News Updates December 08, 2022

1. Bitcoin Expected to Surge Vs. Tesla, Here’s Why: Bloomberg’s Mike McGlone.

Mike McGlone, senior strategist of Bloomberg Intelligence, has taken to Twitter to share an extract from a recent Bloomberg report, which mentions Bitcoin and TSLA, as well as the prospects these two major assets can have in the near future. He sees a potential for Bitcoin’s rise against shares of Elon Musk’s main company. “Bitcoin could rebound vs. Tesla”, here’s why McGlone tweeted that both assets, BTC and TSLA, have lost $500 billion in their market capitalization this year since February up to now. This may indicate of a declining economic tide as the US Fed Reserve keeps tightening so far, according to the screenshot from a recent Bloomberg Intelligence report shared within the tweet.

McGlone stated that these assets may resume growing now, but actually he is inclined towards Bitcoin only so far. There are several reasons for that, per McGlone.

The first is that the world is heading towards digitization, and Bitcoin is a digital property, which is likely to rise in price. The second is Bitcoin’s declining supply which is facing a fast growing adoption and a rising demand. Unlike Bitcoin, Tesla is facing a massive competition in the market, which is falling into a recession, per the report. The latter may be beneficial for gold, its digital version (Bitcoin) and US Treasury bonds.

2. Leader of Suspected Russian Ponzi Scheme Is Arrested in UAE: Report

Edvard Sabirov's arrest leaves just one of the four known leaders of the Finiko fund at large.

Finiko was popular in Russia in 2020-2021, marketing itself as a crypto investment fund. The company, which had been conducting public events and openly advertising itself, operated as a multilevel marketing scheme, offering rewards for bringing in new users and targeting mostly women from 30 to 50 years old, according to the Russian investigative outlet The Bell. It could have gotten away with as much as $95 million of investors’ money, The Bell said.

In summer 2021, Finiko froze bitcoin withdrawals on its website, allowing users to withdraw only the fund's native token, FNK, which immediately plunged in price by 97%. According to Crystal Blockchain, at the time of the crash Finiko’s crypto wallets contained 1.8 million USDC, 111.3 million USDT and 888 ETH, as well as 110 million FNK tokens.

Sabirov's arrest leaves just one of Finiko's known leaders at large, Marat Sabirov, who is not related to Edvard. Kirill Doronin was arrested in Russia in July, despite obtaining Turkish citizenship under the name Onur Namik.

Russian serial crypto entrepreneur Sergey Mendeleev told CoinDesk last year that in January 2021, Finiko has been cashing out massive amounts of crypto, sending Moscow's over-the-counter crypto market into a frenzy.

3. EU crypto taxation proposal will target firms all over the world.

Companies offering crypto services to residents of the European Union will need to comply with tax reporting rules to close tax evasion gaps.

A new proposal from the European Commission will require crypto asset service providers of all sizes and geographical locations to report on the transactions of EU-based clients to tax authorities.

“Tax authorities currently lack the necessary information to monitor proceeds obtained by using crypto-assets, which are easily traded across borders,” the European Commission wrote in a statement. “This severely limits their ability to ensure that taxes are effectively paid, which means European citizens lose important tax revenues.”

The gap in expected and collected tax on taxable goods and services within the bloc was €93 billion ($98 billion) in 2020, according to statistics released by the Commission. That makes up 9.1% of the total expected revenue. Collecting taxation on crypto activity in the EU could bolster an additional €2.4 billion ($2.5 billion) of revenue, The Block reported earlier this week.

4. How do crypto hardware wallet firms make money?

All the companies that are involved in producing hardware crypto wallets have multiple revenue streams, either directly or indirectly.

The hardware wallet industry has emerged as one of the most resilient sectors to the ongoing cryptocurrency winter, with issues like the FTX crash bringing in even more cold wallet sales.

The bear market of 2022 has once again reminded crypto investors of the importance of self-custody and independence from centralized exchanges (CEX).

As a result, some major CEXs like Binance has increased their investment exposure to hard wallet firms, while CEO Changpeng Zhao even suggested that CEXs may no longer be necessary in the future. Should it be the case, the crypto industry of the future will be quite unlike the existing one because the business model of hardware wallets is very different from that of CEXs.

One massive difference is how hardware wallets make money because — unlike CEXs — cold wallets don’t charge any fees for most transactions by design. But selling devices cannot be the sole revenue stream for cold wallet manufacturers due to a number of reasons, including that hardware wallets are durable devices that don’t often need upgrades.

So, how do hardware wallet manufacturers actually make money? Cointelegraph reached out to several cold wallet providers to discuss the issue to better understand their business model.

How long does a hardware wallet last?

There is no clear answer on how long a hardware cryptocurrency wallet is able to last, partly because the world’s first-ever cold wallets are still working properly.

Czech Republic-based hardware wallet firm Trezor was the first company in the world to officially release a cold wallet back in 2014. After eight years, the Trezor One model is still one of the most popular hard wallet devices, with many customers still using their first generation of Trezor devices, Trezor brand ambassador Josef Tetek told Cointelegraph.

“Trezor devices come with a two-year warranty. However, that doesn’t mean the devices break down after two years,” Tetek said, adding:

“At conferences we regularly meet users who still use the first edition from 2013. In general Trezor devices are very durable and the fault rate is minimal.”