Trading volume on the world’s most popular crypto exchange has surged following a rally of the top three tokens.
With Bitcoin within $1,000 of its all-time high price of $19,891 set in December 2017, trading on major crypto exchange Binance is also hitting new heights with more than $37 billion in volume in the last 24 hours.
According to data from CoinMarketCap, the daily trading volume of Binance has now hit $37,291,444,117 which is up 40.5% in the last 24 hours. Last week, the analytics site reported $25 billion in trading volume for Binance.
In addition, Bitcoin (BTC) futures open interest on Binance hit an all-time high of $1.17 billion, according to crypto analytics site Glassnode.
The surge accompanies bullish price action from the major crypto assets. The price of Bitcoin is more than $19,100 at the time of publication, having risen 4% since yesterday, Ether (ETH) has surged more than 25% in the last week to reach $605, and yesterday XRP rallied to a yearly high of $0.73 after more than doubling in the space of a week.
While the exchange is drawing in more trading activity than ever, it’s doing so without U.S. users. Several Twitter users based in the U.S. have reported an email from Binance informing them they have 14 days to close their accounts. The exchange reportedly said th accounts will be locked if they fail to withdraw all funds before the deadline. Binance has been restricted for users living in the United States since September 2019.
The exchange said the move was in response to “new guidance from the Commodity Futures Trading Commission.”
U.S. crypto exchange Coinbase Pro announced today that customers would not be able to use margin trading on the platform beginning on Wednesday.
According to the Coinbase blog, Chief Legal Officer Paul Grewal said that no new margin trades would be allowed starting on Nov. 25 at 2:00 PST. The exchange stated that it would take the product offline in December “once all existing margin positions have expired.”
“We believe clear, common sense regulations for margin lending products are needed to protect and provide peace of mind to U.S customers,” said Grewal. “We look forward to working closely with regulators to achieve this goal.”
Grewal said the move was in response to “new guidance from the Commodity Futures Trading Commission,” or CFTC. In March, the commission clarified its position on the “actual delivery” of assets to include crypto bought using leverage trading or other methods. The CFTC’s guidelines stated there would be a 28-day deadline for physical delivery, allowing buyers to use any purchased digital asset after that period.
When participants trade futures in traditional markets, they are betting on the future price action of an underlying asset. If they hold those futures all the way through settlement, they end up receiving the underlying asset, physically delivered to them. However, the CFTC guidelines clarify that for digital assets, the parties selling tokens and those acting as facilitators — which would include Coinbase — would not have any control over crypto used for margin trading once it has been delivered to the customer.
It's unclear what impact the move will have on markets, but some pundits suggest it may cool down the recent price run.
Based on CFTC guidance Coinbase Pro is removing margin trading.
Huge blow to US crypto and likely to drive price impact as it will take a lot of money off the table:https://t.co/8lYHh9PiVf
Wonder how long before other US exchanges are forced to comply.
The announcement comes on the same day Coinbase stated it would no longer be using Form 1099-K to report the cryptocurrency activity of its users to the Internal Revenue Service. This tax form was for Coinbase users who had more than 200 transactions and $20,000 in volume annually, but did not include accurate reporting of the cost basis and fair market value of any cryptocurrency investments.
Coinbase announced it would be using 1099-MISC forms to report tax information for customers who have received $600 or more in crypto “from Coinbase Earn, USDC Rewards, and/or Staking in 2020.” However, it will not issue tax forms to users who are not U.S. citizens residing outside the country.
Additional transactions have been deposited into the Ethereum 2.0 contract to ensure a Dec.1 launch of Eth2's beacon chain
The highly anticipated launch of Ethereum 2.0, or Eth2, is scheduled to take place next week. Specifically speaking, Eth2’s proof-of-stake blockchain known as “the beacon chain” has been confirmed to run alongside the Ethereum network starting Dec. 1.
While impressive, it’s important to note that additional deposits went into the Eth2 deposit contract even after the target goal was reached. To put this into perspective, Vitalik Buterin, the co-founder of Ethereum, sent a recent tweet on Nov. 24 showing the impressive amount of transaction across the Ethereum network over time:
While it’s unknown where these transactions came from, Alex Mashinsky, chief executive officer and founder of Celsius Network — a crypto lending and borrowing platform — told Cointelegraph that Celsius provided 25,000 worth of ETH to ensure that the Eth2 deposit contract had enough funds to launch on time.
According to Mashinsky, the amount of ETH Celsisus deposited was equivalent to $15,125,000 at the time of the transaction. Mashinsky further noted that funds came from the Celsius ‘s pool of community assets, explaining that this will be used to generate an even higher yield for the community once the Eth2 network is officially launched. Currently, Celsius users can earn up to 7.21% Annual Percentage Yield on ETH held in the Celsius wallet. Mashinsky said:
“We already have 230 thousand users on the Celsius network, along with 3.3 billion dollars worth in assets. These users are putting in ETH, allowing the network to earn yield on it in many different ways. The 25,000 ETH contributed to the proof-of-stake Ethereum network will generate another source of yield for our community.”
Mashinsky further shared that the growing Celsius community has been modeled off Ethereum, noting the importance of giving back the Ethereum network:
“We built our CEL token on the Ethereum blockchain and used it to scale and become one of the fastest-growing companies in crypto. We are proud to inaugurate the ETH 2.0 Genesis and contribute the last building block with 25,000 ETH from the Celsius community and be a helping hand to a company that helped us scale our own project.”
Hopes are high for Eth 2.0, but concerns remain
Although the Eth2 beacon chain is set to launch on Dec. 1, concerns still remain. For example, while scalability issues are expected to be resolved as Ethereum adopts a proof-of-stake consensus algorithm, the security of some Ethereum smart contracts remains questionable. This has especially come to light with the rise of decentralized finance, or DeFi, projects.
Additionally, some remain concerned that benefits will not be seen immediately following the gradual launch of Eth2. As such, the need for layer-two scaling solutions has become apparent.
Concerns aside, Mashinsky expressed excitement for faster scalability from the Eth2 network:
“Ethereum 2.0 will scale everything 100 times faster than now. The ability to move Ethereum from a proof-of-work to a proof-of-stake network will open a world of new ideas and opportunities that couldn’t be achieved before due to scalability issues.”
Africa’s largest economy has become a bastion for crypto adoption.
Nigeria’s Finance Ministry is reportedly in talks with the country’s securities regulator to develop a new framework for blockchain and cryptocurrencies -- a move that could accelerate adoption in Africa’s largest economy.
Business Day, a Nigerian market intelligence publication, reported Tuesday that the Ministry of Finance is working with the Abuja-based Securities and Exchange Commission, or SEC, to “provide a regulatory environment for blockchain” and digital assets. The publication cites Ministry adviser Amstrong Takang speaking at an industry event in Lagos on Tuesday.
Digital assets are recognized as commodities and governed by appropriate securities law in Nigeria following the SEC’s stunning edict on the matter back in September. At the time, the SEC said its role was to regulate this new asset class, not hinder adoption or innovation.
A CNN report suggests Yang may be on the short list for a position in Joe Biden's cabinet.
President-elect Joe Biden is reportedly considering crypto-friendly Andrew Yang as his future Secretary of Commerce.
According to a CNN report “based on conversations with Biden allies and advisers and Democrats with knowledge of the matter,” the president-elect may be tapping Yang, a former presidential candidate and entrepreneur, for a position in his cabinet.
Many considered Yang to be one of the most pro-crypto presidential candidates. He said that he wanted to implement blockchain-based mobile voting and outlined plans to regulate the cryptocurrency industry. The former presidential candidate is most well known for his signature campaign promise to deliver $1,000 a month to every adult in the U.S.
Since ending his campaign in February, Yang has spoken about potentially getting involved in a Biden cabinet. In an August interview on The Carlos Watson Show, Yang said he had spoken to then-candidate Biden regarding “a new position that doesn’t exist yet [...] around technology and innovation” but did not directly answer questions in regards to a role as Secretary of Commerce. He also helped launch a nonprofit organization intended to protect privacy online.
As Secretary of Commerce, Yang would represent U.S. businesses in Biden’s cabinet. Lawmakers have already proposed bills which would require outgoing secretary Wilbur Ross to study blockchain technology and report his findings to Congress, responsibilities which would seemingly pass to Yang.
Biden has already named Janet Yellen to serve as Treasury Secretary and tapped former Commodity Futures Trading Commission Chairman Gary Gensler to volunteer on the transition team as a financial expert. The president-elect announced plans for several positions in his administration today following yesterday's release of millions of dollars in transition funding. If selected and confirmed, Andrew Yang as Secretary of Commerce could be a step towards more pro-crypto views in the U.S. government.
Yang is currently in Georgia assisting Democratic candidates Jon Ossoff and Raphael Warnock in their runoff elections for U.S. Senate.
Google Trends data show searches for ‘Bitcoin’ rose to a yearly high as BTC price rallied to $19,400.
Today Bitcoin (BTC) price extended its rally toward a new all-time high as the price surged to $19,412 in the morning trading session.
Determining the actual all-time high for BTC is somewhat debatable as various exchanges have different figures listed. For example, Coinbase has registered $19,892 as Bitcoin’s peak, whereas BitMEX and Binance have $19,891 and $19,799 respectively. Thus, for most traders, $20,000 is likely to be the primary focal point that will solidify BTC reaching a new all-time high.
Pushing through the $19,000 level occurred quicker than many expected, especially after Bitcoin price plummeted to $18,000 in the evening hours on Nov. 23. This drop was nearly in tandem with XRP’s 30% drop at Coinbase after the altcoin pumped to $0.92.
Data from TheTie, a social analytics data platform, shows that as Bitcoin price lost momentum on Nov. 22 and Nov. 23, trading sentiment took a noticeable hit when traders anticipated a possible retest of lower supports in the sub-$18,000 zone.
According to Joshua Frank, the founder at TheTIE:
“The daily sentiment score looks at how positive or negative investors have been over the last 24 hours versus a rolling 20-day window. This metric (daily sentiment) has been positive (above 50) since Nov. 16 when Bitcoin was near $16K. For the daily sentiment score to remain positive, that means that conversations must continually get more and more positive. So if investors are positive over the last 20 days, they must be even more positive over the last 24 hours for the score to stay above 50.”
This suggests that regardless of strong pullbacks to say $18,000 or below, the majority of people investing in or tracking Bitcoin price still feel overwhelmingly bullish about the digital asset’s prospects when compared to historical price and sentiment data.
Google Trends data also shows that searches for the term ‘Bitcoin’ also reached a 2020 high today as the price rallied above $19,000 but the figure is nowhere near the high seen in December 2017.
What’s next for Bitcoin price?
As shown on the 4-hour chart, Bitcoin’s flushout to $18,000 created a double bottom right at the key support, and bulls stepped in to buy the dip with 3 successive high volume spikes.
At the time of writing the price has already pulled back to restest the lower support at $18,900 and if this level fails to hold then the next support is at $18,650 which is slightly above the 20-MA and a high volume node on the VPVR.
Similar to the move up to $18,000, a period of consolidation and support building is normal and healthy for sustaining momentum in an uptrend.
According to Matt Blom, the head of global sales trading at EQUOS:
“Bitcoin is focusing on claiming a new all-time high and it seems highly unlikely that having come this close, it fails to break the 2017 record. With a dearth of resistance levels overhead, thoughts turn to the next key upside target. Using Fibonnaci retracements levels, we see $29,100 as the goal, with a 1.618 move from $4,644 to $19,447 price points as our basis.”
Experts explain why blockchain-based systems are still more efficient then paper ballots or online voting systems
The 2020 United States presidential election was met with an increase in mail-in ballots due to COVID-19 concerns. Yet while many Americans stayed away from polling stations this year, postal delays, rejected ballots, and other challenges emerged.
Unsurprisingly, better ways for casting votes during major elections quickly became a hot topic of discussion. This has also led some in the crypto community advocating with renewed vigor for a blockchain-based voting system to be used in the future presidential elections.
Security aside, blockchain voting systems may be viable
Despite security concerns, some still believe that blockchain-based voting systems will be leveraged in major elections moving forward. Maxim Rukinov, head of the Distributed Ledger Technologies Center of St. Petersburg State University, told Cointelegraph that blockchain allows for a system of fair elections to take place within a trusted environment between participants who generally do not trust each other: “With blockchain you can make voting available and increase the transparency of any election. In a perfect scenario, the results of such a vote cannot be faked."
Rukinov shared that he has been working with a team of researchers to develop an online voting system specifically designed for enterprise use. Known as “CryptoVeche,” Rukinov explained that this particular system stores voting results in a blockchain, which is a type of distributed ledger. As such, the system is highly secure against external and internal hacks.
Alex Tapscott, co-founder of the Blockchain Research Institute and a book author, explained this in detail for a New York Times article published in 2018, even before the COVID-19 pandemic brought new challenges to light. Tapscott pointed out that in elections, trust is concentrated within government agencies, which are extremely vulnerable to hacks, fraud, and human errors. To put this into perspective, a study released last year shows that local and federal government entities have fallen victim to 443 data breaches since 2014, but those mostly included lost hardware, mailing errors, and paper breaches.
Tapscott noted that a blockchain system relies on distributed network computers to verify transactions. Once verified, results are recorded in blocks that are linked cryptographically to the preceding block. A secure ledger is then formed, which is transparent to all network participants, yet remains immutable and tamper proof. This feature is also important for ensuring that individuals only cast a single vote, as blockchain-based systems are meant to prevent double-spending.
Don Tapscott, well-known author and co-founder of the Blockchain Research Institute further told Cointelegraph that votes cannot be sent online today because internet-based systems do not work well for such applications:
“If we transmit information like a vote on the Internet we’re actually sending a copy of that file; the original remains in our possession. This is acceptable for sharing information but unacceptable for transactions with assets, like money, securities, songs or recording votes in elections.”
As such, Tapscott noted that within a blockchain-based system, public trust in the voting process is achieved through cryptography, code, and collaboration among citizens, government agencies, and other stakeholders.
Technical challenges must be overcome
Of course, there is no denying that technical challenges related to blockchain-based voting systems remain. In addition to the security concerns mentioned by MIT researchers in their recent report, Rukinov acknowledged that developing an online voting system is challenging.
Rukinov further explained that with blockchain systems the accuracy of transactions, in this case, voter registration is verified by a consensus mechanism between different members of the network. However, when it comes to voting systems independent observers must also be one of the parties involved with the consensus, meaning they would have to hold several validation nodes.
According to Rukinov, in most cases the number of nodes owned by the network organizer are greater than the number of independent nodes. So in the case of a blockchain-based voting system, an attack may occur when those who control more than half of the resources have the ability to change data at random. Rukinov pointed out that this problem is not the case for all types of consensus mechanisms.
Lior Lamash, Founder and CEO of GK8, a cybersecurity company, also told Cointelegraph that while the immutable nature of blockchain makes it an effective platform to ensure the integrity of the voting process, several vulnerabilities remain. Specifically speaking, Lamash noted that voter identification is problematic when using blockchain-based voting systems:
“The security aspect of blockchain-based voting is tricky. On one hand, the blockchain itself is completely secured from even state-level hackers, as it employs hundreds of thousands of nodes on multiple servers across the globe. The challenge would be in securing the ‘endpoints’ of this network – individual ballots and voting stations.”
Moreover, Lamash noted that while each ballot stores a user’s private keys, a hacker could obtain that information and manipulate the entire election process: “This issue is quite similar to the challenge that banks and other financial institutions face when offering blockchain-based services."
Although challenges remain with blockchain-based voting systems, it’s clear that blockchain has huge potential for use in future elections. Dylan Dewdney, chief executive officer of Kylin, a cross-chain platform designed for Polkadot-based data economy, told Cointelegraph that the trusted outcome of an election must also be taken into consideration. He further determined that blockchain being applied for data validation is highly useful in this case.
According to Dewdney, a decentralized infrastructure could help improve the trusted outcome of an electoral process. Dewdney explained that Kylin has created a data validation process using an oracle node, which serves as an information feed. An arbitration node is then used to judge if that data is valid or not. Dewdney said:
“Anyone operating an arbitration node would have an excellent incentive to challenge inaccurate information as they would be rewarded in a native token to do so. Similarly, providing accurate, validated (challengeable) information as a premium data feeder to consumers like news organizations, is incredibly valuable as a premium data feed in a data marketplace.”
Although Kylin is a solution that can easily be applied in the decentralized finance space, the same concept can be used for voting systems. “Decentralized validation of local electoral results could provide a very powerful tool against some of the problems we are currently seeing." He further added: "This could easily operate as the linked consensus of the validated API feeds of literally thousands of local election results reported to websites within a Dapp developers premium data sourcing.”
Rukinov believes that the ideal blockchain-based voting system must cater to voter eligibility, verifiability, and immutability. He mentioned that these features can be achieved in the future through cryptographic protocols including digital signatures, zero-knowledge proofs, and homomorphic encryption: “In order to achieve additional benefits, it’s necessary to add the possibility of cancelling the registration; observers being able to detect the facts of falsification; and the permanence of the register change history."
Bitcoin's bull market is having a dramatic effect on demand for hardware resources as miners look to ramp up production.
Bitcoin (BTC) mining continues to ramp up following the successful May 11 halving, but growing industry concentration could undermine the “democratization of hash rate,” according to a panel presentation at this year’s Mining and Investment Summit.
Hosted by Matrixport and sponsored by Bitmain, the 2020 Mining and Investment Summit was held virtually Tuesday morning, bringing together the "leading companies in the fields of cryptocurrency mining and digital asset financial services.”
In a presentation called “Bringing Bitcoin Mining to a Broader Market,” Thomas Heller of HASHR8 provided an update on the mining industry, including trends in ASIC demand.
Heller indicated that the market is currently experiencing an “ASIC supply squeeze,” with a “large group of eager miners looking to buy.” He indicated that hardware suppliers Bitmain, MicroBT and Canaan are already taking orders for March to July 2021.
Commenting on the so-called Bitcoin supply crunch, Heller’s presentation indicated:
“North American public and private companies continue to accumulate bitcoin, as well as expand their bitcoin mining operations. Leading to a supply crunch for BTC itself.”
A rush to accumulate Bitcoin by institutions and corporations has contributed to a rise in mining revenue, which, in turn, has caused a surge in demand for new and secondhand ASIC miners. Large miners are ramping up their operations amid the Bitcoin supply squeeze and are looking to bring as much hash rate as possible within their borders.
These trends could move the industry's hash rate further away from democratization as China continues to dominate. As Heller notes, two-thirds of Bitcoin’s hash rate is concentrated in China-based mining farms.
China is generally believed to have one of the lowest breakeven rates for miners in the world. As of June, it cost between $5,000 to $6,000 to mine 1 Bitcoin in China, assuming an electricity cost of $0.04 kilowatts per hour. Globally, the Bitcoin mining breakeven rate could be as high as $8,500 in some jurisdictions.
Bitcoin mining is generally considered to be less accessible to individual miners due to the costs and resources involved. Over the years, the mining industry has come to be dominated by weighted pools, or groups of cryptocurrency miners that combine their computational resources. Although pool distribution isn’t as concentrated as it was before, in the last 12 months, three pools accounted for 45.3% of the hash rate.
Location and individual ownership of hash rate are important considerations when thinking about decentralization, Heller said on Tuesday.
HASHR8 recently announced the launch of Compass, a platform that matches Bitcoin miners with verified hosting facilities. The goal of Compass is to democratize mining profitability and bring more small-scale miners into the fold.
As we proclaimed in 2019, IOTA is on a mission to set and become a de facto standard in DLT and IoT technology. Today, we will explain what standards are, the standards that apply in our space, and what we are doing specifically with standardization. In addition, we will discuss what we have in development for the IOTA Protocol and the progress we’ve made over the last few months.
Stay tuned for future updates, as we work our way through the various standards processes at the Object Management Group (OMG) and elsewhere, as well as communicate the state of IOTA’s own standards.
First things first: what are standards?
What does it actually mean to be a standard? Standards are so ubiquitous that usually, we don’t need to think about them. For example, you don’t have to think about which way to turn a screw. For more complex requirements such as interoperability between computer models, some group of experts will have had to think long and hard about the requirements. Once they get this right, this can be published as an international standard, so that everyone can now refer to the same requirements.
A standard is really a special kind of requirement specification, in which everyone can agree what specification they are referring to, what the latest version is, and how to use it. In the Internet of Things, this is particularly relevant, since there will be several layers of protocols, each defined in its own standard. These include W3C standards, IETF, and industry de facto standards like Zero MQ.
At this level, when we use the word ‘standard’ we might just be referring to something that everyone has agreed to refer to, for example, a common industry standard or even the standard way some vendor does something. These are what we call ‘de facto’ standards. Effectively, IOTA is already a de facto standard — you need to refer to it in order to build anything that can be run on the IOTA Mainnet or that extends or exchanges data with an IOTA Node.
Why are standards important?
Standard setting is a key part of engineering. Standards are often quoted as part of a specification. Back in the days when everything was printed a specification might be more than a meter thick, as it contained copies of all the standards referenced in it.
The use of standards gives the user of any product a level of confidence that all aspects of a product covered by a standard will behave the same way. They don’t need to think about which way to turn a screw.
There are also times when more confidence in a standard is needed. How do I know your standard won’t change, is the latest version, and there aren’t any vulnerabilities or other gotchas that other users have found?
Note that most standards bodies don’t ‘write’ the standards as such. Rather, a company or industry consortium will take a standard they have developed and submit it to the standards body. In doing so, they are subjecting it to a level of scrutiny, formal control and best practice that will give everyone more confidence in that standard than when it was just a group of people doing it on their own. The standards body will also take steps to make sure that your new idea for a standard isn’t doing something that already exists, and that a fair and level playing field exists among industry participants.
IOTA setting standards
IOTA Foundation is looking to set and become a set of key standards for Distributed Ledger Technology and the Internet of Things. Through our work over the last few months, The IOTA Protocol has already become a ‘de facto’ standard, in the sense that existing node software (IRI, Bee and Hornet) behave in a standard way in order to participate in the Tangle. The next step is to submit the IOTA Protocol as a formal international standard via the Object Management Group (OMG), thereby introducing a level of formal control and governance while giving users confidence that the standard can be used consistently across industries.
How does the process work?
Every standards body has its own formal processes for the development and publication of formal standards. These processes vary considerably but are geared towards the common outcome of publishing a formal specification that can be followed by anyone wishing to build a product or service that can assert conformance to that standard or to specific conformance points defined in the document. Standards-setting processes are designed to ensure a level playing field among participants. It is generally required that the standard is reflected in some real-world application before it can be published.
Object Management Group standards process
The currently active IOTA standards initiatives are being pursued through the Object Management Group. The OMG also has an arrangement whereby it is possible to ‘fast track’ an OMG standard to become an ISO standard.
The Object Management Group (OMG) has two routes towards the publication of a formal international standard specification. These are:
Request for Comments (RFC)
Request for Proposals (RFP)
These are shown in the diagram below. In some cases, the development of an RFP is preceded by a more general ‘Request for Information’ (RFI) in which the relevant OMG Task Force determines whether or not there is a need for a new standard for a particular set of requirements.
The ‘Request for Comments’ (RFC) process is intended for use when there is an existing de facto standard and there is no realistic chance that someone else may wish to propose a standard to meet the same requirement. An RFC is submitted directly by the organization that already maintains that standard, and if accepted by the relevant OMG Task Force, the initially submitted version is then put out for review to the public. Responses are sought by OMG members and non-members alike since the purpose of this process is to ensure that there is no competing specification. The RFC process is used with caution. If it is shown that someone else could also submit a specification to cover the same set of requirements, the proposal will be knocked back and replaced by the RFP process.
The ‘Request for Proposals’ (RFP) process is used when the OMG community sees the need for a standard and asks people to submit proposals. Whereas an RFC is submitted directly by the de facto standard maintainer, an RFP is drafted by an OMG Task Force. Once finalized, the RFP goes out to OMG members who are encouraged to submit a potential standard specification as a response to that RFP.
In special cases such as for DLT-related standards, a Special Interest Group such as the Blockchain Platform SIG may assist in drafting an RFP or RFI. This group then brings it to the appropriate OMG Task Force for formal voting and action.
Standards are a two-way street. We also benefit from and use existing standards in drafting our own specifications. This is a requirement for OMG RFC submissions and RFP responses. Our IOTA standards submissions will, therefore, use standard notations whenever possible to describe things in the specification — whether this is something as simple as mathematics, or industry notations like UML for class diagrams, state machines, and so on.
We have also started to fine-tune our own internal specifications to be more in line with formal international standards, as well as defining our own internal processes for RFI, RFP, and RFC in the development of IOTA specifications.
At OMG, IOTA participates in several task forces and special interest groups, including the Blockchain Platform SIG (Blockchain PSIG).
As a ‘citizen’ of the OMG ecosystem, IOTA has already played an active part in the Blockchain PSIG, which we co-chair. This is a symbiotic relationship in which we have been sharing updates and insights from IOTA as the Protocol has evolved from 1.0 through 1.5 to the present IOTA 2.0 Coordicide specifications. At each stage, we have updated the relevant OMG groups on these and other developments and gained valuable insights and feedback from them, such as how to apply existing OMG standards to our work. These conversations will start to bear more fruit as we introduce more IoT-specific features to the IOTA protocol.
Meanwhile, we have headed up most of the work in the Blockchain PSIG, where we have worked on:
IOTA Foundation response to the interoperability RFI
Potential RFPs for aspects of Interoperability coming out of the Interoperability RFI
Semantics for Smart Contracts
Self-sovereign identity — Disposable SSIDs RFI and future RFP
Linked Encrypted Transaction Streams (LETS) RFP
IOTA Streams practical demonstrations in mobility
In the past, we have also shared insights into the IOTA ‘EEE’ protocol and the Ternary specification, though these are not set to become OMG standards at this time.
At the OMG we have two things we are working on at the moment: the IOTA Protocol as an RFC, and a standard for IOTA Streams as a response to the LETS RFP.
“I’m proud and excited that the first DLT standardized will be IOTA and its Tangle architecture. This will make it much easier to achieve DLT interoperability for the user.”
— Richard Mark Soley, Ph.D., Object Management Group Chairman and CEO and IOTA Foundation Supervisory Board Chairman.
The IOTA Protocol standard
The IOTA Protocol defines what a piece of software needs in order to run it on the IOTA Tangle. This de facto standard already exists and anyone who refers to it may build a Tangle node.
In order to make it easier to refer to the IOTA Protocol specification, and so that the whole community can have confidence that they are referring to the most up to date version of the Protocol, we are submitting this to become a formal OMG standard.
The IOTA Protocol is following the OMG Request for Comments (RFC) process since it is a de facto standard specific to the Tangle.
The basis for the IOTA Protocol RFC will be the IOTA 2.0 Coordicide version, since this will be non backwardly compatible with the current IOTA 1.5 protocol that is implemented on the IOTA Mainnet.
A formal submission requires that a standard is in use somewhere in production, so this will be finalized after IOTA 2.0 is running on the IOTA Mainnet, but can be submitted as soon as we have a stable version, likely for the March OMG quarterly meeting. We will use the intervening time to get more feedback via the OMG, both from the technical experts and from a number of academic institutions that are OMG members. Part of the OMG way of working is that we share upcoming standards drafts early and often, to make the most of the expertise available to us.
IOTA Protocol RFC Submission Timings
The time that would normally elapse between submitting an initially proposed version of the specification, and this being approved as a formal international standard (‘Finalization’) can typically take around nine months and cannot be completed in less than six.
In discussions with the relevant OMG task force during the September meetings, we established that we could file the initial submission ahead of it being implemented on Mainnet, but only at the point where any changes between the submitted version and the later Final version would remain backwardly compatible. A formal communication that the IOTA Protocol is in deployment on Mainnet will need to be received by the OMG before the finalization by the OMG. This buys us some flexibility — we will file the initial submission as soon as we are fully confident that there will be no breaking changes, and have from then until final publication to complete deployment onto the Mainnet. This means that for example if the relevant tests at IOTA are completed by February, we could submit the initial draft as early as March 2021 and expect to complete the finalization process for the September or December quarterly meeting cycle.
Within the IOTA Foundation, the Formal specifications for Coordicide are in good shape and are in the process of being handed over to Engineering.
Between now and the initial submission of the RFC, we will be working at IOTA to take these specifications and refine them so as to separate the ‘What’ (Protocol) from the ‘How’ (Implementation specifications). This is part of the considerable work that is needed before IOTA 2.0 is ready to submit to the OMG. By the end of the next phase of development, the Protocol specification will be available to be submitted as an RFC proposal and will be under full formal change control as required for a standards submission.
For the next OMG quarterly meeting in December, we will present the current draft specifications from Research to get feedback from OMG. This will be submitted in 2021 via the OMG Middleware and Related Services (MARS) Platform Task Force, who will vote on this when it is formally submitted.
A future ‘Coordicide’ with support for more advanced Internet of Things functionality could be a further revision of the same standard if changes are backwardly compatible. If that version of the protocol represents breaking changes (which is a real possibility) then this will be submitted as a new RFC following the same process.
The Linked Encrypted Transaction Streams (LETS) RFP
The OMG Blockchain Platform SIG has been working on a ‘Linked Encrypted Transaction Streams’ (LETS) RFP, based on the ideas set out in the IOTA Streams protocol. IOTA Streams is an open-source DLT framework for decentralized data streaming and encryption on embedded systems.
At the September OMG Quarterly Meeting, drafting continued on the LETS RFP. We discussed how submissions are expected to make use of the OMG’s Data Distribution Services (DDS) family of standards and finalized the wording in the RFP to reflect that.
The draft RFP was completed and submitted to the OMG in November and will be formally voted on at the December quarterly meeting. Assuming this is passed, the RFP will be formally issued by the OMG. Unless the dates are altered by the relevant OMG committees, this will have a response due date in February 2021, so that responses (the Streams-based proposed standard) may be reviewed at the March OMG Quarterly Meeting. The current progression from alpha through beta to the final status of the IOTA Streams protocol itself is expected to be completed within that same time frame.
Any suitable entity may respond to an RFP, as long as they are members of the OMG with the right level and type of membership. RFP responses are often submitted by consortia of member firms, and this is encouraged by the OMG.
The IOTA Streams specification is expected to form the basis for a formal response to the LETS RFP, using the ‘Framework’ part of that specification, which has been released in alpha. This IOTA proposal will be based on the OMG’s Data Distribution Services (DDS) family of standards and will make extensive reference to that. Similarly, the Streams Data Description and Modification Language (DDML), which forms part of this specification, would be expected to make use of the OMG Interface Definition Language (IDL) standard.
On the recommendation of people in the OMG community, we expect IOTA to work with one or more DDS vendor firms in the drafting and submission of the Streams Protocol as a response to the LETS RFP, to broaden our submission and improve take-up across a wider range of ecosystems. This activity can start now, and we will be reaching out to these DDS vendor firms during the current quarter.
We are also in discussions with a group in the Netherlands called SKALY, who have developed a protocol called Freighter that is also capable of being defined in terms of the ideas set out in the LETS RFP. We have updated the OMG LETS RFP document to include some of the specific features of Freighter and we anticipate having SKALY working alongside us in drafting the RFP response specification.
The submitted protocol needs to be independent of the Tangle in order to be a suitable response to the LETS RFP. This means that a LETS or Streams implementation can be built for other DLT environments as well as non-DLT deployments, for linked streams of messages. This also means that changes from IOTA 1.5 to IOTA 2.0 need to be transparent to the Streams protocol. This is made possible by IOTA’s layered architecture, where Streams represents a ‘Layer 2’ protocol that is already independent of any underlying transport arrangements.
What else are we looking into at the OMG?
There is a lot more to come. We participate in other DLT related initiatives such as self-sovereign identity (SSID). These activities take place at meetings of the Blockchain PSIG, which meets weekly and has a more formal meeting during the OMG Quarterly Meeting, typically on Wednesday. At the September OMG meeting, we had updates on the IOTA Protocol, held a drafting session for the LETS RFP, and worked on a new initiative in the area of self-sovereign identity, relating to disposable identities.
In the near future, the OMG Blockchain PSIG will also look at the recently-released IOTA Access work and determine whether there is potential for an RFP in that area, or as a deployment scenario for Disposable SSIDs.
Overall we will continue to work both within the IOTA Foundation and at the OMG to identify things that may benefit from standardization within the IOTA ecosystem, for example in Smart Contracts, Stronghold and other things as they come up. We will continue to work in both Research and Engineering to ensure that the IOTA Protocol proposed standard will work for the full range of possible usage scenarios, including through our work on supply chains, identity, mobility, Internet of Things and other uses of the IOTA distributed ledger technology stack that are yet to be thought of.
Self-Sovereign Identity Standards
The OMG Blockchain PSIG has been exploring standards in the area of self-sovereign identity (SSID) and considering potential gaps in the standards space for these.
The PSIG is currently exploring the potential for a standard for ‘ephemeral’ or context-specific disposable SSIDs. This proposal was brought to the OMG by a group of researchers from the European Union. These would be context-specific identities using the W3C DID standard, that are disposed of as soon as the context they are created for no longer applies. Users can also choose different trusted third parties for different kinds of contexts.
Disposable Self-sovereign Identity RFI
In order to make sure there is a real need for a new standard for disposable SSIDs and to ensure that this would get used, the Blockchain PSIG is first following the ‘Request for Information’ (RFI) process. Assuming the RFI confirms such a need, the OMG would then issue an RFP.
The basis of the identity RFI is to get a good overall understanding of the landscape around cryptographically enabled identity solutions, including market needs for potential applications, coverage of any existing standards and alternative approaches to business problems including GDPR compliance.
Standards for SSID itself are well-established, for example, the W3C DID standard and the related Verifiable Credentials work.
The Blockchain PSIG worked on the draft RFI over the summer, reviewed it at the September quarterly meeting, and submitted a formal draft to the OMG in early November for discussion and formal voting at the December quarterly meeting, after which all being well this will be issued so that interested parties may respond to the questions it poses.
The IOTA Foundation will be responding to the Disposable SSIDs RFI as soon as this is issued by the OMG, just as we did for the earlier RFI on supply chain interoperability. We will also be reaching out to other partners that we are involved with such as the Trust over IP Foundation.
If the responses to the RFI indicate that there is potential for a Disposable SSID standard, the Blockchain PSIG would then draft an RFP for potential issuance through the MARS PTF, most likely in June 2021.
The Blockchain PSIG is also curating a wiki page for the information we learn from responses to that RFI.
For IOTA, this represents an opportunity to develop applications for this new kind of identity standard. IOTA has IOTA Identity, an implementation of the W3C DID standard. This RFI and any subsequent RFP gives IOTA the potential to shape the development of these standards going forward, working with other submitters and the relevant task force.
IoT and Home Automation
Through our involvement with the OMG, IOTA also has access to its sister organization, the Industrial Internet of Things Consortium (IIoT). The support for IoT-specific features is integral to the IOTA protocol.
We have also been looking at the home automation space, where we think there may be gaps in the existing standards. We will start to explore this, looking at the layers of the existing stack, what standards are in play for each layer (W3C / IETF, de facto protocol standards, and so on), and see where the gaps are. We would then reach out to whatever standards body is most suited to standardizing the relevant protocols. This is a further opportunity for IOTA to show leadership in the IoT space, supplementing our existing work in Industrial IoT, Smart Cities, and Mobility.
Other Standards Proposals
Going forward there are likely to be a number of other areas where we can contribute standards, including Access and Smart Contracts. We may start developing standard semantic representations (called ontologies) for business concepts referenced in Smart Contracts and applications while drawing on other specifications from the OMG in our standardization of things that are coming down the line.
Tangle EE is a working group collaboration with the Eclipse Foundation. It provides a governed environment for organizations and contributors to develop new ideas and applications using IOTA technologies. It brings together IOTA, OMG, Eclipse and a number of industry participants. There are a number of active TangleEE working groups looking at different areas and this is a good forum for helping people adopt and use the IOTA standards and specifications as well as for exploring new potential standardization opportunities. Exploration of the potential for an IOTA implementation of ephemeral (disposable) SSIDs is taking place within TangleEE.
Our vision for standards is that we have formal standards defined at the OMG (and other bodies as appropriate), while we publish software libraries via the Eclipse Foundation and publicize these to the wider community via TangleEE and elsewhere. People can use these libraries in the confidence that in doing so they are building in conformance with the latest standards in partnership with industry.
We will continue to develop IOTA standards internally, liaise with the OMG and other standards bodies, and pilot these through from IOTA de facto standards into internationally recognized standards as we launch IOTA 2.0. We look forward to sharing the progress with you over the coming months.
If you have any questions, you can find our team members on our Discord server. You are also welcome to follow us on our official channels:
In remarks that highlight flaws of the fiat currency system, the European Central Bank (ECB) president, Christine Lagarde, says the institution cannot go bankrupt even if it incurs losses running into trillions. According to Lagarde, normal bankruptcy rules do not apply to the ECB primarily because it is the sole issuer of euro-denominated central bank money. The Eurosystem will always be able to generate additional liquidity as needed.
Bankruptcy Rules Not Applicable to ECB
The ECB leader made her remarks while responding to a question from an Italian member of the European Parliament. According to a Reuters report, an unequivocal Lagarde argues that central banks and the ECB in particular, are exempt from the established norms. She says:
The European Central Bank can neither go bankrupt nor run out of money even if it were to suffer losses on the multi-trillion-euro pile of bonds bought under its stimulus programmes.
In response to the effects of the global pandemic Covid-19, the ECB, just like other central banks, pumped trillions into the Eurozone financial system. The money was intended to help economies hard hit by lockdown restrictions as well as to boost demand for goods and services. However, the unprecedented money creation and borrowings are raising alarm as some believe the ECB went beyond its capacity.
However, in an apparent response to such concerns, the ECB president not only defends the massive borrowing but asserts that financial losses cannot bring down central banks. Lagarde says:
“So, by the definition, it will neither go bankrupt nor run out of money. In addition to that, any financial losses, should they occur, would not impair our ability to seek and maintain price stability.”
Furthermore, Lagarde adds that “there is no legal basis for the ECB to cancel the government debt it owns.”
The Fallacy of Unbridled Money Creation Monopoly
Lagarde’s claim that the ECB has unhinged money creation powers has long been the source of concern for opponents of the fiat currency system. One such opponent, the famous Austrian economist Fredrich Hayek wrote a book titled “Denationalization of Money” in which he attacks the fiat currency.
In the book, which was published five years after the world abandoned the gold standard currency system, Hayek argues for free markets even in the sphere of money creation. According to an excerpt from the book’s preface, Hayek states:
“Money is no different from other commodities and that it would be better supplied by competition between private issuers than by a monopoly of the government.”
Hayek, a winner of the Nobel Prize in Economics, argues the case that “money is no exception to the rule that self-interest would be a better motive than benevolence in producing good results.”
Meanwhile, adherents to Hayek’s school of thought including bitcoiners, have consistently used the economist’s arguments when making the case for privately issued cryptocurrencies. They point to the competition that currently exists within the crypto space and how some coins are faltering, while others gain traction.
Lagarde’s latest remarks, as well as recent reports that the global debt will reach unprecedented levels by end of 2020, only helps to buttress the argument for private sector participation in the creation of money.
What do you think of Lagarde’s comments? Share your thoughts in the comments section below.
Earlier this year, DeFi exploded to the unseen heights. From a humble beginning at the start of this year, it progressed to the value exceeding the initial one by thousand times. This all serves as a proof of the increasingly important role that DeFi starts occupying in our lives. Right now, the field is close to bringing the revolutionary change to many areas of our lives – and financial management is just one area to mention.
Despite this fact, the gap between traditional financial markets and a newly-born fetish of decentralized finance remained open. While DeFi is only in its infant stage, the stock market is still a preferred way for companies to trade their value and attract investment flow. This may explain why the sizes of these two are so different – the size of the US stock market is $217 trillion, which seems like a mammoth value compared to the humble $14.41 billion stored in DeFi. But now, there comes a solution that stores a promise to build a bond between these two realms and even merge them into one – its name is OpenDAO.
The bridge between DeFi and the world of real finance
By surpassing the boundary of DeFi, OpenDAO steps on a stage of the real world and aims to make the highest-volume traded stocks available to all DeFi enthusiasts. These include big tech like Facebook, Tesla and Apple, also adding the exposure to illiquid assets like real estate.
This goal is accomplished in two ways: first, OpenDAO came up with its original stable coin, whose value is based on real-world collateral transformed into a tradeable token. Second, by partnering with various individuals and investor groups, and by automating whenever possible, OpenDAO secures the presence of these off-chain assets on their on-chain platform.
What’s even more noteworthy, OPEN is one of the rare tokens fully entrusting the reins of its governance to the hands of the public. That means, once the token is acquired through the open exchange, its possessor has a chance to define its further fate. All users can exercise their voting rights and make a collective decision on which types of assets are to be taken on board in the next round of investment. This segregates OPEN token out of numerous market alternatives, making it an extremely liberal asset ready to hear the voice of investors.
Cash Box and OPEN staking
The challenge with the abovementioned scheme is the long-term stability of the liquid resources within the platform – especially when it concerns open decentralized exchanges based on the model of Uniswap.
To overcome this difficulty, OpenDAO came up with two solutions: Cash Box liquidity mining and OPEN staking. The first one of them, Cash Box, is storage where liquidity providers supply various stablecoins (e.g. USDC and USDT) that together serve as a back-up of real-world assets. Another one, OPEN staking, encourages the participants to participate in a yield farming program that brings generous API rewards of 13%-20%.
This all allowed creation of Open Market, a decentralized exchange facilitating the free swaps of digital assets for the real-world collateral. This platform gives an opportunity to earn high interest on assets that are projected to give a rise of up to 100x times.
These prospects altogether bring OpenDAO to open a new horizon of decentralized finance. Apart from being able to get possession of a community-governed token, users can also participate in a free exchange of assets on a democratized platform facilitating a direct swap between participants. OpenDAO created a new realm where DeFi and traditional finance live in close unity, and a long-lasting partnership between DeFi and traditional finance is finally achieved.
CryptoBanter is the first cryptocurrency-centric media outlet available 24/7.
The world’s first live-streaming platform dedicated to cryptocurrency is going live just in time for the 2021 bull market.
Ran Neuner, host of CNBC’s Crypto Trader show, has launched the first call-in media channel devoted exclusively to cryptocurrency. Dubbed CryptoBanter, the station features a blend of news, opinions, interviews and live discussions with industry leaders.
CryptoBanter aims to be the world’s first crypto-based streaming platform available 24 hours a day, 365 days a year.
The new service is designed to provide viewers with an alternative source of “credible, live information” that can be accessed any time without having to go down the Crypto Twitter rabbit hole.
In an exclusive press release made available to Cointelegraph, Neunuer said:
“Banter is designed to bring the banter from Crypto Twitter and Telegram to a credible, moderated AV medium. It is designed to filter out the noise and bring information that people can trade on to a live streaming medium.”
CryptoBanter is described as a mix between CNBC, the Joe Rogan Experience and talk radio. The live stream is available on YouTube and through the forthcoming CryptoBanter mobile app.
Although the pendulum for cryptocurrency adoption has seemingly swung from retail to institutional investor, a platform like CryptoBanter is banking on growing consumer interest in digital assets. Cointelegraph asked Neuner about his thoughts on cryptocurrency adoption over the next few years. His response:
"While we are seeing great adoption Bitcoin as a store of value and a hedge against USD printing, the real adoption of Blockchain hasn’t yet begun and will take several years."
"(...) for now there will be a ton of speculation on investments in this space. Money will be made and lost in minutes and up-to-the-minute info is key. Today there is no live streaming (...) CryptoBanter looks to fill this gap!"
Mooniswap and the Pathfinder algorithm will be available to NEAR users.
The Mooniswap decentralized exchange protocol, developed by DEX aggregator 1inch Exchange, will be the first Ethereum (ETH) DeFi protocol to develop on NEAR, a sharded smart contract platform.
As part of a collaboration announced on Tuesday, the 1inch team pledged to port its automated market maker protocol to NEAR. Sergej Kunz, CEO of 1inch, told Cointelegraph that its Pathfinder aggregation algorithm will be eventually implemented as well.
The NEAR iteration of Mooniswap will remain independent from the existing version on Ethereum for the time being. While users will be able to use the NEAR Rainbow Bridge to bring Ethereum tokens to the new blockchain, the liquidity pools between the two platforms will be separate.
NEAR is a smart contract platform claiming a much higher current scalability than Ethereum. Unlike some other protocols like Polkadot (DOT) or Cosmos (ATOM), there are no independent blockchains or parachains on NEAR. Instead, the protocol offers a single chain that is sharded at the level of individual blocks. The goal of this construction is to simplify development by abstracting the underlying architecture into a familiar format. The NEAR Protocol has a single environment shared by all DApps, similar to Ethereum’s current architecture.
Kunz said that the existing scaling technology on NEAR will allow the team to “experiment with sharding and be prepared for the arrival of Ethereum 2.0.” The protocol is set to be deployed on NEAR in 2021.
Mooniswap uses a unique system of delayed virtual prices to prevent front-running and help reduce impermanent loss by reducing the profit collected by arbitrage traders. Under this system, changes to the effective price of an asset from previous exchange transactions are gradually enacted over a five minute period.
Mooniswap is among the first major Ethereum DeFi protocols that committed to building on another blockchain. NEAR had previously inked a deal with the Balancer protocol to establish funding for independent developers, though the DeFi app did not commit to building a new iteration of its protocol.
XRP-affiliated American blockchain giant Ripple has posted a job advertisement as it looks to recruit a Senior Director for Central Bank Engagements – the clearest indication yet that the company is planning to increase its focus on central bank digital currency (CBDC)-related initiatives on the XRP Ledger (XRPL) in the near future.
In the ad, the firm wrote that the
In a surprising turn of events, Ripple’s XRP is up 140% this week, making it the biggest top ten gainer of the past seven days.
There’s no denying that XRP is a divisive token that draws criticism on multiple fronts. Recent blasts include the uncertainty bought about by the SEC’s indecision over XRP as a security and condemnation over its practice of XRP dumping, which stopped at the end of 2019.
The situation wasn’t helped by almost two years of price decline and stagnation. In fact, during this period, XRP holders became the laughing stock of the crypto world.
However, that changed last week when XRP managed to crack key resistance at the $0.33 level. Since then, Ripple’s native token has rallied hard, hitting $0.80 on Bitstamp today. With Coinbase registering a peak at $0.92.
@TraderLenny commented on the shocking turn of events by congratulating Ripple.
“Honestly, who would’ve thought that $XRP would be the best performing high-cap during the last 7 days; and it’s not even close. It’s leaving both $BTC and $ETH far behind. Never thought I’d say this but: Impressive stuff #Ripple.
Just like that, in a matter of two weeks, talk of XRP revisiting its previous all-time high of $3.30 isn’t outside the realm of possibility.
However, it remains to be seen if XRP can sustain this form. After all, two years of price stagnation, in which XRP showed little fight, doesn’t disappear in just two weeks.
Series of Incentives Announced to Sustain the XRP Network
The up and coming Spark token airdrop from the Flare Network is welcome news for XRP holders.
“The Flare Network is a smart contract platform that aims to increase the usability of various digital assets by making it possible to use these digital assets in its smart contracts. Flare will be based on the Avalanche protocol and will integrate the Ethereum Virtual Machine. The resulting network aims to be scalable, safe and decentralized.”
“As for the incentive payout system, until further notice, the reward payout is a percentage between 5 – 27% of your current XRP balance. This percentage is final, a whitelisted address will receive its generated percentage and no more or less XRP; dual or multiple whitelisting is not possible.”
This move was likely prompted by criticisms of XRP being a 100% pre-mined token, with only the founders benefiting from its inception.
Whether that’s the case or not, it’s clear that Ripple is making moves to foster a fairer ecosystem for all stakeholders.
The question is, is this enough to reinvigorate XRP for the long haul?
On Tuesday, the most popular cryptocurrency, bitcoin (BTC), surpassed the USD 19,000 level for the first time since December 2017, while altcoins corrected lower.
At pixel time (10:09 UTC), BTC trades at USD 19,055 and is up by 2% in a day and 14.5% in a week. The price rallied by 45% in a month and 178% in a year.
At the same time, other coins from the top 10 club dropped
For the first time since 2017, Bitcoin price pushed above $19,000, and multiple indicators suggest the rally may continue.
The price of Bitcoin (BTC) hit $19,000 on Nov. 24 for the first time since the historic rally in December 2017. Three key reasons are behind the dominant cryptocurrency’s strong momentum.
The main factors buoying BTC’s ongoing rally is whale accumulation, decreasing exchange supply and explosive volume trends.
Whales are still accumulating Bitcoin
All throughout November, Cointelegraph reported that whale clusters were steadily forming as the price of Bitcoin rallied.
These clusters emerge when Bitcoin whales buy BTC at a certain price point and do not move them. Analysts have interpreted this as a signal that whales are accumulating and that they have no intention of selling in the near term.
The difference between the ongoing Bitcoin rally and previous price cycles is that the recent uptrend has proven to be more sustainable. In fact, each whale cluster shows that every major support level BTC reclaimed was accompanied by whale accumulation.
On Nov. 18, when Bitcoin dropped to as low as $17,200, analysts at Whalemap said that the new whale support is located at $16,411. They said:
“Bubbles indicate prices at which whales have purchased BTC that they are currently holding. Bubbles also visualize support levels. Last time we bounced from $15,762 and had a 15% price increase. Is the new bubble at $16,411 going to hold this time as well?”
Furthermore, data from Santiment, an on-chain market analysis platform, shows a similar trend. Santiment researchers found that the number of BTC whales significantly increased in recent months. They explained:
“The amount of #Bitcoin whales with at least 10,000 coins (currently $185M or more) has ballooned to 114 the past couple days as prices soared above $18k. Additionally, the amount of holders with at least 1,000 $BTC ($18.5M) has hit an ATH of 2,449!”
Bitcoin's supply is drying up
One consistent trend throughout the 2020 bull cycle was the continuous drop in Bitcoin exchange reserves.
Investors and whales deposit BTC to exchanges when they want to sell BTC. Hence, the recent drop in exchange reserves means there are fewer sellers in the market.
A pseudonymous trader known as “Byzantine General” said that every time spot exchanges expand their BTC reserves, they get accumulated. He said:
“Everytime spot exchanges add to their $BTC reserves it gets depleted almost immediately. Don't you get it? There's literally not enough supply.”
Volume is surging
The volume of both institutional and spot exchanges has been increasing rapidly since September. Open interest on Bitcoin futures and options at CME surpassed $1 billion in November and Binance’s BTC/USDT pair has consistently delivered over $1.5 billion in daily volume.
Various data points also show that the spot market has been leading the rally, not derivatives or futures markets. This trend makes the rally more stable and reduces the risk of massive corrections.
When the futures market accounts for the majority of the volume during a Bitcoin uptrend, there is a large risk of cascading liquidations. This time, the spot market has been leading the rally, thus making it more sustainable.