Uniswap (UNI), Compound (COMP), Other DeFi Coins Are Slipping Lower

Top decentralized finance (DeFi) coins are sliding lower despite strength in the Ethereum price.

Data from Uniswap indicates that against the U.S. dollar, coins such as UNI, Compound’s COMP, and Yearn.finance’s YFI, have slid lower by 1-5% in the past 24 hours.

This slight move lower in the price action of these coins adds to an overall trend of consolidation seen in the DeFi market over the past week. After a strong breakout in January, which transitioned into early February, the DeFi market has cooled fairly rapidly.

DeFi Market Stumbles as Ethereum Pushes to New Highs

The DeFi market is stumbling as key market players fail to react positively to Ethereum’s push to new all-time highs.

Coins such as UNI, SNX, and COMP are sliding lower against Ethereum, and in some cases, against the U.S. dollar.

This consolidation appears to be a result of capital cycling back into Ethereum itself and other layer-one blockchain coins, such as Binance Coin (BNB) or Cosmos (ATOM).

Image below from CoinGecko, showing the performance of the top 13 DeFi coins over the past few days and weeks.
Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Decentralized Finance Gets Validation From Federal Reserve Report

While the short-term health of the DeFi market may look grim, the decentralized finance narrative gained steam last week.

The St. Louis Federal Reserve, a branch of the American central bank, published a report indicating that DeFi could lead to a “paradigm shift in the financial industry.”

The author of the report, a blockchain-focused professor at the University of Basel, elaborated on the matter:

“DeFi has unleashed a wave of innovation. On the one hand, developers are using smart contracts and the decentralized settlement layer to create trustless versions of traditional financial instruments. On the other hand, they are creating entirely new financial instruments that could not be realized without the underlying public blockchain.”

While this was not a direct endorsement by the Federal Reserve, the thesis that DeFi will disrupt finance in a positive manner has gained steam over recent weeks and months.

The general idea is that because blockchain systems are relatively open compared to traditional systems, DeFi should garner more value in the long run.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Uniswap, Compound, Other DeFi Coins Are Slipping Lower

Breaking Down What Bill Gates Said About Bitcoin

With the recent craze around Bitcoin, CNBC has been asking many of its guests to its television programs to talk about digital assets.

Bill Gates, the founder of Microsoft and one of the most wealthy people on Earth, was no exception to this rule just recently.

The billionaire technologist, who has now become a philanthropist, recently took to CNBC. During his interview, he was asked about Bitcoin and his thoughts on the digital asset. Here’s more about what he said.

Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Microsoft Founder Bill Gates Talks Bitcoin

Microsoft founder Bill Gates, when asked about Bitcoin today, clarified that he does not own any of the digital asset and is not short BTC. Instead, he clarified that he has a “neutral view” on the cryptocurrency, adding that it can go “up and down just based on the mania or whatever the views are.”

Gates did admit, though, that he sees Bitcoin as a potential medium for funds to be moved to avoid taxes or for illegal activity.

Related Reading: DeFi Founder Targeted in $8m Hack Says He Has His Hacker’s IP

Other Billionaires on BTC

While Gates is neutral, there are other billionaires that are quite positive on the digital asset.

Billionaire asset manager Ray Dalio recently commented that while he was not a fan of Bitcoin before, he is increasingly seeing the asset’s importance. In a public-facing letter, Dalio, who has been asked about the digital asset incessantly over the past few years, commented:

“I believe Bitcoin is one hell of an invention. To have invented a new type of money via a system that is programmed into a computer and that has worked for around 10 years and is rapidly gaining popularity as both a type of money and a storehold of wealth is an amazing accomplishment. That, like creating the existing credit-based monetary system, is of course a type of alchemy—i.e., making money out of little or nothing.”

Dalio also commented that he thinks Bitcoin is a gold-like asset.

On gold-like assets in general, the co-founder of Bridgewater Associates said that there is a rising need for them “because of all the debt and money creations that are underway and will happen in the future.”

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Breaking Down What Bill Gates Said About Bitcoin

2 Key Reasons Why Bitcoin Bulls Expect Further Upside

Bitcoin has seen strong gains over the past seven days. According to CoinGecko, the leading digital asset is up 16% in the past seven days, outperforming Ethereum and a number of other digital assets.

Despite this strong rally in the price of the leading digital asset, analysts are expecting further gains in the weeks ahead.

Here are a few reasons why this sentiment has been shared about Bitcoin.

Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

#1: Bitcoin Is Seeing Strong Corporate Demand

Bitcoin is seeing strong demand from players like MicroStrategy and other corporate players.

Just this past week, it was revealed by the business services company that it will be raising nearly $1 billion to buy Bitcoin through the sale of corporate bonds. The firm announced on the matter:

“MicroStrategy® Incorporated (Nasdaq: MSTR) (“MicroStrategy”) today announced the pricing of its offering of $900 million aggregate principal amount of 0% convertible senior notes due 2027 (the “notes”). The notes will be sold in a private offering to qualified institutional buyers… MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin.”

It is expected for this sale to end in the coming week. Should the sale succeed, the proceeds will be “TWAPped” into the Bitcoin market, representing a material increase in demand for the leading digital asset.

Other corporations such as Twitter are also looking into purchasing Bitcoin to hedge their balance sheets against the inflationary effects depressing the U.S. dollar.

Related Reading: DeFi Founder Targeted in $8m Hack Says He Has His Hacker’s IP

#2: Inflows Likely to Increase With Custody Solutions

There are prominent investment banks and institutional players that are working on institutional custody solutions that are likely to drive demand for Bitcoin and other digital assets.

As reported by The Wall Street Journal, Bank of New York MellonCorp., the nation’s oldest bank, is working on a digital asset custody solution.

The firm said last week that it is working on a system that will allow it to “hold, transfer and issue bitcoin” and other digital assets.

The firm’s executives see that there is an increasing amount of demand for Bitcoin and other digital assets.

BNY Mellon’s offering will be unique in that both retail and institutional players will be able to access Wall Street-grade custody for both digital assets and traditional assets through one broker, which may lower the barrier to entry for prospective investors.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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2 Key Reasons Why Bitcoin Bulls Expect Further Upside

Bitcoin Shoots Through $52,000: Here Are What Analysts Are Saying

Bitcoin just shot through $52,000 despite weakness in the altcoin market over the past day. The cryptocurrency is up 7.5% in the past 24 hours, outperforming a majority of other large-cap altcoins as the spotlight focuses back on BTC.

This rally in the Bitcoin price comes on the back of strong institutional support for the leading cryptocurrency.

Related Reading: Wall Street Veteran Kickstarts Own BTC Fund With $25m Investment

Bitcoin Shoots Higher: Here’s What Analysts Are Saying

Long-time technical analyst Peter Brandt says that Bitcoin is in the midst of a longer-term parabolic advance, potentially meaning there is upside from here.

Commenting on the chart seen below, Brandt, who has been a trader in the futures markets for decades, said:

“Bitcoin is undergoing its third parabolic advance in the past decade. A parabolic advance on an arithmetic scale is extremely rare – three on a log scale is historic.”

Bitcoin is also likely to benefit from fundamental trends, too.

Charles Edwards, a crypto-asset investor and analyst, recently said that today has been a serious day for the fundamentals of BTC. Positive fundamental events include:

  • MicroStrategy may be buying $900 million worth of BTC, pending the sale of corporate bonds to qualified institutional buyers.
  • BlackRock has announced that it has started to dabble in BTC, confirming sentiment that has been floating about over the past few weeks.
  • Digital asset firms have begun to file for Bitcoin ETFs once again.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Bitcoin Shoots Through $52,000: Here Are What Analysts Are Saying

Bitcoin Pierces Through $50,000 Amid Continued Wall Street Support

Bitcoin once again just pierced past $50,000 for the second time in history. The first time was earlier today, which was when the cryptocurrency shot past $50,400 early Monday morning as MicroStrategy doubled down on its support for the leading digital asset.

The cryptocurrency recently began to flirt with that milestone price level over the past 30 minutes, bouncing above and below $50,000.

Bitcoin has yet to firmly establish a grip over $50,000, though may do so as the cryptocurrency sets a series of higher lows and higher highs.

Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Trouble In Macro Town: Will It Hurt Bitcoin?

While Bitcoin is making an attempt to flip $50,000 into support, there are some concerns about macroeconomic trends.

Mike Novogratz, the chief executive of Galaxy Digital, noted that 10-year rates in the U.S. sold off hard today. He elaborated that this may a potentially worrying sign for the leading digital asset:

“Rates sold off hard today. Is it the beginning of something far bigger? All traders need to watch closely. Crypto is in a secular bull market. The adoption story is overshadowing the macro story. So gold and $BTC can go in opposite directions for a while.”

Despite this potential worrying side on the macro front, there is strong support for Bitcoin on the institutional side.

MicroStrategy announced on Tuesday that it will be raising 600 million by selling convertible senior notes, a type of corporate bond. Once the sale finishes, the $600 million raised will be converted into Bitcoin.

The firm purchased $650 million worth of the leading cryptocurrency in December after it did a similar raise back then.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Bitcoin Pierces Through $50,000 Amid Continued Wall Street Support

Bitcoin Sets New All-Time High at $49,400

Bitcoin just rocketed to a new all-time high at $49,400 despite consolidation in the price of Ethereum. The leading cryptocurrency set this new high after spending most of the past week in the $47,000 range.

Bitcoin is moving higher on continued institutional support of the coin.

Tesla revealed last Monday that it holds a significant amount of the cryptocurrency, which it purchased to hedge its cash position and to provide liquidity for its intent to accept BTC payments.

Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Institutional Support to Drive Further Bitcoin Demand

Raoul Pal, the chief executive of Real Vision and a former Goldman Sachs head of hedge fund sales in Europe, stated that the introduction of institutions like Tesla will create a recursive feedback loop that will drive demand for Bitcoin:

“Remember that as the market cap of BTC rises, it forces more institutions into it. The more institutions that adopt it, the more the others have to and the harder it is for regulators to stop it. A perfect reflexive loop with the little guy front running it all.”

For instance, the news that Tesla bought Bitcoin to diversify its cash portfolio has sparked discussions about the cryptocurrency with other corporations across the United States. For instance, Twitter’s chief financial officer stated that they are looking into Bitcoin and even paying salaries in the cryptocurrency in a recent CNBC interview.

Bitcoin’s technicals may also indicate there is room to move higher.

“PlanB,” a BTC-focused analyst, noted that the cryptocurrency’s relative strength index is on a similar path to the one it was on in the previous cycle. Should history rhyme, Bitcoin still has room to extend to the upside before it undergoes a correction.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Bitcoin Sets New All-Time High at $49,400

Bitcoin Just Set a New All-Time High—Here Are What Analysts Are Saying

Bitcoin just set a new all-time high at $48,600 on top exchanges just days after setting its previous high of $48,300 on Coinbase. The cryptocurrency is up 8% in the past 24 hours, outperforming the stock market, though Bitcoin is underperforming some of its stock market peers.

The rally comes as Tesla has confirmed that it owns over $1.5 billion worth of Bitcoin to help hedge its balance sheet and to provide liquidity for its upcoming plan to accept BTC for payments of vehicles.

Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Bitcoin Pushes to New All-Time Highs

Some are attributing Bitcoin’s ongoing move to recent events of adoption for the cryptocurrency.

The Twitter account for “Zerohedge” noted that both Mastercard and BNY Mellon, the latter of which is a famous bank, adopted Bitcoin and cryptocurrencies to some extent today.

Mastercard announced that it will let merchants accept payments made in cryptocurrency later this year, while BNY Mellon revealed its intent to launch crypto custody and other white-glove services for institutional players.

Bitcoin’s rally to new all-time highs has led many to expect further gains.

Willy Woo, a prominent on-chain analyst, highlighted earlier this week that Bitcoin holders with little historical precedence of selling BTC have recently acquired a large amount of the cryptocurrency.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Bitcoin Just Set a New All-Time High—Here Are What Analysts Are Saying

Other DeFi-focused networks are surging as Ethereum congestion narrative spurs up

Ethereum has been facing extreme network congestion once again, which has been made worse by the cryptocurrency’s rapidly increasing price.

At one point over the past week, it cost over $100 to trade on Uniswap, which caused even larger players—some that you could call “whales”—to lament about the extremely high transaction fees.

This has caused a strong narrative shift to “alternatives” to Ethereum that can also support DeFi applications. Of course, there may be trade-offs regarding centralization and the usability of these other networks, though many seem to be willing to leave Ethereum, for now, to trade on other networks.

Ethereum “alternatives” gain traction amid congestion

Ethereum alternatives are gaining traction amid this market congestion.

Coins such as Avalanche’s AVAX, Binance Coin’s BNB, and others, which all act as payment mechanisms for transactions on other DeFi-focused blockchains, have begun to surge by literally dozens of percent over the past 72 hours as Ethereum has become congested once again.

According to CryptoSlate market data, AVAX is up 250 percent in the past seven days while Binance Coin has gained over 140 percent.

Also, the native coins of networks like Cardano, Qtum, Icon, and more have surged by over 80 percent as life is breathed back into these alternative blockchains that were dubbed Ethereum killers back in 2017.

Incoming solutions

Many argue that there are solutions that can allow Ethereum to maintain its dominance but to process more transactions and at a lower cost.

The first discussion has been to increase the block size of Ethereum blocks.

Nikita Zhavoronkov from BlockChair recently suggested that the Ethereum gas limit, which determines the block size, should be increased to 15 to 20 million from 12.5 million. That would mark an increase of 20 to 60 percent, which is quite a large range.

This would allow for a large increase in transactions. The exact numbers are unclear, as it depends on how much gas a transaction takes up.

Zhavoronkov says that this is feasible because the “uncle rate,” which is sometimes used to determine the health of mining, is low. He believes that adding this capacity won’t threaten the security of the network.

Many have actually pushed back against Zhavoronkov’s comments because they say that he isn’t properly assessing the potential risk of what adding more block size would do to the network.

Namely, there have been discussions around how an increase to the gas limit will result in a large increase in the “state size” of the Ethereum network, potentially causing increased latency or stress put on nodes, and as a result, more centralization.

Positively, though, there has been good progress made on the front of layer-two scaling solutions such as Optimistic Ethereum, which projects like Synthetix, Uniswap, and Rari Capital are dabbling with right now.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Bitcoin-focused DeFi protocol Badger joins hands with Yearn.finance (YFI)

Badger DAO, a decentralized finance (DeFi) protocol on absorbing bitcoin liquidity on Ethereum, recently announced a partnership with Yearn.finance.

Badger DAO launched in December as a project looking to drive the adoption of Bitcoin (namely tokenized Bitcoin iterations such as WBTC and renBTC) on Ethereum. The project has seen immense traction thus far, garnering over $2 billion worth of deposits as of the highs yesterday.

The project’s native coin BADGER has been on a tear over the past few weeks, moving as high as $80 from its lows in the $5 range.

Badger DAO unveils partnership with DeFi powerhouse Yearn.finance

Badger’s core team just unveiled that it will be working closely with Yearn.finance to bring value to the project’s Bitcoin vaults, which allows depositors to earn additional capital on their initial capital.

“Today we’re excited to develop a partnership that will bring our teams together to further accelerate best in class BTC vaults for the industry. This is a step to further secure users funds as we continue to introduce more Yearn developed, maintained and secured vaults to our users.”

The protocol’s developers see this as critical as this will help drive longer-term value to the depositors in vaults, as opposed to the current state of the vaults, which are largely being subsidized by BADGER and DIGG rewards, which are distributed to depositors to incentivize participation.

This partnership will mean that Yearn developers will be able to create Bitcoin vaults, which will be incentivized with Badger and DIGG rewards.

This partnership will allow both communities to “share in the net revenue from these vaults based on the total TVL that Badger brings.”

BADGER is stagnant over the past 24 hours, trading 0.1 percent down. This means the Ethereum-based coin is outperforming BTC by three percent.

Yearn.finance (YFI) is up 2.5 percent in the past 24 hours and is outperforming Ethereum by 5.5 percent, per CryptoSlate data.

More to come

This partnership comes as the hype has begun to grow about Badger DAO’s next product, CLAW.

CLAW will be a stablecoin that will be collateralized by deposits into Badger DAO’s vaults. This means that users can deposit capital into Badger DAO, earn a yield on that deposit, then take out a stablecoin to trade or to use in different facets of DeFi:

“It is a stablecoin that you mint after using one of our Setts as collateral and is in collaboration with UMA. The current cap on how much can be minted is $1b. Unlike DAI, Claw will have an expiration that will be a fixed term, from release.”

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Twitter and GM Are Considering Adding Bitcoin to Their Balance Sheets

Twitter may be pursuing adding Bitcoin to its balance sheet, to follow Square, which is also run by Jack Dorsey. The firm’s chief financial officer Ned Segal indicated in an interview with CNBC that the firm is considering BTC as an asset that it can add to its balance sheet.

This discussion comes after Tesla shocked the world when it was unveiled to have bought a large sum of Bitcoin recently.

Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Twitter to Buy Bitcoin Next?

Twitter may be the next large firm to buy bitcoin, according to a recent interview with the firm’s CFO and CNBC. The executive said that Twitter has done a “lot of the upfront thinking” in terms of how it can get involved in Bitcoin and cryptocurrency, specifically mentioning adding the asset to its balance sheet as a potential path it can take.

“We have done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in bitcoin, how we might pay a vendor if they asked to be paid in bitcoin and whether we need to have bitcoin on our balance sheet.”

This comes shortly after the chief executive of GM said in a comment that his firm currently has “no plans” to invest in Bitcoin but will “continue evaluating.” The key word here is “continue,” suggesting that the firm was already considering making such a decision.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Twitter and GM Are Considering Adding Bitcoin to Their Balance Sheets

Wall Street Journal commenters lambast $1.5 billion Bitcoin purchase by Tesla

Yesterday, Tesla shocked the crypto space when the firm was revealed to have purchased $1.5 billion—yes, billion—worth of Bitcoin.

As reported by CryptoSlate previously, a filing  with the US Securities and Exchange Commission (SEC) said that the firm had purchased this Bitcoin to provide “more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity.” The filing also indicated the firm may accept Bitcoin for its vehicles in the future.

“Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt,” the document noted.

The move has been widely accepted within the crypto space, seeing that this marks a validation of Bitcoin and of MicroStrategy’s thought that treasuries should invest idle cash in BTC to mitigate inflation risk.

Michael Saylor, CEO of MicroStrategy, for instance, stated:

“Congratulations & thank you to Elon Musk & Tesla for adding Bitcoin to their balance sheet.  The entire world will benefit from this leadership.”

But not everyone is satisfied with this move.

Not everyone is liking Tesla’s move to buy Bitcoin

The Wall Street Journal report that outlined Tesla’s purchase of Bitcoin was brigaded by seeming Bitcoin skeptics that think the automotive/green technology company holding BTC will mark its end.

Commenters, whose names have been redacted for privacy reasons, made comments like “This con is going to end badly for so many people” and “[Imagination] supports the value of Bitcoin.”

Image

On Twitter, a number of other skeptics made similar comments, with many in the Tesla shorter community bringing this up as a way both the cryptocurrency and TSLA could go down in flames.

This pushback against what many in the crypto space have dubbed a sound business decision comes as billionaires have begun to embrace Bitcoin alongside Elon Musk.

Anthony Scaramucci, the founder of alternative investment firm Skybridge, recently said on the cryptocurrency:

“Bitcoin is a monetary network. Looking at what has happened in the 21st century, we’ve seen the evolution of a retail network that’s known as Amazon. We’ve seen the revolution of a social network called Facebook. We have a search and advertising network known as Google.”

Ray Dalio, the famous Wall Street hedge fund manager, also recently clarified that he thinks Bitcoin is “one hell of an invention” and that he sees it as a potential contender as “both a type of money and a storehold of wealth is an amazing accomplishment.”

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Federal Reserve branch shares paper on Ethereum and DeFi

We’ve made it. Kind of.

A paper regarding decentralized finance—which surprisingly included the term “DeFi”— was recently published to the website of the St. Louis Federal Reserve, a branch of the United States’ central bank.

Fabian Schär, a professor at the University of Basel who focuses on blockchain and DeFi technologies, wrote the paper. He is a member of the Center for Innovative Finance, which is a part of the University focused on financial technology.

What does the paper say?

In the paper, Schär outlined that decentralized finance could lead to a “paradigm shift in the financial industry.”

The paper concluded that while DeFi is still niche and small compared to traditional financial services, there are benefits in terms of “efficiency” and other attributes of a financial system:

“I conclude that DeFi still is a niche market with certain risks but that it also has interesting properties in terms of efficiency, transparency, accessibility, and composability. As such, DeFi may potentially contribute to a more robust and transparent financial infrastructure.”

Schär’s paper outlined how Ethereum smart contracts are composable—that’s to say, they can work together to unlock key innovations and benefits. Further, it outlined key components of how Uniswap, MakerDAO, Aave, and other decentralized protocols work and why they can be seen as better than centralized services.

Many in the space reacted to the paper with a bullish sentiment. Fred Ehrsam, co-founder of Paradigm, said that “you can’t make this stuff up” in response to the paper.

It’s worth noting that while this was shared by the Federal Reserve branch, this isn’t a firm endorsement of the sentiment. The branch just hosted this discussion.

Going mainstream

The paper comes as the viability of decentralized finance has apparently become stronger than ever before.

Michael Novogratz, the founder of Galaxy Digital, says that the GameStop short squeeze by retail investors against Wall Street is a sign that DeFi has value:

“1) This GME squeeze is deeper than a squeeze. its a large group of people saying they don’t want Citadel preying on their orders from RH, they don’t want IPO’s being allocated to insiders, they don’t like a system geared to the already rich.This is a giant endorsement of DEFI.”

Mark Cuban, the billionaire owner of the Dallas Mavericks, has also begun to dabble in the space in response to the Gamestop event and other trends.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Investors bullish on Ethereum ahead of much-hyped CME futures launch

The day is finally here—today, depends on how you cut it, the CME Group will be launching a futures market for Ethereum.

The CME Group is one of the world’s leading financial exchanges, hosting a majority of trade in top commodities, including Bitcoin. The CME Group made crypto headlines in 2017 when it rolled out futures for BTC.

As that launch coincidentally marked the top of the 2017 bull market, some have speculated that this will have the same effect this time around. A number of traders have postulated that this launch can cause a short-term top.

Though, a vast majority of analysts appear to be bullish on Ethereum as the launch of this regulated investment vehicle rolls around. This market should allow institutional players to obtain better exposure to Ethereum.

Analysts comment on Ethereum CME futures launch

Analysts seem to be largely bullish or at least neutral on the upcoming launch of the CME’s Ethereum futures contracts.

Ryan Watkins, a researcher/analyst at Messari, recently noted that the “fear” of how the upcoming launch could affect the crypto market is “ridiculous.”

Watkins highlighted that the fears of a correction after this launch stem from “one data point.” That’s to say, just because the previous CME crypto futures launch coincided with a previous top doesn’t mean it will happen for a second time. Furthermore, he said that there are clear differences in the market conditions in December 2017 and market conditions now.

He did not name these changes in his thread, though just to highlight two:

  • Futures are not extremely overleveraged as they were in previous bull trends or previous segments of the ongoing uptrend
  • And secondly, there is a clear institutional bid as made clear by public announcement by Wall Street funds, on-chain data, and interviews published by top media outlets.

Economist Alex Kruger discussed more tangibly how this launch can drive a bid in the Ethereum market.

“This is a great point. CME futures will allow parties that at present have difficulties accesing $ETH markets to hedge Grayscale’s $ETHE risk, driving increased $ETHE institutional demand, thus increasing spot demand and compressing the $ETHE premium.”

Existing investors that have access to ETHE and Grayscale’s products may not want to purchase the product, even at net asset value. The introduction of futures, which should trade at/very close to the spot price, and have lower fees that fund products, may provide a better way for certain players to buy Ethereum.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Dogecoin (DOGE) just surged 50% after Elon Musk gave the crypto another bump

It appears that crypto’s favorite chief executive, Elon Musk, just gave Dogecoin (DOGE) another bump.

The Tesla and SpaceX chief executive recently spoke to TMZ, the media outlet, about Dogecoin, while he later tweeted about the meme cryptocurrency.

This latest turn of events comes after a rocky past week for DOGE, which surged some 900 to 1,000 percent shortly after it began getting heavily shilled on Wall Street Bets, then proceeded to corrected by over 65 percent in the subsequent sell-off.

Elon Musk messes with Dogecoin again

Musk appears to be messing with the Dogecoin community once again, inducing some extreme volatility in the price of the cryptocurrency.

According to CryptoSlate market data, DOGE has appreciated by over 50 percent in the past 24 hours, making it the best performing digital asset in the top 100 by market capitalization.

This rally comes after videos were shared online of Musk discussing Dogecoin and cryptocurrencies more broadly on his way to his car.

Chart of DOGE’s price action over the past five days. Source: DOGEUSD from TradingView.com

According to a TMZ video from Saturday evening, he said that he thinks that cryptocurrencies are likely where the world’s monetary systems are going. When asked to elaborate on that answer, he half-joked that Dogecoin could be at the center of that, adding that “fate likes irony.”

Musk elaborated that while Dogecoin was created to make somewhat of a mockery of Bitcoin and other “real” cryptocurrencies, Dogecoin was formulated as a joke.

Musk appears to be addressing the subject in a more jovial mood on Twitter.

He recently posted the photo below, which went viral. The photo shows him holding up a number of other celebrities, and at the top, the Shiba Inu dog known as the face of Doge.

Musk’s comments about the joke cryptocurrency come shortly after other celebrities such as Gene Simmons of KISS and Kevin Jonas of the Jonas Brothers have commented on Dogecoin in a positive manner.

A market top?

While early DOGE buyers are up on their holdings, Michael Novogratz, CEO of Galaxy Digital, is calling for some rationality.

He said that he thinks “the $DOGE frenzy is gonna end poorly” because of “greed and gravity.” Novogratz added that “$DOGE doesn’t have a purpose,” which is a critique that many have brought up over recent weeks.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Billionaire Mark Cuban talks about Aave, SushiSwap, and DeFi

Billionaire investor Mark Cuban has been under the microscope in the crypto space over the past few weeks as he has started to tweet more about Bitcoin, Ethereum, and now even decentralized finance tokens to his over eight million followers.

Cuban has long been asked about Bitcoin, being a prominent investor and a prominent media figure due to his involvement in projects like “Shark Tank.”

In a recent Reddit “Ask Me Anything” post, Cuban confirmed that he has been dabbling heavily in the DeFi space, doubling down on his Twitter posts on the subject.

What’s interesting is that instead of hosting the “Ask Me Anything” on the AMA Subreddit, he opted to do it on WallStreetBets, which has seen a parabolic explosion

Cuban talks about DeFi

In the Reddit post, he was asked about his current holdings in the crypto space.

Cuban responded by noting that he currently holds AAVE and SUSHI, the native coins of Aave and SushiSwap, respectively.

This confirms analysis done by on-chain trackers who noted last week that a wallet affiliated with Mark Cuban held AAVE, along with capital staked in the protocol itself. Further analysis found that another wallet in the network of Cuban held SUSHI.

While this was not explicitly Cuban, this Reddit comment has seemingly confirmed this. That comment also indicated that the billionaire holds Bitcoin, Ethereum, and Litecoin, which is somewhat unsurprising.

He added that he thinks DeFi is one of the industries, along with nanotechnology, green technology, and other new technology classes, that have the potential to “explode in the next 10 years.”

Cuban also imparted some more comments about the broader state of the crypto space.

He specifically pointed to the strength of Bitcoin HODLers (yes, he used the term “HODLers”), noting that the fact they had conviction in BTC allowed them to make money even if they bought the top of the 2017 rally near $20,000.

He also spoke to the broader GameStop situation, seemingly indicating that he is ideologically aligned with the WallStreetBets group and the DeFi space by somewhat of an extension.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Ethereum (ETH) rockets to a new all-time high at $1,500 as altcoin market cools

After tremendous price surges in decentralized finance coins and many smaller-cap crypto assets, attention is finally returning to Ethereum.

The second-largest cryptocurrency by market capitalization is in the midst of shooting higher to new all-time highs as the altcoin market froth starts to cool down. Ethereum currently trades for $1,500 as per CryptoSlate market data, which is a new all-time high by the standards of most.

Ethereum is struggling slightly at this key level, with sell orders coming in at that round number, as can be seen in the chart below.

Chart of ETH’s price action over the past five weeks from TradingView.com

The trend appears to be positive despite the resistance at $1,500.

Grayscale buys to boost Ethereum

Michael Sonnenshein, the chief executive of Grayscale, just announced that the firm’s Ethereum Trust just opened its doors to accredited investors to allocate capital at NAV for the first time in over a month.

Grayscale is a digital asset manager that allows accredited investors (most often Wall Street firms and family offices) to obtain exposure to bitcoin and Ethereum.

Grayscale holds over 2.8 million ether. The firm saw around 400,000 ether worth of inflows during the month of November, which is around the same amount of ETH that was mined in that period. Many investors think that the reopening of the Ethereum Trust will result in a spike in demand for the cryptocurrency, driving the asset higher.

It is unclear how much Grayscale will see in inflows until the firm files an update to the SEC later this week or next week.

Strong fundamental trends

Ethereum is seeing fundamental trends that will likely drive value to ETH in the long run.

As reported by this outlet previously, Spencer Noon, an investor at crypto-focused venture firm Variant and an on-chain analyst, has noted that Ethereum is seeing record levels of on-chain activity by many standards.

To name just a few metrics that are at all-time highs for the cryptocurrency, Ethereum transaction fees have surpassed that of Bitcoin due to DeFi, the amount of value transferred on the network has hit an all-time high, Ethereum has hit an all-time high of daily active addresses, and there is now over $25 billion locked in the DeFi space.

Raoul Pal, a macro investor and the founder of Real Vision, is adding to his Ethereum position as he sees more potential upside in the cryptocurrency than Bitcoin:

“For longer-term HODLers of BTC and ETH this is probably a good time to start accumulating more. Personally, Ive added more ETH and now time to add more speculative crypto. Have not pulled trigger yet as doing some homework on it. Good luck ! Ugly price = opportunity.”

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Dogecoin “supporters” turn on DOGE as Reddit-fueled craze ends with 50% correction

For some reason, Dogecoin (DOGE) has been the talk of the town over the past 72 hours.

It began shortly after GameStop (GME) peaked this past week. After GameStop hype began to die down largely due to certain trading platforms pausing/restricting GME trading, many on WallStreetBets began to turn to new targets.

Due to it being on Robinhood, it having a cheap price, and it being predicated on a meme, Dogecoin—yes, the meme cryptocurrency—began to get shilled en-masse. The image below is of mentions of “Dogecoin” on WallStreetBets shortly after GME peaked.

dogecoin
Source: r/WallStreetBets

DOGE began to surge after this promotion began. $0.01 fell, then $0.02, until 36 hours later, the cryptocurrency had hit $0.085 on some trading platforms, reaching its highest price ever and a bitcoin price of 220 satoshis.

The mania was at a point where the trading volume of Dogecoin on certain trading platforms was passing these platforms’ volumes for assets like Ethereum. Really.

Furthermore, the ranking of the free Dogecoin Wallet on the Apple App Store reached 51 in terms of free applications in the world, passing prominent applications like Uber and Tinder and reaching/nearing parity with other crypto-related applications.

But after peaking above $0.08, the meme cryptocurrency has ground to a halt. And that’s left many under the water in terms of their DOGE positions.

Dogecoin turns on a dime

Dogecoin turned on a dime after peaking at $0.08.

The cryptocurrency has since “returned to Earth” after its 800 percent rally, and now trades for $0.0385.

This means that from its highs, the cryptocurrency has dropped by over 50 percent. Earlier today, the cryptocurrency was down even lower.

The rapid Dogecoin reversal has sparked quite a discussion on Twitter about “pump and dumps” and the effects it has on investors that participate near the top.

Economist Alex Kruger shared the image below, indicating that those that bought DOGE based on their belief that they should HODL until $1 (as was memed on Reddit and apps like TikTok) are now bagholders.

Adult actress Mia Khalifa, who bought Dogecoin at the peak at $0.08, also tweeted about the drop.

The unexpected savior of the meme cryptocurrency may be Elon Musk, though.

The Tesla and SpaceX CEO commented on Sunday evening’s Clubhouse that an ironic outcome would be Dogecoin becoming the currency of the Earth.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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What Elon Musk said about Bitcoin during today’s packed Clubhouse event

I don’t know about you but around two hours ago, I had my eyes and fingers glued to my iPhone trying to join the latest Clubhouse even with Elon Musk.

Unfortunately, I didn’t get in.

Well, kind of. I quickly found a bootleg stream of the event on Youtube and another on Discord set up by some friends.

What happened next was fascinating.

What’s Clubhouse?

On Sunday, Elon Musk, the ever-venerable CEO of Tesla and SpaceX, announced that he would be joining Clubhouse.

Clubhouse is a Silicon Valley-focused social media application that is audio-only. That’s to say, the only way you can communicate with one another is through audio, no video or text.

Clubhouse has risen to prominence as a place for innovators, venture investors, and more to convene and talk about interesting societal trends and issues. Musk joining was validation of the platform.

So tens of thousands, likely even hundreds of thousands, crammed onto Clubhouse just hours ago to try and join the “room” with Musk.

Only 5,000 individuals got in. In this case, I was not one of them.

Thoughts on Bitcoin

Going into the Clubhouse, many on Crypto Twitter were commenting that they expected the billionaire Tesla CEO to touch on Bitcoin, Ethereum, and similar subjects.

This expectation was built after Musk was spotted changing his bio to “#Bitcoin” and liking a tweet regarding Ethereum and decentralized finance.

So, around 30 minutes into the Clubhouse room, someone asks Musk about his thoughts on digital currencies.

To that, Musk responded by saying that he thinks “Bitcoin is on the verge of getting broad acceptance among finance people.” The connotation appeared to be positive as he later said that “Bitcoin is a good thing.”

BTC shot $400 higher after he made these comments, then rapidly corrected lower as he, unlike some expected, didn’t announce that he had acquired Bitcoin or other digital assets.

Whatever the case, many see Musk’s comments as more good than bad.

He has previously said that he “likes” Bitcoin’s “structure” and that it may have more value than “ghost government money,” referencing currencies such as the U.S. dollar.

Almost a DeFi fan

What was equally as notable in this Clubhouse discussion, Musk invited Vladimir Tenev, the chief executive of Robinhood, to talk about what had happened over the past week with Gamestop.

According to an account of the conversation by a prominent crypto commentator, Musk grilled the fintech chief executive, asking Vlad if he “sold your customers up the river.”

He, along with other investors like Chamath Palihapitiya, have ardently been against Robinhood as this recent controversy has played out.

It has been argued that seeing his views on this debate, Musk would be a good proponent of DeFi, in that it’s right up his alley. It may be no surprise then that just the other day, one of the tweets he liked was that of Zerion, a tool for DeFi users.

Image

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Mark Cuban: Bitcoin (BTC) is a Digital Store of Value

Bitcoin and crypto Twitter has been ablaze over the past few weeks as Mark Cuban, a billionaire investor, has continued to dabble in the space. Cuban is best known for his role as a Shark on “Shark Tank” and as the owner of the Dallas Mavericks. The American investor recently started to increase his exposure to the Bitcoin space, at least in terms of his public persona, when he began to tweet about cryptocurrencies.

In a recent blog post, Cuban affirmed that he sees Bitcoin as a digital store of value.

Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Cuban Talks Bitcoin

In a blog post dated January 31st, Cuban discussed Bitcoin, Ethereum, and other aspects of the digital economy.

In this blog published to Blog Maverick, his personal website, he explained that blockchain driven assets have “now legitimately become stores of value”:

“This digital store of value isn’t limited to Digital Goods of course. It has long included cryptocurrencies (CryptoAssets is what they should be called, they are rarely used as currency), like Bitcoin , Ethereum and so many others, along with the tokens being created to support De-Fi and other value creating derivatives of CryptoAssets. They all are Stores of Value with market cap leader Bitcoin having a decade plus long history of transactions and wealth generation.”

The investor has long discussed Bitcoin, previously arguing that investors should have some percentage of their portfolio in the leading cryptocurrency.

Cuban is now arguing that there may be some intrinsic value to these digital assets:

“To so many the idea that a CryptoAsset could be a store of value is crazy. To them, there is no there, there. There is no intrinsic value. To them it is a digital representation of nothing, that crazy people are paying good money for. That is not the case.”

Related Reading: DeFi Founder Targeted in $8m Hack Says He Has His Hacker’s IP

Far From the Only Billionaire Involved

Ray Dalio, another billionaire investor, also recently released a blog post on his thoughts on Bitcoin.

The world-famous asset manager commented last week that he thinks “Bitcoin is one hell of an invention.”

He added that the cryptocurrency is becoming a gold-like asset:

“Those who have built it and supported the dream of making this new kind of money a reality have done a fabulous job of sustaining that dream and moving Bitcoin (by which I mean it and its analogous competitors) into being an alternative gold-like asset.”

Cuban and Dalio join the growing list of prominent investors that see Bitcoin as a viable investment opportunity.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Unsplash
Chart from TradingView.com
Price Tags: xbtusd, btcusd, btcusdt
Mark Cuban: Bitcoin (BTC) is a Digital Store of Value

DeFi bulls continue to roar as Gamestop (GME) saga continues

Even the ever-noisy crypto space has been overrun with comments about the Gamestop (GME) saga playing out in traditional finance.

For those that don’t know, a quick recap:

  • Gamestop, the video game retailer, was short over 140 percent of the stock’s float by large hedge funds expecting the stock to go down.
  • Retail investors on WallStreetBets, the famous stock trading subreddit, took notice of the trend and began to buy call options on the stock.
  • The stock began to shoot higher heading into 2021, culminating in a massive squeeze higher over the past week.
  • Due to the fact that there were so many shares short of GME, those that were holding those positions went underwater.
  • Some short holders had to close their positions or get bailed out by different entities.
  • Due to the influx of trading demand and uncertainty about the legality and risk of Gamestop’s price action, brokerages have begun to shut down the trading of GME across the U.S.

It is by far the biggest story in finance of 2021. Crypto investors, especially DeFi bulls, are taking notice of this trend as a sign that having on-chain financial applications is the future.

Economist Alex Kruger put it well when he said:

“Great thread on WSB and RobinHood. The problem: the system is rigged. The solution: Decentralized Finance. It doesn’t get any clearer than this.”

The sentiment that the system is “rigged” comes as WallStreetBets and the traders in the ecosystem have begun to face issues in using platforms, from Discord and Reddit to the trading platforms like Robinhood themselves.

DeFi, by comparison, is seen as trustless and fair because it does not arbitrate if users can or cannot make a trade. Instead, the qualifications one has to interact with different platforms, whether that’s Uniswap on Ethereum or another app on a new blockchain, is based on their ability to pay the transaction fee.

Even if the Gamestop saga doesn’t drive capital directly to DeFi, many have concluded that it shows how much space the decentralized finance space has to grow.

Santiago Roel Santos, my boss at ParaFi Capital, put it nicely when he noted that Gamestop’s market capitalization (at least at the heights of the rally yesterday) was practically larger than all DeFi coins currently in circulation.

For context, CryptoSlate market data indicates that there is around $36 billion worth (subtracting certain names) of capital in DeFi coins right now. This is only a few percent of the circulating cryptocurrency market capitalization.

Not ready yet?

The prevailing sentiment is that DeFi is the obvious alternative to the issues of centralized systems, though we may not be ready, some say.

Prominent researcher “Hasu” shared that most crypto projects are not yet censorship-resistant. Also, to some, the transaction fees may it basically prohibitive for smaller traders to ever made trades.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Dogecoin (DOGE) shoots 270% higher as WallStreetBets starts to pick up on crypto

Over the past few months, there have been expectations of an extremely strong Dogecoin (DOGE) rally.

Each and every bull market/trend over the past half-decade plus now has been marked by an extremely strong rally in the DOGE price. It’s a meme-based cryptocurrency of course, though has done really well.

This past day, the rally finally began to play out for everyone’s favorite meme cryptocurrency.

Per CryptoSlate market data, DOGE has appreciated by over 200 percent in the past 24 hours, pushing from the $0.008 range to over $0.023 right now. The cryptocurrency is currently trading at all-time highs and a market capitalization of $3 billion. The cryptocurrency has seen a strong spike in volume, with over $10 billion worth of DOGE traded across exchanges in the past day.

Dogecoin price
Chart of DOGE’s price action over the past 30 hours from DOGEUSD Chart on TradingView.com

The cryptocurrency is now one of the top-20 cryptocurrencies in market capitalization, bypassing a number of DeFi plays.

This rally comes as certain prominent names within WallStreetBets, the famous stock trading subreddit, have begun to touch on the cryptocurrency. One account called “WSBChairman,” who jokes he is the Chairman of the forum, tweeted about DOGE last evening, kicking off a move from the $0.01 range to where it is now.

Below is a screenshot of WallStreetBets’ recent mentions of Dogecoin. They are aiming of buying the cryptocurrency en-masse to trigger a similar move to what has been seen with Gamestop.

Other investors within the crypto space have also hopped onto the DOGE train. This includes “Cousin Crypto,” a fitness and now crypto-focused social media influencer that has taken Crypto Twitter and Crypto TikTok by storm over the past few weeks.

Start of wider crypto boom?

While Dogecoin’s rally is mysterious to many, some see it as a valid sign that there is growing retail interest in the cryptocurrency market.

Charles J. Read from Rarestone Capital noted that Dogecoin will be “the catalyst for millions of frustrated retail traders to enter the crypto market – it’s like our little Trojan horse in #Robinhood’s dirty castle.”

Dogecoin has long captured retail interest in the cryptocurrency market as it is based on a popular and often undying meme. Many in the Bitcoin space now have actually cited Dogecoin as a reason why they have entered the cryptocurrency space.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Coinbase Announces Proposed Direct Listing Amid Crypto Boom

Minutes ago it was announced that Coinbase is looking to become a publicly-traded company. The firm wrote in a blog post dated January 28th:

“Coinbase Global, Inc. today announced its intent to become a publicly-traded company pursuant to a proposed direct listing of its Class A common stock. Such proposed listing is expected to be pursuant to a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”).”

Of note, this is not an initial public offering. Instead, Coinbase would allow existing shareholders to trade their positions on the primary market.

This comes shortly after the company announced that it had confidentially submitted a draft registration statement on Form S-1 with the SEC.

Coinbase will be the first major cryptocurrency company to trade on a major U.S. exchange if it does manage to move forward with this direct listing process.

Coinbase’s decision to go public comes as the crypto market has begun to see an influx of institutional and retail interest as prices move higher.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Unsplash
Chart from TradingView.com
Price Tags: 
Coinbase Announces Proposed Direct Listing With SEC

Bitcoin bull Mike Novogratz: GameStop (GME) rally is an “endorsement of DeFi”

If you’ve been following the news at all over the past week, you know of the story of GameStop.

The GameStop stock, which trades under the ticker GME, has undergone an extreme rally of over 1,000 percent in the past two weeks, which is somewhat of an unforeseen event in financial markets.

The long and short of it is that Wall Street fund managers and investors were short the brick-and-mortar video game company, though smaller investors who have been rallying on the subreddit Wall Street Bets have managed to squeeze out these holders, causing literal billions in losses.

Nothing really has changed about the GameStop business, so many see this as more of a statement by smaller investors than anything.

As this story has become widespread, crypto investors have taken notice. They see it as somewhat of an endorsement of the Bitcoin space, especially decentralized finance.

DeFi validated by the GameStop short squeeze

Michael Novogratz, the founder of Galaxy Digital, says that the GameStop short squeeze by retail investors against Wall Street is a sign that DeFi has value:

“1) This GME squeeze is deeper than a squeeze. its a large group of people saying they don’t want Citadel preying on their orders from RH, they don’t want IPO’s being allocated to insiders, they don’t like a system geared to the already rich.This is a giant endorsement of DEFI.”

He elaborated that this short squeeze goes much beyond just a financial event, touching on how there has been a concerted effort amongst smaller investors and individuals to usurp establishment entities over the past few years.

Qiao Wang, a prominent DeFi investor and innovator, also echoed the sentiment first shared by Novogratz.

He shared that this a good sign that investors should be “long uncensorable securities trading platforms.”

He specifically named Synthetix and Mirror, both of which are protocols that allow any users to obtain synthetic exposure to a variety of assets without having to pass through KYC regulations or anything along those lines.

Of note, key players in the DeFi market are up in the past 24 hours despite weakness in Bitcoin and Ethereum.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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What were investors thinking as the Bitcoin price slipped under $30,000?

Bitcoin’s price slipped under $30,000 a few hours ago as selling pressure began to pick up across top exchanges. This came after BTC attempted to push past the $33,000-34,000 resistance region on Monday.

The cryptocurrency has since bounced after slipping under $30,000, bottoming in the $29,500 range that Bitcoin bottomed over seven days ago.

Chart of BTC’s price action over the past two weeks from TradingView.com

Bitcoin’s short-term trajectory as seen by analysts

Bitcoin’s drop below $30,000 resulted in a large liquidation event for traders, with over $430 million worth of cryptocurrency positions liquidated in the past 12 hours.

While Bitcoin has since bounced after falling under $30,000, analysts are mixed over what comes next for the coin.

From a market structured standpoint, BTC is still holding on just fine: the cryptocurrency bounced off the mid-$29,000s, which is where it caught a bid on five occasions over the past month. The fact that Bitcoin has once again held that support is a sign that bulls are holding on. It’s worth noting that the cryptocurrency set a lower high in the recent recovery though, suggesting the formation of a descending triangle.

Bitcoin’s recent bounce in the $29,000 region was predicated on strong spot buying activity, which some speculate to be institutional players.

While there are large buyers interested here, the macro trends could result in risk-off market behavior in the near term.

Raoul Pal,  a co-founder of Real Vision and a former Head of Hedge Fund Sales for Goldman Sachs in Europe, said that he is cautious about markets due to how bonds, the U.S. dollar, and other asset classes are trading:

“A bit early to tell, but something feels very risky about the markets – how bonds are trading, how the dollar is trading, gold, BTC and what’s been going on in equities. On alert for a market clearing event. Equities are probably the weakest spot.”

Medium-term uptrend intact

The medium-term trend is intact though as Bitcoin’s fundamental trends appear to be stronger than ever. Pal said a few days ago:

“Feels like BTC is getting ready to climb the wall of FUD fear. Positive seasonality and a nice wedge give it a good chance to hit $50k by March. Let’s see… I remain, as ever, #irresponsiblylong.”

Bloomberg Intelligence analyst Mike McGlone also said that Bitcoin is on track to hit a $1 trillion market capitalization as there is maturity over its reputation as a store of value, crypto industry regulation, and the influx of institutional capital via firms such as Grayscale Investments.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Breaking down the DeFi airdrops that netted Ethereum users an average of $20,000 in 2020

I’m not too sure about you guys but one of the most fascinating things I’ve seen in DeFi is airdrops.

In 2017, airdrops were all the rage. But often the case, all users did was dump them, and most of the time, they weren’t worth all too much.

But this has changed with the introduction of decentralized finance. Airdrops have become extremely sizeable for all users and there have been investors holding their coins as sometimes, holding the airdropped coins performs better than selling them right away for Bitcoin, Ethereum, or stablecoins.

I recently broke down the top airdrops of 2020 (though one was in 2021) and what effect they had on Ethereum DeFi users.

The airdrop phenomenon

There have been five (or six) major airdrops in the DeFi space over the past 12 months. Here are each of them and some details about each one:

  • Uniswap (UNI): 252,803 addresses could (and still can) claim. Average amount is 593.3 UNI.
  • 1inch (1INCH): 55,224 addresses could (and still can) claim. Average amount is 1,629.76 1INCH.
  • BadgerDAO (BADGER): 32,262 addresses could (and still can) claim. Average amount is 64.31 BADGER.
  • BadgerDAO’s DIGG: Average airdrop of 0.0704 DIGG.
  • Curve DAO Token (CRV): Average airdrop of 16,043 CRV
  • Tornado Cash (TORN): Around 8,000 addresses will be able to claim. An average of 66.54 TORN will be allocated to each user.

This means that assuming you were an “average” DeFi investor this past year and used only one address, you made nearly $20,000 in airdrops alone. Of course, the use of “average” is a bit of a misnomer here due to the sometimes heavily skewed distribution to whales, though it goes to show how much value there is in someone just playing around with Ethereum and DeFi.

When to sell?

One thing I’ve noticed is the difference between selling an airdrop and keeping it.

The best example of this is Uniswap, which listed at around $1.5-2 when it first launched. There were some that rapidly dumped their tokens in expectations of everyone doing the same. But due to the excitement around Uniswap and the cash flows the protocols sees, things quickly reversed on the sellers as UNI shot to $7 literally 48 hours later.

A similar trend was seen with Badger, when listed around $6-7, though has reached as high as $22 just yesterday.

The difference between the airdrops before and the airdrops now is that the tokens that are actually dropped are or soon will be entitled to cash flows of the protocol they are from. That’s to say, by holding or staking the airdropped token, some Ethereum users may be able to earn dividends and boost their portfolios over time.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Former Goldman Sachs exec Raoul Pal: Bitcoin price could hit $50,000 by March

Bitcoin has finally begun to cool down after an extremely strong rally in December and early January.

After peaking at $42,000 earlier this month, the cryptocurrency has settled toward $31,000, which is over 25 percent off those highs.

Analysts remain confident that this malaise won’t stop the trajectory of the market in the medium to long term, with investor Raoul Pal saying that $50,000 is not out of the cards for the leading cryptocurrency.

Bitcoin to hit $50,000?

Raoul Pal, a co-founder of Real Vision and a former Head of Hedge Fund Sales for Goldman Sachs in Europe, recently said that BTC could be targeting $50,000 next as the chart for the coin is starting to flip bullish.

Pal posted the tweet below just recently, in which he wrote that he thinks Bitcoin could hit $50,000 by March:

“Feels like BTC is getting ready to climb the wall of FUD fear. Positive seasonality and a nice wedge give it a good chance to hit $50k by March. Let’s see… I remain, as ever, #irresponsiblylong.”

Bloomberg themselves thinks that Bitcoin could hit $50,000 in the coming year.

Analyst Mike McGlone commented on the matter of BTC’s price trajectory:

“Crypto assets in 2021 are initially about the diminishing prospects for Bitcoin to revisit old highs around $20,000 vs. the increasing potential of staying a bullish course toward $50,000 and a market cap of about $1 trillion, the way we see it. Increasing regulation is part of maturation and is more likely to enhance the digital-gold attributes of Bitcoin vs. the other 8,000-or-so so-called cryptocurrencies, most of which are someone’s project and/or liability.”

One factor driving Bitcoin higher is the increased talks about inflation as the economy tries to get back on its feet.

With a Blue Wave in the U.S., the consensus is that there will be inflationary monetary policy that should drive the market into true inflation once everything returns to normal. BTC stands to benefit from this as a fixed-cap cryptocurrency that cannot be debased by a central bank or by a central authority.

Institutional bid is still here

There remains an institutional bid driving Bitcoin higher.

On Monday, Marathon Patent Group said that it has purchased $150 million worth of bitcoin. The purchase allowed the company to acquire 4,812 BTC, at an average price of $31,167.

This adds to the laundry list of institutional capital that has entered the crypto space recently.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

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Chainlink (LINK) surges as Grayscale CEO hints at upcoming unknown announcement

Chainlink (LINK) is bumping higher on Sunday and Monday morning as the altcoin market has begun to rip higher.

The seventh-largest cryptocurrency is up five percent in the past 24 hours, making it the top-performing altcoin in the top 10 by market capitalization. LINK is currently trading at all-time highs, having broken out of its consolidation against BTC and the U.S. dollar a few weeks ago.

The strength in the Chainlink coin comes as Grayscale’s chief executive has hinted at an upcoming announcement that many expect to involve the popular cryptocurrency.

Chainlink moves higher on Grayscale rumors

Just minutes ago as of this article’s writing, Michael Sonnenshein, the CEO of Grayscale Investments, posted this somewhat cryptic tweet below:

stay tuned CT, @Grayscale and I have something good for you in the AM! (yes, that was the announcement of the announcement).”

As can be seen, it was vague. Though considering recent company filings spotted online, many think this relates to potential altcoin investment vehicles that will be launched by the asset manager.

Grayscale Investments is a Wall Street digital asset manager focused on allowing institutional players to obtain exposure to Bitcoin and Ethereum. While most of its assets under management are in its BTC and ETH positions, the company offers investment vehicles for assets down the crypto risk curve.

Rumors recently began to spread that LINK, along with a number of other altcoins that are from the 2017-2018 bull market, is going to be added to Grayscale’s umbrella through a number of new Trusts. Trusts are Grayscale’s preferred investment vehicles.

As reported by CryptoSlate previously on the matter, documents were recently spotted online of a Grayscale Chainlink Trust. The Trust was purportedly established on December 18th as a Delaware Domestic Statutory Trust.

This fueled speculation that the asset is being added to LINK.

The reason why this is so important is that it is widely believed that inflows into Grayscale’s variety of Trusts are critical in driving the crypto market higher. Grayscale services institutional players that collectively siphoned over $3 billion worth of capital into the cryptocurrency market via the firm through Q4 of 2020.

A frothy alt rally

This froth in the LINK price comes as the entire altcoin market has seen some absurd price swings.

While ghost chain coins are dead, many decentralized finance (DeFi) coins are undergoing a true re-rating. There are countless DeFi coins up by over 30 percent in the past 24 hours.

Some fear that this surge in the face of stagnation in the Bitcoin price is the sign of euphoria before a correction.

The post Chainlink (LINK) surges as Grayscale CEO hints at upcoming unknown announcement appeared first on CryptoSlate.

Ethereum (ETH) rockets to new all-time high despite apathy in Bitcoin price

Ethereum just rocketed to a new all-time high despite the apathy in the Bitcoin price, which fell toward $30,000 on Sunday morning.

The price of ETH is up 15 percent in the past 24 hours, making it one of the top-performing crypto assets in the top 100 by market capitalization, according to CryptoSlate market data.

Bitcoin is flat, as suggested earlier. The cryptocurrency has entered a period of consolidation over the past week, falling as low as $30,000, then bouncing back toward $33,000 as of this article’s writing.

Community reacts

The community is excited about this accomplishment.

Jeremy Allaire of Circle commented that with Ethereum setting a new all-time high, the “entire” decentralized finance landscape is set to see “explosive growth” in the months and years ahead.

Alex Wice, a prominent FTX trader that did over $b billion worth of volume in a single month by himself, recently posted a tweet “54% 0.1.” While this may look like two random numbers, this is an indication that Wice thinks that Bitcoin Dominance could hit 54 percent from 62 percent right now, along with a 0.1 ETH to BTC ratio, which is around 125 percent higher than the current level.

While Bitcoin Dominance dropping by eight percent doesn’t sound like a large feat, it would cause a massive re-rating in certain altcoins, which have extremely small market capitalizations compared to BTC.

Ethereum strength could catalyze further altcoin growth

Chris Burniske, a partner at Placeholder Capital, thinks that further strength in the Ethereum price relative to Bitcoin could push the altcoin market seriously higher.

He shared the chart below recently, which shows that Ethereum is pushing for blue skies against BTC as it aims to pass above a critical resistance level that may indicate there is massive growth on the horizon for the largest altcoin:

“Getting deja vu from March 2017, when all energy shifted from $BTC (ETF at the time) to $ETH. That’s the far left yellow mark, with the right yellow mark Jan 2021. When $ETH decides to move against $BTC in a month, it really moves.”

We’ve already been seeing this take place as altcoins have exploded higher over the past 24 hours.

Uniswap, 1inch, Aave, amongst a swath of other DeFi coins have rocketed over 20 percent higher in the past 24 hours as the decentralized finance space re-rates against other altcoin sectors and against Bitcoin most importantly.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

The post Ethereum (ETH) rockets to new all-time high despite apathy in Bitcoin price appeared first on CryptoSlate.

Grayscale adds $120 million worth of Bitcoin to its coffers amid continued institutional interest

Bitcoin has seen some volatility over the past few weeks. The cryptocurrency has bounced between $30,000 and $40,000, even falling below the former level at one point in time in a move that scared bulls.

Unfazed by the recent market volatility, data shows that institutional players have been adding to their Bitcoin positions.

Grayscale adds Bitcoin positions

According to crypto data aggregator Bloqport, Grayscale Investments, a Wall Street digital asset manager, added BTC worth $118 million to its coffers over the past day. This adds to the $1 billion that Grayscale has bought for its clients over the past seven days.

This means that the company now has over $20 billion worth of the leading cryptocurrency under management, which is up by over seven percent in BTC terms over the past 30 days alone.

Grayscale is adding these funds for its Grayscale Bitcoin Trust, which holds BTC for accredited investors, often including hedge funds and other institutional players that need exposure to this space.

More corporate money inbound?

There may be even more corporate money inbound, though.

MicroStrategy’s Michael Saylor found that he will be hosting a digital conference that will allow executives from Corporate America to learn more about Bitcoin and how they can implement it into their businesses:

“We’re going to have thousands of executives, officers…directors, & advisors of corporations coming together in the first week of February. They all want to figure out how to plug #bitcoin into their balance sheet or their P&L…We’re going to open source it.”

It is unclear if Grayscale is the optimal method for investors in Corporate America or Wall Street to allocate capital into Bitcoin, as there are an increasing number of institutional service providers that can safely execute and custody BTC.

Grayscale’s alt funds

Grayscale is expected to add new funds soon for institutional players to obtain further exposure to altcoins.

This screenshot was shared below just recently, which shows filings indicating there have been documents signed and submitted for new Grayscale funds, including those for Chainlink (LINK), Tezos (XTZ), Basic Attention Token (BAT), Decentraland (MANA), and Filecoin (FIL).

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

The post Grayscale adds $120 million worth of Bitcoin to its coffers amid continued institutional interest appeared first on CryptoSlate.

There’s a massive 32,000 Ethereum sell wall at $1,250 stopping bullish price action

Both Bitcoin and Ethereum have entered periods of consolidation over the past two weeks despite attempts by both to break above and below their respective medium-term price ranges.

Ethereum may continue its consolidation for the time being, as there has been one large holder that has appeared with a large amount of ETH to sell.

This may prevent the cryptocurrency from moving higher in the near term and may signal that there are holders of the coin that aren’t willing to let Ethereum go up just yet.

Ethereum sees large sell wall

According to crypto trader “Cyrii,” there is an entity or group of traders that are selling over 32,000 Ethereum, currently worth around $40,000,000, on Bitfinex’s Ethereum/USD market.

This is by far the largest entry/wall on this market’s order book.

Analyst Nik Yaremchuk noted more recently that there is now 25,000 Ethereum worth of selling pressure left. As can be seen in the chart he shared, there has not been a single trade printed above the $1,250 level, as the selling has yet to pull that sell order.

It may be that this sell wall is related to a large claim that took place on Bitfinex’s margin book a few weeks ago.

As noted by crypto-asset analyst “Light,” the $1.7 billion long opened on Bitfinex by an unknown entity has started to shrink over the past few days via what is known as a “claim.”

A claim on Bitfinex is when a margin trade is converted into an exchange trade, meaning the cost to borrow capital is settled to the lender.

This means that the trader was holding a large ETH spot position, and might be unwinding it now.

Strong fundamentals

This selling pressure being placed in Ethereum markets comes in spite of the fact that the cryptocurrency has seen strong on-chain trends.

As reported by this outlet previously Spencer Noon, an investor at crypto-focused venture firm Variant and an on-chain analyst, says that there are a number of on-chain trends indicating Ethereum will “blow past its all-time high.”

  • Ethereum’s transaction fees are more than double of Bitcoin, indicating to some that it is one of the most useful, if not the most useful, crypto-asset and blockchain network.
  • The amount of value transferred on Ethereum via stablecoins, ETH itself, and other tokens is surpassing Bitcoin and is far above that of other blockchains. This is largely attributed to the strength in the DeFi space and the rise of stablecoins, of which there is now over $20 billion worth on the Ethereum network, discounting algorithmic stablecoins.
  • Ethereum has an all-time high of daily active addresses, at around 550,000 (90-day moving average).
  • Ethereum has seen a strong influx of capital locked up in its native decentralized finance applications, with the total value locked in DeFi reaching past $25 billion.

Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only. 

The post There’s a massive 32,000 Ethereum sell wall at $1,250 stopping bullish price action appeared first on CryptoSlate.