Bitcoin News Summary – June 1, 2020

Barry Silbert’s Grayscale Bitcoin Trust has been accumulating more than the daily Bitcoin supply since the halving. More than 12000 BTC have been mined since the halving, whereas Grayscale has purchased almost 19000 BTC since that event.

Prominent Bitcoiner, Tyler Winkelvoss, took to Twitter to call out investment bank, Goldman Sachs. A day before, Goldman published a list giving 5 reasons why Bitcoin is “not an asset class” or “suitable investment.”  Tyler drew attention to the $6 billion Dollar money-laundering scandal which tainted Goldman earlier in the decade and said the bank’s statements mean they’re afraid of clients leaving for Bitcoin.

US and Canadian users of Samsung Blockchain Wallet can now trade crypto via Gemini exchange within the app. Both companies announced further crypto developments this week. Samsung introduced a new security chip for its devices which will better secure mobile banking and cryptocurrency usage in its new mobile devices. While Gemini has partnered up with Bitwage to introduce the world’s first Bitcoin 401k plan that enables companies to provide their employees with the ability to invest in Bitcoin. 

Argentina is taking steps to protect the falling value of its rapidly-inflating peso. The country’s Financial Information Unit is imposing stricter rules on crypto trading, which calls for closer monitoring of all crypto traders by banks. It’s unlikely that the new rules will prove effective at stopping the rising volume of P2P crypto trading in Argentina.

Before we conclude, this week’s “Bitcoin quick question” is what is Bitcoin arbitrage?

Bitcoin arbitrage is the purchase and sale of a Bitcoin in order to profit from a difference in the Bitcoin price between markets.

Bitcoin is traded across many exchanges and its price is determined on each exchange separately. Factors such as trading volumes, liquidity, and exchange risk impact the difference in Bitcoin’s price between exchanges.

For example, Bitcoin’s now traded at a lower price on Bitstamp, while simultaneously being traded for $40 higher price on Livecoin, which has less trading volumes, lower liquidity, and higher exchange risk. Using the same example, an arbitrage trader would buy a Bitcoin on Bitstamp in order to sell it on Livecoin and profit from the $40 difference (excluding the fees). 

Arbitrage trading requires speed, flexibility, information availability, and large capital.  Therefore, it is usually conducted by algorithmic traders.  If you want to learn more about Bitcoin arbitrage, visit the link in the description.

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That’s what’s happened this week in Bitcoin. See you next week.