This digest is prepared for informative purposes only and does not represent an investment recommendation or investment advice. Please see our full disclaimer at the bottom for more information.

See below all the important happenings this week in the world of crypto, presented by the experts at Kraken:

1. Reuters: Facebook Open to Currency-Pegged Stablecoins for Libra Project
2. Yahoo! Finance: Bitmain Fulfills Commitment to Rockdale, Texas, With Launch of Cryptocurrency Mining Farm to Construct 50MW Facility
3. BitcoinNews: The Number of Bitcoin ATMs Has Increased by 1,900 in the Past Year, a Jump of 50%
4. The Block: HTC Launches Smartphone With Bitcoin Full Node Capabilities
5. Ripple: Q3 2019 XRP Markets Report
6. Totle: Kraken’s Cryptowatch and Totle Partner to Unite Centralized and Decentralized Cryptocurrency Markets
7. CoinDesk: CFTC Chair Says Ether Futures ‘Likely’ in 2020
8. CoinDesk: Opera Browser Adds Bitcoin Payments to Android Update
9. Bloomberg: Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges
10. 7Bitcoins: Bitcoin Network Velocity Increased During the Past Months
11. TrustNodes: Ethereum 2.0 Dev Says “Will Attempt Cross Client Testnet this Week”
12. Cointelegraph: New Bitcoin ETF Proposal Filed With SEC by Gold Fund Veteran
13. The Block: Zuckerberg Says Facebook Would Leave Libra if US Regulators Don’t Approve the Project
14. BBC: Facebook’s Partners Yet to Commit Money to Libra
15. Forbes Russia: TON Investors Agreed Not to Demand Back Money Invested in Durov’s Project
16. The Block: 42% of Blockchain Industry Employees Work for Exchanges (Quick Take)
17. CoinDesk: CFTC Makes Its Fintech, Blockchain Research Lab a Full-Fledged Office
18. SEC: U.S. Financial Regulatory Agencies Join the Global Financial Innovation Network
19. CoinDesk: Galaxy Digital to Launch 2 New Bitcoin Funds in November
20. Xihuanet: President Xi says China  Should ‘Seize Opportunity’ to Adopt Blockchain
21. @100trillionUSD: Bitcoin Transferred $11 Trillion Since 2009 (Misleading)
22. Finder: A Rising Number of Americans Own Crypto
23. Bloomberg: Controversial Crypto Coin Tether Gains Popularity at Gambling Sites, Pot Shops
24. WEF: Seven Mining, Metals Companies Partner on Responsible Sourcing with World Economic Forum

1. Reuters: Facebook Open to Currency-Pegged Stablecoins for Libra Project
   • Libra co-creator David Marcus said Libra is considering dropping the planned synthetic stablecoin and instead issue a number of fiat-pegged stablecoins, “We could do it differently. Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc. We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form. That is one of the options that should be considered”
   • Marcus added that he isn’t suggesting individual stablecoins are the new preferred option, but the goal of creating a more efficient payment system is paramount and Libra needs to “demonstrate a lot of agility”
   • Libra is still aiming for a June 2020 launch, but it could miss its target due to regulatory hurdles
2. Yahoo! Finance: Bitmain Fulfills Commitment to Rockdale, Texas, With Launch of Cryptocurrency Mining Farm to Construct 50MW Facility
   • Bitmain launched a 50MW BTC mining facility that sits on a 33,000-acre site in Rockdale, Texas, alongside the Rockdale Municipal Development District (MDD) and Canadian tech firm DMG Blockchain Solutions
   • Bitmain will continue to construct the 50MW facility, which can expand to a capacity of +300MW, making it the largest BTC mine worldwide
   • DMG will provide hosting and management services for the facility, and will work with Bitmain to expand capacity and ensure efficient operations of Bitmain’s mining hardware
   • Both parties will work with the local workforce commission MDD on project development and to grow its on-ground team at the facility; local suppliers will be looked towards as preferred vendors to support the ongoing construction of the data center
   • Bitmain is purchasing energy directly from the Electric Reliability Council of Texas, which operates the electric grid in Rockdale
   • Bitmain plans to work with the local school district to provide education and training on blockchain and mining data center operations 
3. BitcoinNews: The Number of Bitcoin ATMs Has Increased by 1,900 in the Past Year, a Jump of 50%
   • According to Coin ATM Radar, 1,900 bitcoin ATMs (BTMs) have been installed globally in the past year, representing 5 new BTMs installed daily and a +50% increase YoY 
   • This year’s top BTM manufacturers include CoinCloud with 374 ATMs, CoinFlip with 348 ATMs, Bitcoin Depot with 312 ATMs, Coinsource with 277 ATMs, Rockitcoin with 207 ATMs, Bitcoin of America with 204 ATMs, PayDepot with 184 ATMs, local coin with 169 ATMs, iQCashNow with 147 ATMs, and digital mint with 132 ATMs
   • North America currently leads the world with 76.3% of all BTMs (of which 64.5% is concentrated in the U.S.),  followed by Europe (19.7%), Asia (2.3%) and South America (1.1%)
4. The Block: HTC Launches Smartphone With Bitcoin Full Node Capabilities
   • HTC launched the EDOXUS 1s, a lower-cost version of HTC’s flagship HTC EXODUS 1, which has a built-in crypto wallet and the capability to run a BTC full node; units are available for order in Europe, Taiwan, Saudi Arabia, and the UAE
   • HTC Decentralized Chief Officer Phil Chen said, “EXODUS is about empowering the user. We gave users the ability to own their own keys, and now we’ve gone one step further to allow users to run their own full Bitcoin node. We are providing the tools for access to universal basic finance; the tools to have a metaphorical Swiss bank in your pocket. Full nodes are the most important ingredient in the resilience of the Bitcoin network and we have lowered the barrier to entry for any person to run a node, which is simply a computer, mobile in our case, participating in the global Bitcoin network that propagates transactions and blocks everywhere, which is the foundation and fundamental definition of a peer-to-peer cash system”
   • Link to coverage by Digital Trends
5. Ripple: Q3 2019 XRP Markets Report
   • Ripple sold $66.2M of XRP in 3Q, -73.7% lower than the record quarterly sale of  $251.5M in 2Q
   • XRP price declined -35.4% in 3Q, while the overall crypto market cap decreased -30.4% during the same period
   • XRP volume decreased -53% from $39.1B in 2Q to $18.2B in 3Q
   • 3B XRP (~$875,000,000) was released from escrow during 3Q, while 2.3B (~$670,000,000) were returned and put into new escrow contracts
6. Totle: Kraken’s Cryptowatch and Totle Partner to Unite Centralized and Decentralized Cryptocurrency Markets
   • Kraken’s Cryptowat.ch and Totle partnered to give users access to Totle’s DEX data on Cryptowatch’s UI and to allow users to execute crypto trading strategies on both centralized exchanges and DeFi applications from a single platform
   • Cryptowatch pulls pricing info from the Totle API to display real-time, on-chain trade data for top ERC-20 pairs across DEXs
   • Cryptowatch Founder Artur Sapek commented, “We’re excited to put a spotlight on the decentralized exchange ecosystem by integrating with Totle. DeFi has a lot of potential to continue pushing the world down the path that Bitcoin started and we think Totle is the perfect partner to work with in promoting it”
7. CoinDesk: CFTC Chair Says Ether Futures ‘Likely’ in 2020
   • CFTC Chair Heath Tarbert said he “absolutely” believes ETH futures could trade in the next 6-12 months, “The volume to which it’ll trade, no idea, that’s where the markets decide, but my guess is now that we’ve provided at least … a little bit more clarity on [ETH’s eligibility for futures], my guess is market participants will consider that”
   • Tarbert doesn’t know of any company that has applied to launch ETH futures, “My guess is that it will come soon but I don’t know where they’re coming from”; CFTC approval of ETH futures will depend on the application itself and firms can apply to self-certify or can have the CFTC go through the product and approve it (similar process as approving BTC futures)
   • He added, “[exchanges] could start it on their own or they could come to us with an application and ask us to grant it to be able to [offer the product]. Now in the past most people have not been self-certifying, they’ve been coming to us particularly if they’re creating an entirely new exchange and DCO [derivatives clearing organization] so it’ll depend I think in large part on who wants to have it on their trading platform. Is it one of our existing exchanges that’s been working with the CFTC for years or is it an entirely new platform that wants to specialize in it?”
   • The Chairman stated that there are ~4 dedicated crypto exchanges looking into derivatives products, as well as the larger firms that offer BTC futures
   • Tarbert said the CFTC may soon acknowledge other crypto as commodities, “There will be other derivatives coming soon to a market near you for crypto assets […] As the SEC sort of works through its process [and] we work through ours and other regulators, it’s likely we’ll see more but I can’t tell this audience that it’s necessarily coming soon because even the two that we thought about – bitcoin and ether – it took us quite some time to work through those”
   • He added that part of the process is working with the SEC, noting that under current federal law any instrument that isn’t a security is “most likely” a commodity (though exceptions apply, e.g., movie tickets), “What we’re seeing is that if the [SEC] has undertaken its analysis and comes to the conclusion that the particular crypto asset doesn’t meet the old Howey Test as to whether it’s an investment contract and therefore a security, in most cases it’s going to fall in [the commodities bucket]”
8. CoinDesk: Opera Browser Adds Bitcoin Payments to Android Update
   • Opera added BTC e-commerce and TRON integration to its Android web browser app, allowing android users to make BTC payments directly from its built-in digital wallet and interact with dApps on TRON 
   • Opera’s Head of Crypto Charles Hamel commented, “We believe that opening our browser to more blockchains, including Bitcoin, is the logical next step to making our solution more relevant to anyone who has a Bitcoin crypto wallet and would like to do things with their cryptocurrencies beyond just keeping them in an account”
   • Of the top-five browsers – Chrome, Safari, Samsung Internet, UC browser and Opera – Opera is the only one with an integrated digital wallet
9. Bloomberg: Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges
   • According to estimates from Skew and BitcoinTradeVolume.com, ~$5-10B worth of BTC derivatives have been traded globally on a daily basis since the start of 2019, exceeding BTC spot volume by 10-18x
   • Skew CEO Emmanuel Goh said, “The main use case around this product so far has been around speculation”
   • According to BitMex, traders have been looking for new ways to profit as BTC’s volatility has fallen to <2% a day lately
10. 7Bitcoins: Bitcoin Network Velocity Increased During the Past Months
    • Crypto analyst @100trillionUSD (PlanB) reported that the BTC network velocity (i.e., how actively each BTC moves in the blockchain expressed as UTXOs) has increased to an ATH of 764,007 UTXOs/day, according to data from their full node
    • On the other hand, Byte Tree CEO James Bennet argues that we’ve seen a decrease in the network velocity that caused the recent drop in BTC price, “Velocity has been slowing significantly over the past weeks as transaction volume moves over to stablecoins such as tether. Ultimately, this depressed demand for the bitcoin network has lead [sic] to this recent drop in price”; BTC takes up ~29% of all crypto trading, while USDT often exceeds a share of ~35%, according to CoinMarketCap
11. TrustNodes: Ethereum 2.0 Dev Says “Will Attempt Cross Client Testnet this Week”
    • Prysmatic Labs’ Preston Van Loon said Ethereum 2.0 devs plan to begin the process of launching a testnet this week, “We’re ready […] I just pinged other client teams and it seems they are just about ready with their ETH1 data functionality. We wrote up some documentation on our end so we will attempt cross client testnet in a complex environment this week”
    • Age Manning of Sigma Prime’s Lighthouse, an ETH 2.0 client, said, “By ‘the testnet’, I assume you are talking about a long lived public multi client testnet? If so, yes. We will be doing some internal multi client testnets before then”
12. Cointelegraph: New Bitcoin ETF Proposal Filed With SEC by Gold Fund Veteran
    • Kryptoin Investment Advisors applied with the SEC on Oct. 15 to launch a BTC ETF on the NYSE Arca, an ETF that is designed to “provide exposure to bitcoin at a price that is reflective of the actual bitcoin market where investors can purchase and sell Bitcoin, less the expenses of the Trust’s operations”
    • The company plans to hold BTC at an unspecified third-party insured custodian that is regulated under the Investment Advisers Act of 1940 and will value the shares of the trust according to the CME BTC Reference Rate
    • The Trust won’t purchase/sell BTC directly but will acquire BTC through shares called “baskets […] Instead, when it sells or redeems its Shares, it will do so in ‘in-kind’ transactions in blocks of 100,000 Shares called ‘Baskets’ at the Trust’s net asset value (‘NAV’). Only Authorized Purchasers may purchase or redeem Shares with the Trust, and they will do so by delivering bitcoin to the Trust in exchange for Shares when they purchase Shares”
    • The Head of ETP at Kryptoin is Jason Toussaint, former managing director at the World Gold Council and ex asset manager of SPDR Gold Shares, one of the world’s largest Gold ETFs
13. The Block: Zuckerberg Says Facebook Would Leave Libra if US Regulators Don’t Approve the Project
    • Facebook CEO Mark Zuckerberg testified before a U.S. House committee to address regulatory concerns around its planned Libra stablecoin
    • Zuckerberg said Facebook is willing to quit the Libra Association if the project moves forward without receiving full approval by U.S. regulators, “If I feel like Facebook can’t be a part of it, then Facebook won’t be a part of it”
    • Link to Zuckerberg’s testimony (PDF)
    • Link to coverage by CoinDesk & Cointelegraph
14. BBC: Facebook’s Partners Yet to Commit Money to Libra
    • Several sources familiar with the matter said the Libra Association’s 20 founding members (excluding Facebook) haven’t yet committed investment dollars to Libra
    • Libra Association member companies claimed they would likely invest in the project when asked, “Rather than collect a bunch of money from a bunch of people and then figure it out…the feeling is that we needed to form, ratify a budget, and then figure out how to fund that budget, rather than the other way around”
    • Notably, one source at a founding member company added, “We’ve seen Facebook start to move away from the Association a little bit, maybe, but it’s still a challenge for them, definitely”
15. Forbes Russia: TON Investors Agreed Not to Demand Back Money Invested in Durov’s Project
    • A majority of Telegram’s TON investors have allegedly refused Telegram’s offer to receive “approximately 77 percent” of their money, and therefore have agreed to wait for TON to launch on April 30, 2020
    • The Telegram-SEC case was scheduled to take place today, but has since been postponed until Feb. 18–19, 2020; Telegram views the postponement as a positive development, “We and our advisers will use the time to ensure that at the February hearing, the position of Telegram was presented and supported as much as possible”
16. The Block: 42% of Blockchain Industry Employees Work for Exchanges (Quick Take)
    • The Block analyzed the ~20,000 employees at 158 crypto/blockchain-related firms and found that +50 firms currently employ +100 people
    • The largest is Bitmain with 1,500 employees, followed by  Huobi (~1,300), Coinbase (~1,000), OKEx (~950), Kraken (~800), Binance (~650), and Ripple (450)
    • More than 42% of employees in the space work for crypto exchanges (i.e., ~7,700 work at 30 exchanges), 10% for mining hardware manufacturers, and another 10% for cryptocurrency foundations with Ripple, TRON, Block.one and IOHK being the largest employers in that sector
    • There are 11 “unicorns,” or firms worth +$1B, according to Hurun’s inaugural list of unicorns
    • Link to Cointelegraph’s report
17. CoinDesk: CFTC Makes Its Fintech, Blockchain Research Lab a Full-Fledged Office
    • The CFTC is upgrading LabCFTC, its FinTech research wing, to become its own independent office within the CFTC and will report directly to the agency’s chairman Heath Tarbert
    • Tarbert said, “In its new capacity, LabCFTC will continue to be focused on both internal and external innovation,” adding that this will include keeping CFTC employees up to date on new tech, adopting technological tools that the agency can use in its enforcement and anti-market manipulation missions, and continuing to gather input from industry participants
    • Tarbert added, “Our agency’s vision is to be the global standard for sound derivatives regulation […] I want the agency to be the resource for you to help identify ways those technologies could fit into the current regulatory structure. Now that LabCFTC’s success has been demonstrated, we want to solidify its position within the agency. Now it will take on an even bigger role here at the CFTC and be a critical link to innovators for years, and perhaps decades, to come”
18. SEC: U.S. Financial Regulatory Agencies Join the Global Financial Innovation Network
    • The CFTC, FDIC, OCC, and the SEC joined the Global Financial Innovation Network (GFIN), which includes 46 other financial authorities, central banks, and int’l organizations, to develop a “global sandbox” for financial innovations
    • The move aims to “enhance regulatory clarity and understanding for all stakeholders and promote early identification of emerging regulatory opportunities, challenges, and risks,” and to enhance the agencies’ abilities to encourage responsible innovation in the int’l financial services industry 
19. CoinDesk: Galaxy Digital to Launch 2 New Bitcoin Funds in November
    • Galaxy Digital Asset Management is allegedly launching two BTC funds in November to give accredited investors low-fee, institutionally managed BTC exposure and will make a seed investment into both funds, though it’s unclear how much Galaxy aims to raise for either fund
    • The Galaxy Bitcoin Fund will require a $25,000 minimum investment with optional quarterly redemptions, while the Galaxy Institutional Bitcoin Fund will allow weekly withdrawals and require minimums higher than $25,000—both will be passively managed and will offer custody, tax documentation, and client service support
20. Xihuanet: President Xi says China  Should ‘Seize Opportunity’ to Adopt Blockchain
    • Xi Jinping, President of China and General Secretary of the Communist Party of China, said the country needs to “seize the opportunity” afforded by blockchain because it has a wide array of applications ranging from financing businesses to mass transit and poverty alleviation, “We must take the blockchain as an important breakthrough for independent innovation of core technologies. [We must] clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation”
    • Xi added that it would be “necessary to implement the rule of law network” into existing and future blockchains, arguing for a top-down approach concerning implementation, calling for guidance and regulation
    • Blockchain testing should be widespread, including the investments in training platforms and “innovation teams” before implementation
    • Xi also called for the creation of “Blockchain+,” a platform alluding to personal development such as education, employment, food and medicinal safety, among others
    • Link to coverage by CoinDesk
21. @100trillionUSD: Bitcoin Transferred $11 Trillion Since 2009 (Misleading)
    • Twitter user @100trillionUSD posted stats from his BTC node that showed ~$11T in raw volume, or ~$9.6B per day, has been transferred on-chain since Bitcoin’s inception in 2009; however, this figure is misleading since it’s not adjusted for coinjoins/mixing, the “obvious change” heuristic, nor the “non-obvious” change heuristic
    • Glassnode’s Rafael Schultze-Kraft said “obvious change” occurs when “an address in the inputs of a transaction appears in the outputs of that transaction as well. The amount of that newly created UTXO (which belongs to an address of the sender) is discarded […]  Effectively, no funds were transferred to another address/entity. It’s just “change” that is returned to the sender (due to the atomic nature of UTXOs that have to be spent in their entirety)”; this is an obvious change because the address in the inputs appears in the output, however a “non-obvious change” occurs when a sender creates a new address to receive the change volume of that tx
    • If adjusting just by the “obvious change” heuristic, the daily mean this year is ~$5.3B, almost half of the raw volume
22. Finder: A Rising Number of Americans Own Crypto
    • According to a survey of 2,068 participants, the number of Americans who own crypto has increased by +81% in one year from 7.95% in 2018 to 14.4% in 2019; this means that roughly 36.5M Americans own crypto
    • Americans with crypto have an average $5,447 in coins, however ~3/4 respondents held less than this amount which is likely why the median was merely $360
    • 19% of men surveyed own crypto versus just 10% of women; of the estimated 36.5M American crypto owners, ~23.6M are speculated to be men and ~12.9M to be women
    • 55.4% of American BTC owners also invested in another form of crypto
    • 61% of respondents that own crypto (~22.3M Americans) use it as a form of investment, 29.3% (~10.7M) use it for tx payments, and 25.6% (~9.3M) use it to store their savings outside of traditional banks, and 18.2% (~6.6M) use it to send money overseas those surveyed saying it’s the reason they own coins
    • 47.9% respondents (~103.4M Americans) say crypto is too complicated or difficult to understand, while people who closely follow crypto say they either aren’t interested (45%) or think crypto is too much of a risk (23%)
23. Bloomberg: Controversial Crypto Coin Tether Gains Popularity at Gambling Sites, Pot Shops
    • CoinPayments.net, one of the largest crypto payments processors with ~2.4M vendors, now sees USDT account for ~30% of its volume, up ~30x since last year; BTC’s share of payment volume has fallen to ~60% from ~ 80% last year, while ETH has dropped behind USDT to third place
    • CoinPayments Operations Lead Sean Mackay said, “Merchants used to accept Bitcoin, Ethereum, Ripple and convert it into Tether in order to hedge against the volatility. Now we are seeing the payments just being done directly in Tether”
    • At B2BinPay, USDT has grown to ~20% of txs that originate from both customers and merchants, while it was less than 10% a year ago
    • Store directory Cryptwerk lists 265 companies that accept USDT for payment directly
    • USDT is purportedly gaining traction among merchants that may have trouble getting credit-card processing services, or are charged high card processing fees, such as adult and online gambling sites, and vaping and cannabis shops
    • On Jan. 1, 2020, California Bill 953 will come into effect and will allow cannabis-related firms to pay taxes in stablecoins
    • USDT market cap more than doubled from ~$2B a year ago to ~$4.12B today, according to CoinMarketCap
    • Link to coverage by Cointelegraph
24. WEF: Seven Mining, Metals Companies Partner on Responsible Sourcing with World Economic Forum
    • The World Economic Forum (WEF) launched the Mining and Metals Blockchain Initiative that will experiment, design and deploy blockchain solutions to speed up responsible sourcing of metals, addressing issues such as transparency, the tracking and tracing of materials, and the reporting of carbon emissions
    • Seven mining and metals companies – Antofagasta Minerals (Chile), Eurasian Resources Group Sàrl (Luxembourg), Glencore (Switzerland), Klöckner & Co (Germany), Minsur SA (Peru), Tata Steel (India) and Anglo American/De Beers/Tracr (UK) – joined the WEF as founding members of the initiative, “The group will look to develop joint proof-of-concepts for an inclusive blockchain platform. Over time, this could help the industry collectively increase transparency, efficiency or improve reporting of carbon emissions”
    • The WEF stated that many blockchain projects that support responsible sourcing have been bilateral and lack interoperability, adding that initiative aims to resolve those issues

DISCLAIMER

The information in this report is provided by, and is the sole opinion of, Kraken’s research desk. The information is provided as general market commentary and should not be the basis for making investment decisions or be construed as investment advice with respect to any digital asset or the issuers thereof. Trading digital assets involves significant risk. Any person considering trading digital assets should seek independent advice on the suitability of any particular digital asset. Kraken does not guarantee the accuracy or completeness of the information provided in this report, does not control, endorse or adopt any third party content, and accepts no liability of any kind arising from the use of any information contained in the report, including without limitation, any loss of profit. Kraken expressly disclaims all warranties of accuracy, completeness, merchantability or fitness for a particular purpose with respect to the information in this report. Kraken shall not be responsible for any risks associated with accessing third party websites, including the use of hyperlinks. All market prices, data and other information are based upon selected public market data, reflect prevailing conditions, and research’s views as of this date, all of which are subject to change without notice. This report has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Kraken and its affiliates hold positions in digital assets and may now or in the future hold a position in the subject of this research. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of, or located in a jurisdiction where such distribution or use would be contrary to applicable law or that would subject Kraken and/or its affiliates to any registration or licensing requirement. The digital assets described herein may or may not be eligible for sale in all jurisdictions.