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Ethereum reaches an ATH amid its soaring demand as collateral in DeFi

Different fundamentals are at play for the second-largest crypto when it comes to the recent price gains

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ETHEREUM ALL-TIME HIGH

Different fundamentals are at play for the second-largest crypto when it comes to the recent price gains

We have only been three weeks into 2021 and already it has broken some records for the Crypto market — Bitcoin posted an all-time high (ATH) of almost $42k on Jan. 07, followed by Ether charting its ATH around $1440 on Jan. 18 and now the total value locked (TVL) in Defi assets crossed the $25 billion mark. Interestingly, the last two are a little more correlated than the first one.

Let me explain how. The second-largest crypto is primarily used as a collateral asset for borrowing & lending in the decentralized finance (DeFi) market, apart from being the primary home base for smart contracts & decentralized applications (dApps). It is this unique set of use cases that drives the interest of investors and traders in ETH.

It was only recently that I wrote about how it was Ethereum’s turn to climb higher. And one of the reasons mentioned was the Defi boom that has taken shape in the past 12 months or so. Although there is no denying the fact that Bitcoin drives the broader crypto market, we are also seeing divergent use case narrative play out in individual cryptos as is the case with Ethereum.

While Bitcoin was receding from its ATH, Ethereum propelled higher to its ATH. An interesting question that is now being raised by some is, what would happen if bitcoin could more easily be used in DeFi — would the premier digital coin infringe on ETH’s territory? For now, price volatility is the running theme in cryptos as the wild swings continue to dominate the digital market.

According to the Chainalysis Market Intel, The short term conditions for price volatility strengthened last week. inflows to exchanges fell 11% and median trade intensity was down 6% in the last seven days as compared to the prior seven days, although Ethereum exchange balances only increased in recent days after initial declines. The data suggests while volatility may continue for a little longer but the profit-taking may be easing off.

Source: https://medium.com/technicity/ethereum-reaches-an-ath-amid-its-soaring-demand-as-collateral-in-defi-5f5160765f2a?source=rss——-8—————–cryptocurrency

Blockchain

Bitcoin’s S&P 500 Correlation Is At 5-Month High, Is This Bearish For BTC?

Bitcoin’s S&P 500 correlation hits a 5-month high and some analysts consider this to be a bearish factor for the cryptocurrency but let’s see why in our today’s Bitcoin news. Bitcoin and the traditional financial markets were correlated highly n the past few months which was clearly seen over the past couple of weeks where […]

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Bitcoin’s S&P 500 correlation hits a 5-month high and some analysts consider this to be a bearish factor for the cryptocurrency but let’s see why in our today’s Bitcoin news.

Bitcoin and the traditional financial markets were correlated highly n the past few months which was clearly seen over the past couple of weeks where the cryptocurrency followed stocks step by step. The data from crypto analytics resource skew showed that the realized correlation between Bitcoin’s S&P 500 correlation surged to a 5-month high which has happened back in November 2020. There are plenty of reasons why this could be the case but maybe the most obvious one is the involvement of institutional investors in the crypto space.

As reported plenty of times, the institutional interest in the asset class surge when companies started flooding the market. Grayscale for example saw its assets under management skyrocket over the past few months. The company’s CEO Michael Sonnenschein said that the institutional interest in BTC increased in 2021. In any case, there are many implications of the soaring correlation. The correlation to stocks shows a few things but the most important one was the fact that BTC fails as a hedge against the traditional finance systems so if BTC Is moving along with stocks, then it doesn’t serve as a hedge.

bitcoin S&P
Bitcoin – S&P 500 Realized Correlation. Source Skew

This has implications on its own and for example, we saw one reason for the 25% correction for BTC that was actually due to Wall Street crashing as well. Back then, NASDAQ had a slump and the catalyst was that the government bond yields gave some boost and investors favored companies that benefit the broader economic recovery, as Peter Tuz who was the president of Chase Investment Counsel, said:

 “Rates matter. At 1.5%, the yield is comparable to S&P 500 dividend yield. […] And there’s no capital risk with a 10-year, you’ll get your principal back. All of a sudden it’s competitive with stocks.”

As much as it is bearish, in the case of higher correlation the broader macroeconomic events need to be factored in the price formation of the cryptocurrency. The US House of Representatives passed another $1.9 trillion stimulus bill which will be another major injection in the economy if passed so we can only imagine what it will do to the stock markets.

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Source: https://www.dcforecasts.com/bitcoin-news/bitcoins-sp-500-correlation-is-at-5-month-high-is-this-bearish-for-btc/

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Chainlink Rolls Out Support For XDai Amid Rising Ethereum Fees

Chainlink rolls out support for XDai which is a layer-two sidechain that saw centralization is not able to stop major dapp players so let’s read more in our latest chainlink news today. The Chainlink oracles made their way to xDai as an ETH sidechain that saw growing adoption among Dapp developers that are not able […]

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Chainlink rolls out support for XDai which is a layer-two sidechain that saw centralization is not able to stop major dapp players so let’s read more in our latest chainlink news today.

The Chainlink oracles made their way to xDai as an ETH sidechain that saw growing adoption among Dapp developers that are not able to sustain themselves due to the high fees on the Ethereum mainnet. The price feeds are live on the xDai mainnet and offering price data for the initial set of trading pairs like AAVE/USD, LINK/USD, DOT/USD, and SUSHI/USD. More pairs should be expected if there’s more demand.

LINK Eyes Another, chainlink, price, level, support

The integration was done by Protofire which is a development workshop and xDai validator with the team receiving a Chainlink Community Grant to port native oracles on XDai and the token bridge adapter that enables native LINK payments for the functionality of the oracle. The integration of the LINK price feeds is the latest in the series of positive adoption news as the chain has already been hosting major ETH-based Dapps like Perpetual Protocol and Omen. The inclusion of native Chainlink oracles will erase a huge barrier for projects that rely on them and will open up xDai for more dapps that want to avoid the congested ETH mainnet.

xdai
Source: Medium

In the ETH community, xDai is known as a centralized layer two solutions and was launched by the PoA network that eventually transitioned to a POS model that is used by EOS and Binance Smart Chain. The number of validators can never surpass 19 which is a huge benefit that provides faster scalability with xDai offering 70 transactions per second. Friederike Ernst who is a chief operating officer at Gnosis said:

 “It is not as decentralized as mainnet, this goes without saying. Obviously these are for very different use cases: you don’t want to do things on xDai where you need the economic consensus guarantees of layer one. But for many things, you don’t actually need them.”

As chainlink rolls out support for XDai, the centralization concerns are not enough to stop the adoption. LINK’s head of integrations at chainlink Labs Johann Eid said that the smart contract developers should have the option to work with the best chain to fit their use cases.

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Source: https://www.dcforecasts.com/chainlink-news/chainlink-rolls-out-support-for-xdai-amid-rising-ethereum-fees/

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Binance Coin, Neo, Enjin Price Analysis: 05 March

Binance Coin was heading towards $205 after Bitcoin fell below $49k on the price charts. Neo also moved below a strong level of support, with bearish momentum likely to push the price to as low as $32

The post Binance Coin, Neo, Enjin Price Analysis: 05 March appeared first on AMBCrypto.

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Binance Coin was heading towards $205 after Bitcoin fell below $49k on the price charts. Neo also moved below a strong level of support, with bearish momentum likely to push the price to as low as $32

The post Binance Coin, Neo, Enjin Price Analysis: 05 March appeared first on AMBCrypto.

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Source: https://ambcrypto.com/binance-coin-neo-enjin-price-analysis-05-march

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Bybit to Cease UK Operations in Compliance with FCA Ban

Bybit has shuttered its operations in the United Kingdom. According to its latest announcement, it will cease rendering futures trading services to customers in the country from March 31. It has asked customers to close positions and withdraw balances before this date.   This action from Bybit complies with a ban on futures trading issued … Continued

The post Bybit to Cease UK Operations in Compliance with FCA Ban appeared first on BeInCrypto.

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Singapore-based cryptocurrency derivatives trading platform Bybit has announced that it will suspend operations in the United Kingdom following a ban on retail derivatives trading by the Financial Conduct Authority (FCA).

Bybit has shuttered its operations in the United Kingdom. According to its latest announcement, it will cease rendering futures trading services to customers in the country from March 31. It has asked customers to close positions and withdraw balances before this date.  

This action from Bybit complies with a ban on futures trading issued by the Financial Conduct Authority (FCA). According to the FCA, the ban was to take effect from Jan. 6, 2021.

It has also moved to restrict new signups from UK phone numbers and IP addresses.

While ensuring full compliance, Bybit said it will make efforts to engage in a dialogue with regulatory bodies and explore options.

The Prelude

A cryptocurrency derivatives ban has been in the picture since 2019. The FCA started considering this after it was reported that UK investors lost a total of $492 million on cryptocurrency derivatives between mid-2017 and 2018.

It further claims that a derivate ban will save its citizens about $289 million in potential losses.

Cryptography ID Identity UK

FCA Finally Issues Ban

The UK independent financial regulatory body issued the ban on cryptocurrency derivatives, stating that they are “ill-suited for retail consumers due to the harm they pose.”

The UK financial watchdog outlined several other reasons for the ban, saying that cryptocurrency derivatives have no basis for valuation.

Another concern raised by the FCA is that most retail traders lack proper education on cryptocurrency derivatives. Speaking further on the ban, the regulatory body’s interim Executive Director of Strategy, Sheldon Mills said;

“This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here.”

It also warned citizens to look out for and report scam cryptocurrency derivative platforms.

The post Bybit to Cease UK Operations in Compliance with FCA Ban appeared first on BeInCrypto.

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Source: https://beincrypto.com/bybit-to-cease-uk-operations-compliance-fca-ban/

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