Bitcoin Breaking Out of Re-Accumulation Phase Likely to Ignite “Another Parabolic Rally”

Since June 2019, Bitcoin has been in a re-accumulation phase, shared Tuur Demeester. He explained on Twitter how a year back bitcoin broke out of its accumulation phase that lasted about nine months only to start the re-accumulation.

As such, “a break out of this band will likely ignite another parabolic rally,” he said.

Bitcoin can Rally to $50k -$100k in Next Bull Cycle

Involved with Bitcoin since 2013, Demeester has been here when the world’s leading digital asset went through its first “crazy bubble” that took BTC from $1 to $30.

This time, he believes the bottom is in and the next bull market is here. This cycle according to him could easily take us to $50,000-$100,000. Demeester said in a conversation with Messari,

“Now we’re back in a bull market. I think for sure $3,000 was the bottom and I don’t think we’ll go below $6,000 again. I think a price target of like $50,000 is not insane at all especially given just how crazy the money printing is. I would even say like between fifty and a hundred thousand.”

However, it all depends on the buying power of the USD, for instance, if inflation takes the cost of a bicycle from $200 to $2,000, bitcoin would have to discount that.

Institutions are here, Retail is to come

Currently, bitcoin is trading around $9,800, up 157% from the March lows, and recording nearly 34% gains YTD. But, “retail is still not paying attention,” said Demeester.

According to him, they have been shaken out and there’s lots of despondencies. Whoever stayed invested probably got burned between 2018 and now and that’s gonna keep people away for a while still, he said.

But they will only come back once when we are close to 20,000 or beyond that. What’s driving the current market is institutions.

“Right now it’s institutions that are interested and it’s kind of like a land grab phase where this is gonna get big.”

Bitcoin is not correlated with the traditional financial system which is in all kinds of trouble. Moreover, it’s really scarce so these institutions are just kind of staking their claim and then see what’s gonna be built on top of it later.

So, the price right now is driven mostly by institutions — billionaires, family offices, and large institutions such as Paul Tudor Jones.

As such, the bitcoin market is still in the infrastructure phase despite JP Morgan becoming the bank for Coinbase and Gemini. It’s all about building the rails, both legal rails and financial bridges between the financial industry and Bitcoin.

He expects 2020 and 2022 to be the deployment phase where we really go mainstream and people can start using it for many different purposes.

You can watch the full interview here:

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Author: AnTy

CoinMarketCap Finds the Solution to “Fake/Suspicious” Volume

In 2019, it was reported that 95% of the bitcoin trading volume is fake.

About a month after that, CoinMarketCap said they are “working hard to build constructive solutions to address volume concerns.”

Now, a year since the report came, CoinMarketCap has found the solution to tackle this issue.

Over a month after the leading spot exchange Binance acquired CMC in a $400 million deal, the crypto data tracker has exchanged the “volume” criteria for ranking cryptocurrency exchanges with the web traffic category.

à la ‘If you don’t have a solution, change the question!’

Real Volume? Remove suspicious volume!

Interestingly, the day Binance acquired CMC, the exchange was ranked 15th with a reported volume of $6.7 billion. However, the adjusted volume, a metric to exclude data that is “skewed or potentially suspicious,” reported just over $2 billion.

But this metric is now removed from the site.

And based on the new metric, Binance got the top spot!

“What did you think was gonna happen? Six weeks in and binance acquisition of CoinMarketCap already being abused to manipulate the rankings,” called out analyst Mati Greenspan.

Greenspan has been against Binance’s decision to acquire CMC from the start which he said is “buying out the ranking site in order to manipulate your way to the top.”

Source: CoinMarketCap

According to Binance founder and CEO Changepeng “CZ” Zhao, the new rankings are “better than before,” and he finds it useful as “I can finally have a clear view of the field and see who the real upcoming exchanges are.”

With the new metrics, “We strive to maintain a high standard for data transparency and integrity in our industry,” he said.

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Author: AnTy

Beam Privacy Cryptocurrency to Undergo Second Hard Fork at Block 777,777 in June 2020

Beam, a privacy centered altcoin which was launched on top of the Bitcoin mainnet on January 3rd, 2019, has announced the date and timeline for its second hard-fork which would be executed on June 28, 2020 on the 777,777th Block of the network. The announcement was made via a blog post,which was published on April 22nd, detailed that the new hard-fork would see the Proof-of-Work based mining consensus change from BeamHash II to BeamHash III.

Some of the major changes that would be implemented with the second hard-fork would include,

  • PoW algorithm will change from BeamHash II to BeamHash III. More details on BeamHash III will be shared closer to the time.
  • Activate support for Confidential Assets
  • Activate support for Lelantus Mimblewimble
  • Activate support for One-Sided Payment

The upgrade to the PoW mining consensus is expected to bring significant improvement to the present mining network and enhance the GPU card capabilities along with it.

The beam would also avail a testnet a few weeks prior to the scheduled hardfork and the launch of the testnet would depend on the block time. The hardfork would only require users to make a software upgrade. The platform is planning to release the node and desktop wallet binaries a month in advance to give necessary amount of time to its users to upgrade to the latest version.

The users would be required to upgrade to the latest version of the wallet called Eager Electron 5.0 prior to the hardfork as the upgrade won’t support the earlier versions and that is one of the key reasons for releasing it a month prior. The firm also assured that the funds will remain safe even if some people forget to upgrade in the given time frame.

The Second Hard-Fork Comes Within a Year of the First One

Beam network’s first hard fork came in August 2019 which also saw major upgrades in the mining consensus software changing from Beam Hash I to Beam Hash II at block 321,321. The first hard fork resulted in the decline of the mining difficulty, which was found because some miners forget to upgrade their software on time.

Beam being a privacy-focused altcoin uses Mimblewimble privacy protocol. Although a research study from Dragonfly Research analyst, Ivan Bogatyy claimed that the protocol in question cannot be seen as an alternative to Monero or Zcash, due to certain privacy breaches in the past, Beam challenged the study claiming their implementation of the protocol was not used in the study.

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Author: James W

Bitcoin Delivery on Bakkt Remains Unaffected by an Unstable Market

  • After a disappointing activity in last quarter of 2019, 2020 records a significant increase
  • Bakkt consumer app to help loop in mainstream users – Paul Veradittakit, partner at Bakkt investor, Pantera Capital

The physical delivery of Bitcoin on ICE’s Bakkt is looking to be moving in the opposite direction of price.

This month, Bitcoin price went down as low as $3,850 on March 12th however, the physical delivery of Bitcoin had a record increase of 44%. As of March 20, nearly 300 BTC were delivered. However, the USD value of the Bitcoin delivery saw a decline.

“Physical BTC delivery on Bakkt increased 44% in March, although being relatively flat in USD. Despite the recent market instability, Bakkt seems relatively unaffected,” reported Arcane Research.

Unlike the last quarter of 2019, when the bitcoin physical delivery was extremely low at below 25 BTC, the first quarter of 2020 is seeing a much-heightened delivery, March more so.

Source: Arcane Research

Bakkt was launched in September last year as the first such platform to offer physical bitcoin delivery. Unlike the other cash-settled bitcoin futures, these products have been expected to bump up the market activity in bitcoins.

However, as we noted last year, the activity has been underwhelming, to say the least as in October, Bakkt delivered 15 bitcoins adding two more in the next month. But it has started to see a jump as users go for their bitcoins.

In December however, the company launched cash-settled bitcoin futures along with bitcoin options.

Bakkt Consumer App to Help Loop in Mainstream users

Elsewhere, Paul Veradittakit, a partner at Pantera Capital talked about Bakkt’s upcoming mobile app being a “critical step” to bolster the credibility of crypto assets as legitimate.

Recently, the platform closed a $300 million Series B led by Pantera Capital, ICE, Microsoft’s M12, BCG, and others.

In this app, a user can manage all of their digital assets while offering rewards programs and a checking account. This app is key because it shows why cryptocurrencies are useful, drives user engagement, and identifies new opportunities for both suppliers and merchants, said Veradittakit.

Bakkt’s consumer app that will be launched in the summer will bring “accessibility, understanding, and utility to digital assets.” This he said is a step forward in “helping loop in mainstream users to the digital space.”

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Author: AnTy

Bitcoin Purchases on Dorsey’s Square Cash App, Records Its 7th Straight Quarter of Growth

  • In 2019, Bitcoin generated $510 million in revenue and half of Cash app’s Q4 earnings
  • In 1Q20, the company is projecting up to $715 million in transaction and bitcoin costs

According to the financial report of the quarter four of Twitter founder and bitcoin proponent Jack Dorsey’s Square, customers bought $178 million of Bitcoin.

In total, the peer-to-peer payments and stock trading Cash App generated $361 million in revenue, half of which came from bitcoin trading. During the entire 2019, the cryptocurrency brought in $510 million in revenue.

Source: Square’s Bitcoin sales

This has been Square’s Cash app’s 7th straight quarter of growth, seeing $239% of year-over-year growth. This growth has been despite bitcoin losing its value for the better part of 2018 and 2019.

In the quarter first and second of 2018, Bitcoin lost 50.74% and 8.17% of its value but gained 2.63% in 3Q18 only to lose 43.21% in 4Q18. In 2019, while the first two quarters were green by 10.34% and 161.50%, the last two recorded negative returns of 25.11% and 10.30%.

Also, the company reached 24 million active users in the three months ending Dec. 2019, which has been an increase of 60% in comparison to 2018. They exceeded the expectations of the market by raking in over $1.3 billion in revenue, a solid 41% YoY increase. As a result, the shares of Square rallied as much as 10% on this better-than-expected fourth quarter results.

About 90% of this revenue was also generated in the US and that’s why the coronavirus might have much of an impact on the company’s return this year while PayPal lowered its outlook for first-quarter revenue growth by one percentage point.

Continued Growth

The Venmo competitor rolled out its bitcoin services across the US on its Cash App in the summer of 2018 and then in mid-2019, it allowed customers to deposit bitcoin into the app. For the first-quarter of 2020, the company is projecting up to $715 million in transaction and bitcoin costs.

On Wednesday’s investor call, Chief Financial Officer Amrita Ahuja said once a user starts using the app for bitcoin buying and selling, they tend to generate 2-3 times the revenue by regular users. Ahuja said,

“We are able to efficiently acquire customers, keep them engaged and show them additional ways we can continue to add value.”

The company already has a dedicated division for bitcoin, Square Crypto that announced a software development kit last month to make it easier for applications to integrate the Lightning Network, the second 2 layer on the bitcoin network for cheaper and faster payments.

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Author: AnTy

CEO Brad Garlinghouse Compares Ripple To The Earliest Days of Amazon

2019 was “an incredible” year for Ripple, says CEO Brad Garlinghouse in an interview with Julia Chatterley of CNN. The year he said saw the shift from speculation that has “driven the crypto market” to a utility like solving problems.

In 2020, they are building the momentum which brings in more customers and more liquidity. This year will be pivotal because of the regulatory clarity which Garlinghouse said will help “catapult the whole industry.”

He talked about how in Davos during the World Economic Forum, he was meeting with regulators and banks and explained to them how crypto but specifically XRP can be used to solve a real problem without circumventing regulation or government.

Ripple is also in discussion with the regulators over the nature of XRP. He didn’t provide any details but said they’ll continue to engage with them and “had very constructive conversations with regulators here in the United States.”

Shifting the Focus to On-Demand Liquidity

Ripple’s focus is certainly on its On-Demand Liquidity Solution which Garlinghouse said processed $54 million using XRP from the US to Mexico in a week. This has been 7.5% of all US-Mexico flows, which has been a substantial increase from about 3% in December.

“Liquidity begets liquidity” and the more activity you see, the more follows. The largest digital asset exchange of Mexico, Bitso is using XRP through which “instead of being dependent upon the speculative trading of crypto,” it represents institutional flows.

And these $54 million flowing through Bitso is a big deal for their business which Ripple CEO said, “brings other players.”

However, it just one corridor. There is already “a lot of demand” and Ripple is “prioritizing new corridors,” so they’ll be expanding in other corridors while seeing the liquidity grow naturally.

But the regulatory clarity is of importance here. And that’s the reason India isn’t high on their list, he said. This is what Garlinghouse also shared at the Davos with the regulators that they are not circumventing KYC, customer check, or anti-money laundering checks which gets them “very comfortable very quickly.” Garlinghouse added,

“I think a lot of countries around the world see that this is a technical wave, this is a major step and they want to invest in it. They want to see companies continue to invest and I think that’s good for the economy.”

XRP or the Fed Coin?

The regulatory clarity has also been because of the central banks taking a step towards creating their own digital currencies.

This according to Garlinghouse is “healthy and constructive for the entire crypto community.” It makes sense because even at the Fed window, it isn’t giving a crate of dollars rather a digitized centralized ledger entry, so there isn’t any difference.

However, in most of Europe and the US, for the central bank to go directly to the customers and circumvent commercial banks “doesn’t make a lot of sense,” he explained.

So, could it mean Ripple will substitute XRP for a Fed coin one day? Garlinghouse is open to that but says there still be a cross-border settlement dynamic and it doesn’t “change the need for a cross-border neutral like an XRP which has been extremely efficient.”

This means, there won’t be “one winner in the crypto space,” rather “a lot of different participants solving different segments of problems.”

“There’s going to be other digital assets that increasingly have utility for customers and therefore drive velocity” and demand.

Is an IPO Really Coming?

Ripple is one of the most valued companies in the crypto space at $10 billion valuation but given that Garlinghouse talked about an IPO earlier this year, what could be the reason with Ripple already having a “very strong balance sheet,. Garlinghouse did try to deflect with,

“I don’t think I’ve said go public I think what I said was 2020 will likely have crypto kind of blockchain IPOs (…) I don’t think ripple will be the first but we certainly don’t to be the last so I kind of kept it open.”

However, he shared that IPO would mean more flexibility for the company which would give them the “strength to do new things,” and grow business like they did last year by adding 100 new employees while other companies in the space had layoffs.

The Shift from Amazon Books to Amazon

Gallinghouse also shared Ripple’s long term goal of becoming Amazon as he explained, “in the earliest days of Amazon it’s called the Amazon books. As a bookseller it competed with Barnes & Noble and with the hoarders.”

Ripple he said is viewed today as a cross-border payments company but sees themselves as a blockchain infrastructure company. Cross-border payments he said are just the first vertical and “we want to make sure we’re winning in cross-border payments before we do another vertical.”

In the next five years, Ripple will “continue to grow and take market share” and “we’re not just Amazon books but we are Amazon,” said Garlinghouse.

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Author: AnTy

Crypto Related Losses Skyrocket Despite Hacking Crimes Dropping Significantly

  • According to a Q4, 2019 survey by CipherTrace users have lost 4.5 billion in Ponzi scheme and fraud scams while hacking-related scams have significantly dropped
  • Banks have also fallen prey as US banks unsuspectingly facilitate illegal transactions

Losses in 2019 shot up by 160% despite hacking crimes dropping by 66%, this was according to a 2019 Q4 report by CipherTrace, a cryptocurrency intelligence firm. Amounting to $4.5 million just in the previous year.

Dave Jevans, CipherTrace CEO, stated they had seen a major bump in crimes where the unsuspecting users were duped by Ponzi schemes, mainly set up by people inside the system. This would make investors pull the plug on the cryptocurrency investments that are hurting the systems built around digital assets.

“We noticed a significant uptick in malicious insiders scamming unsuspecting victims or leaching on their users through Ponzi schemes.”

A common use case is the crypto wallet and exchange PlusToken Ponzi scheme where unsuspecting clients lost $3 billion in a single scam. There has also been the Canadian Exchange, QuadrigaCX, clients lost close to $135 million after the founder of the company passed away suddenly.

Banks are Unsuspecting perpetrators

Banks have also been victims as they have unknowingly facilitated illegal cryptocurrency transactions of up to $2 billion in US banks alone. This could be mainly attributed to the fact that it has become harder for traditional financial systems to embrace emerging technology while steering clear of crypto relations. This is as banks globally continue to face fines levied by Anti-money laundering (AML) authorities of about $6.2 billion.

Jevans further explained that banks need to come up with alternative solutions of ridding their systems of illegal dealings that would finance terrorism as they had previously underestimated the percentage of digital assets that are to be found in their accounts and systems.

“Like them or not, banks have a lot more virtual assets lurking in their accounts and payment networks than most in the industry had previously thought.

Banks need new capabilities to ferret out illicit MSBs [Money Service Businesses], terrorist financing, and other major sources of risk.”

Illegal crypto merchants have also been key in funneling funds to terrorist fronts. They are usually connected to high-risk exchanges and hide the transactions by intentionally using the wrong merchant category codes (MCC) the report further read.

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Author: Lujan Odera

Darknet Markets Account For Only 0.08% of All Incoming Crypto Transactions: Chainalysis

  • In 2019, darknet sales increased by 70% and for the first time, it surpassed $700 million
  • Active markets collected more revenue than ever, except in 2012 and 2013
  • Chainalysis expects more darknet markets to accept privacy coins like Monero in 2020

In 2019, cryptocurrency prices weren’t the only ones that saw an increase but the darknet market also grew. Its transaction activity actually hasn’t been influenced by the ebbs and flows of the crypto markets and other seasonalities.

According to Chainalysis, after a decline in 2018, the total darknet sales increased by 70% in 2019 to more than $790 million worth of cryptocurrency.

This has been the first time that the sales surpassed $600 million and for the first time since 2015, darknet market share of overall incoming transactions increased, doubling from 0.04% in 2018 to 0.08% in 2019.

Darknet markets total share of incoming activity remains “extremely low” but Chainalysis states,

“recent increased volume speaks to the resilience of darknet markets in the face of heightened law enforcement scrutiny.”

The trend that remained intact was that the vast majority of these transactions flow through exchanges. Exchanges are the most common service customers use to send cryptos to vendors and then sending these funding to cash out.

Active Darknet Markets Collected Huge Revenues

In 2019, eight of the darknet markets closed but eight new ones took their place, keeping the total number of active markets steady at 49. Each of these active markets also collected more revenue than ever, except during the height of Silk Road’s heyday in 2012 and 2013.

This revenue was driven by more purchases rather than larger ones. While the median purchase size remained constant in USD value, the number of transfers jumped yet again from 9 million to 12 million.

“This suggests that either more customers bought from darknet markets in 2019, or that old customers are making more purchases.”

Darknet Markets Implement Safety Features

In the darknet markets, drugs remains a popular choice. Markets specializing in other illicit goods also bring in sizable funds.

Chainalysis report finds that some of these darknet markets have begun implementing user safety features such as multi-signature technology and wallet-less escrow also knowns as direct deposit. Some are even adopting new infrastructure to avoid shutdowns by law enforcement.

Going forward, Chainalysis expects more darknet markets to accept or mandate the usage of privacy coins like Monero as used by Empire which it says “could change in 2020.”

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Author: AnTy

Ponzi Scheme Cloud Token Drafts New Contract for Investor Exit, Not Likely To Get A Pay Out

Cloud Token which collapsed back in October 2019 has drafted new contracts that might see its investors lose more money as opposed to being reimbursed. The project turned out to be another ‘Ponzi’ within the crypto industry following payout defaults last year as stipulated in their agreement with investors.

According to the new contract, investors can exit the project and cash out at will; the catch however is they will only get back their initial investment. This contract further outlines that CTO returns based on re-invested funds will not be part of the settlement to investors. It is also notable that CTO conversions made through the Backoffice face a similar fate as per the new contract.

The woes of this MLM token-oriented project began back in Q4 last year when Cloud Token ran out of investment options to sustain its ‘Ponzi’ model. As it stands, the firm cannot reconcile existing CTO’s and payout the dollar interest as most only exist in thin air. News reports within crypto have it that Cloud Token exhausted the real funding proceeds way back during the purchase of premier CTO bundles.

Furthermore, Cloud Token’s Admin, Ronald Ai, went into hiding as early as December, 2019. He has also vanished from social media platforms leaving stakeholders to speculate that Cloud Token is indeed another crypto MLM scam.

The investors who opt to sign this new contract with Cloud Tokens will have their funds locked for another half year before the obligations are honored. However, given the history of scamming and disappearance acts in crypto, this might only be temporary music to the ears of investors.

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Author: Lujan Odera

The US Twiddles Their Regulatory Thumbs As Asian Countries Are Becoming Crypto Powerhouses

2019 did not turn out to be the year of bulls as many had expected, but despite that cryptocurrencies and blockchain dominated the world news for their growing influence in various sectors around the globe. Interestingly, it’s not just world power which is seeing a gradual shift from West to East the Eastern world is also dominating the west in terms of crypto and blockchain acceptance and regulation.

Asia is currently leading the blockchain and cryptocurrency race with several countries in the continent looking to either implement friendly regulations or have already made strides. China towards the last quarter of 2019 called for accelerated crypto adoption, while Singapore has become one of the leading choices for fintech firms, as the country provides access to south Asian Markets of over 600 million people.

Singapore’s Payment Services Act which is slated to come into action by January 28th is already being seen as one of the most progressive and comprehensive regulatory frameworks covering blockchain and cryptocurrencies. The act is set to cement Singapore’s position as the hub for the fintech industry.

Central Governments Will Also Venture Into The Decentralized Space

Many central governments who were strictly against regulating crypto use in any form have come around to realize the potential of these digital assets. These governments have also realized that it is next to impossible to put a blanket ban on these cryptocurrencies and thus they are looking to regulate crypto trading.

Many central banks from Asia have also shown a great interest in launching a Central Bank Issued Digital Currency (CBDC) to offer faster cross-border remittance services while still maintaining their financial sovereignty. China is slated to become the first country of the world to launch its national digital currency whose research they started back in 2014 itself.

Many crypto analysts believe that governments around the globe understand the shortcomings in the fiat monetary system and know that it would lead to financial instability. This is the reason not just China but many other nations have started their research and development wing to study digital currencies and also develop a stablecoin pegged by the national fiat system.

While Asian countries are actively working to be at the top of the blockchain game Western nations especially the US and many developed nations of Europe are still not clear about the scope of use of cryptocurrencies in their nation.

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Author: James W