pair drops and breaks below the 20-day EMA.

XTZ/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the bulls had pushed the price above $2.85 but they could not build upon the strength, which led to a correction. However, the bulls aggressively purchased the dip to the 20-EMA and are now trying to drive the price above $3.1838. If they succeed, the uptrend could resume.

On the contrary, if the price turns down from the current levels or the overhead resistance and drops below the 20-EMA, it could correct to the 50-SMA. A break below this support could signal that the recent breakout above $2.85 was a bull trap.

ATOM/USD

Cosmos (ATOM) rose above the stiff resistance at $8.877 on Jan. 16 and made a new all-time high at $9.60. Whenever the price hits a new all-time high, it is a sign that bulls are in command.

ATOM/USDT daily chart. Source: TradingView

However, the bears have not given up yet as they have pulled the price back below $8.877 and are attempting to trap the aggressive bulls. The bullish momentum could weaken if the bears sink the price below the 61.8% Fibonacci retracement level at $7.093.

Conversely, if the bulls can defend the zone between the 38.2% retracement at $8.05 and the 50% retracement at $7.572, it will suggest strong demand at lower levels.

If the price turns up from this support zone, the bulls will try to resume the uptrend. A break above $9.60 could push the ATOM/USD pair to $12.10 and then to $13.974.

ATOM/USDT 4-hour chart. Source: TradingView

Both moving averages are sloping up and the RSI is in positive territory, indicating that bulls have the advantage. The pair has bounced off the 20-EMA and the bulls will now try to push the price above the $8.877 overhead resistance.

If they succeed, the pair could rise to $9.60 and a break above it will signal resumption of the uptrend. Conversely, if the bears sink the price below the 20-EMA, it will suggest that the momentum has weakened and a drop to $7.50 and then to the 50-SMA is possible.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Top 5 cryptocurrencies to watch this week: BTC, LINK, UNI, XTZ, ATOM

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Sleepy Swiss town launches Tezos-backed Coronavirus aid program

On Friday the Swiss town of Wetzikon — formerly best-known for its idyllic pastures and churches — launched a blockchain-based program to support small and medium-sized local businesses affected by the Coronavirus pandemic.

Valued at 250,000 Swiss francs ($280,000), the initial aid disbursement will be funded with a municipal credit line earmarked for the Coronavirus and will be distributed to the roughly 25,000 inhabitants of Wetzikon in the form of an eCoupon worth 10 Swiss francs. 

Residents can access the disbursement through a smartphone app, “ecoo,” which will be using the aid program as a pilot trial for its platform. 

According to their website, ecoo is designed to help entities such as governments and event organizers distribute earmarked funds in the form of coins and points, and was built on the Tezos blockchain through a collaboration between the Swiss firms Papers AG and multiple subsidiaries of Farner Consulting AG. 

On the app residents will be able to convert their coupons into “WetziKoins” that they can later use to make purchases at local companies. Local business owners can then convert the currency back into Swiss francs from the town administration, also via the app. 

Ruedi Rüfenacht, Mayor of Wetzikon, said of the program: “Under the current circumstances it is imperative for us to act in favor of the local economy in a sustainable manner. With ecoo, we have found a viable solution to motivate the people of Wetzikon to shop in local stores instead of just buying online or from wholesalers outside our town. ”

Wetzikon is not the only government that has explored using blockchain technology as a response to the Coronavirus. Bank of Canada exec Timothy Lane has previous called on central governments to prepare for Central Bank Digital Currencies (CBDCs) in an effort to encourage cross-border digital payments.

Sleepy Swiss town launches Tezos-backed Coronavirus aid program

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