Bitcoin Price Soars to $11,400 as Traders Say a ‘Bull Phase’ Is Igniting

Bitcoin price continues to test the $11,400 level, leading top crypto analysts to believe a rally to $12,000 could occur soon.

The price of Bitcoin surpassed $11,400 for the third time in three days, breaching a critical resistance level. Earlier today BTC price reached $11,444 but it quickly rejected back to the $11,250 range.

Surprisingly, within the last hour the price has risen above the $11,400 mark again and some traders believe that repeated retests of the resistance could raise the chances of a breakout.

Spartan Group’s Kelvin Koh said that when BTC breaks out of $11,400, a rally to $12,000 is likely. Meanwhile, on-chain analyst and trader Willy Woo said Bitcoin’s rally above $11,000 could place BTC at the start of the “main bull phase.”

The 1-hour price chart of Bitcoin. Source: TradingView.com

The 1-hour price chart of Bitcoin. Source: TradingView.com

After surging to as high as $10,470 on BitMEX, the price of Bitcoin dropped to around $11,260. Currently, the resistance range from $11,200 to $11,400 is seemingly triggering sellers to defend this level and prevent a major breakout.

Investors are optimistic about the chance of a Bitcoin bull run

On June 27, on-chain analyst and Bitcoin trader Willy Woo revealed a new price model for BTC. The model suggested that a new bull run for the top cryptocurrency is brewing. At the time, Woo said:

“This is a new model I'm working on, it picks the start of exponential bull runs. 1) Bitcoin was setting up for a bullish run until the COVID white swan killed the party. 2) This model suggests we are close to another bullish run. Maybe another month to go.”

The weekly price chart of Bitcoin with a new price model. Source: Willy Woo

The weekly price chart of Bitcoin with a new price model. Source: Willy Woo

A month has passed since the model was revealed and the price of Bitcoin has increased from $9,100 to over $11,000. Following up on the model, Woo said he is “relatively confident” the main bull phase is igniting.

The analyst broke down various on-chain data points, including Bitcoin’s mempool and the relative strength index (RSI), to evaluate market cycles. Woo said that the on-chain RSI, specifically, suggests the main bull market could begin in the fourth quarter.

Woo explained that:

“With the current break to 11K, I'm relatively confident last months model is working on queue, we're at the start of the ‘main bull phase’... 365 day on-chain RSI shows the compression at the early phase of the bull cycle nearing completion, I'm expecting RSI expansion that typifies the main bull season run starting Q4 2020 into 2021.”

Similarly, Koh said that if the price of Bitcoin continues to increase above $11,400, it will sustain its momentum. But if BTC continues to rally, the investor emphasized that alternative cryptocurrencies could consolidate. Koh said:

“If BTC breaks the resistance at $11.4K, we are going above $12K in no time. Will take the wind out of altcoins again in the short term.”

Before BTC exceeds $12,500, the sentiment is not so bullish

According to ExoAlpha’s chief investment officer David Lifchitz, profit-taking from well-performing DeFi tokens led BTC and Ether (ETH) to surge. The initial upsurge then led to short contracts on futures exchanges being liquidated.

As Bitcoin started to rally, DeFi tokens and other top alternative cryptocurrencies started to decline, which strengthens the argument. Assets in the likes of Compound, Chainlink, and Cardano, which outperformed BTC in June, stagnated in the past several days.

Lifchitz told Cointelegraph:

“The recent move in BTC-USD seems to have been linked to DeFi coins profit-taking rolled into the majors (Bitcoin and Ethereum), which triggered a short squeeze of the overleveraged shorts at the BitMEX casino.”

In the short-term, Lifchitz said a pullback could occur as the market cools down, but if BTC surpasses $12,500 and remains on top of it, a bull market could then materialize. Lifchitz said:

“So basically, the run-up in Bitcoin seems more driven by rotation and a devaluating USD than a genuine interest in the coin, but should BTC reach and remain above $12,500 (i.e. July 2019 high) it could change the narrative. In the short term, a small pullback might be in the making, which would be healthy from here before engaging in a new run to $12,500.”

Overall, traders and on-chain analysts remain positive after Bitcoin’s relatively swift rally above $11,000.

There are some risks of a pullback as the futures market gets overheated with high funding rates, but the sentiment appears to be improving, and BTC is repeatedly testing a key resistance level at $11,400 as a result.

$2 trillion asset manager reveals 5 reasons why Bitcoin demand will increase

Bitcoin’s recent rally past $11,000 for the first time in about a year has been impressive by many standards. The move brought BTC past a crucial technical resistance, shook out many bears, and increased sentiment in the industry drastically.

Even still, there remain skeptics. Peter Schiff, the chief executive of Euro Pacific Capital and a prominent gold bull, wrote as BTC moved past $10,000:

“Two of the last three times #Bitcoin rose above $10,000 in Oct. of 2019 and in Feb. of 2020 it soon fell by 38% and 63% respectively. The last time Bitcoin rose above $10,000 was in May, and it only fell by 15%. It’s above $10,000 again today. How big will the next drop be?”

Yet the crypto asset branch of Fidelity Investments — a $2 trillion Wall Street asset manager and financial services company — released a report on Jul. 30 indicating that demand for BTC should increase over the medium to long term.

Higher demand, assuming consistent or decreasing supply, should lead to higher prices.

Why Bitcoin demand will increase in the long run: Fidelity Investments

In a report titled “Bitcoin Investment Thesis: an Aspirational Store of Value,” Fidelity Digital Assets identified five “longer-term tailwinds that could fuel adoption” of BTC. These are as follows:

  • An increase in monetary and fiscal stimulus triggered by the economic effects of the pandemic will likely make investors to “turn to a new type of fixed supply asset as protection against potential inflation or low-interest rates, but with significant growth potential – bitcoin.”
  • Deglobalization, spurred by economic and political trends, could create inflation as global supply chains break down. Bitcoin stands to benefit from this trend.
  • Paul Tudor Jones, a billionaire hedge fund manager, has acknowledged Bitcoin.
  • Even if we don’t see hyperinflation, Bitcoin’s potential ability to store wealth over long periods of time, compared to the slowly inflating fiat currencies, should give it a bid in the decades ahead.
  • The world is undergoing a “great wealth transfer” from baby boomers (and those older than them) to the younger generations. This shift in wealth should naturally favor Bitcoin as there are more millennials bullish about crypto than baby boomers.

Investors are acknowledging the narratives

Fidelity’s report comes shortly after the company revealed that per a survey they spearheaded, institutional investors are rapidly getting acclimated with cryptocurrency as they begin to acknowledge the aforementioned narratives.

In that survey, it was said that 80% of investors surveyed find something interest about the crypto asset class. What makes digital assets interesting, according to the results, include crypto’s long-term upside potential, the technological developments of the industry, and Bitcoin and other altcoins being uncorrelated with other asset classes.

The post $2 trillion asset manager reveals 5 reasons why Bitcoin demand will increase appeared first on CryptoSlate.

Tencent to Co-launch Blockchain-powered Wine Traceability Platform

Source: Adobe/Ekaterina_Molchanova Chinese tech giant Tencent has unveiled a wine traceability platform using blockchain technology – in conjunction with the nation’s biggest and oldest wine producer. Per the China News Network, Tencent’s deal with China's biggest winery, Changyu, will be a nationwide first for the country’s domestic wine industry. Changyu said that it has applied the

Why Was The Official Apple Twitter’s Only Tweet Ever About Bitcoin?

Oddly enough, Apple is known for never using its official Twitter account to market its flagship iPhone or Mac computers. However, the one tweet the account has ever made was directly about Bitcoin to its more than 4.6 million followers.

Comparing Apples To Oranges, And a Computer Firm To Crypto

Bitcoin was created by the pseudonymous Satoshi Nakamoto sparking an entire industry of competitors. Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne, and like the cryptocurrency is the leader in its space.

Apple also sparked a sea of competitors and knock offs, much like what has happened with the emergence of altcoins.

Related Reading | Why Apple Won’t Reveal Crypto and Bitcoin Support at iPhone 12 Event

But Apple is a company, led by executives and featuring everything from a full marketing arm to a research and development department. There’s constant productivity pushing innovation and adoption of their products forward. None of this exists for Bitcoin.

While both Apple and Bitcoin both have an official Twitter account, Apple’s strangely has never been used to tweet to market its products.

It was used, however, to bring publicity to Bitcoin. But it is not in the positive way you might expect.

Why Did The Tech Brand’s Official Account Tweet About Bitcoin?

The reason Bitcoin was mentioned in the official Apple account’s only tweet, was because it compromised by a hacker.

The hacker then posted a BTC address, along with the commonly seen cryptocurrency scam requesting a sum of crypto is sent for double the amount in return.

Celebrities are usually impersonated for such tactics, using other accounts designed to mimic the likes of Elon Musk or President Trump. But in this case, the hacker was able to gain control of not only Apple’s official account, but accounts of public figures, musicians, and politicians.

Related Reading | The Most Common Bitcoin Scams And How To Avoid Them

Jeff Bezos, Joe Biden, Kim, and Kanye were among those who had their accounts hacked.

A 17-year old Tampa teen was responsible for the attack, who was recently detained by authorities. He’s now facing a full slate of charges including one count of organized fraud, 17 counts of communications fraud, one count of fraudulent use of personal information with over $100,000 or 30 or more victims, 10 counts of fraudulent use of personal information, and one count of access to computer or electronic device without authority.

Although the suspect is a teen, the court system plans on charging him as an adult if allowed due to the crime being monetary related.

Over $120,000 in BTC was transferred to accounts controlled by the hacker. There are several similar scams to watch out for. Be sure to check out our list of the most common Bitcoin scams and how to avoid them.

Bloomberg: Americans Trade Depreciating Dollars For Bitcoin

Low-yielding dollar savings accounts aren’t cutting it for Americans anymore.

A Bloomberg article claims that Americans are foregoing the safety of the dollar for more speculative assets like stocks, gold, and Bitcoin (BTC).

High saving rates, low yields

Because of the COVID-19 lockdown, the personal savings rate in the U.S. is at a historic high. The yield offered by the financial institutions on savings accounts, however, is close to zero. At the same time, assets as Bitcoin, equities, and gold, all have made double-digit gains since March. This is making them an attractive option for investors.

Race to the Bottom

Source: Bloomberg.

The article mentions a 28 year-old Californian, who told the reporter that he is going to convert his $15,000 savings held in a high-yield savings account at Ally Bank into Bitcoin. He says that he is doing so because he expects long-term economic stagnation.

July was USD’s worst month in a decade

The reality is even worse than what the Bloomberg article posits. It is no secret that the dollar is rapidly depreciating against other leading fiat currencies. In fact, according to the Financial Times, July is the dollar’s worst month in a decade.

Bitcoin and U.S. Dollar Index (DXY)  July 2020

Bitcoin and U.S. Dollar Index (DXY)  July 2020. Source: Trading Economics.

With another round of stimulus checks around the corner and most of the nation still affected by COVID-19 restrictions, it is possible that this problem will only get worse. Americans may likely have more depreciating fiat on their hands in the short term, and could seek to convert their holdings into higher-yielding assets. However, there is no such thing as a free lunch. In the investment world, high-return comes with high-risk.

Price Analysis 7/31: BTC, ETH, XRP, BCH, BSV, LTC, ADA,CRO, BNB, EOS

Bitcoin finally broke through the $11.2K resistance and Ethereum’s continued strength is likely to pull several altcoin prices higher.

Economists are divided on the consequences of record low interest rates across the globe and the incessant money printing by the central banks. However, one thing that most experts agree upon is that investors should get out of paper money and invest in hard assets.

Gold has been the traditional safe haven asset which is preferred by institutional investors looking to hedge their portfolio or protect their purchasing power. 

However, in this digital age, crypto enthusiasts believe that Bitcoin (BTC) is a better bet than gold. Fidelity Digital Assets believes that the “decentralized settlement network and its digitally scarce native asset” makes Bitcoin a potential store of value. 

Daily cryptocurrency market performance

Daily cryptocurrency market performance. Source: Coin360

The crypto naysayers are quick to point out that the majority still do not consider Bitcoin as a safe haven asset. While this is true, an increasing amount of institutional money has been gradually flowing into the crypto space lately. 

If retail traders wait until all the institutions step in, then it might be too late. Therefore, retail traders should realize the potential of the asset class and benefit from the early-bird advantage they hold over institutional traders.

BTC/USD

Bitcoin (BTC) had been trading close to the $11,000 level for the past three days, which is a positive sign. This suggests that the bulls are in no hurry to book profits and are not allowing the bears to have their way.

 

BTC/USD daily chartBTC/USD daily chart. Source: TradingView

The BTC/USD pair has formed a small ascending triangle pattern and if the bulls can sustain the price above $11,377.55, the uptrend is likely to resume. There is a minor resistance at $12,304.37, which might again lead to a minor correction or consolidation. 

However, as long as the price stays above the upsloping 20-day exponential moving average ($10,077), the advantage remains with the bulls.

Contrary to the assumption, if the pair turns down and breaks below the triangle, it could retest the $10,500 level once again. A break below this level will be a huge negative.

ETH/USD

In a strong uptrend, the corrections usually do not last for more than three to five days. Ether (ETH) corrected on July 28 and followed that up with an inside day candlestick pattern on July 29, which showed indecision among the bulls and the bears.

ETH/USD daily chart

ETH/USD daily chart. Source: TradingView

However, with the sharp up move and breakout above $332.931 on July 30, the bulls have asserted their supremacy. 

The ETH/USD pair has an immediate target objective of $366, which might act as a stiff resistance because the relative strength index is deep in the overbought territory, but if this level is scaled, the next leg of the up move can reach $480.

On the downside, $305 is likely to act as a strong support. A break below this level will be the first indication that the bears are back in the game.

XRP/USD

XRP reached the pattern target of the breakout from the inverse head and shoulders setup on July 29 when it reached the $0.25 level. After an inside day candlestick formation on July 30, the bulls have resumed the up move today.

XRP/USD daily chart

XRP/USD daily chart. Source: TradingView

If the bulls can sustain the price above $0.25, the XRP/USD pair is likely to start its journey towards the next target at $0.284584. The upsloping 20-day EMA ($0.216) suggests that the trend has turned in favor of the bulls.

During a change in trend from down to up or range-bound to up, the RSI can stay in the overbought zone for a long time, hence, this should not be a reason alone to become bearish. However, traders should remain cautious.

A break below the 20-day EMA will be the first indication that the uptrend has lost momentum.

BCH/USD

Bitcoin Cash (BCH) has not picked up momentum after breaking out of the $280.47 level, which shows some hesitation among the bulls. However, the positive sign is that the bulls have not allowed the price to dip back below the $280.47 level, which will now act as a strong support.

BCH/USD daily chart

BCH/USD daily chart. Source: TradingView

The bulls have pushed the price above the $280.47–$300.38 resistance zone. If they can sustain the BCH/USD pair above this zone, the up move is likely to pick up momentum and rally to $360 and then $400.

However, the RSI is close to the 80 level, which has resulted in a pullback during the previous two occasions, hence, the pair might enter a correction or consolidation near $360.

This bullish view will be invalidated if the bears sink the pair back below $280.47 and sustain the lower levels for three days. Such a move could keep the pair range-bound for a few more days.

BSV/USD

Bitcoin SV (BSV) has broken out of the $227 resistance, which is a huge positive. If the altcoin closes (UTC time) above $227, a new uptrend is likely.

 

BSV/USD daily chartBSV/USD daily chart. Source: TradingView

The 20-day EMA ($195) has turned up and the RSI is in the overbought zone, which suggests that the bulls have the upper hand. The target objective of this up move is $308 but the bears might pose a stiff challenge at $260, which could result in a minor correction or consolidation.

This bullish view will be negated if the BSV/USD pair fails to sustain above $227 and plummets back below $200. Such a move could keep the pair range-bound for a few more days.

LTC/USD

Litecoin (LTC) made an inside day candlestick pattern on July 29, suggesting indecision among the bulls and the bears. This uncertainty was cleared on July 30 when the altcoin formed an outside day candlestick pattern and the bulls asserted their supremacy with a positive close.

LTC/USD daily chart

LTC/USD daily chart. Source: TradingView

The first level that might offer stiff resistance to the bulls is $64 but if the bulls do not allow the price to dip below $56, then it will indicate strength and increase the possibility of a breakout of the overhead resistance. If that happens, the LTC/USD pair could rally to $80.

This bullish view will be invalidated if the pair turns down from the current levels and plummets below $51.  

ADA/USD

The bulls are facing stiff resistance close to the $0.15 level and are struggling to keep Cardano (ADA) above the $0.1380977 support, which suggests profit-booking by short-term traders.

ADA/USD daily chart

ADA/USD daily chart. Source: TradingView

If the bears sink the price below the 20-day EMA ($0.13) support, it could attract further selling by the bulls that can result in a fall to the next support at $0.11. 

Such a move will indicate that the uptrend has ended in the short-term and could result in a consolidation for a few days. The bearish divergence on the RSI is a negative sign as it suggests that the momentum has weakened.

Contrary to this assumption, if the ADA/USD pair rebounds off the 20-day EMA, it will indicate that the bulls are buying the dips. They will then try to push the price above the $0.15–$0.1543051 resistance zone. If they succeed, the uptrend is likely to resume with the next target being $0.173.

CRO/USD

Crypto.com Coin (CRO) has been consolidating in a strong uptrend for the past few days, which suggests that the bulls are in no hurry to book profits yet, as they expect higher levels in the next few days.

CRO/USD daily chart

CRO/USD daily chart. Source: TradingView

A break above $0.169481 will resume the uptrend with the next target being $0.20. Although there is a minor resistance at $0.174114, it is likely to be crossed. Both moving averages are trending up and the RSI remains in the overbought zone, suggesting advantage to the bulls.

This bullish view will be invalidated if the CRO/USD pair turns down and breaks below the 20-day EMA ($0.15). Such a move will indicate profit booking by the bears and could result in a deeper correction to the 50-day simple moving average at ($0.133).

BNB/USD

Binance Coin (BNB) remains bullish but it lacks momentum, which suggests that the higher levels are not attracting aggressive buying from the bulls. Unless the altcoin picks up momentum, it could face stiff resistance at $21.7628.

BNB/USD daily chart

BNB/USD daily chart. Source: TradingView

Any pullback is likely to find support at the 20-day EMA ($18.80), which is rising up. If the BNB/USD pair rebounds off this support, the bulls will try to carry the price above $21.7628. If they succeed, the rally could extend to $24.

Conversely, if the bears sink the price below the 20-day EMA, it will be a negative sign as it will indicate that the bulls are not buying the dips. In such a case, a drop to the breakout level of $18.20 is possible.

EOS/USD

The bears are defending the critical overhead resistance of $3.1104 but they have not been able to sink EOS to the immediate support at $2.83, which is a positive sign. A consolidation close to the resistance usually resolves to the upside.

EOS/USD daily chart

EOS/USD daily chart. Source: TradingView

A breakout and close (UTC time) above $3.2 is likely to attract buyers who have been waiting for a trending move to start. Above this level, the first target to watch out for is $3.8811 and then $4.40.

Contrary to this assumption, if the EOS/USD pair turns down from the current levels and plummets below $2.83, then the range-bound action is likely to extend for a few more days.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Vitalik Buterin: Future Lotteries Could Benefit From ETH 2.0’s Randomness

Vitalik Buterin discusses how ETH 2.0’s randomness function could benefit future lotteries.

Discussing Ethereum’s (ETH) hackathon in partnership with the Colorado State Lottery, Vitalik Buterin opined that in the future, such lotteries could benefit from Ethereum 2.0’s Verifiable Delay Function.

No immediate use for Ethereum in the project

The Ethereum creator will be one of the guests at the virtual opening ceremony for the Colorado State Lottery GameJam Hackathon. Jared Polis and Chainlink’s co-founder, Sergey Nazarov, will also be inattendance. Buterin does not believe that the Colorado Lottery will immediately start using the Ethereum blockchain for its games of chance, but suspects similar applications may utilize ETH 2.0’s randomness functions in the future:

“My understanding is that there isn't really an Ethereum tie-in to the lottery itself; rather, it's part of Jared Polis's administration's efforts to look at innovative approaches in funding public goods and modernizing government. I do think that potentially in the future applications like these could benefit from Ethereum 2.0's randomness though, when we add the VDF!”

Chainlink believes that its Verifiable Randomness Function, or VRF, holds a lot of potential for the gaming industry as well. In the future, this could be a source of competition between the decentralized ecosystems.

Discussing the partnership's overlap with Ethereum’s 5th birthday, Buterin said:

“I think it’s a coincidence! I don't think the State of Colorado is making decisions based on Ethereum dates yet...”

There is no state-by-state competition between Ethereum and Cardano

Colorado’s neighboring state of Wyoming is perhaps the most crypto friendly in the United States. It has also seemingly been claimed by Ethereum competitor, Cardano (ADA), as they project’s home turf. Cardano’s development company IOHK moved its legal headquarters from Hong Kong to Wyoming when the state passed its crypto-friendly legislation. Cardano also has close ties with the University of Wyoming and a number of local businesses. Ironically, founder of Cardano and co-founder of Ethereum, Charles Hoskinson lives in Boulder Colorado. We asked Buterin whether Ethereum was trying to lay claim to Colorado, to which he stated:

“I don't really like to think of it in terms of "this state is our turf, this other state is their turf." There's certainly a very strong Ethereum presence in Colorado, but in general Colorado has smart people, they'll use the tech that makes sense for them, and I'm confident that Ethereum will prove valuable in lots of locations.”

It will be interesting to observe how blockchain technology is used outside of its regular environment in future. If it is able to help the Lottery achieve its revenue goal of $1 billion, it could mean big things for the proliferation of Blockchain.

This Indicator Suggests Ethereum is on a “Moon Mission” with a Target of $460+

Ethereum has been seeing some incredibly strong price action throughout the past several weeks, and there’s no end in sight to its ongoing uptrend.

The cryptocurrency is currently reaching up towards a key high time frame resistance level that analysts have been closely watching for quite a while, but the overtly bullish market structure formed in recent times will likely be enough to propel it over this level.

One analyst is pointing towards the crypto’s decisive break into its Ichimoku Cloud resistance as a factor that could help propel it higher.

He notes that this pattern suggests that a move up towards a minimum of $460 is imminent in the coming weeks.

The same trader also notes that it has yet to flash any bearish divergences yet – which is a testament to its current technical strength.

Ethereum’s Market Structure is Firmly Bullish as Analysts Eye Near-Term Upside

At the time of writing, Ethereum is trading up over 3% at its current price of $346. This is around the price at which it has been trading at throughout the past several hours.

The reason why it is struggling to extend its daily upswing much further is because of the heavy resistance around $350.

This has long been a level watched by analysts, as it has historical significance.

Despite not being able to breach this level yet, it is important to note that bulls have guarded against any firm rejection within the upper-$340 region.

This may be a sign that a breakout rally is imminent.

While speaking about Ethereum’s near-term outlook, one popular analyst explained that he is watching for a move up towards $365 in the near-term, followed by a rally past $400.

“ETH: After closing above a long term [S/R] on the 2-day chart. We can go ahead and send ETH to $365. Followed by over $400… which means altcoins can make a run right here as BTC dominance pulls back too,” he explained.

Ethereum

Image Courtesy of Josh Rager. Chart via TradingView.

ETH is Now on a “Moon Mission” as Chances of a Massive Upside Movement Grow

Others are echoing this bullish outlook on Ethereum.

Another respected trader noted that ETH is now trading well-within its Ichimoku Cloud resistance. Because assets typically hit the upper boundary of the cloud once it is breached, it may soon be trading at $460 or higher.

“1W ETH: Price on a moon mission to $460 minimum based on weekly e2e – tk cross flips bull this week – obviously, the important part is the trajectory – no high tf bear divs just yet, which is quite impressive…”

Image Courtesy of Josh Olszewicz. Chart via TradingView.

How Ethereum responds to $350 may have far-reaching implications for Bitcoin and the entire cryptocurrency market.

Featured image from Unsplash.
Charts from TradingView.

Law Decoded: Big Tech, Central Banks and the Hunt for Monopolies, July 24-31

The leaders in this week’s policy news focus on some case studies in power accumulation that more than anything show why decentralization tech matters.

Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law. 

Editor’s note

The concept of monopoly will reign in today’s Law Decoded. As a fundamental principle, blockchain technology is about distributing both inputs and outputs of information securely. In its still very young lifecycle, the technology has proven to have boundless applications on the basis of this fairly simple principle. 

A secondary principle is decentralization, and in this way, blockchain technology seems inherently opposed to monopolies. The big challenge of Bitcoin’s white paper was finding a way to move value across parties without getting lost in either that proverbial valley between two Byzantine generals OR the trap of a third party. That’s not to say that every firm working in blockchain is morally so grounded as to turn down the opportunity to monopolize its market. But the tech is promising for addressing a huge range of concentrated power — especially in a digitizing world.

This week saw antitrust conflict between paeons of big tech and government. While those encounters were hostile, they will likely not result in any major damage to anyone’s bottom line. It also saw some new consequences for misuse of monopolized monetary power, which is a system that is also unlikely to change soon. The great thing about a monopoly, once you have it, is that it’s really hard for someone else to take it from you. But these are clusters of power that seem pretty obvious as places you’d look to decentralize.

Kollen Post, Policy Editor, @the_postman_

Subscribe to the Law Decoded newsletter, delivered every Friday

* indicates required

Governments take Big Tech to task for antitrust practices

CEOs for the four horsemen of U.S. tech — Apple, Amazon, Google and Facebook — appeared virtually before Congress on Wednesday to face accusations of functionally acting as monopolies. 

The Thursday release of Q2 earnings reports showing rising revenues for each of the firms except Google did nothing to gain these firms sympathy. This was despite efforts during the hearings by the CEOs to depict their companies and their individual biographies as the American dream come true. 

The past half-decade has ravaged the public image of tech in the United States. Increasingly dystopian revelations of data-gathering practices and brutal campaigns to squash competition have led to a widespread backlash against Silicon Valley. The role of social media in the 2016 election and subsequent waves of disinformation (including COVID-19) has also ended whatever honeymoon period firms like Facebook and Twitter had enjoyed. 

Meanwhile, China, whose digital payments providers are widely praised as ahead of those in use in the U.S., looks set to crack down on those providers based on similar antitrust principles. For China, however, that might be at least in part to clear the way for a broad launch of a digital yuan.

Many of these tech giants are entrenched enough that they may be getting too big to fail. It is undeniable that they provide services that have changed our way of life. As Mark Zuckerberg pointed out during Facebook’s investor call last night, had the COVID-19 pandemic happened two decades ago, this shift to working remotely wouldn’t have been possible, and many more people would be dying. However, recent events should be getting a lot of people thinking about whether these giant firms are the best we can do and whether we might be better served looking at decentralized alternatives. 

...and maybe central bank monopolies next?

Also in the U.S., the Federal Reserve’s printer continues to go brrr, beating out the country’s total money printing over the first two centuries of its existence in the space of a month. The dollar is, for the first time during this pandemic, looking to be on the ropes. 

Quantitative easing — the formal term for the Fed’s use of inflation as a source of funds at the expense of all dollars already out there — is a recurring villain in Bitcoin narratives. The idea is that it has to result in a monetary collapse eventually.

The extraordinary expenditures in the U.S. over recent months have seen the dollar stubbornly resisting this narrative, but according to recent analysis, that’s changing. Early in the pandemic, global financial institutions and governments scrambled to stock up on dollars, buoying demand and value despite outlays. But this week, as Congress considers another huge stimulus bill, the dollar dipped to its lowest level since May 2018. 

We’re not witnessing a collapse in the monetary system, but certainly, a strain that, if it continues, will call into question whether the Fed really knows what it’s doing. At the same time, the head of the country’s major banking regulator is calling for blockchain-based challengers to the Fed’s central role in payments. 

All five of the world’s main reserve currencies are now looking to digitize

As China and the U.S. dominate headlines focusing on potential central bank digital currencies, and different European Union banks are launching their own trials, the remaining two of the five major currencies in the world have taken major steps indicating the same interest. 

The Bank of Japan announced that it had appointed its top economist to a team doing research on the digital yen. The Bank of England, meanwhile, tapped Accenture to update technology for the U.K.’s payments system — not explicitly referring to a CBDC, but Accenture is deeply involved in the development of CBDCs around the world, including the digital dollar.

The dollar, the euro, the yen, the pound sterling and, as of 2016, the yuan form the basis for the International Monetary Fund’s Special Drawing Rights and form the backbone of global reserves. None of the five are transacting as CBDCs yet, but it’s clear that they are all worried about being left out. CBDC technology is not yet standard, but at the very least, research into it has become necessary to those currencies looking to maintain their prestige.

Further reads

The American Enterprise Institute’s visiting crypto expert, Jim Harper, talks digital dollars and new payments systems.

Coin Center, a leader in lobbying and research on decentralized networks, has updated its educational resources.

Kelman Law runs down the basics of paying taxes on both earnings in cryptocurrencies and capital gains on trading in the United States.

Decentralized Apps May Solve SIM Swapping Woes

FIX Network is partnering with NEM to provide a solution that prevents SIM swapping.

In the US alone, over $55m has been stolen through SIM swapping attacks since 2018. NEM, a blockchain-based ecosystem, believes that decentralized apps could provide a meaningful solution to this problem.

According to NEM, they’re working with a solution called “FIX Network”, which was established to help mobile subscribers secure private keys and transactions on SIM cards.

The network leverages a blockchain-based protocol to support the security and privacy of mobile subscribers, NEM explains:

“This unique architecture will allow mobile operators to deliver services such as digital identity management, cryptocurrency wallets, and personal data firewalls, all enabled by the safekeeping of private keys on the subscribers’ SIM cards.”

Aiming for mass adoption

One of the features, FIX ID, aims to prevent fraudulent activities by identifying participants through subscriber-owned global phone numbers.

NEM expects that mobile carriers are able to use FIX Network to provide OTT services such as crypto wallets, mobile banking, and ID management. However, they clarified that the FIX ID feature won’t be blockchain-based. It will instead rely on decentralized characteristics that follow the philosophy of the FIX network solution.

Edwin Terek, co-founder at FIX Network, shed some light about the purpose of the solution:

“Our exhaustive search for an appropriate platform led us to converge on NEM’s Symbol, as we are confident as this technology includes the features, security, reliability and interoperability between private and public blockchain networks to fulfill our current and future requirements. We are proud of our technology partnership with NEM.”

Latest SIM swapping cases

Recently, Reggie Middleton, the chief executive of crypto company Veritaseum, sued telecommunications provider T-Mobile for allegedly enabling the theft of $8.7 million worth of crypto in a series of SIM-swapping attacks.

Californian Richard Yuan Li, 20, was charged on June 11 with conspiracy to commit wire fraud for his role in SIM-swapping attacks. These attacks targeted at least 20 individuals. He was also charged for the attempted extortion of a New Orleans-based doctor and a cryptocurrency investor known only as “Investor A.”

Five Years of Ethereum: From a Teenage Dream to a $38B Blockchain

How far has the Ethereum blockchain come in the five years since its inception? We explore key developments, changes and challenges.

It would seem that five years is a relatively short time for an information technology company, but Ethereum has made colossal progress during this time, growing from its own initial coin offering project to the largest blockchain platform, running about 2,000 decentralized applications. Today, the market capitalization of its native cryptocurrency, Ether (ETH), is worth $38 billion — larger than Ford Motor Company and the popular app Snapchat. Not only that, but the value of Ether has seen a 121-fold increase over the period of the network’s existence.

While the whole team is preparing for the transition to the proof-of-stake consensus algorithm ahead of the upcoming Berlin upgrade, Cointelegraph recalls the striking changes that have occurred to the platform over the five years since its launch, and the failures that have only toughened its resolve.

2013/2014: An idea to an $18 million crowdsale 

Ethereum was invented by Vitalik Buterin, a Canadian programmer of Russian descent. It was 2013, and Buterin was just an 18-year-old teenager, but his idea found a lively response in the global blockchain community. Later, Gavin Wood, a British computer programmer, proved the possibility of creating the system invented by Buterin and described the basic principles of its operation in the Ethereum “Yellow Paper.” Together with the first members of the Ethereum team, they launched a crowdsale and raised $18 million for the project’s development.

2015: Network launch and exchange listing

The first version of the Ethereum cryptocurrency protocol, called Frontier, was launched on July 30, 2015. But the security level the system boasted back then was far from what Ethereum is today. The launch of Frontier marked an important milestone in the history of the network, after which the developers immediately started working with smart contracts and creating DApps on the real blockchain.

The first existing historical record of Ether’s price is from Aug. 7, 2015, when ETH was added to the Kraken crypto exchange at $2.77 per coin. Over its first three days of trading, its price dropped to a demeaning $0.68, most likely under the influence of rapid sales by early investors.

In the second half of the year, droves of crypto enthusiasts rushed to learn what they could about Ethereum. A particularly significant contribution to its popularization was made by the DEVCON-1 developer conference, which was held from Nov. 9 to 13. The event sparked intense discussions on the development of Ethereum, with the participation of representatives from IBM, Microsoft and UBS.

2016: The DAO, hackers and Ethereum split

At the beginning of 2016, the price of Ether rose rapidly, fueled by news of the upcoming launch of a network protocol with a more stable version: Homestead. As a result, ETH reached its first serious high of $15 per coin on March 13, with the platform’s market cap exceeding the boastful $1 billion mark. On March 14, Homestead went live, which made its blockchain officially secure through new protocols and network changes (EIP-2, EIP-7 and EIP-8), making future updates possible.

More specifically, the network protection became based on mining, which was planned only for the initial stage of development with subsequent transition to PoS with a hybrid model at an intermediate stage. At the same time, exuberant requirements for video memory acted as protection against the use of ASIC miners.

The next event, which brought the price of Ether to its highest value that year — $21 — was the widespread media coverage of the dizzying success of The DAO project, which raised more than 12 million ETH ($150 million at the time ) in May. The DAO — an acronym for decentralized autonomous organization — was one of the pioneers of the upcoming ICO era and chose Ethereum as its launchpad to raise investments.

However, on June 16, using a vulnerability in The DAO’s code, unknown hackers stole about $60 million in ETH from the project. News of the attack sliced the price of ETH in half to $11. Buterin offered to return the stolen funds by conducting a hard fork to restore the network to its pre-attack state. Following a controversial hard fork held on July 20, the network split into two: Ethereum and Ethereum Classic.

On Sept. 22, Ethereum suffered another blow: The network was subjected to a distributed denial-of-service attack, significantly slowing its operations. The news became an impetus for the beginning of a local downtrend in the curbed price, which began consolidating in the $7–$9 range by the end of the year. Two unplanned hard forks were then carried out to improve the resilience of the network and rectify the consequences of the DDoS attack.

2017: ICO boom 

Ether’s price experienced a meteoric rise at the start of 2017 as the cryptocurrency was added to the eToro platform on Feb. 23. Around the same time, the number of unconfirmed transactions on the Bitcoin network had reached 200,000, causing an increasing number of crypto investors and miners to opt for Ether as an alternative investment. On May 6, the price of ETH set a new bar of $95 per coin.

The popularity of Ethereum grew rapidly in the crypto community and among DApp developers. The initial coin offering hype also contributed to the increased demand for Ether, as thousands of projects opted to fundraise in ETH. By Sept. 1, the price of Ethereum had almost reached a whopping $400, but news of China banning ICOs and crypto trading quickly slashed it to nearly $220.

The price gradually recovered by mid-October after the release of the Byzantium network upgrade, which took place on Sept. 18. Along with the growth of the ICO bubble, in which Ether was still the main means of payment, ETH reached nearly $800 by the end of the year.

2018: Ethereum at $1,400 and a bearish trend

The beginning of 2018 turned out to be even more successful for Ethereum than the previous one. On Jan. 13, the price of Ether reached its all-time high of around $1,400. But the ICO rush, which had triggered the rapid growth of Ethereum’s price in 2017, came to an end. Throughout 2018, its echoes played a cruel joke on Ether as thousands of ICO projects sold their savings, meaning that ETH dropped even faster than the rest of the market.

In early September, news of the Constantinople hard fork — expected in November — slowed the drop in the price and injected positive sentiment into the community. However, the network upgrade was delayed. Influenced by inter-bearish sentiments on the crypto market and pending updates, the price fell to $85, dropping from the second-largest to the third-largest cryptocurrency by market capitalization behind XRP.

2019: Technical works, update delays and popularity of DAOs

Many aspects spiraled out of the control of developers over the year as they were actively engaged in conducting technical work on the network. Meanwhile, the community lost count of the number of upgrades carried out. In January, the technical roadmap gained clarity as difficult engineering problems were solved and the Ethereum development community continued to grow.

DeFi became the largest sector within Ethereum, and the market saw early signs of growth in gaming and decentralized autonomous organizations. At the beginning of 2019, the only DeFi protocol with significant funds was MakerDAO, which had a total of 1.86 million ETH ($260.4 million at the time). The playing field became much more diverse by the end of the year when new participants rushed into the industry.

On Feb. 28, the Constantinople hard fork took place on the Ethereum network, which prepared it for the transition to the Casper PoS protocol and the abolition of the previous mining model. However, the eighth upgrade, called Istanbul — which initially had been scheduled for Dec. 4 — was delayed and activated on the Ethereum mainnet on Dec. 8. 

Among the main objectives of Istanbul were ensuring the compatibility of the Ethereum blockchain with the anonymous Zcash (ZEC) cryptocurrency and increasing the scalability of the network through SNARKs and STARKs zero-knowledge-proof protocols. In addition, the update made it difficult to carry out denial-of-service attacks on the network due to the change in the cost of gas needed for launching operating codes.

The progress of Ethereum 2.0 laid the foundation for the world’s largest corporations to start using the Ethereum blockchain. In July, Samsung released a software kit for Ethereum developers, six months after it was revealed that the development of its new phone included a built-in Ethereum wallet. Another large partnership involved internet browser Opera, which had launched an Ethereum-supported Android wallet at the end of 2018 and announced a built-in Ethereum wallet for iOS users in early 2019.

Meanwhile, Microsoft continued its involvement with the Ethereum ecosystem. In May, the company released the Azure Blockchain Development Kit to support Ethereum development. In October, it backed a tokenized incentive system from the Enterprise Ethereum Alliance for use within enterprise consortiums. And in November, it launched Azure Blockchain Tokens, a service that lets enterprises issue their own tokens on Ethereum.

2020: The DeFi boom and PoS 

In the first half of 2020, Ethereum — famous for its numerous conferences and meetups — was forced to postpone all activity due to the coronavirus pandemic. Nevertheless, the team managed to make significant progress in solving the scalability issue, with the launch of the final Ethereum 2.0 testnet scheduled for Aug. 4.

The developers hope that once the upgrade is complete, the Ethereum network will become faster, cheaper and more scalable without compromising decentralization and network flexibility. Meanwhile, the blockchain network continues to grow, as activity in the decentralized finance market has increased significantly.

According to Dapp.com, the daily volume of value transferred via DeFi applications reached an all-time high of $1.8 billion on July 2. During the second quarter, a record $4.9 billion was moved through DeFi applications — a 67% growth when compared with the previous quarter — while the number of active users of Ethereum applications reached 1,258,527, an increase of 97%.

A 17 Year Old Was Just Arrested in Connection With Twitter’s Recent Hack

Authorities have taken a teen into custody, claiming him to be the brains behind the recent Twitter breach.

Authorities have taken a teen into custody, believing him to be the brains behind the recent Twitter breach.

Authorities have taken a 17-year-old into custody, claiming the not-yet-adult as the brains behind the recent massive Twitter breach. 

"Early this morning, the FBI, IRS, US Secret Service, and Florida law enforcement placed a 17-year-old in Tampa, Florida, under arrest — accusing him of being the 'mastermind' behind the biggest security and privacy breach in Twitter’s history," a July 31 article from The Verge said.

The massive exploit saw many top Twitter accounts breached on July 15, including the likes of Elon Musk, Joe Biden, and Bill Gates. 

The teen reportedly faces north of 30 felony accusations, The Verge said. “I can’t comment on whether he worked alone,” Andrew Warren, a Hillsborough State Attorney,  said in a press conference on the ordeal.

Analyst: Watch Which Altcoins Hold Against Bitcoin For Surprising Springboard Recovery

The top two crypto asset by market cap Bitcoin and Ethereum pumping so hard has left the rest of the crypto market in its dust. Even DeFi tokens that had once been hot to trot have plummeted in the wake of this week’s rally.

But one crypto analyst claims its wise to pay close attention right now to how certain altcoins hold up to the rally in majors, as they may be the top-performing assets once the top two titans cool off.

Bitcoin, Ethereum, and XRP Break Out, Crushing Small-Cap Altcoins In Their Wake

Bitcoin and altcoins have an unusual relationship. Occasionally, the assets all rise together in the same tide, while other times they show an inverse relationship.

When major crypto assets all rally together, it can often be disastrous for riskier, smaller-cap, and mid-cap altcoins. That’s exactly what happened this week when Bitcoin, Ethereum, and XRP began soaring.

Bitcoin broke above $10,000 and is trading well above $11,000, and Ethereum rallied by almost 50% in a week.

Related Reading | Analyst: Bitcoin’s 20% Surge Ruptured DeFi Boom, Projects Dive 20% or More

XRP, which has been the crypto market’s worst performer two years running, is primed for a major rally and kicked it off with an over 13% return on the week. It even helped the altcoin regain the third-ranked spot in the top ten crypto assets by market cap from stablecoin Tether.

Together, these top three crypto assets absorbed a substantial amount of capital from the rest of the crypto market, fueling the pump. New money also came in, as investors flocked to hard assets like precious metals and crypto as a hedge against inflation.

Analyst: Altcoins Holding Up During Major Crypto Rally Highlight Most Promising Projects

Which altcoins hold up well against Bitcoin and Ethereum during the next few weeks, especially small-cap altcoins, will be the best performers in the new bull market, according to one crypto analyst.

The analyst claims that any altcoins that show exceptional strength and hold their valuations well while majors rally, will be the most likely assets to “springboard” back when Bitcoin, Ethereum, and XRP cool down.

Related Reading | Crypto Analyst Pitches a Case For XRP to Hit $30 By End of 2021

Any small or mid-cap altcoins holding strong against a massive rally in majors will be due to their holders seeing the true, long-term value in the projects or coins. This typically indicates that there’s real merit in the cryptocurrency, and are the likeliest to rise when the full bull market begins.

For example, Ethereum and XRP were once far less than their current valuations, and the initial Bitcoin boom helped propel these assets into the finance industry limelight.

They’ve since become top contenders of their own. And when they do finally pause their current momentum, the next round of top contenders will begin to stand out from the pack.

Despite pullback, top Ethereum token Synthetix (SNX) is seeing “heavy accumulation”

Before the craziness of yearn.finance (YFI) and Ampleforth (AMPL), the hottest token in decentralized finance was arguably Synthetix Network Token.

Trading with the ticker SNX, the crypto asset had seen a parabolic explosion higher. Synthetix Network Token is the native token of the Synthetix protocol, an Ethereum-based DeFi platform that focuses on offering on-chain synthetic exposure to altcoins, stocks, precious metals, and other asset classes.

But as CryptoSlate covered, the asset underwent a strong drop as capital cycled from altcoins into Bitcoin and Ethereum, which ripped higher.

SNX is seeing “heavy accumulation” despite drop as altcoin profits cycled into Ethereum

SNX fell from its all-time high price of basically $4.00 to $2.62 in the span of a week. The altcoin has since bounced back, trading at $3.52 as per CryptoSlate data. 

Data from crypto data from Viewbase shared by crypto commentator Humboldt Capital indicates that investors have largely been confident throughout this volatility.

Approximately 102,000 SNX — worth over $350,000 — have been withdrawn from leading exchanges that support it in the past 24 hours. This 102,000 SNX sum is about 1.7 percent of all of the cryptocurrency currently deposited on the exchange.

At this rate, assuming no deposits of the coin, all SNX will be out of exchange wallets in out of two months.

Image

Although it isn’t clear what is being done with this withdrawn SNX, the withdrawal of a crypto asset from an exchange usually means it isn’t going to be sold. This means that these withdrawals should reduce potential SNX sell pressure, which should naturally lead to higher prices.

Long-term investors in the crypto asset as incentivized to withdraw the coin from exchanges as users can stake their SNX for rewards.

SNX bounce back above $3.00 unlikely to last, say some

SNX’s strong bounce from the aforementioned $2.62 lows is unlikely to last according to some commentators.

Ari Paul, CIO of BlockTower Capital, commented on the prospects of altcoins in a market where Bitcoin and Ethereum are trending and seeing large bouts of volatility:

“A big part of altcoins rallying for the last few months has been BTC in a tight range. IMO, most alts likely to underperform BTC if it breaks out in either direction. Historically, alts have generally done best when BTC takes a long pause after rallying substantially.”

Other commentators have made similar arguments.

Despite the approximately 20 percent surge in the past 10 days, Bitcoin remains in the beginning of an uptrend in volatility.

Mohit Sorout, a founding partner of Bitazu Capital, shared the chart below on Jul. 27. It shows that the Bollinger Bands’ width, a measure of volatility, remains at extremely low levels on a macro scale despite the recent surge. Should history rhyme, Bitcoin volatility should continue to increase, meaning altcoins will underperform.

Image
Chart of BTC’s price action with the Bollinger Bands width from Mohit Sorout

The post Despite pullback, top Ethereum token Synthetix (SNX) is seeing “heavy accumulation” appeared first on CryptoSlate.

As Gold Touches New Highs Investors Face Storage Issues, Market Dilution, Threat of Seizures

As Gold Touches New Highs Investors Face Storage Issues, Market Dilution, Threat of Seizures

During the last few weeks, gold has skyrocketed in value over the concerns fueled by the faltering global economy. Despite the fact that gold has always been a safe-haven, many investors are looking to bitcoin because they fear central banks will dilute the market or even confiscate the gold.

Prior to Covid-19, central banks purchased massive amounts of gold and alongside this, a number of countries are having serious issues repatriating their gold reserves. This has caused investors worldwide to question gold over crypto assets.

There’s no doubt that gold has been on a tear, but many people have concerns about the precious metal being a solid safe-haven due to a number of factors. In recent years, investors have found cryptocurrencies like bitcoin (BTC) have a number of benefits that gold cannot offer.

At the time of publication, one troy ounce of .999 fine gold is trading for $1,963 and many investors believe the price is headed higher. But some of the biggest issues with gold, in comparison to crypto assets, is the problem with storage.

As Gold Touches New Highs Investors Face Storage Issues, Market Dilution, Threat of Seizures

A few hundred thousand dollars worth of gold held by a single individual isn’t not as easy as say storing $300,000 worth of BTC. An individual has to secure the precious metal by hiding it and leveraging a safe, and oftentimes people with that much gold have a third-party store it for them.

Safes and added custodial security create extra costs to investing in gold and storing the metal with a third party means you have to trust them. The gold custodian could get robbed or a government entity could seize the metal leaving all the investors high and dry.

Moreover, governments have been known to seize peoples gold. One of the most famous instances of this type of event occurred in 1933, when American President Franklin D. Roosevelt (FDR) invoked the Emergency Banking Act. At that time, FDR also issued Executive order 6102 which forbade the hoarding of gold certificates, bullion, and gold coins.

As Gold Touches New Highs Investors Face Storage Issues, Market Dilution, Threat of Seizures
American President Franklin D. Roosevelt signing Executive order 6102.

According to FDR, the move to seize American gold stashes was meant to stimulate economic growth during the Great Depression. On April 5, 1933, FDR signed Executive order 6102, and citizens were mandated to take their bars, coins, and certificates to the Fed. They were paid $20.67 per ounce and after the Emergency Banking Act was lifted, FDR raised the price to $35 per ounce.

Many people wholeheartedly believe that this “could never happen again” but the reason why it did happen was so FDR and the banking cartel could strike 40% off the dollar and bolster the economy. The reason it could happen again is because the USD has been declining in value for years.

On July 30, 2020, the USD’s trade-weighted index dropped to a two-year low against a basket of other fiat currencies. The U.S. government could easily invoke another executive order against gold in order to keep the reserve currency of the world afloat. Furthermore, back in 1933, FDR had government entities conduct a nationwide search for gold coin, bullion, and certificates as part of the government’s “confiscation policy.”

As Gold Touches New Highs Investors Face Storage Issues, Market Dilution, Threat of Seizures
The U.S. dollar dropped to a two-year low on Thursday with values not seen since May 2018.

There are a few high-profile U.S. gold confiscation enforcement that the American press covered at the time. For instance, the federal government seized double eagles worth $12.5 million at the time from an investor who was holding the coins for a Switzerland-based firm.

Another individual was charged when he tried to withdraw 5,000 ounces of gold worth $9.6 million today. Banks holding gold would notify government entities if someone was withdrawing gold and the man with the 5,000 ounces was greeted by federal agents that day. In addition to the U.S., other countries like China and Japan have had cases where gold smuggling is common and governments seize people’s gold.

Gold investors are also scared about the massive amounts of precious metal central banks have held in reserve and many suspect they could dilute the market. There are a number of central banks doing shady things with gold reserves and some of them are not allowing other countries to withdraw.

Many countries have tried to repatriate their gold, but have had significant issues from central banks. Venezuela, the Netherlands, Germany, Belgium, Switzerland, Austria, India, and Bangladesh all have had problems attempting to repatriate their gold. The countries holding these reserves could weaken the value of gold, by simply selling off massive amounts during times of economic distress.

Statistics show that the U.S. is the largest holder of gold reserves and the country is followed by Germany, the International Monetary Fund, Italy, France, Russia, China, Switzerland, Japan, India, the Netherlands, and the European Union.

In April, financial columnist David Fickling said that it was possible central banks could sell these reserves in an emergency. This happened during the 2007-2008 economic crisis as gold was supposed to be a safe haven after the 2007 Bear Stearns emergency bailout, but central banks dumped gold to provide liquidity.

Gold has been a safe haven asset for centuries, but crypto assets are far more portable and they require far less security. A person can easily send a million dollars worth of ethereum (ETH) or bitcoin cash (BCH) to anyone in the world in a matter of no time. Moving a million dollars worth of gold is not as easy. It would be much harder to seize people’s digital currencies as well, as a million dollars can simply be hidden in a twelve-word mnemonic phrase. Just the other day, news.Bitcoin.com’s financial columnist, Jeffrey Gogo, reported on how the gold bull Dennis Gartman is moving out of gold, because the market has become “too crowded.”

An individual can store a million dollars in bitcoin without paying custodial costs and do so in a noncustodial fashion. Even central banks who are attempting to repatriate their gold reserves, would have been in much better shape if they leveraged crypto assets over gold reserves. There is no doubt that gold will continue to be thought of as a safe-haven asset, but there is also no doubt that crypto-assets offer people significant advantages over precious metals like gold.

What do you think about gold’s issues? Let us know what you think about this subject in the comments section below.

The post As Gold Touches New Highs Investors Face Storage Issues, Market Dilution, Threat of Seizures appeared first on Bitcoin News.

DeFi User Base Needs to Be More Decentralized, Says Former ConsenSys Exec

A panel of known Ethereum investors and influencers discussed decentralization and the value of the total value locked in DeFi.

At a Kraken-hosted webinar titled “DeFi-ing expectations: the future of Ethereum,” panelists discussed the rise of decentralized finance, its defining features and how to measure its success.

The webinar was held on July 31 and featured known DeFi influencers Anthony Sassano, co-founder of EthHub.io, Ryan Sean Adams, founder of Mythos Capital, Andrew Keys, managing partner at Darma Capital and former ConsenSys executive, and William Mougayar, an early Ethereum investor and former advisor to the Ethereum Foundation.

Pete Rizzo, editor-at-large at Kraken, moderated the panel, often asking somewhat provocative questions about the nature of the DeFi movement.

Metrics and decentralization

One of the questions touched on the Total Value Locked metric, with Rizzo asking why it matters and what is its utility. 

Sassano gave a brief introduction, noting that it was first popularized by statistics website DefiPulse as a way of measuring how much Ethereum is locked in the protocols, with the implication that it would not be contributing to selling pressure.

“That’s a very primitive way to look at it,” Sassano said, explaining that the metric recently came under scrutiny as that value can be easily withdrawn from the networks. 

A potential improvement would be the metric of “on-chain cash flow” which measures how much money goes through the protocols in a given period. Wash trading could still be used to bolster this metric, he warned, especially if the protocol does not collect fees. “Any metric that we try to assign is going to be imperfect due to the way the systems are designed,” he concluded.

Keys proposed a different metric:

“What I’m most interested in is the Gini coefficient. I want to see millions of people take out $100 loans rather than one person taking a $1 million loan. [...] I think that’s an important metric for the growth of the ecosystem so we don’t have [...] a 1% [against] 99% type economy again.”

This hits at an important issue with the current top-heavy nature of the DeFi ecosystem. For example, 30 wallets account for over 70% of activity on platforms like Compound, according to DappRadar data.

Keys also maintained that the Gini coefficient is an important component of measuring decentralization, saying:

“We need to decentralize the user base. The smaller [the] amounts of money, the better.”

Nevertheless, Sassano noted that due to the current cost of Ethereum gas fees, starting out small in the DeFi space is somewhat impractical.

XRP Giveaway for Exchange Clients, eSports Teams to Get XRP

More Japanese citizens could end up with Ripple-affiliated XRP tokens – after an exchange announced a token giveaway for new account holders, while one of the nation’s biggest crypto players said it is planning to pay eSports players and their managers in XRP. FXCoin said it will give away XRP 50 (around USD 12) to all new account holders. In an official release, the

Mastercard and Visa Are Making Bold Moves Toward Mass Crypto Adoption

Global payment processors Mastercard and Visa are laying the foundations for crypto support that may drive adoption on a global scale.

Leading global payment companies Mastercard and Visa have been making moves to accelerate the support of cryptocurrency payment processors by opening up new options for users around the world. Both companies made strong statements in support of the use of cryptocurrencies in July by announcing respective projects and collaborations that are driving the adoption of cryptocurrencies.

The positive attitude toward cryptocurrency exchanges and payment platforms from the world’s largest traditional payment processors signals a shift in perception from the traditional financial space. Mastercard has been actively encouraging exchanges and payment service providers to enlist in its recently expanded cryptocurrency card program, becoming partners in just a few weeks as part of its Accelerate program. Meanwhile, Visa outlined its vision of the cryptocurrency space with an overarching theme of positivity toward the market and the role it will play.

The payment service provider noted digital currencies as an exciting avenue to expand existing network-of-networks to support the latest technology powering global commerce. These two global giants are not just offering lip service, either; their payment cards and technology are already powering a number of platforms and service providers within the crypto space. The likes of Coinbase and Binance crypto exchanges use either Visa or Mastercard to power their crypto debit card services.

Visa’s and Mastercard’s relationship with crypto is growing

Visa’s public affirmation of its positive stance toward cryptocurrency payment services reflects its drive to remain a leading player in the global payment network. As highlighted in its “outlook on new digital currency payment flows,” the company admits that a growing body of players in the traditional financial sphere has been looking to plug into the crypto space: “It’s a concept that is gaining traction beyond fintechs.”

The company has already established a working relationship with some leading cryptocurrency-based firms in 2020, including Coinbase and Fold. This is in addition to more than 25 cryptocurrency wallets that are connected to Visa’s systems. Visa also has its fintech-focused accelerator program called FastTrack, which allows tech firms including cryptocurrency and blockchain-based companies to access its systems and network.

The company has also been developing its own cryptocurrency projects that include an investment into tech firm Anchorage, which builds security infrastructure for the cryptocurrency ecosystem. Its research team has also been working in the blockchain space for a number of years, culminating in the creation of the white papers for the Zether and FlyClient projects.

Furthermore, Visa has been involved in helping shape regulations and policies toward cryptocurrencies around the world. It has worked with the World Economic Forum to develop recommendations for central banks looking into the use cases of central bank digital currencies. Cointelegraph reached out to Visa for additional insights, but the company declined to provide any further information other than its blog post.

Mastercard has been actively encouraging crypto exchanges and payment service providers to sign up to their Accelerate platform in an effort to expedite the process to become partners by fast-tracking the onboarding of new crypto debit and credit card providers while providing added assistance for market entry and expansion in different countries. Nevertheless, prospective partners need to meet stringent requirements set by Mastercard. This includes high levels of consumer protection and compliance with AML/KYC regulations. 

This move to collaborate with the crypto industry comes off the back of the news that Wirex became the first cryptocurrency platform granted a Mastercard principal membership. Part of the functionality allows users the ability to instantly convert cryptocurrencies into conventional fiat currency. An added benefit is a rewards program that gives users 1.5% of purchases made with these cards in Bitcoin.

Bridging the divide

Recently, Binance confirmed that a limited run of its Binance Cards is being shipped to Europe. The move adds real substance to the statements made by Visa and Mastercard, as users are beginning to have access to these card services through some of the biggest players in the cryptocurrency exchange space.

According to Josh Goodbody, the director of European and Latin American growth and institutional business at Binance, traditional banking cards are a “bridge between the crypto and traditional finance,” adding: “Crypto debit cards provide a tangible and frictionless way to spend your crypto, and it provides users with the ability to incorporate crypto into their day-to-day lives.”

Goodbody declined to go into detail about the direct working relationship with Visa but stated that the acquisition of cryptocurrency payment platform Swipe would allow Binance to tap into an established network of regional service providers where the company hopes to bring new users into the cryptocurrency space. Goodbody believes that mainstream financial firms will have a key role to play in this:

“Visa and other networks’ willingness to work with the blockchain industry is a very positive vote of confidence for the further adoption of cryptocurrencies. Not only are traditional technology providers facilitating adoption, they are actively participating in the development of the ecosystem — we see this as an opportunity to further the adoption and accessibility of cryptocurrencies.”

Crypto analyst Mati Greenspan also complimented the move by Mastercard and Visa in the Quantum Economics email newsletter from late July, saying: “As far as fundamentals are concerned, this is about as bullish as it gets for Bitcoin and the gang.”

Netanel Kabala, the chief analytics officer and co-founder of payment platform Simplex, told Cointelegraph that his company has been working alongside Visa and Mastercard for seven years. The relationship has allowed the company to open up cryptocurrency offerings to new users exploring alternative investment methods: “Crypto adoption is growing globally as people seek out alternative investment avenues.” Kabala identified a lag time for new users being introduced into crypto, but the integration of mainstream financial institutions like Mastercard and Visa is a strong signal:

“From an analytics standpoint, we’re seeing many new users enter the crypto world. With every new technology or advancement, it often does take some time before the general public incorporates it into the mainstream. While we definitely believed this mainstream adoption would have come earlier, it seems to be starting now.”

Simplex CEO Nimrod Lehavi believes that there is a more receptive perception to the potential benefits of cryptocurrency, mainly driven by people who want to wrestle back control of their assets and ability to transact independently: “Anything that lowers friction and helps people gain full control of their assets will spread adoption, and crypto-connected debit and credit cards are a key component in that regard.”

Financial industry leaders like Mastercard and Visa vocally supporting and actively working with cryptocurrency and blockchain firms add more credence to the value and utility of these services. Lehavi believes that this will open the door to more users that have not been exposed to digital assets: “The support of major players removes a great deal of the uncertainty people might have regarding cryptocurrencies and will enable them to discover digital assets for what they are.”

$1.2B Bitcoin Futures and Options Contracts Just Expired — What’s Next?

$1.2 billion in Bitcoin futures and options expired today, what does this mean for BTC price?

A total of 106,000 Bitcoin (BTC) futures contracts and options expired today, and this has investors curious about how BTC price may respond, leading into and after the expiry. 

Bears were not expecting the most recent run to $11,000, especially after two months of sideways trading activity.The 52% increase in Bitcoin futures’ aggregate open interest increase in July indicates that sellers are either excessively confident or mostly using it for hedge and arbitrage opportunities.

Bitcoin futures aggregate open interest

Bitcoin futures aggregate open interest. Source: Skew

The above data shows total futures open interest surpassing $5.2 billion, just 3% shy to its historical high in mid-February. Although this number might seem daunting, the truth is less than $500 million expired today. 

Bitcoin options were a bit more worrisome as 32% of the previous day $2.1 billion in aggregate open interest expired. Unlike futures markets, there is not much benefit in rolling over options over the last trading days.

Options contracts are a winner takes it all market, as those heavily underwater are deemed worthless. As for the $1.4 billion in open interest that did not expire today, the big question is figuring out how bullish/bearish positioned are those.

Futures open interest unfazed after 18% gains

The average leverage usage on BitMEX surpasses 20x, meaning a 10% move should be enough to liquidate 60% of traders due to insufficient margin covering their risk.

Bitcoin BTC perpetual liquidations

Bitcoin BTC perpetual liquidations. Source: Skew

The above chart depicts a mere $115 million in buy liquidations on July 27 despite a 12% price hike, signaling that those sellers had an unusually high margin. This a bullish indicator indeed, as most of those future contracts sellers seem to be hedged.

Options markets remain bullish

Bitcoin options open interest by expiry

Bitcoin options open interest by expiry. Source: Skew

Bitcoin options open interest reduced by $690 million today, leaving 60% of the remaining  $1.4 billion to August and September. More importantly, one should understand the impact on the put/call ratio. This metric provides an excellent gauge of professional traders sentiment.

Bitcoin options put/call ratio

Bitcoin options put/call ratio. Source: Skew

As per the above chart, the put/call ratio was 63% on July 30, ahead of expiry. This indicates that options (bearish) open interest was 37% smaller than call options (bullish). Preliminary data show that indicator is currently at 69%. Despite remaining in a bullish territory, open interest for the remaining calendar shows slightly less optimism.

The net expiry result will most likely be neutral

Futures markets are naturally more balanced as longs and shorts have equivalent exposure at all times. By monitoring recent perpetual liquidation activity, one can infer that most sellers are fully hedged. Some $500 million expired today, and this is less than 10% of aggregated open interest.

Currently, BTC options markets seem to be favoring bulls, and as mentioned earlier, the most recent Bitcoin (BTC) price surge caught many bears off guard. 

Investors should closely monitor options 25% delta skew indicator and futures contracts contango, as previously reported by Cointelegraph. Each of these indicators will signal whether there is potentially excessive bullish activity.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

What To Expect If Bitcoin Forms Three White Soldiers On Weekly Timeframes

Bitcoin price this week exploded through resistance at $10,000 and blasted to a high of $11,400. The cryptocurrency is now consolidating below that level, gearing up for what one crypto analyst expects to be a follow up nearly one and a half times the size of this week’s rally.

Will the cryptocurrency close a “Three White Soldiers” formation, and if it does, what can be expected for price action in the days and weeks ahead?

Bitcoin Price Weekly Structure Looks Set For Bullish Uptrend Pattern, Claims Crypto Analyst

In response to the United States’ second round of stimulus money flowing into free markets, gold soared to a new record, while silver, Bitcoin, and cryptocurrencies went on a tear.

These hard assets are expected to continue to perform in response to hastening inflation. Cryptocurrencies like Bitcoin are also breaking out from a three-year bear market, providing them with much pent up momentum.

Related Reading | Why Bitcoin Ditching Stock Market Correlation For Gold Is Bullish for BTC

Case in point, BTCUSD rallied over 13% this week alone, after spending nearly three full months consolidating below $10,000. And while much of the push from precious metals and crypto was due to the dollar collapsing and not all due to these assets pumping, most analysts are expecting the uptrend to continue in crypto.

According to one crypto analyst’s “bold take,” they expect Bitcoin to close out this week strong, yet next week much stronger. They see the leading cryptocurrency by market cap performing 1.5 times better than this week, confirming a three white soldiers Japanese candlestick pattern.

But what exactly will the pattern imply if confirmed?

bitcoin three white soliders

BTCUSD Weekly Three White Soldiers | Source: TradingView

Will Three White Soldiers Form On BTCUSD Weekly Price Chart? What Does This Mean?

Three white soldiers is a bullish Japanese candlestick pattern, where three green candles close in a row, each higher than the next, with similar-sized or increasingly larger candlestick bodies.

Even if the pattern confirms with three candles in a row, due to heavily overbought conditions the fourth candle in the formation is often a pullback. After that, however, three white soldiers would confirm a new uptrend.

The last time such a pattern confirmed, was during the 2019 parabolic rally that took Bitcoin price to $14,000.

Related Reading | Bearish Bitcoin Signal That Preceded 220% Explosion in 2017 Just Flashed

After finally breaking out from resistance near Bitcoin’s bottom, the asset paused, consolidated, and then took off like a rocket ship. The second weekly candle was particularly large after the breakout, matching the rally we’ve seen this past week.

What came next, was another 100% climb before the asset topped out. Another 100% rally from current prices, would take Bitcoin price to a new all-time high.

Three white soldiers are the opposite signal of three black crows. The bearish signal appeared on monthly timeframes following the asset topping in 2019, promoting a new downtrend to follow.

With three white soldiers potentially forming on BTCUSD weekly price charts, will it kick off another explosive uptrend?