Categories
Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 4: Crypto Outlook

These are some of the topics we’ve covered in this series, focusing on cryptocurrencies, changes that have already taken place, and opportunities for you to be ready ahead of time. The crypto world is in the spotlight these days and we want to know what we can expect in the new year. Actually, the crypto market has been getting increased attention for quite some time now. In the past few years, we have seen a rise in investment professionals’ interest in cryptocurrencies. We now have central bank digital currencies and institutional investment vehicles for crypto as well.

In the near future, we could also see some big companies buy much bitcoin. Square invested 1% of its total assets to get 50 million USD worth of bitcoin; Grayscale reported impressive inflows towards the end of 2020; and, even some affluent figures such as Paul Tudor Jones trusted bitcoin to fight against inflation in the past year. Last year also closed with unprecedented events, leaving the crypto community with renewed hope and more questions on the future of money.

At the end of 2020, with cryptocurrencies soaring to new heights and receiving more investor attention than ever before, the largest cryptocurrency exchange in the US – Coinbase – announced its plans to go public. Recognizing cryptocurrencies’ long-term potential, Coinbase strived to provide investors with safe, easy, and regulated access to bitcoin from the very beginning. The significance of the company’s expansion plans also lies in their ability to show us whether there is any interest in something like this. Based on this transition, which also attracted increased media coverage, 2021 could bring other companies towards achieving similar goals. Having private investors and venture capitalists recognize Coinbase’s high growth potential and providing funds for its development could also signify an opportunity for the public market to value the company as well. The dynamics should render both Coinbase and its investors flushed with cash that could also be eventually reinvested smartly in 2021.  

Many people wonder if the impressive 2020 rise of bitcoin, as a global network and financial system, is going to drive an even greater spike in the market. With over trillion USD market cap public companies, gold amounting to a similar height, real estate soaring trillions upon trillion, and derivatives market equally thriving, among others, bitcoin may as well join the club at some point this year. We are still hundreds of percent away from this goal, which is why we may anticipate some expected volatility in the upcoming period.

Central bank digital currencies (CBDCs), along with the accompanying technology, comprise another important topic for 2021. As we discussed in the previous article of this series, the US Federal Reserve mainly talked about its discoveries, apparently without really putting its foot down and making any lasting commitment. Still, there may be more happening under the surface than we can see at the moment. The question of regulations comes up as the first step in trying to see how Americans can even start to rely on the Digital Dollar. 

The US central bank seems to prefer to take things slow, being cautious about its next step. However, some other central banks (e.g. China) are already testing and preparing to release their CBDCs for the public. Any information disclosed regarding these events can certainly be of use to the rest of the world, but we should also understand that central banks generally refrain from sharing everything before any product is completely ready to launch. People’s reactions always pose a concern in the early stages and any misinterpretation, especially in the loud crypto community, could just hinder the process, affect safety levels, and make things more difficult for the central banks. 

In terms of blockchain, experts claim how we can always find a new use, and 2021 may be an interesting year for investable assets too. We can expect to see more discussion on immunity passports this year as well as how to track the vaccinated population and regulate their movement geographically. Interestingly enough, a decade ago, it was predicted that tokenization would be a major theme for the following 10 years, covering an array of assets from the things people own to digital money and identification as well. We have entrusted more of our information to the digital sphere than ever before, allowing our personal identification, such as medical records, to be more trackable. In the past few years, we have seen numerous nations become more open to microchip implants, happening concurrently with an elevated desire to preserve privacy. This is where blockchain comes in handy, giving you the option of sharing personal information (e.g. vaccination) only with the chosen group of people and institutions. Blockchain has the potential to draw the line between what should be shared in public databases and what should not be as transparent to greater audiences, which we can expect to see more of in 2021 and the upcoming years as well.

With all this information and ongoing events and changes, new market entrants may find it increasingly difficult to distinguish what is relevant and helpful. For these reasons, novice crypto traders should consider investing small amounts of money, professionals advise. Start trading with as little as 100—500 USD and take the learning stage seriously as if you had a much larger starting sum. After you commit to getting a small amount of bitcoin or ethereum, among others, choose an exchange such as Coinbase, Binance.US, or Kraken and seek help from them if you need it. The interest in crypto trading is definitely on the rise, which may propel these companies to establish a more user-friendly and supportive service. The post-pandemic surely supports the work from home concept and the crypto market, as we can see from the chart below, is leaving much room for more individuals to join.

While we are all impressed with the events that are taking place as you read these lines, we also need to be mindful of the impact of news events and possible market volatility. Make sure that you are taking every possible precaution as we described in the first article of the series and strive to make smart, not fast, money. Also, as we are seeing developments in other trading markets as well, diversifying trading skills and expanding to other markets could be a rewarding and intelligent move in 2021 as well. Digital currencies are certainly not going away; as a matter of fact, some finance connoisseurs predict that digital currencies will become as important as PCs or cellphones with time. It is only expected that 2021 is likely to bring more news on the long-term changes we are going to see in terms of technologies inherent in cryptocurrencies and related regulations on the national level, as we talked about last time. While cryptocurrencies are slowly but surely increasing their footprint on the global financial system, individuals should take their portion of responsibility to ensure safe trading and maintain the right attitude. 

Categories
Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 3: Will Crypto Replace the USD as the Global Reserve Currency?

The USD is losing its privileged status, many say. Others believe that it will never go away. Still, different financial books describe how the reserve status impacts reserve currencies, such as the USD, with time. The problem with these safe-haven currencies is that their issuing countries can borrow and spend as they please without facing an immediate backlash that other non-reserve nations would in a similar scenario. Decades of reckless spending and management may lead to severe consequences, rendering the reserve currency nations indebted and abandoned by the rest of the world. The loss of trust in one reserve currency’s creditworthiness inevitably leads to another currency acquiring this status. 

And, in the past few years, we have seen extensive attempts to reduce the dependence on the USD. Aside from the United States’ 27.45 trillion national debt, the worldwide frustration with the USD’s global monopoly has reached its peak. The US foreign policy, in particular, seems to raise concern in other nations, with Russia and China being the most vocal opponents to the US meddling in international trade. The US claim to its jurisdictional authority over any transactions settled in and out of its territory also drew the attention of the European Union, especially after the US took severe measures to control European banks’ and companies’ activities even though they abide by the local laws. 

Reserve currencies are believed to enjoy this privileged status for a period of approximately 80—100 years. As the USD has served as the global reserve currency since WWII, its rule may just be over soon. Many believed that the USD would lose its influence after the Bretton Woods agreement, which promised that the US would avoid trade wars, fell through in the 1970s. The new petrodollar system ensued and world oil exporters agreed to settle their exports in the USD and invest their profits in US Treasury bonds. While petrodollars helped the US maintain its dominance for more than half a century, the global oil trade dynamics are changing and a question mark hangs over the future of the USD once again.

These changes are already visible. China has begun trading a crude oil futures contract priced in the JPY instead of the previously used US dollars. And, if the USD has been replaced like this, imagine how much room there is for a cryptocurrency to take over. Naturally, it would be highly impractical to settle international trade or keep central banks’ assets denominated in all world currencies, which is why reserve currencies are not only useful but necessary as well. Throughout history, the world simply found it easier to pick one currency they could trust the most to serve as the global reserve currency, not because they necessarily wanted to have to trust another government. 

So far, reserve currencies have been chosen based on the strongest credit and military. However, after the distributed ledger has been invented (which we talked about in the previous article of this series), the world has a system that can scale to meet the needs of the global economy without having to trust any single nation to take charge. With the digital currency system, there is no need for having a reserve currency as we know them.

The world is still immersed in which cryptocurrency ranks better, while the role of the new reserve currency is there for the taking. The only requirement would be for different central banks to agree on using the distributed ledger system, thus limiting the power of any single government. The US, however, may not take these changes lightly because they would directly interfere with its foreign policy and affect its global position. The rest of the world would, needless to say, welcome the use of the new system with open arms. The possibility of adopting this new system also raises additional questions; for example, will the changes involve different countries building in features that could benefit them individually? 

While many predict that bitcoin is going to take the role of the new global reserve currency, we mustn’t forget that it was solely created as means to settle private financial transactions without having to deal with law enforcement. Nonetheless, it is a rather far-fetched idea that governments, which are tasked with overlooking and regulating any financial transactions, are going to let go of this power so easily. The truth is, governments still have a say and will hardly opt for bitcoin or any other cryptocurrency to replace the existing monetary system just yet. We may, however, expect to witness the enactment of some stringent laws that would limit or completely prohibit cryptocurrencies. While governments may find it hard to silence the crypto community, they are far from powerless to impose any regulations that would help their cause of maintaining power.

Central banks across the globe seem to have already recognized the potential gain of the crypto world, as they issued CBDCs – central bank digital currency, a blockchain-based variant of current currencies such as the USD. Interestingly enough, in the United States, a future CBDC is commonly referred to as a Digital Dollar. While the US Federal Reserve has only recently started to openly communicate their years’ long CBDC research findings, the information shared in the past year commonly points towards the digital currency’s benefits – increasing efficiency and transparency and reducing illegal activity.

Big US companies, such as Facebook, also seem to be seeing the benefits of engineering their own cryptocurrency and, considering their impact on the global scale, we can expect to see some interesting long-term ramifications. Re-engineering money may become one of the strongest pursuits of the financial industry, and the USD’s current struggles may just shove it aside even more.

Yes, the US witnessed some unprecedented moments concerning its official currency in the previous year. Interestingly enough, 21% of all USD (M2) was printed in 2020 alone. This impressive surge in the USD stems from the US government’s freedom to print more money to help its economy. The entire conundrum began in March last year with liquidity issues sparked by the Russia—Saudi Arabia oil price war. Upon the breakout of the COVID-19 pandemic, economies and global trade found themselves at a complete standstill. 

Credit to Katusa Research

While the US was not alone in this money-printing craze, the USD is facing quite a few challenges at the moment. We are currently seeing the USD at the largest short position since 2014, which only means that investors are betting against the currency at record levels. The net positioning of non-commercials presented in the chart below reveals how the wall of shorts piled up all year long, weakening the USD and leaving room for real assets to soar. Gold and silver markets also saw unbelievable spikes in 2020, along with bitcoin that continues to impress traders even in January of 2021, making the USD rather pale in comparison.

Still, should we give up on the USD? Well, the USD continues to dominate as a global trade payment currency, with a 79.5% inter-regional currency usage share. Despite the past year’s scenario, the USD maintained its global importance. And, if all currencies happen to go down, the USD still seems to be the best choice to hold on to. 

Since even the FED admitted to having been testing the CFDC for years now, we may just relax for now and trade as we did so far. The onset of a new monetary era is there, yet more time should pass before we can all start to see any major changes in our everyday lives, which is why we are better off polishing our crypto trading skills and diversifying our coins’ spectrum as we explained in the first article of this series.

Categories
Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 2: Death of Bitcoin or Birth of a New World?

Digital currencies will change the world we live in so profoundly that everyone will be taken by surprise. Yes, it is true and it is already happening. Some are convinced that precisely this year, 2021, is going to force these changes that we have been hearing about lately.  Bitcoin is already believed to be a thing of the past, technologically. With bitcoin skyrocketing these days, it is almost impossible to believe the things you are reading, but just bear with us and maybe discover a different perspective you have never seen elsewhere before. It is just the fundamental analysis we need for long-term investing.

As the ground-breaking precursor to many new coins, Bitcoin served to show the path, to pave the way for innovative tokens, opening our eyes to a whole new world of possibilities. It was a breakthrough invention that changed the world, like the first cell phone or the first TV. Still, it is important to distinguish between a predecessor and emerging inventions because we all long replaced our brick cell phones with devices that can meet our present needs.

When Bitcoin first appeared, it was a true revolution in many different ways. We finally had a new technology and decentralized digital currencies, and such an information technology breakthrough mustn’t be understated. The invention we now know under the name of decentralized distributed ledger eliminated the need for a centralized body or intermediary, like banks, to process or validate transactions. Blockchain technology is thus as important to the world as the first car, having changed the options available and the way different processes are managed.

When we think of the software industry, we know how new generations upgrade their original versions. We can painfully recall the first version of Microsoft Windows 1.0, acknowledging and appreciating all the ways computing has changed since its debut. The thing with each new invention is that its purpose is to see if this item is going to work at all. Only after this point, engineers and concept designers can actually make changes to fix any bugs and enhance performance, launching newer and improved versions each time. 

Bitcoin inventors faced a much greater hurdle than building a graphical user interface, but the accompanying first version quality challenges remained more or less the same. Their first product, blockchain, immediately drew the attention of people and institutions all across the world, but the product’s quality is still questionable. 

To understand these matters properly, it is crucial to differentiate between the bitcoin cryptocurrency and blockchain technology. Blockchain, the first version of a decentralized distributed ledger, is a historically significant invention that has brought about unprecedented changes to all of us. However, and this is the main point, blockchain, as we know it is still version one, just like Microsoft Windows 1.0, was. Unfortunately, blockchain technology resides on a highly inefficient algorithm – proof of work (PoW), which we mentioned in the previous article when we talked about the way to secure extra income with crypto. Due to its imperfections and lacks, blockchain’s performance is far less than what it should be now, 12 years after its creation. 

What these concerns aim to point out is that we need a more sophisticated version of a decentralized distributed ledger that compensates for blockchain’s limitations. We still want to keep the essential functions of blockchain, yet we need faster and more efficient performance. To do so, the current PoW design that serves to keep the network safe needs to be replaced.

Staking, or mining, that we discussed in the first series of these articles on cryptocurrencies, may be an excellent way for traders to earn a few extra coins, but the system’s need for it to work only demonstrates a serious downside. The problem we are presented with here is why we need this feature in the first place to grant security to the system. Thankfully, we have seen some successful attempts to break this barrier in the recent past. 

A new distributed ledger – permissioned distributed ledger, which is used by XRP cryptocurrency, is able to process 10 times more transactions per second than any blockchain-based cryptocurrency. What it lacks however is the means to bypass the need for a central authority because the crypto community essentially needs a mechanism that will bypass the involvement of banks. That is why even this improved version of this technology is insufficient to meet the needs of crypto traders. 

The only reason why blockchain is still used lies in the fact that no one has managed to come up with a better, more efficient solution that will satisfy the basic requirements and speed up the process at the same time. However, in the past few years, we have been seeing different companies advertise their products that have supposedly managed to meet these requirements and overcome challenges inherent to the blockchain. A fully decentralized permissionless distributed ledger finally leaves room for engineering scalable digital currency systems that have the real potential to become, or even replace, major currencies in the global financial system one day.  

Blockchain-based cryptocurrency systems could never be apt at achieving this, but we finally have the stage ready for digital currencies to compete with conventional currencies on the global level. While this indicates global progression towards new systems and ways of operating and existing, it also poses a serious threat to blockchain technology and currencies such as bitcoin.

Are cryptocurrencies as we know them going to disappear? Well – not anytime soon. However, it is reasonable to assume that their importance is going to diminish slowly with time. In the next article of this series, we are going right into the lion’s den to see where digital currencies stand in comparison to the global financial system and what will happen with fiat currencies in the near future. Stay tuned. 

P.S. If you want to learn what you can do now to still make money in the crypto market, check out the previous article where we discussed how to make smart money trading crypto now. 

Categories
Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 1: Making Smart Money Trading Crypto

Bitcoin will do to the banks what email did to the postal industry, said Rick Falkvinge. Yes, we are certainly seeing gigantic moves in the cryptocurrency market these days. As we are waiting for Facebook to launch its long-awaited Libra (now Diem) digital currency, Bitcoin is skyrocketing like never before. Currency revolution is heavily speculated and we all want to see what’s behind the facade. Where is the crypto market headed in the long run and what impact is it going to have on the world? What’s the big picture and how can we ride this massive wave that is happening as you read these words? Stay tuned as we start a series of articles on crypto trading, providing objective facts and key advice that you can immediately apply in trading.

They say it is not important when you enter the market as long as you forever maintain the buy-and-hold mindset. What we don’t want is instant gratification compulsion, especially now when the market is moving erratically. Money management and trading psychology will prevent you from interfering with your trades, collecting profit prematurely, and taking major losses. If you are new to crypto trading, following these essential tips will make a significant difference in the short and long term. In this market, the upside is extraordinary, while the downside is limited. Therefore, let’s see what steps you can take to make the most of it.

Luckily, we can now go both long and short and crypto already has an inherent upside that we can benefit from immediately. We need to see if we are in a buyer’s or seller’s market and determine where we can make the most profit. Still – and this is imperative now more than ever before – we can always make a mistake in our estimations. That is why we absolutely never go all in. And, equally importantly, we never give in to the market’s community hype, fortifying our sense of independence and self-reliance. The key is to make smart money and, to do so, the best strategy is to spread out. Diversify your coins and that way, even if something falls through, you will always be safe. This also means that you will not overleveraged and, thus, take a smaller (5-15%) fraction of the entire portfolio to hold crypto. 

Always come up with a plan and make sure you stick to it. Keep your anxiety and other emotions aside and set key points ahead. Determine your stop-loss and take-profit, and then move your stop-loss to break-even when it gets there if you want to scale out. Scaling in and cost averaging can be something you can apply but then you would need more attention and research. Rely solely on your system to tell you when the right time to make a move comes and do not deviate from the initial plan. Additionally, besides the daily chart, you can also use the weekly and the monthly ones for long-term trading. Just remember not to let the fear of missing out get the best of you, especially in the midst of this crypto craze.

Holding is used by the richest traders on the globe, who know how to allot their investments to reap benefits continuously. Allocate 70% of your finances to long-term buy and hold and 30% to your short, more aggressive trading strategy. Then, decide how you are going to spread out to ensure risk is reduced. For example, you can have the majority of investment in commodity stablecoins as a protection in case everything else falls apart. The second in line could be bitcoin or ETH or, preferably, both. Next, 5—20% could be distributed across different altcoins. Your final layer should be your longshots or the coins you use for your long-term strategy.

With crypto, we may not know exactly when the best time to start trading is. However, if you do feel that something is to go up, crypto’s upside and downside ratio allow you to invest your money more freely than in other markets. You can also use Trailing Buy, which helps us determine entry signals. To enter a new trade, move the trailing line down only if the price goes lower than it is right now (i.e. if it breaks down upon the candle close). When the price finally hits the trailing stop, you are getting the green light to buy.

Whether a trade renders great results or not, you need to set a defined exit strategy. Like in any other market, you need to align your exit point with your overall strategy; hence, your exit strategy is going to vary depending on the type of trade. You must maintain consistency and refrain from making any changes in the middle of a trade. As cryptocurrencies are great for holding, your exit will then be contingent upon your idea of how long that trade should last. As long as you have a projection of how far you want to go, you will know exactly where you want to take your money off.

Staking is an excellent way to make passive income in the crypto market while holding them at the same time. This strategy implies that you hold some coins (keep them in a crypto wallet) and, therefore, strengthen the network for which you get a reward in the form of extra tokens. While not all cryptocurrencies permit this, the Proof-of-Stake mechanism requires that certain coins’ new blocks be verified by staking after production. What is important is that you can earn additional income when the coin you hold increases in value. Some blockchains have predefined minimum and maximum staking periods that basically determine the span during which you can retrieve your coins. To avoid dealing with all these requirements, traders prefer to delegate their coins to a validator (traders who stake their coins) running a staking pool. It is, however, important to mention that validators lose a portion of their stake if they double-sign or attempt to attack the network.

Since crypto is known to multiply in value up and down in only one year, what we are witnessing right now should not come as a surprise. What you can, and must, do is ensure all possible protection to minimize losses and ride the big waves. Money management, trading psychology, and the right mindset are your strongest tools to combat any unpredictability and volatility, regardless of the positive aspects this market bears. Announcements and predictions generated in the crypto community often come with an excess of falsehood and unnecessary drama, so to avoid this, just try to the best of your abilities to keep a cool head and be smart about each move you make. As they say – haste makes waste. Don’t be another failed promise of success but rather invest intelligently – both your time and money.

Categories
Cryptocurrencies

Detailed Breakdown of Bitcoin’s Four Year’s Cycles

Up to 30 companies in Japan have announced plans to issue digital yen, and Rick Rieder, the CIO of BlackRock, is taking crypto seriously if his comments on CNBC are anything to go by. According to the world’s largest asset manager, the functionality and durable mechanism of crypto assets makes them more functional than gold, a fact that is up for debate.

It seems that the financial sector around the world is gradually embracing cryptocurrency, and it’s only a matter of time before it transitions to the mainstream. As a crypto investor, the current trend is satisfying. 

But is it time to make a move and laugh all the way to the bank?

Well, the most recent bitcoin highs had some investors rolling in a sense of accomplishment and success when they cashed out at the right time. Others waited for the prices to continue the upward trajectory above $41,000, but it is now on a free fall. 

Well, understanding the price movement of bitcoins is critical to make wise decisions. 

The popular theory that attempts to explain bitcoin’s price movement is bitcoins four-year cycles.

The price of bitcoin moves in cycles of booms and busts. If we were to learn anything from history, investors’ best financial decision has been to own bitcoin in a bull market.

Let’s examine the historical price behavior to have a better understanding of the bitcoin price volatility.

Price History of Bitcoin

Satoshi Nakamoto invented the cryptocurrency in 2008, and in the following year, the first transaction took place between him and an early adopter. The first real-world transaction took place when a bitcoin miner used bitcoins to buy pizzas in 2010 in Florida.

Bitcoin’s trading history is characterized by volatility since its creation in 2009. It has a reasonably short life, but it has seen a lot of action. One upon a time, the cryptocurrency traded for next to nothing, and the real price increase was from $0.0008 to $0.08 for a single coin. 

All along, bitcoin has been through significant rallies and crashes. Regardless, interest in bitcoin has surged in 2020 and is expected to continue in 2021. By 2020, the crypto-currency had recouped all its losses to record an all-time high. 

The Stages 

Stage 1: Exponential Highs

At this phase, the fear of missing out (FOMO) and euphoria among bitcoin investors is at its highest. The emotions compel many people to purchase at abnormally high prices leading to a prolonged bull trend that pushes the prices through the roof.

The high exponential stage is also called “topping out,” where the bitcoin prices reach their peak. 

Stage 2: Correction

The correction stage comes immediately after the euphoria that characterized the previous 12 months. The stage corrects for over-optimism by shedding considerable valuation.

Profit-taking investors create a sell-side pressure, which causes the bitcoin to drop a bit after an abnormal growth.

Stage 3: Accumulation and Recovery

Following the price correction, the sell-side momentum starts to slow down and bottom out. It is at this stage that bargain buyers take advantage of the discounted prices to accumulate bitcoins. 

Eventually, new demand starts to form, and the phase becomes a point of maximum financial opportunity where the prospect of reward overtakes that of the associated risk. The new growing demand is driven by the desire to make enormous profits. 

Stage 4: Continuation

After bottoming out, bitcoin starts to go up. Historically, the continuation stage has been all about exceeding the sell-side pressure characterized by sellers resisting the growing prices.

The continuation stage is an essential technical step that indicates a shift in market psychology. The stage tends to encourage strong emotions to result in buy-side momentum. Following a successful 12-month close, the market psychology then transitions to buying from selling.

The Effect of Bitcoin Halving 

Bitcoin halving occurs when the value of new bitcoin created every 10 minutes is halved. The latest bitcoin halving reduced the block reward of 12.5 to 6.25 every 10 minutes. 

Typically, bitcoin halving marks a fundamental variation in the protocol of the cryptocurrency. The event also has a significant impact on the prices of the bitcoin as well. It acts as a catalyst to propel the prices to new heights. 

Given that 21 million is the maximum supply cap, the halving event means that it will take much longer for all the bitcoin to go into circulation. It also means that all the bitcoins created will be less and less, limiting the supply. The scarcity of bitcoins increases value, which is why bitcoin halving acts as a catalyst in the new bull market. 

In the past, the bitcoin price has grown exponentially following the halving events. This observation can be used to explain the current situation.

The bitcoin’s next phase one was expected to be in 2021 to manage a 12-month candle close above the price level of ~$14,300. It has clearly exceeded this.

The belief was that the $20,000 mark will spur the buy-side momentum driven by investors’ intense emotions.

The 12-month price chart indicated that ~$14,300 may actually be the inflexion point in market psychology. Based on the 4 Year Cycle historical trends, a candle close above ~$14,300 provides the necessary confirmation that the prices may go above $20,000 in 2021. That is just what happened based on the current prices. 

Current Bitcoin Situation and Interpretation

A few days ago, on 8th January 2021, the world’s largest and most popular cryptocurrency was posting highs of $41,962. It is now just above $30,000, recording losses of up to 20%. Bitcoin is in free fall, which has already wiped $130 billion off the market.

The fall in prices comes after the UK Financial Conduct Authority warned investors that they could lose everything based on difficulties in valuing crypto assets and price volatility. 

However, the problem is that the price volatility will pique the interest of individual investors whose ability to take on significant losses is a far cry compared to institutional investors.

Since bitcoin was created, the debate has raged about whether the abnormal rises in prices constitute market bubbles or are objective indicators of its future role in the financial ecosystem. A market bubble is when the asset value becomes over-inflated.

Some investors will see the latest bitcoin rise and fall as a bubble that has burst. On the other side of the spectrum, some experts believe the bitcoin fluctuations are nothing out of the ordinary and will continue to occur towards its eventual valuation.

The considerable upside swings followed by corrections are normal behaviour and confirm the bitcoins four year cycles is more than just a theory. 

Bitcoin prices were in the first stage of exponential growth to reach an all-time high of $41,962. Apparently, the cryptocurrency is now in the correction stage before it enters the accumulation and recovery phase, and eventually, continuation.

Final Word

As with any other new technology, bitcoin prices are highly volatile, but it’s normal behavior. Based on the four-year cycles, bitcoin was experiencing exponential growth towards the start of January 2021, but it is now in the correction stage. The slashing of up to 20% of its value is just a normal phase of correction and nothing to cause panic.

Bitcoin investment is not for the faint-hearted. It is only for those with higher risk tolerance levels, sufficient exposure to the asset class, and a long term view of the technology. It would be best if you never lost sight of the big picture. Focus on the forest as opposed to a single tree. Happy trading, folks! 

Categories
Crypto Daily Topic Cryptocurrencies

5 Crypto Trading Strategies To Bank on in 2021

Cryptocurrencies are rapidly transforming the financial sector. At the moment, they’re finding greater acceptance in payments besides offering an alternative investment vehicle. The reasons for their increased popularity are varied. Chief, though, is their decentralized nature and potential for high returns. From these reasons, it is easy to see why they’d be an attractive investment. 

Crypto trading is as lucrative as it’s risky. It is, therefore, imperative to adopt a solid investment strategy. Again, investing in digital assets needn’t be a complex engagement. The market is rich in strategies that ease potential investors’ foray into the space. 

This article examines five proven strategies that one may bank their crypto trading on in 2021.

Which are the Best five Trading Strategies to Adopt in 2021?

As already indicated, there is a myriad of trading strategies at any investor’s disposal. Individual preferences determine the choice of the means to employ. Here are five concrete plans that you can depend on this year. 

1. Scalping

Scalping is a trading strategy defined by short durations between a trade’s opening and closing. The underlying thinking is that little profits snowball into huge ones in time. Scalpers are traders employing this technique. It utilizes market volatility and is handy in slow market days.

Types of Crypto Scalping Strategies

A scalper may pick from any of the following five strategies:

  • Crypto Range Trading- the range is the difference between the price support and resistance. Scalpers buy at support and sell at resistance.
  • Bid-Ask Spread- The scalper opens a position at either the bid or ask price. To get a profit, they then quickly close the position a few points lower or higher.
  • Arbitrage- here, the investor profits from trading the same asset in different markets. Arbitrage is either spatial or paring.
  • Price Action– the trader uses price movements to make trading decisions. 
  • Margin Trading- It entails transacting with borrowed funds.

The Pros and Cons of Crypto Scalping

Like any other trading strategy, scalping has its pros and cons. One advantage is that the small position sizes make it low risk. Additionally, regular small price changes enhance profits, and one can automate their transactions. 

Finally, affordable entry positions expand trading opportunities.

On the other hand, scalping is demanding; Any slight delay may lead to losses. Further, it has low returns per trade, and traders incur higher transaction costs.

2. Buy the Dips and Hold

Downswings offer excellent buying opportunities. If the affected asset is strong, the price will appreciate once it gains its market confidence.

An examination of cryptos reveals periods of over and undervaluation. Additionally, the crypto market reacts to media coverage. Positive reportage triggers increased acquisition at overvalued rates. The reverse causes traders to panic, therefore, sell their coins below their real value.

Undervalued cryptocurrencies are ideal investment opportunities. Traders using this strategy study the market to determine peak undervaluation. They also predict the earliest recovery. After this, they do their trades holding out for profit when the market corrects itself.

Pros and Cons of Buying the Dips and Holding

A significant plus for this strategy is that one needn’t have special high-frequency trading software to trade. It is convenient as a single trade suffices. Moreover, one profits from both the cryptos upside and the undervalued amount. 

The downside is that it is a long term approach. There aren’t quick profits here. Additionally, it requires a proper grasp of the market. Finally, the strategy calls for calmness amidst market turbulence.

3. Fading Trading

A high-risk trading strategy, fading involves betting against the market’s momentum. The trader sells when there’s an upswing in the market and buys when the market experiences a downswing.

Owing to its high-risk nature, it’s a suitable method for experienced traders. Also, it’s ideal for risk-inclined individuals. However, it could yield dividends when correctly applied and is best suited for a highly volatile market.

Pros and Cons Of Fading Trading

When adequately executed, Fading can be a lucrative trading strategy. Traders can realize profits from any market reversals, a situation that always follows an upsurge or a markdown. That said, it is a risky strategy. One risks incurring massive losses if they misread the market.

4. High-frequency Trading 

High-frequency trading is the most profitable yet complex trading strategy to use. It involves the full automation of trading strategies. HFTs are algorithmic and entail volume trading in milliseconds.

Pros and Cons of High-Frequency Trading

HFT trading is beneficial in several ways. Firstly, it reduces the bid-ask spreads, enhances market efficiency, and creates high liquidity to mitigate the effects of market fragmentation. Further, HFT removes emotions out of trading hence improving better decision making.

On the other hand, HFTs could be disadvantageous. For example, algorithms are susceptible to spoofing, thus price anomalies. Secondly, the hardware and software required for trading are costly. Also, the risk of glitches isn’t far away.

5. Golden Cross and Death Cross Trading

The golden cross denotes a situation where a cryptocurrency’s short term average crosses its long term average. Whereas the short term average comprises the currency’s 50 days average, the long term is its 200-day average.

The death cross, on the flip side, is the opposite of the golden cross. It is the point when the short term average goes under the long term average. The gist of this strategy is buying at the golden cross and selling at the death cross.

Analyzing the changes in trading volumes confirms the occurrence of these trends. Although some use technical indicators such as RSI and the MACD, many consider volume one of the best indicators. 

Pros and Cons of Golden Cross and Death Cross Trading Strategy

A major boon for the strategy’s users is that it helps to determine the market trend. Using both indicators is essential in pointing out attractive entry and exit points. 

Conversely, other schools of thought consider the two to be lagging indicators. Thus, they indicate momentum after price movements have occurred, not before. Additionally, some of the momenta they show could be temporary hence unreliable.

Final Thoughts

The growth of cryptos has ushered in an exciting period in global finance. Besides expanding the payments sector, it has created alternative investment avenues. This growth is fuelled by, among others, the higher ROIs recorded in the space. 

To the first time investor, navigating crypto investments could be exacting. For profitability, they need concrete strategies. Luckily today, there are many sound ones that help ease their entry into the sector. These vary in their utility, and ultimately the choice of one over the other is individual. That said, they serve the same end; taking the guesswork out of investments. 

So, let us know which of the five strategies you’ll be adopting this year!

 

Categories
Cryptocurrencies

The History of Bitcoin

If you’ve never heard of Bitcoin before, you’ve either been living under a rock for the past few years, or you don’t keep up with the news. This cryptocurrency didn’t attract much attention in its early days, but it has become more recognized as a real currency and boasted upon as the price of Bitcoin has reached maximum highs in just the past few months. But what exactly is Bitcoin…and where did it come from? If you’re thinking of investing in this asset, you’ll need to know the history of the up and coming currency that might even become as accepted as the US Dollar someday. 

The Beginning 

Bitcoin was first introduced under the alias Satoshi Nakamoto back in October of 2008 as a “peer-to-peer cash system”. The idea was that Bitcoin would allow users to send and receive money online without dealing with a middleman (i.e., the central banks). This would save investors from paying high banking fees, relying on major payment systems, and trusting banks in general. It was also meant to provide the people with more privacy, as the government would not be able to trace the transactions or to know how much money someone had or withdrew through Bitcoin. 

A console developer named Hal Finley read about this interesting concept for a decentralized currency and offered to mine the first coins as a test. Many people accused Finley of actually being Satoshi Nakamoto, the original developer, but he swore that it was not him up until his death from ALS in 2014. To this day, the true identity of Satoshi remains a mystery. Finley even claimed that he never found out who the original Bitcoin creator was, despite working with him from the early days of Bitcoin’s launch. 

 Although Bitcoin was first mentioned in 2008, the first lines of code weren’t written until the following year. There was also an issue with the currency being worthless in the beginning, as it was literally worth $0. The coin was finally recognized as a form of currency by a small number of online merchants as early as 2010. Surprisingly, pizza was one of the first material assets that were purchased using Bitcoin. Today, the pizza would be worth around $100 million in value! 

Rising Popularity 

Cameron and Tyler Winklevoss purchased $10 million worth of Bitcoin in 2012. Their purchase paid off big time, as their investment’s value more than tripled within one year’s time. In addition to finding these influential investors, Bitcoin also received another big push towards popularity in 2011 once it was introduced as the main form of currency accepted on Silk Road.

For those that don’t know, Silk Road is an online marketplace that allows users to buy and sell illegal items. The list of black market items include drugs, medical supplies, illegal fireworks, stolen goods, and more. Since Bitcoin was traceless and eliminated the government and banks from transactions, it made sense for the site to want to use it in order to keep the identities of their consumers anonymous. 

Things continued to fall into place in 2011 as other cryptocurrencies like Litecoin and Ethereum were created. Even more, attention was drawn to cryptocurrencies and the option to trade them on exchanges was introduced, which made many of the formerly skeptical traders see Bitcoin as a real currency. It became easier to buy and sell Bitcoin and the price grew to be above $1 that year before reaching its first all-time high of $31. Although the price did die back down, this would be the first of many price bubbles that Bitcoin would experience. 

The Following Years

Bitcoin reached even more price peaks a couple of years later, rising from $200 to $1,000+ in 2013. A few years later in 2017, the price continued to rise to $10,000 before reaching a maximum peak of more than $19,000 that same year. Everyone was talking about Bitcoin.

Sadly, Bitcoin’s luck did not continue and prices crashed in 2018. This could be blamed on the fact that many investors still did not trust the currency and saw it as worthless. Some investors simply trusted the central bank more than they trusted the newer currency; others saw Bitcoin as fraudulent because it was being used to make illegal purchases. 

In 2019, prices began to rise and fall once more. The currency reached a $10,000 value by June of that year but fell to $7,000 before the year was over. These highs and lows in value could be considered a normal factor for Bitcoin prices by this point, but investors still saw a lot of investment opportunities.

Then, in 2020, the COVID-19 pandemic helped Bitcoin to reach its highest price peak so far at $24,000 USD. This was due in part to the government’s efforts to reopen the economy and support spending by passing a stimulus aid package that caused inflation with the US dollar. This caused many investors and financial institutions to turn towards Bitcoin. 

Where is Bitcoin Today? 

Today, one Bitcoin is worth exactly $36,853 USD – a far cry from the $0 starting price back in 2009. The outlook for the next decade could go either way. Some investors expect to see a price of more than $500,000 per Bitcoin by the year 2030, while others think the price will crash to less than $1,000. Only time will tell where the true price is going. 

As time goes on, Bitcoin is expected by many to draw in even more investors and to potentially break its all-time high several times over. With so many perks, especially anonymity, Bitcoin will continue to offer something that draws in investors that are looking for privacy. Others will continue to discredit cryptocurrency as a whole and might never be convinced that Bitcoin is more trustworthy than using a traditional bank. Bitcoin’s critics still believe the bleaker predictions that state the value will drop dramatically. In the end, each investor will need to decide for themselves whether they think Bitcoin is the way of the future or just a fad that will be forgotten about over the next few years.

Categories
Cryptocurrencies

3 Assets that Will Keep Your Investment Inflation Resistant

Inarguably, the value of the dollar today is not the same as it was a decade or two ago. You use more currency to buy less, and that is what inflation is all about.

Inflation can be defined as the measure of the average price level, in an economy, of a unit of goods and services. It is the increase in the price over a particular period, where you cannot use the same amount of currency to purchase a specific item. 

No doubt, the pandemic and the rushed measures to control it were devastating to the world economy. Governments worldwide scrambled to shut down their economies and started printing money to control the spread while also trying to keep the local market functional.

The main issue with printing excess money is that it eventually decimates the host government’s currency and pushes the economy into an inflationary spiral. 

Nonetheless, inflation is a natural event, and only the most disciplined investor benefits from it or reduces its effect on their investments. 

How to Safeguard Against Inflation

In response to the COVID-19-inspired economic fallout, the Fed was forced to pull out all the stops in a bid to control it. These measures have pushed the Federal Reserve balance sheet to over the $7 trillion mark from $4 trillion, and further contractions are expected.

But what should you do as an investor? 

Ideally, there are two factors to look out for when searching for an inflation-resistant asset; real yield and store of value.

An asset with a large store of value such as gold does not lose its purchasing power over a particular period. If the asset can also create income, the better, as it fulfills the two requirements.

There are a couple of other benchmarks that measure potential hedges against inflation, and they include how the asset holds its value over time. Other essential factors include how people perceive the assets as a store of value across borders and how quickly it can be monetized.

Lastly, the ideal inflation-resistant asset should be easily movable across geographical borders in case of unforeseen hurdles.

The perspective of bitcoin as a viable store of value that can be monetized quickly is gaining traction, at least in recent months. Bitcoin is also beyond the control of any government and is, therefore, borderless.

Understanding the Top Three Assets That Will Keep Your Investment Inflation-free

While changes in the inflation level depend on various factors, such as the rapid increases in raw materials prices and rising wages, the coronavirus pandemic is the most significant.

In the last century, the US dollar buying power has been on a free fall, mostly because of the monetary, fiscal policy adopted. The Federal Reserve’s primary response has been to print money and purchase securities on the open market to plug an economic crisis like it is happening now. Although it adds more liquidity to the market, this policy diminishes the value of the dollar, which sometimes aggravates an already dire situation. 

Consumer Price Index (CPI) is the primary method of tracking US Dollar inflation. As far back as 1948, the inflation rate has been at an average of around 2%. This translates to a loss in value of up to 2% every year. That means the money in your savings account is losing its value.

Although inflation is a significant characteristic of market economies, it is possible to plan for it by focusing your investment in asset classes that outperform the market during such challenging times.

Gold 

Traditionally, gold has been the perfect inflation hedge based on its stability. Not long ago, gold went above the $2,000 an ounce ceiling to record a 27% raise last year, 2020, which is quite enormous. 

In fact, many people have previously viewed gold as a possible alternative currency, especially in countries whose money is losing value fast. This precious metal is tangible and real and tends to hold its value in the long term, like no other asset.

Typically, it is common practice for gold or other strong currency to replace a weakened local currency to keep the economy sane. Central banks around the world hoard gold as they start to print money. They spend more of the bad money, which loses value and hold on to the good money, which is gold.

Unfortunately, gold is not always the perfect hedge in tough economic times. When inflation is in an upward trajectory, central banks move in to enforce a monetary policy that includes increasing interest rates. Assets such as gold, with no yields or any other accumulating rewards, are not always the best investment vehicle.

Other better assets will protect your wealth from inflation and still give you good yields. However, diversification is vital for a strong portfolio.

Bitcoin

Last year, bitcoin was up by 66%, and the rise continued into the new year to post a high of $40,519.45, an all-time high. With its exceptional value, bitcoin is hedging against inflation and chaos.

 

The borderless and decentralized cryptocurrency is beyond any government control, and they cannot print more of it like they do with the standard currency. The maximum bitcoin supply is 21 million, which serves to limit the supply and prevent eventual dilution.

Bitcoin supply remains constant, regardless of what the local governments do.

Interestingly, the current government shutdowns are playing in the hands of digital assets such as cryptocurrency, thereby increasing its value as an inflation hedge asset. But how is that so?

Clearly, the current shutdowns have directed the focus to digital currencies. This may be one of the reasons that propelled bitcoin to an all-time high. It is one of the few assets posting excellent results, which is good for crypto investors. 

Stocks

Thanks to coronavirus, the S&P 500 index surged 55% from the lows observed in March last year despite all the groom. Similar to bitcoin and gold, the lockdowns and the resulting money printing has caused a rally to the stocks. But how can this happen? 

According to economists, the stocks’ value is not appreciating, but rather the dollar is depreciating against the stocks. The surge in equities is a significant indication of diminishing trust in the local currencies, which forces the wise investor to add more stocks to their portfolio to safeguard against losses.

Apparently, investors have lined up to take up stocks at the expense of fiat currencies.

Final Word

Ostensibly, most investors do not give a hoot about inflation and its effect on day-to-day trading and investment. Well, indeed, what you can’t see can’t hurt you, but inflation is the exception. It will hit where it hurts the most; your financial well-being.

The common practice is to hoard local currency in the form of savings to safeguard against tough times. Putting away something for the rainy day is alright, but the strategy has a significant flaw. You lose a bit of the savings to inflation. Saving in a bank is not a viable option, especially when the global central banks do everything to devalue the local currency.

The looming economic crisis, driven by the continued printing of money, calls for wise investment decisions. Ideally, invest in inflation hedge assets such as gold, bitcoin, and stocks to weather the current storm. Don’t be on the losing side by putting so much faith in the dollar and other global currency.

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 29 – Dogecoin Skyrockets as r/Wallstreetbets Enters on Crypto; Bitcoin Jumps on Elon Musk’s Twitter Profile

The cryptocurrency space had a wild week, first because of the r/WallStreetBets community entering the market (and pumping Dogecoin’s price by over 1000%) and then because of Tesla’s CEO Elon Musk tweeting about Bitcoin and promoting it. This has, in turn, caused Bitcoin to spike from $31,000 all the way to $38,200 in a matter of one hour. An interesting fact is that Musk’s Twitter bio now has #bitcoin displayed for everyone to see.

The crypto sector ended the day with most of the top cryptocurrencies in the green. Most analysts speculate that the recent wave of buyers came as a result of Dogecoin’s incredible pump, which was caused by the notorious r/WallStreetBets subreddit. Bitcoin is currently trading for $32,964, representing an increase of 5.26% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 1.41% on the day, while Litecoin gained 5.11% of its value.

Daily Crypto Sector Heat Map

3X Long Dogecoin Token gained 905.02% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Dogecoin’s 513.17% and DOGEFI’s 369.90% gain. On the other hand, 3X Short Dogecoin Token lost 99.85%, making it the most prominent daily loser. It is followed by Panda Yield’s loss of 83.13% and Psychic’s loss of 72.46%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance decreased slightly from when we last reported, currently 62.8%. This represents a 0.1% decrease from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has increased greatly since we last reported, with its current value being $979.02 billion. This represents a $54.27billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day attempting to push its price up as the market turned to green. Its price conquered the $32,350 level and pushed higher without hesitation. The move ended as bulls reached exhaustion near the $34,627 level. BTC’s inability to push past its immediate resistance has triggered a pullback, and the cryptocurrency is now most likely to retest the $32,350 level.

The overall change in market direction today came as a result of (as most speculate) Dogecoin’s insane upswing triggered by r/WallStreetBets.

BTC/USD 1-hour chart

Bitcoin’s technicals on all time-frames are either neutral with a slight hint of bullishness or bullish with a slight hint of neutrality.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is above its 50-period EMA and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (51.01)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $34,627                             1: $32,350

2: $37,445                             2: $30,072

3: $38,000                             3: $27,960

Ethereum

After yesterday’s failed break of the top downtrend line, the second-largest cryptocurrency by market cap pushed past and broke its descending pattern. Its price (at one point) went past the $1,350 level, but as bulls couldn’t confidently hold this level, bears initiated a pullback.

Ethereum’s short-term price direction will be dictated by how the cryptocurrency handles the top downtrend line (which is now a support rather than a resistance line) as well as by Bitcoin’s price direction.

ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are bullish but also show a hint of bearishness.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below both its 50-period and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral (45.66)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin has confirmed its position above the $128.4 level after pushing its price above it yesterday. LTC is now in consolidation mode and is currently testing the 21-hour EMA. Its recent moves seem slightly unenthusiastic, meaning that its short-term price direction will most likely be determined by other cryptocurrencies’ movements.

LTC/USD 1-hour Chart

Litecoin’s 4-hour and daily overviews are neutral/bearish, while its weekly and monthly overviews are completely bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above both its 50-period EMA and its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (55.45)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Cryptocurrencies

5 Exchanges that Don’t Need KYC Verifications

The KYC (Know Your Customer) regulations are standard with financial institutions around the world. These laws were enacted to prevent money laundering activities in the financial industry, and every one of us has been subject to them, in one way or another. 

The regulations require institutions or platforms to verify individuals’ identities before using their money transmission services, and most recently, virtual currencies. 

Cryptocurrency and blockchain technology is the new kid in the financial block, and already disrupting the market with lower transaction fees, confidentiality of transactions, and improved security against fraud.

Surprisingly, the KYC verifications are gradually creeping to cryptocurrency exchange platforms. This means that getting your money from the cryptocurrency exchange is a bit more complicated than sending money. But you don’t need to use “surveillance exchanges,” as critics call them, to trade.

If you prefer to withhold personal information with your cryptocurrency investment, you can use anonymous cryptocurrency exchanges. We list five of the best exchanges that don’t require KYC verifications.

Are KYC Exchanges Safer than non-KYC Exchanges?

No doubt, the exchanges that mandate KYC verifications may sometimes offer better security. The platforms are fully regulated and may provide better redress in case of a hack or when something goes wrong. 

On the other hand, regulators may not be able to track culprits in a fully anonymous platform. It can also sometimes be difficult to access important information such as inflation rate, currency generation, and other blockchain transactions. Regardless, the benefits of anonymity in cryptocurrency outweigh its downsides. 

BitMEX is a cryptocurrency derivatives exchange that is the latest to join the club of cryptocurrency platforms aligning themselves with the traditional financial institutions’ regulations. Since August 28 of 2020, the exchange has been rolling out KYC. All traders are required to submit photographic ID and other identifying information by February 12, 2021.

But this does not imply non-KYC Exchanges are not safe. In contrast, many cryptocurrency investors prefer non-KYC platforms. This is because they believe KYC is a powerful magnet for hackers, making everyone unsafe. Every time you make a transaction, you give out your crypto address that can be used in blackmail, social engineering, hacking, or by law enforcement.

At the Web3 Summit, Edward Snowden was given a headline spot, and this goes to show that privacy hardliners are not going to relent anytime soon. The action by BitMEX could see migrations to non-KYC exchanges such as ByBit, but still, that is a wait-and-see situation. 

The main goal of high-value crypto traders is to be in cryptocurrency exchanges that blend anonymity and security to a satisfying level. If any one of the two fails, the investors move to better alternatives, and there will always be crypto exchanges such as ByBit ready to receive them with open arms.

As a crypto trader, you can choose to keep your personal information and protect your identity from the reach of criminals by choosing secure, anonymous crypto exchanges.

Binance

The Hong Kong-based cryptocurrency exchange is currently the most popular and the world’s largest, with up to 10 million active users, ahead of Bittrex. With Changpeng Zhao as its head, Binance has been one of the most innovative with creating the Binance Coin (BNB) token. Binance supports over 150 cryptocurrencies.

Users can access a 2 BTC worth of cryptocurrency trading limit without KYC verifications, with additional benefits of up to 50% reduction in fees. You do not need verification for spot trading.

However, transactions involving large amounts of BTC will involve completing KYC procedures to use the Binance platform. Binance US, which the US traders must use, requires KYC verification during registration.

You can deposit funds on Binance through credit cards, bank transfers, and crypto deposits. Holders of its native token, BNB, enjoy a discounted rate. The exchange has a referral program for BNB tokens, among other rewards.

There are some signs that Binance could go the way of BitMEX and transition to full KYC sometime in the future. This is mainly because it is compelled to align with numerous jurisdictions’ requirements where the platform operates. They choose to avoid the push and shove involved with the regulators of different countries and regions. 

Block DX

The exchange operates on blockchain interoperability protocol or the Blocknet, allowing communication between private and public blockchains. Blocknet also makes it easier to interact and exchange crypto among the platform users. 

The Blocknet Protocol-powered decentralized exchange allows users to transact without an intermediary. It has no withdrawal and trade limits, thus allowing greater flexibility. The exchange provides trading pair freedom, where all you need is a small amount of its native coin, BLOCK, to take an existing order. You do not need BLOCK tokens to create an order.

According to the non-custodial exchange developers, Block DX does not have any pause button, kill switch or email notifications. There are no interruptions in scheduled or unscheduled maintenance, and it does not have any offshore company. It claims to be the best definition of a decentralized and anonymous cryptocurrency exchange.

What separates Block DX from its other decentralized peers is that it decentralizes all its platform components. You enjoy more flexibility and freedom.

Changelly

The anonymous cryptocurrency exchange has been around since 2013 and has considerable experience in the crypto space. 

The platform allows instant transfers across various cryptocurrencies to cryptocurrency wallets. The exchange has a reasonable fee of 0.5% and is very committed to protecting your privacy. Changelly only requires an email address.

Changelly is integrated into the Stratis app, and you can conveniently trade the $STRAT tokens right on your mobile device. But still, the exchange supports up to 150 cryptocurrencies. $STRAT is among the leading cryptographic tokens that you can freely trade in open exchanges. 

However, you need supporting cryptos such as dash and Ethereum to exchange for BTC. Changelly is a centralized exchange, but it does not require id verification to access the swapping services. The only instance where KYC verification is necessary is when Changelly detects suspicious activities.

The platform has a vast array of acceptable payment services apart from the crypto deposits. You can deposit through credit card payments, bank transfers, and even ApplePay. Besides, its trading algo is one of the most impressive yet, which scans other platforms to find the best trading prices.

ByBit

This platform matches the ability to leverage trades by up to 100 times by BitMEX without requests for any personally identifying information. This strategy helped ByBit accrue more than a million users worldwide since its launch in 2018.

ByBit may seem too lax with security for a casual observer, but nothing could be further from the truth. ByBit is only part of a handful of cryptocurrency exchanges that can genuinely be said to have never been breached since its establishment.

ByBit leverages two-factor authentication sign-ins compatible with authenticator apps, SMS, and email. Funds are usually in multi-signature wallets stored in offline cold storage.

The Singaporean crypto exchange has a wide variety of features for margins trading. The perpetual swap product, BTC-USD, is the most popular with ByBit, and you can trade ETH, EOS, and XRP. 

ByBit’s crypto margin trading guides have a wealth of tips and tricks on swapping derivatives. Anyone around the globe can use ByBit without the need for KYC verification. The platform has both Android and iOS compatibility and is available in different languages. 

Unfortunately, ByBit bars users from the US. 

IDEX

The hybrid cryptocurrency exchange, which has centralized and decentralized features, is a favorite for Ethereum holders. In an operating environment where owners can be liable for illegal activity in their exchanges, IDEX has pursued pragmatic decentralization to influence legal treatment by the regulators.

IDEX is mainly designed for Ethereum and Ethereum-based tokens (ERC-20) trading. 

The platform employs blockchain technology security and privacy to allow anonymous trading by using only the wallet addresses. You only need to deposit tokens to unlock the wallets and start trading. The IDEX native token holders receive a percentage of the transaction fees generated on the platform.

As of August 23, 2020, all users in the IDEX platform require partial verification to trade. You will also need passport scans and selfies for withdrawals of $5,000 or more. US customers are restricted from trading particular assets on the platform.

Final Word

The world of digital currency was propelled by, among other factors, anonymity. The increasing need for KYC verification to improve security also acts as a barrier. In some way, KYC is a potential threat, as well, in case of a data breach on public ledgers. 

Well, bitcoin mixers are an excellent option for anonymity and security. Nonetheless, a well-established crypto exchange platform that doesn’t require KYC verification is usually sufficient in most cases. Do a little digging before signing up for a cryptocurrency exchange. Check its policies, read the reviews, and weigh the quality of its customer support.

The above exchanges are only a few of the well-established and reliable crypto platforms you can start with. There are many others, as well. Happy trading!

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 28 – Bitcoin Strong Bounce off the 30K level, Altcoins Reversals Followed

The crypto sector ended up almost completely in the red, though most cryptos barely lost any value. Bitcoin is currently trading for $31,200, representing a decrease of 1.13% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 0.95% on the day, while LTC lost 2.06% of its value.

Daily Crypto Sector Heat Map

Zero Collateral Dai gained 828.50% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by QuadrantProtocol’s 327.68% and 3x Long Dogecoin Token’s 137.80% gain. On the other hand, EveryCoin lost 89.97%, making it the most prominent daily loser. It is followed by Zugacoin’s loss of 79.94% and TokenPay’s loss of 50.46%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance decreased slightly from when we last reported, currently 62.9%. This represents a 0.2% decrease from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased very slightly since we last reported, with its current value being $924.75 billion. This represents a $10.78 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

 

After another day of its price moving towards the downside, Bitcoin attempted a rally towards the $32,350 mark. After its price establishing strong support at the $30,000 level, the largest cryptocurrency by market cap started surging. There is a strong chance that BTC will pass the $32,350 level if the hourly candle ends up above the 21-hour EMA.

Scott Minerd, the CIO of investment services firm Guggenheim, said that the institutional demand is insufficient to keep BTC above $30,000. Many analysts agree with this short-term assessment, while almost all of them are bullish in the long-term.

BTC/USD 1-hour chart

Bitcoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are tilted towards the buy-side. On the other hand, its 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is above its 50-period EMA and its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (56.39)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap spent the day testing the $1,211 level multiple times. After the support level held up on various occasions, ETH bulls entered the market and started pushing its price up. However, it is still uncertain whether this push towards the upside will end as another lower high and a continuation of the downtrend, or a break from the trend.

Ethereum’s immediate downside is guarded by the 21-hour and 50-hour EMAs, while its first major resistance level is the $1,350 mark, as well as the descending line that connects ETH’s recent lower highs.

ETH/USD 1-hour Chart

Ethereum’s technicals on the daily, weekly, and monthly time-frames are tilted towards the buy-side but also show some neutrality. Its 4-hour overview, however, is slightly bearish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price at its top Bollinger band
  • RSI is neutral (57.04)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin managed to break out from its downtrend after breaking the $128.4 mark. What’s surprising is that such a strong trend was broken by just average volume. LTC found support in the 21-hour EMA, which currently stands right below the price level.

Litecoin has a zone of heavy resistance straight above it (above $130). It is very unlikely that it can “survive” without a major boost in volume, especially in these market conditions.

LTC/USD 1-hour Chart

Litecoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are tilted towards the buy-side. On the other hand, its 4-hour time-frame is completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is above both its 50-period EMA and its 21-period EMA
  • Price at its top Bollinger band
  • RSI is neutral (58.51)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Crypto Videos

Craig Wright (Claims To Be Satoshi Nakamoto) Threatens Legal Action Take my Bitcoin Whitepaper Down!


Craig Wright Threatens Legal Action: “Take my Bitcoin Whitepaper Down!”

Craig Wright, the self-proclaimed Bitcoin inventor Satoshi Nakamoto, has threatened legal action against the owners of two Bitcoin websites he accused of stealing his whitepaper and his other intellectual property.

As announced on Jan 21, Bitcoin.org and Bitcoincore.org had received allegations of copyright infringement coming from none other than Craig Wright and his lawyers. The counsel reportedly claimed that Wright, as the inventor of Bitcoin, was the legal copyright holder of the official Bitcoin whitepaper, owned the Bitcoin name and trademark, and the two aforementioned websites.

While the owner of Bitcoin.org, a developer known only as Cobra, has stated that he refuses to be intimidated by the threat of “false allegations,” the owner of Bitcoincore.org has already adhered to the request.

Cobra then stated: “Unfortunately, without consulting with us, Bitcoin Core developers removed the Bitcoin whitepaper from bitcoincore.org, in response to the allegations of copyright infringement, lending credence to these completely false claims.”

He then added: “The Bitcoin Core website was modified to remove all references to the whitepaper, the local copy of the whitepaper PDF was deleted, and with under 2 hours of public review, the change was merged.”

Things got heated when the owner of Bitcoincore.org, as well as the current maintainer of Bitcoin’s code, Wladimir J. van der Laan, responded quickly, telling his Twitter followers that this issue was not something he cares deeply about. 

He stated: “So let this be clear: I’m happy to maintain Bitcoin core’s code, but I will not personally be a martyr for BTC. It’s completely up to you as Bitcoiners to protect it.”


Van der Laan added: “This thing is all about decentralization and distributed systems, rather than personal macho posturing. I have no interest in it and am definitely not paid enough to take a stance.”

As the two Bitcoin core websites decided to take vastly different approaches, we will see which one was better and why. In the meantime, the Bitcoin whitepaper will continue to be hosted on Bitcoin.org, which hopes that other websites would follow them in resisting Craig Wright’s attempts at intimidation.

Categories
Crypto

Holding Bitcoin Now Is As Safe As Gold & Bonds!


Holding Bitcoin is as Safe as Owning Gold and Bonds – Anthony Scaramucci

Anthony Scaramucci, the head of SkyBridge Capital as well as former White House communications director, believes that Bitcoin’s value proposition has strengthened ever since governments have addressed many of the risks that are associated with the digital asset. 

In an opinion article published by CNN, Scaramucci and his fellow SkyBridge executive Brett Messing argued that Bitcoin had become a viable option for long-term investors seeking refuge from inflation. The authors also stated that holding Bitcoin is far less risky today than it was just a couple of years ago when regulations and infrastructure were underdeveloped.

Bitcoin’s growth has “caused government, as well as institutions, to step in and address many of the risks that are often associated with the digital currency,” the authors wrote, pointing to the Office of the Comptroller of Currency’s decision to enable all banks to provide cryptocurrency services.

They added: “Increased regulations, improved infrastructure, as well as access to financial institutions such as Fidelity, have made Bitcoin investments just as safe as owning bonds and commodities such as gold, which are used to balance portfolios.”

SkyBridge Capital made a big splash in the news last month when it applied with the US SEC to launch a Bitcoin hedge fund. Its SkyBridge Bitcoin Fund LP launched just a few weeks later, with Fidelity serving as custodian, while Ernst & Young were chosen to handle the auditing.

SkyBridge reportedly invested in Bitcoin during Nov and Dec 2020, allowing it to accumulate a substantial position in the cryptocurrency prior to its parabolic spike. By the time the fund was launched, on Jan 4 of this year, SkyBridge had claimed its BTC exposure was worth around $310 million.

Institutional capital is considered a major catalyst behind Bitcoin’s 300% rally in 2020, which brought its price to a new all-time high of $42,000 on Jan 8. Smart money investors are beginning to view Bitcoin as digital gold rather than just a speculative asset. 

 

Categories
Crypto Daily Topic Cryptocurrencies

Impact of DeFi in the Banking Sector

Blockchain is revolutionary fintech, and DeFi applications are taking success in financial services to a whole new level. Over 1.7 billion people remain unbanked, and DeFi is empowering internet users with permissionless financial services that cut out third parties.

Investors locked more than $15 billion within DeFi protocols in 2020. While decentralization has only captured billions, traditional, centralized finance controls the vast trillions of dollars transacting globally. Therefore, more innovations and marketing will suffice for further adoption.

However, with the industry admitting roughly $500 million from investors monthly, the prospects are changing. DeFi offers irresistible convenience and cost-effectiveness. The potential is also vast.

DeFi encompasses digital lending, borrowing, staking for capital gains, and regular income. DeFi services are permissionless, and they execute most transactions through tokenization and smart contracts. Eliminating all the third-parties and profit-seeking intermediaries make DeFi cost-effective.

Laws, rules, and regulations are programmed into blockchain protocols, and DeFi impacts every aspect of traditional financial services via automation. The impact is so great that it could change human interactions on an international scale.

In this article, we are peering into DeFi and its impact on the finance industry. A chronological outlook of blockchain developments suggests a pattern of innovation and adaptability. Understanding this pattern is crucial for your future investment projects.

The Ethereum Blockchain: How Are dApps Taking over the Banking Sector?       

To start with, let’s appreciate that the Ethereum community has revolutionized and accentuated DeFi as no other blockchain has. The ecosystem is advanced enough to evaluate systemic risks, and it reports DeFi Scores for platform security.

The ecosystem supports open-source composability, and the Ethereum blockchain harnesses the collaboration of independent developers worldwide. Borderless, open-source development has encouraged software designers and coding experts to focus on their strengths.

Ethereum’s infrastructure allows users to integrate various DeFi applications covering vast, diverse industries such as gaming, credit, supply-chain management, and capital markets. Laying and building applications on each other creates a vast network effect.

The Ethereum community is significant in DeFi because its network has over 7,083 live, global, main-net nodes, over 88 million unique users, over 42 million smart contracts executed.

You can utilize over 2,773 decentralized applications along with over 23K daily users. DApps are popular and post daily transactions exceeding 78K because of their:

  • Open-source codes.
  • Decentralized consensus and governance.
  • Noncustodial, permissionless services.
  • Tokenization and the use of smart contracts.

The diversity of dApps supports digital currency banking services, alternative services, DEXs, and P2P lending. Users embrace digital transactions because they are fast, secure, borderless, pseudo-anonymous, and irreversible.

Cross-chain interoperability came into DeFi markets in 2020, and you can now lend, borrow, and trade tokens across different blockchain networks.

How DeFi Saved Global Finance from Total Atrophy

When the Coronavirus became a global pandemic, states imposed mandatory lockdowns. Globally, the banking sector came to a standstill, and the international exchange services and other intermediaries such as asset managers, insurers, and bankers.

People were required to stay at home, and only essential services were allowed to proceed. If we didn’t have alternative financial services, most global supply chains would have suffered complete atrophy.

Governments created concerns about the value of money when they printed cash to bail out people and agencies. People and investors got more concerned that they pay taxes, yet governments dilute their savings by printing more money.

The threat to traditional finance was runaway inflation and the concern that credit is limited for those needing it the most. The international investment landscape went through shocks as investors turned to DeFi, seeking to mitigate the effects of a global pandemic.

Fintech Verticals Most Impacted by DeFi

Open Banking and Financial Data

Data is one of the most valuable commodities in the Mega Big Data era. Banking institutions traditionally hoarded all the financial data of users. In the US, financial data is worth over $15 billion. However, bankers won’t let you access it.

DeFi frees up your financial data for your benefit, allowing you to make intuitive, cost-effective investments. DeFi applications and services are providing open-source, immutable, financial market data.

Moreover, pseudo-anonymity and permissionless transactions prevent a handful of corporations from accessing your private transaction history.

Decentralized Exchanges

DEXs empower users to control their funds, giving them exclusive access to their private keys. These permissionless exchanges reduce the risk of custodian third-parties and diminish the risk of custodian third-parties losing your funds through major hacking events.

Cross-chain money markets are completely cutting off permission-based, custodian exchanges where you need expensive, third-party intermediation to swap bitcoins for other tokens like ETH, BCH, and XRP. Therefore, you can take just seconds to execute fast, borderless, almost-free transactions.

Borrowing and Lending

DeFi allows people to earn high interest on their savings. As crypto-assets stabilize volatility issues, DeFi is empowering crypto users to save profitably. You don’t need banks to store or transfer value. You can just use your smartphone and an internet connection to upload your finances to online savings software with blockchain transparency, security, and profitability.

DeFi platforms offer flexible interest payments, with some paying out interests every second. The best part is that you don’t need credit checks to take out DeFi loans. You only need to collateralize with your long-term investments. DeFi borrowing costs for commercial use are tax-deductible.

Tokenization and Asset Management

The tokenization of assets is at the core of decentralized finance. It’s revolutionizing assets-trading across the globe, offering traders new markets and opportunities. DeFi offers reliable asset and supply-chain management via smart contracts.

You can make international deals and trust total strangers to hold their side of the deal. Smart contracts don’t release payments unless all predetermined conditions are fulfilled. Tokenization is crucial in executing group contracts such as the ones utilized in:

  • Liquidity pools.
  • DeFi insurance protocols.

Parting Shot

The impact of DeFi on the banking sector threatens its existence, but bankers can adopt dApps to survive the storm and thrive. The banking sector won’t disappear, but it will evolve drastically as DeFi revolutionizes how we interact and do business.

Understanding the role of DeFi in 21st commerce is important for your financial future. Remember that these technologies offer cutting-edge convenience, and the market is growing exponentially. Therefore, you need to join in on the benefits or risk falling behind.

What do you think about DeFi, and what are your predictions on 2021 banking? Share your views in the comments section.

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 27 – Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) Price Analysis

The crypto sector ended up either slightly red or slightly green, with only rare exceptions making significant moves to either side. Bitcoin is currently trading for $31,679, representing an increase of 0.51% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 1.61% on the day, while LTC lost 3.33% of its value.

Daily Crypto Sector Heat Map

Coupon Chain gained 74575.19% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by YVS.Finance’s 683.5% and Chonk’s 198.23% gain. On the other hand, Narwhale.finance lost 72.98%, making it the most prominent daily loser. It is followed by 3X Short Matic Token’s loss of 67.68% and MangoChain’s loss of 66.24%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance increased slightly from when we last reported, currently 63.1%. This represents a 0.2% increase from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased very slightly since we last reported, with its current value being $935.58 billion. This represents a $0.96 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

After a day of attempting to break out of its slightly descending channel, Bitcoin has returned to the downtrend. The largest cryptocurrency by market cap tried to regain the $32,350 level but failed in doing so. This created a strong sell-wall above its current price of just below $32,000.

Bitcoin’s immediate upside is guarded by the 21-hour and 50-hour EMAs, as well as the 32,350 level. Its downside, however, is a free-fall until the zone above $30,000.

BTC/USD 1-hour chart

Bitcoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are slightly bullish. On the other hand, its 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below its 50-period EMA and its 21-period EMA
  • Price is slightly under its middle Bollinger band
  • RSI is neutral (46.41)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap returned to mirroring Bitcoin’s movement after entering its consolidation phase. Ethereum has, after failing to break the $1,350 level, returned to its slightly-downwards movement. The zone just above the $1,300 level mentioned yesterday was also broken, meaning that ETH is now trading between $1,211 to the downside and $1,350 to the upside.

Ethereum’s immediate upside is guarded by the 21-hour and 50-hour EMAs, as well as the $1,350 level. Its first major support level is sitting at $1,211.

ETH/USD 1-hour Chart

Ethereum’s technicals on the daily, weekly, and monthly time-frames are tilted towards the buy-side, but all have neutral oscillators. Its 4-hour overview, however, is completely neutral.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below both its 50-period and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral (46.02)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin has seemingly created a double bottom formation after hitting and staying above the $128.4 level twice. This may be a bullish signal for LTC traders, but the move needs to be accompanied by at least a slight increase in volume.

Despite creating a double bottom, LTC will have a hard time moving past the 21-hour and 50-hour EMAs, as they seem to be its immediate resistance levels. On the other hand, its $128.4 support level is holding up well for now, making it very uncertain where LTC will go in the short-term.

LTC/USD 1-hour Chart

Litecoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are slightly bullish. On the other hand, its 4-hour time-frame is completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is below both its 50-period EMA and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral (41.89)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Crypto Videos

Largest Russian Bank Sberbank Launching its Stablecoin in Spring 2021!


Largest Russian Bank Sberbank Launching its Stablecoin in Spring 2021

Sberbank, the largest Russian state-owned bank, has reportedly filed an application with the Bank of Russia regarding the launch of a blockchain platform for its “Sbercoin” stablecoin.

The director of the transaction business at Sberbank, Sergey Popov, announced the news on Jan 21 at a local financial event.

At the “Digital transformation and prospects for regulating the digital economy” event, Popov stated that Sberbank applied with the Russian central bank in early January, explaining that this kind of registration procedure usually takes no longer than 45 days. If everything goes by plan, the bank may launch its platform by spring 2021, the official said. However, Sberbank is still working on specifics about how to tax Sbercoin:

“There is a high probability of this project being launched in the spring. However, there is still one more issue that has not been fully resolved, and it is connected to the taxation of digital assets. We hope that this question will soon be resolved.”

Popov also added that Sberbank had completed internal testing to see if the solution they propose works, which it apparently did.

Sberbank broke the news on developing its own Sbercoin token at the end of November 2020, following long-running speculation about these plans. Its latest announcement comes shortly after Russia’s official adoption of the crypto law “On Digital Financial Assets” on Jan 1, 2021.


In late 2020, a member of the Russian State Duma, Anatoly Aksakov, said that the Duma’s Committee on Financial Markets expects that Russian crypto issuance will surge after adopting the country’s new crypto law.

Categories
Crypto Videos

Grayscale About To Unveil Chainlink?


Is Grayscale about to unveil a Chainlink (LINK) trust?

Rumors about Grayscale Investments being set to launch a raft of new products, including a Chainlink (LINK) trust, surfaced in the last week.

A statement from the State of Delaware’s Division of Corporations says that someone set up Grayscale Chainlink Trust on Dec 18, 2020. Basic Attention Token (BAT) trust, Livepeer (LPT) trust, Decentraland (MANA) trust, and a Tezos (XTZ) trust were also set up at the same time.


Grayscale Investments didn’t respond to the rumors and has yet to officially confirm it is behind the filings at all. Some reports tried to cast doubt on the legitimacy of this whole ordeal, as the registered agent for the trusts is not listed as Grayscale Investments, but rather as “Delaware Trust Company.” 

However, the Delaware Trust Company is currently listed on Grayscale’s website as one of its official service providers. On top of that, the same details were used when the Grayscale Bitcoin Trust was initially created in 2013.

With that being said, new trusts are far from certain to launch. A Filecoin (FIL) trust was established two months before the aforementioned trusts and still has not been made public.

Adding to all the uncertainty, a few weeks after the inception of numerous trusts, Grayscale founder and CEO Barry Silbert decided to step down from its position. He was then replaced by Michael Sonnenshein. It is unclear if Sonnenshein will continue with Silbert’s strategy or take the firm in a completely new direction.

Grayscale last made an official filing for a Stellar Lumen (XLM) trust in October 2018 — over two years ago. The Stellar trust was made public around six weeks after its inception.

The Chainlink army has been very vocal about the potential filing, showing its support and speculating on the effect this might have on the LINK’s price.

Chainlink recently flipped Bitcoin Cash and became the eighth-largest cryptocurrency by market cap, boasting a value of over $9 billion. 

Categories
Crypto Daily Topic Cryptocurrencies

DeFi vs CeFi Investments: What’s the Difference?

The advent of the blockchain and Bitcoin ushered a new era of transformation in the financial sector. The latter’s successes catalyzed further innovations in this space. One of its earliest adaptations was Centralized Finance( CeFi). Further developments have seen the introduction of Decentralized Finance(DeFi). 

Though the two are diametric opposites of each other, they serve one end: the expansion of financial services. But what do these concepts mean? What are their pros and cons? Can we find commonalities between the two? Finally, is there a way of bridging the divide between them?

This article will use the questions above to differentiate CeFi and DeFi investments. In this way, it aims at deepening your understanding of these crucial financial developments.

Understanding CeFi

CeFi is centralized finance and comprises closed financial markets. It entails a central authority controlling all aspects of transactions between peers. The said authority could be a bank, government, or any other uninvolved third party. 

Salient Features of CeFi

A keen look at CeFi investments reveals several important features. First, there’s a strong emphasis on KYC and AML requirements. In keeping with their jurisdictions’ laws, CeFi service providers require their users to provide personal information, including identity and residence details.

Secondly, CeFi investments are custodial in that they hold their users’ private keys. They are centralized and offer cross-chain services. CeFi investment services also allow for the exchange of different cryptos issued on different blockchains.

Advantages of CeFi

The popularity of CeFi investments speaks of their usefulness. For instance, they guarantee the protection of depositors’ funds. As they’re custodial, CeFi service providers assure their users of the safety and returns on their users’ funds.

Additionally, they undertake to secure one’s private keys. Since the service provider holds the private keys, there’s no danger of ever  losing them. Moreover, they have dedicated customer support systems. 

Disadvantages of CeFi

There are several deficiencies linked to CeFi. Among these are higher transaction fees. Because they use intermediaries in transactions, they charge higher fees. Another shortfall is that they lack transparency as they don’t provide for a public audit of transactions.

The centralized nature denies users control over their funds and makes them invasive in nature. Their  KYC requirements demand full disclosure of personal information. Users can quite easily lose their funds on these since CeFi investments are an easy target for hacking owing to their custodial nature.

Decentralized Finance (DeFi)

DeFi is an acronym for decentralized finance- a movement that champions the provision of P2P financial services. DeFi solutions give parties greater control over their transactions. They achieve this by eliminating centralizing authorities – banks and governments – from the exchanges.

Last year saw a proliferation of DeFi platforms. Currently, the major players in the space include Compound, Yearn Finance, Uniswap, and Marker DAO.

Key DeFi Features

A number of features define DeFi investment projects. To begin with, they are permissionless, which means that anyone can use them, regardless of their geographical location.

On top of that, they depend on Smart contracts, a set of code defining the relationship of the transacting parties. The smart contracts work together with Decentralized apps (Dapps) to automate transactions.

Again, DeFi investments are Blockchain-based. They run on the Ethereum blockchain and have wide applications across the payments, lending, and trading sectors.

Advantages of DeFi

The ballooning of DeFi projects points to them being beneficial. Here’s a rundown of their key advantages. A key feature is that DeFi investments give users autonomy over their funds. The user is the sole custodian of their investment.

Equally, it is expedient as it eliminates third parties, which helps to make it more affordable. Furthermore, DeFi investments are tradeable, thanks to tokenization, which allows for trading in micro-units.

Another key feature is that they’re accessible. DeFi investments are open to everyone, notwithstanding their location. They are also transparent since their deployment on the blockchain opens transactions to public scrutiny.

Disadvantages of DeFi

Although advantageous in many ways, DeFi platforms have their shortcomings. The threat of losing assets ranks highly among those. DeFi users may permanently lose their crypto assets by losing their private keys or mistyping their wallet addresses.

In close tow is the possible exposure to scams. Many cons have infiltrated the DeFi Sector. These take advantage of the absence of centralized control; victims have very little recourse, if any, in such cases. 

Significant Differences Between DeFi and CeFi

The differences between CeFi and DeFi are more than in the terminology. As the following points will indicate, the two platforms are stark contrasts of each other.

Governance

Centralized authorities run all aspects of CeFi platforms. The users have to subscribe to a set code of regulations. On the contrary, DeFi platforms look to their user communities for governance. Some of them issue governance tokens that enable holders to participate in the decision-making processes. An example is Compound (COMP).

Features 

Both CeFi and DeFi have unique features defining them. For example, CeFi projects are custodial while DeFi projects are non-custodial. Again CeFis offer dedicated customer services, which DeFis don’t.

Further CeFi investments adopt the use of Centralised Exchanges (CEX). On the flip side, DeFi investments use Decentralized Exchanges (DEXs).

Whereas CeFi projects are permissioned, DeFis aren’t. CeFis use third parties to create trust, while DeFis are trustless networks.

Regulation

CeFi platforms conform to strict regulations of the jurisdictions they operate. In compliance, they undertake thorough KYC and AML reviews of their users. On the other hand, DeFi is nascent and unregulated. They, therefore, dispense with KYC requirements. 

That said, many jurisdictions are instituting regulatory measures in crypto operations. The Securities and Exchange Commission of the US oversees cryptocurrency trade.  At the same time, the European Commission is pushing for a comprehensive legal framework targeting cryptos.

Fees 

As CeFi runs centralized exchanges, they charge higher fees. The higher fees arise from the need to maintain the platform, pay their staff, improve their offering, among others.

In contrast, DeFi platforms are affordable. They employ decentralized exchanges that don’t provide custody services and don’t have teams engaging in their day to day running.

Liquidity 

CeFi and DeFi investment platforms have different approaches to raising liquidity. CeFi projects raise liquidity by matching buyers’ and sellers’ orders akin to forex or stock markets. DeFi projects in reverse employ automated market makers that  pre-fund both sides of the trade.

Security 

The custodial nature of  CEXs increases their susceptibility to cyberattacks. Although CeFi platforms invest in robust security systems, it isn’t unusual to hear of major platforms getting hacked.  

 

DEXs, however, are noncustodial. Thus are less susceptible to such attacks. However, vulnerabilities in their smart contracts could expose them to the theft of funds.

Similarities Between DeFi and CeFi Investments

Although different, the two platforms find convergence in certain areas. For example, they offer similar financial services. These include trading (spot, derivatives, and margin), borrowing and lending, payments, and the development of stablecoins. 

Also, both systems bank on innovation. They use transformative blockchain technology. Further, both serve the digital assets ecosystem.

Parting Shot

CeFi and DeFi platforms are polar opposite. That said, they serve similar functions in payments, lending, and trades. Moreover, both are at different stages of their development, with CeFi having a headstart over DeFi. This gap in development calls for urgent redress. 

To that end, several projects and platforms are working on appropriate solutions. Binance is one of them. Apart from reducing the risks inherent in DeFi, there’s a need to mainstream it. Moreover, there must be a simplification of the DeFi adoption process besides building robust DeFi communities.

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 26 – Blood on the Streets: Crypto Market in the Red

The crypto sector ended up almost completely in the red as most cryptocurrencies pulled back to lower levels. Bitcoin is currently trading for $31,575, representing a decrease of 5.26% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 7.24% on the day, while LTC lost 6.79% of its value.

Daily Crypto Sector Heat Map

EveryCoin gained 501.69% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by BBYS’s 280.04% and X Infinity’s 255.24% gain. On the other hand, ARTH lost 61.58%, making it the most prominent daily loser. It is followed by Typhoon Cash’s loss of 44.07% and Aventus’s loss of 40.31%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance increased slightly from when we last reported, with its value currently being 62.9%. This represents a 0.2% increase from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased greatly since we last reported, with its current value being $936.54 billion. This represents a $54.92billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin’s gains in the past two days were taken away when bears took over the market after BTC failed to break the $34,627 mark. The cryptocurrency declined to the $32,350 level but quickly lost hold of it as well. BTC is currently hovering right above the $31,000 mark.

Bitcoin’s 1-hour RSI is getting dangerously close to the oversold territory, while its volume is descending, indicating a possible price stagnation or a direction reversal.

BTC/USD 1-hour chart

Bitcoin’s daily overview is completely neutral, while its weekly and monthly overviews are completely bullish. On the other hand, the 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is below its 50-period EMA and its 21-period EMA
  • Price is close to its bottom Bollinger band
  • RSI is near the oversold area (31.21)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap spent the day retracing after posting a new all-time high at $1,477.30. ETH tested many levels but ultimately fell below the previous all-time high, and then the $1,420 and $1,350 levels as well. It is currently consolidating just above $1,300.

Ethereum seemingly created a zone of support just above the $1,300 level, which is holding up for 10 hours now. If this support holds long enough for BTC to change its price direction (or at least enter a sideways trading period), we may see ETH bulls reentering the market once again.

ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are slightly tilted towards the buy-side, with its oscillators taking a more neutral stance.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is below both its 50-period and its 21-period EMA
  • Price near its bottom Bollinger band
  • RSI is very close to being oversold (39.73)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin has lost all of the gains it made yesterday, and then some. The eighth-largest cryptocurrency by market cap failed to pass the zone just under $150, which triggered a pullback and a dip below the $142.1 support (now resistance) level. On top of that, LTC also fell below the trading range it was in for the previous four days (excluding yesterday’s push).

LTC/USD 1-hour Chart

Litecoin’s short-term and long-term overviews have opposing stances: while its 4-hour and overviews show a slight tilt towards the sell-side, its weekly and monthly overviews are slightly bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is below its 50-period EMA and its 21-period EMA
  • Price slightly above its bottom Bollinger band
  • RSI is close to being in the oversold territory (33.05)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Cryptocurrencies

What is Ethereum (ETH)?

Ethereum is a very important blockchain in the cryptocurrency world and is responsible for many of the revolutionary technologies that seek to transform the world as we know it.

What is Ethereum?

The cryptocurrency Ethereum is one of the largest cryptocurrency projects in the cryptocurrency industry. Ethereum itself is a digital platform that is based on blockchain or blockchain technology. Its goal is to become a blockchain capable of running decentralized applications.

To achieve this, this project has a blockchain and cryptocurrency with unique features. These include the ability to use and create smart contracts and new tokens. Both are powerful functionalities, which allows it to stand as one of the most complete and powerful blockchains in cryptocurrency.

The currency of the network is called Ether (ETH), and like Bitcoin (BTC), the Ether is characterized by being a cryptocurrency that can be used as a peer-to-peer payment method. An important point is that it uses the Proof-of-Work (PoW) consensus protocol, using the Ethash algorithm. The development of this blockchain began thanks to the work of Vitalik Buterin in 2013.

Technical Characteristics of Ethereum

Mining

Ethereum is a cryptocurrency that works by PoW consensus protocol using the Ethash algorithm. This algorithm is designed to be highly demanding and targeted at GPU mining. For this reason, mining was in principle highly decentralized and diverse.

Ethash uses the Keccak hash function, also known as SHA-3. In this way, the algorithm seeks to use highly secure cryptographic elements. At the same time, Ethash is thinking of having an intensive memory and cache usage. Both characteristics are aimed at offering resistance to mining by ASIC and avoiding centralization of it.

Issuance of Cryptocurrencies

This cryptocurrency at the moment has an annual issue limited to 18 million Ethers per year. That is, every year mining activity can generate up to 18 million new currencies. However, the total issue is endless. To achieve the broadcast, the network has a rather peculiar coinbase transaction system. First, if a miner finds the solution of a block it receives as a reward 2 ETH. 

However, Ethereum is a blockchain in constant evolution. One of the important changes that will be seen in Ethereum in the coming years will be the abandonment of PoW to a PoS mining system. With this change, Ethereum will go on to create cryptocurrencies for its blockchain in a completely different way from the current one, avoiding using miners and encouraging greater economic participation in the blockchain.

Gas, the Basis of Everything

Gas is a very typical concept of the Ethereum network. It is used to measure the work done within the blockchain. Each action will count as a single operation or set of operations has a specific cost that is given in Gas units.

Among the functions of the Gas inside the blockchain we can mention:

-Assigns a cost to the execution of tasks. Gas is used to measure the cost of performing a specific action within the blockchain. Each action has a cost in Gas and a set of actions carried out adds the total cost of said operation. In this way, we can see Gas as the price to pay for carrying out actions within the blockchain.

-Helps to improve the security of the system. Since every action has a price, this helps prevent the blockchain from stopping its operation and undermining its security. This is possible because the Gas helps protect the network from spam attacks. 

-Reward the miners. The actions in the blockchain depend on their execution in the hardware that is in the hands of the miners. To pay for this use there is the Gas.

Block Size and Generation Time

Ethereum is characterized by calculating the size of its blocks in a somewhat particular way. Unlike Bitcoin, where its size is limited to 1 MB, in Ethereum its size is limited to a specific amount of Gas. To be more precise, the size limit of the Ethereum blocks is 1.500.000 Gas. 

“A block can contain about 70 payment transactions between accounts, the simplest of the possible transactions.”

Another difference with Bitcoin is block generation time. In Bitcoin, each block is generated every 10 minutes, while in Ethereum this value is variable. Each block was generated approximately every 16 seconds. This means that it is generally quicker to provide confirmations than Bitcoin, which positively impacts its possibilities as a payment system.

Smart Contracts

A smart contract or smart contract is a computer program that performs certain actions preset in your code under certain conditions. Actions that have been reviewed and accepted by the various parties that have “signed” the contract. In this way, the smart contract enforces its programmed conditions by submitting a response according to its clauses in a completely autonomous way.

The technology of smart contracts is one of the fundamental bases of Ethereum and the operation of many of its features. A situation that can be seen especially in the tokens and DApps of this blockchain.

Ethereum Virtual Machine

The Ethereum Virtual Machine (EVM) is a software whose objective is to serve as an abstraction layer in the execution of code that is stored in the blockchain. With this, the aim is to prevent a malicious programmer of a DApp or smart contract from attacking the security of the network nodes and with the network itself.

EVM enables the operation of smart contracts and DApps thanks to the use of the Solidity programming language. This language allows you to program all the logic behind the DApps and smart contracts while allowing the decentralized execution of your code using the EVM.

Smarts contracts and DApps

Smart contracts and DApps are one of the largest uses for Ethereum. The capabilities of these two tools are virtually endless. Since the creation of smart contracts to buy or trade goods or services, their usefulness is only limited by the imagination. On the other hand, DApps are a revolution. They are capable of creating completely decentralized, non-corrodible, safe, and economically self-sustainable applications. We can also mention the platforms of oracles that are built on this network, as in the case of Augur.

Companies Using Ethereum

Ethereum’s capabilities to use smart contracts, build tokens easily and deploy DApps have captured the attention of many companies worldwide. This has meant that the development of Ethereum has had the direct or indirect support of a large business group interested in developing its technology. All these companies have created the so-called Ethereum Enterprise Alliance (EEA) which has more than 100 members. 

Among them are:

Accenture, a company dedicated to technology services and consulting.

AMD, a leader in the development of chipset, CPU, and graphics cards.

BBVA, a Spanish bank with a worldwide presence.

BP Ventures, the investment arm of oil company BP.

Cisco, the world’s largest network company.

Delloite, one of the world’s largest audit, financial, and legal consulting firms.

GoChain, probably the most important company in the development of DApps.

Hyperledger, the world’s largest enterprise blockchain and open source development project.

JP Morgan, one of the world’s largest financial firms.

Microsoft, the world’s largest software development and technology company responsible for Windows development.

Advantages of Ethereum

-It is a multipurpose blockchain thanks to its ability to integrate and use smart contacts.

-The use and development of EVM confer a high level of security to run smart contracts and DApps in a completely decentralized and secure way.

-It has a fast block production which allows you to have a much faster transaction confirmation speed than Bitcoin and other cryptocurrencies.

– Development is not under the control of any authority, its development core is completely decentralized and decisions are made by consensus. In addition, the community has a high impact on decisions about blockchain development.

Categories
Crypto Daily Topic Cryptocurrencies

A Complete Guide to DeFi Taxes: Everything You Should Know

2020 was revolutionary for DeFi markets, and investors flooded the young industry with over $7billion from a mere $1.2 billion. As the market cap and number of transactions surged, regulators came up with responsive ways to tax cryptocurrency income. 

Initially, taxes were a foreign concept in crypto realms, but the IRS made definitive tax rules for blockchain transactions. Most digital currency taxation policies are based on cryptocurrencies, but regulation is spilling over to the DeFi markets.

Most crypto users are ignorant of digital currency tax laws, but the IRS will not let you plead ignorance. The federal tax agency is decisively cracking down on crypto tax compliance, and this article will help you gain some valuable insights.

Reading on will help you keep compliant with DeFi taxation requirements. Even more importantly, it will help you navigate DeFi, so you trigger as much tax deductibility as allowed in novel legal confines. 

Crypto Taxes 101

The IRS categorizes digital tokens as properties and not currencies. Bitcoins, for example, are capital assets that can attract profits and losses from transactions.

Reporting your crypto taxes gets harder with the increasing number of blockchain transactions per financial year. The IRS adopted and has never changed its use of first-in, first-out accounting, which means you should determine your net gains/losses on crypto assets.

Profits are categorized as long-term or short-term capital gains. Losses on cryptocurrencies are considered deductible capital losses.

To prevent crypto holders from absconding cumbersome tax computing and filing, the IRS imposes the form 1099-K for all crypto exchange users posting over 200 transactions per year. This file is similar to form 1099-B that stockbrokers use for filing capital losses/gains, but it has some unique provisions.

Introduction to DeFi Taxes

DeFi exists within cryptocurrency realms, enabling digital token users to trade, lend, and borrow via low-cost automation that rules out third-party financial services. In DeFi markets, crypto owners earn interest on lending platforms, and the interest is paid in the same digital currencies.

Therefore, crypto interests increase the number of digital currencies. When you earn interests through your crypto tokens, a different taxable event occurs from profits/losses. Taxable events in DeFi markets transpire when:

  • You trade one cryptocurrency for another via cross-chain money markets, realizing either profits or losses.
  • You trade crypto tokens for fiat currencies, either realizing either profits or losses.
  • You spend digital tokens on goods and services, realizing either profits or losses.
  • You earn in cryptocurrencies, and DeFi services create numerous earning opportunities where you trade your time and skills by executing network protocols. Moreover, some CEOs and athletes prefer getting their salaries in digital tokens.

These taxable events in cryptocurrency transactions are either:

  • Capital gains.
  • Ordinary income.

Ordinary Income vs. Capital Gains Income               

Ordinary income taxes apply for normal jobs, and the IRS doesn’t classify cryptocurrency miners any differently. You must pay according to your marginal tax bracket.

Bitcoin miners and validators on Proof of Stake protocols earn digital tokens for authenticating transactions. These earnings are categorized as ordinary income, and they offer minimal tax savings.

Capital gains income manifests when you swap your digital assets for a higher monetary value than you acquired them. These income streams present significant tax benefits and holidays. For starters, long-term capital gains tax rates are diminished compared to short-term capital gains.

Moreover, you can completely offset capital gains with capital losses. However, capital gains can only offset ordinary income up to $3,000.

DeFi Taxes in Lending and Borrowing

The DeFi ecosystem offers lending opportunities like no other. Your digital currencies can earn interest on Compound, Blanancer, and Uniswap by contributing to liquidity pools or lending directly.

Some DeFi protocols take crypto loans and issue out Liquidity Pool Tokens in return. The currencies you loan out determine the number of tokens from the liquidity pool and ultimately how much interest you make.

Interests that you make on crypto lending platforms qualify as ordinary income for tax purposes. The DeFi ecosystem allows you to boost your revenues, with some platforms paying out interests every second.

The same applies to crypto borrowing platforms. You can borrow bitcoins and other digital tokens to use for business or personal use. Commercial cryptocurrency loans qualify for tax-deductible expenses. Therefore, you can claim relief on costs you incur when borrowing cryptocurrencies for commercial use. 

DeFi Taxes for Unexpected Income from Hard Forks and Token Distribution

Sometimes, blockchain networks award existing users or asset holders with free digital tokens. Such tokens are newly acquired assets with monetary value. Such a transaction is taxable, and the IRS categorizes it as regular income.

Therefore, you must report it within your appropriate tax brackets, and you won’t qualify for many deductions on these earnings. If you use such tokens profitably, file the revenue made on top separately.

Networks like Compound sometimes distribute their native tokens for free to users during initial offerings. For example, the DeFi platform distributed $100 worth of COMP. The users who enjoyed free $100-worth assets owed the IRS whatever your income rate is for that $100.

You won’t pay any more taxes if you hold the COMP, no matter how much they appreciate it. However, you will owe the day you redeem that appreciated monetary value, and you should report the net revenue as capital gains.

If the $100-worth of COMP appreciates to $300 within a year, you will owe short-term capital gains tax for $200 if you sell the COMP or redeem it for products and services. Your capital losses for the COMP are not deductible on the income tax you owe for unexpected digital income.

Cryptocurrency forks are other sources of unexpected digital income. Forks result when validators or miners in a network disagree on blockchain governance. A great example is that of Bitcoin and Bitcoin Cash. They disagreed, and the Fork was quite controversial because it created BTC tokens from scratch.

Investors of parent cryptocurrencies end up with an equal number of forked-off tokens. For example, if you had 4 BTC during the fork, you automatically got 4 BCH, and you became a member of two independent blockchains.

These unexpected incomes are also part of your taxable income, and you pay per your tax bracket. Any gains on them are taxable, and any losses on them are not tax-deductible.

DeFi Taxes in DEXs

Basic taxation rules for cryptocurrencies apply to DEXs. You do not incur taxation for transferring funds from one platform to another, so long as the accounts and funds are yours.

However, when DEXs allow cross-chain asset swaps, an element of profitability occurs. You either gain profits or losses on your initial capital assets.

Reporting DeFi Income on Your Taxes

It is your responsibility to report DEX revenue streams for tax purposes. The advantages of DeFi taxation are abundant. Report all DeFi buys and sells on the IRS Form 8949 for your capital gains filing.

Tax Advantages of DeFi

For starters, DeFi lending converts your currencies to Liquidity Pool Tokens. Your liquidity tokens remain the same, but their value increases over time. You make a capital gain when redeeming your LPTs for the original cryptocurrencies.

DeFi converts what should be your regular income into capital gains income. Consequently, you qualify for deductions if you make losses later selling the tokens.

DeFi allows you to borrow tokens with different cryptocurrencies acting as collateral in Ripple’s XRP for the long-run, but ETC is more profitable in the short-term.

Long-term capital gains offer more deductibles than short-term ones, and you shouldn’t keep selling your XRP to leverage ETH’s profitability. You can borrow ETH with XRP as the collateral if the prospective earnings are more than interest costs.

Tax Disadvantages of DeFi

Whenever you exchange a crypto asset for another, you are most likely triggering a taxable event. This makes it cumbersome to track all profits and losses made every time such DeFi transactions occur.

Tax Treatment Overview on Different Platforms

  • Uniswap

Uniswap executes the Liquidity Pool protocol for its crypto lenders. It empowers you to swap income tax liability for capital gains liability, which is deductible. UNI tokens basically cushion you from future losses on the native coin you want to lend.

  • Maker/Oasis

This DeFi service allows you to harness long-term tax deductions on capital gains. The platform allows you to trade between assets and even earn interest on other assets. They allow you to lock your ETH as collateral, and as it gathers capital gains, you can seize the short-term profitability of other blockchain networks.

  • Compound

Compound is also a Liquidity Pool platform, which converts your ETH to cETH. When the liquidity pool earns interest, the value on your cETH will move from income tax liability to capital gains revenue, deductible for losses.

  • Balancer

Balancer is another Liquidity Pool DeFi service. It’s sort of a tax-lien insurance package against future losses on crypto assets. 

Parting Shot

Ignorance cannot be your defense when you are found to be non-compliant. The DeFi markets are enormous and have the potential to overtake centralized finance in years to come. The IRS knows this fact, as do most sovereign central banks. 

Fortunately, DeFi taxes are friendly, and they offer numerous tax-saving opportunities. You stand to make tremendous capital gains and high, compounding interest rates investing in DeFi. The gains are way bigger than the tax costs. 

Enforcement over DeFi taxes will only get more aggressive, intuitive, and efficient. That’s why you need to read this article and share it with your friends. Take charge of your tax compliance, and share some of your most effective tax filing tips for DeFi transactions. 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 25 – Ethereum Reaches a new All-Time High: What’s Next?

The crypto sector ended up mostly in the green as altcoins pushed up (while Bitcoin remained mostly stable). Several cryptocurrencies reached new all-time highs, including Ethereum and Aave. Bitcoin is currently trading for $33,335, representing an increase of 1/59% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 7.93% on the day, while LTC gained 2.12% of its value.

Daily Crypto Sector Heat Map

Foglory Coin gained 389.19% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Unifty’s 187.19% and MileVerse’s 160.11% gain. On the other hand, EveryCoin lost 76.45%, making it the most prominent daily loser. It is followed by Zloadr’s loss of 62.48% and FUTUREXCRYPTO’s loss of 54.1%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance dropped further from when we last reported, with its value currently being 62.7%. This represents a 2.1% decrease from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has increased greatly since we last reported, with its current value being $991.66 14.56 billion. This represents a $77.10 billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the weekend with its price slowly descending towards the $30,000 mark until a new surge of buyers changed the price direction. BTC has bounced from the $30,900 level and pushed up past the $33,250 level. Its price is currently consolidating in the $33,400 zone.

Bitcoin’s upside is guarded not only by the $34,627 level but the recent high of $33,865. Traders will have to be careful when taking long positions on BTC and will have to devote most of the time checking the order flow to properly gauge the resistance levels.

BTC/USD 1-hour chart

Bitcoin’s 4-hour and weekly overviews are bullish and show some signs of neutrality or bearishness, while its monthly overview is completely bullish. On the other hand, its daily time-frame is pretty neutral.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly above its 50-period EMA and its 21-period EMA
  • Price is close to its top Bollinger band
  • RSI is near the overbought area (64.47)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $34,627                             1: $32,350

2: $37,445                             2: $30,072

3: $38,000                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap “decoupled” from Bitcoin and pushed up, surging to its all-time highs and briefly creating a new one at $1,477.3. Ether is currently fighting to stay above $140 and enter the price discovery mode yet again.

Ethereum has quite a lot of support levels right beneath its current price, most notably the $1,440, $1,420, and $1,350 levels. Its upside levels past the all-time high will, however, have to be determined by drawing Fib retracement levels.

ETH/USD 1-hour Chart

Ethereum’s technicals on the 4-hour, daily, and weekly time-frames are bullish and show some signs of neutrality or bearishness, while its monthly overview is completely bullish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price near its top Bollinger band
  • RSI is very close to being overbought (68.27)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $1,440                               1: $1,420

2: $1,477.3                            2: $1,350

3: $1,500                               3: $1,211

Litecoin

Litecoin’s weekend went without much price fluctuation, with LTC moving between $133 and $143.5. However, LTC bulls managed to push past the $142.1 level and bring its price to $145, where it is now consolidating. Litecoin’s volume also surged during the price increase.

Litecoin traders will have to pay attention to several factors, including LTC technicals, Bitcoin price movement as well as Ethereum price movement.

LTC/USD 1-hour Chart

Litecoin’s overviews on all time-frames are bullish, with its 4-hour, daily, and weekly time-frames having some signs of neutrality, while its monthly overview is completely bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above its 50-period EMA and its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (63.36)
  • Volume is slightly above average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $120

Categories
Crypto Videos

Crypto Ban Petition Attempt! Is He Just Serving His Own Interests?


British Financial Advisor Creates a Crypto Ban Petition

 

Neil Liversidge, a veteran financial advisor and the owner of the independent financial advisory firm West Liversidge, has called on the government of the United Kingdom to fully ban transactions in cryptocurrencies like Bitcoin.

Liversidge’s strong opinion on the topic goes as far as him starting a petition urging the local financial authorities to stop cryptocurrency transactions in the UK. The petition has the goal to:

“Legislate to prohibit the payment by or any form of acceptance of cryptocurrencies by UK resident businesses or individuals, and to require UK regulators (the FCA and PRA) to prohibit any transactions by UK financial institutions in cryptocurrencies.”

Liversidge cited an anti-crypto narrative common amongst crypto disbelievers, arguing that cryptos such as Bitcoin have no intrinsic value and that they “can be a destabilizing influence on society, and mostly used for criminal activity.” The financial advisor also thinks that cryptocurrency proof-of-work mining is “harmful to the environment.”

The aforementioned petition’s deadline is July 7, 2021, according to the UK Government and Parliament website. At the moment, the petition has collected 108 signatures.

In an interview with finance-focused publication Professional Adviser on Jan 13, Liversidge noted that a blanket ban on cryptocurrency transactions in the UK would help the enforcement reduce the power of criminals using cryptocurrencies like Bitcoin for illicit activity. “Law enforcement will never catch all of the people that use crypto for illicit activities; it won’t even catch most of them. However, destroying their financial base reduces their power.”

Liversidge acknowledged that a crypto ban would immediately trigger a market crash: “If the UK government takes the lead and bans transactions on cryptos as my petition requests, that will surely set off a chain reaction, crashing cryptocurrencies overnight,” he said.

The IFA’s verdict is that all cryptocurrency investors should immediately sell their holdings: “If you’re holding cryptos now, my advice to you would be to find a bigger fool than you and dump it all quickly.” Liversidge also stated that he has “never owned any and never would own any” cryptocurrency, even if he knew it would net him hundreds of percent of returns.

Categories
Crypto Daily Topic Cryptocurrencies

How to Come Up With a Good Bitcoin Investment Strategy

Surprisingly, many people just buy Bitcoin and fumble with the investment until they make some profit. Investing in Bitcoin is actually a serious venture, and contrary to widespread practice, it needs a strategy! But what is an investment strategy anyway? What constitutes a good strategy? And, does it apply to all forms of Bitcoin investment?

These are the hard questions we seek to answer in this article. 

Is There a Right Way to Invest?

When investing in crypto or any other asset, you can gain or lose. The most successful investors are those who combine tactic, experience, and of course, luck. Since we cannot do anything about experience and luck, we are usually left with the tactic in the playground, and that’s where planning comes in. We’re not saying that there is a right or wrong way to invest. But, if you are really keen on maximizing your profits and keeping risks at bay, then planning for that journey is indispensable.

What is an Investment Strategy?

An investment strategy is a calculated approach that helps an investor make decisions to achieve specific goals. The investor could be seeking to multiply wealth. They could be seeking to protect whatever they already have. Regardless of the circumstances, an investment strategy must consider the investor’s goals, risk tolerance, and future capital needs. 

What Constitutes a Good Strategy?

Keeping in mind the above picture of what an investment strategy is, it is easy to figure out what a good one should be made of. Generally, you can consult the following checklist if you want to come up with a sound Bitcoin investment strategy.

  1. It contains your definition of risk tolerance – Risk is a central component of any investment strategy. Defining your risk tolerance helps you apply brakes when the train is accelerating in the wrong direction. It might sound trivial, but desperate decisions are never far from the mind when things get thick. 
  2. It identifies your goals – An investment strategy is nothing without goals. It should be clear from the start what you want to achieve from such an engagement. 
  3. It should be realistic – If it were that easy to make money, everyone would be rich. The excitement one gets when approaching an investment may mislead them to overshoot.
  4. It should aim at maximizing profits and minimizing risks – well, that’s the whole point of investing. 

This is by no means an exhaustive definition of a good investment. However, it is a fair guide on how to approach planning for your Bitcoin investment. With this background in mind, let us look at how you can develop an award-winning Bitcoin investment strategy.

Step #1 Identify the opportunity and the risk

If there is no opportunity, abort the mission. Diving straight into an investment without identifying whether there is a suitable opportunity sounds like gambling. After all, the whole purpose of venturing into investment is taking advantage of some opportunity. 

Spotting opportunities is not always easy, but sometimes it is. An example of opportunity in Bitcoin investment is the crypto’s rising value. This could be a short term opportunity or something that will outlive this generation (no one knows how long Bitcoin will sustain the uptrend). However you look at it, we must agree that identifying the opportunity is the basis of everything.

With opportunity comes risks. As mentioned earlier, risk is a core part of any investment strategy. The opportunity might be huge, but so could be the risk. If there is reason to believe that the current Bitcoin boom is a fad, the risk associated with investing all your savings would be catastrophic. The bottom line is, you should identify how much risk the opportunity presents and how much of it are you willing to tolerate.

Step #2 Decide how much and for how long

The amount of money you should invest and for how long are crucial parameters. Of course, you’re not planning to hold Bitcoin until you die. But if that is your intention, it should be clear from the onset. Holding assets indefinitely and without a plan defies the purpose of accumulating wealth.

However, this is not a rule cast in stone. For instance, if you plan to protect your wealth, you might want to convert a huge chunk of your dollar savings to Bitcoin, and short time fluctuations will not be a bother because profits will average out over time. 

Step #3 Invest – a plan without action is pointless.

Now that you have a clear goal and an understanding of the opportunities and risks, it is time to invest. Depending on your goals, you may find one investment approach more suitable than others. Typical options for investing in Bitcoin include:

  • Trading – With trading, you can either go for spot trading or derivatives trading. With spot trading, you simply buy Bitcoin when you think it is trading at a low price and sell when you believe the price has gone high enough. Without concrete investment goals, it is difficult to remain disciplined when spot trading as periods of explosive uptrends and epic falls might send you into euphoric buying/ panic selling episodes, respectively.
  • HODLing – This is where you buy Bitcoin and keep it with no intention of using the asset in the short run. This approach may be more suitable if you plan to protect your wealth or diversify your investment portfolio. Wealth stored in Bitcoin can be readily liquidated and converted to fiat money. You can also use such investments to acquire crypto loans. 

Step #4 Monitor your investment

An investment is like a seed – once sowed, the growth journey has only begun. Keeping an eye on your investment helps you to determine whether your strategy needs editing. If you believe you made mistakes in your original plan, there is no shame in revising it until you feel you have gotten it right. It is important to practice emotional control while observing how events unfold during the course of the growth of your wealth. You should also stay updated and keep learning, as that’s the only way to align your strategy with the reality of the market. 

Final Thoughts

Investing in Bitcoin is not complicated, but without planning for it, the chances of going nowhere with your investment are high. A good investment strategy, we have seen, needs to define your goals, your risk tolerance, be realistic, and focus on maximizing profits while keeping risks under control. There is no right or wrong way to invest, but that does not mean a planless investment is also acceptable. Similarly, the four-step approach described above is not the only sound methodology. However, it captures most of the crucial elements that will help your Bitcoin strategy stand out. Feel free to play around with it!

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 22 – Bitcoin Briefly Drops Below $30K; Market Sees Blood on the Streets

The crypto sector ended up almost completely in the red as Bitcoin’s drop below $30,000 (at one point) led the market down. Bitcoin is currently trading for $31,730, representing a decrease of 8.41% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 11.29% on the day, while LTC lost 4.76% of its value.

Daily Crypto Sector Heat Map

EveryCoin gained 734.83% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Vox.Finance’s 132.94% and DACC’s 129.86% gain. On the other hand, PegsShares lost 99.20%, making it the most prominent daily loser. It is followed by Mithril Share’s loss of 75.17% and Chimpion’s loss of 59.53%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance stayed at the same spot as when we last reported, with its value currently being 64.8%.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased greatly since we last reported, with its current value being $914.56 billion. This represents a $10.97 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has had a horrible day as bears took over the market. Its price dropped to as low as $28,800, but found support in its 50-day EMA. The downturn, however, means that the largest-cryptocurrency by market cap fell out of its triangle formation, most likely spelling a start of a short-term downtrend or sideways trading phase.

Bitcoin is very unpredictable at the moment, but traders could find an opportunity in looking for drastic volume increases and “catch the wave” of buyers or sellers (while taking into account all the support and resistance levels).

BTC/USD 1-hour chart

Bitcoin’s weekly and monthly time-frames are bullish but show some signs of neutrality or bearishness. On the other hand, its 4-hour and daily time-frames are completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below its 50-period EMA and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral after returning from being oversold (48.04)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap followed Bitcoin’s direction, but with slightly less intensity. Ether’s price dropped below the $1,211 and $1,183.85 levels and found support in the $1,047.6 level. However, the bounce that came after the bulls came into the market was insufficient to break the $1,183.85 level, and Ethereum’s price is now trading just below it.

The $1,183.85 level could be considered a pivot point, and ETH’s short-term price direction will greatly depend on whether bulls manage to break this resistance.

ETH/USD 1-hour Chart

Ethereum’s technicals are still mostly tilted towards the buy-side, with its longer time-frames (weekly and monthly) being completely bullish, while its daily time frame’s oscillators are pointing to the sell-side. On the other hand, its 4-hour time-frame is completely bearish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is below its 50-period and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (45.02)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $1,183.85                          1: $1047.5

2: $1,211                              2: $960.5

3: $1,350                             3: $932.5

Litecoin

Litecoin’s movement in the past 24 hours much resembled Ethereum, with its price dropping below the $142.1 level and finding support slightly below the $128.4 level. While its push up did not reach the now-resistance level of $142.1, Litcoin did find support in the 21-hour EMA.

Litecoin’s volume increase in recent hours is negligible compared to the increase that Bitcoin and Ethereum saw. This may indicate less intensity in the moves to come, regardless of the price direction.

LTC/USD 1-hour Chart

Litecoin’s weekly and monthly time-frames are completely bullish and but show no signs of neutrality or bearishness. On the other hand, its 4-hour and daily time-frames are completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly below its 50-period EMA and slightly above its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (51.31)
  • Volume is slightly above average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Crypto Videos

Bitcoin is a Possible Reserve Currency – Former Canadian Prime Minister Says!


Bitcoin is a Possible Reserve Currency – Former Canadian Prime Minister 

Stephen Harper, a former prime minister of Canada, says there may be a place for Bitcoin as well as central bank digital currencies as part of a basket of reserve currencies that may replace the dollar.

In an interview with the investment service, Cambridge House’s Jay Martin Harper stated the possibility of the US dollar being completely replaced could only come from a large currency such as the Euro or Chinese Yuan. He expressed his doubts when it comes to either of them being a viable alternative currency given the uncertainty over the value of the Euro in the long term and the “arbitrary measures” that the Chinese government would take when it comes to guiding the value of the Yuan:

“It’s very hard to see what the alternative is to the US dollar as the world’s major reserve currency. Other than possible candidates such as gold, Bitcoin, a whole basket of things… I think you’ll see the sheer number of things that people use as reserves will certainly expand, but the US dollar will still be the bulk of it.”

The former prime minister then added that he thought central bank digital currencies were to some degree “inevitable,” but that they would likely be subject to monetary policy around the world. Harper stated his concern about central banks becoming “some kind of a general banker” rather than just a financial monitor that they currently are:

“Ultimately, if you have a digital currency that will be used by the central bank to control inflation and create a stable currency as well as priceability, then this digital currency is just a straightforward evolution of the marketplace,” Harper stated. “But if it is part of a series of what I consider as wild experiments as to the role of central banking… Well, then it worries me a lot.”

Stephen Harper served as the prime minister of Canada for nine years, from 2006 until 2015. Cryptocurrency and blockchain adoption in Canada has started expanding significantly since his departure, with the country getting its first regulated crypto exchange in Sept. 

Categories
Crypto Videos

Canada’s First Public BTC Fund Grows 900% Passing 1 Billion Dollars!


Canada’s first public BTC fund grows 900% as it passes the $1 billion milestone

Canadian regulated digital asset manager 3iQ has passed another massive milestone of its public Bitcoin fund. 

On Jan 14, 3iQ’s Bitcoin Fund hit the $1 billion mark, as the company announced the news on Twitter. The new milestone shows QBTC’s parabolic growth after 3iQ originally launched the fund in April 2020. QBTC is up 900% from its previous milestone of $100 million recorded in Oct 2020.

As previously reported, 3iQ’s BTC fund is the first public Bitcoin fund in Canada that got listed on a major stock exchange, the Toronto Stock Exchange. Gemini, a firm owned by the Winklevoss brothers, provides custody services for 3iQ’s QBTC fund.

QBTC.U is currently trading at $48.63, up 330% from the $11 price it was trading for when it got listed in April.

3iQ is one of the largest cryptocurrency firms in Canada. In Jan 2018, 3iQ reportedly became the first cryptocurrency fund regulated by the Ontario Securities Commission as well as the Canadian Securities Administrators. Two years after that, in Feb 2020, 3iQ partnered with the blockchain startup Mavennet to launch a stablecoin that would be pegged to the Canadian dollar. This stablecoin would be regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

3iQ’s former senior executive Shaun Cumby is currently the CEO of Arxnovum, a company that filed an application with OSC for a Bitcoin exchange-traded fund on Jan 11, 2021. Winklevoss’ Gemini will also provide its custody for the Arxnovum’s Bitcoin ETF.

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 21 – BTC in a Triangle Formation – What do the Analysts Say?

The crypto sector was split between slight gainers and slight losers, but overall lost some value as the market cap dropped below $1 trillion. Bitcoin is currently trading for $34,644, representing a decrease of 2.39% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 4.12% on the day, while LTC lost 5.41% of its value.

Daily Crypto Sector Heat Map

Cocos-BCX gained 107983.76% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by HAPY Coin’s 383.49% and Vox.Finance’s 371.42% gain. On the other hand, PegsShares lost 59.35%, making it the most prominent daily loser. It is followed by KIMCHI.finance’s loss of 44.21% and EveryCoin’s loss of 34.88%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down slightly since our last report as altcoins started to outperform, with its value currently being 64.8%. This value represents a 0.1% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased slightly since we last reported, with its current value being $955.53 billion. This represents a $69 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin’s daily time-frame shows that the cryptocurrency is still contained within the triangle formation, which will be a major determinant in BTC’s future price movement. If we zoom in to the hourly time-frame, we can see that BTC moved down, broke the $34,627, and pushed towards the downside, but got instantly stopped by the triangle formation’s bottom line.

While Bitcoin’s short-term overview seems slightly bearish, many analysts call for a push towards $60,000 before any major pullback. However, judging by the current trading session, BTC has a higher chance of breaking the triangle formation to the downside at the moment.

BTC/USD 1-hour chart

Bitcoin’s weekly and monthly time-frames are completely bullish and show no signs of bearishness. On the other hand, its daily time-frame oscillators point to “sell” while the rest of the overview is still bullish, and its 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below both its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (44.21)
  • Volume is average (low)

Key levels to the upside:          Key levels to the downside:

1: $37,445                             1: $34,627

2: $40,000                             2: $32,350

3: $42,000                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap went into retracement mode after creating a new all-time high of $1,440 two days ago. Ether’s price moved in a straight descending pattern at first but then bounced back up and tried to retest the $1,350 level. As time passed, it was more and more evident that ETH failed to break $1,350 to the upside and that its price is now contained between $1,350 to the upside and $1,211 to the downside.

Ether’s current upside is heavily guarded, not only by the $1,350 level but also by the 21-hour and 50-hour EMAs.

ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are bullish, but only its daily time-frame shows no signs of neutrality or bearishness. The rest of the time-frames (4-hour, weekly, and monthly) have their oscillators pointing to a neutral or bearish stance.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below its 50-period and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (44.30)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                              3: $1047.5

Litecoin

Litecoin spent the day trading on very low volume compared to the previous days, with its price contesting the $142.1 level twice. At the moment, LTC traders can face two scenarios, one being LTC falling below $142.1 level and pushing towards $128.4, and the second one being that LTC acts on the double bottom it created and pushes up to regain some of the lost value.

LTC/USD 1-hour Chart

Litecoin’s technicals are pretty split, with its 4-hour and daily indicators showing almost complete bearish sentiment and its weekly and monthly overviews showing complete bullishness.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly below both its 50-period EMA and its 21-period EMA
  • Price between its middle and bottom Bollinger band
  • RSI is neutral (41.78)
  • Volume is below average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto Daily Topic Cryptocurrencies

Now You can Earn Interest on Your Idle Crypto Assets with Nexo

Apart from HODLing and spending, many crypto users have no idea what to do with their crypto assets. Nexo, a leading financial institution for digital assets, provides crypto users with the opportunity to earn interest on their idle crypto assets. Overall, the concept is simple – you entrust your assets with Nexo, they invest them primarily through lending, and you share the returns. It works almost like a traditional investment bank; only that crypto is the main asset here.

Naturally, many questions will emerge regarding the profitability of Nexo’s offerings, its security, usability, and much more – investors are an inquisitive lot. This article will answer some of the most pertinent ones if only that will give you the confidence to join the league of passive investors. 

What Is Nexo?

Before we rush into how to invest with Nexo, let us first understand what it is. Simply put, Nexo is (arguably) the world’s leader in the provision of digital banking services. The company has strived to bring traditional banking to the world of crypto by merging fintech with blockchain. Nexo specializes in providing lending facilities in the DeFi space. According to the company, $5 billion worth of digital loans have been processed on the platform since its establishment in 2018. The company enjoys a user base of over 1 million and is available in nearly every corner of the planet. 

How Do You Earn?

Nexo offers a variety of crypto financial services, with lending at the top of the list. To earn, you need to deposit supported digital assets (both fiat and crypto) to your Nexo account. The following steps should help with the process:

  1. Register for an account on platform.nexo.io 
  2. Enable 2-factor authentication (this is mandatory)
  3. Scroll down until you find a list of supported crypto assets and select ‘Top Up’ on the one you wish to invest in. Besides the token, you will see how much interest you can earn from each one and what options there are for maximizing your interest.
  4. Nexo will generate a deposit address and a QR code. You can either copy the address or scan the code. It is extremely important to double-check this address before depositing since Nexo puts a disclaimer for funds sent to the wrong address. You can also top up your Nexo account directly from an exchange. If you are depositing BTC, your transaction will appear after 6 nodes have confirmed the transfer. For ETH and other ERC-20 tokens, 50 is the required number of confirmations. 
  5. You can follow the progress of your deposits on the transactions page/ tab.
  6. Interest is earned when you withdraw from your available credit line. The withdraw button is conveniently placed next to the deposit button. 

The steps may look numerous, but really, the entire process can be summarized as ‘top up supported assets and start earning automatically.’ In other words, once you deposit, no other effort is required from you – that’s the true spirit of passive earning. 

Which Digital Assets Can You Invest?

Nexo supports the following digital assets:

  • Bitcoin
  • Ether
  • Litecoin
  • Bitcoin Cash
  • Nexo Token
  • XRP (Ripple)
  • Tether
  • USD Coin
  • Dai
  • Euro
  • GBP
  • Several others

Is Nexo a Good Investment?

As an investor, you have the choice to bid your assets in a portfolio of your choice. So, what would make you choose Nexo first? The following factors might:

  • You can earn up to 12% interest on stablecoins. Interest earned depends on the asset you have deposited and the method you choose for payout. Earning in Nexo for selected stablecoins attracts the full 12% interest.
  • While interest is calculated on an annual percentage rate (APR), payouts are made daily. So you don’t have to wait for end-year dividends like most investments.
  • You can deposit or withdraw funds at any time of your liking.
  • Your deposited assets are backed by a $100 million insurance secured with BitGo.
  • There are no minimum contribution thresholds and no fees charged for funding or withdrawing from your wallet.

Are There Any Risks?

Any keen investor would be worried about the safety of their investment, especially if their assets will be used to extend credit to others. With Nexo, this is not a matter of great concern as your assets and those of others are backed by a $100 million insurance at BitGo. Deposits are also stored in multisig cold storage wallets so you can rest easy as your money works for you. 

Additionally, borrowers have a limit based on their deposited crypto assets. Nexo uses a complex formula to dynamically calculate credit limits based on the dynamic value of digital assets. So, Nexo is unlikely to run out of cash due to overborrowing. 

Lastly, while this is not a risk per se, it is worth noting that first time users may find the platform a little cumbersome to use. The website has only scanty information about what you need to do to get started, and you are likely to fumble around looking for where to click next. Clearly, the platform has not been customised for the crypto investor who’s just starting out. 

Reputation and Regulation 

Nexo boasts of a good reputation among users of crypto financial services. On TrustPilot, a leading consumer review website, 90% of users have ranked it ‘excellent,’ with a score of 4.8/5. The company is also licenced and regulated by the European Central Bank, besides being certified as ISO/IEC 27001:2013 compliant. With such credentials, you can be assured that you will be dealing with a legitimate and tried, and trusted platform. 

But What’s The Catch?

For those who are still not convinced about the viability of Nexo’s business model, questions on where’s the catch will linger. The way this financial institution operates is quite similar to traditional banks – users deposit their assets (usually dollars, euro, etc.), which gives the banks the capital to finance credit and other investments. The only difference is that Nexo cannot rely on traditional loan recovery techniques in case a borrower defaults. Therefore, the company depends on a user’s deposited assets as collateral. You can deposit multiple assets to maintain a positive loan-to-value ratio. This ratio is an indicator of your ability to settle the debt. If you default, Nexo will automatically initiate a sale of your deposited assets until the desired balance is achieved. 

Final Thoughts

‘Earn passively from your idle crypto assets’ sounds just as cool as it is, especially when using Nexo. The platform allows you to deposit a variety of crypto assets and earn up to 12% interest. Interestingly, all you need to do is deposit funds to your Nexo wallet, just as you would do with a crypto exchange. Nexo’s investment terms are quite friendly. For instance, there are no minimum deposits, you can deposit or withdraw at any time, payouts are done daily, and so on. Additionally, the platform ensures the security of your funds is guaranteed by implementing 2-factor authentication for deposits and withdrawals, insuring depositors’ funds, and storing them in multisig cold storage wallets. The only downside with Nexo is the limited information on the website, which might leave new investors struggling to get started. 

Categories
Crypto Videos

Grayscale GBTC Faces Competition!


GBTC Faces Competition in the OTC Bitcoin Trust Market

Osprey Funds has just entered the crypto sector and is trying to become Grayscale’s competitor. The firm is offering an over-the-counter Bitcoin trust under the ticker symbol OBTC. The trust Osprey offer is similar to Grayscale’s Bitcoin Trust, also known as GBTC.

“The Osprey Bitcoin Trust provides an easy access to Bitcoin,” the firm’s website says. They charge a 0.49% management fee, which is the lowest cost solution currently on the market. As they stated, Osprey is an entity that “builds digital asset solutions for intelligent investors,” with the OBTC trust considered its “flagship offering.”

“OBTC began operating and being quoted in the OTC market on Friday, Jan 15,” Osprey Funds’ CEO, Greg King, said, adding:

“As of Jan 14, the product met all the requirements to become quoted under the OBTC ticker in the OTC market. In the next 30 days, the fund will attempt to become DTC eligible, and after Feb 14, all additional market makers will be allowed to quote it. 

Osprey’s launch in the BTC trust market is a direct poke at the largest Bitcoin trust, Grayscale. Grayscale has become one of the largest BTC holders in the world, currently possessing over 500,000 BTC.

GBTC stepped into the market with the idea to provide the public with easier access to Bitcoin through more traditional avenues, all while not even requiring them to custody their own funds. GBTC comes with a yearly 2% management fee, which is where Osprey wants to step in and beat the competition. Osprey’s recently unveiled BTC trust announced a management fee of only 0.49%. 

“We are always happy to see cryptocurrency access products enter the market, especially here in the US,” CEO of Grayscale Michael Sonnenshein told Bloomberg.

Accredited investors will require a $25,000 minimum to buy directly into the trust. Additionally, OBTC shares have a lock-up period of one year before they can be sold in the secondary market. As a comparison, Grayscale’s Bitcoin Trust requires a six-month lock-up. However, based on King’s comments to Bloomberg, the public may expect Osprey’s lock-up period to be cut in half in the near future.

Categories
Crypto Videos

JPMorgan Chase Executives Talk About Stablecoins!


JPMorgan Chase Executives Talk About Stablecoins

During a JP Morgan Chase’s Q4 2020 earnings call, the firm’s CEO Jamie Dimon and CFO Jennifer Piepszak discussed the OCC’s recent approval of banks being able to use stablecoins for payments, as well as whether or not this approval will have any significant impact on the development of JPM Coin, the company’s private digital currency. 

During the Q&A portion of the call, Portales Partners analyst Charles Peabody asked the executives about the OCC approval for banks to use various public blockchain networks for payments.

“That guidance enables an offering of stablecoins going on a public blockchain. That doesn’t impact the JPM coin. You should think about JPM coin as the tokenization of our customer deposits,” stated JP Morgan CFO Jennifer Piepszak, according to the call transcript.

However, she did not completely rule out the possibility of a stablecoin backed by JPM if customers showed interest.

“It’s obviously very early. We will assess the use cases and customers’ demands. But, it is still too early to see where everything goes for us.”

JPM CEO Jamie Dimon was quick to jump in and mention that the bank is currently “using blockchain for sharing data with banks,” and adding that their bank is at the forefront of development.

Debuted in Oct 2020, JPM Coin is used on the backend of JPM’s payments systems, helping the firm settle nearly $6 trillion in payments on a daily basis. 

Ultimately, Dimon seemingly implied that crypto payments settlement wouldn’t greatly change how JP Morgan operates.

“I do expect that stuff is coming soon, and it may not change our world all that much.”

However, Dimon may be underestimating the impact that crypto will have on the payments landscape. Paypal is one of the Fintech giants that Dimon mentioned by name as a direct competitor, confirmed that crypto payments would be available in 2021. The CEO — a former skeptic of cryptocurrencies — made it very clear that payments will become an increasingly crowded field over the next decade:

“I expect it to be a very, very tough competition in the next ten years. However, I expect to win. So help me, God.”

Categories
Crypto Daily Topic Cryptocurrencies

Earn Passively with VeriBlock’s Latest Tech: Proof of Proof

Innovations in the cryptosphere are fast and wild. Recently, VeriBlock released the novel proof-of-proof protocol, which allows blockchains to inherit Bitcoin’s security. The organization’s unique technology solves two problems simultaneously. First, a diverse ecosystem of blockchains – each focused on addressing a unique need – is secured. Secondly, gains made from the increased adoption of these alternate blockchains will drive more transactions out of the Bitcoin network, thereby increasing Bitcoin’s scalability, and by extension, solving the pioneer blockchain’s major headache.

While this technology is expected to transform Bitcoin and the entire crypto universe, the best part is that you can take part in the revolution and earn passively. 

In this article, we will look closely at this interesting concept and discuss the opportunity in it.

What Is Proof-of-Proof (PoP)?

At the core of it, PoP is a form of mining. VeriBlock envisioned an ecosystem of blockchains – each addressing diverse problems – but with the full security of Bitcoin. But why Bitcoin? You may ask. 

Currently, Bitcoin is the largest cryptocurrency network and is rightfully considered the golden standard of security. Attacking the network would require massive investment in specialized computational infrastructure, all thanks to the high number of nodes in the network paired with its consensus algorithm. It is argued that to stage a 51% attack against Bitcoin, even the world’s fastest supercomputer would be of no use. Smaller blockchains have had to endure this vulnerability for years, but not anymore.

Simply put, VeriBlock’s PoP scheme will allow participating blockchains to use Bitcoin for a second-layer of consensus. So, first, they do their own proof-of-work consensus then push the transactions to Bitcoin through VeriBlock’s blockchain. 

The VeriBlock ecosystem acts as an aggregation layer between alternative blockchains and Bitcoin. Whenever a new blockchain joins this ecosystem, VeriBlock becomes even more decentralized and more secure due to the increased network effect. 

What’s The Deal?

For VeriBlock’s technology to work, PoP miners are needed, and that’s where you come in. As discussed above, the technology works by having transactions mined in their original blockchains then published to Bitcoin in a decentralized, trustless, transparent, and permissionless (DTTP) manner. Hence, your work as a PoP miner will be pushing blockchains, which already have intermediate consensus, to Bitcoin to receive the final security seal. The backend mechanics are complex, but the user’s role is suitable for a layperson.

With VeriBlock’s PoP, everyone stands to benefit. We have seen that PoP miners get their commissions by pushing transactions to the second layer of verification. On the other hand, innovators working on alternative blockchains will see their projects boosted as users become more confident in adopting these blockchains. The thing is, it is easier for developers to build applications on alternative blockchains where speed and scalability are non-issues. But security remains a challenge for such networks. Therefore, it is easy to understand why the whole crypto community should rejoice at the release of this invention.

How Do You Earn?

Unquestionably, VeriBlock’s PoP technology is too complex to be discussed here, but luckily, you do not need to understand the intricacies to participate and earn.

Send Bitcoin, get paid! Earning with VeriBlock’s PoP is that simple. The company has partnered with ZelCore to make this dream a reality. From December 2020, ZelCore users can earn $VBK by sending Bitcoin from their wallets. On the updated wallets, users will find $VBK alongside BTC, BCH, LTC, and other major cryptos. 

For the earning part, all you really need to do is update your ZelCore wallet to get the new feature. Any time you send Bitcoin from your ZelCore wallet, you will be taking part in VeriBlock’s second layer of consensus and getting paid for the hard work. Again, for emphasis, you do not need to do any manual validations – sending BTC is sufficient to earn you rewards.

In the bag of goodies, we also had some 1.5 million $VBK, which was to be shared among the first 15,000 users to upgrade their wallets by December 21. If you did upgrade before then, kudos! If not, your second chance is to earn by sending BTC from your ZelCore wallet.

Rewards are earned in VeriBlock coins ($VBK), which can be converted to other major cryptocurrencies. The conversion is expected to be smooth as $VBK is already listed as an asset in the updated wallet. Paying out earnings through $VBK was necessary because that’s the network that performs the final consensus, which is understandably confusing as Bitcoin would be expected to be doing this task. 

Which Wallets Are Supported?

At the moment, you can only participate in this passive earning scheme if you are using the ZelCore wallet. Some consider this a disadvantage given that the wallet is not open-source, and for being a commercial wallet, users are charged monthly maintenance fees to use some features. Nonetheless, the developers have tried to compensate for this by offering highly reliable customer support and unmatched user experience. 

About the ZelCore Wallet

ZelCore is a multi-asset crypto commercial wallet that supports over 170 digital assets. It integrates the services of a number of major exchanges, including Changelly, InstaSwap, Coinswitch, and Kyber, so you have it all under one roof. The application, which is available for both mobile and desktop devices, offers beautiful interfaces, best-in-class security, including two-factor authentication, great usability, and seamless integration of new features, which the company promises to roll out continuously. 

Why Should You Participate in VeriBlock’s PoP?

First, to earn passively. VeriBlock’s PoP gives ordinary Bitcoin users – those without any special mining equipment – the opportunity to earn from mining. This idea is not only novel but exciting too. It is not often that you can make money by almost investing nothing. Also, mining has, hitherto, been a reserve of those with the financial muscle to invest what it takes to set up the specialized infrastructure.

Secondly, your participation in VeriBlock’s PoP scheme will be for the greater good of the cryptoverse. The growth of alternate blockchains has been hampered significantly by security issues related to the 51% attack. It has been difficult for merchants and exchanges to list tokens from alternate blockchains when the risk of double-spend stares at them. Thus, when you take part in proof-of-proof validations, you are helping alternate blockchains to grow.

Final Thoughts

Earning passively is one of the easiest and effortless ways to earn from crypto. With VeriBlock’s proof-of-proof invention, ordinary Bitcoin users can make extra money by validating transactions. Participating is easy – one only needs to download a ZelCore wallet (or update it for existing users) and start sending BTC from the wallet. There is a slight limitation in the use of the ZelCore wallet as it is a commercial product. Nonetheless, its usability, security, customer support, and its wide variety of features make it worth the trouble. VeriBlock may extend the technology to other wallets, but as to which ones and when, that remains a matter of conjecture. Overall, we may point out a few areas of improvement for VeriBlock’s PoP earning scheme. Still, we must also agree that this is a noteworthy opportunity for Bitcoin users to earn effortlessly.

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 20 – ETH Reaches a New All-Time High; Crypto Sector in the Red

The crypto sector ended up mostly in the red as altcoins started retracing after their moves to the upside. Bitcoin is currently trading for $35,776, representing a decrease of 2.1% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 3.28% on the day, while LTC lost 3.44% of its value.

Daily Crypto Sector Heat Map

Folder Protocol gained 813.46% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Global Gaming’s 198.29% and Benchmark Protocol’s 159.89% gain. On the other hand, 3XT TOKEN lost 85.20%, making it the most prominent daily loser. It is followed by Ether Kingdoms Token’s loss of 61.70% and Matrix AI Network’s loss of 52.48%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down since our last report as altcoins started to outperform, with its value currently being 64.9%. This value represents a 0.7% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased slightly since we last reported, with its current value being $1.024 trillion. This represents a $10 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin’s daily time-frame shows us that the largest cryptocurrency by market cap is still contained within the triangle formation (purple). Any break of the current sideways movement may contest the triangle as well. On the other hand, BTC on the 1-hour time-frame is bouncing between the $34,627 support and the $37,445 resistance level for the past five days.

Bitcoin’s price will soon have to break the sideways trading pattern and contest the triangle formation. If BTC bulls or bears manage to break the triangle formation, we could see a large move in the same direction.

BTC/USD 1-hour chart

Bitcoin’s short-term (4-hour and daily) technicals are slightly tilted towards the sell-side but still show a hint of neutrality or bullishness. Its weekly and monthly technicals are exactly the opposite, as they are slightly bullish but show some bearishness alongside it.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below both its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (44.32)
  • Volume is average (low)

Key levels to the upside:          Key levels to the downside:

1: $37,445                             1: $34,627

2: $40,000                             2: $32,350

3: $42,000                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap took advantage of the “altcoin season” as money moved from Bitcoin and onto other altcoins. Ever since Ether’s price bounced from the $1,211 level on Jan 18, we could see bulls coming to the market in larger numbers. This made the $1,350 level fall, and ETH finally set a new all-time high of $1,440. While the new ATH is just $20 away from its previous one, this is considered a testament to Ethereum’s upside potential.

Ether couldn’t position itself above the $1,420 (previous ATH) and fell below as it started retracing. Its price is now testing the $1,350 level but will most likely stay above it.


ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are tilted towards the buy-side, but all show a hint of bearishness in the oscillator department.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above its 50-period and at its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (50.69)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $1,420                               1: $1,350

2: $1,440                               2: $1,211

3: $1,450                               3: $1,183.85

Litecoin

Litecoin spent the day retracing from the recent $166.2 high after bulls reached exhaustion. LTC was trying to push towards the $180 levels and contest the 2021 highs but failed to do so as bulls spent too much strength in the $160 area, where the cryptocurrency faced heavy resistance.

Litecoin is now having a downward trajectory and has failed to break the 50-hour moving average in an attempt to break it. LTC traders may look for a trade after the cryptocurrency finishes testing the $142.1 level.

LTC/USD 1-hour Chart

Litecoin’s technicals on the 4-hour and monthly time-frames are completely bullish and show no neutrality or bearishness. On the other hand, its daily and weekly overviews show some form of bearishness.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is below both its 50-period EMA and its 21-period EMA
  • Price sightly below its middle Bollinger band
  • RSI is neutral (44.85)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto Daily Topic Cryptocurrencies

What Is It Like Investing in Tezos (XTZ)?

Smart contract safety, long-term upgradability, and open participation: these are the problems Tezos promised to solve when it was created in 2018. So, the developers built the network to facilitate peer-to-peer transactions and launch smart contracts. Behind the network sits the Tez (also called Tezzie) digital token, which is the focus of this article. 

If you are familiar with Ethereum smart contracts, you might already understand Tezos’ offering. However, the slight difference between smart contracts on these two networks is that Tezos allows participants to directly control the network’s rules. This makes Tezos not just a re-invention of the Ethereum wheel but a rather more flexible and scalable platform for implementing smart contracts. 

Tez can be considered a major crypto. By market capitalization, it ranked #19 at the time of writing. It’s availability in multiple exchange pairs and listing on major exchanges indicates that it is a popular asset among investors. 

This article will look at what it is like investing in Tez and answer questions such as is it a good investment.

What is Unique about Tezos?

One of the things that make Tezos unique is its proof-of-stake consensus. Unlike Bitcoin, consensus on the Tezos network is achieved by stakers, whose mining power depends on how much Tez they hold. Relying on this consensus mechanism might have given the crypto some resilience against the cryptocurrency bear market of 2019. Between October 2019 and February 2020, the crypto recorded triple growth. This is a remarkable movement – at the time of writing this, even Bitcoin, in its current biggest bull run yet, has not attained triple growth.

Performance in 2020

Tezos is known for euphoric investment. During its ICO launch, it raised $232 million, one of the biggest ICOs at the time. Well, in 2020, the crypto has shown similar tendencies – fluctuating between less than a dollar and $4. Such volatility has only been shown by a few cryptocurrencies. Again, we must acknowledge how large these fluctuations are. Despite the relatively low price, the percentage changes are tremendous. 

Tez was trading at roughly $1.3 at the beginning of 2020. By mid-February, it had rallied to trade at $3.7. Prices soon crashed to lows of $1.3 a month later. Between April and July, Tez demonstrated rare stability exchanging at about $2 and only fluctuating slightly. In August, the crypto experienced its largest spike of the year, and at some point, fetched a whopping $4.2 at exchanges. The prices have since dropped to $2, which so far seems like its point of equilibrium.

24-hour trading volumes for the crypto indicate drastic changes in investor activity. There was only 30 million worth of trade per day as the year opened, but by mid-February, this number had increased 10-fold. By mid-August, the volume was 20 times. Even when the prices dropped to the $1.3 figure witnessed at the start of the year, 24-hour trading volumes never declined below $70 million. 

The volume of trading exhibited by Tez shows how enthusiastic investors have been with this crypto. Coupled with its relatively high volatility, we can conclude that Tez has been the perfect asset for short-term trading, at least according to investors’ 2020 trading patterns. 

The Future of Tezos

We have seen that, due to its volatility and high trading volume, Tez performs impressively in the short term. For investors who seek to grow their investment in the long term, questions on Tez’s suitability still persist. 

Tezos had a promising start right from its introduction to the initial coin offering. As earlier mentioned, the crypto raised one of the highest amounts ever raised in a cryptocurrency ICO. The faith investors have placed on the crypto from the start indicates its potential and guarantees some level of support for its growth.

Tez has also shown tremendous resilience in the past. After the successful ICO, legal disputes delayed its launch for almost a year. Even so, when it finally launched in 2018, investors had not lost faith in the project – which can be proven by how fast it rallied to reach triple gains. Tezos’ market rank is another indicator of its resilience and aggressive growth. For a crypto that is only 2 years in the market, claiming a position among the top 20 cryptocurrencies is no mean feat.

These past indicators describe a crypto with a solid foundation, good reputation, and the community support needed for future growth.

Adoption in The Banking Sector

The network’s flexibility and scalability also imply that we will see new use cases regularly. In 2019, barely a year after Tezos was launched, BTG Pactual and Dalma Capital (both are reputable investment banks) announced that they will be using the Tezos blockchain for security token offerings (STO).

Tezos adoption in the banking sector is also likely to increase, particularly due to its security. Least Authority, an esteemed security auditing company, released a report affirming that ‘Tezos protects against chain reorganizations and selfish baking.’ Such approvals will go a long way in promoting the crypto’s adoption in the financial sector. 

Stability and Reliability

Tezos’ designers spent a lot of thought on the network’s stability. Unlike most crypto, Tezos has an advanced infrastructure that is not prone to hard forks. Users can vote on proposals to upgrade the protocol on the main blockchain. Through a process known as baking, users stake an amount of XTZ to participate in the voting process. Changes to the protocol become effective only after they have been backed by a super majority. This form of governance ensures the network is ‘built to last.’ As an investor, you will be protected from the uncertainty that comes with hard forks and the subsequent possibility of making a loss on your investment.

Is it Risky Investing in Tezos?

Cryptocurrencies are inherently risky investments. Tezos appears as a stable, secure, and well-governed blockchain. However, the currency faces the same volatility and speculation that all other cryptos face. No matter how lucrative Tezos might appear, the golden rule remains, never risk more than you can afford to lose.

Final Thoughts

Investing in Tezos can be an exciting experience – you can quickly gain or lose, and by high margins. The currency’s relatively high volatility makes it a particularly suitable asset for short term investment. In the long term, Tezos looks equally promising. It is secure, stable, and reliable. These characteristics position the crypto strategically for widespread adoption in the mainstream financial sector. The network’s immunity against hard forking is a guarantee of stability against hard fork uncertainties. While Tezos is a good investment, it is still risky due to the virtue of being a cryptocurrency. Therefore, it is best to exercise caution and avoid hype when making the decision to invest in Tezzie. 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 19 – Ether Breaks $1,300; Litecoin Skyrockets

The crypto sector was mostly green, with altcoins attempting to push up and reduce Bitcoin’s market dominance. Bitcoin is currently trading for $36,423, representing an increase of 3.85% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 9.89% on the day, while LTC gained 13.38% of its value.

Daily Crypto Sector Heat Map

4THPILLAR TECHNOLOGIES gained 441.52% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by CryptoAds Marketplace’s 221.1% and YAMv2’s 181.43% gain. On the other hand, CY Finance lost 66.83%, making it the most prominent daily loser. It is followed by Basiscoin Share’s loss of 39.38% and Trading Membership Community’s loss of 37.1%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down since our last report, with its value currently being 65.6%. This value represents a 0.5% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has returned above the $1 trillion mark since we last reported, with its current value being $1.034 trillion. This represents a $41.3 billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin spent the day mostly trading sideways, bound by the $34,627 to the downside and $37,445 to the upside. The price hopped between these levels and created a higher high higher low pattern, which later on broke after BTC couldn’t pass its immediate resistance level.

Bitcoin’s price has created a triangle pattern on the daily chart, and breaking this triangle to the upside or downside will determine the short-term price direction.

BTC/USD 1-hour chart

Bitcoin’s technicals on all time-frames show a slight bullish tilt, with its oscillators pointing towards the sell-side.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is at both its 50-period EMA and its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (49.56)
  • Volume is average (low)

Key levels to the upside:          Key levels to the downside:

1: $37,445                             1: $34,627

2: $40,000                             2: $32,350

3: $42,000                             3: $27,960

Ethereum

Unlike Bitcoin, Ethereum has spent the day first slowly preparing for a move and then explosively pushing to the upside. The second-largest cryptocurrency by market cap has, after confirming its position above the $1,211 level, shot up towards the $1,350 level, which it was not able to break. With the volume descending after that move, ETH will most likely not be able to break $1,350 unless a new wave of bulls comes into the market.

ETH/USD 1-hour Chart

Ethereum’s 4-hour, daily, and monthly technicals are completely bullish and show no signs of neutrality or bearishness. On the other hand, its weekly overview shows some neutrality.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price is at its top Bollinger band
  • RSI has just left the overbought area (67.24)
  • Volume has spiked up in the recent hours

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,450                               3: $1,060.5

Litecoin

Litecoin was one of the largest daily gainers after its price suddenly shot up from $141 all the way up to $160 in just one hourly candle. While it seemed at first like the retracement will eat away the gains LTC made, the cryptocurrency made another push towards the upside and stopped just below the $161.55 resistance level.

Litcoin’s descending volume and price movement, as well as the number of sell orders near the $161.55 level, will most likely be enough to keep LTC below the resistance level for now.

LTC/USD 1-hour Chart

Litecoin’s technicals on the 4-hour, daily, and weekly time-frame are completely bullish, while its monthly technicals are slightly more neutral.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is above both its 50-period EMA and its 21-period EMA
  • Price close to its top Bollinger band
  • RSI is neutral (66.70)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto Daily Topic Cryptocurrencies

How to Take Advantage of Ethereum 2.0

Ethereum, the decentralized blockchain that features smart contracts, will be getting a series of upgrades that will see improved scalability, security, and sustainability. This massive upgrade will create new opportunities for investors. Apart from allowing Ethereum users to earn passively from staking, smart investors can take advantage of price changes during the launch of Ethereum 2.0 and multiply their investments. 

In this article, we will look at what is Ethereum 2.0, what investment opportunities it creates, and how you can be part of this development.

What is Etherum 2.0 All About?

Also known as Eth2, Ethereum 2.0 is fundamentally a shift from the current proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) model. In the PoW model, the generation of new blocks relies on the computing power of each node on the network that is taking part in transaction validation. On the other hand, PoS relies on virtual miners (also called validators) and Ether deposits to achieve consensus. 

Besides changing the consensus mechanism, Eth2 also introduces shard chains – a mechanism that ‘splits’ the Ethereum blockchain and shares the processing task among different nodes. This approach increases the network’s processing capability by allowing concurrent processing of transactions – a shift from the traditional sequential processing. 

While the upgrade is squarely technical, its economic and financial implications will be far-reaching. 

How Will Eth 2.0 Affect Prices?

Whenever a major event happens on certain crypto, its prices are bound to change due to increased speculation. In the wake of the anticipated Eth2 launch, upward price movements were observed. The launch was set to happen on 1st December, and a week to this launch, ETH prices had gone as high as $600. While this rally might have been due to other factors, such as the general positive sentiment on cryptocurrencies, the surge observed just a week before the event can’t be coincidental. 

Speculation aside, Eth2 is bringing improved transaction speeds and lower costs – factors likely to increase demand for the crypto. Already, exchanges are reporting declined sell pressure, which indicates that investors are not eager to sell ETH at the moment. The speed and transaction cost improvements will also automatically cascade to tokens that run on the Ethereum blockchain. This will trigger even more demand for the crypto and, thus, better prices. 

Staking in Eth 2.0

The introduction of staking in Eth2 creates a new opportunity for investors to earn by validating transactions, and this is the latest investment opportunity we would like to discuss. 

Simply put, staking in Eth2 implies depositing 32 ETH to activate validator software – the tool you will be using to process transactions. As a validator, you will have the power (and duty) to process transactions and add new blocks to the blockchain, and earn rewards while at it.

Rewards are given to validators for pushing transaction batches into new blocks and validating other validators’ work. While there are bountiful rewards in staking, you might lose ETH if you are unavailable to perform validations or if you use your stake against Eth2 validation specifications. 

How to Stake in Eth 2.0

Staking involves sending 32 ETH to the following address: 

0x00000000219ab540356cbb839cbe05303d7705fa

However, you will need to use the launchpad dedicated for this purpose. The address above is for verification purposes only. The process involves several distinct steps, summarized as follows:

  1. Review Eth2 staking agreement/ terms and conditions
    1. Sign up on the launchpad. This will involve depositing the 32 ETH.
    2. Agree that it is your responsibility to keep your validator online.
    3. Agree that you are liable to slashing (incurring a large penalty) if you act against validation specifications.
    4. Agree that you understand that your mnemonic (or seed) is the only way to access your funds and that you will keep it safe.
    5. Agree to safeguard your key stores, which will hold your keys, and provide the public keys to the launchpad site to activate your validator.
    6. Agree that you cannot transfer your staked ETH until Phase 1 and that you cannot withdraw until Phase 2.
    7. Agree that once you exit, you cannot rejoin as staking is a long-term commitment. (The completion of each phase depends on reaching a certain amount of staked ETH. Thus, withdrawals will keep extending timelines for this smart contract).
    8. Accept early adoption risks, i.e., software and design flaws that may result in the loss of your ETH.
    9. Agree that you are technically capable of configuring a validator.
  2. Select an Eth1 client that will run parallel to your Eth2 client. This is necessary to process deposit transactions coming from the Eth1 chain.
  3. Select an Eth2 client and set up a node. You can choose between Prysm, Nimbus, Lighthouse, and Teku. Nimbus is one of the most versatile as it can run even on older smartphones.
  4. Select the number of validators you would like to run and the operating system you will use. Remember, to operate each validator, you will need 64 ETH.
  5. Upload the validator which you downloaded/ built from the previous step.
  6. Finally, connect your wallet.

While staking in Eth2 is quite technical, especially for the average user, a comprehensive step-by-step guide is provided on the Ethereum launchpad website. It is also worth acknowledging the thoroughness with which the documentation was put together by the Eth2 team to guide potential validators. If you use this guide, you are unlikely to get stuck simply due to technical difficulty. 

Is Eth 2.0 Staking a Good Idea?

Staking in Eth2 is a double-edged sword – it comes with both benefits and risks. When you commit your ETH to the staking contract, you are almost guaranteed returns just from staking. However, returns are highly variable. In fact, it is impossible to tell how much you can earn by staking a fixed amount of ETH until you actually receive the reward. Even so, if you stake and consistently participate in validation, you will get rewarded. 

Secondly, staking means locking your ETH to the network for some time, without the possibility of withdrawing it at least until Phase 1.5. This is akin to depositing with a fixed account, whose interest can be compared to the growth of ETH in the near future. 

While staking is a good way to earn from Eth2, you might want to consider the following risks:

  • Staking is a one-way deposit. ETH you send to the contract address cannot be withdrawn until an unknown future date (this is until Phase 1.5 of the upgrade is reached).
  • Profits you earn from staking also remain staked until this unknown future date.
  • Validation is a responsibility that all stakers must undertake. By being offline, you will lose as much as you would have earned if you were available for validation.

Final Thoughts

The coming of Eth2 brings with it exciting investment opportunities. Other than the traditional trading and HODLing, Eth2 allows you to commit some funds to the network and join other validators and earn exclusive rewards from it. Risks, including early-adoption software bugs and slashing due to being offline, exist. However, all considered, staking is a worthy venture that ETH investors should consider. 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 18 – Bitcoin Drops During the Weekend, ETH Remains Strong

The crypto sector spent the weekend in a mostly descending fashion, with BTC continuing its short-term downtrend. Bitcoin is currently trading for $35,258, representing an increase of 0.14% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 0.39% on the day, while LTC lost 0.46% of its value.

Daily Crypto Sector Heat Map

Astosch gained 285.95% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by ALL BEST ICO’s 273.67% and Yeld Finance’s 264.65% gain. On the other hand, Bestay lost 87%, making it the most prominent daily loser. It is followed by Zugacoin’s loss of 85.51% and VKF Platform’s loss of 77.77%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down since our last report, with its value currently being 66.1%. This value represents a 2.3% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has dropped below the $1 trillion mark since we last reported, with its current value being $993.33 billion. This represents a $43.67 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin spent the weekend following the downtrend it started on Jan 14, with its price slowly declining from a high of $39,600 to a low of $33,833. During the downtrend, the price has contested and broken the $36,640 level to the downside and looks like it will contest the $33,200 level in the near future. BTC is currently trading at a little above $35,000, representing a weekly loss of 6.09% and a monthly gain of 29.87%.

Bitcoin’s price has responded well to the 21-day moving average and found very strong support there. Staying above this level will be crucial if BTC wants to turn to the upside.

BTC/USD 1-hour chart

Bitcoin’s technicals on the daily, weekly, and monthly time-frame are completely bullish and show no neutral or bearish signs. On the other hand, its 4-hour overview is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (43.00)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $36,640                             1: $33,200

2: $40,000                             2: $30,640

3: $42,000                             3: $27,960

Ethereum

Unlike Bitcoin, Ethereum’s weekend was not spent in a downfall. The second-largest cryptocurrency by market cap headed towards the $1,300 level but failed to break it, which prompted a weekend of sideways trading. While ETH did break the $1,211 level to the downside, the $1,183.85 level held up. Ether is currently trading in a very narrow range, bound by the aforementioned levels.

ETH’s short-term movement will greatly depend on two factors: Bitcoin’s volatility and Ether itself, breaking its immediate support or resistance levels.

ETH/USD 1-hour Chart

Ethereum’s technicals all time-frames are tilted towards the buy-side, with the 4-hour, daily, and weekly overviews fully pointing towards the buy-side. Its monthly overview, however, has oscillators pointing towards neutrality.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below its 50-period and its 21-period EMA
  • Price is between its middle and bottom Bollinger band
  • RSI is neutral (43.72)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $1,211                               1: $1,183.85

2: $1,255                               2: $1,060.5

3: $1,350                               3: $1,047.5

Litecoin

Litecoin mirrored Bitcoin’s movements over the weekend, stepping into a downtrend that started on Jan 14, after Litecoin couldn’t push its price to $160. The price is currently fighting for the $142.1 level, which it has recently broken to the downside.

While Litecoin’s movements seem to mirror Bitcoin’s, its volume remains stable despite Bitcoin’s volume dropping. At the moment, LTC might be a better choice for people that want to be less affected by Bitcoin’s volatility.

LTC/USD 1-hour Chart

Litecoin’s technicals on the daily, weekly, and monthly time-frame are completely bullish and show no neutral or bearish signs (though they are slightly less bullish than Bitcoin’s overviews). On the other hand, its 4-hour overview is completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly below its 50-period EMA and its 21-period EMA
  • Price close to its bottom Bollinger band
  • RSI is neutral (42.47)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $114.75

3: $181.3                               3: $97.8

Categories
Cryptocurrencies

Overview of PoW and PoS Consensus Algorithms

One of Ethereum’s most anticipated updates in 2018-2019 is the final part called Serenity, which will lead to the shift of the consensus algorithm with Proof-of-Work to Proof-of-Stake. For the miners, this will mean the end of classical mining (proof of labor) and the step towards obtaining an interest in the self-possession of the currency (proof of participation). Good or bad, there’s no definitive answer. Although the PoS algorithm is considered of greatest interest, always viewed from a technical point of view, this consideration may lead to the problem of centralization and pricing. What is PoW and PoS: essence, differences, advantages, and disadvantages, read this article.

PoW or PoS: About Consensus Algorithms

In the spring of 2017, Ethereum developers released some details of Casper’s future protocol. One of the main changes that have been proposed to the protocol, whose publication of the first part was already held in November 2017, will be the transition from the Proof-of-Work consensus algorithm to Proof-of-Stake. This point should first be of interest to those involved in mining. And let the second part of the protocol be postponed, you need to understand the difference between this type of algorithms and what is changed to miners are waiting for. But before that, let’s understand what the consensus algorithm is, in principle, and what they are.

What Is A Consensus Algorithm?

In any network built under blockchain, two types of messages are transmitted: transactions (conventionally, money transfer) and blocks that are made up of these transactions. To make a transaction, it is not necessary the consent of participants outside the system, just know the key (password, identification of the holder of the wallet). Another issue is the blocks, whose order in the transaction log is confirmed by consensus. The biggest problem we’re dealing with on the net is that it’s possible to forward a transaction at the same time between nodes.

Example of the so-called “double expense”. Oleg has 1 bitcoin, which he wants to send, but does it at the same time Alexander and Yana. And if Alexander and Yana do not agree with each other on these transactions (that is, they do not know that a simultaneous shipment was made), then a network problem arises. Therefore, all network participants agree on a transaction log, so that one of Oleg’s operations will be successful, and the second one will be recognised as incorrect. The reason for this problem is obvious, but how to solve it technically is a difficult question.

Byzantine Consensus

The Byzantine consensus is a common definition of the task of the interaction of several participants of the network with each other, located remotely and receiving a task from a single center. And some network participants, including the same center, may be intruders (hackers). In other words, the Byzantine protocol algorithm should provide communication between remote network participants, eliminating fraudulent operations, i.e., transaction security.

The idea of Byzantine consensus appeared in the 1980s. Its essence lies in the following (including fantasy). Byzantium on the eve of the battle. The Byzantine army consists, for example, of four legions that are located at a distance from each other. At a certain point, each of the legion generals receives an order from the executive center to attack or retreat. The development of events is as follows:

If all the legions attack, they win.

If all the legions withdraw, they save the people (also a successful outcome).

If a party attacks, a party retreats, the army suffers defeat.

The work to be done is obvious, but where do we find the guarantee that there will be no traitors who carry out contrary orders? And where do we find the guarantee that the boss will not also be a traitor who sends different orders to his subordinates? Conclusion: Subordinates must comment on the information between themselves, and thus the false data will be deleted. To be precise, they should comment on the information about the number of legions who have been loyal to Byzantium, and draw conclusions about the number of legions of traitors. The task assumes that with N number of generals the traitors can be N-1.

The principle of the agreement is that all loyal subordinates, as a result of the exchange of information, will have to make the same decision, ignoring the information of the general traitor. Let us return to the example. The main feature of the exchange of information is as follows:

Each general sends information on the number of his legion to three other generals. And the disinformation traitor sends the other generals different numbers on the number. In cryptocurrencies, it is an analogue of spam, DDoS attacks, fictitious transactions.

Each general forms a block in which it indicates all four digits received, indicating from whom it was received, and this ready block sends it to other generals.

As a result, each general has in his hands 4 blocks with figures on the number of each legion. And it is logical that for three general figures are the same in the three blocks and only one will have discrepancies.

Thus, the loyal generals reach an agreement, excluding the opinion of the traitor. The example is short, but it clearly shows how network members come up with a single solution, eliminating the fake ones.

Proof-of-Work Consensus

The Byzantine consensus has a serious problem: the generals know from whom the information comes. That is, there is no anonymity, which is inherent in cryptocurrencies. In the 1990s, a certain version of the consensus algorithm that we’re discussing, maintaining anonymity. In essence, it does not make sense to go deeper, but it comes down to the fact that all the calculations (analyses transmitted to each other in the information network) are made by the PC. To join the network, applicants must complete a certain task (perform a calculation it is not possible for a person, but it is not impossible for a computer), this comes to prove that it is a real user.

The Proof-of-Work algorithm itself (proof of work) is the calculation that the computer performs at the time of mining, while blocking the fake strings and finding the correct transactions.

Distinctive Features of Proof-of-Work

Consensus eliminates the problem of anonymous networks: Sybilla attacks. This situation is what we find when an attacker wants to surround the node of a victim, that is, access all nearby nodes. By seizing the channels of entry and exit of information, you can send false data to the victim. In a BTC built on the PoW algorithm, this possibility is leveled off, as the victim’s node chooses other nodes at random, excluding the victim’s entire environment.

The test does not move to other blocks, that is, it excludes the possibility of stealing from each other (the test is the result of calculations in which energy is spent).

The test cannot be obtained in advance. Each new block will always have a reference to the previous one block, so it is possible to calculate each new test only with the arrival of a new block.

PoW guarantees the integrity of the distribution of the unit’s rewards according to the computer’s capacity. If the power (hash) is 5% of the network, the miner’s computation process creates a certain percentage of the block and receives the same percentage of the reward.

Actual resources, for example, electricity, are spent for the purpose of obtaining evidence, because miners lose the incentive to somehow influence nodes and transmit false information, there is a risk of losing the money invested.

Proof-of-Stake Consensus

If there are many miners in the network and there are also more cryptocurrencies extracted, more power is required for computational operations. Only there are no benefits of these calculations, except for the security and anonymity of the network. Attempts to steer energy in the right direction were in the early stages of Ripple, where miners performed calculations, necessary for different scientific industries (medicine, robotics, etc.), and thus received a reward from developers. But he had to retire.

The second problem in mining is unlimited emission. If bitcoin has this limitation (and BTC extraction is becoming less profitable as the reward for the block decreases), some currencies (for example, Ethereum) have no restrictions. And any unrestricted issuance is charged with depreciation.

The Proof-of-Stake (proof of participation) algorithm deviates from the concept of emission. If in the above-mentioned algorithm, the miner had to prove his presence in the system by calculations, here it is enough that the miner has cryptocurrencies, that is, a participation in the common system on which interests are accrued. In other words, mining as such disappears is replaced by interest.

Other Test Algorithms

The PoW and PoS consensus algorithms use most existing cryptocurrencies. And technically more perfect coins are considered based on PoS. But there are many other mechanisms to protect data, and although these mechanisms are similar to PoS and PoW, they have, of course, their own peculiarities:

Proof-of-Activity is a model that represents the original symbiosis of PoW and PoS.

Delegated Proof-of-Stake is an analogue of PoS, but with elements of vote delegation. Each system member votes for a witness to protect their computer network. The impact on the vote is determined by how many tokens the person has (the more, the greater the impact on the network). The algorithm uses EOS, Lisk, BitShares.

Proof-of-Burn is a model in which the miner sends coins to an address from which they cannot be reliably removed (coin burning). Thus, the miner obtains the possibility of eternal mining, the right to which is played in the form of a lottery among the owners of burnt coins. /li>

Proof-of-Capacity is a model based on the popular idea of “memory as resources”. To participate in the mining process, you need to provide a part of your computer’s memory.

Proof-of-Storage is a similar version of the previous algorithm, with a small difference: the allocated memory is part of the shared cloud storage.

The logic of these algorithms is hard to explain. Since the objective of the algorithm is to ensure maximum network security with minimum power consumption, with which PoS handles very well. Other types of algorithms seem to try to create something of their own, original, but not as effective. And by the maturity of the idea, these algorithms lag behind PoW and PoS.

Consequences of the Ethereum Transitions

And then, again, we return to the same question with which the article began: What can miners expect from future changes? There is still no precise transition plan and the transition is postponed. The road map envisages the start of the transition in Metropolis (Serenity) stage 4. The transition will be smooth: First, according to the PoS algorithm you will check 1 transaction out of 100, then your amount will increase.

Miners do not yet fully understand how the transition from Ether to the PoS algorithm will affect. Criticism of the algorithm sounds relative to the price of a cryptocurrency. If in the Proof-of-Work algorithm the minimum cost of a coin is the amount of energy spent for its extraction, then in Proof-of-Stake the price of the coin is determined by speculators. If the project is not interesting, then the price of the coin will drop to zero. On the other hand, more and more coins go to ICO directly with the PoS algorithm.

The question remains as to the amount of the commission for the possession of coins and their comparability with the profitability of other instruments. There is an opinion that will not be high, and therefore the popularity of Ethereum may be affected due to high risks. In this sense, there are perspectives in Ethereum Classic.

Possible changes may include:

Cost reduction. As the practice of such changes shows, price growth does not occur. On the contrary, miners lose interest in the currency, after which a reduction happens.

Change of mining target. Ethereum mining disappears. And in order to continue using your power, you will have to choose another currency. Or try to join the cryptocurrency project, which offers a fee for computing capacity rental (e.g., Golem).

Change in the correlation of forces. The ownership test can lead to large investors being able to concentrate on most cryptocurrencies, which really destroys the advantage of decentralization.

So far, the feasibility of moving to PoS raises more questions than answers. Analysts agree that the transition to a new algorithm like Ethereum will positively affect, but no one can predict the exact consequences. Cryptocurrency is a new instrument, only to gain experience to fill the potholes.

Categories
Cryptocurrencies

Everything You Need to Know About Litecoin

In this article, we will try to develop the essence of the project and the main differences with Bitcoin. Where to buy, save, and how to mine Litecoin, and prospects for cryptocurrency quotes.

The Litecoin cryptocurrency is called silver, compared to Bitcoin, which is rightfully gold. Initially, the currency was created as a reserve variant of BTC, which did not have analogues for a long time. Subsequently, the payment system became a stand-alone project, which created Bitcoin a real competition. However, maintaining the “silver” Litecoin could not, giving way to BCH, Ripple, and decentralized networks EТН and EOS. Although the startup is gradually losing positions, it remains an attractive option for diversification of the investment portfolio. What is Litecoin, what are its characteristics, how to mine the cryptocurrency, where to buy it, and what are the projections of its course.

Litecoin To Replace BTC?

In 2018, relative stability began in the cryptocurrency market and some clear trends were emerging. The success of ICOs is still present and continues to have some growth, but it has begun to follow a pattern: developers are moving further and further away from non-traditional startup ideas, creating analogues (fork, clones) from the most popular cryptocurrencies. Firstly, we are talking about payment systems and decentralised networks such as BTC and ETH. It is logical that when there is a market correction the vast majority will cease to exist, giving way to the oldest, but not less popular cryptocurrencies. And although these older cryptocurrencies have been repeatedly criticized, they remain solid in the top capitalization rating of CoinMarketCap and are unlikely to be eliminated.

One of these coins is the cryptocurrency Litecoin, which is among the most flexible, progressive, and promising. This cryptocurrency is traded on almost every stock exchange in the world, except for “pocket” exchanges (“adapted” for a particular project). Your code is constantly improving, and it is possible that someday this payment system will be able to become equal with BTCs in terms of capitalization. What is Litecoin, what are its differences with Bitcoin, where to buy and save, how to mine and what are the prospects of cryptocurrency, read it in the article.

Charlie Lee was the founder of this project, and I was the one to date is one of the main developers. Initially, cryptocurrency was conceived as an analogue to Bitcoin, a kind of reserve currency. In 2011, its code was developed, copying almost literally the BTC code, only with more bandwidth, and in 2013 the project gained worldwide recognition, occupying second place in terms of capitalization. Subsequently, some changes were made to Litecoin with respect to the mining algorithm, transaction speed, and the number of coins. The order of blockchain construction on both currencies is the same, the differences are only in the function of finding a hash. Both currencies have a Proof-of-Work consensus algorithm.

Differences Between Litecoin and Bitcoin

The number of Litecoin coins is 84 million, of which more than 56 million have been extracted (the BTC issue is limited to 21 million coins, of which 17 million have already been extracted).

Hash search algorithm: Litecoin is Scrypt, Bitcoin is SHA-256.

The speed of computation generation is 4 times higher. The generation of 6 blocks takes place in 15 minutes.

There are many possibilities that in the future an adaptation of Atomic Swap technology, this technology will allow for paying for goods and services with Litecoin and Bitcoin. For example, if the seller accepts only BTC, it will be possible to pay for the goods with LTC (automatic conversion) without commissions. The technology, at present, has not been implemented, but in the future, it may become a significant competitive advantage compared to BTC.

There is protection against “double costs”. The peer-to-peer network excludes third-party intervention. Litecoin and Bitcoin are very similar. LTC developers had one goal: to increase the speed of transactions. And in part, they succeeded, but they failed to break the glory of the BTC. There are two reasons for this:

  1. Investors are used to Bitcoin and have legislative support in some countries. And while the idea of Litecoin looks promising, investors preferred the already proven asset.
  2. Bitcoin doesn’t have a founder, the development team is working on it, and the network itself is completely decentralized. Litecoin was created by Charlie Lee, who had substantial participation until the end of 2017. This dependence partly deterred investors who feared an artificial influence on quotations.

The official startup website is somewhat confusing. It is a single page, where the main information is only data on purses, shoes, and bags. There is neither a White Paper, nor a clear description of the essence of the project and its advantages, nor information about the developers. Why such a serious startup was left without any information support is a mystery. And that’s one of the reasons why Litecoin is inferior to its competitors. Some of the information can be found on the litecoin-foundation.org site, but it is uncomfortable.

Where to Buy and Save Litecoin

It could be thought that the popularity of cryptocurrency should ensure a uniform distribution of turnover, which would mean reducing the risks and equal interest of investors worldwide. However, the largest volume of sales falls to OKEx (okex.com), approximately 27-30%. You have the possibility to purchase a chip here, but only for BTC or USDT, unfortunately, ЕТН or fiat are not provided. Although this exchange is one of the largest, it is surprising why in Huobi or Bitfinex the volume is much smaller. Here it is appropriate to recall the accusations against Charlie Lee, whose essence was the artificial manipulation of LTC’s price when he was one of the developers in the Coinbase exchange.

Litecoin is present in more than 350 exchanges of cryptocurrencies its instruments, but currency trading takes place in just a few tens of them, literally. The second place after OKEx is in the Binance exchange (binance.com) with a turnover of 10-12%, but here the currency is also traded only by USDT or BTC. Between 5% and 9% of turnover corresponds to GDAX (gdax.com), Binance, Huobi (huobi.pro/ru-ru/), Bitfinex (bitfinex.com), Bit-Z (bit-z.com). Few exchanges can have the possibility of purchase cryptocurrencies for a South Korean won, EUR, or ETH.

In terms of the proportion of turnover for each specific exchange, Litecoin is lower than its main competitors: BTC, ETH, XRP, EOS, ВСН. In front of Binance is LTC also TRON and Loom Network, in front of Huobi is Cortex, in front of Bit-Z is TRON, in front of OKEx is True Chain. Due to frequent cryptocurrency exchange attacks, it is not desirable to keep coins in your accounts. An alternative could be the purses, whose list is provided on the site. These include online, cold wallets, and coin purse devices for different types of carriers. To avoid problems and loss of cryptocurrencies, it is recommended to use only these.

Another alternative for intraday trading is Forex. Advantages of this option:

  • The ability to open not only a long position but also a short position. The implementation of any strategy that cannot be implemented in exchanges due to technical details, the possibility of using trading advisors.
  • Account security (protection against piracy and unauthorized withdrawal of money). The ability to recover a password if you have lost it (the wallet password is not restored).
  • Instantaneous transaction speed.

For those who were interested in this possibility, LiteForex prepared a nice surprise: recently, cryptocurrency pairs have been added to the list of instruments, allowing you to win at rates not only relative to the US dollar, but also among themselves. Learn more about the terms and conditions here.

Litecoin Mining

Litecoin is often referred to as “silver after gold,” meaning it is the second most significant cryptocurrency after Bitcoin. It is true that in times past it was in the TOP 3, even the cryptocurrency came out of the TOP 5, occupying a sixth-place rather unstable. By the level of capitalization only a little Cardan is missing to lower Litecoin another line down. And there, she will be reached by Stellar, who is rapidly gaining momentum. We will try to explain this by the following factors:

The emergence of new payment systems, in part “drag on itself”. First, there are numerous Bitcoin forks and a new address in cryptocurrencies: blockchain symbiosis (e.g., Bitcoin and ZClassic). If Bitcoin is backed by great trust and recognition from countries, then other payment systems to reach the CIMA is more difficult.

Competence of decentralized networks. Any startup has the obligation to be a useful project if we look at it from a practical point of view. And if most payment systems are only in a model state, then, based on decentralized networks, application development is already underway. Because Litecoin lost positions to Ethereum and EOS.

The prospects for the Litecoin cryptocurrency are more than optimistic, but the chances of even reaching the TOP 5 (not to mention the TOP 3) are slim. The payment system is improved and developed, actively promoted in forums and media. But competitors don’t stay in place either, and the closest of them, Bitcoin Cash, is out of reach.

One of the decisive factors determining the interest of investors in cryptocurrency is the news fund. In early February 20, 2018, developers announced the release of LitePay, a technology that would allow retailers to make and record payments instantly anywhere in the world. According to the information on the project’s website, this technology would protect against volatility through the instantaneous exchange of LTCs by traditional currency units, thus competing with exchanges.

With a rate close to 3% for payment cards, LitePay technology would reduce costs by up to 1% (which is even lower than BTC’s). The planned launch of the technology did not take place and so far its future is unknown. After the failed release of LitePay (allegedly due to hostile actions by card issuers in relation to cryptocurrency companies), the rate dropped and so far has not returned to the same level.

In the near future, lots of news determine Litecoin’s exchange rate. By the way, startup founder Charlie Lee in December 2017 completely got rid of his share, selling coins at the time of the spike in quotes. After the LTC price on 19 December reached a record high of USD 359, it sold its entire share, motivating that it will now not be accused of influencing the quotations for its own benefit. For several weeks afterward, the coin was halved.

And yet, Litecoin’s exchange rate forecast is positive. Little by little, startups support different platforms, and now the success of the project will depend exclusively on the developers. With cryptocurrency, you can pay for goods in some online stores, but so far their number is limited.

Conclusion

The Litecoin cryptocurrency is a good second-tier currency, lower due to development errors only in the BTC and BCH payment systems (Ripple and decentralised networks are not taken into account, as they have a different essence). It is not strictly necessary that we talk about the stable growth of the exchange rate, but on the other hand, this is a possibility for Forex to gain in the fluctuations of the quotes in both directions. To project the exchange rate, we follow the news and do not forget the diversification of the portfolio.

Categories
Crypto Daily Topic

What is coin burning all about?

The crypto adoption juggernaut rolls full steam ahead. You need only look at the increasing number of outlets accepting crypto payments to prove this. Even governments that once approached them with cynicism have caught on to the act. The big migration to CBDCs is now a matter of time.

Whereas the growing acceptance is positive, it comes with its misgivings. Although the proliferation of coins and tokens expands choices, it raises concern about sustaining cryptos’ value within the cryptosphere.

Cryptos are good at mitigating inflation, but they’re not immune to it. Crypto projects have had to devise the means of controlling this. As such, coin burns have been the tool of choice. But what are coin burns? How does one execute them? Importantly what is their value? Stick around as we go deep into the subject. 

What Is Coin Burning?

Coin burning is the process of removing a set volume of cryptos from circulation.  In doing so, developers and miners reduce their total supply. 

Eater Addresses/ Blackholes

Coin burning entails sending cryptos to public addresses with unobtainable private keys. Also known as eater addresses or blackholes, these addresses render the coins useless. Nevertheless, they allow for their public viewing and peer verification on the blockchain.

Coin Burning Varies With The Project

Depending on the frequency of the coin burning process, we can classify it into two broad categories:

  • One time burns – are one-off coin burns popularly embraced by  ICO projects to clean the market of unsold coins.
  • Periodic Burns- these are undertaken repeatedly at either fixed or varying intervals; Binance holds quarterly coin burns while Tether does so per withdrawal or collection

What are The Approaches to Coin Burning?

There are two major approaches to coin burning. These are:

  • Mechanisms relating to the token’s blockchain protocol
  • Mechanisms driven by economic sense

Protocol Related Mechanisms

In this category, we have coin burning mechanisms embedded in the project’s core protocol layer. We may divide these into two main groups.

  • Proof of Burn Mechanisms
  • Anti Spam mechanisms
i) Proof of Burn Mechanisms

These use the  Proof of Burn (PoB) consensus that requires miners to prove that they’ve burnt some of their coins. PoB has several variants:

  • Burning Native Coins for Mining Rights- miners must burn some of their coins to acquire block mining rights;  an example is Slimcoin.
  • Burning Bitcoins to Create New Native Coins- projects like  Counterparty (XCP) use PoB that burns BTC in exchange for a similar value of coins in the native currency, XCP
  • Burn-And-Mint Equilibrium: an advanced version of PoB used by  Factom (FCT) that burns native tokens in return for Entry Credits for storing data on its blockchain
ii) Anti Spamming Mechanisms

Introducing a cost to transactions prevents spamming and DDOS attacks that compromise the network. Projects like  Ripple (XRP) and Request Network (REQ) integrate a burning mechanism for every transaction on their network. Though indirectly, their Users ‘incur’ the cost of trading on them. The ecosystem gains in value resulting from a reduced supply of native coins. 

Mechanisms Driven By Economic Sense

These are mechanisms informed by a project’s economic considerations. They may be one-offs or periodic.

i) Mopping up of The Unsold ICO Tokens

At times ICOs fail to meet their hardcaps. Consequently, remain with unsold tokens. The projects may decide to destroy these to maintain their credibility.

ii) Paying out Dividends to the Coin Holders

Profitable projects may use their profits in buying back their native coins from the public. They then destroy the repurchased coins, thus paying them some dividend, which increases the value to coin holders.

What are the Steps Followed in a Coin Burning Event?

The coin burning event follows a sequence of four steps. Here’s its breakdown:

  • Institution of the burn function- the coin holder starts by calling the burn function, indicating the number of coins they intend to burn.
  • Verification of the coins  for burning- The contract proceeds to determine the ownership and validity of the selected coins, considers positive numbers only
  • Abortion of the burn function- The process aborts if the instigator has fewer coins or uses a negative value or zero.
  • Execution of the Burn function- the smart contract withdraws  the sums from the instigator’s wallet, permanently cutting them from circulation 

Why do Crypto Project’s Institute Coin Burns?

You’d think that coin burning is beneficial. Wouldn’t you? After all, you have Key players like Binance and Tether performing them. What then are its benefits

i) Appreciation in the Crypto’s Value

Cryptos are decentralized. In essence, market forces determine their prices. Coin burning depletes the sum of coins serving the market. As a result, their value rises to attain equilibrium. The attainment of market equilibrium is essential in stabilizing the price(value) of the crypto.

ii) Ensuring Network Stability

As stated elsewhere in this article, coin burning is key to eliminating Spam and DDOS. Accordingly, the network becomes stable.

iii) To Mop Up The Unsold Tokens From an ICO or Token sale

Crypto projects initiate ICOs to get public buy-in. Towards these, they set aside a certain percentage of the coins hoping that the investors will acquire the whole lot. However, things don’t always go that way, resulting in a remnant of those coins.

iv) Winning Investors’ Trust

The token insurer burns the coins remaining unsold from the ICO. They do this to ensure a level playing field for all investors. Were the issuer to keep the unsold coins, they’d have a massive advantage over other investors. Coin burning helps win the trust of other investors and incentivizes their stay within the project. 

A case in point is the Neblio cryptocurrency. Its team burned 122 million tokens that remained from their ICO. It sent them to an unspendable NEBL address.

v) Correcting Errors in Coin Issuance

At times projects realize errors in the creation of their tokens or coins. As such, they turn to coin burns to remedy this situation. A case in mind is Tether. The company realized that it had erroneously produced $ 5 Billion USDT. It resorted to a coin burn to maintain its 1:1 peg to the USD. Allowing the extra coins to stand would have destabilized the ratio.

vi) Guaranteeing The Developers’ Commitment to the Project

Coin burning signals the Developers’ commitment to the project. Look at it this way: the coin burn reduces their supply. At the same time, it increases the value of the coin or token in question. Burning is indicative of the developers’ desire to see the project grow in value and network function.

vii) Reduction of The Competition Between Miners

The Proof of Burn (PoW)  consensus is a popular offshoot of coin burning. Through it, a user destroys their coins to gain mining rights.

Managing Mining

PoB matches the number of blocks a miner can verify to the volume of coins they burn. This way, one’s mining ability increases with increased burning. Thus it reduces the number of miners and competition for resources between them.

Leveling the Playing Field Through Decay Rates

Since PoB favors the large-scale miner, they employ decay rates. This feature reduces one’s mining capacity with every verification. For them to remain profitable, it compels them to invest in more tokens to burn.

Final Thoughts

Although touted as the fix against inflation, cryptos aren’t immune to the same. Consequently, projects have had to find ways of guarding against it. Their default method has been the institution of coin burning: the deliberate removal of a given amount of coins from the market. It may be a one-off event or a periodic undertaking. Additionally, it could be a procedure hardwired into the project’s core protocol layer or driven by economic consideration. Whatever the cause, coin burning is an essential undertaking that, among other positives, infuses stability and confidence in any crypto project.

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 15 – Bitcoin Retraces After Hitting $40k; Ethereum Contests $1.2k

The crypto sector was mostly stable in the past 24 hours, as most cryptocurrencies were trying to find their top or retraced slightly. Bitcoin is currently trading for $37,766, representing a decrease of 0.42% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 5.98% on the day, while LTC gained 0.33% of its value.

Daily Crypto Sector Heat Map

FastSwap gained 244.13% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by HedgeTrade’s 225.26% and Capital.Finance’s 145.48% gain. On the other hand, Zugacoin lost 87.51%, making it the most prominent daily loser. It is followed by Roti Bank Coin’s loss of 77.52% and BitiPro Exchange Token’s loss of 74.35%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down slightly since our last report, with its value currently being 68.4%. This value represents a 0.6% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has made negligible gains since we last reported, with its current value being $1.037 trillion. This represents a $5 billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has ended its uptrend by hitting a high of $40,112 yesterday, prompting a slight pullback. The pullback was, just like the price increase, happening on low volume and had the same intensity as well. The only differentiating factor was its direction. The move to the downside ended with BTC’s price hitting the 50-hour moving average and pushing up.

Bitcoin has a couple of strong resistance lines to the upside, one being the immediate 21-hour EMA, and then the $40,000 and ultimately $42,000 levels. On the other hand, its support is guarded by the 50-hour EMA and the $36,640 level.

BTC/USD 1-hour chart

Bitcoin’s technicals on the daily and monthly time-frame are overall bullish but have oscillators pointing to the sell-side. On the other hand, its 4-hour and weekly overviews are completely bullish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is between its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (50.19)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $40,000                             1: $36,640

2: $42,000                             2: $33,200

3: $43,600                             3: $30,640

Ethereum

Ethereum’s push to the upside has, just like with Bitcoin, seemingly ended. However, its pullback hasn’t started at all, as its price kept fluctuating between the recently $1,183.85 support level and the recent high. Trading in such a narrow range is not sustainable, and ETH will break either to the upside or downside very soon.

ETH traders can finally catch a nice trade as the cryptocurrency has (at least a bit) moved in a different manner than Bitcoin. Ether’s upside is guarded by the heavy resistance zone slightly below $1,300 as well as the $1,350 level. Its downside has smaller support levels, some of them being $1,211, $1,183.85, as well as the 21-hour and 50-hour EMAs.

ETH/USD 1-hour Chart

Ethereum’s technicals on the 4-hour and daily time-frames are overall bullish but have oscillators pointing to the sell-side. On the other hand, its weekly and monthly overviews are completely bullish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above its 50-period and at its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is neutral (61.37)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $1,255                               1: $1,211

2: $1,350                               2: $1,183.85

3: $1,419                               3: $1,060.5

Litecoin

Litecoin continued trading within its range, bound by $142.1 to the downside and $161.5 to the upside. Its price is now also between the 21-hour and the 50-hour EMAs, which have proven to be strong support and resistance levels, especially when paired with low trading volume.

Litecoin is currently mirroring the direction of Bitcoin’s moves, but with much less intensity. This makes it a very unattractive trading pair at the moment.

LTC/USD 1-hour Chart

Litecoin’s technicals on all time-frames are completely bullish and without any signs of neutrality.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above its 50-period EMA and at its 21-period EMA
  • Price at its middle Bollinger band
  • RSI is neutral (53.10)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Cryptocurrencies

Bitcoin: 10 Things I Wish I’d Known Earlier

Bitcoin is a crazy beast! It’s had some huge ups and downs over the past few years for those that are trading it as well as those that are simply holding it. Much like many things in life, we know a lot more now than we did a few years back, and there are things that we know now that we absolutely wished that we knew back then. That is what we are going to be looking at today, 10 things that we wish we had known about Bitcoin all those years ago.

It Will Hit $30,000+

Many people said it, yet a lot of the people that stated that Bitcoin would hit those prices did not put their money where their mouth is. Unfortunately, I was one of those people. I told others that it would go that high, others bought in because of what I said, yet I did not. I simply said it but did not do it. That was a huge mistake, especially as I had some bitcoin from back when they were worth about $10, I also had some when they were worth $6,000. Now that they are worth over $30,000, I have none. So I wish I had taken my own advice and bought in. A really tough lesson, but a good one.

There Are No Bull or Bear Markets (Technically)

This may sound strange, but if you look at bitcoin as a whole, there is only a bullish market with pretty much no bears. The problem is that most people look at the short term, what is happening now, and I have done the same thing. I have seen drops and I have sold, rather than looking at the big picture. When we look at long term trading, then the markets have only moved up, meaning that if we buy at any point in bitcoins history, we would now be making money. Even if we bought at the previous all-time highs, which people said was a stupid thing to do, at the time yes, but overall no. the markets are bullish, and probably will be for years to come.

Don’t Believe Everything You Hear

People say a lot of things. Some may turn out to be true, while others can be completely made up. The crypto and Bitcoin world is full of people saying things. If you believe it all you will be buying and selling every minute. Instead, you need to find sources that give good and accurate information. Easier said than done, but it is possible, do not listen to social media, which is simply full of people shouting about anything they want without any real evidence behind it.

Idiots Make Money Too

We often see things about people selling their homes to buy bitcoin. We all called them an idiot, but now, they are pretty darn rich…but they are still idiots. People risk all sorts of things on hopes and dreams, some work out others don’t. Just because someone made a lot of money with bitcoin does not mean that they aren’t idiots.

Volatility Is Great

A lot of people are scared of volatility and there is a lot of it when it comes to Bitcoin, but it is also the volatility that makes it so profitable. I was a little scared of the volatility, the fact that I could very easily lose my money, but instead I should have been looking at the opportunities that it was presenting me. I should have used that volatility to help increase my accounts and to look at it as a good thing rather than the bad that I did.

Learn From the Mistakes

Mistakes are there as a brilliant learning tool, one that should always be used. Unfortunately, it is not something that I used. Instead, I committed the same mistake multiple times, to the horror of my account balance. Of course, eventually, I did learn from them and no longer make them, but I should have known that I needed to learn straight away. If you make a mistake, be sure that you learn from it and don’t commit the same mistakes over and over.

You Can’t Trade It Like Forex

While it looks very similar and uses the same brokers and charts, the way that you trade bitcoin varies a lot when you compare it to forex trading. Again, this is something that I did not realise straight away. When I began trading it, I traded it with the same strategies and this led to a lot of losses. Bitcoin simply does not follow the same fundamentals or systems that forex trading does, so you need to adapt, and need to create your own strategy that better suits the way that bitcoin moves.

People Control the Markets

Something that I learned a little down the line was that the Bitcoin markets are not entirely their own thing. They can be massively influenced by a number of large traders, they can freeze the price or help to push it up, so when you see huge movements from different wallets. This can give you an idea of what may be about to happen. I never took any notice back then of huge sell-offs or huge buys, but if I had I would have made a lot more and prevented some of the losses that I had.

It’s Easy to Access Bitcoin

A few years back it was not quite as easy to get access to bitcoin, to buy it, or to trade it. However, it wasn’t anywhere near as hard to get than I thought it was. There were many more brokers offering it. I was simply sticking to the major brokers, ones that offered it with pretty high spreads. Instead, I should have been looking for more specialist brokers, the ones that are focusing on cryptocurrencies. There were quite a few of them around and they offered much better trading conditions.

There Is A Lot of Dead Hype

Hype is all around when it comes to cryptocurrencies, especially Bitcoin. Everywhere you look you will see people hyping up the price or what will happen. The problem is that a lot of this hype has come from nothing. There is nothing fueling it. The next big bull run is tomorrow, next week, the month after, there will be hype and rumours about it pretty much all the time. You need to be careful what you listen to and which bits of hype you listen to. Certainly don’t believe everything that you hear.

Those are 10 things that I wish I knew earlier about Bitcoin, some when I look back are pretty obvious and I should have known, but we often get caught up in the moment and I certainly did. There are probably other things that I should have known or done, but that is the past, it is now time to look to the future and what can be achieved from here, using what I have learned.

 

Categories
Crypto Videos

Bitcoin Price Dump Shakes Investors!

Bitcoin price dump! was the writing on the wall?

Thank you for joining this Forex Academy educational video.

In this session, we will be looking at the recent bitcoin US dollar price dump and what might have been the possible contributing factors.

In this daily chart of bitcoin to the US dollar, we can see a steady bull run, as highlighted in section A, with a critical area of support on the $10 k line, which lends itself nicely for a price action move up to the resistance line, which was breached in section B, which coincides with the all-time high of around $19.5K from 2017, and where eventually price reaches the key $20K figure, and from there on over the Christmas period and into the new year, we see exponential growth, where bitcoin skyrockets to $42k.
With market analysts and investors talking up the value of bitcoin from anywhere in the region of $30 to 40K and even 140k, it’s hardly surprising that euphoria crept in and where everybody was buying, especially in the CFDs market.
This was a gold rush in all but name. And one has to ask oneself a question; when assets are being talked up by investors, or even talked down, what are the real motives behind this? Are they simply looking for a market reaction in favour of their own investment strategy, for example? This is a question for another day.
Getting back to the issue, was the writing on the wall all for a price collapse? Yes, it was, and for a number of reasons:
Firstly, when a market is moving steadily as in a trend, it is less likely to see extreme volatility unless there are fundamental reasons behind it. And because bitcoin is essentially a speculative instrument, fundamentals can be set aside in favour of a trending market.

The problem with this, as highlighted here, is that this is unchartered territory. We are looking at a $20,000 price increase in just a few days, which is almost unheard of. Technical analysis becomes difficult to gauge, and professional traders don’t know where to get in on the trend or place stops. Many are forced into buying for fear of missing out, and this is extremely dangerous.

Certainly, the writing was on the wall when on the 4th of January, we see a $6K price range move on this bearish daily candlestick. However, volatility continued with the bulls regaining control taking bitcoin to a record high of around $42,000.
Professional traders will know from history that a correction was on the cards, and with the UK FCA warning retail traders about the potential of losing all of their money trading bitcoin assets, it very likely contributed to price action hitting a brick wall all and to the collapsed….

Of around $12K in 24 hours. Many investors and retail traders were still buying well above $40,000, while the price was tanking, causing billions of dollars to be wiped off of the price, and where billions were lost in margin calls, with accounts being liquidated, because of the massive move lower.
Bitcoin should have a health warning on it, buyer beware, and with more and more weekend traders getting involved in this market, which operates 7 days a week, and where these part-time traders in there are spare rooms have a punt, with many losing their cash deposits, it is not a surprise that the FCA have banned retail traders from trading cryptocurrencies in the UK from the 6th of January this year, and where the EU are now calling for tighter regulation in this space.
Weekend bitcoin traders will be licking their wounds. But let’s not forget that a lot of people are still in the money and sitting back waiting to see if the price steadies itself and then continues to move higher, or if it will continue to slide.
Advice on this one would be too to look at trends on lower time frames…..

Such as this one-hour chart, while looking for support and resistance lines, and pick out trends that are set by big money investors, such as institutional traders, where they typically operate Monday to Friday. Be ultra-cautious when going long during aggressive rallies and around huge candlesticks, especially the bearish ones, as highlighted, which represents an overall move of $4000 dollars. They spell out danger. And set tight stop losses.

Categories
Crypto Daily Topic Crypto Videos

Pension Funds Are Investing In Bitcoin!


“Pension Funds are Investing in Bitcoin” – Grayscale

 

Grayscale’s newly-appointed CEO, Michael Sonnenshein, told Bloomberg that pension funds and endowments are actively investing in the Grayscale family of funds. Sonnenshein’s interview with Bloomberg came on Jan 7.

He further explained the statement: “We have started to see participation not just from the hedge funds, which we’ve seen participation from for a long time now, but now it’s recently coming from other institutions, pensions, and endowments. The sizes of allocations that they are making are also growing rapidly.”

Grayscale has been at the forefront of the recent Bitcoin buying spree, and its holdings now account for roughly 3% of the circulating Bitcoin. The fund manager continues to increase its position by buying even more cryptocurrencies as more institutional investors seek exposure to Bitcoin and other digital assets. 

Grayscale’s total assets under management, or AUM for short, have eclipsed $27 billion across ten different investment products. The Grayscale Bitcoin Trust remains its most popular product by far, with over $23 billion in AUM. Its Ethereum trust is the second most popular product, and it is currently valued at around $3.7 billion, while its Digital Large Cap Fund holds somewhere in the ballpark of $340 million.

Pension funds are starting to follow a hoard of institutional buyers that started to enter the Bitcoin and crypto market in 2020. A survey conducted by Fidelity Investments in late 2020 found that 36% of financial institutions across both the United States and Europe said they own cryptocurrencies or derivatives. Over 25% of the respondents reported holding Bitcoin, while 11% said they own Ether.

According to Grayscale Investments, the institutional interest for cryptocurrency and Bitcoin is intensifying at an alarming rate, with pension funds and endowments being the most recent entrants into the space.

The company’s aggressive Bitcoin buying is likely contributing to the digital currency’s rapid price increase. With more Bitcoin taken out of circulation and miners not being able to produce as much Bitcoin as it is requested, the already scarce asset is becoming even more difficult to get at current prices. Sonnenshein stated:

“This is a verifiable scarce asset, so when there are mechanisms that are removing Bitcoin from circulation, that’s inherently making it an even more scarce asset.”

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 14 – Bitcoin Records Double-Digit Gains as it Passes $38K; Crypto Market in the Green

The crypto sector ended up almost completely in the green as Bitcoin recorded double-digit gains and pulled the rest of the market up. Bitcoin is currently trading for $38,222, representing an increase of 11.05% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 9.00% on the day, while LTC gained 6.48% of its value.

Daily Crypto Sector Heat Map

Simbcoin gained 366.72% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Penta’s 229.88% and DEX’s 187.13% gain. On the other hand, Daiquilibrium lost 88.91%, making it the most prominent daily loser. It is followed by Dynamic Supply Tracker’s loss of 80.15% and Dynamic Supply’s loss of 63.83%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved up slightly since our last report, with its value currently being 69%. This value represents a 0.4% difference to the upside when compared to the previously reported value.

Daily Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has made significant gains since we last reported, with its current value being $1.032 trillion. This represents an $88.3 billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin had started changing its price direction on Jan 13, when it started to slowly push towards the upside. The largest cryptocurrency by market cap managed to pass the $36,640 level and reach as high as $38,789 before pulling back slightly. This steady price increase was followed by average (or even slightly descending) volume.

The pullback BTC went into after hitting the recent high was quickly stopped by the 21-hour and 50-hour EMAs, changing the overall stance from an expected downturn to uncertainty.

BTC/USD 1-hour chart

Bitcoin’s technicals on the 4-hour, daily and monthly time-frame are overall bullish, with oscillators pointing to the sell-side. On the other hand, its weekly overview is completely bullish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is above both its 50-period EMA and its 21-period EMA
  • Price is between its middle and top Bollinger band
  • RSI is neutral (62.38)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $40,000                             1: $36,640

2: $42,000                             2: $33,200

3: $43,600                             3: $30,640

Ethereum

Ethereum’s period of heavy correlation with Bitcoin has continued as its price slowly gained momentum towards the upside. Ether managed to push its price to the $1,183.85 level but couldn’t quite break it. This caused a minor pullback, which ended very quickly.

Ethereum’s 21-hour and 50-hour EMAs play a significant role in determining its price direction and should be considered by the traders at all times. On top of that, any ETH trader should pay attention to BTC’s movements, as those ultimately determine the price direction of most cryptocurrencies.

ETH/USD 1-hour Chart

Ethereum’s technicals on the daily and weekly time-frame are currently completely bullish, while its 4-hour and monthly overviews show some signs of neutrality.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is neutral (64.19)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $1,183.85                          1: $1,060.5

2: $1,211                               2: $1,047.5

3: $1,226.5                            3: $992

Litecoin

While Litecoin did follow Bitcoin’s price direction, it did so with much less conviction and intensity. Its price managed to pass the $142.1 level to the upside and establish its price above it but failed to move into the upper half of the trading range bound by $142.1 to the downside and $161.5 to the upside.

Litecoin currently has a very nicely-built support zone, while its upside is quite open. If Bitcoin’s price remains the same, traders can expect LTC to try to push towards or even contest the $161.5 level.

LTC/USD 1-hour Chart

Litecoin’s technicals on the shorter time-frames (4-hour, daily, and weekly) show overall tilt to the buy-side with hints of neutrality. Its monthly time-frame, however, is completely bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above its 50-period EMA and its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (57.08)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto Videos

Morgan Stanley Bought 10% Stake in Michael Saylor’s MicroStrategy!


Morgan Stanley Bought 10% Stake in Michael Saylor’s MicroStrategy

MicroStrategy has been in the crypto news for months now – this time regarding a major player joining in on their venture to become a major Bitcoin HODLer. Per a filing with the US Securities and Exchange Commission released on Jan 8, an investment bank mogul Morgan Stanley had acquired 792,627 shares in the business intelligence firm MicroStrategy. This massive investment represents a 10.9% stake in the company that has recently made astonishing investments in Bitcoin. 

While the purchase itself mostly likely happened on Dec 31, the news was released to the public nine days after that. The Morgan Stanley investment into MicroStrategy came after Michael Saylor’s company performing incredibly and its shares moving from $289 on Dec 8 to a whopping $545 as of Jan 8.

In August 2020, MicroStrategy took some very bold steps by investing crypto, making Bitcoin its primary reserve asset. At the time of investing, CEO Michael Saylor talked about why his company decided to invest so much into Bitcoin:

“This is not a speculation, nor just a hedge. It is a deliberate strategy to adopt the Bitcoin Standard.”

Just a couple of weeks ago, MicroStrategy announced a whopping $400 million securities offering, stating that the purpose of raising funds is to buy even more Bitcoin. As of Dec 21, 2020, the firm had managed to stockpile 70,470 Bitcoin. 

At current prices, MicroStrategy’s Bitcoin holdings came up to a worth of over $2.8 billion. 


Institutional investors such as Morgan Stanley have warmed up to cryptocurrencies considerably over the past year. Many analysts have attributed Bitcoin’s recent bull market to this institutional uptick, compared to the FOMO coming almost strictly from the retail market that was so critical to Bitcoin’s 2017 highs, which subsequently fell apart. 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 13 – Polkadot Outperforms the Market as it Heads Towards $10; Crypto Sector in the Red

The crypto sector ended up mostly trading in the red as cryptocurrencies such as Ether, Litcoin, and Bitcoin Cash dropped over 5% on the day. Polkadot was one of the few cryptocurrencies that managed to score double-digit gains and outperform the market by a large margin. However, this is purely due to fundamental reasons (immense support coming from the Binance exchange) rather than technicals.

Bitcoin is currently trading for $34,223, representing a decrease of 3.03% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 4.09% on the day, while LTC lost 3.07% of its value.

Daily Crypto Sector Heat Map

Metacoin gained 103.61% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by OVR’s 98.72% and Latamcash’s 92.88% gain. On the other hand, Amun Bitcoin 3x Daily Short lost 75.44%, making it the most prominent daily loser. It is followed by Zugacoin’s loss of 73.82% and KIMCHI.finance’s loss of 66.82%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down very slightly since our last report, with its value currently being 68.6%. This value represents a 0.1% difference to the downside than the value it had when we last reported.

Daily Crypto Market Cap Chart

The cryptocurrency sector’s capitalization has decreased since we last reported, with its current value being $948.23 trillion. This represents a $17.92 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin spent the day hovering between the $33,320 support level and the $36,640 resistance level, with its price mostly being in the bottom part of the range. The price even breached the support level and went past it on several occasions, but it always returned back up. While it currently seems stable and on decreasing volume, Bitcoin might experience a stronger pullback and an attempt to retest $30,000 once again.

BTC/USD 1-hour chart

Bitcoin’s technicals on the daily and monthly time-frame bullish, but contain some neutrality alongside the bullishness. However, its weekly overview is completely bullish, while its 4-hour chart is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is between its 50-period EMA and its 21-period EMA
  • Price is near its middle Bollinger band
  • RSI is neutral (50.24)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $36,640                             1: $33,200

2: $40,000                             2: $30,640

3: $42,000                             3: $27,960

Ethereum

Ethereum has traded almost exactly like Bitcoin in the past 24 hours, both in terms of price direction and intensity. The second-largest cryptocurrency by market cap is currently in an extremely narrow and unsustainable range, bound by the Fib retracement level of $1,060 to the upside and a 2017 Fib retracement sitting at $1,047.

Ethereum’s 21-hour and 50-hour moving averages play a significant role in determining price direction and should be considered by the traders at all times.

ETH/USD 1-hour Chart

Ethereum’s technicals on the daily and monthly time-frame bullish, but contain some neutrality alongside the bullishness. However, its weekly overview is completely bullish, while its 4-hour chart is completely bearish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is between its 50-period and its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (48.60)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $1,129                               1: $1,060.5

2: $1,211                               2: $1,047.5

3: $1,226.5                             3: $992

Litecoin

Litecoin has been pretty stable in the past 24 hours, with its price trading within a range bound by $128.4 to the downside and $142.1 to the upside. These support/resistance levels, alongside the 21-hour and 50-hour EMAs, will determine Litecoin’s future price intensity, while Bitcoin’s next move will most likely determine its price direction.

LTC/USD 1-hour Chart

Litecoin’s technicals on the daily and monthly time-frame are completely bullish. However, its weekly overview shows slightly less bullishness, while its 4-hour chart is almost completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is between its 50-period EMA and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral (51.37)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $114.75

3: $181.3                               3: $98

Categories
Crypto Videos

Biden’s $3T Stimulus Bill Could Make Bitcoin Explode!

 

Biden’s $3T Stimulus Could Create Another Bitcoin Skyrocket Scenario


The incoming Biden administration’s plan to print almost an infinite amount of money into the US economy and supply it with trillions of dollars could likely ignite the next leg of the Bitcoin bull market, as more investors seek refuge from the United States dollar.
Aan Arlington-based news outlet Axios reported that Joe Biden had asked Congress to provide Americans with a stimulus check of $2,000 to help offset the economic devastation caused by Covid-19. The incoming president has also proposed a tax and infrastructure package as part of his “Build Back Better” program. The package would be worth $3 trillion.

Biden also doubled down on his call for more direct relief to American citizens after Jan 8 disappointing jobs report showing a loss of over 140,000 positions in the last month of 2020.
He stated: “Economic research confirms that, with the current conditions such as the crisis today, especially with such low-interest rates, taking action immediately– even with deficit financing – is certainly going to help the economy overall.”
If 2020 is anything to go by, the new wave of stimulus could be another catalyst for Bitcoin’s rise as more money floods the market and makes prices into assets.

Even the current president Donald Trump, a Republican, has played a role in vast government outlays. Under his leadership, the US passed a historic $2 trillion stimulus package bill in March. Trump also signed a relief package worth $900 billion in December. This document would then pave the way for $600 stimulus checks coming to every American citizen.
The federal government’s inflation-increasing policies have coincided with interventionism coming from the Federal Reserve, which deployed trillions of dollars in 2020 to combat a liquidity crisis and keep overnight rates somewhat under control.

Although the aforementioned policies provided a strong backstop for risk-on assets – a category that has previously included Bitcoin – the emerging narrative surrounding Bitcoin is that it’s a hedge against inflation.
Institutions are currently buying Bitcoin with a clear purpose and are hoping to one day become the industry’s whales.


Bitcoin’s digital gold narrative has recently been one of the biggest catalysts for Bitcoin’s price increase, as well as the institutional shift towards it. This narrative helped fuel BTC’s 300% rally in the previous year, as well as it more than doubling in price in this year alone. This trend could increase in intensity in 2021 as the purchasing power of the US dollar continues to erode.
Even a giant such as JPMorgan Chase publicly acknowledged that Bitcoin is taking market share from gold.

Categories
Crypto Videos