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Bitfinex officially releases LEO whitepaper; token offered for USDT to raise $1 billion




Bitfinex officially releases whitepaper for exchange tokens LEO worth to raise $1 billion
Source: Pixabay

Just as the market was starting to recover from New York Attorney General’s report on Bitfinex’s $850 million cover-up, Bitfinex decided to remedy their ordeal by issuing a $1 billion token offering. After a week of uncertainty, with the exchange’s parent company iFinex even hitting back at the NY AG, the official whitepaper for their LEO tokens has been released.

The whitepaper stated that the LEO tokens would be priced at 1 USDT. However, “other forms of consideration,” may also be accepted. A specific LEO:USDT market for peer-to-peer trading will be opened once the token sale has been completed.

A maximum sell cap of 1 billion USDT in LEO tokens has been placed by Bitfinex and this offering would be private and for sale outside the United States.

Bitfinex claimed that LEO tokens would be the epicenter of the iFinex ecosystem. The whitepaper read,

“LEO will be the utility token at the heart of the iFinex ecosystem. Token holders will experience benefits across the entire portfolio and are expected to obtain benefits from future projects, products, and services, whether or not detailed within this white paper.”

The exchange also stated that the proceeds from the sale of the LEO tokens will replenish the inner workings of the exchange, in terms of its working capital and general business expenses. Bitfinex highlighted, “capital expenditures, operating expenses, repayment of indebtedness and other recapitalization activities,” as being the sources for their revenue.

LEO tokens can be used to redeem fee reduction on either Bitfinex or EthFinex, the exchange added.

Post the announcement, several customers were interested in understanding the terms regarding the repurchasing and burning of tokens, since this token offering was seen by many as a scapegoat tactic. Bitfinex confirmed that they will buy back the tokens on a monthly basis for a price “equal to a minimum of 27% of the consolidated gross revenues of iFinex,” based on previous month’s calculations. This will carry on until no tokens are in public circulation.

Additionally, at least 95 percent of the net funds that may be retrieved from the regulatory authorities of the US, Poland and Portugal, will be “used to repurchase and burn outstanding LEO tokens within 18 months from the date of recovery.” Bitfinex also referenced its August 2016 hack, stating that 80 percent of the recovered net funds will be,

“Used to repurchase and burn outstanding LEO tokens within 18 months from the date of recovery.”

The exchange confirmed that private token sale would take place until 11 May, with the objective to sell 1 billion USDT tokens. Further, if fewer than the same are sold, the exchange will sell the remaining tokens at a time “it deems appropriate.”

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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise




JP Morgan: Big bank stands corrected at Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Source: Pixabay

Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off.

A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency.

Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards.

Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop.

Source: Bloomberg

It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise.

Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing.

The analyst added:

“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past.

Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated:

“Great to see JPM finally admitting that Bitcoin has intrinsic value.
Now wait till they understand that miners who run a surplus tend to begin hording.”

Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee.

This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations.

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