Chainlink (LINK) taps South Korea’s biggest banks to bolster forex and DeFi

Financial market data from South Korean banks will now feature on Chainlink’s decentralized oracles services, as announced at an event in Seoul on Friday.

Hyperledger-based CenterPrime — which has access to the APIs of top Korean banks —will now share its data feeds on Chainlink. As a result, app developers can now source their information from big-wigs like Shinhan Bank and the Industrial Bank of Korea (IBK).

The integration is a first for Korea’s broader banking system. The government has previously pushed for wider fintech efforts and investments, but none involving a public blockchain.

Korea’s DeFi ecosystem to benefit

CenterPrime said they looked extensively into firms that could facilitate decentralized KRW-denominated exchange rates for use in Korean Fintech and DeFi. 

“Chainlink has extensive experience building decentralized data feeds, having already created numerous decentralized price reference networks that secure over a billion dollars in value for many leading DeFi applications,” said CenterPrime.

A Shinhan bank ATM in Seoul. The bank’s financial data will now be available on Chainlink. Image: Business Korea

With the partnership, dApps and DEXs can now provide nationally-verified forex data in their products. The process will be wholly-decentralized; opening the Korean market up globally on the blockchain.

For now, Chainlink price reference feeds will be deployed upon Ethereum. However, this can then be ported to other blockchain platforms through Chainlink (including both public and enterprise Korean chains).

Centerprime said the development could help propel DeFi adoption and development in the region:

“By opening up access to these key price feeds, we anticipate a major uptick in development within the Korean Fintech and DeFi market.”

It added the data will be shared on an upcoming “Public Cloud Local Currency Wallet” that can be combined with live Chainlink Price Reference Data (e.g. BTC/USD, ETH/USD, etc) to “create KRW exchange rates for cryptocurrencies.”

Chainlink’s in-demand oracles 

The release said Chainlink oracles allow for a “massive explosion” in blockchain-based fintech applications operating cross-border and DeFi applications building homegrown products priced in the local currency KRW.

As CryptoSlate reported previously — oracles are finding their place on betting apps, golf games, exchanges, and, just yesterday, digital identity. The firm also received a boost last month after the World Economic Forum (WEF) selected Chainlink as one of its ‘Technology Pioneers’ for 2020. 

For the uninitiated, oracles are a decentralized data solution that fetches data from “outside” the blockchain to within. This is required as blockchain cannot verify data — they only provide storage.

Chainlink’s decentralized oracle network ensures any supplied data is both accurate and resistant to manipulation; ensuring reliability and security for a network. If this lapses, there’s a possibility of putting users’ funds at risk (similar to what MakerDAO underwent in April).

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Cardano (ADA) rockets to fresh 2020 highs; Here’s what’s behind this movement

Cardano’s price just set a fresh 2020 high. Today’s sharp climb comes shortly after the Shelley mainnet transition process was launched, with ADA investors taking this as a “buy the news” opportunity.

The cryptocurrency is now pushing up against some substantial resistance, but the technical significance of this latest movement does indicate that further upside could be imminent.

One analyst pointed out that today’s upswing allowed ADA to break out of a bull pennant that was formed while looking towards its daily chart.

Other fundamental data metrics also indicate that this latest push higher may simply be the start of a much larger movement. According to Cardano’s “social volume,” the uptrend is not yet showing signs of faltering.

Cardano sets fresh 2020 high following Shelley hard fork initiation

Yesterday, Cardano parent company IOHK initiated the Shelley hard fork process, which will take place over the next five days.

The team does have until Monday to abort the process if any unexpected problems are encountered.

Investors were pleased to see that the final step towards transitioning from Byron to Shelley was completed, and the cryptocurrency’s price has been surging in the time since.

At the time of writing, Cardano is trading up 12 percent at its current price of $0.137. This marks a notable climb from its recent low $0.115 that was set earlier this week.

While speaking about the technical factors driving this movement, one analyst noted that it appears to have been rooted in a break above the upper boundary of a bull pennant. This could also open the gates for it to see further upside.

“ADA (BTC) Daily chart – Accelerating off this bull pennant break.”

Cardano ADA
Image Courtesy of Cheds. Chart via TradingView.

Here’s why ADA could continue pushing higher

In addition to confirming this bullish technical pattern, data regarding the cryptocurrency’s social activity also suggests that it is far from peaking.

According to the “social volume” indicator from the analytics platform Santiment, Cardano’s latest price rise has not yet reached “frenzy” territory, as social mentions of ADA remain tempered.

cardano price
Data Source: Santiment

This indicator tends to show when an asset is forming a short-term top based on a sharp anomalous rise in social volume.

As seen in the chart, this latest price rally has yet to generate this type of surge in social volume, signaling that Cardano may be able to push higher in the near-term.

One factor that could halt this price rise in its tracks is the potential cancellation of the Shelley hard fork process between now and Monday, although there are no indications that this will occur.

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Top investor expects the billions locked in Bitcoin forks to flow to BTC or DeFi

Love them or hate them, some of Bitcoin’s biggest forks still have a market capitalization in the hundreds of millions or even billions. CryptoSlate data depicts this trend well:

Although the proponents of these projects would argue they have merit, a top investor in the space expects the value to flow out of these chains, then into two markets: Bitcoin and decentralized finance.

Bitcoin and DeFi could benefit from the death of forks

According to Jason Choi, an investor at crypto venture and hedge fund The Spartan Group, he currently sees no reason to be invested in most Bitcoin forks over a long-term period:

I can’t find a defensible thesis for most $BTC forks (LTC, BCH, BSV) over the long term.” 

To him, the value in these chains, which he dubbed “glorified digital pet rocks” will slowly be siphoned over time to DeFi and Bitcoin. Choi attributed this to the “emergence of fee-accruing tokens in DeFi,” which promote non-productive assets to be converted into these tokens to acquire yield.

Choi’s comment comes as Ethereum proponents have made similar assertions.

Eric Conner, part of the team at Gnosis and a prominent Ethereum podcaster/commentator, published the following tweet on Jul. 19.

He did not mention what he meant by “ghost L1 chains,” but noted that their cumulative market capitalization adds up to $30 billion, making it almost an order of magnitude larger than all DeFi tokens.

Spencer Noon, the head of DTC Capital, has echoed this comment.

He said that Ethereum and its DeFi protocols/coins will suck in value from all corners of the cryptocurrency industry as yields become attractive:

“Cryptoassets from blockchains that lack expressiveness (ex: Bitcoin) or healthy ecosystems (ex: ghost chains) are being sucked into Ethereum’s #DeFi yield vacuum. Not enough people are talking about how long-term this could threaten the security models of those blockchains…”

It isn’t clear how such inflows from other chains could affect the price of Ethereum and DeFi coins. But considering the size of the market of “ghost” and unproductive coins relative to ETH and its tokens, the move could cause large ripples in the market.

Traditional finance may get involved

Some commentators have gone even further than the aforementioned investors, arguing that money from the traditional financial sector could eventually make its way into DeFi (and maybe Bitcoin too) as the broader crypto space develops.

Max Bronstein, part of the institutional and ventures team at Coinbase, commented that in a world where there is $15 trillion locked in negative-yielding debt, “DeFi will grow exponentially” as long as there remain relatively high yield opportunities.

Su Zhu, CIO of Three Arrows Capital, added that now that banks can hold crypto, they can actually obtain yield in DeFi to bolster their revenues. If and how this plays out, though, is not yet clear. But considering that banks are getting squeezed for revenue as interest rates drop, this may not be out of the realm of possibility.

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A Wall Street veteran revealed he just bought Ethereum as DeFi sees rapid adoption

It’s been an explosive past few days for Ethereum. According to CryptoSlate data, the leading cryptocurrency is up by nearly 20 percent in the past 72 hours, rallying from approximately $245 to a local high of $289. 

Supporting ETH is a confluence of technicals and fundamentals trends, one such trend being a growing number of Wall Street veterans and institutional investors involved with the cryptocurrency.

Prominent investor throws weight behind Ethereum

While he first bought Bitcoin over half a decade ago, only recently has Raoul Pal become a public champion of the asset on Twitter. The former head of Goldman Sachs’ hedge fund sales division, who ran funds of his own and currently operates Real Vision, has begun to divert some of his focus to other cryptocurrencies, including Ethereum.

On Jul. 22, the Wall Street veteran confirmed that he has finally acquired a position in ETH, though did not divulge any details about the time, price, and size of the transaction(s).

Pal adds his new Ethereum stack to his Bitcoin stash, which he claims has been built up over a number of months in response to the ongoing macroeconomic situation where money is printed left and right. 

Pal’s confirmation of his new position in Ethereum comes after he spent recent months arguing that the altcoin could outperform BTC early this bull cycle.

The investor’s optimism about Ethereum is largely related to the fundamental factor of decentralized finance — better known as “DeFi.” In a research note published earlier this year, Pal said:

“I am getting increasingly bullish on Ethereum. ETH is the silver to Bitcoin’s gold. It has more industry uses and less store of value uses… ETH is all about adoption rates and usage. Basically, it’s all down to something called DeFi. “

DeFi has provable catalyzed growth in Ethereum’s adoption, with transaction volume, gas usage, and active user metrics spiking to highs not seen since 2018 due to this sector.

Importantly, the ex-hedge fund manager added in the same aforementioned note that he thinks it’s logical to suggest Bitcoin could surge to $100,000 in the coming five years. Pal even went as far as to mention the $1,000,000 figure, saying that this could happen if there is a collapse of banking and currency.

Not the only prominent ETH bull

Pal is seemingly in good company when it comes to prominent investors being long/optimistic about Ethereum at current levels.

According to a survey shared by Fidelity Investments, a $2 trillion asset manager known for its involvement in crypto and Bitcoin especially, approximately 11 percent of respondents own exposure to ETH in some capacity. The respondents to that survey were American and European institutional investors.

On an individual basis, respected commodities trader Peter Brandt said earlier this month that he was expecting a  20 percent rally in ETH against BTC because the ratio recently saw a “significant” breakout supportive of upside.

This optimism was echoed by  Tuur Demeester, the CIO of Adamant Capital and someone many would dub a “toxic Bitcoin maximalist.” Responding to Brandt, he said, “ETH/BTC technicals are looking bullish so I’m long.”

High transaction fees remain a barrier to growth

High transaction fees, though, remain a barrier to the success of the cryptocurrency, some have said. As crypto analyst Qiao Wang commented:

“I’ve changed my mind after using a dozen of Defi platforms. So long as ETH 2.0 is not fully rolled out, there’s an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX.”

This comes in response to the cost of gas, how Ethereum transaction fees are calculated, growing to highs not seen since the CryptoKitties mania of 2017.

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Ethereum long positions on Bitfinex soar to $510M as uptrend builds momentum

Ethereum’s price has been caught within the throes of an intense uptrend throughout the past few days, surging from its recent low of $230 to a high of $285 that was set earlier today.

The cryptocurrency’s intense strength is creating a tailwind that has even allowed Bitcoin to climb higher, with the benchmark cryptocurrency now pushing up towards $9,600.

One byproduct of the crypto’s strength has been a massive influx of long positions on Bitfinex.

Earlier today, the notional long count on the platform rocketed to fresh highs, with there now being over $510 million worth of open ETH longs.

From a technical perspective, Ethereum’s outlook is incredibly strong.

Analysts are closely watching the cryptocurrency’s weekly close for insights into where it might trend in the weeks ahead.

Ethereum rallies past $280 as technical outlook grows bright

At the time of writing, Ethereum is trading up over three percent at its current price of $283.25.

This marks a notable climb from its weekly low of $233 that was set on July 19th.

ETH’s overt strength throughout the past few weeks has allowed it to significantly outperform Bitcoin, even creating a tailwind that has lifted the benchmark crypto higher.

The over 20 percent climb it has posted this week has caused it to form a strong market structure.

While looking towards its weekly chart, one analyst who goes by the moniker “Cactus” noted that ETH is “super healthy” at the moment, remaining in firm bull territory as long as it trades above $250.

“ETH HTF Update: Market structure playing out perfectly, will not be bearish unless we close a daily or a weekly candle below $250, seems as though PA is looking super healthy right now!”

Ethereum
Image courtesy of Cactus. Chart via TradingView

Notional ETH long count on Bitfinex rockets to $510 million

Over the past year, investors have been loading up on Ethereum long positions.

The notional ETH long count on Bitfinex has risen from just over $50 million at the start of 2020 to $510 million today – marking a roughly 900 percent increase.

Image Courtesy of Josh Olszewicz.

This growth is likely premised upon the multiple bullish narratives that are currently counting in Ethereum’s favor.

As CryptoSlate reported earlier this month, three primary narratives could help fuel ETH’s upswing. These include:

Investors are likely considering these factors as they add to their Ethereum long exposure.

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Analysts expect Ethereum to see an explosive movement as options OI rockets

Ethereum’s price action over the past several weeks has grown closely tied to that of Bitcoin.

Although in recent times this has caused ETH to see a prolonged bout of sideways trading, it has ended up working in the cryptocurrency’s favor throughout the past day, as it has been able to dodge the downturn seen by most altcoins.

The crypto is now showing signs of both technical and fundamental strength. This has led one analyst to set his sights on a sharp move up towards $350.

The explosive growth seen by Ethereum’s options market also indicates that traders are widely expecting a sizeable movement to ensue in the coming weeks and months.

Ethereum’s technical outlook strengthens as analysts eye upside

Despite seeing heightened volatility today, Ethereum remains caught within its macro trading range between $230 and $250.

The second-largest digital asset has been respecting both of these levels as support and resistance, and now appears to be gearing up to test the upper boundary of this range.

At the time of writing, Etheruem is trading up just over three percent at its current price of $244.

This marks a notable climb from its recent lows of $230, which is where it had been consolidating at over the past week.

Today’s movement also comes in the face of immense turbulence amongst altcoins, with many trading down as much as five percent or more.

One analyst is now noting that he believes Ethereum could target $350 in the near-term.

In a recent blog post, the analyst explained that he believes that a clean break above $244 in the hours ahead could spark a rally that allows it to set fresh 2020 highs.

“This $242/244 resistance level has been a significant resistance level for price action for some time now… This should give bulls the momentum to get a clear test of $350.”

Ethereum
Image Courtesy of Cactus. Chart via TradingView.

He further added that there are signs of accumulation seen while looking towards the cryptocurrency’s high time frame price action.

ETH options OI surges to $180 million

Ethereum’s options market appears to be expecting it to see some imminent volatility.

According to a report from Arcane Research, ETH’s options market currently boasts an open interest of $180 million and is on the cusp of setting a fresh all-time high.

Image Courtesy of Arcane Research. Data via Skew.com and Digital Assets Data

The fast recovery of Ethereum’s options OI following the recent monthly and quarterly expiry in June does indicate that traders are expecting the cryptocurrency to see some imminent volatility.

Additionally, as OI in this fragment of the market continues growing, its influence over ETH’s future price action will also grow larger – making future contract expiries important to watch.

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U.K. strengthens consumer protection laws for Bitcoin and crypto ads

Cryptocurrency firms advertising to U.K. citizens will be governed by legal regulations for marketing their products, as per Her’s Majesty Treasury announcement Monday

Crypto ads to be scrutinized 

The HM Treasury is weighing a proposal for “better” consumer protection for users of cryptocurrencies and similar products.

Documents obtained by CryptoSlate show city minister John Glen has published a proposal to “strengthen protections around the promotion of financial products and cryptoassets.” Glen is a management consultant-turned-politician who has been a British Member of Parliament (MP) since the 2010 general election.

The U.K. FCA will oversee crypto ads in the country. (Source: Financial Times)

This is not a crypto ad ban. Instead, the politician calls for more protections for the promotion of cryptoassets while “continuing to ensure people have access to a wide range of products on the market.”

“It’s important that people can understand the financial products they see promoted. If adverts by unauthorized firms are misleading or don’t fully outline the risks, then people can end up losing money,” said Glen.

In the proposal, the country’s Financial Conduct Authority (FCA) is earmarked to oversee all crypto-related advertisements:

“Today’s proposals would mean that authorized firms would have to obtain specific FCA consent to approve the financial promotions of unauthorized firms.”

No misleading ads

Glen points out the variety and “vast quantity” of products being offered on the market as one of the reasons behind the increased scrutiny. FCA oversight, in this regard, helps can ensure such promotions are “clear, fair, and not misleading.”

“The fact they are often targeted towards retail investors underscores the importance of promotions being candid about the risks involved,” Glen added.

The proposal said crypto-companies will be regulated in the manner as popular fintech and financial service applications like eToro and Revolut:

“This would mean that their promotion would be held to the samehigh standards for fairness, clarity, and accuracy that apply to traditional financial services promotions.”

The development comes almost two years after U.K. authorities noted crypto ads overstate their benefits and “rarely warn of volatility risks, the fact consumers can both grow and lose their investment, and the lack of regulation.”

Subsequent surveys confirmed the above; 35 percent of British citizens had, indeed, been swayed by crypto advertisements to purchase tokens. Meanwhile, the number of countrymen using cryptocurrencies saw an increase as well — from 1.5 million people to 2.6 million people.

(Two relevant consultations here and here are currently ongoing and active.)

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Altcoins are going parabolic, but a VC says Bitcoin and DeFi will grow in “lock step”

Unlike normal, the crypto spotlight has been focused on Ethereum’s budding decentralized finance (DeFi) ecosystem over the past few weeks, not on Bitcoin.

This is for good reason: as CryptoSlate data indicates, countless Ethereum-based altcoins related to this cryptocurrency sector have surged as BTC has stagnated. In the past week alone, the DeFi sector has gained 13.87 percent. Those gains have been concentrated in a few crypto players such as Aave’s LEND, Ampleforth (AMPL), Synthetix Network Token (SNX), and THORChain (RUNE).

With such strong growth over recent weeks, some have been asking if this is the end of Bitcoin’s dominance and the start of DeFi’s dominance. If you search up “Ethereum” or “DeFi” on Twitter, you see many of the blockchain’s proponents claiming that BTC is a “pet rock” while DeFi is the “real revolution.”

According to a venture capitalist and strong DeFi proponent, it is not the end of Bitcoin’s dominance. In fact, he expects these two sectors to grow in “lock step.”

DeFi and Bitcoin to grow in tandem? A VC thinks so

Imran Khan, an investor at the crypto-centric Volt Capital and a proponent of DeFi, says that he doesn’t expect DeFi to run away from Bitcoin in terms of growth.

“Bitcoin and DeFi will grow in lock step, I foresee the macro changes push Bitcoin’s flywheel aggressively. While DeFi being a sub flywheel,” Khan commented, indicating that growth in BTC is effectively needed to drive users and capital to DeFi.

He added that the two sectors of the cryptocurrency industry service two different “final bosses”: Bitcoin was built to usurp monetary sovereignty and DeFi was built to usurp traditional banking.

As currency and finance are inherently related to each other, growth in one will drive the other. (There’s a reason why the U.S. has the most dominant currency and banking/finance sector.)

Khan’s comment was well received by some in the industry.

But as one crypto trader commented, his comment doesn’t mean that the two will be locked at the hip on a short-term time frame:

“Caveat is timeline as well, as @HumboldtCap pointed out, it will be imperative to catch the right trend and risk-on at the right moment.”

Connecting the two ecosystems

For Bitcoin to grow in tandem with DeFi and vice-versa, arguably moves will need to be made to connect the two ecosystems.

As it stands, Bitcoin — and a majority of other top cryptocurrencies, for that matter — have effectively been cut out from the DeFi equation.

By connecting the two ecosystems — by connecting the reserve currency of crypto to the Wall Street of crypto, in Khan’s terms — growth is accelerated. As Steven Becker, president of MakerDAO, explained to Bloomberg about projects to link Bitcoin and Ethereum DeFi:

“tBTC is brilliant because ultimately it links two major concepts together. [Bitcoin and Ethereum working together] is how all these networks are going to come together to create the on-chain economy.”

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eToro: Crypto “finally” has a use case, and it’s not DeFi or Bitcoin

A new report jointly-published by eToro and The TIE laid out their research on the cryptocurrency landscape for Q2 of 2020. Among the main takeaways is the booming use of stablecoins, the rise of DeFi, and why Bitcoin is not a “risk-off” asset yet.

eToro is a global financial services firm that is one of the pioneers of social and copy-trading; allowing investors to replicate the trades of successful market participants.

The TIE, the report’s data source, is a provider of alternative data for digital assets such as a proprietary feed that uses Twitter data to determine a coin’s public sentiment at any time.

Stablecoin growth booming in developing countries

Joshua Frank, CEO of The Tie, said stablecoin activity is seeing increased activity across the globe; particularly in areas like Hong Kong where the income (for utility workers) is low, the cost of living high, and remittance fees eating into whatever little is left to send back home.

“Remittances are set to surpass foreign aid as the largest source of external financing to many of the world’s developing countries. But the high cost of cross-border money transfers reduces the benefits of migration,” said Frank.

Migrant workers sit outside an immigration office in Hong Kong. Stablecoins usage seems to be increasing among such workers. (Source: Al Jazeera)

Bitcoin — although the most widely known and used digital currency — fails in this regard. It’s relatively high fees, volatile nature, and network speed creates the potential for a price distortion between the sender and a receiver.

But stablecoins fix this. They can be transferred 24/7, are low fee (average Ethereum gas fee (~$0.25, and are near-instantaneous (estimated ERC20 transaction time ~6 minutes), Frank noted.

He added that “in just two and a half years, stablecoins have grown nearly 10x, approaching $11B in total market cap. In 2020, the total market cap of stablecoins has more than doubled. Fiat inflows into USD-collateralized stablecoins exceeded $5B in only six months.”

Yields and the rising public interest in DeFi are serving as a catalyst behind stablecoin growth, said Frank:

“As global interest rates have cratered, investors have flocked to stablecoins in search of yield. While the federal funds rate has dropped to 0.25%, yields on stablecoins currently exceed 8% on many lending platforms.”

Other factors include stablecoins as a hedge against inflation, the “fat protocol thesis,” and stablecoins as a fiat on-ramp.

Bitcoin social metrics show “institutions are coming”

While the main use of cryptocurrencies is current stablecoins, the TIE’s proprietary sentiment data shows Bitcoin mentions across the Twitter-verse remains a favorable signal of its adoption.

However, the pioneering digital asset has suffered a bit post its halving event in May. “While the price of Bitcoin held up throughout the second half of Q2, trading mainly between an $8,800 and $10,000 range, the coin suffered from a lack of enthusiasm and narrative post-halving. In the weeks leading up to the halving, investors had a narrative and event to be excited about,” said Frank.

“Throughout the second half of the quarter, the predominant narrative discussed among cryptocurrency investors on Twitter was Bitcoin being a “digital gold” and hedge against macroeconomic uncertainty.”

However, that narrative has not received as much traction as the halving did. Towards the end of Q2, there were approximately 700 tweets per day mentioning Bitcoin and “gold” with ~58% of those tweets being positive.

Not all is lost. Frank said Bitcoin’s “NVTweet Ratio” was signaling that institutions are setting foot in the crypto market.

“An increasing NVTweet Ratio could suggest that a particular coin’s market is becoming increasingly driven by institutional trading. As the market cap is increasing faster than social volume, this may suggest less retail involvement in the market for a particular coin,” wrote Frank.

While DeFi and Bitcoin prices steal the limelight; data indicates stablecoins might be where the actual crypto-adoption is at.

The 77-page-long report — with topics ranging from an in-depth view of DeFi, to individual coin breakdowns, to Bitcoin’s nature as a risk-off asset can be viewed here.

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Ethereum has stalled after 180% rally but its on-chain case remains strong

Like Bitcoin, Ethereum’s price has flatlined over recent weeks. According to CryptoSlate data, the leading cryptocurrency has traded between $215 and $250 for the past seven or eight weeks, barely deviating from that range. Even still, the asset is up by around 180 percent since the March capitulation lows.

Analysts say that the asset is primed to move even higher as the on-chain case for Ethereum remains strong.

Ethereum’s on-chain case remains strong

Multiple of Ethereum’s most important on-chain metrics remain decisively skewed in favor of bulls.

A trader noted that per Coin Metrics, the count of daily Ethereum transfers (meaning transactions sending ETH from wallet to wallet, not smart contract interactions) is now at two-year highs, ” as it continues to diverge bullishly away from price.” The chart indicates that price follows the metric higher. This has been attributed to growth in DeFi. 

Image

Simultaneously, the value of all ERC-20 tokens just flipped the value of all ETH. ERC-20 tokens, especially stablecoins, have become such a force that Messari noted on Jul. 20 that the Ethereum network “now settles significantly more value per day than Bitcoin.”

Investors are taking notice of these on-chain trends. Blockchain analytics firm Santiment shared the chart below on Jul. 18 to display that the number of smaller ETH addresses continue to grow to all-time highs. Santiment defines small addresses are those that hold less than 10 coins.

These metrics have almost consistently been growing higher since the start of the year, suggesting there has been an underlying bid for Ethereum for all of 2020 thus far.

Ethereum
Chart of the number of smaller ETH addresses from Santiment

Further boosting Ethereum, three prominent traders and investors in the cryptocurrency space recently came out in support of the asset, arguing there is a technical case for the asset to appreciate.

As reported by CryptoSlate previously, these individuals are Raoul Pal, the ex-head of hedge fund sales at Goldman Sachs and the CEO of Real Vision; Peter Brandt, a trader with multiple decades of experience in the commodities sector; and Tuur Demeester, the CIO of Adamant Capital and someone some would brand a “toxic Bitcoin maximalist.”

High transaction fees could change this

Although all these metrics and signals in tandem suggest that Ethereum will eventually revert to the upside, there remains the risk of high transaction fees stalling growth.

Data from Glassnode suggests that the average gas cost that users are paying to send Ethereum and interact with smart contracts is 500 percent higher than that seen in April.

Qiao Wang, a former head of product at Messari and popular crypto analyst, recently argued that as long as Ethereum transaction fees are high, the blockchain’s dominance is threatened by competitors:

“So long as ETH 2.0 is not fully rolled out, there’s an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX.”

As reported by this outlet previously, this is a sentiment that has been echoed by the CIO and VP of Exponential Investments — Steven McClurg and Leah Wald, respectfully. They wrote in a blog post that:

“The issues inherent in gas costs have created congestion, which is a negative network externality. Congestion on Ethereum has led to poor user experience, especially for traders in this highly volatile environment, as their leveraged positions may be liquidated before they can act.”

Until Ethereum can achieve strong adoption on low transaction fees, there remains the risk of ETH and its blockchain underperforming competitors, analysts say.

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Tether (USDT) is about to pass Bitcoin’s average daily transaction value

The stablecoin sector has been seeing tremendous growth throughout the past year. This has led Tether’s daily transaction value to nearly flip that of Bitcoin.

The growth this fragment of the crypto market has seen is rooted in the global flight towards the U.S. Dollar – which is widely considered a “safe-haven” currency – as well as the ongoing DeFi boom.

This has driven massive inflows into the monetary base of the stablecoin market, which is now worth over $12 billion.

Despite there being many competitors and significant controversy, Tether (USDT) still has firm dominance over its peers, also becoming the first stablecoin to build a market cap of over $10 billion.

Stablecoin sector sees massive growth in the first half of 2020

The first couple of months in 2020 were quite slow for stablecoins, as investors were keen on capturing the upside seen by Bitcoin and most of its smaller counterparts.

Once the benchmark cryptocurrency began flashing signs of weakness after its $10,500 rejection, however, rattled investors fled to stablecoins.

The growth these tokens saw was further perpetuated by fears of an economic decline. These fears reached a boiling point when the stock market and crypto market cratered in tandem, with this decline leading Bitcoin to lows of $3,800.

From here, the growth of the DeFi ecosystem and continued fears regarding global economic turmoil has fueled stablecoins’ continued rise.

Ryan Watkins, a researcher at Messari, explained in a recent post that the growth these tokens saw in Q1 and Q2 has allowed their aggregated market cap to briefly surpass $12 billion.

“In Q1 2020 the stablecoin monetary base grew $2.4 billion to just over $8 billion. In Q2 2020 another $3.8 billion was added onto the base, bringing it to over $12 billion.”

According to CryptoSlate’s proprietary data, the aggregated stablecoin ecosystem now has a market capitalization of $11.55 billion.

Data Source: CryptoSlate

Tether’s growth may soon make it the most dominant currency on a public blockchain

The growth Tether has seen in recent weeks may soon allow it to surpass Bitcoin as the most dominant currency on a public blockchain.

While looking towards the two digital assets’ average daily transaction value over a rolling 30-day period, USDT’s is currently sitting just below $1.75 billion, while Bitcoin’s is just a hair above this level.

Watkins also spoke about this while referencing the chart seen below.

“USDT may soon surpass Bitcoin as the dominant currency on public blockchains.”

Bitcoin Tether USDT Stablecoins
Data Source: Messari

Because the “yield farming” trend is still driving massive user inflows to USDT, and Bitcoin’s consolidation phase is causing its daily transaction value to slide, it is a strong likelihood that Tether will soon flip BTC on this front.

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Options market predicts chance of Bitcoin hitting all-time high in 2020 is 4%

Bitcoin’s multi-month consolidation phase is narrowing as the cryptocurrency now trades between $9,100 and $9,200.

The incredibly low volatility that has come about as a result of this has only been seen a handful of times throughout its history and suggests that a major movement is looming on the horizon.

That being said, one important fragment of the crypto market doesn’t seem to think that this next big movement will be enough to spark the next parabolic uptrend.

According to data, Bitcoin’s options market is only pricing in a four percent chance of Bitcoin hitting its all-time highs of $20,000 by the end of the year.

The options market is placing a low likelihood on Bitcoin hitting its all-time highs in 2020 

Bitcoin is currently trading down over fifty percent from its previously established all-time highs of roughly $20,000.

This number was hit in late-2017 during the peak of the crypto market, and the closest that the benchmark crypto has gotten to revisiting these highs was last summer when its price rocketed to $13,800.

There are significant debates amongst investors as to what could catalyze a rise back to these highs.

Previously, investors suspected that institutional involvement would help create a tailwind, but these entities have been getting more involved within the markets with no tangible impact on BTC’s macro trend.

Because of the lack of clarity regarding what could provide Bitcoin with parabolic momentum in the months ahead, the options market is only pricing in a four percent chance of BTC hitting $20,000 this year.

Crypto data aggregator Unfolded spoke about this in a recent tweet while referencing data from the analytics platform Skew.

“Bitcoin hitting ATH by end of the year —  4%.”

Bitcoin
Image Courtesy of Unfolded. Data source: Skew

Why Bloomberg analysts disagree with the options market

In their June crypto market research report, Bloomberg analysts explained that history shows BTC may rally towards $20,000 by the end of the year.

They note that BTC is closely mirroring the post-halving price action seen in 2016, which entailed a long consolidation bout followed by a parabolic surge at the end of the year.

“Bitcoin is mirroring the 2016 return to its previous peak. That was the last time supply was halved, and the third year after a significant peak… Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016’s trend.”

For this to occur, it will require a massive influx of capital from multiple sources – likely both retail and institutional investors.

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As Hong Kong banks censor millionaires for pro-democracy ties, Coinbase CEO calls for open finance

Accredited investors in Hong Kong are facing scrutiny from wealth managers and banks globally — the latter searching for investor ties to a pro-democracy narrative.

Coinbase CEO Brian Armstrong called the above an example of why “open finance” was required in today’s environment.

“Politically exposed”

One year after Hong Kong demonstrators led rallies against an extradition law; the political unrest is still going strong and has now spilled over to one’s financial independence.

Reuters said Monday that global banks are scrutinizing their Hong Kong clients for pro-democracy ties. This is unlike anything seen in the country previously; Hong Kong is a global center for unbiased, accessible financial services in a free market environment. However, that is soon starting to change.

Hong Kong’s banking district. Banks are reportedly scrutinizing client accounts for pro-democracy ties. (Source: The Star)

According to six people with knowledge of the matter, bankers at Credit Suisse, HSBC, Julius Baer Gruppe AG, and UBS Group AG are “broadening scrutiny under their programs that screen clients for political and government ties and subjecting them to additional diligence requirements.”

The designation, called “politically exposed persons,” can make it more difficult or altogether prevent people from accessing banking services, depending on what the bank finds about the person’s source of wealth or financial transactions, added Reuters.

Combing through social media

Banks are going through comments made by clients and their associates in public, print media, and social media. One such manager said some of these “social” audits are going back to 2014 — gauging clients on their then reaction to the pro-democracy “umbrella” movement.

A top executive at a regional wealth manager said that his firm’s risk and compliance team prepared a list of top 10 Hong Kong individuals identified in local media as pro-democracy sympathizers within a couple of days of the enactment of the law on July 1, the anniversary of the handover, noted Reuters.

Hong Kong demonstrators rally for their democracy. (Source: Bloomberg)

The executive said their firm checked its internal database to see if they had an existing relationship with any of them and were “quite relieved” to see that they didn’t.

Albert Ho, a local lawyer, said on the issue:

“There’s not much you can do, actually, unless you cease all your financial and banking activities in Hong Kong.”

As one of the premier financial centers in the world, the development stands to undermine Hong Kong’s legacy.

Crypto as a protest?

Coinbase CEO called for an “open finance” system earlier this morning, referencing the report:

Open finance — or decentralized finance — as popularly known, refers to building a financial system fully-accessible to all persons, regardless of their socio-economic standing. Bitcoin creator Satoshi Nakamoto aimed for this back in 2009; leading to the birth of the broader cryptocurrency industry as we know today.

Bitcoin as a protest is not new for Hong Kong. As CryptoSlate reported last year, the city’s demonstrators engaged in “bank runs” as a form of non-violent protest.

A bank run in progress in Hong Kong. (Source: Evening Standard)

And they might do it again; considering Hong Kong likes its freedom and is proactive against active censorship like the banks are reportedly doing.

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Japan: Bitcoin-friendly central bank creates digital currency division

Japan’s central bank — the Bank of Japan (BoJ) — confirmed Monday it has created a new division to research and study the issuance of digital currency.

Colloquially the “digital yen,” the development follows days after Japanese parliament members called for increased participation for digital assets and CBDC research.

Japan’s digital currency gets a home

Local publication Mainichi said earlier today the BoJ’s new digital currency group will work under the bank’s Payment and Settlement Systems Department. Ten team members have been allocated to the division. They will be headed by Akio Okuno, a senior official at the department. 

This group takes over from a digital currency research team set up in February. No information on why the older team was replaced was provided at press time.

The Bank of Japan in Tokyo. (Source: WSJ)

As CryptoSlate reported last week, the new division will conduct joint research on CBDCs and digital currencies with European administrations and regulators. These include the European Central Bank and the Bank of England.

Last week, the Japanese Cabinet had approved an annual economic policy guideline stating the bank will conduct a feasibility study on digital currencies in collaboration with other countries.

However, no issuance can be expected in the immediate future. The report added:

“The BOJ has said it does not currently plan to issue its own digital currency, but has not ruled out the possibility in the future.”

Japan’s booming crypto sector

While this is the first government-backed development in terms of digital asset developments, Japan’s private sector has both adopted and brought in a vibrant crypto-focussed environment.

Three Japanese megabanks — Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corp — currently offer crypto services to clients or have conducted their independent studies on a yen-based stablecoin. 

Last month, Nomura, another Tokyo-based conglomerate, launched its Bitcoin custodial services for accredited investors in the country.

A Nomura trading desk. (Source: Nikkei)

Others like the East Japan Railway Co. and KDDI Corp. similarly set up a consortium in June to study interoperable electric money and digital currency. At the time, the BoJ participated as an “observer.”

News of the digital yen comes at a ripe time. Last month, a Japanese senator said cryptocurrency and blockchain will be “more important” in a post-COVID world, laying out several reasons for his opinion at the time.

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The biggest thing since Bitcoin? New AI protocol scares Twitter users

While Bitcoin has yet to go entirely mainstream, it has been deemed one of the world’s most important innovations of the past two decades. After all, the launch of the cryptocurrency solved the reversibility of electronic payments and the duplication of digital money.

In a world becoming increasingly digital and interconnected, Bitcoin is a pivotal technology, according to prominent technology entrepreneurs and Wall Street billionaires like Paul Tudor Jones.

Yet a new innovation just launched that many say is the biggest thing since Bitcoin and cryptocurrency.

The biggest thing since Bitcoin: OpenAI’s GPT-3

OpenAI, the artificial intelligence startup founded in part by Tesla’s Elon Musk, just launched an AI language called “GPT-3,” short for Generative Pretrained Transformer 3, into private beta. This new language builds on the company’s two previous iterations of this model.

Although the exact uses for this new technology are still being discovered, there have already been amazing things done with it.

Manuel Araoz, the CTO of Zeppelin Solutions and someone sometimes involved in Bitcoin, shared a post to his blog entitled “OpenAI’s GPT-3 may be the biggest thing since bitcoin.” The blog did a good job of breaking down what GPT-3 is and what it can do. Then Araoz got to the kicker: the entire blog post, which reads like a human penned it, was written by the artificial intelligence.

If you search up “GPT-3” on Twitter, Reddit, or other online forums where users with access to it go, you can see even crazier use cases.

One individual shared an application he built where a GPT-3 AI will generate text for your resume that he described as “better” than the input text. Another person built a system that creates a user interface based on what you want it to do. And another, still, has made a system where you can make in-depth conversation with a bot about whatever you’d like.

The community response has been strong

The response to GPT-3’s use cases and implications in and outside of crypto has been large.

Ryan Zurrer — a founding principal at Polychain Capital, one of the earlier crypto-focused funds — recently commented:

“GPT-3 is one of those seminal moments, of generation-shifting tech, marking dawn of a new sector. The last time we saw this was Bitcoin. @OpenAI’s post-capitalism business model may be equally important & prescient. Excited deploy capital here.”

Branden Hampton, the founder of Alexander Ventures, has echoed in the optimism. He said around the same time as Zurrer:

“GPT-3 by OpenAI is not just a “cool technology” that you hear about infrequently, its at the importance level of the internet itself, WiFi, Bluetooth, and Bitcoin.”

What’s funny, though, is that we can’t confirm if it is these individuals saying this or a GPT-3 AI.

Whatever the case, it seems that this technology seems poised to disrupt many industries as it gets developed in the years ahead.

Core to the cryptocurrency industry, GPT-3 may even allow for advancements in trading, coding, and data processing that could help to bolster digital assets and related systems.

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The number of large transactions on Chainlink increased 15x in 2020

After the price of its native token LINK reached its all-time high last week, Chainlink has seen its on-chain metrics skyrocket. Data from crypto analytics company IntoTheBlock has shown that the number of large transactions on Chainlink has increased over 15 times in the past three months, matching the growth seen in the number of active addresses on the network.

Chainlink has been on a roll in the past few months, seeing an unprecedented rise since it capitulated in mid-March during the market downturn. Aside from gaining an excess of 400 percent, its native cryptocurrency LINK has also seen a huge increase in use.

Data from cryptocurrency analytics company IntoTheBlock has shown that Chainlink recorded the largest number of transactions greater than $100,000 since July 2019. On Jul. 13, the network recorded 300 large transactions—an increase of almost 1500 percent since the beginning of the year.

Graph showing the number of large transactions on Chainlink from Jan. 1 to Jul. 20
Graph showing the number of large transactions on Chainlink from Jan. 1 to Jul. 20

Given the fact that the large transaction volume on Chainlink has remained more or less the same even when its price reached its all-time high, the phenomenon could be explained by an influx of new users to the network.

Graph showing the large transaction volume on Chainlink from Sep. 2017 to Jul. 2020
Graph showing the large transaction volume on Chainlink from Sep. 2017 to Jul. 2020.

Increase in active addresses indicate a healthier network

Chainlink’s latest price rally isn’t backed just by speculation—the network has seen its stable on-chain metrics gain a significant amount of strength in since March. This could mean that the 400 percent YTD increase won’t be followed by an equally steep consolidation and that LINK will spend most of the year above its current $8 level.

Graph showing LINK’s price from Jul. 2019 to Jul. 2020
Graph showing LINK’s price from Jul. 2019 to Jul. 2020 (Source: TradingView)

This theory is backed by the fact that the number of new addresses and daily active addresses on the network has skyrocketed —data from IntoTheBlock has shown that there were over 9,500 active addresses on Chainlink on Jul. 16. On the same day, the network recorded an ATH of 4,590 new addresses.

Graph showing the number of new addresses and daily active addresses on Chainlink from 2017 to 2020
Graph showing the number of new addresses and daily active addresses on Chainlink from 2017 to 2020 (Source: IntoTheBlock)

This indicates that the Chainlink network is growing at a healthy pace. While the overall number of addresses is increasing, the more important metric is the one showing the increase in the number of active addresses.

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Not a trader? Here are 5 other ways to earn Bitcoin (BTC) in 2020

The world of Bitcoin trading is equal parts alluring and intimidating. The former throws up images of “Lambos” and private jet trips around the globe while the later means account blow-ups and unfortunate consequences.

But trading is not the only way to earn BTC. In this article, we explore six ways that interested individuals can use to get their hands on the digital asset — minus staring at charts all day.

Bitcoin Mining

This is perhaps the most fool-proof, easy, risk-free way to earn Bitcoin. Mining goes back to when Bitcoin was created; quickly becoming a major industry/income source since 2012-13. Firms like Bitmain, F2Pool, and Lubian earn millions of dollars from their mining efforts each month — rewarded by the network in turn for providing their massive computing power.

But it requires significant capital in upfront costs. Mining is not a cheap activity. A mid-sized operation could cost millions to set up, oft-involving regulatory clearances as well while being situated in a cool, electricity-abundant area.

A mining farm in China. (Source: Charl)

Still, one can get their hands on a specially-designed ASIC miner for the purpose. Firms like Bitmain, Ebang, and Canaan Creative offer a range of mining devices. As CryptoSlate’s product page for Bitmain notes; Antminer S9 (14 TH/s) and the Antminer T9+ can make for solid rigs.

Or, one can simply join a mining pool. These are shared Bitcoin miners offered by firms like AntPool, Binance, and Huobi to allow people to invest directly in the activity without the need for setting up infrastructure.

Simply create an account, log in, contribute the minimum Bitcoin, and gain monthly payouts based on the amounts paid.

Earn Bitcoin through Crypto Lending

Firms like Crypto.com, Nexo, Cred, operate similarly to neo-banks, proving services to “stake” one’s crypto assets or lend it to other users for an interest. The accrued amounts can be converted to Bitcoin or reinvested to compound earning for the next month.

One such firm is Cred. Its customers are present in 183 countries. As per its site, the firm is a licensed lender and leverages a proprietary technology to provide business and retail credit and to allow its customers to earn a yield on more than 30 crypto and fiat currencies through its partner network.

(Source: Cred)

The San Francisco-based tech-first firm pays out up to 10 percent on all deposits. Accredited money managers can also access undercollateralized loan services. BitGo custodies all assets, and the firm provides a credit card as well.

Complete bounties for Bitcoin

Back in the ICO mania of 2017-18, many startups offered a way to earn crypto by finding out discrepancies and loopholes in their app/network. While 99 percent of these projects have since died down, many Bitcoin bounties are active in the industry.

Sites like Hackerone list several ongoing bounty programs — many of them paying out in Bitcoin. This would require an elementary knowledge of coding and blockchain, as many of the bounties deal with system bugs, faulty codes, and smart contracts.

Some exchanges offer such programs too. Kraken lists a minimum reward of $500 in Bitcoin for anyone who gives information/implementations as specified on this list. Blockstack offers a similar program — paying out a maximum of $2,000 for bounty hunters. 

Referral programs and Affiliate marketing

Referral programs abound in the cryptocurrency space. Exchanges lead in this regard, offering a “commission” for users who market the platform and provide affiliate links to others.

This is classic affiliate marketing but gives users/the public a chance to earn Bitcoin without buying it on an exchange or any other method listed above.

CryptoHopper, a trading bot, offers a referral program to users writing blogs or educational articles on relevant topics. They claim to have paid out over $250,000 to affiliates over the past few years.

Bitcoin trading platform Paxful, ByBit, and even Coinbase offer such programs.

Work for Bitcoin!

This one is perhaps the most interesting, but working for Bitcoin can be a good choice for many. Sites like Crypto.jobs list many job postings for developers, content creators, and designers — with many firms paying in Bitcoin.

The cons are likely suffering from Bitcoin’s volatile prices, and enduring a project which does not payout. For the latter, it’s advisable to only use trusted platforms to find clients and sign a basic contract before commencing an assignment.

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How Chinese crypto investors may help fuel the DeFi sector’s rise

The decentralized finance sector has been grabbing the attention of crypto investors throughout the past couple of months, as virtually every associated token has been posting massive gains.

Despite seeing parabolic growth, the sector as a whole remains relatively small, with an aggregated market capitalization of just over $4 billion.

Outside of the crypto industry, DeFi remains unknown, and the trend hasn’t built popularity in many countries – including China.

There are a few reasons for this, and one analyst is noting that it is a good thing for early DeFi investors that China hasn’t yet gotten in on the trend, as an influx of investor capital from the country could cause it to see a “boom and bust” cycle.

DeFi sector continues growing as investor capital floods in

Bitcoin’s stagnant price action throughout the past few months has provided altcoins with an ideal backdrop to rally against.

Many DeFi-related tokens have seen the largest gains out of all altcoins, with some even climbing as much as 1000 percent.

Shortly after the successful launch of Compound in late-June, investors began siphoning funds into just about every token related to the bourgeoning ecosystem.

This created a multi-week uptrend in which these tokens were able to post consistent gains daily.

Although this momentum has stalled over the past couple of weeks, many of these digital assets are still caught within the throes of parabolic uptrends.

This has caused the sector to see a mixed performance.

According to CryptoSlate’s proprietary data, the DeFi sector has grown by just over 6 percent throughout the past seven days, with its market cap now totaling at just under $4.1 billion.

DeFi Crypto
Data Source: CryptoSlate

While looking towards the top tokens within this fragment of the crypto market, it becomes clear as to just how mixed their price action has been.

Data Source: CryptoSlate

Chinese investors could ultimately fuel the market’s continued rise

Because the DeFi sector still remains relatively small, the entrance of one large investor group could propel it higher.

Chinese investors may be the next source of fresh funding, although Dovey Wan – a partner at Primitive Ventures – recently explained that there are six key things that have stopped DeFi adoption in China:

  • The bust of the exchange liquidity mining era
  • Lack of a large Ethereum community in China
  • DeFi farms are primarily tailored towards English-speaking users
  • Fears regarding DeFi being a bubble (similar to the exchange transfer fee mining trend that collapsed)
  • Lack of incentives for users to hold tokens for the long-term

Assuming that the decentralized finance trend does start gaining popularity amongst Chinese investors despite these concerns, they may help fuel its continued rise.

One fund manager who posts on Twitter under the name “Spartan Black” explained that the entrance of Chinese money into the DeFi space could create a dangerous situation for the sector.

“Chinese money not doing much DeFi farming is probably a good thing for farming sustainability. When Chinese money gets involved it usually does so in size, and hence accentuates the boom and bust.”

If “yield farming” becomes unsustainable, the strong fundamentals underpinning many DeFi protocols will degrade.

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CME futures traders widely bearish on Bitcoin as a big movement looms

Bitcoin’s ongoing consolidation phase has been perpetuated by limited liquidity and cratering trading volume.

This has caused the cryptocurrency to trade within the lower-region of its long-held trading range between $9,000 and $10,000.

BTC’s lackluster price action has directed greater attention to the benchmark cryptocurrency’s smaller counterparts. Traders are now moving to capitalize on the ongoing rallies seen by many smaller cryptocurrencies – also known as “altcoins.”

As investors await further Bitcoin volatility, futures traders on the CME are growing increasingly bearish.

Data shows that institutions, retail traders, and professional traders using the platform are all starting to load up on short positions.

Traders closely watch for Bitcoin to make a big movement

Throughout the past few weeks, Bitcoin has narrowed its trading range to between $9,000 and $9,300.

The cryptocurrency is now trading squarely between these two levels at its current price of $9,100.

A few factors are suggesting that this sideways trading won’t last for too much longer.

Bitcoin’s Bollinger Bands are currently the tightest that they have been since November of 2018. When these bands “squeeze” like they are now, it typically means that a massive movement is imminent.

In November of 2018, these squeezing bands closely preceded a sharp price decline that sent the crypto’s price reeling down by over 50 percent to lows in the $3,000 region.

BTC’s realized volatility is also at a historic low, which typically doesn’t last for too long. If history repeats, the crypto is about to see a spike in its volatility.

Futures market sees lowest volume in 3 months as traders grow bearish 

The prolonged sideways trading that Bitcoin has seen as of late is having tangible impacts on its underlying market.

While looking towards the futures market, the crypto just saw its lowest trading volumes in over three months.

Analytics platform Coinalyze spoke about this in a recent post:

“Bitcoin – another boring day… lowest volume on futures markets over the last 3 months.”

Bitcoin
Data Source: Coinalyze

Data also suggests that traders utilizing the CME’s Bitcoin futures product are widely growing bearish on the cryptocurrency.

While looking towards the Commitments of Traders Report (COT), although open interest on the platform has climbed slightly in July, the net-long positions of retail and professional traders have been diving.

The CME’s COT report can be seen below, as put forth by crypto data aggregator Unfolded:

Data Source: Unfolded

Institutions remain firmly net-short, but they are starting to add some slight long exposure.

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Ethereum’s latest DeFi token just launched, and it’s 2,000% above its seed price

While Bitcoin and Ethereum have continued to stagnate, it is clear that the decentralized finance (DeFi) finance craze is alive and well.

In a single day, two tokens in this segment of the cryptocurrency market launched. One launched over one thousand percent higher than its seed round price, and another gained around 5,000 percent in a day.

New Ethereum DeFi tokens rocket higher

On Jul. 18, after weeks of waiting, the new DeFi project mStable finally released its native token: Meta (MTA).

In short, Meta is a governance token that will fully decentralize the Ethereum-based protocol, which is predicated on facilitating stablecoin swaps with low slippage and offering interest opportunities on stablecoins.

According to Messari researcher Ryan Watkins, the public launch of the token, done through a new process called an “IDO,” was immensely profitable for some. An IDO is an initial decentralized exchange offering. Meta’s purportedly was a sight to be seen, with an Ethereum user attempting to manipulate the order book to change narratives.

Trading at a price of $2.40 just minutes after it went live, MTA immediately netted early mStable investors over 1,000 percent returns if they sold.  And at the current price of $3.50, the Ethereum-based altcoin is over 2,200 percent higher than the price it was acquired during mStable’s seed round.

Three Arrows Capital, a prominent crypto-centric fund based in Singapore, is one of the investors known to have been part of that seed round.

In a similar craze, yearn.finance, a multi-faceted DeFi protocol whose entire existence is rather mysterious, launched its native token YFI (YFI) on the same day. In a Medium post on the release, the team behind the Ethereum-based project wrote:

“We have released YFI, a completely valueless 0 supply token. We re-iterate, it has 0 financial value. There is no pre-mine, there is no sale, no you cannot buy it, no it won’t be on Uniswap, no there won’t be an auction. We don’t have any of it.”

This was seemingly a ruse.

At the highs on Jul. 18, YFI traded at $2,250, more than 7,000 percent higher than the daily low price of $31 according to CoinGecko.

Sentiment against DeFi grows

The increasingly high interest rates and returns of the DeFi space have made some question its fundamentals.

Pseudonymous Bitcoin whale “Joe007,” who has verifiably made dozens of millions trading cryptocurrency on Bitfinex, said that he thinks DeFi is a “centralized Ponzi/HYIP scheme that uses random ‘crypto’ trappings to lure in dump money into the same old musical chairs game.”

This was in reference to a comment from a DeFi-centric Twitter account that was asking about the next “hidden DeFi gem” in a way rather reminiscent of the 2017 and 2018 ICO boom and bust.

Other largely Bitcoin-focused individuals have made similar comments, making comments like “DeFi is just Wall Street 2.0” and other things along those lines.

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