Digital currency markets have increased significantly in value during the last 24 hours as the market capitalization of all 5,700+ coins is up over 2.4% on Friday. Bitcoin has been inching toward the $12k region again and ethereum touched a high over $442 a coin during the afternoon trading sessions.
Crypto Market Cap Crosses $365 Billion
The market valuation of all the crypto assets in existence is around $365 billion on Friday afternoon as a number of coins have seen decent percentage gains. Bitcoin (BTC) is trading just above the 11,800 zone and is up 2.7% today. BTC is also up over 28% in the last 30 days and 26% for the last 90 days. The forerunner in the top ten on Friday is ethereum (ETH), which has gained more than 12% during the last day and ETH is also up 85% during the last 30 days. ETH is currently trading for $442 per coin at the time of publication.
XRP still commands the third-largest market cap and the coin is up over 8% today and trading for $0.30 per coin. The stablecoin tether is still seeing massive trade volume and USDT’s $12 billion market valuation still holds the fourth position.
Another forerunner this week is chainlink (LINK), which saw it’s price peak at $18.00 per LINK, but the coin is down over 6.6% at press time. Currently, LINK holds the fifth-largest market cap and each token is swapping for $16.77 a piece.
The coin has a $5.4 billion market valuation and $767 million in global trade volume. The top seven pairs trading with bitcoin cash (BCH) on Friday include tether (64.3%), BTC (16.6%), KRW (4.43%), USD (4.15%), TWD (4.08%), GBP (1.4%) and ETH (1.31%).
Trader Believes Bitcoin Could Target $14k Next
The popular trader and analyst Jacob Canfield told his 59,000 followers that he can envision the price of BTC hitting $14,800 per coin in the near future. On August 12, Canfield tweeted: “As long as BTC can hold $10,500 support, I think we continue to move up to test the 1.618 extension 1.618 is at $13k and 2.618 is around $14,800 Yesterday’s drop was possibly price suppression and re-accumulation of longs and a bear trap on shorts to fuel the next push up.”
After Canfield made his statement an individual replied “It’s happening.”
Regulated Futures Exchange CME Group Becomes Third-Largest Bitcoin Futures Mover
This week the Chicago Mercantile Exchange (CME) joined the ranks as one of the largest bitcoin futures providers by order of open interest. On August 13, CME Group posted roughly $800 million becoming the third-largest derivatives exchange. More than $840 million in open interest was recorded on Monday according to the data analytics provider Skew.com.
In fact, the biggest derivatives exchanges worldwide have shuffled in order as far as volumes provided during the last two weeks. The top bitcoin futures movers besides CME Group include Okex, Bitfinex, and Huobi.
LINK May See Rough Seas Ahead
There is no doubt that chainlink (LINK) has jumped massively in value during the last few weeks and even bumped bitcoin cash (BCH) from the fourth position. At press time LINK is down after touching an all-time high of $18 per token. The coin is down 6% today but it is slowly recovering from its prior wounds. However, the research and analysis firm Santiment says that chainlink (LINK) may see “rough waters ahead.”
“LINK is up a whopping +68.7% in the last week,” Santiment tweeted. “However, we are seeing signs that investors are becoming increasingly uncertain in its prolonged rally. Speculative interest has exploded, and we’ve looked into some concerning signs for the #1 trending coin.” The firm also published an analytical report describing why LINK may see some volatile market action.
What do you think about the market action this week? Let us know in the comments section below.
The post Market Update: BTC Inches Toward $12K, ETH Jumps 12%, Report Says LINK May See ‘Rough Waters’ appeared first on Bitcoin News.
The power of television is no joke.
Grayscale Investments had its best fundraising week in history following an ad blitz on a number of major television networks. According to the company’s CEO Barry Silbert, Grayscale netted $217 million in investments in the days following the campaign.
The firm’s Bitcoin Trust Fund was the biggest contributor to the success, adding 14,422.01411512 Bitcoin (BTC) at a value of $167,932,466, according to an SEC filing. The firm is currently holding 409,131 BTC, essentially removing it from circulation.
This story is developing and will be updated
New muscle from law enforcement investigating crypto suggests that government innovation may be slow but the government gets what it wants.
Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law.
DeFi has stolen the show lately. Spectacular rises and falls of unaudited tokens named after meme-able foods changing hands via ascendant liquidity pools have left many of us unimaginative observers mostly blinking.
In this area, I can offer no particularly hot takes beyond the line that keeps coming to me: “This does not end well.” Chalk it up to some midwestern assumption that money you make too quickly is never truly yours. But the situation with DeFi and yield farming resembles the ICO boom too closely for comfort. A fascinating technology very few understand attracts people who can earn a lot of money at the expense of other people wanting to earn a lot of money.
With the ICO boom, the SEC took a long time to put together the tools to grapple with billions of dollars changing hands, but grabble they have. Similarly, a Calvinist sense of inevitability tells me that the law will come, because the law wants to get paid. In that cheery spirit, we’re looking at a series of recent upgrades to government capabilities to track and punish illicit crypto usage.
US sets new standard for tracking down terrorist-bound crypto
In groundbreaking news for the future of illicit financing in crypto, the Justice Department announced the seizure of millions of dollars in crypto bound for Al-Qaeda, ISIS and the militant arm of Hamas.
It’s been obvious to anyone watching that federal agencies in the U.S. have been working hard to cope with crypto as a channel to fund terrorism for years. The association is often used as a means of dismissing crypto as a whole. However, it’s easy to see a number of philosophical parallels between modern terror and Bitcoin.
Al-Qaeda, for example, has spent decades developing a network of decentralized cells made up of pseudonymous operators that has proved incredibly resilient to better-armed established nations. Does that not remind you of Bitcoin nodes? Not to mention that these days, organizations like ISIS depend on crypto-favorites like Telegram and Signal to recruit and communicate, rather than the traditional satellite phone in the mountains.
A major moral distinction to interrupt such philosophizing is that Bitcoin doesn’t kill people, though, as with all money, plenty of people are prepared to kill to get Bitcoin.
The recent announcement of the investigation was clearly meant as a bombshell. It takes the Department of Justice, the Department of Homeland Security, the IRS and the FBI a very long time to work together on anything. This is the product of years. Major media outlets like the New York Times and the Washington Post were tagged in to get the story amplified right out the door. The DoJ meant to broadcast the message as far as possible: Look out, the Feds are coming.
The Russian Bear Never Sleeps
In related news from the other side of the world, Rosinfomonitoring, Russia’s illicit financing watchdog, is building a new analytics system to track blockchain transactions.
While recent developments around the world, especially from Chainalysis, Ciphertrace, and the younger Elliptic have done much to pull the veil off of the “anonymity” that governments so fear in networks like Bitcoin, Rosinfomonitoring’s plans apparently include tracking for privacy coins like Monero and Dash.
Despite widespread and growing interest in the area and questions as to how private some of these so-called privacy coins are, some have proved quicker at adapting their tech than the people looking to track it.
To public appearances, Russia is relatively late to the game. Nonetheless, despite not having the resources of the U.S. or China, the technological agility of Russian intelligence habitually exceeds expectations.
While government agencies continue to onboard crypto capabilities, there’s a major barrier that resources don’t always make up for. In the more security-sensitive areas of tech generally and cryptocurrencies specifically, there’s deep hostility towards working with the government. If you take privacy tokens, a lot of the people who understand them best are people who would least like to work with the government. On the flip side, in the U.S. at least, the intelligence community has a hard time squaring their security clearance processes with the hackers and cypherpunks they’d need to hire to stay competitive.
Another ICO bites the dust
The SEC is busting up another ICO from the boom era, in news that has become familiar.
The ICO in question — for Boon.Tech’s Boon Coins — netted only $5 million, and the enforcement action is not especially extreme. The SEC requires a return of those funds to investors, demands penalties of less than $1 million, and bars the project’s CEO from holding office at a publicly traded company ever.
So what does it matter? The order is part of what seems to be a continuing trend of the SEC’s improving knowledge of crypto jargon and technology, even in cases small enough where they were probably not expending a ton of the commission’s resources. Typically, ICO pursuits of this scale have depended on obvious thefts of funds — lambos showing up in the driveways of homes recently purchased by token operators using funds they can’t account for. This case is interesting in that it shows a rise in casual technological savvy.
Kelman Law goes through the patchwork of money transmitter licenses required in each of the United States.
Jerry Brito, executive director of non-profit lobbying group Coin Center, argues for the language of “permissioned” and “permissionless” networks.
Global payments processing system SWIFT evaluates what digitalization can do for know-your-customer identification requirements.
What do you do when two identical men standing 6 ft 5 in tall pull up to your house in the Hamptons during a pandemic? If you’re Dave Portnoy, the founder of Barstool Sports, you open the door and welcome them in.
On Aug. 13, the enigmatic sports, gaming, and investing celebrity was visited by the Winklevoss Twins — Tyler Winklevoss and Cameron Winklevoss, co-founders of the Gemini crypto exchange and Bitcoin billionaires.
They weren’t there to discuss Facebook, sports, or anything of that sort. What the Winklevi, as Portnoy calls them, were there to talk about was — no surprises here — Bitcoin.
As CryptoSlate previously reported, the Barstool “Presidente” announced on Aug. 4 that he wants the “rowing robots,” the “best-cast characters in the history of movies,” to help him buy Bitcoin:
“I’m officially inviting the Winklevi twins to my office to explain bitcoin to me. Have to wear the rowing outfits though,” Portnoy wrote and said in the video.
— Dave Portnoy (@stoolpresidente) August 4, 2020
Their rendezvous on Aug. 13 was a culmination of this Twitter interaction.
Here are four takeaways from the meeting between Portnoy and the Winklevoss Twins, which has since been viewed over 500,000 times on Twitter alone.
#1: The Winklevoss Twins still own 1% of all Bitcoin circulation
In the ten-minute clip, Portnoy tried to ask the Winklevoss Twins everything he could about Bitcoin.
At one point, he brought up a fact that he read that the duo collectively owns 1% of all BTC in circulation. At the current supply of 18,460,000 million coins as per CryptoSlate data, that is ~184,000 BTC — worth over $2.17 billion. “Is that true?” Portnoy asked.
The Winklevoss Twins nodded, with one responding with a “yep.”
— Dave Portnoy (@stoolpresidente) August 13, 2020
#2: Portnoy now owns BTC — and Chainlink
After some convincing, which included the Winklevoss Twins saying Bitcoin is valuable because Elon Musk is going to mine gold from asteroids to devalue the precious metal, Portnoy pulled the trigger on Bitcoin.
“So what is it? Down three percent in the past 24 hours. OK. So I hit ‘buy’?”
And that he did, hitting buy as the Winklevoss Twins ran Portnoy through the ropes of their own exchange.
While the Barstool founder was first thinking to put 50 percent of his capital into Bitcoin and 50 percent into Chainlink, this ended up not being the case. He claims to have put $200,000 into BTC and $50,000 into LINK.
The Winklevoss Twins advised him against a large Chainlink allocation due to the fact that the token is pushing all-time high valuations, with it recently becoming the fifth-largest cryptocurrency.
Portnoy published a tweet after the rendezvous that suggested he has “7 figures” in crypto, which would mean at least 300 percent more than the sum he allocated in the video. Maybe he decided to stack more sats after the meeting the Winklevi?
#3: This is unlikely to be Davey Day Trader Global’s last purchase of Bitcoin or crypto
Alluding to the “7 figures” comment perhaps, Portnoy ended the video with the Winklevoss by stating that this likely isn’t the first and last time he will be buying cryptocurrency. Well, as long as Bitcoin doesn’t crash, the celebrity figure added jokingly.
He’s already bullish, anyway, writing on the evening of Aug. 13 that he expects to see Bitcoin at $12,000 on Aug. 14.
#4: We may get a Portnoycoin
Last but not least, we may soon be getting a Dave Portnoy Coin, launched by the man himself.
After the Winklevoss talked about how altcoins can be based on a blockchain like Ethereum, Portnoy asked if he could do a coin of himself and then “pump and dump it.” As much of a joke this may sound like, the twins entertained the idea, adding that it’s entirely possible to launch a Portnoycoin but that “pumping it” likely isn’t the best idea.
The post 4 takeaways from the Winklevoss Twins’ Bitcoin rendezvous with Barstool’s Portnoy appeared first on CryptoSlate.
ETC’s bad month isn’t over yet.
ETC is facing delisting from OKEx in the wake of a 51% attack that cost the exchange $5.6 million.
According to a report recently released by OKEx, the perpetrators registered five accounts between June 26 and July 9, 2020, subsequently depositing 68,230.02 ZEC (worth more than $5 million) on their platform.
On July 31, the attackers exchanged their ZEC holdings for 807,260 ETC and withdrew it from the exchange.
The on-chain process of the initial 51% attack on Aug. 1. Source: community enthusiasts
On the same day, the attackers began creating a “shadow chain” using their newly acquired hashrate. At this point, the shadow chain was identical to the main ETC chain, but was unknown to the rest of the community. Then they deposited the ETC on OKEx, while simultaneously moving the same ETC on their shadow chain to wallet addresses that they controlled — effectively double spending the coins.
They traded their newly deposited ETC for ZEC on OKEx and withdrew the ZEC from the exchange. Then they broadcast their shadow chain to the network, which was already longer than the main chain.
According to the OKEx report, the problems were not communicated promptly by the ETC community with the rest of the crypto community, including the exchange finalized the status quo:
“After what appeared to be inefficient communication with other participants in the larger crypto community — including exchanges like OKEx, wallets and ETC miners — the ETC community at this point made the decision to move to mining the now-broadcasted shadow chain, given that it was longer than the original mainnet.”
OKEx reimbursed its users in the aftermath of the attack, eating the entire $5.6 million loss. It has since temporarily suspended all ETC deposit and withdrawal activity, and plans to extend confirmation times for transactions on the troubled chain.
The exchange has said that they may delist ETC entirely, unless the community takes steps to improve the network’s security and stability:
“The exchange will consider delisting ETC, pending the results of the Ethereum Classic community's work to improve the security of its chain.”
At an ETC community meeting yesterday, a fiery debate ensued over Charles Hoskinson’s proposal for a decentralized treasury. During the same meeting, Hoskinson mentioned that the company he currently runs, IOHK, has developed a solution that would prevent a similar 51% attack in future.
At the meeting, many attendees voiced concerns that more exchange delistings will follow if the community does not take major steps to solve the existing security issues.
Traders have turned bullish on Ethereum again and the strong break above $400 could pull Bitcoin and other altcoins higher.
The correction in the U.S. dollar (DXY) and the possibility of further weakness due to continued money printing by the U.S. Federal Reserve could be one of the main reasons for the surge in institutions investing in Bitcoin (BTC).
Interestingly, about 40% of the Bitcoin accumulated over the past two years has not been moved, which suggests that investors are “HODLing” their purchases as they anticipate higher levels in the future.
Daily cryptocurrency market performance. Source: Coin360
Abra CEO Bill Barhydt believes that Bitcoin is witnessing a “pivotal moment” as a new asset class. Rumors suggest that the U.S. government could try to revive growth by stoking inflation. Hence, Barhydt considers that this is the best time for Bitcoin to stake a claim “as the defacto hard digital asset.”
Bitcoin bounced off the 20-day exponential moving average ($11,253) on Aug. 12, which shows that the bulls are aggressively buying the dips to this support.
BTC/USD daily chart. Source: TradingView
The price action of the past few days has formed an ascending triangle pattern, which will complete on a breakout and close (UTC time) above $12,113.50. The target objective of this set up is $13,702.55.
Both moving averages are sloping up and the relative strength index is in positive territory, which suggests that bulls have the upper hand.
This bullish view will be invalidated if the BTC/USD pair turns down from the current levels or the overhead resistance of $12,113.50 and breaks below the 20-day EMA.
Such a move will be the first sign of profit booking at higher levels. Below the 20-day EMA, a drop to $10,400 is possible. If this support holds, the pair might remain range-bound for a few days. The trend will turn negative on a break below the $10,400–$10,000 support zone.
Ether (ETH) surged above the downtrend line and the overhead resistance of $415.634 on Aug. 13, which shows that the uptrend has resumed.
ETH/USD daily chart. Source: TradingView
Both moving averages are sloping up and the RSI is in the overbought zone, suggesting advantage to the bulls. The next target on the upside is $480 and then $520.
This bullish view will be negated if the bears fake the current breakout and pull the ETH/USD pair down below $415.634. Such a move will indicate profit booking at higher levels and could result in a deeper pullback.
XRP has broken out of the falling wedge pattern, which is a bullish sign. If the bulls can scale the price above $0.307301, a rally to the $0.326113–$0.346727 resistance zone is likely. A breakout above this zone will signal a resumption of the uptrend.
XRP/USD daily chart. Source: TradingView
Above $0.346727, the next target to watch out for is $0.40. The uptrending moving averages and the RSI close to the overbought zone suggest that bulls have the upper hand.
Contrary to this assumption, if the XRP/USD pair turns down from $0.307301, the bears will make another attempt to sink the price below the 20-day EMA ($0.275). If they succeed, a deeper correction to the 61.8% Fibonacci retracement level of $0.244472 is likely.
Chainlink (LINK) broke above the 261.8% Fibonacci extension level of $17.4319 on Aug. 13 but the bulls could not sustain the price above it, which suggests some profit booking at higher levels.
LINK/USD daily chart. Source: TradingView
However, the LINK/USD pair has not given up much ground, which suggests that the majority of the bulls are still holding on to their positions as they expect the rally to continue. If the buyers can push the price above $18.3488, the rally can extend to $20.
On the other hand, selling could pick up momentum on a break below $15.9175. Below this level, a drop to the 38.2% Fibonacci retracement level of $13.9639 is possible.
If the pair bounces off this level, the bulls will again attempt to resume the uptrend but a break below this level could signal that the momentum has weakened.
Bitcoin Cash (BCH) has held the $280 support for the past few days, which suggests that the bulls are buying at these levels. However, unless the bulls push the price above the downtrend line, the bears will again try to break the $280 support.
BCH/USD daily chart. Source: TradingView
If the price again turns down from the downtrend line, it will form a bearish descending triangle pattern, which will complete on a breakdown and close (UTC time) below $280. The pattern target of this setup is $222.
However, if the bulls push the price above the downtrend line, a move to $325 and then to $353 is possible. A breakout of this resistance will signal the possible resumption of the uptrend.
Bitcoin SV (BSV) has held the $200 support but the rebound lacks strength, which shows a lack of urgency among the bulls to buy at these levels.
BSV/USD daily chart. Source: TradingView
The price has reached the downtrend line, which is likely to act as a stiff resistance. If the BSV/USD pair turns down from this resistance, the possibility of a break below $200 and the 50-day simple moving average ($192) increases. Below the level, the decline can extend to $160.
Currently, the 20-day EMA ($214) is flat and the RSI is close to the midpoint, which shows a balance between supply and demand. A breakout above the downtrend line and the $227 resistance will signal that bulls are making a comeback. Above this level, a retest of $260.86 is likely.
The bulls have successfully defended the breakout level of $51, which is a positive sign. If they can push Litecoin (LTC) above the descending channel, a move to $60 and then to $65.1573 is possible.
LTC/USD daily chart. Source: TradingView
A break above $65.1573 could result in a rally to $80. The LTC/USD pair is presently above the 20-day EMA ($55) and the RSI has risen to just under 60 level, which suggests a minor advantage to the bulls.
Contrary to this assumption, if the pair turns down from the current levels, then the bears will make another attempt to sink the price below $51. A break below the 50-day SMA ($48) will be a huge negative.
Cardano (ADA) is currently consolidating between the $0.13–$0.15 zone. The attempt by the bears to break below this zone on Aug. 12 was purchased aggressively by the bulls, which shows strong demand at lower levels.
ADA/USD daily chart. Source: TradingView
During this leg of the up move, twice the consolidations lasted for about 27 days or more. The current consolidation has completed 18 days and if history were to repeat itself, the price might remain stuck in the range for a few more days before a breakout or a breakdown happens.
The 20-day EMA ($0.137) has flattened out and the RSI is just above the midpoint, which also suggests a balance between the bulls and bears. The next trending move is likely to start after the ADA/USD pair closes (UTC time) above $0.15 or below $0.13.
Binance Coin (BNB) dipped below the 20-day EMA ($21.37) on Aug. 11, 12 and 13 but on all three days, the bears could not sustain the lower levels, which shows aggressive buying by the bulls.
BNB/USD daily chart. Source: TradingView
Today, the bulls have pushed the price above the downtrend line and are attempting to scale the overhead resistance of $22.93. If they succeed, a rally to $24.588 and then to $27.1905 is possible.
Both moving averages are rising and the RSI is in the positive territory, which suggests that bulls have the upper hand.
Contrary to this assumption, if the BNB/USD pair turns down from $22.93, the bears will make another attempt to break the 20-day EMA support.
Crypto.com Coin (CRO) is consolidating in an uptrend, which is a positive sign. Currently, the price is stuck between $0.154322 and $0.176596.
CRO/USD daily chart. Source: TradingView
The 20-day EMA ($0.16) is sloping up marginally and the RSI is close to the 60 level, which suggests that the momentum has weakened but the advantage is still with the bulls.
If the bulls can push the price above $0.176596, the uptrend is likely to resume with the next target at $0.20. Conversely, if the CRO/USD pair plummets below the support of the range, a drop to $0.13 is possible.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
Is it enough to meaningfully resist election fraud?
A new patent has been filed by the U.S. Postal Service, or USPS, following recent comments from President Donald Trump concerning the mail service's funding in light of his fight against mail-in voting. The patent appears to use Blockchain technology to make mail-in voting a safe alternative to physical polling stations amid the COVID-19 pandemic.
"This developement releates to a voting system that also incorporates the use of cryptographic elements, such as blockchains, as are used with cryptographic currencies, to track and secure the vote by mail system," said a patent filing, dated Aug. 13, 2020.
COVID-19 still remains a global hot topic as the 2020 U.S. presidential elections draw closer. As a result, mail-in voting has also surfaced as a point of contention among members of the country's political parties. Trump opposes the movement, and has posited the idea of withholding further USPS funding in light of the situation, a CNBC article said.
Bitcoin and Tesla are the talk of the town throughout the USA.
All eyes are on Bitcoin (BTC), crypto's largest coin by market cap, and Tesla, a future-centric car company run by eccentric billionaire Elon Musk, thanks to a standout year for both assets.
Tradable equity in Tesla, under the ticker TSLA, has captured more of the American public's attention than any other investable asset, according to July figures from financial charting platform TradingView, posted on Aug. 13. Bitcoin held the spotlight as the second most popular asset charted on the platform.
TradingView also pointed out that Bitcoin interest is on the rise specifically in Washington, California and Oregon. "The west coast loves crypto the most," the article said. "Boeing was the third most viewed stock and American Airlines the 10th," the article added, detailing the airline sector — an industry that saw the brunt of COVID-19 restriction consequences.
Bitcoin and Tesla earned their spots in the limelight as both have rallied tremendously in price over 2020. Bitcoin hit a low near $3,800 back in March as COVID-19 fears were ramping up. The asset recovered fast, however, flying up past $12,000 in the following months, tallying a radical comeback.
Tesla CEO and SpaceX founder Elon Musk is no stranger to the crypto space, although he reportedly only owns 0.25 BTC as of May.
It’s a clash of the crypto titans.
Charles Hoskinson presented his idea for a decentralized treasury protocol to the Ethereum Classic (ETC) community during a Discord call on August 13. Hoskinson, who is the founder of Cardano (ADA) and one of the co-founders of Ethereum, strongly believes that setting up an independent source of funding for development and innovation can ensure the prosperity of ETC.
Hoskinson’s proposal to change ETC’s block reward allocation would mean that instead of rewards going entirely to the network’s miners, blocks would allocate a portion of every reward to a newly-created decentralized treasury. This treasury would then be used to finance future development of the ecosystem. IOHK, a company which Hoskinson runs, has also apparently developed a technology that would prevent future 51% attacks.
He contended that the best defense against such attacks is innovation, which he believes will attract more DApps and users. This would lead to the appreciation of ETC, which would in turn attract more miners, making such attacks improbable in the future. Not everyone was enthused by Hoskinson’s proposal, however. Some felt that a reduction in rewards would lead to a miner exodus, while others did not like the idea that initial projects might all be led by IOHK.
When explaining the supposedly unfair advantage that ICO projects have over ETC, Hoskinson took a small swipe at Ethereum and Chainlink:
“ETC would be at a very different place, Ethereum had an unfair advantage. All those people who wanted to do cool stuff like the chainlinks and so forth, they did their ICOs. That's how they funded everything. Our ecosystem was much more principled. We didn't succumb to the ICO mania.”
It sounded for a moment as if Hoskinson was channeling Adam Back, who recently lambasted ICO projects, including Cardano. But things became truly heated when James Wo’s question was read by the moderator.
James Wo’s question.
Wo is the founder and CEO of Digital Finance Group — a crypto investment firm with $550 million in assets under management. His group has a vested interest in one of the biggest contributors to the ETC ecosystem, ETC Labs. From the tone of his question, Wo appeared to perceive Hoskinson’s proposal as a hostile takeover attempt.
Hoskinson jumped in before letting the moderator finish reading, directing his answer directly to Wo:
“Because I was here in the very beginning, James, and I put millions of dollars of my own money in. I understand that you put money in and that's why I say we should split it up. But I was here in the beginning. I put my brand and reputation on the line.”
When the moderator finished reading Wo’s question, Hoskinson continued:
“I was here in the beginning, in the beginning of Ethereum, in the beginning of Ethereum Classic; again, I put my own time and money in. I didn't ask for anything until I had a fully working client built with 100% new code.”
Terry Culver, the CEO of ETC Labs, jumped in to interrupt Hoskinson, but was silenced by the moderator.
The call lasted a total of 90 minutes, though some stayed on after the main participants left. Most seemed skeptical about miners accepting a decrease to the block reward.
Bitcoin has broken out from downtrend resistance and appears to be poised for a new uptrend. Market conditions change dramatically when a switch from bear to bull occurs, and a “buy the dip” strategy is often the most effective.
For investors and traders unsure of how to do that, history shows that one specific level is the best place to buy BTC.
Bitcoin Bull Run Is Here: Time To Buy The Dip, Or Time To HODL?
During the last major crypto bull run, the term “HODL” was coined to reflect how violent each bull market crash was in Bitcoin. Rather than selling Bitcoin, seeking to rebuy the asset lower, the term’s originator recommended investors simply “hold on for dear life,” instead.
Selloffs are especially violent, but present an unrivaled opportunity to double-dip on ROI. During the 2016 and 2017 bull market, Bitcoin had several, over 35% crashes taking place in a matter of weeks to a month.
Price action and sentiment during these moments would get exceptionally frightening, making buying the dip more difficult in practice than it seems. But those that did manage to buy the dip were always handsomely rewarded for the risk taken.
Looking back over past price action, there could be one important level that acted as an ideal buy zone whenever Bitcoin retracted to touch it. If the same strategy works just as well during the next uptrend, the level could be the key to unlocking untold wealth.
BTCUSD Weekly Price Chart + 20-Week Moving Average | Source: TradingView
20-Week Moving Average Historically Acts As Ideal Buy Zone For Big BTC Profits
Moving averages are visual-based line indicators that are added to price charts, based on statistical open and close data regarding price action. These moving averages can be used to find potential support or resistance and can act as a buy or sell trigger as price passes through it.
The 20-week moving average, according to historical Bitcoin price charts, may be the ideal level to buy just about every dip during a cryptocurrency bull market.
Related Reading | Crypto Is Up Over 80% in 2020—and Google Users Are Taking Notice
In the chart above, at least five different instances took place in 2016 and 2017 where Bitcoin price collapsed back to the 20MA. There, the cryptocurrency found strong support and rocketed off to toward the next psychological resistance level.
BTCUSD Weekly Price Chart + 20-Week Moving Average | Source: TradingView
On average, each time Bitcoin price fell back to the 20MA, there was an over 100% gain that followed before the next correction. This means that each crash in Bitcoin was an opportunity to double your money.
The fifth and final pump from the 20MA resulted in an over 500% rally from $3,000 to $20,000.
Bitcoin has only just broken out from downtrend resistance. If the same sort of price action repeats, Bitcoin price has at least five major corrections back to the 20MA before the top and peak of the next cycle is in.
Before that happens, it may be wise to watch the 20-week MA as the prime zone to buy the dip in crypto for the most possible financial upside.
Hong Kong-based crypto exchange and card provider Crypto.com is launching an attractive competition for Bitcoin fanatics in September, ahead of its “public beta” exit.
Bitcoin at 50% off on Crypto.com
The Crypto.com Exchange will exit its public beta on September 8, 2020, almost a year after launching in private beta and opening the floodgates to the public. Millions of dollars in transactions and trades later, the exchange is rolling out its launch in all markets where the Crypto.com App is available.
Want to build your #BTC position at 5️⃣0️⃣% off?
🗓️ 8 Sept 2020 is your chance!
We’ve allocated USD$2,000,000 to The Syndicate – for one day only – to mark the day our Exchange exits Beta!
Sign up: https://t.co/1w2M6EZTsX
— Crypto.com (@cryptocom) August 13, 2020
As a token of appreciation, Crypto.com is presenting a Bitcoin Syndicate Special, featuring BTC at 50% off with USD$2M allocation, it shared in a release with CryptoSlate.
This event will commence on Tuesday, 8 September 2020 at 6 AM UTC on the Crypto.com Exchange. Users can stake a minimum of 5,000 CRO on the Exchange and trade at least $5,000 USD worth of volume in the past 30 days on the Exchange to subscribe.
The total sale amount & subscription price is as follows:
- Total BTC Supply: $2,000,000 USD worth of BTC
- Discount rate: 50%
- Syndicate Allocation: Each participant’s maximum amount of CRO that can be applied towards the event will depend on the amount of CRO Staked on the Crypto.com Exchange.
As a note — the maximum allocation in CRO stated in the table above is indicative and for reference only. A final maximum allocation will be made available on Crypto.com on September 8.
Syndicate Allocation Subscription
Crypto.com Exchange users will be able to subscribe for BTC by contributing an amount of CRO not exceeding their respective maximum allocation. Staked CRO may not be used to subscribe for BTC in this event, the firm said.
Crypto.com Exchange users will need to trade at least $5,000 USD worth of volume in the past 30 days on the Crypto.com Exchange in order to be eligible to subscribe.
The release said that “the past 30-day trading volume is calculated every day at 00:50:00 UTC; thus, the volume calculated as of 8 September 2020 00:50:00 UTC will be used to determine one’s eligibility.”
Event participants are expected to receive their finalized BTC allocation at Distribution Time. If the total contributed amount for the event is above the total discounted allocation, each individual participant’s final BTC coin allocation will be calculated as follows:
Terms and conditions apply, and traders from China, Hong Kong, and the US and China, are exempt from taking part. All details are available on Crypto.com.
The post Crypto.com will sell Bitcoin at “50% off” in September, here’s why appeared first on CryptoSlate.
There are multiple ways to approach digital payments, and Facebook wants to cover them all.
Despite regulators across the board giving a cold shoulder to Facebook’s ambitious plan to install a worldwide crypto-based payment system called Libra, the company’s enthusiasm for moving into the digital payments space is only mounting. Earlier this week, reports emerged that the social media hegemon has realigned its forces on this front, arranging all its payments-related subsidiaries into a single group called Facebook Financial.
David Marcus, co-creator of Libra and head of the Novi (formerly Calibra) project, will take command of the new division while continuing to directly oversee the crypto effort. Facebook CEO Mark Zuckerberg also tapped former Upwork CEO Stephane Kasriel to assist Marcus as vice president for payments in charge of Facebook Pay, the solution that the company is currently integrating into its family of products.
These organizational changes reflect further articulation of Facebook’s focus on enabling financial activity across its platforms, and they may also be indicative of some strategic prioritizations the company has made with regard to its various approaches to payments — including the Libra stablecoin.
In-app payments promise
Most people who post on Facebook or chat with friends on WhatsApp will switch to another app when they need to make a payment. Venmo is great for splitting a dinner check, PayPal often comes into play when one needs to pay a merchant at an online marketplace, while Google Pay and Apple Pay are go-to options for in-app payments and purchasing goods at stores.
In an online economy that thrives on monetizing user attention and retention, having people slip out of an app to perform a transaction amounts to wastefulness. A Bloomberg report on the formation of the payments division also documents the consolidating realization within Facebook that allowing users to transact on its apps will go a long way toward keeping people within the ecosystem. One direct consequence, this argument goes, will be the growing value of the ads that the company sells.
There is also evidence that Mark Zuckerberg has lately been increasingly excited about the messaging apps’ potential to spur commercial activity. A Facebook spokesperson reflected this sentiment to Cointelegraph:
“Payments and financial services have become increasingly more important for the world, and as a result, we need to increase our efforts around making payments and commerce easier for people. We want to empower people everywhere to send money to each other, buy and sell things online, and help businesses grow.”
Expansion by negotiation
In pursuing this vision, Facebook’s immediate priority is the ongoing rollout of Facebook Pay, the payments layer built into its social apps. The process is unfolding unevenly, as the company is developing custom approaches for every region, depending on where it stands with local regulators and in national markets.
Some of the key expansion vectors, for example, include enabling users in two major markets, Brazil and India, to transfer money within the widely popular WhatsApp messenger. In both cases, however, the push has been stalled by regulators.
These cases once again illustrate the crucial role of regulatory negotiations when it comes to expanding novel financial services across a variety of markets. Convincing legislators and watchdog organizations that the potential benefits of the proposed solution outweigh the security issues has been the centerpiece of the campaign to promote Libra, and it will remain the case with any other payments innovations.
Marcus is known for successfully facilitating financial services’ scaling and expansion efforts since his PayPal stint. His experience as Libra’s advocate in chief — which entailed endless rounds of negotiations with policymakers — has surely seasoned him even further. It’s only logical that Marcus’ experience is now equally indispensable for all of Facebook’s payments initiatives — especially given the obvious fact that Libra’s initial plan to blitzkrieg its way into becoming a dominant global financial infrastructure has failed.
The face of Kasriel, who will specifically oversee the operation of Facebook Pay, is less familiar to the crypto community. Most recently known as CEO of online staffing firm Upwork, he has vast experience in digital payments. From 2006 to 2008, he spearheaded PayPal’s operations in France where he crossed paths with Marcus. Kasriel then went on to serve in various leadership roles at eBay.
Interestingly, Facebook’s two French executives seem to share a memorable moment attesting to a common early interest in crypto. According to one report, Kasriel was the first person to whom Marcus sent a Bitcoin transaction in 2011.
Is Libra taking a back seat?
Naturally, with Marcus taking up a new commission, the question arises: Is Libra now less of a priority for Facebook? The company’s spokesperson told Cointelegraph that “There are no changes to our current plans with the formation of a new group,” further adding:
“We want to be able to give people the ability to make a payment however they choose — debit, credit or Libra digital currencies. We’re taking multiple approaches to payments, ranging from Facebook Pay and checkout, which are built on top of traditional payment infrastructure, and longer-term work around Libra with Novi, so that global payment infrastructure around the world can be more efficient, especially for things like transferring money across borders.”
Libra was never intended to be a financial layer inside Facebook’s ecosystem, but rather an open infrastructure where the social media company would have the edge in offering the premier wallet — Novi — to hold the digital currency. Leveraging the wallet proposition, Facebook could expect to fuel Libra’s expanding use and also benefit from it.
Sky Guo, CEO of smart contract platform Cypherium, commented to Cointelegraph that the projects seem likely to combine into a single offering, adding:
“Both are important strategical moves of Facebook. The two have different goals and use cases. However, we can expect that Facebook Pay will integrate Libra once it launches.”
A company with Facebook’s resources can be simultaneously upping its in-app payments game and actively pursuing the cryptocurrency effort. Libra and Novi, now categorized as the “longer-term work,” may have entered a less publicly visible stage of development, yet they can shake up the crypto space once again at any time.
Loyalty can be so rewarding.
Gamified shopping loyalty platform StormX will now let its users earn cashback in cryptocurrencies when shopping at Walmart.
According to an announcement shared with Cointelegraph on August 14, StormX users can now earn up to 4% cashback in crypto for purchases made at Walmart. Users who achieve a “Diamond” rank can earn up to 14%. StormX CEO Simon Yu said that he believes this Walmart partnership will bring new users to the service:
“As the only crypto cashback program for Walmart worldwide, we are confident that users will take advantage of the rewards program to earn their favorite cryptocurrency while shopping at their favorite retailer.”
Per the announcement, Walmart is the latest addition to StormX’s pool of more than 650 partners, which already includes outlets like Microsoft, eBay, Nike, Adidas, Target, Dell and Samsung. StormX says it has already distributed more than $2 million to its users.
In June, Walmart’s Chinese subsidiary partnered with VeChain, a blockchain-based supply chain management platform, to create a system that traces food products. At the beginning of March, Walmart also joined the Hyperledger blockchain initiative.
The NCSC has gone scorched earth on crypto scams.
Over the past four months, the National Cyber Security Centre, or NCSC, removed over 300,000 URLs pertaining to fake celebrity-endorsed investment opportunities. More than a half of these sites belonged to fraudulent cryptocurrency investment schemes.
Per an announcement published by the NCSC on August 14, an increasing number of these scams utilized fake endorsements from national celebrities, such as Ed Sheeran and Richard Branson. This raised red flags for authorities, prompting the launch of a massive retaliatory campaign.
Ciaran Martin, CEO of the NCSC, commented:
“These investment scams are a striking example of the kind of methods cyber criminals are now deploying to try to con people. We are exposing them today not only to raise public awareness but to show the criminals behind them that we know what they’re up to and are taking action to stop it.”
In Australia, a similar warning was issued by the Australian Securities and Investments Commission, or ASIC. They too asked people to remain cautious about celebrity-endorsed Bitcoin (BTC) scam sites.
Cointelegraph recently reported that the United Kingdom Advertising Standards Authority, or ASA, and the Internet Advertising Bureau, or IAB, have launched a new system to help detect and remove fraudulent online ads.
During the last few months, crypto proponents have focused their attention on Iran. The Iranian President Hassan Rouhani initiated a new mining strategy last May, and the government-licensed 14 bitcoin mining farms in July. According to the Chinese mining operation Lubian, it claims to operate one of these regulated bitcoin mining farms in the oil-rich nation.
The Cambridge Bitcoin Electricity Consumption Index or “Bitcoin Mining Map” attempts to visualize the geographic distribution of global Bitcoin hashrate. Iran is the sixth most powerful country in terms of global hashrate.
Of course, China consumes a vast amount of the global hashrate and Chinese miners also have a strong relationship with the oil-rich nation of Iran. Back in April 2019, news.Bitcoin.com reported on Chinese miners migrating to Iran for cheaper electricity rates.
At that time, it was difficult for the bitcoin miner, Liu Feng, to get his ASIC mining rigs into the country. However, when miners got into Iran, they had access to extremely affordable electric prices ($0.006 per kilowatt-hour).
The government then mandated licensure for mining farms and the electric rate was upped to fluctuating export prices depending on the season. More recently, President Hassan Rouhani initiated a bitcoin mining strategy and the government is focused on bolstering the industry.
The Chinese mining operation Lubian.com recently told the financial columnist Vincent He that the company operates one of the largest regulated farms in Iran.
Lubian’s cofounder Liu Ping detailed that it has a partnership with a power facility in Iran and the investors are both Iranian and Chinese. Power companies in Iran are now allowed to house bitcoin mining operations. Unlike the Chinese miner Liu Feng who had an awful time dealing with customs getting ASIC mining rigs across the border, Liu Ping said his firm has no problems with clearance.
“We have our own customs clearance channels as we have the experience of establishing the logistics company,” Liu Ping stated. “And we have good local resources in Iran, and we have maintained good relations with the Ministry of energy, the Ministry of foreign affairs, and even the army in Iran,” the miner added.
Lubian is a relatively new mining operation and more recently it was the sixth most powerful mining operation in terms of hashrate. Today, Lubian has around 3% of the global hashrate or around 3.86 exahash per second (EH/s).
This puts the firm in the eleventh position among a number of mining pools and giant operations like Poolin, F2pool, and Antpool. Liu Ping said that the Iranian farm is housed in containers within the power plant’s property lines.
The Chinese miner also said the operation pays the power company in shares of bitcoin (BTC), as well as traditional means of payment.
“Compared with traditional industries, crypto mining is a profitable business,” Liu Ping concluded. “Apart from the mining pool business, at present, there is no other crypto financial service business conducted by Lubain.com. At present, their purpose is only mining and accumulating Bitcoin.”
What do you think about Lubian.com’s cofounder statements about mining bitcoin in the oil-rich nation of Iran? Let us know what you think about this subject in the comments section below.
The post Chinese Bitcoin Miners Develop Strong Relationships and Crypto Mining Facilities in Iran appeared first on Bitcoin News.
Bitcoin and cryptocurrencies as a whole remain bullish as $12,000 comes into view once more as the markets head into the weekend.
Bitcoin yet to clear $12,000 hurdle
Ethereum Gas prices skyrocket
Small-cap cryptos shine
Watch the Bitcoin and gold correlation
This week, the Bitcoin and cryptocurrency market roared into Monday like a lion only to end the week more like a lamb. Going into the weekend, let’s take a look at the major developments that have shaped the past week and what can be expected for the price of Bitcoin during the weekend.
Bitcoin yet to clear $12K hurdle
Bitcoin (BTC) price tested its year-to-date high, briefly surging past $12,000 only to fall back down into the same mid-$11,000 range it has been stuck in for the better part of the past couple weeks.
Ether (ETH) also surged, along with Gas fees, largely on the back of DeFi growth and speculation. But the big story was a previously unknown token that shot astronomically higher only to fall back to earth almost as quickly.
Moving over the $12,000 hurdle was always seen as the key to Bitcoin retesting all-time highs. Overcoming the gauntlet of resistance levels between the $12,000-14,000 level would be followed by a vacuum all the way to record highs, some analysts believe.
Heading into the week, Bitcoin made a run at the $12K key psychological barrier. But despite leveraged interest, the lack of follow-through resulted in Bitcoin falling back below it. In turn, the market was forced to try again, in part helped by flat to minor positive perpetual funding rates.
Gas prices skyrocket
Alongside the technical price rejection, it is worth noting that Ethereum transaction fees began to creep ever so higher and, in fact, over the subsequent day, the rise was such that transaction fees reached $6.04 on Wednesday night, the highest since 2015.
Ethereum network fees. Source: Etherscan
Various network upgrades are supposed to solve this issue or, at the very least, alleviate the immediate pressure, but these developments are believed to be months away.
Still, despite the aforementioned price swings, the in-vogue DeFi sector continued to grow from strength to strength and the total amount locked across the ecosystem remained largely unaffected by the swings in the secondary market.
In turn, this resilience and the appetite to take on risk to experiment with DeFi, AMM, and yield farming, as evidenced by the ongoing surge higher in the total amount of value locked across the DeFi ecosystem, pointed to strong dip-buying interest.
Total value locked in DeFi (USD). Source: DeFi Pulse
Strong dip-buying interest was subsequently confirmed over the following days when the initial unwind of bullish price expectations in the options market, as seen by the evolution of Bitcoin and Ethereum front-end options skew, was gradually retraced.
ETH 25d skew and implied volatility. Source: skew.com
What’s more, this was driven by the front-end of the futures curve, while the back end held largely steady. A much more significant development, rather than profit-taking, would result in a much more significant and broader market repricing.
Small-cap cryptos shine
However, while the media focused on yet another round of price swings by Bitcoin and ETH, the real movement was in small-cap tokens, which outperformed large-cap counterparts by a ratio of 3:1.
The fast-growing world of DeFi is not without its risks and as well documented by CoinTelegraph earlier in the week, Yam Finance, an experimental DeFi protocol, made major headlines.
The Yam protocol initially gained steam as the second purely decentralized DeFi project after Yearn Finance. It deployed a decentralized governance model that enabled YAM holders to have a say across the protocol. Within 24 hours, nearly $500 million worth of capital was locked in only for it to soon crash back down to zero after the discovery of a rebase bug.
Initially, Yam opened staking pools for Compound, Aave’s Lend, Chainlink’s Link, Wrapped ETH (WETH), YFI, Synthetix (SNX), Maker (MKR), and Uniswap V2 LP tokens.
But most of the tokens that were used in Yam staking pools crashed after the bug occurred. Despite the harsh lesson and reminder of the high risks that are involved, the market staged a strong recovery.
Bitcoin was able to gradually recover into the $11,500 zone, but the total value locked on DeFi tracked near record highs.
Watch the Bitcoin and gold correlation
On a macro level, the one-month correlation between Bitcoin and gold has begun to grow closer by the day, climbing all the way to 68% before a slight correction.
However, caution is warranted before extrapolating the thesis from the above, as the more prudent measure, the three-month correlation coefficient currently sits at 15%.
It is also worth noting that while gold has advanced past $2,000 per ounce in the wake of rising uncertainty surrounding the ongoing monetary policy easing stance by the Federal Reserve and other central banks, continued uncertainty will make the correlation worth keeping an eye on for the foreseeable future.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Bitcoin is once again trading within the upper-$11,000 region. This is where its price has found immense stability throughout the past couple of weeks.
The cryptocurrency’s sideways trading has led it to oscillate between $11,200 and $12,000 – with these two levels marking the upper and lower boundaries of a trading range formed over the past two weeks.
Some analysts are pointing to recent events like a sharp decline in exchange’s BTC balances, and Dave Portnoy’s foray into crypto, as factors that could help boost the market in the short-term.
Despite these events certainly boding well for Bitcoin, the cryptocurrency’s technical strength alone may be enough to send it flying past its $12,000 resistance.
One top trader who was previously bearish on BTC is now noting that opening directional shorts within its current trading range is “pure gambling.”
He believes that the risk of positions being liquidated in a sharp upside movement is too high to justify being short on Bitcoin.
Bitcoin Rallies Towards $12,000 as Ethereum Provides It with a Tailwind
Bitcoin and the aggregated cryptocurrency market have been seeing mixed trading in recent times, with certain altcoins seeing explosive rallies while other drift lower.
Yesterday, Ethereum’s price saw a sharp upswing that led it from $390 to highs of $435. At this point, the crypto lost its momentum and began consolidating just below these highs.
In previous weeks, ETH has front-run the gains seen by BTC, which means that the benchmark cryptocurrency could soon see a breakout rally as well.
At the time of writing, Bitcoin is trading down marginally at its current price of $11,700. This is around where it has been trading at for the past couple of weeks.
Although it has yet to mirror ETH’s price action, its fundamental strength, coupled with a potential flood of new investors as its price gains momentum, could help drive it higher.
Top Trader: Shorting BTC Here is “Pure Gambling”
While speaking about the cryptocurrency’s current technical strength, one top trader explained that the risk of shorting Bitcoin’s trading range is “pure gambling” and risky unless it is being done for the purpose of hedging other positions.
“Directional shorts in this range are just pure gambling. I understand hedging especially if you’re up huge on illiquid DeFi stuff but the risk of being short is still too high unless certain market factors change. BTC still in range 12.2k-11.2k.”
Image Courtesy of Flood. Chart via TradingView.
Considering the strength of the uptrends seen by Ethereum and other altcoins, it would take a massive influx of selling pressure to force Bitcoin below the lower boundary of its trading range.
As such, it may only be a matter of time before it sees further upside.
Featured image from Unsplash. Charts and pricing data from TradingView.
The saga continues...
After the original Yam Finance protocol collapsed due to a single line of code, its developers are planning to relaunch the project on new, audited smart contracts.
The relaunch was announced shortly after it became clear that a last-ditch effort to save the protocol failed on Thursday.
Now, details on the upcoming transition have emerged. The migration will happen in two stages, and includes an initial Yam V2 contract that will store information on previous balances. Users will need to burn their V1 tokens and mint new tokens before an unspecified deadline. This transition contract will not be taking rebases into account, so the amount minted will depend on the underlying share of total supply of the tokens.
The transition contract will not have governance features, but will instead use off-chain signature-based voting to let the community express its desired path forward.
The most likely path is the deployment of fully audited V3 contracts, which will be the actual relaunch of Yam. No timelines were given on this yet, though the team said that specific information on audits will be provided in the coming days.
Once the contracts are deployed, the team will “strongly advocate” for rewarding all token holders who “acted to save the system.” It will be up to the community, however, to decide if the plan is worth pursuing and submit the appropriate governance proposal.
This could result in an interesting political conundrum for the nascent community, depending on what percentage of holders delegated their tokens to save the protocol. If they are a majority, they could force the decision through at the expense of the non-participating holders. If they are a minority, this decision would require altruism from the remaining holders.
Diversity and inclusion are valued higher in the crypto space than in traditional finances, but there are some cultural obstacles we need to overcome.
When we talk about financial inclusion, we have to think about inclusion for whom, in what context, and what inclusion itself means. One of the common answers when thinking about who needs to be “financially included” is “most currently unbanked people, who should ideally have access to commercial banking systems.”
But it’s not as simple as just asking, “How do we get unbanked people into the banking system?” because the banking system can be exploitative, and newly banked customers often wind up being the least-important customers or paying the highest fees, among other issues. There are significant limitations on the extent to which current systems are the right solution for a lot of people’s actual needs.
So, we have to ask tough questions and understand what the critically important problems actually are, particularly as we proceed upward on the hierarchy of needs. I think we need to examine access to crypto in this context.
Gender cultural code as the reason
A question I think about a lot is: Whom do we as a society empower to take risks? Generally speaking, the answer is young-ish white men from certain (privileged) educational backgrounds — noting that whether or not they actually completed college is usually not considered relevant. These individuals have access to not only certain kinds of privilege, but they also have the ability (engendered by cultural and social habits and norms) to accommodate an enhanced level of risk. Obviously, it’s not the case that “every white man can take on risk,” but the disproportion is clear: Young white men are founding more companies more often, and a reason for that is that they are culturally oriented toward thinking that it’s okay to fail, and it’s okay to take risks. They have a confidence that is culturally ingrained in them.
When looking across non-white cultures, risk-takers are still predominantly male. We as a society empower men to take risks that we do not similarly empower women to take. There are a million reasons for this that are coded in gender, and it is something we have to acknowledge before we can effectively address it.
The good news is that in the United States, the way we’re raising girls now is very different from the way I was raised. I examine and pay a lot of attention to this as a parent, as I have three young daughters. My daughters are definitely getting very different messaging from the media, from books and from their teachers than I received. Even though I was raised in a progressive household when it comes to gender issues, these external cultural influences are very powerful, and it’s wonderful to see how much progress has been made. I am not going to say that the job is anywhere near done, because gender roles are still very coded into our culture and language, but there is cause for optimism.
Mathematicians and the coder identity
Another thing I’ve been thinking about a lot is STEM education — specifically, why girls leave math and computer science in droves. I’ve been reading up a lot recently on the fascinating idea of decolonizing mathematics. There’s a whole social justice movement about developing an identity as a mathematician or a computer scientist. Culturally in the U.S., or even more broadly speaking in Western cultures, there is no notion of an identity of a female person as a mathematician. It is familiarity with these kinds of concepts and mathematical fluency beyond arithmetics that eventually leads to familiarity with coding, which then paves the way to being interested in careers in coding and logic.
Part of it is really starting to ask questions like, What is the cultural identity as a coder and how is that culturally ingrained? We still suffer from this idea that it’s some loner who puts on headphones and drills in. That isn’t necessarily wrong; introverts often do tend to gravitate towards coding, and there’s no question that some of these things are personality traits (though I’m an extroverted woman who loved coding, for the record). But personality traits do not have to be gender-coded unless we make them so, at a societal level. We can choose what cultural context we create around mathematics and coding.
I love that my daughters now have access to books with protagonists who are girls of color who are scientists. Series like that didn’t exist when I was growing up, where the protagonist is basically a girl of color, deliberately positioned against the supposed black-and-white of who is and isn’t a scientist to eventually solve mysteries using science. Representation matters, at every level. If you see something, it becomes easier to imagine.
Now, to get an education about crypto, whether as an investment vehicle in terms of money or from a tech perspective — you pretty much have to have minimum connectivity, or internet access. The access needs to be robust and stable enough to provide hours and hours of time to become an expert in the field. Moreover, there needs to be a family structure that enables a member to dedicate their time and can cover expensive network costs to facilitate the endeavor. Ideally, there should be access to an institution with people who can teach you, whether through online activities like streaming or downloading, or through a community, or by having access to experts, or whatever it might be. You have to have a lot of support around such an undertaking.
In a three-part documentary called Inside Bill’s Brain, Bill Gates demolishes the premise of Malcolm Gladwell’s nonfiction book Outliers. Microsoft’s founder said he used to just go down to his parents’ garage with friends and tinker around with robotics as a kid because he had access to it. Therefore, a lot of onboarding in tech is about what gets put in your path. The learning curve and its hurdles in tech are a lot higher for someone who does not come from an environment where these technological options are presented to them.
The opportunities presented to each person determine the likelihood of their understanding something like crypto. It’s difficult to imagine the success of some people in the crypto and blockchain space, myself included, if they hadn’t, to some extent, serendipitously fallen into a certain kind of environment. Nowadays, the needed environment to learn about tech, specifically crypto and blockchain, is more common, but it’s still far more prevalent in some places than others.
There is a woman named Fareshteh Forough, an Afghan social activist, who is the CEO and founder of Code to Inspire, a coding school for girls in Afghanistan. It’s a great example of an inspiring woman who wanted to develop a community for coding and robotics for girls. The school’s programs aren’t taught as traditional education, but as a trade that women and girls can do from their own homes, without even having to go out in public. They make money for their families using their skills, thereby making their education and work status culturally acceptable. Forough basically decided not to try to fight patriarchal culture. She accepted elements of it and said, “Nevertheless, within this patriarchy, I can still create opportunities for women and girls to engage in these kinds of activities. I can train them and they can actually create a livelihood.”
Forough is also looking at where the money goes. To prevent women’s wages from being taken by their male relatives, she is empowering some of them via crypto so they can create their own accounts and have their own wallets. In this way, they can create a separate, private, account for themselves, as their relatives rarely understand how crypto works and aren’t able to track it down. This access can lead to more opportunities and empowerment.
When you examine context, you can’t just assume that everything is equal. Part of what the progressive race relations movement in the U.S. has been so good at doing is saying, “Look, there are real differences here.” It is not the same thing to be raised black in an urban center and white in a suburb, to take one often-cited example. Economic privilege, obviously, is critical to access as well, in addition to ability, gender, etc. Imagine you’re dealing with a lot of other things, like unequal education and/or the fact that you have to regularly combat discrimination for not fitting into a traditional gender role or for not being neurotypical; these affect how you move through the world.
I don’t think that I’m saying anything particularly radical, but I do think that these things are not talked about enough in the blockchain space or are talked about quietly, in quiet corners or on the women’s or LGBTQ+ panels at a conference, rather than much more openly like other issues. So, what I sometimes do is focus on financial inclusion as a proxy, because so much activity is happening around that conversation right now, and I can push people to at least acknowledge that there is an issue and be willing to speak about it.
I work for the World Economic Forum, so my official professional view is one of objectivity. And I think that, objectively, we have a huge problem with inclusion in our society! Again, I don’t think saying that is novel or radical, because it is, or should be, obvious and self-evident. Once you accept and internalize this reality, you can get to a place where you start kicking out ideas and thinking, How do I address that? But it can’t be addressed without understanding the context.
Cryptocurrency and financial inclusion
Crypto is fascinating for a zillion reasons, one being that it came about because there was a really interesting problem and someone wanted to solve that problem. I don’t think that Satoshi Nakomoto, who invented Bitcoin, was thinking about inclusion in any meaningful way - I think it was much more about government surveillance issues and financial stability — that kind of stuff. I think it was a nerdy, libertarian sort of approach. Back in 2009, we were at a time of increasing dissatisfaction with the government’s approach to a lot of different things, and I think crypto has become a critical response to that. But I think it’s pretty safe to say it wasn’t originally about helping poor or unbanked people.
Now, we’re at a point of maturity with this technology: an inflection point to build something that can actually address these social issues and be a tool to help democratize systems. We, as a community and as an ecosystem, need to make a choice about which side we are going to come down on regarding equality in conjunction with how we use these new forms of technology and for which purposes we implement them. We need to think about user rights, and decentralization, what its pros and cons are, and the other benefits of all these opportunities.
Each of us as individuals has a set of choices to make. To start changing the world, you don’t have to wait for the right protocol or the right app or company. To solve these problems, individuals have to make a decision on their own about what matters to them — rights, equality, inclusion and other issues — which leads them to think about this stuff every single day and embed these ideas into emerging tech by asking themselves: Why is decentralization exciting? Why is it important? What is it about the system that isn’t working? What are the systems that we are building as alternatives?
How do we ensure that we’re really considering the points of view of unspoken-for individuals specifically and not guessing or building or colonizing yet another environment, like we did with mathematics? Because that’s the default. It’s the easiest thing to do, and it’s what will happen if we don’t pay attention.
This article is from an interview held by Max Yakubowski with Sheila Warren. It has been condensed and edited.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
IOTA Announces Coordicide Grant for Security Analysis, a new collaboration with SPRITZ Research Group at University of Padua
We are thrilled to announce our latest Coordicide grant! The new collaboration, with one of the leading Security and Privacy Research Groups in Europe, aims at providing an independent, academic review of our team’s work on the Coordicide project.
The grant, titled “Validating the Security and Efficiency of the IOTA 2.0 Consensus Protocol” has been awarded to the SPRITZ Security & Privacy Research Group at the University of Padua in Italy. Principal Investigator of the project is SPRITZ founder Professor Mauro Conti, well known within the security and privacy community.
The primary goal of the grant is to provide an independent, academic review of our team’s work on the Coordicide project. An additional focus for the work is the design and analysis of an efficient and secure reputation system. Below, Professor Conti describes the intended work in a bit more detail.
On collaborating with IOTA:
It is my pleasure and great interest to engage in this important work of reviewing IOTA’s Coordicide solution. As a person who has always liked to take things apart to see how they work, to probe the inner workings of a system, the task presented here is exactly the kind of challenge that motivates myself and my colleagues at SPRITZ. The IOTA network is of great interest because of its approach to resolving the DLT trilemma of scalability, security, and decentralization.
In the first part of our contribution, we aim to validate the IOTA 2.0 consensus protocol, including Fast Probabilistic Consensus as well as the other modules of the protocol. We will provide a detailed report that consists of security validation of Coordicide against various known and possibly unknown threats. We will also evaluate if the design of IOTA 2.0 can provide a certain degree of fairness and heterogeneity, allowing resource-constrained nodes such as IoT devices to fairly participate in the network. Finally, we will verify the consensus protocol against an essential set of properties (such as deadlock-freeness, ability to reach consensus, security against overwriting proposed messages and adding invalid transactions, and security against censorship attacks) within the Coordicide framework.
The second part of our contribution has two aspects. First, we will research the usage of different state-of-the-art reputation schemes in the context of Coordicide by analyzing them in terms of the key requirements of an IoT network. If needed and appropriate, we will also consider possible adaptations of state-of-the-art solutions to the unique features of Coordicide. Furthermore, we will explore the usage of sharding together with reputation-based solutions. We aim to investigate this direction because the use of sharding alone decreases the security level, but a reputation system can be used to impose a certain trust level in the network. Moreover, the efficiency and security of the existing reputation using mana in Coordicide will be taken into consideration while investigating new reputation-based approaches.
Our team will share all the updates about our contribution to this project with everyone through SPRITZ’s website, and IOTA’s official channels. Stay tuned! Furthermore, you are welcome to contact us and feel free to have a technical discussion by sending an e-mail to firstname.lastname@example.org
We are absolutely thrilled to begin this collaboration with such a prestigious organization as SPRITZ. It’s been a pleasure to work with Mauro so far, and our Research Team members are excited to engage regularly with all involved SPRITZ members as they progress in their work. The grant work is planned to last for one year and we hope to share some preliminary findings as they become available.
More about SPRITZ — Security & Privacy Research Group:
Founded by Prof. Mauro Conti in 2011, SPRITZ is a group of scientific and technical experts working on security and privacy issues. The SPRITZ Group is mostly based at the University of Padua, which is one of the leading Universities in Italy. The Group is affiliated with HIT — Human Inspired Technology Research Center of the University of Padua. SPRITZ collaborates with progressive research teams all over the world and is now starting this new project with the IOTA Foundation. You can learn more about the working group and how you can participate on our Facebook page!
IOTA Announces Coordicide Grant for Security Analysis, a new collaboration with the SPRITZ… was originally published in IOTA on Medium, where people are continuing the conversation by highlighting and responding to this story.
“Decentralized technology that creates programmatic consensus to seamlessly fix inefficiencies and increase opportunity? I think it may prove to be unstoppable.”
Each week we ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and we throw in a few random zingers to keep them on their toes!
This week our 6 Questions go to Justin Rice, Head of Ecosystem at the Stellar Development Foundation.
Stellar Development Foundation (SDF) is a non-profit organization that supports the development and growth of Stellar, an open-source network that connects the world’s financial infrastructure.
Justin speaks on behalf of developers building on the Stellar network and coordinates the members of the Stellar ecosystem, with the ultimate focus on growth and development of that system. He became familiar with the Stellar technology and its benefits during his time working in product development. In that role, he helped build an exchange, called StellarX, which utilizes the Stellar open-source technology.
Justin holds a Bachelors of Arts degree in Comparative Literature from Harvard University.
1 What kind of consolidation do you expect to see in the crypto industry in 2020/21?
I think back longingly to the days of Web 1.0: the weird websites, the super cool fonts, the sense of limitless possibility. Sure, things were less organized and it was hard to find your way around, but it was a lot more fun. Consolidation of the internet increased connection, but it also created siloed echo chambers and led to visual uniformity, and there’s no way to uncross the bridge.
Right now, I think the crypto industry is still in an era of exploration, and I think (and hope) 2020/21 sees increasing diversity rather than consolidation. New chains: bring them on! Middleware: let’s do it! Everyone benefits as we all support each other, and as we listen to new ideas and encourage experimentation. Interoperability is important and I think the entire industry should look for ways to collaborate and connect but it’s too soon to get uniform.
I’m rooting for the rag-tag innovators to keep pushing the limits, and to see what’s possible before picking a path.
2 Other than the present day, in what time and in what country would you like to have lived?
I would have liked to work in Edison’s lab. To be there for the birth of the light bulb, the advent of sound recording, the earliest forays into motion pictures: that would be amazing. You can still visit it not today, because it’s temporarily closed due to Covid, but hopefully soon and there are these amazing shelves filled with materials they’d experiment with: rubber, glass, clay, metal, whatever they could get their hands on.
The whole place is stocked with odds and ends, and in room after room, you can picture people in lab coats coming up with crazy ideas, and figuring out how to put them to the test. I would love to experience that early and intense time of innovation.
3 What will happen to Bitcoin and Ethereum over the next ten years?
Ten years! Wow. That’s an impossibly long time. The bigger question: what will happen to the world over the next ten years? How long will it take to recover from the current crisis? What other crises will rear up and drag down income, productivity, and livelihood? How many lockdowns will we have to live through? Will we be ten years closer to utopia, or living in some kind of post-apocalyptic nightmare? The answers to those questions will really determine the future of Bitcoin and Ethereum.
That said, my off-the-cuff predictions: In ten years, the Bitcoin network still won’t be used for day-to-day transactions: it’s too slow, transactions are too expensive, and there’s no good way to make it user friendly. Plus, you can only use Bitcoin to transact in BTC, and getting the world at large to believe in an obscure currency feels like an impossible challenge. Bitcoin may never shake its association with drug dealers and ransomware, and barring some kind of radical change in the electricity required for PoW computations its environmental impact will become increasingly unacceptable.
In 2030, BTC will be like the Krugerrand: a gold standard prized by collectors with a somewhat tainted history. Unlike a Krugerrand, however, you can’t melt it down for fillings if you need to perform home dentistry in the post-apocalypse.
What happens with Ethererum, on the other hand, depends entirely on the rollout of Ethereum 2.0. When I was working on StellarX, a front-end user interface for Stellar’s built-in decentralized exchange, we ran some tests to see how Ethereum scaled, and discovered that the more transactions we pushed to the network, the worse the network performed. Which is the exact opposite of what you’d expect when building an app. Improving scalability is a big part of what’s motivating the creation of Ethereum 2.0, and I applaud the ambition and the initiative.
But will it work? It’s like having a train careening down the tracks behind a diesel-powered locomotive, and deciding to switch to an electric locomotive not by stopping the train, but by building a parallel track, and moving every car over without losing momentum. It’s a challenge, and I hope they manage to pull it off.
If they do, then Ethereum 2.0 will open up a green field for developers to build a new generation of distributed apps. If they don’t, in ten years, we’ll be saying: “Remember Ethereum? Whatever happened to that?”
4 Thinking of a favorite poem or musical lyric, what is it and why does it speak to you?
From the Smiths: “Now I know how Joan of Arc felt when the flames rose to her Roman nose and her Walkman started to melt.”
As a teenager sulking in self-professed martyrdom, I’d ride the bus with my headphones on, and when this song came up, I’d think: Yes! I get it! Now that adolescence is long past, I listen to it, and realize that unlike Joan of Arc, I survived it all pretty easily, and that the flames of the proverbial stake, unlike the flames of the actual stake, won’t melt your Walkman.
So while I didn’t really get how Joan of Arc felt, this song and others like it helped me keep on keeping on. They still do. The cleverness makes me chuckle, it has a great cadence, and I like the fact that Joan remains defiantly attached to music that’s clearly central to her identity all the way to the bitter end. Plus, it reminds me that a technology as simple as the Walkman can make you feel empowered in an intensely personal way. Even on your worst day.
5 What does decentralization mean to you, and why is it important?
The world isn’t fair, and that’s not right. You can’t choose where you’re born, and where you’re born determines whether or not you have access to financial infrastructure, and therefore, to money. If you happen to be born under a despot, or in a country with unstable currency, or in a region with no access to banks, your opportunities are limited from the get-go, and that makes it hard to create something new, to build a better life, or to make meaningful contributions to your community.
The effects of access accrue over generations, and the divide deepens. Decentralization can make the world more fair.
Payment systems that connect the world internet-style provide access to regions overlooked and underserved by traditional banks, let individuals everywhere build credit and acquire capital, and prevent censorship and control by a single incompetent or despotic authority. Distributed ledgers are a neat technological workaround that empower innovative thinkers to fix inequality on the ground.
Do I want to see policy solutions and social initiatives designed to improve access to financial infrastructure and fix income inequality? Yes. Yes I do. But that’s a personal opinion, and a lot of people disagree. There’s no political consensus about if or how to make the world more fair.
But decentralized technology that creates programmatic consensus to seamlessly fix inefficiencies and increase opportunity? I think it may prove to be unstoppable.
6 Close your eyes and think of a happy place. What do you see?
It’s dusk, and I’m in the stern of the big yellow Old Town canoe my wife and I picked up at a garage sale for peanuts. We’re paddling lazily up the Hudson near the western shore, drifting past the abandoned brick factories, keeping an eye out for deer, kingfishers, ospreys, and the occasional fox.
Just as the sun sets over the Catskills, my wife in the bow uncorks the wine and turns to pour us each a glass.
The supply of Tether has surpassed $12 billion and this will likely only make traders more bullish on the price of Bitcoin and alternative cryptocurrencies.
The market capitalization of Tether (USDT) surpassed $12 billion as of Aug. 14, according to cryptocurrency market analytics firm Coinmetrics. Meanwhile, some believe the rapidly-rising valuation of the dominant stablecoin positively benefits Bitcoin (BTC) in the long term. But some investors also fear that it makes the cryptocurrency market vulnerable.
Tether has been the most widely-utilized stablecoin for several years, and it has seen exponential growth. In January 2017, the total supply of Tether was hovering at around $10 million. Within four years, that number has increased by 1,200-fold.
The increase in the supply of Tether since 2017. Source: CoinMetrics
Firepower for Bitcoin or vulnerability?
Tether is used as a substitute for fiat currencies across major exchanges, including Binance and Bitfinex. As such, cryptocurrency investors often rely on Tether to store capital on the sidelines.
Coinmetrics researchers explain:
“Moving into stablecoins allows investors to effectively keep money parked on the sideline without having to completely cash out into fiat currency and incurring fees. This rush to safety likely accounted for a significant portion of the increased stablecoin demand following March 12th.”
Since Tether is often used to hedge against major cryptocurrencies, an argument could be made that its supply represents capital waiting on the sidelines. When the supply of Tether expands, it might indicate that investors are actively hedging, leaving an abundant supply of capital ready to enter the crypto market.
BTC/USD price vs. Tether market capitalization. Source: Skew
Charles Edwards, a digital asset manager, pinpointed the increasing supply of Tether as a catalyst for Bitcoin. He said the 26% increase in Tether is one of the eight fundamental factors that is driving BTC upward. He said:
“How can you be bearish Bitcoin here? - Portnoy in Bitcoin - Fed investigating crypto dollar w MIT - Gold S/R flip - +26% Tether - 45% supply hasn't moved in >2yrs - Energy Value increasing > price - Mining profitable & price near Production Cost - Accumulation price structure.”
While some analysts consider the expanding supply of Tether as an optimistic trend, others have expressed concerns towards the stablecoin. Coinmetrics addressed several issues Tether has faced in recent years, including a lawsuit from the New York Attorney General’s office.
“The problem is that tether is funny money -- a derivative make-believe peddled by the crypto exchanges. As the chart by @Silver_Watchdog shows, total market cap of tether exceeds total cap of cryptos. This is imaginary money backed by air”
Still, the researchers emphasize that Tether remains dominant and continues to expand to other blockchains. The researchers noted:
“But despite Tether’s issues and the introduction of new stablecoins, USDT remained dominant and continued to grow. Originally launched using the Omni protocol on the Bitcoin blockchain, by the beginning of 2018 Tether began to expand to other networks.”
The confluence of various positive macro factors, including institutional adoption, the weakening of the U.S. dollar via the increasing expansion of the money supply, and rising Tether supply, has led the sentiment around Bitcoin to improve with some analysts predicting new highs for BTC before 2021.
Wall Street firms are waking up to the prospect of holding Bitcoin as a hedge against uncertainties in the mainstream equities market.
Bitcoin (BTC) adoption by big-money players is once again on the agenda following the recent $250 million BTC purchase by MicroStrategy. Industry commentators have also stated that corporations plugging into Bitcoin will provide prominent tailwinds to push BTC valuation to new heights.
With the coronavirus pandemic adversely impacting economies around the globe, investors appear to be looking toward safe haven assets. Indeed, the attention on both BTC and gold is causing a significant coupling of their respective price actions, given that central banks continue to pursue aggressive quantitative easing. With a firm like MicroStrategy hedging with Bitcoin, it appears this pivot might now spread to Wall Street.
Reports of the Trump administration looking to delay the collection of Social Security payroll taxes are also ringing alarm bells in the United States. The likely outcome of this executive order is more money being printed to fund the country’s social security, which consequently means further U.S. dollar debasement.
Well-established retail adoption
Since the start of 2020, the number of addresses holding 0.01 BTC and 0.1 BTC has been climbing steadily, while data from market intelligence platform Glassnode claims the number of “wholecoiners” — wallets with at least 1 BTC — has also increased in 2020, all highlighting a consistent culture of “stacking sats” by various groups of investors.
When the U.S. government sent stimulus payments to the public in April, Coinbase reported a spike in BTC purchase sums to the tune of $1,200 — the exact amount in the checks. The Bitcoin bought with $1,200 at the time is now worth over $1,600, resulting in gains made by BTC over a weakening USD during the period. Even when Bitcoin dipped to $3,800 during the “Black Thursday” market crash, exchanges reported an uptick in retail BTC buying.
Platforms like Square’s CashApp are even taking advantage of the stacking sats culture, with features aimed at automating periodic micro BTC purchases. Studies show that dollar-cost averaging — the practice of dividing total investment across fixed intervals — assures positive returns for Bitcoin investors, irrespective of volatile price action. Thus, the events of 2020 so far suggest that Bitcoin is being viewed as a viable safe-haven asset.
MicroStrategy buys $250 million in Bitcoin
On Aug. 11, MicroStrategy — the world’s largest business intelligence firm — purchased 21,454 BTC, valued at $250 million. The move saw MicroStrategy swapping cash for BTC as its treasury reserve asset in what industry commentators say could be a watershed event for Bitcoin institutional adoption. MicroStrategy CEO Michael Saylor echoed the sentiments espoused by many BTC proponents, stating in a press release: “Bitcoin is digital gold — harder, stronger, faster, and smarter than any money that has preceded it.”
Saylor’s comments offer a snapshot of how Bitcoin’s perception on Wall Street appears to be changing. Back in December 2013, when one BTC was worth $520, the MicroStrategy CEO was not sold on its value proposition:
#Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.— Michael Saylor (@michael_saylor) December 19, 2013
Indeed, 2020 has seen Wall Street figures taking a significant interest in Bitcoin. Billionaire hedge fund investor Paul Tudor Jones revealed back in May that 1% of his total assets in BTC are a hedge against inflation, tipping Bitcoin to become the de-facto leader in the emerging global financial landscape. Despite dismissing BTC as an investment asset earlier in the year, Goldman Sachs is reportedly looking into client requests for cryptocurrencies in another 180-degree turn.
Brian Kerr, CEO of DeFi banking service Kava Labs, told Cointelegraph that businesses now more than ever need robust risk-management planning: “It’s the job of every corporate’s finance department to manage risk.” He added, “It’s a bit irresponsible of treasury departments if they are not considering Bitcoin to hedge risks of their assets.” Konstantin Anissimov, CEO of crypto exchange platform CEX.IO, highlighted to Cointelegraph the implications of a listed company investing in Bitcoin:
“What is really important here is that a listed company with strict requirements for financial diligence to the shareholders has taken a substantial position in BTC, announced it publicly (as it should do) and has taken a strong position that this move will not have a detrimental effect to the share price of the corporate social responsibility. If this position was taken by a private business, albeit large, then this would not be such a major pivotal price of news.”
The Bitcoin purchase announcement also had a positive impact on MicroStrategy stock, as it surged by 12%.
Bitcoin as a treasury asset
Back in June 2020, crypto research firm Messari estimated that institutional investors allocating 1% of their capital in Bitcoin could drive the BTC spot price to $50,000. Such a surge will see Bitcoin’s market capitalization reach the $1 trillion mark, similar levels to commodities such as the bullion. A publicly-listed company like MicroStrategy holding Bitcoin as a marketable investment on its corporate balance sheet certainly falls into that same category of institutional investment.
The move also signals an emerging sense of Bitcoin as a more mature asset than it was in previous years, according to Anissimov. “The market now has a substantial proportion of professional trading houses and institutional investors, which dampens the volatility and increases the liquidity in the market. Regulation is also more mature and in certain jurisdictions,” he said.
For Ruben Merre, CEO of crypto hardware wallet NGRAVE, Bitcoin’s improving fundamentals such as the meteoric rise in its hash rate over the years and the spread of trading activity are a testament to its maturity. For Merre, investors see Bitcoin as a way to diversify their investments, as there’s a growing mismatch between the stock market and the economic realities on the ground:
“Stimulus spending has a strong effect on stock market prices and even bubble behavior. Meanwhile, economic growth isn’t fully following the pricing, so there is a mismatch. The risk/reward ratio doesn't make much sense, you might argue. It's therefore important for institutional investors to diversify.”
More institutional involvement in Bitcoin will likely enhance the maturity of the asset and improve its overall appeal even further. Corporations also wield considerable lobbying power and push favorable regulations that will trigger more growth in the still-nascent crypto scene. But the sheer volume of the buying positions associated with big-money investors can also cause a new wave of FOMO in the retail space. Given that new coin distribution decreased after the May 2020 halving, demand may outstrip Bitcoin supply, which should exert upward pressure on the spot price.
Potential for huge upside
Another interesting aspect of MicroStrategy’s Bitcoin purchase is that it constitutes a direct exposure to the asset, as Saylor believes Bitcoin has “more long-term appreciation potential than cash.” Usually, institutional interest in BTC involves indirect investment via shares in hedge funds or derivative contracts, so holding Bitcoin either via self-custody or through third-party custodians has not been popular.
However, with improving regulatory clarity, this trend might be due for a change. Back in July, the Office of the Comptroller of the Currency granted approval for federally chartered U.S. banks to provide crypto custody service. The news will see national banks in America join the growing trend of large banks extending their custodial services to cryptocurrencies, thereby helping out the big-money investors, who, by law, must store investment assets with approved third-party custodial platforms.
Direct exposure to Bitcoin does come with certain risks given the intermittent volatility of the largest crypto by market capitalization. However, the potential upside for investors who hold significant positions does exist amid expectations of the spot price setting a new all-time high. As Kerr opined, many believe Bitcoin to represent “a call option on the current financial system in that it may be a sunk cost and go to zero, but the upside is tremendous if it happens.”
Bitcoin is no stranger to a parabolic advance within a bull cycle which usually happens over a few months in contrast to the more measured gains for the likes of gold and silver. For Anissimov, this potential return on investment is providing an enticing incentive for institutional players that are keen on riskier alternatives.
So, most seemingly agree that the influx of institutional money into Bitcoin will cause the spot price to climb further. In a note to Cointelegraph, Nisa Amoils, managing partner at crypto hedge fund Frontier Capital, summed up the investment thesis of BTC:
“People are looking for a way to protect their wealth or that of their shareholders. Bitcoin has always served as a great tool for that purpose. It is sound money built for a digital world. The provable scarcity of Bitcoin will lead to a higher US dollar value as demand for the artificially capped supply sees material increases in demand.”
After garnering a purported $750 million worth of deposits of Ethereum, Yearn.finance, and other cryptocurrencies, DeFi’s latest protocol Yam Finance collapsed on the morning of Aug. 13. The self-proclaimed “experiment” folded just 36 hours after it launched.
That’s not to say $750 million worth of value was lost to the ether. The sum lost was around $500,000-750,000 worth of a coin called yCRV, according to estimates by blockchain analysts.
Many celebrated the “experiment,” calling it the best DeFi had to offer and one of the most “fun” experiences in this segment of the Ethereum market in a while. Others criticized it, with Bitcoiners especially branding Yam Finance and its native token fittingly dubbed “YAM” a sham.
Whatever the case, Yam’s developers, of which there are five, are already looking to launch a second iteration fo the community-favorite protocol. Unfortunately, it’s unclear if it will see the success it saw last time.
How Yam Finance 1.0 collapsed
Before we get into the Ethereum developers’ attempt to launch a second iteration of the Yam Finance protocol, first a refresher on how the first one collapsed.
Like Ampleforth, YAM is a cryptocurrency that has a “rebasing” supply, meaning that its token changes on a periodic basis to accomplish a certain task. For YAM, this is (or was) to rebalance to the value of one Synthetix USD (sUSD), worth around $1.
While many embraced that premise, the rebasing mechanism resulted in the demise of the protocol.
What happened is that there was a bug in the rebasing contract that would have issued too much of the token, allowing for hyperinflation of the supply of the coin. While a fix was seemingly implemented, with YAM holders banding together to vote in a proposal to prevent the bug, another bug cropped up that prevented the implementation of the proposal.
As a result, when YAM underwent its second rebasing 36 hours after launch, too much YAM was put into circulation.
Due to a certain dynamic in the Uniswap pool in which YAM traded, this resulted in a loss of $500,000-750,000 worth of yCRV.
After the bug was disclosed, a developer of the protocol disclosed his sorrows, lamenting that he wasn’t able to finish the work to fix the bug in time.
Ethereum may soon get a second iteration of the vegetable-themed protocol
Despite the unfortunate ending to YAM 1.0, YAM 2.0 is already in the works. Announced in a Medium blog post published on the evening of Aug. 13:
“The community has clearly been supportive of a YAM relaunch with proper auditing, and it has been engaged and helpful in generating ideas regarding how to proceed. This engagement is exactly what we hoped YAM to achieve, and we believe the best solution is to get power to this community as simply and efficiently as possible. Once this is achieved, YAM holders will be able to continue to decide the path of the protocol.”
The key point here is that the protocol will be audited before launch, meaning that the bugs seen in the last iteration will likely be stamped out. This announcement comes shortly after the developers announced they were seeking a Gitcoin grant for funding for the second round of Yam Finance.
YAM 2.0 will be launched in two phases that will actually create a third iteration of the Ethereum-based protocol, which will be the one adopted.
CryptoSlate will update you when this next round of yield farming comes to fruition.
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