<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106984655-1638720074358-gettyimages-1294303237-01_jan_01_005.jpeg" alt="" class="wp-image-413986" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106984655-1638720074358-gettyimages-1294303237-01_jan_01_005.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106984655-1638720074358-gettyimages-1294303237-01_jan_01_005-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106984655-1638720074358-gettyimages-1294303237-01_jan_01_005-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Business Trends Graphs and charts 3d image Vertigo3d | iStock | Getty Images</figcaption></figure>



<a href="https://www.cnbcafrica.com/quotes/btc=x/">Bitcoin</a> prices bounced around on Sunday but remained below $50,000, with the volatility continuing a weekend of wild trading that sent the cryptocurrency tumbling more than 17% in just 24 hours.



The cryptocurrency traded at $48,776 around 7:45 p.m. ET Sunday on Wall Street, according to data from Coin Metrics.



Earlier in the day the cryptocurrency slid more than 2% as the cryptocurrency struggles to regain the $50,000 mark. On Saturday prices dropped to a low around $43,000, down from the $57,000 bitcoin traded at Friday morning.



Bitcoin’s sharp tumble follows Friday’s risk-off tone in the broader market. All three major averages finished Friday’s trading in the red and posted losses for the week amid fears over what the omicron Covid variant means for the ongoing economic recovery.



Investors ditched equities in favor of safer areas of the market, with the yield on the 10-year U.S. Treasury moving lower.



The Nasdaq Composite underperformed the Dow and S&amp;P 500 on Friday, with technology stocks getting hit especially hard. This selling extended to cryptocurrencies, with no fundamental reason prompting the sharp declines across the crypto universe.



<h3 class="wp-block-heading" id="h-read-more-bitcoin-tumbles-from-recent-high-as-cryptocurrencies-take-weekend-hit">Read more: <a href="https://www.cnbcafrica.com/2021/bitcoin-tumbles-from-recent-high-as-cryptocurrencies-take-weekend-hit/">Bitcoin tumbles from recent high as cryptocurrencies take weekend hit</a></h3>



“It looks like somebody likely got hit with a margin call yesterday and thus was ‘forced’ to sell,” noted Matt Maley, equity strategist at Miller Tabak. “The Bitcoin market tends to be much more “thin” on the weekends, so that probably exacerbated the decline. Once the dust had settled, the buyer came back in and it stabilized.”



Still, the selling over the last 48 hours builds on recent declines for bitcoin. The cryptocurrency officially entered bear market territory on Nov. 26, after dropping to a then seven-week low around $54,000.



Maley added that where bitcoin stabilized on Sunday — under the $50,000 level — is notable given that it’s below the trend line from the July lows.



“Whether it regains that level or not next week (once regular trading activity resumes) should be important to Bitcoin,” he said.



Bitcoin is now nearly 30% below its all-time high close to $69,000, which it hit in early November.



“Bitcoin is in ‘no man’s land’ right now and that does not seem to be changing anytime soon,” noted Ed Moya, senior market analyst at Oanda. “The long-term bullish case remains intact but prices seem poised to consolidate between $52,000 and $60,000,” he added.



<a href="https://www.cnbcafrica.com/quotes/eth=x/">Ether</a> also stabilized on Sunday, advancing about 1.5% to $4,176. On Saturday the cryptocurrency hit a low near $3,500, after plunging more than 16% between Friday and Saturday morning. Ether is the world’s second-largest cryptocurrency by market value.



— CNBC’s Weizhen Tan and Tanaya Macheel contributed reporting.

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Bitcoin holds steady below $50,000 in volatile weekend trading

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/GettyImages-1304134980-820x461.jpeg" alt="" class="wp-image-413656" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/GettyImages-1304134980-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/GettyImages-1304134980-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/GettyImages-1304134980-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/GettyImages-1304134980-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/GettyImages-1304134980-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/GettyImages-1304134980-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>NFT non fungible tokens infographics on colorful abstract background. Pay for unique collectibles in games or art. Vector illustration.</figcaption></figure>



If earning money for playing videogames sounds futuristic, think again. With GameFi, it’s already become a reality.



Bitcoin, Ethereum, NFT’s, DeFi,– cryptocurrencies, blockchain, and the technologies that are built off them are no longer simply buzzwords, but fast entering the mainstream. Cynicism toward the current global financial system and the promise of possible profits has driven many more people towards exploring the possibilities offered by blockchain based services – and that applies to gaming as well.



GameFi, a portmanteau of “gaming” and “finance”, has become one of the hottest topics in the cryptocurrency industry over the last year – essentially allowing players to earn rewards in the form of tokens or NFT’s (Non-Fungible Token) as a financial reward or generating income.



An NFT is a cryptographic token on the blockchain that represents a unique item, which can be a piece of artwork, a digital videogame avatar or even physical property – essentially solving the ownership verification challenge in a digital space. “Think of it [an NFT] like owning 1 of a kind item in a game, or like “owning” an Instagram post” tweeted musician and artist Mike Shinoda of Linkin Park fame, who recently sold an NFT which contained a newly released song for over $10&nbsp;000.



Videogames are leveraging this space within the GameFi world by using NFT’s in the structure of the games themselves; for example, your character or avatar in a videogame could be an NFT – such is the case with EtherOrcs, a role-playing game in which all of the games 5050 unique characters are their own NFT’s, and where all of the code running the game itself takes place entirely on the blockchain. Players can purchase and trade these on a marketplace, as well as put them to work. 



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Looks like I’ve just joined the <a href="https://twitter.com/EtherOrcs?ref_src=twsrc%5Etfw">@EtherOrcs</a> 🔥 <a href="https://t.co/z32SFXV58j">pic.twitter.com/z32SFXV58j</a>&mdash; Mike Shinoda (@mikeshinoda) <a href="https://twitter.com/mikeshinoda/status/1448030628528541699?ref_src=twsrc%5Etfw">October 12, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



 These individual characters all have worth by virtue of their uniqueness and scarcity, but like many other NFT-based games, leverage another aspect of the GameFi space; play-to-earn. By completing tasks and objectives within a game, users can be rewarded with further NFT’s or more commonly, in-game tokens, which can be exchanged for other cryptocurrencies or fiat currencies.



 Fundamentally, the main objective is still enjoyment. “The biggest take away from this “NFT 2021” moment that I don’t see being talked about is “fun”” tweeted Vayner Media CEO and NFT proponent Gary Vaynerchuck. “It’s just “fun” and a lot of adults need more “fun” board games were a big part of culture 3-4 decades ago”.



 While the popularity of NFT-based play-to-earn gaming is in relative infancy, blockchain based gaming has been around almost as long as the cryptocurrencies they are built on, with games like Minecraft having servers for years with built-in bitcoin integrations. However, DeFi (Decentralised Finance) through other cryptocurrencies and tokens such as Ethereum, which allow for smart contracts, lower fees and faster execution.



Early-adoption or no, the NFT gaming space offers massive opportunity, and major players are taking notice, with venture capital firms and game developers partnering up to explore and develop opportunities, and major gaming companies such as Ubisoft having launched an incubation program for crypto-based games which has been responsible for some of the most popular play-to-earn games on the market today, including the incredibly popular Axie Infinity, which reports more than 1.8 million daily users. “A friend of mine stopped working recently and told me about this game that they play to earn some extra cash online” says Jamaine Krige, who plays several different mobile-based NFT games. “I figured I was playing games anyway so I might as well be compensated for the time I’m spending.” 



While cryptocurrencies themselves have become codified and accepted, the opportunities offered by rapid developments in the space are growing, and GameFi looks to be one frontier about to massively expand.

NFT non fungible tokens infographics on colorful abstract background. Pay for unique collectibles in games or art. Vector illustration.

Game to earn – how the blockchain is transforming the face of videogames

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency.jpeg" alt="" class="wp-image-413505" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Representations of virtual currency Bitcoin are placed on U.S. Dollar banknotes in this illustration taken May 26, 2020. Dado Ruvic | Reuters</figcaption></figure>



U.S. Deputy Treasury Secretary Wally Adeyemo said that the dollar will continue to be the world’s dominant currency despite increasing interest in cryptocurrencies.



“One of the things that we know is that digital assets present an opportunity in lots of ways for the economy, but potentially it presents challenges,” Adeyemo told CNBC’s Hadley Gamble on Tuesday in Abu Dhabi, the United Arab Emirates.



“We know that digital assets have the ability to be used by those who want to illicitly move money through the system in a way that doesn’t touch the dollar and that we can’t see as easily. But we do think that ultimately working together with countries around the world, we can address this risk by calling on the creators of digital assets to follow the rules around anti-money laundering more closely.”



“Ultimately the thing that is going to drive the dollar’s position in the world are the decisions we make in America about investing in our economy. The reason that people are involved in the dollar-based economy … is because they want to invest in America,” he continued.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/bitcoin-is-inches-away-from-reaching-60000-amid-etf-speculation/">Bitcoin tops $60,000 for first time in six months as traders bet on ETF approval</a></h3>



Adeyemo said it was because of policy decisions, such as the $1 trillion infrastructure package signed into law on Monday, that would help to “unlock the potential” of the U.S. economy and create investment opportunities for other governments.



“As our economy grows, it is an opportunity for the global economy to grow and as that happens, the dollar will remain the dominant currency in the world as well,” he said.



His view echoed comments made by St. Louis Federal Reserve President James Bullard earlier this year, who dismissed bitcoin and other digital assets as a serious threat to the dollar’s position as the world’s reserve currency.



<h2 class="wp-block-heading" id="h-sanctions-policy"><a></a>Sanctions policy</h2>



Russian Central Bank Governor Elvira Nabiullina said last week that it would launch a prototype of the digital ruble platform early next year, according to Reuters. Nabiullina said Russia would undergo a pilot test before making a final decision on the launch of the digital currency.



Speaking to CNBC in early June, Nabiullina said she expected digital currencies to play a pivotal role in the future of financial systems as the economy moves online.



Many central banks around the world are developing sovereign digital currencies, which advocates say could promote financial inclusion and make cross-border transactions easier.



When asked whether the prospect of a digital ruble could make U.S. sanctions less effective, Adeyemo replied: “We believe that even if a digital ruble or other digital currencies come into place, there will still be scope for our sanctions to have an impact on their economies simply because the global economy is still inter-connected.”



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/bitcoin-drops-nearly-7-toward-60000-as-major-cryptocurrencies-plunge/">Bitcoin drops nearly 7% toward $60,000 as major cryptocurrencies plunge</a></h3>



“Companies in Russia still do a great deal of business around the world. A lot of that business is done in dollars, it is done with American financial institutions and that is because the American economy remains the biggest economy in the world,” he said.



“As long as that is the case, and as long as we make the investments that are needed, we are still going to have the ability to use our sanctions regime to make sure that we prevent the thing that it was created to prevent, which is illicit finance through the system and also to hold people accountable who take steps that are not considered in our national security.”



Washington has imposed sanctions on Russia for several reasons in recent years, from the suspected poisoning of opposition politicians to election interference and cyberattacks.



Adeyemo’s comments add to a report in October from the Treasury which there could be some impact on U.S. sanctions from cryptocurrencies. He reportedly told a Senate committee last month: “The advent of cryptocurrencies makes it harder for sanctions to be effective.”



— CNBC’s Abigail Ng contributed to this report.



Correction: This story has been updated to remove an incorrect reference to where U.S. Deputy Treasury Secretary Wally Adeyemo was speaking.

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U.S. sanctions will still have an impact despite the rise of crypto, Treasury’s Adeyemo says

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin.jpeg" alt="" class="wp-image-413479" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A representations of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken May 19, 2021. Dado Ruvic | Reuters</figcaption></figure>



<a href="https://www.cnbcafrica.com/quotes/btc=x/">Bitcoin</a> and other cryptocurrencies fell sharply on Tuesday retreating from near-record highs.



Bitcoin fell toward $60,000 during late morning trade Singapore time, according to CoinDesk data. It recovered some of those loses and was trading at around $60,600.10 at 2:42 p.m. Singapore (1:42 a.m. ET) , down nearly 8% from 24 hours before.



<a href="https://www.cnbcafrica.com/quotes/eth=x/">Ether</a>, meanwhile, fell nearly 8% to $4,310.96.



The impetus behind the price movement was not clear.



China’s state planner, the National Development and Reform Commission (NDRC), said during a press conference Tuesday that it will continue to clean up virtual currency mining in the country.



Earlier this year, China cracked down on bitcoin mining leading to an exodus of miners. Mining is the energy-intensive process which both creates new coins and maintains a log of all transactions of existing digital tokens. 



Beijing is concerned about the amount of energy being used by mining.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/bitcoin-is-inches-away-from-reaching-60000-amid-etf-speculation/">Bitcoin tops $60,000 for first time in six months as traders bet on ETF approval</a></h3>



Mining “causes large energy consumption and carbon emission. It has no active impact to lead industry development or scientific progress,” NDRC spokesperson Meng Wei said on Tuesday, according to a CNBC translation of her Mandarin comments.



“Regulating cryptocurrency mining activities has significant meaning in optimizing our industrial structure, saving energy and cutting emission, achieving carbon emission and neutrality goals.”



Chinese President Xi Jinping said last year that China aims to achieve carbon neutrality by the year 2060.



The NDRC said it will focus on state-owned companies involved in cryptocurrency mining. It also said it is considering imposing “punitive electricity prices” against those participating in cryptocurrency mining activities but paying a residential electricity price.



China’s authorities have been focusing on wiping out bitcoin mining since earlier this year.



Negative crypto-related comments from Chinese authorities have often led to a sell-off in digital coins, even if those comments are not overly new.



<h2 class="wp-block-heading" id="h-pullback-from-record-highs"><a></a>Pullback from record highs</h2>



The retreat in cryptocurrency prices also comes as many of them hit all-time highs in November.



Bitcoin reached a record high of $68,990.90 on Nov. 10 with ether following suit on Nov. 11.



“I think we’re seeing a healthy pullback after a 7 week rally from 40K to 69K, which is normal in an upward trend,” Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, told CNBC via email.

106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin

Bitcoin drops nearly 7% toward $60,000 as major cryptocurrencies plunge

<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106943534-GettyImages-1234636440.jpeg" alt="" class="wp-image-413313" width="798" height="449" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106943534-GettyImages-1234636440.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106943534-GettyImages-1234636440-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106943534-GettyImages-1234636440-160x90.jpeg 160w" sizes="auto, (max-width: 798px) 100vw, 798px" /><figcaption>Representation of Ethereum cryptocurrency is seen in this illustration photo taken in Sulkowice, Poland on August 12, 2021. Jakub Porzycki/NurPhoto | Getty Images</figcaption></figure>



Cryptocurrencies are starting the week on a positive note.



Ether, the world’s second-largest digital coin, surged more than 4% in 24 hours Monday to hit a new all-time high above $4,700. The token was last trading at a price of $4,740, according to Coin Metrics data.



Ether is the cryptocurrency of the <a href="https://www.cnbcafrica.com/quotes/eth=x/">Ethereum</a> blockchain. In the crypto market, the terms ether and ethereum are often interchangeable.



<a href="https://www.cnbcafrica.com/quotes/btc=x/">Bitcoin</a>, meanwhile, climbed 7% to a price of $66,250, inching back toward a record high above $66,900 set in late October.



The reason for the move wasn’t clear. Cryptocurrencies are known for their volatile price swings, with moves of up to 20% higher or lower relatively common.



Mikkel Morch, executive director at crypto hedge fund&nbsp;ARK36, said a $70,000 price for bitcoin now “seems imminent.”



“Importantly, the uptick doesn’t seem to be leverage-driven but rather results from the increased demand on the spot market where there’s currently very little sell-side liquidity,” Morch said in an emailed note Monday.



<h2 class="wp-block-heading" id="h-defi"><a></a>DeFi</h2>



It comes amid growing excitement about DeFi, or decentralized finance, a new trend in the crypto market which seeks to build financial applications like lending and trading on the blockchain.



Ethereum is a key player in DeFi. Some of the biggest DeFi services, including decentralized exchange Uniswap and lending platform Aave, run on the Ethereum network.



Still, DeFi has caught the attention of regulators lately, and experts have warned a crackdown is imminent.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/ethereum-price-rises-after-elon-musk-confirms-he-owns-the-cryptocurrency/">Ethereum price rises after Elon Musk confirms he owns the cryptocurrency</a></h3>



Ethereum is also the backbone for many nonfungible tokens, or NFTs, which are like digital receipts that keep a record of ownership for rare items like online art.



They have seen a boom in activity this year, with one token auctioned at Christie’s selling for a record $69 million.



Still, ethereum is up against some fierce competition. Rival tokens like solana and cardano have surged in price this year.



<h2 class="wp-block-heading"><a></a>Ethereum 2.0</h2>



Ethereum is undergoing a major upgrade which investors hope will make the network faster and more environmentally friendly.



Bitcoin and other cryptocurrencies have been criticized for their swelling consumption of energy.



The latest step in Ethereum network’s overhaul arrived late last month, when an upgrade called Altair went live.



Meanwhile, bitcoin jumped to a new all-time high of nearly $67,000 last month, following the listing of the first U.S. bitcoin futures exchange-traded fund.



Crypto bulls praised the move as another sign of growing acceptance for digital assets on Wall Street.



Alternative digital currencies often rally after significant climbs in bitcoin’s price, as investors search for returns elsewhere in the market.

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Ethereum hits new all-time high, bitcoin inches toward record as cryptocurrencies rally

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K.jpeg" alt="" class="wp-image-411485" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A visual representation of bitcoin.
STR | NurPhoto via Getty Images</figcaption></figure>



Shares of the first U.S. bitcoin-linked exchange-traded fund rose in their trading debut Tuesday.



The ProShares Bitcoin Strategy ETF, ticker “BITO,” jumped 4.8% to close at $41.94. The fund tracks CME <a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a> futures, or contracts speculating on the future price of bitcoin, rather than the crypto itself.



That means investors in the ETF should expect the price and performance of the shares to differ somewhat from the price of bitcoin itself. This isn’t ideal for existing investors; many of them take a long view on cryptocurrencies and had hoped for an ETF that would track physical bitcoin that investors could buy and hold.



The price of bitcoin jumped more than 4% Tuesday to $64,206.51, according to Coin Metrics, about 1% from its all-time high from April 14 of $64,899. Bitcoin futures gained about 4% as well.



The launch highlights the remarkable growth of the ETF industry, Will Hershey, CEO of Roundhill Investments, told CNBC.



“Trading volumes are exceptional,” Hershey said of BITO’s day one trading activity. “BITO has traded in excess of $700 million notional. That puts its first day well ahead of retail ETF favorites like BUZZ and ARKX when compared to their respective launch days earlier this year.”



<h3 class="wp-block-heading" id="h-read-more-first-bitcoin-futures-exchange-traded-fund-starts-trading-tuesday-what-to-know-before-adding-it-to-your-portfolio">Read more: <a href="https://www.cnbcafrica.com/2021/first-bitcoin-futures-exchange-traded-fund-starts-trading-tuesday-what-to-know-before-adding-it-to-your-portfolio/">First bitcoin futures exchange-traded fund starts trading Tuesday. What to know before adding it to your portfolio</a></h3>



He noted that when the SPDR S&amp;P 500&nbsp;ETF debuted in 1993 it traded about $40 million on its first day. By the end of the trading session BITO had traded about $984 million in volume.



ProShares is the eighth-biggest ETF provider by assets, according to ETDB.com. The firm is known for its funds that use leverage to track moves in certain indexes multiplied by a certain amount. ProShares executives rang the opening bell at the NYSE, where the ETF trades. The fund has an expense ratio of 0.95%.



The crypto industry has been longing for a bitcoin-related ETF for many years. In about 2017, asset managers began applying to launch spot bitcoin ETFs but their proposals were rejected by the Securities and Exchange Commission, which maintained none were able to prove market resistance to manipulation. The rush of applications for futures-based ETFs came this year shortly after Chairman Gary Gensler took the helm of the agency.



“What you have here is a product that’s been overseen for four years by the U.S. federal regulator CFTC, and that’s being wrapped inside of something within our jurisdiction called the Investment Company Act of 1940, so we have some ability to bring it inside of investor protection,” Gensler said of the new ETF on CNBC’s “Squawk on the Street” on Tuesday. “It’s still a highly speculative asset class and listeners should understand that underneath this, it still has that same aspect of volatility and speculation.”



Some argue the impact of an ETF, particularly one tied to futures contracts, is lessened by adoption of crypto by companies and fintechs. Investors have many ways to get indirect exposure to bitcoin without actually owning it, through institutional-grade funds, financial apps like PayPal and Square’s CashApp, or crypto-related equities like Coinbase and mining stocks.



“The launch of the first bitcoin-linked ETF in the U.S. will bolster the broader crypto market and help an entirely new investor class experience the benefits of bitcoin as a legitimate asset,” said Anthony Bertolino, VP of growth at iTrustCapital. “However, a derivatives-based bitcoin ETF is not where we want to be long-term. One of the most attractive aspects of bitcoin is that it’s a bearer asset with a highly liquid 24/7 spot market. Investors will almost certainly come to desire a spot based, physically backed bitcoin ETF and 10 years from now, I would even expect some of the bitcoin ETFs to allow physical redemption for those that want it.”

106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K

First bitcoin futures ETF rises more than 4% in trading debut on the NYSE

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106957228-1633755515333-gettyimages-1312493974-_48p7891_2021041460349748.jpeg" alt="" class="wp-image-412808" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106957228-1633755515333-gettyimages-1312493974-_48p7891_2021041460349748.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106957228-1633755515333-gettyimages-1312493974-_48p7891_2021041460349748-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106957228-1633755515333-gettyimages-1312493974-_48p7891_2021041460349748-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Bitcoin on display.
Chesnot | Getty Images</figcaption></figure>



The first U.S. <a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a> futures exchange-traded fund will launch on Tuesday, a milestone for the cryptocurrency industry, and others may soon follow.



The long-awaited ProShares ETF will offer exposure to bitcoin futures contracts — agreements to buy or sell the asset later for an agreed-upon price — rather than bitcoin itself.



“The ETF presents a disruption to what is available in the marketplace today,” said Karan Sood, CEO and managing director of Cboe Vest, a financial advisory platform in McLean, Virginia. “That’s what investors are excited about.”



Currently, investors may buy bitcoin through digital currency exchanges, but there are safety concerns as some worry about hackers or losing so-called private keys, which provide access to their assets.    



Another option, bitcoin trusts, offer an easier way to add bitcoin to portfolios through brokerage or retirement accounts. But these assets may come with higher fees and values may not mirror the digital currency price changes.



While bitcoin futures ETFs don’t offer what the industry eventually wants — funds that invest directly in digital currency — it provides another choice as companies vie for the green light from the Securities and Exchange Commission to launch regular bitcoin ETFs.



<a href="https://www.cnbcafrica.com/2021/bitcoin-is-inches-away-from-reaching-60000-amid-etf-speculation/">The price of bitcoin jumped more than 2% on Monday to $61,958.24</a>, according to Coin Metrics.



There are a few things prospective investors need to consider before piling money into bitcoin futures ETFs, financial experts say.



Although the funds may have a “very high correlation” with bitcoin, the asset won’t mirror values of the digital currency because it tracks the price of future contracts, Sood said. 



Moreover, it costs more to own funds over individual assets. But some investors are willing to pay more for an ETF’s “institutional level liquidity, custody and execution” versus managing the currency themselves, he said.



Still, some advisors see digital currencies as a speculative asset and say betting on prices of futures contracts can be unpredictable.&nbsp;&nbsp;



“It’s just the ultimate risk that you would ever take,” said certified financial planner Jordan Benold, partner at Benold Financial Planning in Prosper, Texas, explaining how the volatility of bitcoin paired with futures contracts may be a gamble. “You’re really into high-stakes poker at this point.”



Bitcoin’s value comes from supply and demand factors of an “unstable and unpredictable group of market participants,” making it inappropriate for an investment portfolio, said CFP Anthony Watson, founder and president of Dearborn, Michigan-based Thrive Retirement Specialists.



However, if someone’s retirement savings and other goals are on track, and they have “fun money” they want to invest in bitcoin futures, some advisors wouldn’t discourage a minimal amount of experimenting.



“I would just say do it on a very, very small scale,” Benold said. “Dip your toe into the water.”

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First bitcoin futures exchange-traded fund starts trading Tuesday. What to know before adding it to your portfolio

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1.jpg" alt="" class="wp-image-412818" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Art at the cryptocurrency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami on June 4, 2021.
Marco Bello | AFP | Getty Images</figcaption></figure>



<a href="https://www.cnbcafrica.com/quotes/btc=x/">Bitcoin</a> climbed above $60,000 Friday, pushing the digital coin further toward its all-time high, as traders speculated U.S. regulators would clear the first bitcoin futures exchange-traded fund. 



The world’s biggest cryptocurrency surged as high as $60,314, notching its highest level since Apr. 18. Bitcoin was last trading 4% higher in the last 24 hours, at a price of $59,945, according to Coin Metrics data.



Traders are optimistic about the chances of the U.S. Securities and Exchange Commission giving the green light to the first bitcoin futures exchange-traded fund, according to analysts.



The ProShares Bitcoin Strategy ETF is&nbsp;scheduled to debut at the New York Stock Exchange&nbsp;on Tuesday, and experts believe the SEC unlikely to object to the product.



The&nbsp;<a href="https://www.cnbc.com/quotes/CME" target="_blank" rel="noreferrer noopener">CME</a>&nbsp;bitcoin futures contract for October was last trading at $60,570, up about 4%.



Approval of an ETF that gives mainstream investors exposure to bitcoin would be a landmark for the crypto industry, which has long been pushing for greater acceptance of digital assets on Wall Street.



“The ETF news is being priced in with the market expecting an approval on Monday. This is driving the price up,” Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, told CNBC.



<h3 class="wp-block-heading" id="h-read-more-crypto-trading-thrives-in-nigeria-despite-official-disapproval">Read more:<a href="https://www.cnbcafrica.com/2021/crypto-trading-thrives-in-nigeria-despite-official-disapproval/"> Crypto trading thrives in Nigeria despite official disapproval</a></h3>



However, Ayyar cautioned that a rejection of ProShares’ product could send bitcoin sharply lower.



Mikkel Morch, executive director at digital asset hedge fund ARK36, said bitcoin could rally above its near-$65,000 all-time high from April, but warned the cryptocurrency may subsequently undergo a “short-term pullback.”



“Investors should be aware that the hopes for a sustained rally above the $60K barrier and further through the previous all-time high may as well turn into ‘buy the rumour, sell the news’ scenario,” Morch said.



Not all cryptocurrencies got a boost from the ETF news Friday. Ether, the second-largest coin, rose 0.5% to $3,804 on spot exchanges. However, XRP and ada were both down about 2%.



Bitcoin and other cryptocurrencies have been on a wild ride this year. The number one digital coin hit an all-time high above $64,000 in April, before slumping sharply on the back of a crackdown on the crypto market in China. It’s since staged a comeback and has more than doubled in price so far this year.



Regulators have been taking a tougher line on crypto this year, as interest from investors has surged. The industry has been putting up a fight though, with&nbsp;Coinbase&nbsp;on Thursday&nbsp;calling on the U.S. to create a new regulator&nbsp;to oversee digital assets.



Earlier this week, Bank of England Deputy Governor Jon Cunliffe&nbsp;warned cryptocurrencies could spark a global financial crisis&nbsp;of similar magnitude to the 2008 crash.



“When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice,” Cunliffe said in a speech Wednesday.

Bitcoin tops $60,000 for first time in six months as traders bet on ETF approval

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K.jpeg" alt="" class="wp-image-411485" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A visual representation of bitcoin.
STR | NurPhoto via Getty Images</figcaption></figure>



Jamie Dimon, JPMorgan Chase chairman and CEO, isn’t a fan of <a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a>, the largest cryptocurrency by market value.



“I personally think that bitcoin is worthless,” Dimon said during an Institute of International Finance event on Monday, CNBC Pro reported.



But, “I don’t want to be a spokesperson — I don’t care. It makes no difference to me,” he said. “Our clients are adults. They disagree. That’s what makes markets. So, if they want to have access to buy yourself bitcoin, we can’t custody it but we can give them legitimate, as clean as possible, access.”



He’s held true to that statement: In February 2019, JPMorgan said it would roll out a digital currency called JPM Coin, and in October 2020, the firm created a new unit for blockchain projects. In August, it started giving its wealth management clients access to crypto funds, CNBC reported.



For his part, however, Dimon has held firm in his anti-crypto outlook.



Recently, he told Axios CEO Jim VandeHei that bitcoin has “no intrinsic value.” And although he thinks bitcoin will be around long term, “I’ve always believed it’ll be made illegal someplace, like China made it illegal, so I think it’s a little bit of fool’s gold.”



<h3 class="wp-block-heading" id="h-read-more-jamie-dimon-says-jpmorgan-is-hoarding-cash-because-very-good-chance-inflation-is-here-to-stay">Read more: <a href="https://www.cnbcafrica.com/2021/jamie-dimon-says-jpmorgan-is-hoarding-cash-because-very-good-chance-inflation-is-here-to-stay/">Jamie Dimon says JPMorgan is hoarding cash because ‘very good chance’ inflation is here to stay</a></h3>



Dimon also told VandeHei that he thinks “regulators are going to regulate the hell out of it.”



He may be right: Recently, the U.S. government has had a heightened focus on regulating cryptocurrency markets. On Friday, Bloomberg reported that the Biden administration is weighing an executive order that would direct federal agencies to study and offer recommendations on the crypto market.



However, though increased regulation may happen, Federal Reserve Chairman Jerome Powell clarified at the end of September that he has no intention to ban bitcoin in the U.S.



Some financial experts contend that well-thought-out regulation would be beneficial in the U.S. “If people want crypto to become more of a mainstream asset, then I think [regulation is] a necessary first step,” Anjali Jariwala, certified financial planner, certified public accountant and founder of Fit Advisors, previously told CNBC Make It.



However, cryptocurrency supporters are wary of further regulation — they worry that certain regulatory framework may stifle crypto innovation in the U.S. and push business overseas.



Bitcoin is currently trading at around $57,501, according to CoinMarketCap, with a market value of more than $1 trillion.

Jamie Dimon says bitcoin is ‘worthless’

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106870012-1618806494603-gettyimages-1231972430-BC_ChineseFlag2021_4293-1.jpeg" alt="" class="wp-image-412343" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106870012-1618806494603-gettyimages-1231972430-BC_ChineseFlag2021_4293-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106870012-1618806494603-gettyimages-1231972430-BC_ChineseFlag2021_4293-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106870012-1618806494603-gettyimages-1231972430-BC_ChineseFlag2021_4293-1-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>In this photo illustration, the Bitcoin logo is seen on a mobile device with People’s Republic of China flag in the background. (Photo Illustration by t/SOPA Images/LightRocket via Getty Images) Budrul Chukrut | SOPA Images | LightRocket | Getty Images</figcaption></figure>



GUANGZHOU, China — Huobi, one of the world’s largest cryptocurrency exchanges, said it has ceased new account openings for mainland Chinese users after Beijing renewed a crackdown on virtual currencies.



The People’s Bank of China declared all virtual currency-related activities illegal including trading on Friday. The Chinese central bank also took aim at overseas exchanges providing services to mainland China users.



Huobi, one of these exchanges, said on Sunday that it would end account registrations for new mainland Chinese users. The company will also gradually retire existing accounts of mainland Chinese users by midnight on Dec. 31, 2021.



Meanwhile Binance, one of the world’s largest cryptocurrency exchanges, said that account registrations using Chinese mobile phone numbers are now blocked. The Binance app is also no longer available for download in China.



<h3 class="wp-block-heading" id="h-read-more-bitcoin-drops-as-china-intensifies-crypto-mining-crackdown">Read more: <a href="https://www.cnbcafrica.com/2021/bitcoin-drops-as-china-intensifies-crypto-mining-crackdown/">Bitcoin drops as China intensifies crypto mining crackdown</a></h3>



“Binance takes its compliance obligations very seriously and is committed to following local regulator requirements wherever we operate,” a spokesperson told CNBC.



This year, Chinese authorities have intensified a crackdown on cryptocurrencies that has targeted bitcoin miners and trading.



But China’s tough stance on cryptocurrencies is not new. Authorities in the world’s second-largest economy have long been worried about the impact of digital coins on financial stability.



In 2017, China shut down local cryptocurrency exchanges and banned so-called initial coin offerings (ICOs), a way to raise money for crypto companies by issuing digital tokens. 



Many of China’s cryptocurrency exchanges moved offshore as a result of that. But loopholes have remained that allow mainland Chinese traders to buy and sell digital currencies on these offshore exchanges.

Major crypto exchanges stop letting Chinese users sign up after Beijing’s renewed crackdown

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106914167-1626861873395-gettyimages-1234061399-sindeyev-notitle210719_npeAJ.jpeg" alt="" class="wp-image-410239" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106914167-1626861873395-gettyimages-1234061399-sindeyev-notitle210719_npeAJ.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106914167-1626861873395-gettyimages-1234061399-sindeyev-notitle210719_npeAJ-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106914167-1626861873395-gettyimages-1234061399-sindeyev-notitle210719_npeAJ-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A bitcoin sign with a graph pictured in the background.
STR | NurPhoto via Getty Images</figcaption></figure>



The price of bitcoin fell Tuesday after breaking through $52,000 late Monday, reaching its highest level since May.



The price action comes on the day <a href="https://www.cnbcafrica.com/2021/el-salvador-bought-21-million-of-bitcoin-as-it-becomes-first-country-to-make-it-a-legal-currency/">El Salvador is set to adopt the largest cryptocurrency by market cap as legal tender,</a> becoming the first country to do so. Bitcoin dropped as much as 16% on Tuesday morning. It was last down about 9.5% and trading at $46,892.04, according to Coin Metrics. Ether fell 12% to $3,441.21.



<div class="wp-block-group"><div class="wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow">
<h3 class="wp-block-heading" id="h-bitcoin-becomes-legal-tender-in-el-salvador">Bitcoin becomes legal tender in El Salvador</h3>


</div></div>



Crypto adjacent stocks&nbsp;MicroStrategy&nbsp;and&nbsp;Coinbase&nbsp;also lost about 9% and 4%, respectively. Coinbase users were experiencing delayed or canceled transactions at “elevated rates” in the morning, the company&nbsp;said in an update&nbsp;on Twitter, but those issues were resolved by the afternoon. Major crypto exchanges Kraken and Gemini were also investigating delays and performance issues.



Early Tuesday El Salvador temporarily disabled Chivo, its government-run <a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a> wallet, to increase the capacity of the servers, which were hindering new users from installing it, President Nayib Bukele announced in a tweet at about 7:00 a.m. EST.



“Any data they try to enter at this time will give them an error,”&nbsp;he said. “This is a relatively straightforward problem, but it cannot be fixed with the system connected.”



The market action is unsurprising, according to Leah Wald, CEO at Valkyrie&nbsp;Investments, who said the news was largely priced into the market “a while ago.”



“When this move was first announced, it didn’t have nearly as big of an impact on price as some may have expected it might, possibly because El Salvador’s population is less than New York City’s, but also because the announcement was light on details and people were on the fence about how this was going to be implemented,” she told CNBC, noting that much of El Salvador lives in poverty and doesn’t have the internet or smartphone access required to participate in the bitcoin network. “Transaction fees, processing times, and other hurdles also make this feel more like a beta test rather than a solution to many of the problems plaguing the country’s poor,” Wald added.



As part of the new law, businesses will be required to accept bitcoin for goods and services, though merchants who aren’t technologically able to accept bitcoin will be exempt. The government has installed 200 bitcoin ATMs around El Salvador. It also&nbsp;bought 400 bitcoins&nbsp;worth about $20 million and is preloading Chivo wallets with $30 worth of bitcoin for Salvadorans who register.



Some traders are saying on social media that they will be buying $30 worth of bitcoin in their local fiat currencies to commemorate and support El Salvador’s new law, at 3:00 p.m. ET. But bitcoin prices were sliding into the afternoon anyway.



“What is most worth looking out for is whether or not neighboring countries in Latin America, or those elsewhere around the world, begin to adopt bitcoin as their national currency as well,” Wald said. “Should this occur, that is when we could see a parabolic move higher, as the momentum gained from many millions more people having instant access to crypto should result in more adoption, more HODLing, and higher prices.” HODLing is crypto community slang for the buy-and-hold investment strategy.



Bitcoin advocates have long held there’s a strong case for Latin American markets using the cryptocurrency as a medium of exchange, for remittances and even for central banks that experience high currency depreciation.



On Monday Panamanian politician Gabriel Silva introduced the “Crypto Law,” which “seeks to make Panama a country compatible with the blockchain, crypto assets and the internet,” he said on Twitter. “This has the potential to create thousands of jobs, attract investment and make the government transparent,” he added.

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Bitcoin tumbles nearly 10% as El Salvador adopts it as legal tender

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106937882-1630990784900-gettyimages-1234925807-EL_SALVADOR_BITCOIN.jpeg" alt="" class="wp-image-411901" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106937882-1630990784900-gettyimages-1234925807-EL_SALVADOR_BITCOIN.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106937882-1630990784900-gettyimages-1234925807-EL_SALVADOR_BITCOIN-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/09/106937882-1630990784900-gettyimages-1234925807-EL_SALVADOR_BITCOIN-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A Chivo Bitcoin automated teller machine (ATM) at the Multiplaza Mall in San Salvador, El Salvador, on Saturday, Aug. 28, 2021. El Salvador began installing Bitcoin ATMs, allowing its citizens to convert the cryptocurrency into U.S. dollars and withdraw it in cash, as part of the governments plan to make the token legal tender. Camilo Freedman | Bloomberg | Getty Images</figcaption></figure>



El Salvador bought roughly $20.9 million worth of <a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a>, one day before it formally adopts the world’s most popular cryptocurrency as legal tender. 



In a series of tweets Monday, President Nayib Bukele revealed that the country had purchased a total of 400 bitcoin, the first step in a larger push to add the digital currency to its balance sheet.



The tweets were posted a few hours apart. Based on the bitcoin price at the time of the tweets, the amount of the digital coin purchased totaled roughly $20.9 million.



“Our brokers will be buying a lot more as the deadline approaches,” he wrote.



The price of bitcoin rose following the tweets and was trading at around $52,681.85 at 12:16 a.m. ET Tuesday.



<h3 class="wp-block-heading" id="h-read-more-el-salvador-becomes-first-country-to-adopt-bitcoin-as-legal-tender-after-passing-law">Read more: <a href="https://www.cnbcafrica.com/2021/el-salvador-becomes-first-country-to-adopt-bitcoin-as-legal-tender-after-passing-law/">El Salvador becomes first country to adopt bitcoin as legal tender after passing law</a></h3>



The posts came hours before El Salvador’s bitcoin law, which was passed in June, took effect Tuesday. El Salvador is the first country to accept bitcoin as legal currency, which will work alongside the U.S. dollar. Proponents and critics around the world will be watching to see how this unprecedented experiment plays out.



Bukele’s announcement marks a major milestone for bitcoin. El Salvador is now the first country to have officially put bitcoin on its balance sheet and hold it in its reserves.



But the policy has drawn criticism across the country. Nearly 70% of Salvadorans surveyed by the Central American University disagreed with the administration’s decision to adopt bitcoin as legal tender. Many were also unsure of how to use the digital currency.



Supporters of El Salvador’s move say that it indicates growing acceptance of bitcoin and that other countries could follow. The Salvadorian government hopes it will boost financial inclusion in a country where around 70% of citizens do not have access to traditional financial services, according to the bitcoin law.



Remittances, or the money sent home by migrants, is also important for the economy, accounting for more than 24% of El Salvador’s gross domestic product, according to the World Bank.



The legislation allows prices to be displayed in bitcoin, tax contributions to be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/bitcoin-rallies-13-jumping-above-37000-after-el-salvador-passes-law-to-adopt-it-as-legal-tender/">Bitcoin rallies 13% jumping above $37,000 after El Salvador passes law to adopt it as legal tender</a></h3>



El Salvador launched a wallet app called Chivo which citizens can sign up for with a national ID in order to transact using bitcoin. Users will receive $30 worth of bitcoin when they sign up in a push to speed up adoption.



Last Tuesday, the Congress in El Salvador passed a law to create a $150 million fund to help facilitate conversions from bitcoin to U.S. dollars.



But bitcoin is known for wild volatility at times, raising concerns about its effectiveness as a currency.



“Bitcoin isn’t really designed to be a means of exchange so this is an early experiment for the currency,” Philip Gradwell, chief economist at data platform Chainalysis, told CNBC’s “Capital Connection.”



“I think the main use in El Salvador is really going to be around remittances and people using it to save some wealth and really perhaps just to be some competition to the dollar in the country.”

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El Salvador bought $21 million of bitcoin as it becomes first country to make it a legal currency

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106929876-1629304059932-Pay_Pal-26.jpg" alt="" class="wp-image-411619" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106929876-1629304059932-Pay_Pal-26.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106929876-1629304059932-Pay_Pal-26-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106929876-1629304059932-Pay_Pal-26-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>PayPal has launched its cryptocurrency service in the U.K. PayPal</figcaption></figure>



LONDON — PayPal is launching its cryptocurrency service in the U.K.



The U.S. online payments giant said Monday it would let British customers buy, hold and sell digital currencies, starting this week.



It marks the the first international expansion of PayPal’s crypto product, which first launched in the U.S. in October last year.



“It has been doing really well in the U.S.,” Jose Fernandez da Ponte, PayPal’s general manager for blockchain, crypto and digital currencies, told CNBC. “We expect it’s going to do well in the U.K.”



PayPal’s crypto feature lets customers buy or sell <a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a>, <a href="https://www.cnbcafrica.com/quotes/bch=x/">bitcoin cash</a>, <a href="https://www.cnbcafrica.com/quotes/eth=x/">ethereum</a> or <a href="https://www.cnbcafrica.com/quotes/ltc=x/">litecoin</a> with as little as £1. Users can also track crypto prices in real-time, and find educational content on the market.



Like the U.S. version of the product, PayPal is relying on Paxos, a New York-regulated digital currency company, to enable crypto buying and selling in the U.K. PayPal said it has engaged with relevant U.K. regulators to launch the service.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/more-than-90-million-in-cryptocurrency-stolen-after-a-top-japanese-exchange-is-hacked/">More than $90 million in cryptocurrency stolen after a top Japanese exchange is hacked</a></h3>



A spokesperson for the Financial Conduct Authority, Britain’s financial services watchdog, was not immediately available for comment on the announcement.



<h2 class="wp-block-heading" id="h-growing-adoption"><a></a>Growing adoption</h2>



PayPal’s crypto service is similar to one from U.K. fintech firm Revolut. As is the case with Revolut, PayPal users can’t move their crypto holdings outside the app. Although Revolut recently started testing a feature that lets users withdraw bitcoin to their own personal wallets.



PayPal says its foray into crypto is about making it easier for people to participate in the market. “The tokens and coins have been around for a while but you had to be a relatively sophisticated user to be able to access that,” da Ponte said. “Having that on a platform like ours makes a really good entry point.”



The payments processor is one of many large finance companies taking a leap into the mostly unregulated world of cryptocurrencies. Despite ongoing concerns about price volatility, consumer protection and potential money laundering in the industry, major firms including Mastercard, Tesla and Facebook have been warming to crypto lately.



Bitcoin, the world’s biggest digital currency, hit a record high of nearly $65,000 in April before tumbling below $30,000 in July as Chinese regulators extended a crackdown on the market. It has since recovered to a price of $48,400.



While PayPal started with crypto trading, the company is betting digital currencies will take a greater role in e-commerce in the long run. Earlier this year, PayPal started letting U.S. consumers use crypto to pay at millions of its online merchants globally. The firm also expanded crypto buying and selling to Venmo, its popular mobile wallet.



“We definitely have ambitions to continue to expand the product range in the U.S., the U.K. and other markets,” da Ponte said.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/meme-coins-or-digital-gold-blockchain-analyst-weighs-in-on-where-crypto-markets-are-headed/">Meme coins or digital gold? Blockchain analyst weighs in on where crypto markets are headed</a></h3>



“We are very deliberate about starting with initial functionality, and then we’ll see where the market is going to take us. Different markets have different appetite for products.”



<h2 class="wp-block-heading"><a></a>‘Britcoin’</h2>



The launch of PayPal’s crypto service in the U.K. also comes as regulators become increasingly wary about the rise of digital currencies. In June, the FCA banned the British subsidiary of Binance, the world’s largest crypto exchange, citing a failure to meet money-laundering requirements.



“It makes sense that, as there is increased consumer interest and increased volume, the regulators are putting more attention into this space,” da Ponte said, adding that PayPal has built “strong regulatory relations.”



Meanwhile, central banks are exploring the potential issuance of their own digital currencies, as cash use in a number of developed countries dwindles rapidly. In April, the U.K. Treasury and Bank of England said they would evaluate the potential launch of a digital version of the British pound, dubbed “Britcoin” by the U.K. press.



Da Ponte said central bank digital currencies, or CBDCs, were a “fantastic prospect” but it would take policymakers some time to iron out the key issues involved.

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PayPal launches its cryptocurrency service in the UK

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106930253-1629367715182-gettyimages-1234739851-porzycki-internet210817_npTeY-1.jpeg" alt="" class="wp-image-411591" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106930253-1629367715182-gettyimages-1234739851-porzycki-internet210817_npTeY-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106930253-1629367715182-gettyimages-1234739851-porzycki-internet210817_npTeY-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106930253-1629367715182-gettyimages-1234739851-porzycki-internet210817_npTeY-1-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>An illustration showing physical bitcoins alongside binary code displayed on a laptop. Jakub Porzycki | NurPhoto via Getty Images</figcaption></figure>



Japanese cryptocurrency exchange Liquid said Thursday it has been hit by a cyberattack that saw hackers make off&nbsp;with a reported $97 million&nbsp;worth of digital coins.



Liquid said some of its digital currency wallets had been “compromised,” and that hackers were transferring the assets to four different wallets.



“We are currently investigating and will provide regular updates,” Liquid tweeted. “In the meantime deposits and withdrawals will be suspended.”



Liquid did not provide an estimate for the loss. It says it is regulated by Japan’s Financial Services Agency. The watchdog was not immediately available for comment when contacted by CNBC.



<h3 class="wp-block-heading" id="h-read-more-hackers-who-infected-200-000-machines-have-only-made-50-000-worth-of-bitcoin"> Read more: <a href="https://www.cnbcafrica.com/2017/hackers-made-50000-worth-bitcoin/">Hackers who infected 200,000 machines have only made $50,000 worth of bitcoin</a></h3>



Elliptic, a blockchain analytics company, said its analysis showed that about $97 million in cryptocurrencies have been obtained by the hackers.



Of the total haul, $45 million in tokens were being converted to <a href="https://www.cnbcafrica.com/quotes/eth=x/">ethereum</a> through decentralized exchanges — blockchain-based platforms that require no intermediaries — like Uniswap and SushiSwap, Elliptic said.



“This enables the hacker to avoid having these assets frozen — as is possible with many Ethereum tokens,” Elliptic said in a blog post.



Liquid did not provide an estimate for the loss. It says it is regulated by Japan’s Financial Services Agency. The watchdog was not immediately available for comment when contacted by CNBC.



Elliptic, a blockchain analytics company, said its analysis showed that about $97 million in cryptocurrencies have been obtained by the hackers.



Of the total haul, $45 million in tokens were being converted to ethereum through decentralized exchanges — blockchain-based platforms that require no intermediaries — like Uniswap and SushiSwap, Elliptic said.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/ethereum-hits-new-record-high-above-3400-extending-its-more-than-300-rally-this-year/">Ethereum hits new record high above $3,400, extending its more than 300% rally this year</a></h3>



“This enables the hacker to avoid having these assets frozen — as is possible with many Ethereum tokens,” Elliptic said in a blog post.



Liquid ranks among the top 20 crypto exchanges globally by daily trading volumes, processing more than $133 million of transactions in the last 24 hours, according to CoinMarketCap data.



It’s the second major crypto heist to take place in little over a week. On Aug. 10, hackers stole more than $600 million of digital tokens from Poly Network, a so-called decentralized finance firm.



In an unusual turn of events, the hackers opened a dialogue with the organization they attacked and gave back nearly all of the funds. However, more than $200 million remains locked in an account that requires a password from the hacker.

106930253-1629367715182-gettyimages-1234739851-porzycki-internet210817_npTeY-1

More than $90 million in cryptocurrency stolen after a top Japanese exchange is hacked

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106907103-1625597281111-gettyimages-1233700528-porzycki-binancep210628_npNRz-1.jpeg" alt="" class="wp-image-411538" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106907103-1625597281111-gettyimages-1233700528-porzycki-binancep210628_npNRz-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106907103-1625597281111-gettyimages-1233700528-porzycki-binancep210628_npNRz-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106907103-1625597281111-gettyimages-1233700528-porzycki-binancep210628_npNRz-1-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>The logo of cryptocurrency exchange Binance displayed on a phone screen. Jakub Porzycki | NurPhoto via Getty Images</figcaption></figure>



When Canadian cryptocurrency trader Fawaz Ahmed saw the price of&nbsp;<a href="https://www.cnbcafrica.com/quotes/eth=x/">ethereum</a>&nbsp;dropping, he knew it was time to get out. Unfortunately for him, he couldn’t.



Ahmed was trading on Binance, the world’s largest digital currency exchange by trading volume. And on May 19, Binance experienced a major outage which meant that, for about an hour, he was unable to exit his position.



That day,&nbsp;<a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a>&nbsp;and ethereum posted their biggest one-day drops since March 2020, with the entire crypto market losing roughly $1 trillion in value. When prices fell below a certain point, Ahmed’s position got wiped out. His personal losses came to about $6 million.



“This loss was not fair,” Ahmed, a 33-year-old who trades full-time, told CNBC. “This is something which was out of my control.”



Binance’s customer service team gave Ahmed an “absurdly” low offer of compensation, he said.



Ahmed is one of hundreds of investors expected to take part in arbitration proceedings against Binance, seeking damages for the money they lost when the cryptocurrency exchange went offline.



Binance was not immediately available for comment at the time of publication.



Binance has experienced several outages over the years in times of heightened volatility for virtual currencies. That can be costly for traders, especially when prices are plunging.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/binance-ceo-says-compliance-is-a-journey-as-worlds-largest-crypto-exchange-faces-growing-crackdown/">Binance CEO says ‘compliance is a journey’ as world’s largest crypto exchange faces growing crackdown</a></h3>



And those losses can balloon to millions of dollars when investors make risky bets using leverage, or borrowed money, to augment trades — which, on Binance, is something users do often.



Binance recently cut the maximum leverage customers can take on futures — financial derivatives that oblige investors to buy an asset at an agreed-upon time at a later date — to 20 times from a previous limit of 125 times.



Binance wasn’t the only crypto exchange to face disruption to its service on May 19.&nbsp;Coinbase&nbsp;users were also&nbsp;temporarily unable to access its site. Bitcoin&nbsp;plunged as much as 30%&nbsp;to nearly $30,000 that day. It has since recovered to $45,790.



<h2 class="wp-block-heading" id="h-no-headquarters"><a></a>No headquarters</h2>



Changpeng “CZ” Zhao, Binance’s boss, has previously said the exchange has no official headquarters. That makes it extremely difficult for investors to figure out how, and where, to take the company to court.



A group of crypto traders hopes to change that. With the help of Liti Capital, a little-known private equity firm providing litigation financing, nearly 1,000 people are expected to join arbitration proceedings in Hong Kong to seek damages from Binance.



“This is a landmark case for the industry,” David Kay, chief investment officer of Liti Capital, told CNBC.



Binance is “the first company that has ever grown to any size in any industry — much less the financial industry — where there is no regulation,” he said. “They have no home, they have no headquarters, they have no office.”



“The only place where Binance has said they have jurisdiction is in a Hong Kong international arbitration court,” Kay added. “This will be the largest consumer international arbitration in history.”



Kay said that Liti Capital began working on the Binance case after receiving a call from Aija Lejniece, an independent lawyer working with a group of crypto traders in France. Lejniece specializes in international arbitration cases.



Binance’s terms of use say that any legal dispute must be resolved through arbitration at the Hong Kong International Arbitration Centre. Arbitration proceedings, unlike class action lawsuits, aim to settle disputes out of court.



The format makes it harder for the average consumer to make a claim, Kay said, as claimants have to pay arbitration fees and additional costs — for instance, traveling to Hong Kong. Individually, that could set each claimant back an estimated $65,000. To cover those costs, Liti Capital has promised to provide a minimum of $5 million in funding.



<h3 class="wp-block-heading">Read more: <a href="ore: Binance, the world’s largest cryptocurrency exchange, is launching an NFT marketplace">Binance, the world’s largest cryptocurrency exchange, is launching an NFT marketplace</a></h3>



White &amp; Case, a New York-based law firm, has been hired to represent the claimants. Abby Cohen Smutny and Darryl Lew, two White &amp; Case partners based in Washington, D.C., will serve as their lawyers.



<h2 class="wp-block-heading"><a></a>Crypto crackdown</h2>



Crypto, a nascent industry, is still largely unregulated. While some firms in the space, like Coinbase, have sought to build rapport with regulators, Binance and many others operate mainly outside the purview of established rules.



That hasn’t gone unnoticed by regulators, who are racing to catch up with new innovations in financial services. Two main concerns with crypto are a lack of protections for consumers and the risk of money laundering and other illicit activity.



Binance, in particular, has attracted attention from authorities in multiple countries. Britain’s Financial Conduct Authority recently banned the firm’s U.K. subsidiary after finding it failed to meet anti-money laundering requirements. Meanwhile, financial watchdogs in Japan, Canada and Italy have issued warnings saying Binance does not have the authority to operate in the countries.



To add to Binance’s woes, the company lost its U.S. chief Brian Brooks, who was formerly acting head of the Office of the Comptroller of the Currency, a U.S. banking regulator.



The company, which was founded by Zhao in China four years ago, recently said it was pivoting to become a regulated institution, with plans to obtain licenses in multiple jurisdictions and set up regional headquarters. Zhao has said he is willing to step down from the exchange to hand the baton to someone with more regulatory experience.

106907103-1625597281111-gettyimages-1233700528-porzycki-binancep210628_npNRz-1

Cryptocurrency traders seek damages from Binance after a major outage cost them millions

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/51008793946_8a23be8a2d_k-820x546.jpg" alt="" class="wp-image-410559" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/51008793946_8a23be8a2d_k-820x546.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/51008793946_8a23be8a2d_k-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/51008793946_8a23be8a2d_k-120x80.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/51008793946_8a23be8a2d_k-768x511.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/51008793946_8a23be8a2d_k-1536x1022.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/51008793946_8a23be8a2d_k.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Close-up of physical coins of Bitcoin, Litecoin and Ethereum in a wallet full of FIAT money coins.
Photo: via Flickr</figcaption></figure>



Wild swings in cryptocurrencies will eventually drive <a href="https://www.cnbcafrica.com/quotes/btc=x/">bitcoin</a> investors to return to gold, says the executive chairman of gold mining firm Evolution Mining.



Jake Klein said bitcoin still has a “long way to go” before it demonstrates the kind of “longevity and security” that gold has proven to offer investors over the last 70 years.&nbsp;



Cryptocurrencies are “running a massive amount of speculative money,” he told CNBC’s “Squawk Box Asia” on Thursday.



“I think that the volatility in the crypto space is going to ultimately lead to people coming back to gold,” Klein said.



Gold prices fell last week, and analysts say they will likely drop further. Hedge fund manager David Neuhauser told CNBC earlier this week that the decline in gold prices is a “massive buying opportunity” for investors now.



Still, Klein said the two can coexist — there are opportunities for gold to “sit alongside” bitcoin, as opposed to bitcoin posing a threat to the precious metal.



Bullish investors view bitcoin as digital gold and a hedge against inflation, expecting the cryptocurrency to appreciate over time.



American investor Tyler Winklevoss, who founded Winklevoss Capital Management as well as Gemini cryptocurrency exchange, said last year that “bitcoin is gold 2.0” — and that it will disrupt gold.



Billionaire investor Kevin O’Leary said in April that “bitcoin will always be the ‘gold.’ <a href="https://www.cnbcafrica.com/quotes/eth=x/">Ethereum</a> will always be the ‘silver.’”



However, there are also other investors who disagree.



Hedge fund manager Ray Dalio, despite owning an undisclosed amount of bitcoin, said earlier this month: “If you put a gun to my head, and you said, I can only have one, I would choose gold.”



<a href="https://www.cnbcafrica.com/2021/crypto-market-tops-2-trillion-for-the-first-time-in-nearly-3-months-as-bitcoin-rallies/">Bitcoin topped $48,000</a> over the weekend – the highest level since May. As of Thursday morning during Asia hours, however, it pared some gains to last trade above $44,000, according to CoinDesk data.



The weekend spike followed a sell-off in June and July, when <a href="https://www.cnbcafrica.com/2021/90-billion-wiped-off-crypto-market-as-bitcoin-drops-below-30000-for-first-time-in-nearly-a-month/">bitcoin fell below $30,000</a>.



Gold prices have also been swinging between gains and losses this year. From levels above $1,900 in January, prices fell to above $1,700 in March.



In June, the precious metal spiked to nearly $1,900 again, before paring gains to trade above $1,700 in August.



— CNBC’s Arjun Kharpal and Jade Scipioni contributed to this report.

51008793946_8a23be8a2d_k

Bitcoin volatility will drive investors back to gold, says mining firm chairman

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K.jpeg" alt="" class="wp-image-411485" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928219-1629130755312-gettyimages-1234311531-sindeyev-notitle210729_np12K-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A visual representation of bitcoin. STR | NurPhoto via Getty Images</figcaption></figure>



LONDON — Bitpanda, a European cryptocurrency trading platform, has raised $263 million in a fresh round of funding valuing the company at $4.1 billion.



That’s more than three times the $1.2 billion Bitpanda was worth in its last private financing round five months ago. The latest cash injection brings the company’s total raised to nearly $500 million.



The investment was led by Valar Ventures, the venture capital firm co-founded by U.S. tech billionaire Peter Thiel. It’s the third time Valar has backed Bitpanda since its first major funding round, announced in September.



“I don’t like to do fundraising,” Eric Demuth, Bitpanda’s CEO and co-founder, told CNBC. “It’s very time-consuming.”



“When you have partners you have a close connection with, and they have deep pockets, you don’t have to do the whole roadshow,” Demuth said. Valar “wanted to double down and we wanted to stay with them,” he added. “It was quite an easy process.”



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928243-1629132342420-Bitpanda_co-founders.jpg" alt="" class="wp-image-411486" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928243-1629132342420-Bitpanda_co-founders.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928243-1629132342420-Bitpanda_co-founders-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/106928243-1629132342420-Bitpanda_co-founders-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>From left to right, Bitpanda co-founders Christian Trummer, Paul Klanschek and Eric Demuth. Bitpanda</figcaption></figure>



British billionaire hedge fund manager Alan Howard and REDO Ventures also invested in Bitpanda’s latest round, along with existing investors LeadBlock Partners and Jump Capital.



<h2 class="wp-block-heading" id="h-what-is-bitpanda"><a></a>What is Bitpanda?</h2>



Founded in 2014, Bitpanda is a Vienna-based brokerage firm that lets people buy and sell cryptocurrencies and precious metals. The company also began testing a service this year that lets users trade stocks around the clock.



“By the end of the year, I think you’ll have a really good offering for stocks,” Demuth said.



Bitpanda is one of many online brokers in Europe attracting growing interest from investors, thanks in part to the “meme stock” trading frenzy. Retail traders piled into unloved stocks like GameStop and AMC, taking inspiration from a popular Reddit forum. That boosted trading volumes at digital platforms such as Robinhood.



Bitpanda’s competitors include Revolut, Trade Republic and eToro.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/jpmorgan-puts-key-dealmakers-in-charge-of-spac-unit-to-lure-emea-clients-memo/">JPMorgan puts key dealmakers in charge of SPAC unit to lure EMEA clients – memo</a></h3>



One way the company hopes to differentiate from rivals is by licensing its technology to banks and fintech companies. It declined to name any clients but said several big firms were already implementing the system and will be able offer crypto and stock trading in a matter of months.



Bitpanda makes its money from the spread between what someone is willing to pay for an asset and the price at which that asset is sold. The start-up has been profitable for five years, Demuth said.



Profitability is a rarity in fintech, with many venture-backed companies in the space racking up heavy losses. Revolut, which was last valued at $33 billion, lost £167.8 million ($232.3 million) in 2020, up 57% from a year earlier.



Demuth said a number of fintech companies are raising money at lofty valuations out of “hype” and a “fear of missing out.”



“I’m very skeptical about this,” he said. “Many companies, especially in the fintech area, are purely based on a combination of hype and growth. But the growth is mostly paid, so you have a product that is for free and you are simply buying your customers.”



Bitpanda didn’t provide a breakdown of how much money it makes each year, but said revenues were on track to rise sevenfold in 2021. The platform now has more than 3 million users.



The firm only operates in Europe, with offices in Vienna, Berlin, London, Paris, Barcelona, Milan and Krakow. It plans to use the money to expand in key markets like France, Spain, Italy and Portugal.



<h2 class="wp-block-heading"><a></a>Crypto mania</h2>



The boost in Bitpanda’s valuation comes at a time of great momentum for the nascent cryptocurrency industry.



Digital currency investors have been on a wild ride this year, with the prices of bitcoin and other major cryptocurrencies hitting record highs in April and May before tumbling sharply in the weeks that followed.



More recently, bitcoin and smaller digital coin ether have made a strong comeback, pushing the entire crypto market across the $2 trillion mark for the first time in three months.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/prosus-to-buy-shares-in-parent-naspers-as-valuations-lag-tencent-stake-2/">Prosus to buy shares in parent Naspers as valuations lag Tencent stake</a></h3>



The main headwind for crypto lately has been the threat of regulation. China has cracked down on speculative investing in digital assets, while the recently approved U.S. infrastructure bill includes a provision that crypto advocates say may harm the industry.



Europe has been slower to regulate the crypto industry than its global peers, Demuth said. But he is encouraged by new EU rules aimed at bringing the sector under regulatory supervision.



“From the drafts I’ve seen so far, it looks like it will not have a bad impact,” he said. “Of course, they can always mess it up at the last minute.”



<h2 class="wp-block-heading"><a></a>IPO? Anything but a SPAC</h2>



Fintech has birthed a number of multibillion-dollar public companies lately, with the likes of Coinbase, Robinhood and Affirm all listing this year. In Europe, Wise — the British fintech formerly known as TransferWise — went public in a rare direct listing in London.



While Bitpanda has no immediate plans to go public, Demuth said he “really liked” how Wise listed. Instead of hiring investment banks to underwrite its offering, Wise listed directly on the London market without raising any money.



Bitpanda’s CEO insisted nothing has been decided yet, but firmly ruled out merging with a special-purpose acquisition company, or SPAC. SPACs are blank-check companies that list with the aim of taking another company public.



“Bad examples of IPO are the SPAC mania,” Demuth said.



Last month, U.S. digital currency company Circle said it planned to go public in a $4.5 billion SPAC deal.

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El Salvador bought $21 million of bitcoin as it becomes first country to make it a legal currency

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Bitcoin volatility will drive investors back to gold, says mining firm chairman

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