BitMEX Co-Founder Arthur Hayes Puts Ether Moon Target Above $20,000

From calling Ether “a double-digit shitcoin” to wishing he had bought some in the pre-sale, Hayes has come a long way and is very bullish on the “most developed, decentralized smart contract network” and DeFi.

Arthur Hayes, the co-founder of crypto derivatives exchange BitMEX is big-time bullish on Ethereum, saying he wishes he had bought some ETH in the pre-sale when it was sold for about 30 cents in 2014.

This week, Ether hit a new all-time high at $2,500.

This is a big shift from calling Ether “a double-digit shitcoin,” which, in his favor, he admits to.

“One of the best writers in the space. Also the most successful market maker/manipulator,” commented trader and investor Tetranode, who is extremely bullish on Ethereum. “The double-digit shitcoin was just a phase. Soon all will understand the method in the madness,” he added.

Ethereum, Hayes goes on to say, though imitating Bitcoin like the majority of the projects does in the crypto space, it “offered a substantial improvement by creating a virtual decentralised computer that greatly expands the potential use cases for the technology underlying Bitcoin.” BTC -8.30% Bitcoin / USD BTCUSD $ 56,210.51
-$4,665.47-8.30%
Volume 97.47 b Change -$4,665.47 Open $56,210.51 Circulating 18.69 m Market Cap 1.05 t
9 h A New Record: Over 1 Million Traders Liquidated for a Whopping $10.1 Billion 10 h Cathie Wood’s ARK Funds Buy More Coinbase (COIN) Shares, Now Owning Just Under 1.3 Million 11 h BitMEX Co-Founder Arthur Hayes Puts Ether Moon Target Above $20,000

Hayes’ views on Ether aren’t much different from the likes of Kyle Davies, co-founder of Three Arrows Capital, who revealed on the podcast “TechnicalRoundup” that their fund is “overweight Ethereum.”

With their focus on layer one, Davie believes Ethereum is “overlooked” as everyone is focusing on the success of some other layer ones. And while some DeFi projects are moving to other platforms like BSC, “layer two is real.” Though 3AC is invested in some layer two solutions as well, Ethereum is where “a lot of innovation is still happening,” he said.

The second-largest cryptocurrency network is the base of the decentralized finance (DeFi) sector, with $60 billion in total value locked (TVL).

The goal of the DeFi movement is to have “a peer-to-peer system that moves information from point to point without a centralized, trusted gate keeper,” Hayes said.

Broken Traditional Model

Haye’s focus in his latest write-up is to determine how much upside there is left in the market right now if some decentralized crypto can replace a portion of the need for blind trust in a centralized trust cartel.

He found this out by putting the failing traditional banking business model in the limelight. The banking index all over the world has been doing poorly despite all the help that they get from governments.

“Banks who privatize profits and socialize losses haven’t managed to enrich their shareholders,” he noted. But if these banks adopted the technological improvements, they would have seen the exponential growth the technology bellwethers are recording.

A decentralized service powered by a public blockchain can actually replicate and improve upon every product and service offered by a bank that too at a lower cost on a macro scale, Hayes wrote.

Traditional banks, he says, “are destined to be service companies for a subset of relatively wealthy global Boomers,” which still got billions of dollars of fee income in that business, but it’s not a growing slice of the market.

The public paid $2.68 trillion, 2% to 3% of world GDP, to these banking institutions. On top of this, we paid audit and accountancy services $87.09 billion, which Hayes said will go to zero because of blockchain.

Ethereum & DeFi is the Way

Ethereum, today, is the most developed, used, and decentralized smart contract network. No doubt others like BSC, Polkadot, and Solana are emerging but simply put, unlike Ethereum, no has proven themselves yet.

“No other public smart contract-enabled blockchain operates at the scale of Ethereum.”

Some might argue that the gas fees are astronomical, but as Hayes says, “it is a good problem to have,” after all, “nothing in life is free, and this is doubly true in the crypto capital markets.”

This fee that incurs on every action, along with the fees charged by dapps, can actually be seen as income to those keeping the network running, just like the tax we are paying banks to use their services.

Assuming Ethereum can capture some percentage of the 5-year average earnings of banks and the big four audit firms, Hayes comes up with extraordinary numbers.

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At 0.50%, the price of ETH implies a 10x price appreciation from current levels putting it above $20,000. Trader Teranode is of a similar opinion and sees Ether hitting $100k in the future.

“Eth went 80% down (400 to 80) after he called it a double-digit shitcoin. 20k, the conservative prediction in his blog post based on DeFi penetration of overall financial markets, would be an 8x from 2.5k. Both spooky and auspicious,” commented Zhu Su, CEO at Three Arrows Capital on this.

“I am very certain that DeFi can take away at least 0.50% of activity from CeFi,” wrote Hayes.

“When you take a high-level approximation that shows you will make money even when you are assuming the worst-case scenario, get long whatever the fuck you are valuing.”

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Author: AnTy

Israeli Asset Manager Invests $100 Million in Bitcoin via GBTC

“A little intimidated” by the speed at which BTC gained in value, the firm has already sold one-third of its holdings after doubling its investment. Now holds $150 million GBTC shares.

Altshuler Shaham Investment House, an Israeli asset manager, invested $100 million in Bitcoin by purchasing the shares in the Grayscale Bitcoin Trust (GBTC) late last year, reported a local publication.

At the time, Bitcoin was trading around $21k; since then, the crypto asset has soared to a new ATH at $58,350.

Grayscale Investments is the world’s largest asset manager with north of $40 billion in AUM.

One of the largest investment managers in Israel, Altshuler Shaham, already sold some of its stake in early February when BTC price was around $40k, as co-CEO Gilad Altshuler said his group was “a little intimidated” by the speed with which bitcoin gained in value.

The price of Bitcoin has appreciated more than 13.5x in value since its March low, becoming a trillion-dollar asset. Still, the fund was able to double its investment before selling about a third of it. He said,

“This is a new investment for us. It took a few months until we got all the relevant approvals and all the opinions that approved our investment in the field.”

This is the first time an Israeli institutional body gained Bitcoin exposure. Altshuler Shaham had over $50 billion in assets in long-term savings associates’ accounts – provident funds and pension funds as of the end of January.

Currently, the company holds $150 million GBTC shares. As for increasing this investment, Altshuler said, “It depends on the price.”

Meanwhile, investment company Altshuler Shaham Horizon, a subsidiary of Altshuler Shaham, is looking to expand into the cryptocurrency market.

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Author: AnTy

Compound to Release a New Cross-Chain Protocol with CASH Token Next Year

Compound Finance has released a new Compound Chain project — “a distributed ledger capable of transferring value & liquidity between peer ledgers.”

The team is currently building a testnet implementation, which is expected to be released in the next quarter. The project will also be bringing other popular DeFi projects like Polkadot, Solana, Quorum, and Celo into the protocol.

Designed to complement the Ethereum contracts, it would be controlled by COMP governance and extend DeFi network effects.

COMP, the $694 million digital asset, is currently trading at $158, up 40.4% in the past 30 days but down 36% YTD. The white paper reads,

“The Compound Chain is designed from the ground up to enable bridging value between its connected ‘peer’ chains.”

The Compound Chain will have CASH as its native unit of account, created through borrowing, much like MakerDAO’s DAI. CASH will be borrowable against any supported asset as collateral.

This CASH unit will be used to pay traction fees on the Chain, and interest would be paid to the CASH holders.

The value of one CASH is set at one US dollar, but through governance, it would later begin to track an alternate index, such as a basket of currencies.

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Author: AnTy

Bitcoin Can ‘Definitely’ Become the World’s Main Currency; It’s Poetry: Jack Dorsey

  • “A global currency which is a native currency for the Internet is a very powerful concept” – Twitter co-founder and CEO
  • Bitcoin is “poetry” and the pseudo-anonymous launch of its whitepaper was a very “powerful statement,” he said

“I believe that the Internet deserves and requires a native currency and that’s why I’m such a huge believer in Bitcoin,” said the co-founder and CEO of Twitter Jack Dorsey.

Dorsey appeared on the AI Podcast with Lex Fridman, a research scientist at MIT working on human-centered artificial intelligence where he talks about the biggest problem they are facing as a company — which is not to be able to act as an Internet company.

The founder and CEO of Square said to enter a new market, they have to have a partnership with a local bank and pay attention to different regulatory onboarding environments.

“But a digital currency like Bitcoin takes that away and we can potentially launch a product in every single market around the world because they’re all using the same currency and we have a consistent understanding of regulation and onboarding.”

A Powerful Concept

Further talking about his interest in bitcoin, he shared,

“I think the most beautiful thing about it is there’s no one person setting the direction and there’s no one person on the other side that can stop. So, we have something that is pretty organic in nature and very principled in its original design.”

“The white paper of Bitcoin is one of the most seminal works of computer science in the last 20-30 years. It’s poetry.”

Also, the underlying principles behind it and releasing it under a pseudonym, according to him, was a very powerful statement. Its pseudo-anonymous launch was “profound” as there could be one person or multiple people representing Satoshi Nakamoto, which builds tangibility and empathy.

The timing of Bitcoin’s release was just as important, which was in the aftermath of the 2008 financial recession, “a total activist move.”

As for what it looks like in the next 10 or 20 year, “no one knows,” but what it means is every person that enters the ecosystem in any capacity “changes its direction in small and large ways.”

Just like the Internet, Bitcoin enables “everyone to be part of the story which is also really cool.”

“A global currency which is a native currency for the Internet is a very powerful concept and I don’t think any one person on this planet truly understands the ramifications of that. I think there’s a lot of positives to it and there are some negatives as well.”

Not Just Money

This kind of digital currency Jack Dorsey said could “definitely” become the main currency of the world to push the decentralization of control of money. But the bigger ramification is how it affects how society works and “there are many positive ramifications outside just money.”

Money is a foundational layer that enables much more. Talking about his recent trip to Africa, he shares how moving money across borders between nations on the continents remains a problem to be solved. He said,

“I think as we get a more durable resilient and global standard we see a lot more innovation everywhere and I think there’s no better case study for this than the various countries with and within Africa.”

Here is the full interview:

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Author: AnTy

Here’s How DeFi’s Smashing Growth Puts a Trillion-Dollar Case for Ethereum

  • Total USD value locked in DeFi surpasses $800 million creates “a new paradigm for global finance” with one common theme Ether
  • The trillion-dollar case for ETH puts in a crazy number for Ether price but at one point $1 billion was crazy as well
  • Caveat Emptor: No Fed to bail you out here and “on a long enough timeline its very likely that many will get rekt” – Mati Greenspan of Quantum Economics

Decentralized Finance or DeFi for short is one of the fastest-growing sectors of the crypto industry.

After a massive upswing in 2019, 2020 is promising to be another great year. Already the total value in USD locked in DeFi has surpassed $800 million. To date in 2020, this amount has surged over 22%, after the price of cryptocurrencies surged in the past 15 days.

The biggest contributor to this growth is Maker which has a 56.67% dominance. The growth in Total Value Locked (TVL) has pushed the amount of DAI locked above 500 million. The curve of DAI locked in DeFi has been steepening lately, with 13 million added since Jan. 1st. Just a month ago, this number was 30 million and now at 60 million, it has grown by 65%.

Ethereum: A new, alternative, permissionless & trustless system

Maker’s dominance means, DeFi is dominated by Ethereum, with ETH locked in Defi exceeding $3 million.

Initially, it was largely comprised of two projects, MakerDAO and Bacon but since then we have seen the explosion of Uniswap, Compound, and InstaDApp. Synthetix is another one seeing “absurdly” high growth.

Projects like these, Lucas Campbell of DeFi rate says, are creating “a new paradigm for global finance” which has one common theme, Ether. This he said means,

“Ether is trustless value supplying economic bandwidth for Ethereum’s permissionless money protocols.”

With Ethereum creating a new, alternative, permissionless, trustless system, it means there will be no shortage of future demand for ETH as an economic bandwidth. Campbell says the next decades are nothing short of exciting for the permissionless finance and proliferation of DeFi. Campbell notes:

“However, in order for Ether to successfully deliver permissionless, trustless finance to the world it will require a massive amount of economic bandwidth to support it.”

The Trillion Dollar Case for ETH

To build a trustless economy, you need a trustless value that is only possible with decentralized crypto-native assets that settle on-chain.

The total bandwidth of Ethereum however, is just about $19 billion, its market cap, and with this, it can’t even support a small nation-state economy. But Campbell argues there is no shortage of addressable market with $250 trillion of global debt, $542 trillion in derivatives, and $90 trillion of equity markets.

MakerDAO already has a goal of Dai to hit 1 billion in circulating supply by 2020 end. On the assumption that a country like Argentina adopts Dai as its primary currency for commerce as “the appetite for the Argentine Peso dwindles,” and if it is able to capture 51% of the country’s M1 supply, that would mean Ether price has to reach between $2,500 to $10,000 to provide a sustainable amount of economic bandwidth.

But that was just for Argentina, the ambitions are bigger. Campbell theorizes Dai competing with US Dollar which puts Ether price at $50,000.

These are “crazy” numbers but investor and Mythos Capital founder Ryan Sean Adams says at one point even $10 billion for ETH was crazy.

Although these numbers should be taken with a grain of salt, Adams says what needs attention is that,

“A trustless economy requires trillions in economic bandwidth. And that’s the trillion-dollar case for ETH.”

Caveat Emptor: No Fed to bail you out here

All of this is very ambitious and shiny but DeFi has its own issues. For starters, the sector is still “very much under construction and new economic models are currently being tested,” points out, Mati Greenspan, founder of Quantum Economics in his daily newsletter.

It isn’t too dissimilar to traditional finance but brings in a high level of transparency and is obviously devoid of any central banks, which “could make all the difference in the world.”

But another big question is the APR they offer on lending the crypto asset.

While the US Federal Reserve offers you 1.5% to lend money to a government in the bond market and the highest yield one can get is less than 7%, it is mostly negative in developed countries like Japan and Germany, so how come these projects offer as much as over 9%?

The thing is they are lending the same crypto-asset out many times and taking a fee from each of the transactions, much like what happens in traditional finance. But as Greenspan notes,

“the only difference is there’s no Fed to bail you out when things do turn sour and on a long enough timeline its very likely that many will get rekt.”

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Author: AnTy

A New Market Developing for Bitcoin Issues a Warning About its Future

  • “A very real possibility the price of bitcoin does not go up after halving” – Meltem Demirors of CoinShares
  • “Anything is only worth what someone else is willing to pay for it” – Wallet developer Jack Mallers

The upcoming Bitcoin reward halving is a much-anticipated and talked about events in the cryptocurrency space. The market is currently divided among those who believe it to be a bullish event for Bitcoin price because of the supply shock and those who see as a non-event.

Meltem Demirors of CoinShares, a digital asset management company, belongs in the second category.

According to her, “there is a very real possibility the price of bitcoin does not go up after halving.”

Price to decouple from its value and its supply & demand

This is because, for the first time, there is a “robust derivatives” market for Bitcoin in the form of futures and market, she argues. As we already know, Bitcoin is still a speculative asset and according to Demirors, most of those firms will trade a derivative than the underlying asset itself.

She illustrates oil markets over the last 20 years where options and futures skyrocketed while oil production remained constant. In this speculation driven market, derivatives dominate trading and most firms trade paper contracts to speculate on the price of oil.

“There is a new market developing for bitcoin – one driven by speculative trading and enabled by derivatives.”

In the bitcoin market, she points out crypto derivatives platform BitMEX was the “first to crack this market” and then came CME Group. Now, there are hundreds of new firms popping up. She said:

“The more bitcoin becomes an investable asset, the more it’s price becomes decoupled from its value and its supply and demand.”

At that point, it will become just another backwater in the big game of global speculation and become correlated to macro markets.

The Bitcoin derivatives market today is still small but it will grow quickly, Demirors said.

“Anything is Only Worth what Someone Is Willing to Pay for it”

Wallet developer Jack Mallers, the founder of Zap Solutions and ZeroHouseEdge however, doesn’t agree with Demirros. Derivatives help in market efficiency and general price discovery but it does not affect the basic supply and demand of an asset, he countered.

“Derivatives derive their value from the underlying, settling against an index composed of spot exchanges. General arbitrage and market efficiencies will always keep derivatives tied to the underlying.”

The premium on the future, he said is only because of the cost of carrying and commodity derivatives were invented to simply transfer risk and has nothing to do with the price of an asset.

Price is a function of supply and demand and isn’t set by the producer of an asset. The willingness for someone to acquire an asset, Mallers said is what sets the price.

“Anything is only worth what someone else is willing to pay for it.”

And this is exactly the reason why he says the halving is not priced in.

“When a market goes through such a supply shock (one that no other asset has ever been through), it’s impossible to predict where demand will meet the new-found supply.”

But time, as Mallers said, is always the ultimate truth-teller and we’ll have to see how in the coming years, Bitcoin will perform.

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Author: AnTy

Judge for QuadrigaCX Case Approves $1.6 Million in Fees to Be Paid in Retribution to Affected Firms

Judge for QuadrigaCX Case Approves $1.6 Million in Fees to Be Paid in Retribution to Affected Firms
  • A judge overseeing the QuadrigaCX case has approved payment to multiple firms.
  • Bankruptcy proceedings for QuadrigaCX are still ongoing.

In the long case of QuadrigaCX, there are many creditors and firms that have been seeking retribution from the now-defunct exchange.

In an effort to reconcile these funds, Nova Scotia Supreme Court Judge Darlene Jamieson approved over $1.6 million in fees to go to these affected firms. Jamieson also stated that the activities and fees taken on by:

  • Ernst & Young (EY)
  • Stikeman Elliot, the legal counsel for EY
  • Kirkland & Ellis, the American legal counsel for EY
  • Miller Thomson, the representative counsel
  • Cox & Palmer, the representative counsel

According to the judge, there’s been no opposition to the activities and fees. She stated,

“I approve the fees and activities of the monitor during the CCAA proceedings and the fees presented towards legal counsel.”

EY had a nearly impossible task of trying to recover the missing cryptocurrency and fiat holdings of QuadrigaCX, considering that it seemed to be dispersed to multiple third parties. Their work also included attempts to determine if Quadriga had the funds that it said, according to the judge. Jamieson added,

“The monitor’s work has been extensive in administering the CCAA proceeding and seeking to recover funds on behalf of Quadriga and its affected users.”

Ultimately, the judge explained that EY came up against “complicated factors,” like the lack of records on the accounts, and the way that QuadrigaCX stored their information with third parties.

This company marks the first cryptocurrency-based insolvency case in the country and has shown many unique traits that are unique to this type of case, which included “requiring specialized resources for the monitor’s investigation.”

The legal counsel for EY, along with EY itself, charged $1.3 million ($1.7 million CAD). The other representative counsel charged:

  • EY: $592,396.57 ($778,444.90 CAD)
  • Stikeman: $684,654.63 ($899,677.57 CAD)
  • Kirkland & Ellis: $14,367.27 ($18,876.44 CAD)
  • Miller Thomson: $302,720.47 ($397,793.00 CAD)
  • Cox & Palmer: $37,023.05 ($48,650.53 CAD)

Overall, to each of the companies, the judge approved $1,631,161.99 ($2,143,442.44 CAD) in costs. These payments will be drawn from the recovered funds of the creditor accounts, which contain about $25 million USD ($33 million CAD).

There is still $23.4 million USD ($31 million CAD) to be provided to the creditors in this case, though EY is working to gain another $9 million USD ($12 million CAD) in the sale of some of Gerald Cotten’s estate’s assets. Cotten, as many people remember, was the founder and CEO of QuadrigaCX.

Miller Thomson had been pushing for the claims process to begin for creditors. Former users of the platform have until August 31st to fill out a form, which will include their Quadriga account number, name, address, phone number, and the amount of crypto and fiat held in their account.

For former users that are unsure of what their holdings were before these proceedings can check https://userbalance.quadrigacxtrustee.com/, which was set up by EY. If the user disagrees with the amount shown, they will need to provide their own documentation to support the claim amount they intend to pursue. Miller Thomson’s website has guidance on how to do so.

The court proceedings involving QuadrigaCX have come up against so many roadblocks since January, when the late CEO’s wife filed for creditor protection. Cotten passed away in December and was believed to have taken his passwords to the firm’s exchange wallets with him.

Jennifer Robertson, Cotten’s widow, stated that there were 115,000 users that were owed about $190 million, but she said she was unable to access it, due to Cotten being the only one with information about the accounts’ private keys.

As the investigation continued, controversy and drama unfolded that Cotten may have taken the funds of his customers for personal use, which may have included margin trading. By March, EY stated that they were unable to find or even account for about $100 million in cryptocurrencies, even though Quadriga claimed to have held this amount.

EY quickly moved to put the exchange into bankruptcy, following filings for creditor protection, indicating that the Canadian crypto exchange was unlikely to bounce back. The motion was approved by Nova Scotia Supreme Court Judge Michael Wood, and the CCAA proceeding was paired with the bankruptcy efforts.

With the new ruling from Jamieson, the only proceedings still going on will be that of bankruptcy.

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Author: Krystle M

Crypto Exchange Smart Valor Launches Integrated Trading and Custody Platform In Switzerland

Crypto Exchange Smart Valor Launches Integrated Trading and Custody Platform In Switzerland

A Swiss cryptocurrency exchange called Smart Valor has been launched this week. The new company will trade Bitcoin (BTC) and Ethereum (ETH), which can be traded against the Swiss franc, euro, and U. S. dollar.

According to its team, the services will be a combination of the brokerage with custody and new currencies are set to be added monthly. The company will also eventually have its own token, the VALOR currency.

Smart Valor’s CEO Olga Feldmeier has affirmed that it took 18 months of development for the company to be ready to launch its platform and that this can be a huge step for the market because it will be the first security token exchange for alternative investments.

The headquarters of the new company will be based in Zug, which is also the base of the Crypto Valley Association, an important blockchain organization in the country.

Olga affirmed that Switzerland is one of the largest wealth destinations of the whole world and it has been an important figure for data privacy and security for years, which is why the country was chosen to be the location of the company.

Before the launch of the platform, the company was able to get $3.25 million USD from its latest investment round. The round was led by companies such as Tally Capital and Venture Incubator and it has several investors from Asia and the United States.

Companies From The Crypto Valley Are Growing Up

Switzerland is certainly turning into an important crypto hub. Several companies from the country, specifically from the so-called Swiss Crypto Valley are growing up a lot lately in this important hub.

Aximetria was one of the companies that recently rose to prominence as it was able to get the country’s Anti-Money Laundering license, a very important license that is very difficult to get.

Smart Valor will be another company from the region to offer its services in the crypto market. The company had its activities approved last year by local regulators. At the time, it was able to get investments from several important companies in the country.

David Johnson, an investor of the country, affirmed that Switzerland needs its own Coinbase-like company and he believes that Smart Valor will be able to fill that role.

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Author: Gabriel Machado

Perlin Buys Out Dispatch Labs Blockchain Development Project for Undisclosed Amount

Perlin-Buys-Out-Dispatch-Labs-Blockchain-Development-Project-for-Undisclosed-Amount
  • A quick glance at the terms of the deal show us that Dispatch’s ex CTO Zane Witherspoon will now serve as Peril’s tech development head.
  • As things stand, the financial aspects (i.e. tx details) of the deal are still not clear.

As per an announcement made earlier today by a spokesperson for Singapore-based blockchain firm Perlin, the company has just bought out another blockchain startup called Dispatch Labs. In relation to the matter, it is being reported that Perlin has also acquired Dispatch’s talent pool as well as the firm’s “provisional and non-provisional United States patents”.

Dispatch’s previous CTO — Zane Witherspoon — will now be heading Perlin’s latest development activities.

At press time, the monetary specifics of the deal have not yet been disclosed.

Additionally, it bears mentioning that this latest acquisition comes at a time when Dispatch Labs was being faced with huge financial losses.

For those of our readers who may not remember, Dispatch Labs was able to raise a whopping sum of $13 million (via a series of private fundraisers) during the first quarter of 2018. However, owing to the market slump that rocked the industry all through last year, the value of this raised capital dropped quite considerably.

Over the past six months or so, Perlin has been involved with a number of blockchain projects for various major companies such as:

(i) Asia Pacific Rayon: One of Asia’s first fully integrated viscose rayon producers.

(ii) International Chamber of Commerce: The world’s largest business conglomerate consisting of more than 45 million businesses (including big name players such as Amazon, McDonalds and PayPal.)

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: Shiraz J