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$ETH Breaks $3600, Mark Cuban Says It ‘Is Uncapped in Terms of How High It Can Go’

On Thursday (May 6), the Ethereum price broke $3,600 to set a new all-time high. Data by TradingView indicates that at 16:24 UTC on crypto exchange Bitstamp $ETH broke above the $3,600 level for the first time ever, and five minutes later, it hit $3,610 to record a new all-time high. Currently (as of 17:32 […]

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On Thursday (May 6), the Ethereum price broke $3,600 to set a new all-time high.

Data by TradingView indicates that at 16:24 UTC on crypto exchange Bitstamp $ETH broke above the $3,600 level for the first time ever, and five minutes later, it hit $3,610 to record a new all-time high.

Currently (as of 17:32 UTC on May 6), ETH-USD is trading around $3,589, which means that in the past 24-hour period, it is up 5.49%; as for the year-to-date period, ETH-USD is up 386.97%

According to a report by Liam Frost and Daniel Roberts for Decrypt, earlier today, billionaire investor and entrepreneur Mark Cuban, who owns both Bitcoin and Ethereum, had this to say during a panel at Decrypt‘s Ethereal Virtual Summit:

Between DAI and ETH 2.0, and all the staking that happens to provide liquidity everywhere else, it wouldn’t shock me if we’re getting significant deflation, which is one of the reasons that ETH is skyrocketing so much. So that’s why I think ETH really is uncapped in terms of how high it can go.

According to another report by Daniel Roberts for Decrypt, Cuban also said:

I think Bitcoin is the greatest risk of a pullback, simply because there’s so many dollars worth of derivatives, and so people speculate so much, and you don’t have an efficient market in terms of buying and selling it…

Each global market has its own pricing, and a buyer of Bitcoin, or any crypto for that matter, doesn’t automatically get the best price like you do with a share of stock, for the most part…

I think Ethereum has greater long term value, period, end of story. Because Ethereum has more utility than Bitcoin does.

CryptoQuant CEO Ki Young Ju says that it is bullish for Ethereum that outflows of $ETH from crypto exchanges are greater than inflows of $ETH into crypto exchanges:

However, it is a bit worrying that funding rates for perpetual swaps are getting a bit too high, which could mean that some of the price increase for $ETH could be due to leveraged long positions, and we all know what would happen if some large $ETH whales decide to sell, or if there is any kind of panic in the crypto market. For example, In the table below from Bybt.com, you can see that on BitMEX the token-margined funding rate for $ETH is much higher than the rate for $BTC.

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

IMAGE CREDIT

Featured Image by “elifxlite” via Pixabay.com

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.cryptoglobe.com/latest/2021/05/eth-breaks-3600-mark-cuban-says-it-is-uncapped-in-terms-of-how-high-it-can-go/

Blockchain

Chainlink, AAVE, Sushi: What’s the deciding factor for these alts?

As ETH fell over this weekend crash, several DeFi projects follow suit. Ethereum’s price action is instrumental to DeFi’s rally. In the past month, ETH’s price has dropped below $2000 on a few occasio

The post Chainlink, AAVE, Sushi: What’s the deciding factor for these alts? appeared first on AMBCrypto.

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As ETH fell over this weekend crash, several DeFi projects follow suit. Ethereum’s price action is instrumental to DeFi’s rally. In the past month, ETH’s price has dropped below $2000 on a few occasions. On these occasions, there has been a bearish impact on the overall DeFi TVL and the TVL of several DeFi projects.

While DeFi has rallied two times since the beginning of 2021, the biggest DeFi rally has not started yet, and it depends largely on the participation of ETH and ETH traders.

There is one important statistic that supports this narrative. Over 1.75 percent of all unique ETH addresses have ever interacted with DeFi projects, any DeFi project. That’s 2.8 Million users out of a possible 159 Million addresses, on the ETH network. This builds a bullish case for DeFi, as this is a scalable possibility. Making note of this, DeFi’s TVL hasn’t hit its highest point in 2021 yet.

DeFi's biggest rally is not in yet

DeFi TVL | Source: DeFiPulse

Currently, DeFi TVL was at $53.2 Billion based on the above chart from DeFiPulse. Among others, AAVE is the most dominant DeFi token, currently. Among DeFi projects that have interacted with ETH, AAVE and SUSHI are the most notable. Though ETH has not directly interacted with these projects, ETH’s layer 2 MATIC has interacted with these projects since they have rallied against ETH on the chain.

The next wave of DeFi projects that rally in response to ETH may be led by LINK. At the $20 price level, 44% of LINK traders are profitable, out of 78% that hold LINK in their wallets. The number of large transactions on the LINK network has increased consistently, it is $2.23 Billion in the past week. The trade volume for LINK has increased consistently over the past week and less than 20% HODLers have held LINK for over a year. This number is less since the investment inflow increases every few months.

DeFi's biggest rally is not in yet

LINK Price Chart | Source: Coinmarketcap.com

In the past 3 months, the price has dropped closer to the $16 level, the current price level is higher than that. LINK is undervalued at the current level, following on-chain metrics and LINK’s correlation with ETH, it is likely that LINK will rally in response to ETH’s price rally. Additionally, several projects in DeFi are expected to rally further in 2021.


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Source: https://ambcrypto.com/chainlink-aave-sushi-whats-the-deciding-factor-for-these-alts

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Blockchain

Understanding Latin America’s Rising Interest in Bitcoin Adoption

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Latin American countries have been enacting or even signaling their interest in bitcoin over the last few weeks.

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Both El Salvador and Paraguay have signaled their pro-bitcoin intentions. The former has not even so much signaled them as put them into practice.

However, this is not the end of the story. Other Latin American countries have similar intentions including Brazil, Panama, Mexico, and Argentina.

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El Salvador adopts bitcoin

El Salvador’s president, Nayib Bukele, during the Bitcoin 2021 conference, did something unexpected. In a pre-recorded video, he announced that he would present a bill to Congress. His goal was to formally adopt Bitcoin as legal tender.

Shortly afterward, he added that he intended to make his country a bitcoiners’ paradise.

According to his bill, BTC would not be subject to capital gains tax. Moreover, those investing their coins in El Salvador would be entitled to immediate permanent residency.

The plan was quickly implemented. Just a few days later, El Salvador became the first country to officially accept BTC as legal tender.

Other countries in the region decided to follow its example. Among them were some equally poor economies of Brazil, Panama, Mexico, and Argentina.

Thus, let us consider why Latin American countries have a completely different stance to that of, for example, the Chinese Government or representatives of Dutch authorities.

Printing the dollar does not help poorer countries

One of the reasons for El Salvador’s pro-bitcoin stance is the United States Federal Reserve. The Fed has been heating up the printers over the past year. According to Forbes:

“The Federal Reserve has dramatically expanded the supply of circulating U.S. dollars, as measured by the M2 money stock, from $15.35 trillion in February 2020 to $20.26 trillion in May 2021. That’s an increase of 32 percent, unprecedented in modern peacetime U.S. history.”

Printing money has helped mitigate the economic impact, unfortunately only in the U.S. Countries like El Salvador have begun to lose purchasing power due to U.S. inflation.

The Fed has so far shown no signs of easing its policy. On the contrary, it keeps announcing newer and larger stimulus measures.

Bukele, through formal approval, hopes to stabilize the Salvadoran economy. In his opinion, in such circumstances, it becomes necessary to allow a private digital currency to circulate, independent of central bank control.

However, the Salvadoran president’s main motive is to improve the economic well-being and financial inclusion in a country where 70% of the people have no access to banking or borrowing facilities.

Around 20% of El Salvador’s GDP comes from money sent home by migrants. This causes additional difficulties with international transfer fees and inefficiencies in the system. It can sometimes take several days to send such funds.

Latin America has the most cryptocurrency users

Statista released a study back in June 2019 that showed the number of global cryptocurrency users.

Interestingly, some of the most “developed” countries, such as the U.S., the United Kingdom, Australia, and France, were at the bottom of the list.

It is Latin America with the most cryptocurrency users in the world. The top ten crypto countries included Brazil, Colombia, Argentina, Mexico, and Chile.

Source: Statista

Another survey conducted by Morning Consult found that as many as 21% of Latinos know “a lot about bitcoin.” Interestingly, this survey was conducted back in 2014, which is considered early for bitcoin interest and adoption.

Considering all this, it begs the question: Why does Latin America have the most users, and why are countries in the region pushing for widespread bitcoin adoption?

Why do LATAM countries want cryptocurrency adoption?

Economic and financial instability

People in Latin America tend to use cryptocurrencies to protect their wealth.

Many countries in this region of the world are experiencing economic problems. Their inflation rates are skyrocketing at a parabolic rate, making citizens’ wealth worth less and less.

Rising inflation and a lack of faith in the government is causing these countries to turn to digital assets. Storing money on a blockchain helps people keep their money’s value.

Regardless of how a country’s economy is going to perform, storing value in something not established within a country’s borders allows people to feel much more secure.

Despite the inherent risks and volatility of cryptocurrencies, it’s still a better option than holding on to devalued national currencies that are sometimes more profitable to burn in the furnace than use daily.

An unbanked population

According to the World Bank, at least 50% of the Latin American population does not have access to banking. This leaves many people with no way to protect their money, apart from keeping it under the mattress.

Likewise, only 113 million people have access to payment cards. On the other hand, Statista reports that 387.2 million people are connected to the internet.

So it seems that people have more access to the internet than to a bank account. This is the reason why people are keen on cryptocurrencies. It is simply an easier option for them.

Bitcoin remittances

Due to the difficult economic conditions and authoritarian regimes in many countries, people are starting to emigrate.

They leave their families and go work in other countries with a stronger currency. This creates another problem. They have to send the money they earn to support their relatives.

Remittance services are usually very expensive and subject to high commissions. What’s more, if the system is inefficient, it can even take days to send money.

This is where cryptocurrencies come in. Digital assets allow for fast and secure transactions.

This is why many people in Latin American send funds to family or friends in other countries via bitcoin, other cryptos, or simply through blockchain technology.

An example of this is the relationship between Venezuela and Colombia. Due to Venezuela’s economic difficulties and authoritarian regime, hundreds of thousands of Venezuelans have fled to neighboring Colombia.

However, some are still left behind in Venezuela. Those who manage to escape often send money to their families using cryptocurrencies.

Special companies have even been created to facilitate this process. For example, the Columbian start-up Valiu has created a blockchain-powered remittance system in which it takes less than an hour to send money to Venezuela.

A younger population

According to Ana González Barrera of the Pew Research Center, Latin Americans use the most cryptocurrencies because the population there is mainly made up of young people.

“Hispanics tend to have a higher share of technology use, especially mobile technology.  This is because Hispanics are younger than other groups. That is why they are more likely to use technology.”

Bitcoin discussion versus adoption

The rising interest in cryptocurrencies by governments across Latin America should not be ignored. However, so far only El Salvador and Paraguay have taken the steps to enact legislation.

Whether the rest will follow suit or continue to face resistance and roadblocks to move crypto to legal tender is still to be seen.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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PhD and an assistant professor at an international university in Lublin, Poland. Spent 10 years studying philosophy of nature and sport science. An author of 4 books and two dozens of scientific articles. Now, he is using his mind for the benefits of the cryptocommunity. Technical analysis enthusiast, Bitcoin warrior, and a strong supporter of the idea of decentralization. Duc in altum!

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Source: https://beincrypto.com/understanding-latin-americas-rising-interest-in-bitcoin-adoption/

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Blockchain

The Week On-chain (Week 25, 2021)

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The Bitcoin market continues to show relative weakness in both price and on-chain activity this week. Prices have traded within the recent consolidation range, marking down from an early week high of $41,295, to a low of $33,818 over the weekend.

On-chain activity across the board is remarkably low across Bitcoin and Ethereum, with demand for block-space falling to levels last seen in 2020. However, whilst low demand for transactions is a generally bearish insight, it also reflects an unwillingness of strong hands to spend at these prices. Are they waiting for a relief rally?

Simultaneously, a seismic shift is underway in the Chinese mining markets as multiple regions enforce bans on the industry. This week we will explore the observable on-chain impact of both changes in hash-power, and in miner spending behaviour.

Tumbleweeds On-chain

It is very quite on-chain.

Both Bitcoin and Ethereum have experienced dramatic slow-downs in on-chain activity with active addresses and total transfer volume falling back to 2020 and early 2021 levels. Bitcoin active addresses have fallen by 24% from the generally sustained peak of 1.16M from March to early May. The current activity of 884k addresses was last seen this time last year.

For Ethereum, the fall in active addresses has been even larger, dropping 30% from the brief peak of around 676k addresses. Activity is now down to 474k addresses/day, last seen in Q1 2021.

BTC vs ETH Active Addresses Live Chart

When it comes to USD value settled on the networks, the decline in activity is even more dramatic. Both Bitcoin (change-adjusted) and Ethereum (ETH transfers) are settling -63% and -68% less USD value respectively, compared to the recent highs set in May.

Bitcoin is settling around $18.3B per day, whilst Ethereum is settling $5B/day in ETH transfers, both demonstrating equivalent volume to Q1 2021.

BTC vs ETH Transfer Volume Live Chart

Naturally, the priority fees for inclusion in the next block have fallen significantly as network congestion almost completely clears. Bitcoin total fees paid have fallen to just under 30BTC/day (~$1.2M), coincident with levels in late 2019 and early 2020. This currently represents around 4% of miner revenue with the block-subsidy making up the remaining 96%.

Bitcoin Total Transaction Fees (BTC) Live Chart

For Ethereum, daily fee revenue has fallen from over 15k ETH/day in early May to just 1.9k ($4.34M). This represents around 10% of total miner revenue being sourced from transaction fees. We have to look as far back as June 2020, before ‘DeFi Summer’, to find similar levels of transaction fees paid.

ETH Total Transaction Fees (ETH) Live Chart

Supply and Spending Behaviour

From a macro perspective, there are remarkable similarities to the 2017 macro peak in regards to the balance of supply held by Long (blue) and Short (red) Term Holders. The chart below shows the relative supply held by each cohort and whether they are in profit (dark colours) or loss (light colours).

After reaching ‘Peak HODL’ (maximum LTH supply), both cycles demonstrated a macro distribution event, as BTC wealth is transferred from Long term to Short term holders. After the top was put in, we have started to see the opposite effect, where Long-term holders stop spending and begin re-accumulating, despite their coins often falling into an unrealised loss.

Since the $64k top, Long-term holders own an additional 5.25% of the circulating supply of which 1.5% of this is currently underwater (held at an unrealised loss). Despite prices approaching the cost basis for many long-term holders, they continue to HODL on.

Relative LTH vs STH Supply in Profit/Loss Live Chart

If we investigate aggregate spending behaviour over the last year, we see the proportion of young coins (those < 1yr old, excl. < 1day) on the move has continued to increase as a proportion of transaction flow. In the last few months, we see younger coins accounting for over 45% of the total transaction count. This is most likely a result of newer market entrants:

  • Buying the euphoric top and then,
  • Selling in capitulation and amidst the current choppy conditions.

What this metric does show that most of the current on-chain activity is due to buyers from the last 6-months spending their coins and realising losses.

Spent Output Age Bands Live Chart

Conversely, older coins (those > 1yr old) have reduced their spending, with a notable decline after the May sell-off. This demonstrates the two sided reality of empty mempools:

1) Demand for on-chain settlement is extremely low (generally bearish)

2) However, this also indicates that long-term investors are not bailing out at these prices (neutral to bullish)

The Spent Output Age bands are a particularly useful tool to have on hand should the market experience a strong rally or further capitulation. A primary behaviour to watch out for is in an event where these older coins come roaring back to life, such as on a relief rally. If so, it may indicate that old hand investors are exiting into liquidity or panic selling (bearish). If not, and their coins stay dormant during volatility, it would be a strong indication that conviction to hold remains in play (bullish).

We explore this and many other cyclical metrics to identify bullish/bearish trends in our article on Bitcoins On-chain Cycles.

Spent Output Age Bands Live Chart

To confirm just how insignificant the spending behaviour of all coins is, we can look to the Binary CDD metric with a 7-day moving average applied. This metric will trend higher when the volume of coin-days destroyed is larger than the long term average. More coin-days are destroyed when older coins and/or large BTC size are moved on-chain.

Binary CDD has fallen so low that only 1 in every 7-days is experiencing lifespan destruction above the long term average. This state has persisted for almost all of June and commenced relatively quickly after the May sell-off indicating old hands are reluctant to sell at these prices. It also highlights how little demand for block-space there is.

The entire market appears to be waiting for the next move, and few are willing to make the first one. Whichever direction this breaks, the directional response of these lifespan metrics will provide valuable insight into the market bias. They will indicate whether old hands in particular are spending their illiquid coins and taking whatever exit liquidity is there, or if they are holding on like Rick Astley.

Binary CDD Live Chart

Weekly Feature: Seismic Mining Shift

One of the largest migrations of Bitcoin hash-power in history appears to be underway. Following an official ban on mining activities in a number of Chinese provinces, many miners are in the process of shutting down or migrating their hash-power outside of China’s borders.

Over the past two weeks, the estimated mean hash-rate (7DMA) has declined by around 16%, falling from approximately 155 EH/s to around 125 EH/s. Hash-power has now returned to levels that were sustained throughout mid 2020.

Mean Hash-rate Live Chart

As the Chinese mining industry comes to grips with the logistical challenges of relocating, migrating or selling their hardware and facilities, some are likely to liquidate a portion of their accumulated BTC treasuries. These coin sales may represent miners hedging risk, obtaining capital to facilitate and fund logistics, and for some miners, may be a general exit from the industry entirely.

The Miner net position change metric shows the 30-day rate of change of miner unspent supply. This shows a notable increase in distribution over the last two weeks, generally coincident with the decline in overall hash-rate. Miners have on net distributed at a rate of around 4k to 5k per month over the last two weeks. This has reversed the trend of net accumulation which was active since April.

Miner Net Position Change Live Chart

Finally, we take a look at the holdings on OTC desks which are utilised by miners for matching their large size distribution, with large volume buyers.

During both the May Sell-off and over the last two weeks, between 3.0k and 3.5k BTC in net inflows have been observed. However in both instances, almost the full inflow size was absorbed by buyers over just a few weeks. On aggregate, the total BTC holdings on OTC desks we monitor have remained relatively flat since April.

OTC Desk Holdings Live Chart

Week On-chain Dashboard

The Week On-chain Newsletter now has a live dashboard for all featured charts

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://insights.glassnode.com/the-week-on-chain-week-25-2021/

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Morgan Stanley Invests $48M in Blockchain Startup Securitize

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Blockchain startup Securitize has raised $48 million in funding during its Series B investment round, co-led by Morgan Stanley.

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The Series B round was also led by Blockchain Capital. However, it is significant as Morgan Stanley Tactical Value Investings’ first foray into the blockchain industry. Co-head of the investment arm of the New York-based bank, Pedro Teixeira, will join Securitize’s board. Despite being the two largest investors, neither company disclosed the size of their stakes.

Morgan Stanley sees Securitize “as the future of finance – a future platform for finance,” while Securitize Chief Executive Officer Carlos Domingo said, “the market potential is huge.”

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Securitize’s business

Securitize intends to launch a platform which will allow investors to buy and sell shares of closely held assets. It will operate similarly to the way the Robinhood app functions for publicly traded companies.

Morgan Stanley’s investment is a sign that Wall Street is further embracing emerging blockchain technologies. In this instance, the confidence is based on the use of digital tokens to represent shares of companies or assets. Teixeira expressed his belief in the growth and adoption of digital-asset securities through the investment in Securitize. “We make long-term investments in businesses and asset classes that are ahead of the curve,” Teixeira remarked.

Over 150 companies already use Securitize to find backers, while 300,000 investors are also using the service to buy shares. Despite launching in 2017, Securitize is still awaiting regulatory approval for both its trading platform and its app. However, Domingo expects approval within the coming months.

Morgan Stanley and crypto

Although this is the first crypto investment of the bank’s investment unit, Morgan Stanley had previously looked into other crypto firms. For instance, it was previously reported that Morgan Stanley had possibly been negotiating the purchase of a stake in Bithumb. Bithumb is the largest cryptocurrency exchange in South Korea. Additionally, another investment unit of Morgan Stanley had been considering adding Bitcoin to its portfolio. 

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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Source: https://beincrypto.com/morgan-stanley-invests-48m-in-blockchain-startup-securitize/

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