Bitcoin is ‘Going to Fall’ if a Correction is Seen in Stocks, Says Fundstrat’s Tom Lee

Bitcoin is ‘Going to Fall’ if a Correction is Seen in Stocks, Says Fundstrat’s Tom Lee

He also called for more than 3x uptrend next year in Bitcoin price from the current levels.

$40,000 is the raised target price from Fundstrat’s Lead Digital Asset Strategist David Grider. This 50% upside from the current price levels estimate is based on institutional and corporate buying, regulatory de-risking, and retail stimulus.

These factors lead to an increase in positive momentum, which the team believes can continue over the next 6-12 months. However, Tom Lee, Fundstrat’s managing partner and the head of research, believes the digital asset can easily achieve 3x the price level. Lee on CNBC’s “Fast Money” said,

“I think in rounder numbers, 2021 is going to be a lot like 2017, which means bitcoin should do even better in 2021 than it did in 2020 so something above 300%.”

Another 300% uptrend next will put BTC above $87,000 per BTC.

Weaker US dollar is part of the reason why Bitcoin is stronger, said Lee, explaining that for starters, Bitcoin is denominated in dollars and when USD goes down, BTC goes up. The USD Index has actually been hitting new 2020 lows, which are not seen since April 2018.

“The more important effect is this year we did see a lot of central bank liquidity, the dollar was really strong surprisingly for much of the year but its weakness now really is going to make people think – how do you sort of keep a unit in sound money.”

Tom Lee Fundstrat’s Head of Research

And while a lot of people thought gold would be that sort of store, for younger folks and those who are in the digital generation, Bitcoin is that digital asset that they want to hold as a store value, Lee added.

As for Bitcoin falling along with the gold and stock market during the March crash, Lee says it is because “Bitcoins’ holder base is still tiny.”

Only about a million real people own BTC compared to nearly a billion people that own other financial instruments, so it’s a tiny penetration and Bitcoin acts like a risk-on asset, he said.

According to on-chain analyst Willy Woo, “Today ~2% of the world population has exposure,” to BTC. “Bitcoin has had 12yrs of capital inflows with minimal outflows, and a decade long span of doubling users every yr,” he added.

“I think if we have a correction in stocks then Bitcoin is going to fall and it’s because a lot of the incremental buyers, if they’re in the US may be using leverage or a risk appetite as a reason to add to Bitcoin so it should actually be falling if stocks fall.”

Tom Lee

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Author: AnTy

Russian Oil Giant Launches Bitcoin Mining Operation Using Associated Gas

Russian Oil Giant Launches Bitcoin Mining Operation Using Associated Gas

The third-largest oil producer in Russia, Gazprom Neft has launched a cryptocurrency mining operation at one of its oil sites in Siberia.

Gazprom Neft is an oil unit of Russian gas giant Gazprom, a partially state-owned multinational energy corporation which is the largest publicly-listed natural gas company in the world and also the largest company in Russia by revenue.

The company doesn’t have any plans to do the mining itself but will be sharing its energy resources with cryptocurrency miners.

The company will be using the associated gas from an oilfield in the Khanty-Mansiysk region of northwestern Siberia to generate electricity that it will be selling to the crypto mining operations.

Associated gas is a product of oil production which is most often pumped back underground. Gazprom Neft believes crypto miners could be one of the customers for the electricity produced from associated gas.

The company has connected a mobile container with computing equipment to the APG power plant and is offering the electricity to the crypto miners.

“Energy from APG can power data centers and mining farms. This will increase the percentage of rational use of raw materials. This is especially true for remote regions of Siberia and the Arctic, where the transportation of associated gas from the fields is unprofitable,” Alexander Kalmykov, head of the Gazprom Neft blockchain technology center told Russia publication Forklog.

The company launched a project in 2020 and Russian computer hardware manufacturer Vekus was the first local purchase of electricity from processed gas. The company leveraged 150 Antminer S9 ASICs that used 49,500 cubic meters of associated gas and produced 1.8 BTC.

While crypto miners get cheaper electricity, Gazprom Neft was able to achieve 95% use of the associated gas, for the first time in 2020.

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Author: AnTy

Social Capital’s Chamath Palihapitiya Bets on Bitcoin Hitting $150k

Social Capital’s Chamath Palihapitiya Bets on Bitcoin Hitting $150k

And to “buy The Hamptons and convert it to sleepaway camps for kids, working farms and low-cost housing.”

The chief executive officer at Social Capital, Chamath Palihapitiya, is a Bitcoiner through and through as he has shared with the market multiple times, calling it a “schmuck insurance.”

Now, he is calling for $150k per BTC, which, to be honest, is not that crazy of a target, as per bitcoin market standards.

“When BTC gets to $150k, I will buy The Hamptons and convert it to sleepaway camps for kids, working farms and low-cost housing,” is Palihapitiya’s exact tweet.

This tweet came on the day the world’s largest digital asset hit yet another all-time high above $29,000 in its series of new ATHs in December that had the digital asset rallying over 67% in just 20 days.

“Well then, you have less than 12 months to go; better start planning the logistics,” said on-chain analytics Willy Woo to venture capitalist Palihapitiya, who is also the chairman of Virgin Galactic, a minority stakeholder in Golden State Warriors, and has been an early senior executive at Facebook.

In 2020, Bitcoin has taken over the world with its over 300% gains YTD and emerging as a safe haven asset, a hedge against dollar weakness and the risk of rising inflation.

Ever since central banks started printing money, institutional investors have poured into the cryptocurrency market.

This year, on-chain transactions greater than $100k, acting as a valuable proxy to institutional activity, grew exceptionally, 30x exactly, as per the data provided by IntoTheBlock.

An increasing number of people are also investing in Bitcoin with the number of addresses with a balance in BTC increasing by 16.8%, adding a total of 4.81m new addresses this year.

According to the quant trader and entrepreneur Qiao Wang, the biggest bullish event for Bitcoin has been MassMutual investing millions in BTC because, “Insurance is among the most financially conservative institutions. The only thing even bigger than that would be nation-states buying,” which he says might happen in 2021.

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Author: AnTy

Binance Will Recompense $10 Million of its COVER Holders’ Losses

Binance Will Recompense $10 Million of its COVER Holders’ Losses

Cover Protocol still on target to release V2 in 1Q21. The team is working on new tokens and distributing returned 4,441.8 ETH to affected users.

The leading spot cryptocurrency exchange, Binance, will be compensating just over $10.1 million to affected COVER users.

Binance will be using its SAFU fund to distribute the funds in 8,171,634.10 BUSD and 2,581.16 ETH, shared the exchange CEO, Changpeng Zhao. He said,

“COVER smart contract got hacked. A lot of users lost A LOT of money. The project team says they can’t cover the losses. We made a simple decision, we use our funds to cover the losses of our users. $10 million bucks.”

As we reported, the insurance coverage DeFi project, COVER was exploited earlier this week with an infinite minting bug in their incentives contract resulting in 40 quadrillion COVER tokens to be minted. The attacker, Grap.Finance sold $3 million worth of COVER tokens for ETH and returned the funds to Cover and burned all the tokens minted.

Cover Protocol then announced that they will be providing a new COVER token through a snapshot. They are also “still on target to release V2 (Q1 of 2021) for Cover Protocol.”

As per its compensation plan, a snapshot taken some point before block #11541219, will be used to distribute new tokens and the returned 4,441.8 ETH will be distributed to the users affected.

But of course, this doesn’t cover all the losses, so Binance has stepped in to help its users who bought COVER from the exchange after COVER’s proposed snapshot time at 2020/12/28 8:11:06 AM (UTC) and thus become worthless. The exchange further noted,

“A large number of minted COVER tokens (greater than the COVER circulating supply) were bought by arbitrageurs on decentralized exchanges and deposited on Binance, causing the price of COVER to decrease at an alarming rate, and resulted in many Binance users experiencing significant losses.”

Some see this as Binance’s marketing tactic, a win-win situation, others are appreciating the gesture noting, “There was really no reason for them to do this.”

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Author: AnTy

VanEck Files for a Bitcoin ETF Again; This Time It Will Physically Hold BTC

The $49 billion investment firm says the Bitcoin market has matured, pointing to better infrastructure, regulated exchanges, and support from OCC.

So, it has started!

After no new proposal in 2020 following the rejection of all the Bitcoin ETF proposals by the US Securities and Exchange Commission (SEC) in the past couple of years, the market is back to try again.

Now that institutions are pouring in amidst the strong bull market, VanEck is yet again making an attempt at a Bitcoin exchange-traded fund (ETF). The market feels that this time, we could finally get approval.

The big difference in VanEck’s proposal is that unlike the last time when they filed for a Bitcoin futures ETF, this one would physically hold the world’s largest digital asset.

The $49 billion investment firm has already successfully launched a Bitcoin ETN in Europe and is now ready to bring in another herd. Gabor Gurbacs, digital asset strategist at VanEck tweeted,

“Bringing to market a physical Bitcoin ETF in the U.S. is a top priority for @vaneck_us. We are committed to support bitcoin-focused innovation & continue to work with regulators & market participants to achieve that goal.”

In its SEC filing, VanEck argues that the Bitcoin market has matured and is “operating at a level of efficiency and scale similar in material respects to established global equity, fixed income and commodity markets.”

Here, it points to the launch of BTC futures contracts on major and regulated exchanges, growth of trading volume, arrival of major, established market makers, development of a robust bitcoin lending market, and expansion in the availability of institutional-quality custody services.

Moreover, the Office of the Comptroller of the Currency has confirmed that national banks may provide custody services for bitcoin and other virtual currencies, it said.

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Author: AnTy

BitGo Settles with Treasury’s OFAC for Violating Multiple Sanctions Programs

BitGo Settles with Treasury’s OFAC for Violating Multiple Sanctions Programs

The settlement of $98,830 with OFAC is for 183 apparent violations.

The Office of Foreign Assets Control (OFAC), a financial intelligence and enforcement agency of the U.S. Treasury Department, has settled an enforcement action with BitGo for failing to prevent users in Crimea, Cuba, Iran, Sudan, & Syria from using its service.

“Turns out Treasury *doesn’t* need more KYC to enforce sanctions laws,” commented Jake Chervinsky, General Counsel at Compound Finance.

Palo Alto-based BitGo is an institutional digital asset custody, trading, and finance service provider.

The company reached a settlement deal of just under a million dollars with the OFAC on Wednesday. Chervinsky called this “a pretty good settlement for BitGo, especially considering it was not a voluntary disclosure.” The official announcement states,

“BitGo agreed to remit $98,830 to settle its potential civil liability for 183 apparent violations of multiple sanctions programs.”

The violations were reported to be processed between March 10, 2015, and December 11, 2019, on behalf of persons located in the Crimea region of Ukraine, Cuba, Syria Iran, or Sudan that were using the company’s non-custodial secure digital wallet management service.

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Author: AnTy

Leveraged Funds are Record Short on CME Bitcoin Futures

However, this might be bullish instead of bearish for BTC.

Bitcoin continues to break new records every day lately.

Yesterday, BTC/USD broke the $29,000 level as well and the market is expecting to enter into 2021 above $30k and end 2020 with more than 300% returns.

Amidst this extreme bullishness, leveraged funds on the Chicago Mercantile Exchange (CME) are record short.

However, this might be rather bullish for Bitcoin’s price than bearish as the same picture was seen on Dec. 1st.

As data provider Skew noted, they are likely to be record long on Grayscale Bitcoin Trust, trying to collect the premium. GBTC is currently holding 607.07K BTC, 3.2% of Bitcoin’s circulating supply, which is trading at a 23.5% premium to BTC price.

Grayscale, however, hasn’t bought any BTC since Dec. 25th, as per Bybt.

These leveraged funds might also be taking advantage of the CME futures basis, the average is currently over 10%. The difference between the spot price of Bitcoin, $28,268 as of writing, and CME Bitcoin futures price, which is $29,135, is an arbitrage opportunity for these funds.

On Monday, the regulated exchange had to temporarily pause the trading of bitcoin futures after one of the biggest gaps was formed, of more than $3k, between the derivatives and the underlying asset.

CME has actually become the largest Bitcoin futures venue by the number of open contracts amidst the growing institutional interest. Open interest on CME stands at $1.60 billion, the highest among the major derivatives exchanges, as per Skew.

Now, CME accounts for more than 18% of the total OI which stands at over $9 billion.

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Author: AnTy

Binance US, Genesis, & Abra Suspends XRP Support; Bittrex & Uphold Clarifies No Plan to Delist

Much like all the XRP trading and deposit suspension that has happened so far, only the US users are affected. Exchanges clarify that Spark (FLR) Token Distribution in 2021 is unaffected.

Binance’s US-based crypto exchange Binance.US has announced the delisting of XRP on Jan. 13, 2021, at 10 am EST. Binance.US users won’t be able to deposit XRP but withdrawals will be unaffected.

Much like all the trading and deposit suspension that has happened so far, only the US users are affected.

The exchange further clarified that delisting will not affect users from claiming their Spark (FLR) Token Distribution in 2021.

Another one to join this list is Genesis which sent an email to its users, informing them of the XRP trading and lending suspension, as of Dec. 29. The users are not allowed to make new purchases while those who hold XRP have until Jan. 15 to sell it.

The company no longer supports loans in XRP either and both open-term loans and fixed-term loans will also be called. Meanwhile, the “team is actively monitoring the evolving regulatory situation with XRP.”

Abra has also joined the list of companies ending XRP support for US users, despite it being a peer-to-peer transaction network.

According to the firm’s message, Abra plans to suspend trading in XRP for US customers at 3 PM PST on Jan. 15th.

“Abra is registered in most states as an MSB and has had previous legal battles with the SEC that led to them delisting their stock ETF offering,” noted Adam Cochran, partner at Cinneamhain Ventures.

No plans to delist XRP

Amidst all the suspensions, cryptocurrency exchange Bittrex, which no longer allows its US customers to trade XRP clarified that they are not going to delist the digital asset and will maintain all XRP markets: BTC-XRP, USD-XRP, USDT-XRP, ETH-XRP, and EUR-XRP.

“Uphold will continue to list XRP until and unless the Complaint is adjudicated against Ripple – specifically citing that XRP is, today, a security, or trading volume dissipates to a point where we can no longer support,” came the tweet from JP Thieriot, CEO of crypto trading platform Uphold.

Australia-based BTC Markets also took to Twitter to share that they are monitoring events in the US regarding the SEC but have “no plans to delist XRP at this time.”

The price of XRP meanwhile lost a considerable amount of its value in the last two weeks. After falling under $0.17, the crypto asset is currently trading around $0.22.

“XRP’s market cap has fallen by 93% from $137B to under $10B. That makes the value of the XRP collapse bigger than Enron and Worldcom,” said Joshua Frank, CEO of The TIE. “While not a bankruptcy, XRP is effectively the third-largest collapse of all-time behind Lehman Brothers and Washington Mutual,” he added.

Coinbase Under Hot Water Too

A class-action lawsuit has been filed against US-based crypto exchange Coinbase alleging that it knew XRP was a security and still sold it “illegally”.

Just this week, Coinbase, which recently filed to go public, said it suspended support for XRP trading and deposits.

The case is filed by Thomas Sandoval in the U.S. District Court, Northern District of California (San Francisco) and he is seeking damages for the commission paid by him and other users to Coinbase for XRP tokens.

“Until late this month Coinbase sold the XRP token, the value of which was entirely linked to the success or failure of Ripple Co. and the managerial efforts of its executives,” Sandoval said in the complaint. “Indeed, Ripple Co.’s survival as a corporate entity depended on its sale of unlicensed XRP securities to the public to fund its business operations.”

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Author: AnTy

Bitcoin Is Ready to Welcome The New Year With Blast; Chance Of A Pullback?

Several factors point to an upcoming correction, what will be instructive for next year’s flows would be whether institutions “buy on a potential dip.”

Bitcoin vaulted above $29,000 to hit yet another record high with just one day left to end 2020. But it is showing no signs of slowing down its crazy December rally that has it up over 50% this month.

The digital asset climbed as high as $29,275 before pulling back to $28,045 but is now just above $28k.

And with these gains came over $540 billion market cap which helped Bitcoin flip its skeptic Warren Buffett’s Berkshire Hathaway and become the 10th largest asset by market capitalization.

Interestingly, while volume on Wall Street is winding down due to the holidays, crypto volumes are seeing record-breaking levels.

As Paul Vigna, a reporter at the Wall Street Journal noted, in his 3-decade experience covering financial markets, he has “never seen a group of people so insanely bullish on a specific asset class.”

This latest uptick in BTC price coincided with increased stablecoin deposits on crypto exchanges. However, such transactions are now decreasing.

A Potential Dip

Bitcoin has been going strong ever since the March sell-off and since then we have yet to see any meaningful pullback.

“BTC would have a correction when the spot inflow of institutional investors slows down,” says Ki-Young Jo, CEO of data provider CryptoQuant. He noted that Grayscale hasn’t purchased any BTC since Dec. 25. Also, we haven’t had significant Coinbase outflows since last week.

The relative strength indicator is also flashing red, putting the digital asset into overbought territory, suggesting the coin is “close to a top.”

“Key to this rally is that it has been sustained over several weeks,” said Matt Long, head of distribution and prime products with crypto brokerage OSL in Hong Kong. “If we do see a break to the downside, it will be instructive on the direction of first-quarter flows whether we see institutions continue to buy on a potential dip.”

The market has long been anticipating a correction that is yet to be seen. In the light of strong demand for Bitcoin, experts believe it won’t be as deep, 30% to 40%, as we saw during the 2017 bull run but less than half of that and even that would be quickly scooped off.

“My sense is we’re very close to a top — we could hit $30,000 though,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “We should definitely see a pullback, but the magnitude is probably lesser. We might only see 10% to 15% drops.”

According to Ayyar, a lot of things have been validated this year, and “Bitcoin is now a real alternative.”

Regulatory Worries

Regulators are also keeping things slightly uncertain. After the SEC sued Ripple Labs and its top executives for allegedly selling unregistered security XRP, it has been speculated that they are “sniffing around a number of projects and companies.”

The market can see the biggest hit if a stablecoin like the dominant USDT gets targeted. And although some may feel so, “Tether is registered and regulated under FinCEN as all the centralized competitors. Strict KYC/AML is applied to all Tether direct users, as the other main issuers are doing. Less regulated is just FUD,” clarified Paolo Ardoino, CTO at Tether and Bitfinex.

When it comes to Tether, the “SEC isn’t the agency to be worried about,” said Jake Chaervinksy, General Counsel at Compound Finance. The NYAG is already pursuing Tether in a Martin Act investigation, He said earlier this week that the handover of loan documents will be completed in “the coming weeks.”

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Author: AnTy

NYDFS Approves Internet Giant, GMO, to Offer The First Japanese Yen (JPY) Pegged Stablecoin

NYDFS Approves Internet Giant, GMO, to Offer The First Japanese Yen (JPY) Pegged Stablecoin

Tokyo-based internet conglomerate, GMO Internet has been cleared by New York Financial Services (NYDFS) to provide two stablecoins; a Yen-pegged stablecoin (GYEN) and a dollar-pegged stablecoin (ZUSD).

The NYFDS allowed GMO Internet to set up a limited purpose trust company, GMO-Z.com which will issue the two stablecoins. In order for the company to gain approval, it had to meet various strict rules from the NYFDS and also adhere to the federal anti-money laundering (AML) rules and economic sanctions.

Although there are various regulated stablecoins, there aren’t any pegged to the Japanese yen. In this case, GMO Internet becomes the pioneer company to issue the world’s first JPY-pegged coin.

According to the company, both ZUSD and GYEN stablecoins can be bought and redeemed using GMO-Z.com. The two stablecoins will be powered by the Ethereum network and will be available from Jan. 2021. The firm also clarified that the two stablecoins will be available to both institutional and individual clients and are ideal for trading, payments, hedging, settlements, and arbitrage. GMO-Z.com Trust Company’s SVP of business development, Kurt Bierbower, explained further,

“We seek to dramatically reduce execution times and expand the digital options for retail and institutional clients in trading, settlements, payments, lending and remittances.”

GMO Trust also stated that it had entered into strategic partnerships with various global virtual asset exchanges to guarantee the liquidity of the digital currencies. Bierbower also clarified that the firm started to develop GYEN in 2018. However, the two stablecoins will not be offered in Japan.

The licensing means that GMO is one of the 27 firms that are regulated to engage in digital currency activities in New York.

GMO has been in the crypto space for a couple of years. The firm owns a licensed crypto exchange operating in Japan and also a Bitcoin mining outfit. The company also states that it runs the globe’s biggest online forex trading outfit apart from their main internet services business. The firm also has an Internet bank that is regulated by the Japanese Financial Services Agency (FSA).

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Author: Joseph Kibe