Posted on Leave a comment

Australian Bitcoin Trader Takes Banks to Tribunal After Sudden Account Closures

The trader had operated a registered digital currency exchange, but said he was unable to continue operating without banking services.

ANZ bank sign
(TK Kurikawa/Shutterstock)

Jan 18, 2021 at 12:05 p.m. UTC

A cryptocurrency trader in Australia is seeking 250,000 Australian dollars (US$192,000) in compensation from two banks claiming he was the victim of unlawful discrimination when his accounts were closed with little warning.

  • Allan Flynn has started proceedings against Westpac and ANZ banks at the ACT Civil and Administrative Tribunal which closed his accounts soon after they had been opened, reports the Australian Financial Review.
  • Flynn had operated a digital currency exchange registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), but said he was unable to continue operating without banking services.
  • The trader said he purchased bitcoin on behalf of 450 customers via his business, but over three years had around 20 accounts closed by banks also including CBA, NAB, ING and Bendigo Bank.
  • Westpac reportedly told Flynn his account was closed because it was “under investigation for cryptocurrency fraud.”
  • “How am I supposed to run a lawful business if I can’t get a bank account?” Flynn told the Australian Financial Review.
  • According to the report, he also claimed an ANZ employee had informed other banks and his customers that he was involved in fraud.
  • The trader said he considering raising his compensation request from $250,000 with the recent jump in the price of cryptocurrencies.

Read more: Australian Central Bank Sees ‘No Strong Public Policy Case’ for CBDC

Read more about…

AustraliaBanksBitcoin TradersCoinFlash

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on Leave a comment

Bitcoin Struggles to Recover After Biggest Weekly Price Loss Since September

Prices fell by 6% in the seven days to Jan. 17, a weekly fall not seen since the first week of September.

Bitcoin prices for the last week
(CoinDesk 20)

Jan 18, 2021 at 11:14 a.m. UTCUpdated Jan 18, 2021 at 11:17 a.m. UTC

Bitcoin is up only slightly on Monday after seeing its biggest weekly decline in over four months.

At press time, the cryptocurrency is trading 0.2% higher on the day near $35,838, according to CoinDesk 20 data. Prices fell by 6% in the seven days to Jan. 17, a weekly fall not seen since the first week of September.

Bitcoin took a beating a week ago, falling from $40,000 to $30,305 in a matter of few hours, mainly due to heavy selling in the spot market. The cryptocurrency spent the rest of the week trimming losses and tested $40,000 at one point before ending the week (Sunday, UTC) just under $36,000.

Bitcoin weekly chart
Source: TradingView

The quick recovery from $30,305 amid the continued accumulation by whales paints a bullish longer-term picture. The options market is also biased bullish, with the Jan. 29 $52,000 call option attracting good demand in the past few days.

However, it may be too early to call an end of the bull market correction, as the cryptocurrency is still trapped in a narrowing price range or triangle pattern on the hourly chart, according to Parick Heusser, head of trading at Swiss-based Crypto Finance AG.

Bitcoin hourly chart
Source: TradingView, Patrick Heusser

A move above the top end of the triangle pattern would confirm a breakout and imply a continuation of the broader uptrend.

However, as per Heusser, a rally to a fresh all-time high above $41,962 would be more credible evidence of a bull revival. That hinges on the pace of institutional inflows, strategists at JPMorgan said in a note Friday.

“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout [above $40,000] to occur,” the strategists wrote.

The Grayscale Bitcoin Trust (GBTC), the biggest publicly traded crypto investment trust, reopened last Tuesday after a month-long break. Since then, the trust has accumulated at least 4,700 BTC, according to the Twitter-based GBTC Bitcoin Tracker. If accurate, that’s $171 million-worth of purchases in six days – significantly less than JPMorgan’s required daily average of $100 million.

Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.

Global stock markets are trading on a weak note on Monday, while the U.S. dollar is gaining ground against major currencies. The stronger greenback could hurt bitcoin’s price, as discussed last week.

A potential triangle breakdown could pave the way for a re-test of the last week’s low of $30,305. According to trader and analyst Nick Cote, $28,500 is key support, which, if breached, could invite intense selling pressure.

Also read: Crypto Long & Short: No, Bitcoin Is Not in a Bubble

Read more about…

BitcoinMarkets

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on Leave a comment

Chainlink surpasses Bitcoin Cash making LINK the 8th largest cryptocurrency

Chainlink (LINK), the oracle-focused blockchain protocol, surpassed Bitcoin Cash (BCH) to become the eighth-biggest cryptocurrency as of Jan. 18.

The market capitalization of Chainlink now hovers at $9 billion and roughly $500 million away from the next biggest crypto asset, Litecoin (LTC).

LINKUSDT 1-day price chart (Binance). Source: TradingView.com

Why is Chainlink surging so rapidly?

The price of Chainlink rose by 13% in the last 24 hours and the momentum of LINK likely comes from the positive sentiment around DeFi.

The DeFi market as a whole has been rallying strongly throughout recent months with AAVE and SUHI being the most recent standouts. The uptrend can be attributed to the fast-growing metric called total value locked (TVL), which measures the amount of capital deployed across DeFi protocols.

As of January 18, the TVL across DeFi protocols is estimated to be around $24 billion and it is still rapidly growing.

image
Total value locked in DeFi. Source: Digital Assets Data

Chainlink benefits from the growth of the DeFi space because oracles feed DeFi protocols with crucial market data.

When DeFi protocols, such as lending platforms or exchanges, fetch price data, they get it from oracles like Chainlink and Band Protocol.

As such, when there are generally more users in the DeFi market, oracles benefit from the increasing TVL of the DeFi market.

Where does LINK go next?

On-chain analysts at Santiment found that dormant tokens are continuing to move. This trend has further fueled the bull trend of various cryptocurrencies, including Bitcoin, Ether and LINK. They said:

“Dormant tokens continue to be moved at rapid rates during this #crypto bull run, and dips in our ‘Mean Dollar Invested Age’ metric indicate the increased rate of $BTC, $ETH, $LINK, $LTC, and particularly $REN (which triggered its massive +60% week).”

With LINK surpassing an all-time high, it is now technically in “price discovery.” In technical analysis, price discovery happens when the value of an asset exceeds its record-high and begins searching for a new ceiling.

In addition to the positive technicals of Chainlink, the oracle provider also does not have many competitors apart from Band Protocol, which is based on the Cosmos blockchain network.

The network effect of Chainlink would likely act as another catalyst in the foreseeable future, especially as Ethereum (ETH) continues to dominate the DeFi space.

Posted on Leave a comment

Bitcoin meets Biden: 5 things to watch for BTC price this week

Bitcoin (BTC) is back in familiar territory as the week begins after a weekend spent ranging in its new, albeit large, trading corridor above $30,000.

With the United States presidential inauguration just days away, Cointelegraph takes a look at what else may be able to shake up BTC price action.

DXY keeps reversing losses

The inauguration of President-elect Joe Biden comes as the strength of the U.S. dollar continues to rebound.

On Monday, the U.S. dollar currency index (DXY), which measures USD relative to a basket of major trading partner currencies, hit its highest level since Dec. 21.

The sustained upside in DXY tends to mean that Bitcoin growth takes a breather, this inverse correlation forming a conspicuous pattern throughout 2020. In the event, BTC/USD had little to lose during the latest gains, the majority of which were preserved despite huge volatility.

DXY was likewise unfazed by Biden’s decision to spend another $1.9 trillion in debt-financed coronavirus support, something that was described last week as “another multi trillion dollar advertisement for Bitcoin” by Gemini exchange co-founder, Tyler Winklevoss.

As Cointelegraph reported, however, analysts still favor dollar weakness to continue in the long term. Even traditional market participants continued to eye the extent of USD supply increases, a move which has shocked many into considering Bitcoin as an alternative store of value.

“A currency market isn’t different from any other market,” William Dinning, chief investment officer of U.K. fund manager Waverton Asset Management, told the Wall Street Journal over the weekend.

“If there’s a lot of potatoes available, it’s going to be cheaper. If there’s a lot of dollars available, it’s going to be weak.”

Nonetheless, incoming Treasury Secretary Janet Biden has said that the U.S. will not deliberately aim to maintain a weak dollar for the benefit of trade advantages.

image
U.S. dollar currency index 1-day candle chart. Source: TradingView

Stocks need a rest, says analyst

On the markets, stocks showed indecisiveness as the week got underway, having calmed down from Biden’s announcement.

Asia saw mixed performance, and with Wall Street still to open at press time, U.S. futures were just a tad higher from Friday.

The lackluster gains were curious for some, coming despite the fact that China had delivered Q4 economic growth statistics which dwarfed any expectations. As Bloomberg reported, the world’s second-largest economy grew 6.5% during the quarter, making it the only major economy to avoid a coronavirus contraction last year.

“Markets needed a breather or even a pull back to justify reflationary expectations,” Ben Emons, managing director of global macro strategy at Medley Global Advisors, explained to the publication.

As Cointelegraph reported, Bitcoin continues to outpace any traditional assets in terms of gains in 2021, with correlation trending further and further towards zero for both stocks and safe havens such as precious metals.

image
Bitcoin rolling 90-day returns correlation. Source: Digital Assets Data

Spotlight on “Altseason”

Also taking a breather in recent days is Bitcoin itself. After weeks of intensely volatile trading conditions, investors were treated to a quiet weekend, which also came as a welcome surprise to exchanges.

Previously, U.S. platforms Coinbase and Kraken had suffered outages at critical price points, and fellow trading platform eToro last week warned that it may have to limit Bitcoin buy orders should the weekend produce fresh volatility.

In the event, things were much quieter than anticipated, thanks to BTC/USD remaining rangebound with no real changes up or down.

As Cointelegraph Markets analyst Michael van de Poppe noted, attention was instead beginning to refocus away from Bitcoin towards altcoins.

In a tweet on Monday, he reiterated the narrative that other cryptocurrencies would begin to take the limelight in the short and mid term. He summarized:

“Most likely going to occur at this point is the following. Relief rallies all across the #altcoin markets. FOMO on altcoins. #Bitcoin corrects one more time -> altcoins making HL and retesting.

A glance at the rankings confirmed the beginning of what is popularly called “Altseason,” with five of the top 100 cryptocurrencies by market cap posting daily gains of more than 20%. In terms of weekly performance, seven tokens were up by more than 100%.

Ether (ETH), the largest altcoin, was itself heading towards all-time highs, climbing past $1,200 again after a dip which saw it at one point lose $1,000 support.

With that, Bitcoin’s market cap dominance was slipping further on Monday, reaching 66.3% compared to 69.5% at the start of the year.

image
Bitcoin market cap dominance percentage. Source: Tradingview

Price action leaves all-time highs untouched

For the spot market, Bitcoin was steadily decreasing volatility as the week began. The past three days saw a narrowing of the trading range within the $30,000-$40,000 corridor, with a pattern of lower highs and higher lows known as compression taking over.

As Van de Poppe noted last week, this is a welcome sign which gives the market time to recoup the strength required for an ultimate breakout of the compression structure. In Bitcoin’s case, this should result in a push towards or even through current all-time highs of $42,000.

image
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Considering the longer term, meanwhile, he forecast that in this bull cycle, Bitcoin would reach between $275,000 and $350,000. For Ether, the top lay between $7,500 and $12,500, he told Twitter followers on Friday.

For fellow analyst filbfilb, meanwhile, there was still a way to go before any form of significant upwards volatility returned to Bitcoin.

“Interesting fractal going on here. Turn break 40k and turn into support and its a full moon mission,” he summarized to subscribers of his dedicated Telegram channel, highlighting a chart structure which may allow a trip to the top of the trading corridor.

“If the fractal plays out we might pump it to 40k and then retrace. Break the diag and turn it to resistance and maybe we need to play about more in this range.”

Fundamentals hit new record highs

Finally, a familiar bull signal returned to investors’ radar in recent days. A classic sign that further upside is in store for price, Bitcoin’s network fundamentals hit fresh all-time highs.

image
Bitcoin hash rate and difficulty. Source: Digital Assets Data

For hash rate, which gives an estimate of the computing power dedicated to the Bitcoin blockchain, this came in the form of 155 exahashes per second (EH/s) on Sunday.

The metric has been on a near-constant ascent since the end of December, adding 25 EH/s in just two weeks.

Just as bullish was difficulty, arguably the most important fundamental metric for Bitcoin, as it offers an insight into miner health and competitiveness.

After a 10.8% increase at the last automated readjustment on Jan. 9, difficulty hit a new record high of 20,607,418,304,385. The next readjustment, due in four days’ time, will add another 6%, current estimates say.

Sustained upside for both indicators has traditionally been associated with price gains, these occurring after a grace period which can last up to several months.

Posted on Leave a comment

Bitcoin Price Battles for $36K As Market Cap Reclaims $1 Trillion (Market Watch)

BTC’s somewhat adverse weekend ended with the asset bottoming below $34,000, but bitcoin has bounced off since then and topped $36,000. New all-time highs for Binance Coin and Chainlink have helped the market cap to conquer the coveted $1 trillion level again.

Bitcoin Tops $36K

The primary cryptocurrency was riding high above $38,000 before the weekend, but the bears didn’t allow any further increases. Just the opposite, they drove BTC’s price south on a few occasions.

The asset dipped to $34,500 before recovering rather quickly to $38,000. However, bitcoin failed to maintain its price at such a high level and dumped once again. This time, it bottomed below $34,000 (on Bitstamp).

Nevertheless, the cryptocurrency has regained some traction since then and currently trades above $36,000. This was the first major resistance level in BTC’s way up, according to the technical aspects.

The following obstacles are situated at $36,700, $38,000, $39,700, and $40,000. Alternatively, BTC could rely on the support levels at $34,800, $34,000, and $33,130 if another retracement arrives.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

New ATHs For BNB And Link

Most large-cap altcoins have remained relatively steady on a 24-hour scale. Ethereum, Ripple, Bitcoin Cash, Polkadot, Cardano, and Stellar have shown little-to-no movements. As a result, ETH is at $1,220, XRP – $0.28, BCH – $480, DOT – $17.5, ADA – $0.38, and XLM – $0.3.

However, Chainlink and Binance Coin have stolen the show with massive gains and new records. LINK has exploded by almost 10% and painted a new all-time high above $23 earlier today.

Just a day after Binance announced the 14th token burn, the native cryptocurrency of the leading exchange went for a new record of nearly $47.

Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto

Further gains are evident from lower- and mid-cap altcoins. The Graph leads the way with a 40% surge. Aragon (37%), Horizen (34%), OMG Network (33%), Kusama (30%), Waves (28%), Curve DAO Token (20%), Ocean Protocol (18%), Voyager Token (15%), Solana (13%), and Yearn.Finance (12%) follow.

More impressive is what happened to the DeFi space in the past couple of days. Since January 16th, the total value locked in various protocols increased by about 10% and currently sits above $24 billion. Over the past 24 hours, numerous tokens have charted massive increases. Apart from the ones included above, some of the other ones include the first version of YAM which is up by almost 100%, Swerve’s SWRV is up by 75%, and CREAM – by more than 30%.

Overall, the crypto market cap has overcome the $1 trillion mark after dipping to $960 billion yesterday.

Posted on Leave a comment

Bitcoin Price Battles for $36K As Market Cap Reclaims $1 Trillion (Market Watch)

BTC’s somewhat adverse weekend ended with the asset bottoming below $34,000, but bitcoin has bounced off since then and topped $36,000. New all-time highs for Binance Coin and Chainlink have helped the market cap to conquer the coveted $1 trillion level again.

Bitcoin Tops $36K

The primary cryptocurrency was riding high above $38,000 before the weekend, but the bears didn’t allow any further increases. Just the opposite, they drove BTC’s price south on a few occasions.

The asset dipped to $34,500 before recovering rather quickly to $38,000. However, bitcoin failed to maintain its price at such a high level and dumped once again. This time, it bottomed below $34,000 (on Bitstamp).

Nevertheless, the cryptocurrency has regained some traction since then and currently trades above $36,000. This was the first major resistance level in BTC’s way up, according to the technical aspects.

The following obstacles are situated at $36,700, $38,000, $39,700, and $40,000. Alternatively, BTC could rely on the support levels at $34,800, $34,000, and $33,130 if another retracement arrives.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

New ATHs For BNB And Link

Most large-cap altcoins have remained relatively steady on a 24-hour scale. Ethereum, Ripple, Bitcoin Cash, Polkadot, Cardano, and Stellar have shown little-to-no movements. As a result, ETH is at $1,220, XRP – $0.28, BCH – $480, DOT – $17.5, ADA – $0.38, and XLM – $0.3.

However, Chainlink and Binance Coin have stolen the show with massive gains and new records. LINK has exploded by almost 10% and painted a new all-time high above $23 earlier today.

Just a day after Binance announced the 14th token burn, the native cryptocurrency of the leading exchange went for a new record of nearly $47.

Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto

Further gains are evident from lower- and mid-cap altcoins. The Graph leads the way with a 40% surge. Aragon (37%), Horizen (34%), OMG Network (33%), Kusama (30%), Waves (28%), Curve DAO Token (20%), Ocean Protocol (18%), Voyager Token (15%), Solana (13%), and Yearn.Finance (12%) follow.

More impressive is what happened to the DeFi space in the past couple of days. Since January 16th, the total value locked in various protocols increased by about 10% and currently sits above $24 billion. Over the past 24 hours, numerous tokens have charted massive increases. Apart from the ones included above, some of the other ones include the first version of YAM which is up by almost 100%, Swerve’s SWRV is up by 75%, and CREAM – by more than 30%.

Overall, the crypto market cap has overcome the $1 trillion mark after dipping to $960 billion yesterday.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO35 code to get 35% free bonus on any deposit up to 1 BTC.

Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


About The Author

Jordan Lyanchev

Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn

Posted on Leave a comment

Iran Reportedly Seizes 45K Bitcoin Mining Machines After Closure of Illegal Operations

The mostly ASIC devices used to mine bitcoin are said to have been consuming 95 megawatts per hour of electricity at a reduced rate.

Tehran, Iran
(vanchai tan/Shutterstock)

Jan 18, 2021 at 8:37 a.m. UTC

Authorities in Iran have seized tens of thousands of bitcoin mining machines claimed to be using illegally subsidized electricity from state-run energy provider Tavanir.

  • According to a report by local media outlet Tasmin News Agency on Sunday, 45,000 mostly powerful application-specific integrated circuit (ASIC) machines were confiscated.
  • The machines had purportedly been consuming 95 megawatts per hour of electricity at a reduced rate, according to Tavanir’s head Mohammad Hassan Motavalizadeh.
  • Earlier this month, Iranian authorities shut down 1,620 illegal cryptocurrency mining farms said to have collectively used 250 megawatts of electricity over the past 18 months, per a different news source.
  • The country’s recent blackouts across major cities have been in part blamed on cryptocurrency mining, drawing the ire of officials who have sought a temporary stay on bitcoin mining until further notice.
  • Cryptocurrency researcher Ziya Sadr told the Washington Post on Sunday miners had “nothing to do with the blackouts” claiming they only made up a “very small” percentage of overall electricity capacity in the country.
  • In July of last year, Iran penned a registration directive forcing miners to disclose their identities. It also forced them to disclose the size of their mining farms and their mining equipment type with the Ministry of Industry, Mines and Trade.

See also: Iran Amends Law to Allow Imports to Be Funded With Cryptocurrency

Read more about…

Bitcoin MiningIranCoinFlash

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on Leave a comment

Bitcoin gets physical: Art or digital heresy?

Since 2011, a group of enthusiasts and collectors have been obsessed with the physical manifestation of Bitcoin.

On the face of it, physical Bitcoin seems like a contradiction to the key terms that define it, so a trustless, instantly transferable virtual currency becomes a real world coin that has all the disadvantages of Earth-bound cash. But there are numerous advantages too when it comes to privacy, storage and ease of use — and they look pretty cool too.

“A lot of people know about Bitcoin, but very few people actually own Bitcoin. Even fewer own physical Bitcoin,” explains Bobby Lee, who has owned a 10 BTC coin since 2011 and designed and produced his own coins under the BTCC Mint brand until 2018. He added:

“Physical Bitcoins are a rarity, they’re sort of like Picasso and Van Gogh paintings were back in those days. Nobody realized how rare they were. I expect these physical Bitcoins will gain in popularity and appreciation by connoisseurs worldwide.”

Physical Bitcoin typically comes in the form of metal coins, with the private key hidden behind a tamper proof holographic sticker Although highly prized by collectors, Lee said the coins are also practical too.

“The reality is that it’s impossible for me to send people Bitcoin if they’re new to Bitcoin,” he said, referring to digital Bitcoin’s steep learning curve to set up wallets and seed phrases. “Physical Bitcoin, there’s no permission needed, I just hand it to them. Recently my cousin got married in Toronto Canada, and I was able to give them some Bitcoin as a gift and they didn’t need to set up a wallet, I just mailed it to them.”

A piece of history

For ‘cryptonumist’ Elias Ahonen, author of the Encyclopedia of Physical Bitcoins and Crypto-Currencies, physical Bitcoin is also a marker of history. “These coins are the physical manifestation, or artefacts, of Bitcoin in every technical phase,” he says. “Anything that happened with miners from the early Bitcoin era we can’t really point to, but these physical coins we can and collectors find that personally meaningful and also something worth preserving.”

Ahonen was a first year political science student at Wilfred Laurier University in Waterloo when he first became interested in Bitcoin.

“I had just bought my first Bitcoin on an exchange and not being technically sound, I was convinced I was going to lose my private key to the wallet and get locked out of my Bitcoin,” he said: “So I decided instead to buy the physical Bitcoins which held the private key inside of them.”

This turned out to be a wise move as he did indeed lose access to his original wallet ,fortunately with less than 1 BTC in it. And of course it led to a whole new career as a Bitcoin historian and coin broker. “It’s taken me around the world on all kinds of adventures where I pick up half a million dollars’ worth of coins at an airport coffee shop,” he said.

Physical Bitcoin
Physical Bitcoin seems like a contradiction in terms. (Wikipedia)

Multi billion dollar industry

Precise figures for the size of the industry are hard to come by, but almost $3.25 billion dollars worth of Bitcoin (at today’s prices) was minted under the original ‘Casascius’ coin brand between 2011 and 2013. More than 1.5 billion worth (or 44,000 BTC) remains unspent and out in the wild.

One of the most valuable is the 1000 BTC coin, three of which remain unopened out of the five minted. “It’s actually the most valuable coin in the world,” said Ahonen. Worth $35 million on face value alone today, it’d fetch considerably more as an ultra-rare collectible. That puts it ahead of its nearest mainstream rival, the ‘Flowing Hair Silver/Copper Dollar‘ from 1794 which last sold for $10 Million in 2013.

Right now you can snap up a 1 BTC Casascius coin from 2011 on eBay for $130,000. If your budget doesn’t stretch that far, there’s a 0.5 BTC coin from 2013 that’s a steal at only $30,000 – and there’s even an unfunded 1 BTC coin from BTCC Mint on sale for $4900. On Crypto De Change, they’re offering a 1 BTC ‘Titan One’ silver coin for just $15,100 (sadly, when you try to buy it you just get a 404 error).

Titan One silver coin
This Titan One silver coin contains one BTC and is listed for $15K. Bargain! (cryptodechange.com)

Dim dark days of 2011

Physical Bitcoin traces its history back to 2011 when Utah computer scientist and Bitcoin contributor Mike Caldwell came up with the idea as an educational tool. “Bitcoin was very difficult to explain and in 2013 the average person simply could not get their head around it,” explains Ahonen, adding:

“The idea was that by taking this physical coin, and actually putting the Bitcoin inside of it, you could make a demonstration and say, look here’s a Bitcoin, I’m giving to you and now that you have it, I don’t control it.”

Caldwell’s first plan was to print out the private key to 1 BTC on a bit of paper, stick it in the middle of a washer, and seal both sides with tamper proof stickers. He quickly abandoned this in favour of something a little more high end, contracting a company that made brass tokens for amusement arcades to produce thousands of beautiful Casascius coins. They feature the Bitcoin logo, year and denomination, along with the slogan Vires In Numeris or ‘Strength in Numbers’.

The coins became popular and Caldwell introduced 5, 10, and 25 BTC coins, followed by gold plated bars with 100, 500 and 1000 BTC. As Bitcoin’s price surged in 2013, smaller denominations below 1 BTC began to appear.

“Crypto enthusiasts would buy these physical Bitcoins from Casascius and give them to friends and family as gifts,” recalls Lee, who’s brother Charlie is the founder of Litecoin. “And that’s precisely what my brother did.”

“That December (2011) he gifted me a 10 Bitcoin and paid about $50 for it. So it was relatively inexpensive. Obviously it’s now worth $100,000.”

By 2013 Caldwell had sealed 90,683.9 Bitcoin into metal coins — around half of which remain unspent in the form of 21,000 or so physical coins.

“It was very much a hobby, I don’t think he ever made any money, or any significant amount of money selling those,” says Ahonen. “Frankly, he took a huge amount of personal risk by basically handling the private keys. He was actually concerned that someone would come and hurt him (to steal them).”

Casascius coins
Casascius physical Bitcoins are the most highly prized.

The Feds object

The whole exercise came to a shuddering halt in 2013 when the Financial Crimes Enforcement Network contacted Caldwell to accuse him of operating an illegal money transmitting business, and he was forced to wind it up.

“It put a damper onto the physical Bitcoin thing,” Ahonen said. “That’s where the rise of these buyer funded coins really came from and also other larger companies that actually have money transmitter licenses.”

A raft of different manufacturers, from boutique artisans to big companies, sprang up in its wake, producing not only Bitcoin but also Litecoin, Dogecoin and Ethereum among others. They included bhCoin, Lealana, Microsoul, Nasty Mining, Recalescence Coins, Ravenbit, Alitin Mint, Cryptmint, Titan Bitcoin and Satori Coin. Ahonen detailed the works of 50 different outfits in his 286 page encyclopedia in 2015, and leveraged the contacts he made writing it to produce a new book called Blockland.

Bobby Lee’s BTCC Mint

The BTCC Mint was an offshoot of Lee’s exchange, BTCC and produced some of the most sought after physical Bitcoin until the company changed hands in 2018. Lee designed the coins himself — “I see myself as an artist having created BTCC Bitcoin” — with the first coins released in early 2016.

“The idea was to take advantage of our BTCC Mining Pool, to mine fresh uncirculated coins into the physical Bitcoins. Over the three years we ran the BTCC Mint business, we minted over 8,700 BTC worth of physical Bitcoins.”

Lee and a select group of highly trusted team members inserted the private keys into the coins by hand. He added:

“I handled the private keys with extreme caution, and have properly deleted all private key data, so naturally, there have been no reports of funds lost or stolen from any BTCC Mint products. I’m most proud of that pristine track record.”

This touches upon one counterintuitive aspect of physical Bitcoin — it breaks the crypto commandment of: ‘don’t trust, verify’. Ahonen points out that purchasers need to completely trust the manufacturer and everyone in the production process as it’s impossible to tell if the coin even contains a private key, or if it does, if the manufacturer kept a copy.

“Bitcoin comes from a specific type of philosophy, which is around not your keys, not your Bitcoin. It very much goes against the concept of trusting other people. But with any type of physical Bitcoin, you effectively are trusting the person created to not have the private key. So there is this implicit paradox.”

Symbols of wealth

While BTCC Mint coins featured a Bitcoin logo and the slogan “In Crypto We Trust”, other coins featured artwork that attempted to capture the philosophy behind cryptocurrency. “I would say that with some there’s a very stark, very clear symbolism, which is very philosophical,” explains Ahonen. “With others, it will clearly be something more difficult to decipher and may be personal to the creator.”

There are plenty of circuit boards, bulls and rockets going to the moon, as well as mining pools, Greco Roman warriors, Buddhist imagery, famous figures like Adam Smith and Satoshi Nakamato and historic events like the collapse of Mt Gox and Bitcoin Pizza. “For me personally, the most striking had a burning bank that was on fire,” Ahonen said: “And the bankers were kind of crying on the steps as people were pulling down the pillars of the bank using chains which obviously represent blockchain.”

Physical Bitcoin art
This coin leans pretty heavily on Bitcoiner ideology. (Elias Ahonen)

Not just keepsakes

Apart from collecting, there are a couple of real world uses for physical Bitcoin too. One is for inheritance planning. “Several of my buyers actually have been looking for physical Bitcoin because they want to put them in a safe deposit box for the purposes of inheritance,” he said: “They have got 100 individual coins, and will split them up with the kids evenly – which is much harder if you have exchange accounts or (have BTC) on wallets or USB sticks.”

Physical coins are also the ultimate privacy coins as there’s nothing to associate the owner with an address and they can be traded a million times without ever leaving a record on the blockchain. Theoretically of course, this would make physical Bitcoin a very attractive way to launder money or pay for drug deals, hence the interest from the U.S authorities.

“I don’t know of anyone specifically using it that way,” Ahonen said carefully. “But you could very easily imagine someone using that way, it’s extremely plausible.” He went on to add: “It’s the same as having gold coins. You can hide them, you can do anything with them. No one can really track them.”

Where did all the manufacturers go?

Sadly, physical Bitcoin’s best days appear to be behind it, with one of the last commercial scale manufacturers, Denarium, closing down in July 2020 after producing more than 15,000 coins. Lee believes that increasing regulations and the sky high Bitcoin price have made the logistics more difficult.

“You can’t sell physical Bitcoins in the U.S. due to regulations and as Bitcoin gets very expensive, it’s very cumbersome to ship in the mail,” he said. “There’s lots of inherent risks, insurance needs and so on.”

Ahonen added that there are still numerous hobbyists doing it as a labor of love or as a side project: “It’s a niche thing, but they do exist.”

Ballet wallet
The Ballet wallet is designed to appeal to your senses. (balletcrypto.com)

Lee’s Ballet Wallet is probably the closest living relative — it’s a metal card with a QR code address and a scratch off wallet passphrase. Able to be used by complete noobs with zero technical knowledge, the wallets support 50 cryptocurrencies and more than $28 million worth of cryptocurrency is currently held on them.

“The inspiration for Ballet came in large part from how much customers loved the simple design of the BTCC Mint physical bitcoins,” he said. Lee designed it to appeal to our different senses, you can feel the design as it’s in relief and there’s a real heft to it as opposed to a plastic credit card.

“You can also hear it. I mean literally if you tap on the table that’s the sound of Bitcoin. And we have a surprise feature where if you actually scratch the QR code you can smell it.”

He scratches it off an empty wallet and holds it up to my nose. It smells like perfume. But don’t bother licking it though, as Lee didn’t come up with anything for taste.

Bank on the future

While the heyday of physical cryptocurrency appears to have passed for now, what about the future? Is there any chance that after Bitcoin becomes the world’s reserve asset that we’ll see 100 Satoshi notes being used for everyday purchases?

Lee thinks this isn’t likely, due to the need for trust:”So that’s why it’s not very feasible to have real Bitcoin embedded in physical form and go for 100 satoshi (coins) circulating in the real world. I think physical Bitcoin will remain in the art, limited edition … collector’s world, just like gold coins.”

But Ahonen sees a future for physical Bitcoin outside of art and collecting: “I do believe that there’s a future for physical Bitcoins simply because they’re such a simple way to hold and verify through the use of an intermediary.” He added:

“I mean, grandma can buy it and put it in her safe deposit box. It’s not necessarily as feasible to do that with a USB stick with whatever program that gets outdated. It’s fairly future proof and fairly idiot proof. And I could see banks, or some sort of institutions creating some sort of physical Bitcoins in the future.”