Janet Yellen Torches Bitcoin Again, Calls it ‘Extremely Inefficient’ As A Payment Option

Janet Yellen Torches Bitcoin Again, Calls it ‘Extremely Inefficient’ As A Payment Option

U.S. Treasury Secretary is rooting for a digital dollar, but remains unconvinced about Bitcoin, which she describes as an inefficient asset.

U.S. Treasury Secretary Janet Yellen is not backing down with her criticism of Bitcoin. Yellen has gone on to describe the leading cryptocurrency as an “extremely inefficient” and “highly speculative asset.”

Bitcoin is Dangerous

Yellen commented at the New York Times’ “DealBook” conference, where she spoke on the country’s road to recovery post-covid-19.

Yellen had previously served as Federal Reserve chair under the Obama administration, having been appointed to replace Ben Bernanke from 2014 to 2018. She makes history as the first woman to be appointed as Treasury Secretary.

Her comments come as Bitcoin witnessed a sharp decline in prices, shedding off around $11,000 to $47K on Bitstamp. Bitcoin bounced back some moments later, regaining support and climbing back up to $51,500.

For Yellen, Bitcoin’s issues trump its benefits. While she acknowledges the role cryptocurrencies play in the financial system by creating quicker payment methods, she believes they have numerous problems. She raised concerns around its legitimacy and stability as an asset, bashing Bitcoin for its illicit financing links.

“People should beware it can be extremely volatile, and I do worry about potential losses that investors could suffer…I fear it’s often for illicit finance. It’s an extremely inefficient way to conduct transactions.”

Yellen also hinted at the possibility of the Federal Reserve hopping on the central bank digital currency (CBDC) bandwagon. While countries like China and Russia are making headway with their CBDCs, the U.S. has remained indecisive and is still unsure of what it plans to do.

Crypto’s Criminal Links

For Treasury Secretary Yellen, there’s one awful smell that hangs around cryptocurrencies—criminality. The crypto market should have gotten used to Yellen’s negative crypto comments by now. It has become a recurring theme with the high-ranking official. Earlier this month, she raised the alarm on how bitcoin was being abused for illicit purposes at a financial sector innovation roundtable. Yellen explained at the event,

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

While cryptos like Bitcoin and Ether are attractive to criminals due to their pseudonymous nature, recent studies from researchers show the tides are changing. Research from famed blockchain analysis firm Chainalysis revealed a decline in crypto-related crimes in 2020. The share of criminal activity was roughly $21.4 billion in 2019 of all crypto transaction volume, according to Chainalysis. That figure fell to 0.34$ or $10 billion in total transaction volume. Chainalysis believes the identification of criminal wallet addresses was a major catalyst for the drop in numbers.

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Author: Jimmy Aki

YFI Flippening Happening Again as Yearn 2.0 Goes Live

YFI Flippening Happening Again as Yearn 2.0 Goes Live

After breaking $40,000 today, YFI is currently worth more than Bitcoin and aiming for new highs.

YFI is back into action.

The blue-chip DeFi token surged above $40,000 today and is currently trading around $38,000. Earlier this month, the token was trading at $20,000.

With this latest price action, one YFI is now again worth 1.05 BTC as the leading digital asset trades range-bound around $36k.

While Bitcoin is currently in consolidation ever since the pullback from the $42,000 all-time high, altcoins are enjoying a run-up.

This has YFI also joining the wild run that DeFi tokens are enjoying and that has the 35th largest cryptocurrency by market cap of $1.13 billion, reaching all that closer to its peak of $44,000 from Sept. 12, 2020.

There are currently 21.17k addresses with a balance in YFI, and 82% of the YFI holders are now in the money.

These gains followed the announcement of YFI V2. “After 4 months and 8 design iterations, v2 Vaults are finally live!” with few details and little fanfare.

The team recently proposed ‘Buyback and Build Yearn’ where YFI staking rewards will be used to buy back YFI in the open market and use them for contributor rewards and other Yeran initiatives.

The proposal has received the approval of the majority, with 99.61% voting in favor.

The community is now debating on minting new YFI tokens into existence after its fixed supply of 30k helped the project gain popularity.

As per this proposal, these new 1000 YFI tokens will be used to compensate contributors and sustainably grow the protocol. Nick Almond, founder of Finance.vote commented,

“The reality is, that @iearnfinance has never made a final decision on its inflation schedule and the 30k fixed supply meme, is a exactly that, a meme.”

“Nothing has changed within yearn, but I hope everyone that participated in the discussions takes some time, reflect on their position, and think carefully what it means to be part of something public. It’s no longer I, us, or them, but we. Do you want to be apart of that?” chimed in YFI creator Andre Cronje.

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Author: AnTy

ETH Gas & Bitcoin Fees Insanity Rear its Ugly Head Again Amidst Market Uptrend

As the price of cryptocurrencies keep its gains and, in some cases, rally, it is becoming costly, yet again, to use the two largest blockchains.

First things first, the fees are nowhere near the levels recorded during the bull market’s height, but still, it is getting pretty ramped up.

The average transaction fees on the Bitcoin network surged to about $12 on Friday. Interestingly, the fees didn’t record a considerable uptick on the two days that the price of Bitcoin breached multiple levels to reach a new all-time high at $24,195.

However, the fees started spiking just a week back, when it was under $3, and the BTC price was only around $18,000.

Today, Bitcoin’s average fees are back around $9. In late October, fees had gone even higher, above $13. During this time, BTC price fluctuated $1,000 up and down. Of course, we have a long way to reach the 2017 high of $60 in average fees.

The latest jump in fees came after the transaction count in mempool surged to nearly 132.5k yesterday. But today, the pending transaction is clearing up, falling to the 34.24k level. The hashrate is also 10% off of its all-time high record in mid-October.

Bitcoin price, meanwhile, is keeping around $23,560 ever since breaking it on Thursday.

Much like Bitcoin, the fees on Ethereum also spiked thanks to the bullishness in the market. For Ethereum, not just its price, which is only around $650, still 58% away from its peak but DeFi tokens also play a part.

And yesterday, DeFi tokens jumped with notable gainers, including UNI, AAVE, SUSHI, SRM, CRV, and SNX that pumped 7% to 12%.

A spike in ETH gas fees was expected. On Dec. 17, average gas fees on the network jumped to 138 ETH, up from 35 ETH earlier this month.

For ETH, the explosion of the DeFi market resulted in several such jumps in fees in 2020. In June, the average gas fees climbed to 704 ETH, as per Blockchair.

Although Ethereum has successfully launched the first phase of ETH 2.0 and already 1.57 million ETH are deposited in it, cheaper fees are still not in the picture and may take a long time to become a reality.

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Author: AnTy

The Pandemic Is Accelerating the Use of Cryptocurrencies to Launder Money

Bitcoin yet again led to a criminal’s capture, a suspected human trafficker Ignacio Santoyo in April 2019 in the Caribbean resort of Playa del Carmen.

The Mexican police officials said the prostitution act that extended across Latin America was busted not by the 2,000 women that Satoyo alleged blackmailed and sexually exploited but the cryptocurrency he is suspected of using to launder the proceeds of his operations.

“There’s a transition to committing crimes in cyberspace, like acquiring cryptocurrencies to launder money … and the pandemic is accelerating it,” said Santiago Nieto, head of the Mexican finance ministry’s financial intelligence unit (UIF).

Along with Brazil, Mexico is the only two nations in Latin America that have enacted legislation to track the use of Bitcoin and other cryptos. As per the law passed in 2018, all registered cryptocurrency trading platforms are required to report transfers above 56,000 pesos ($2,830).

According to US and Mexican authorities, the usage of Bitcoin to launder money has seen a particular increase among drug gangs. However, the sum involved in such few cases uncovered has been only thousands or tens of thousands of dollars compared to cash laundry, which is estimated to be $25 billion a year in Mexico alone.

Over the last three years, however, the three Colombian drug gangs were caught laundering millions of dollars via cryptocurrencies.

UIF chief Nieto said criminals are splitting their illicit cash into small amounts and buying bitcoin from them online.

Santoyo was caught after he bought enough BTC to trigger an alert under the law. He and his sister acquired some 441,000 pesos ($22,260) in Bitcoin on crypto-exchange Bitso between May and November 2018.

The new law has led to 1,033 Bitcoin threshold alerts to be triggered so far this year to check if it links to a user involved in criminal behavior.

According to Reuters, about 98% of all Mexico’s transactions above the 56,000 peso threshold in 2020 were flagged by one registered crypto platform alone.

“Both Mexican and Colombian TCOs are increasing their use of virtual currency because of the anonymity and speed of transactions,” said US DEA spokesman Michael Miller. “It is believed the use of virtual currency will only increase in the future.”

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Author: AnTy

JPMorgan CEO Jamie Dimon Still on The Sidelines, Bitcoin’s ‘Not My cup of Tea’

Jamie Dimon, the CEO of banking giant J.P Morgan Chase, has again expressed his disinterest in Bitcoin during the recently concluded DealBook Online Summit. Andrew Ross of CNBC hosted the virtual event, and in-attendance were other prominent figures, including Lebron James, Elizabeth Warren, and the CFO of Google and Alphabet, Ruth Porat.

Dimon reiterated that he is not interested in Bitcoin but believes in properly regulated and properly backed cryptocurrencies. He was keen to note that Bitcoin is not his cup of tea and doesn’t want to make headlines in line with the flagship cryptocurrency. This is not the first time the JP Morgan CEO has come at Bitcoin; back in 2017, Dimon called BTC a fraud, attracting a backlash from the crypto community.

Nonetheless, he highlighted that blockchain would be a critical tech ‘in helping people move money around the world cheaper.’ JP Morgan already runs its dollar-backed coin and has been developing solutions around blockchain tech. Dimon echoed that,

“We have the JP Morgan Coin, which is a dollar-backed blockchain. You can move the money, split it into pieces … We believe in cryptocurrencies properly regulated and properly backed. Bitcoin is different, and that’s not my cup of tea.”

Meanwhile, BTC continues its bullish trend, although the market seems to have consolidated between $17,500-17,900. Interestingly, financial institutions, including JP Morgan bank, are among the stakeholders that have recently signaled BTC’s fundamentally bullish trend in the coming decade.

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Author: Edwin Munyui

Bitcoin Cash Node (BCHN) in the Lead with 123 Blocks Following the Hard Fork Chain Split

The Bitcoin Cash Network, a hard fork of the largest network Bitcoin, has yet again split into two new Blockchains.

Out of the total hash rate, Bitcoin accounts for the majority at 98.1% while Bitcoin Cash has a share of 1.2%, and a mere 0.7% goes to mine Bitcoin SV, which was the result of the hard fork from Bitcoin Cash in Nov. 2018.

During this upgrade, Bitcoin Cash ABC (BCH ABC) received no hash power making it possible for Bitcoin Cash Node (BCHN) to become the dominant software of the Bitcoin Cash network.

BitMEX’s research arm said there are no two chains because BCHN produced three blocks after the split, and not a single one was produced by BCHA.

But Bitcoin ABC took to Twitter to share that Bitcoin Cash blockchain has split into two chains, and now there are two separate coins called BCHA and BCHN. As such, people who owned Bitcoin Cash before the split now own both of those coins.

All of this has been because Bitcoin Cash went through a hard fork on Nov. 15 at 12:00 UTC, which has been contentious.

It is a regular thing for the Bitcoin Cash network, which undergoes an upgrade every six months. If the community is unable to meet consensus, the chain splits, which is what happened when BSV came into existence and exactly what’s happening this time as well.

This time, the upgrade also included a controversial new “Coinbase Rule,” which requires 8% of mined Bitcoin Cash to be redistributed to Bitcoin ABC to fund protocol development.

This was opposed by another group who removed this “miner-tax” from their source code.

With the last common block between the BCHN & BCHA networks now mined by Antpool, the chains have split at height: 661,647.

The BCHN chain is currently 123 blocks ahead.

Bitcoin Cash Hash Rates by Network Summary
Source: Coin.Dance

Even before the fork, 80% of the miners supported it, and some major crypto exchanges also announced support for BCHN.

With hash power in BCHN’s favor, if BCH ABC doesn’t attract enough hash power, the blockchain may just disappear.

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Author: AnTy

Immature Bitcoin Market Data Is ‘Garbage’ But It’s Sign of ‘Being Early’ – MicroStrategy CEO

Since first announcing bitcoin purchase in August and again in September, MicroStrategy CEO Michael Saylor had become a very vocal bitcoin supporter, a big change from seven years back when he thought its days were numbered.

Now, it is the ultimate hedge, according to him.

He constantly tweets about Bitcoin and how “it is an ark of encrypted energy to escape the currency flood.”

Recently, he talked about “The Long-Term Bull Case” for Bitcoin in an interview with Keith McCullough to convince Hedgeye CEO to “change his opinion of Bitcoin and join the cyber hornets.”

McCullough actually sold all his BTC earlier this month, just a couple of weeks before Bitcoin rallied 23% following Square’s $50 million investment, UK’s public listed Mode converting 10% of its cash reserves into BTC, and PayPal announcing buy, sell, hold, and shopping support for it.

“Bitcoin is an asset, not a commodity. Commodities are abundant and should be traded. Assets are scarce and should be owned. Pure monetary energy is the ideal treasury reserve asset, and for the first time in history, we can now own some,” is Saylor’s message to McCullough.

The “Garbage” Market Data

On Tuesday, he argued his Bitcoin investment by comparing it with Google and Apple investments.

“The thing with technology, Figure out the thing that is gonna eat the world, if you are right, own it, hold it and wait,” said Saylor.

In the current environment, bitcoin is the choice when the monetary expansion is expected to double, he said. Adding that the Federal Reserve has crowded everybody out of Treasury and debt with yield being effectively zero, which has been “stampeding investors into a store of value.”

As a matter of fact, Apple has been more volatile than bitcoin in the past three months, said Saylor. This has been because while monetary stimulus has been debasing fiat currencies, it has been pushing the stock market to new highs.

He particularly talked about the market data during the interview, which he argued is just “garbage.” The trading volume figures of the bitcoin market, according to him, are widely inflated as he challenged Bitcoin’s $25 billion volume to Apple stocks’ $24.76 billion.

“I know for a fact you can’t buy more than $35 million a day without people knowing, so there’s no freaking way there’s $24 billion trading,” Saylor said.

It isn’t even surprising, but a known fact as a 2019 report to the US SEC concluded that 95% of reported volume on crypto exchanges is actually fake.

According to Saylor, false market data is holding the leading digital currency back as it could erode trust in Bitcoin as an asset.

But on a positive note, Saylor said he “love[s] the fact that the data is a little immature” as it represents “the pain and the work of being first or being early.” But of course, the market “needs” high-quality data.

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Author: AnTy

Here’s Why Bitcoin Is A Better Bet Than Gold & Even Stocks

Bitcoin again came close to hitting $12,000 yesterday but failed to do so and currently trades around $11,785.

While the digital asset has been struggling to reach this level for a fortnight now, bitcoin’s gains since its March lows has helped crypto-focused hedge funds to navigate choppy markets better than their peers focused on bonds and stocks.

In these past seven months, crypto fund managers returned over 50% compared to low single-digit gains generated across traditional classes of asset. Last year, crypto hedge funds gained only 16%, but even then, it outperformed mainstream hedge funds, which were up 9%.

This rally is the result of bitcoin surging 60% for the year against the US dollar and up 215% since March sell-off.

A Lot of Upside Potential

Currently, everything from stocks to gold is enjoying a rally thanks to government policies. This is why even Warren Buffett has pivoted to gold — he has cut down his bank holdings and sold all the shares in Goldman with gold miner Barrick Gold being the only addition in Q2.

“Warren Buffett said he would never invest in gold. He did invest in gold miners because it made sense. Warren also said that he would never invest in Bitcoin. I am waiting for the day when Warren changes his mind on Bitcoin,” said Gabor Gurbacs, digital asset strategist at VanEck.

But according to veteran Wall Street fund manager Michael Novogratz, bitcoin is a better bet than gold.

Novogratz, who has about 25% of his net worth in BTC, says the digital asset is “harder to buy” than the traditional haven and, as such, a more worthy investment.

“It’s only got a $20 billion market cap, while gold is over $10 trillion,” he said, adding, “so it’s got a long way to go to catch gold in terms of just adoption.”

While Novogratz doesn’t recommend beginners to put in more than 1-2% of their money into the digital currency, London-based digital asset management firm CoinShare recommend investor to allocate 4% of their portfolio to the cryptocurrency because it is “in its growth phase (and) behaves like a tech stock.”

Increased Interest in Bitcoin

The prospect of strong returns over longer periods continues to draw investors, according to Michael Sonnenshein, managing director at Grayscale Investments, the $5.7 billion AUM crypto fund, which attracted $900 million of inflows in 2020, three times the entire 2019.

“Overwhelmingly, the inflows are coming from major hedge funds,” said Mr. Sonnenshein. “Conversations are being driven by zero interest rates, which is eroding the value of fiat currencies.”

The current environment of collapsing interest rates is also turning out to be good for Bitcoin with high stock price keeping pressure on dividend yields.

“There is no yield on crypto, but look at it this way: the floor in bitcoin is zero whereas in many traditional markets we now have negative rates and yields,” said Max Boonen, co-founder of crypto trading company B2C2.

The Bitcoin market has also been maturing; not only the volatility fell lower than stock markets this year, but price discrepancies on different exchanges that created arbitrage opportunities have faded.

In the past two months, Boonen, who is a former interest rates trader at Goldman Sachs, has been even approached by “blue-chip” names to run a crypto-dedicated for them.

“A number of very large traditional hedge funds are active in crypto, even if they don’t necessarily talk about it,” said Michael Bucella, a partner at BlockTower Capital.

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Author: AnTy

Bitcoin Working on Being a Reserve Asset while S&P 500, Yield, & Inflation Takes the Wheel

The equities market is yet again just inches away from its all-time high. Yesterday, the ATH from February was briefly broken only for the S&P 500 to retrace a bit, currently sitting at 3,382. Another small leg higher today, and it will breach the new ATH at 3,387.89.

It only took 175 days for the index to go from peak to bottom to the peak again. However, only a handful of companies are pushing the overall index higher; energy companies are nursing losses of more than 20%.

Thanks to the Federal Reserve stimulus and frenetic buying by buyers, it took less than six months for the S&P 500 to fully recover, unlike the previous 12 cycles when the stocks took an average of four years to recover from the drop of at least 20%.

“It’s really a policy-driven market at this point,” said Jon Adams, senior investment strategist at BMO Global Asset Management.

Loss of Appetite for Assets not offering Income

Despite the ongoing policies, much like stocks, US Treasury yields rose, going to a five-week high as new debt issuance this week drives prices lower and yields higher. Analyst Mati Greenspan wrote in his daily newsletter Quantum Economics,

“The U.S. junk bond market has been on fire lately, setting a new record for the month of August by generating more than $30 billion in trading volume in only seven business days,”

“The amount of big money chasing small money at high-risk is simply breathtaking.”

The anticipation for the bond yields to head higher is weakening the appetite for assets that don’t offer income.

As seen in gold, the precious metal had its worst plunge since 2013 to as low as $1,866. Although it rebounded sharply from yesterday’s fall, it is still trading at $1,932, down 7.3% from its ATH.

Inflation is coming, Much quicker than anticipated

Government policies are also not good in the long term. Already, US consumer prices are rising; in July, they soared more than expected, especially in auto and apparel costs.

Inflation remained muted as the coronavirus suppressed demand, but the Consumer price index rose 0.6% from the previous month following a 0.6% gain in June.

US core inflation jump

On an annual basis, core inflation is at a four-month high of 1.6%, after measuring 1.2% in June.

Gasoline prices rose 5.6%, clothing 1.1%, used cars 2.3%, new vehicles 0.8%, and car insurance 9.3%, but the cost of grocery falling 1.1% from last month provided consumers some relief.

This increase in consumer prices reflects a rebound in demand for goods and services. The Fed meanwhile doesn’t see a threat of inflation and expects to hold interest rates near zero for the foreseeable future. Brett Ryan, senior U.S. economist at Deutsche Bank Securities Inc., said,

“That’s not a sustained increase in inflation,”

“The bigger picture here is that you’re going to have a persistent output gap and elevated unemployment, and that’s going to put downward pressure on wages.”

Bitcoin Recognized as a Reserve Asset

In these times, people are turning to bitcoin as an inflation hedge.

For now, bitcoin is stuck around $11,500, in red, but up over 200% since March low. In 2020, so far, BTC has recorded 56% returns while still being down 42.5% from its ATH of $20,000.

However, in this cycle, bitcoin is expected to be seen as a reserve by the “most open-minded sovereign state,” said on-chain analyst Willy Woo. As we saw with MicroStrategy and Paul Tudor Jones, it has already started to take shape. He said,

“The thing with BTC is it trades as a risk-on asset, getting bigger shakes this, maybe $1T marketcap that’s 5x from here. $50k-60k BTC will be a mark in the sand.”

In the broad crypto market, altcoins record even harder losses. However, a few coins are still making good gains such as Chainlink (8.62%), TomoChain (10.43%), Algorand (20.39%), WazirX (23%), Aragon network (34%), Waves (36%), HOT (64%), and Numeraire (159%).

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Author: AnTy

Bitcoin Dollar Cost Averaging From 2017 Market Peak Still Returned 61.8%

Bitcoin price remains strong, not far from hitting $12,000 yet again after the touch and go over the weekend.

Interestingly, despite the fact that the leading cryptocurrency is still trading 30% below its all-time high of $20,000, the dollar cost averaging from the peak of the market in December 2017 would have meant a return of 61.8% or 20.1% annually, noted Coin Metrics.

Dollar-cost averaging is an investment strategy in which an investor divides the total amount to be invested across the period to purchase the target asset to reduce the overall impact of volatility on the price of that asset and avoid putting all the investment amount at a poor time.

BTC Dollar Cost Averaging
Source: CoinMetrics

Meanwhile, as BTC reaches a 1-year high, the short-term holder MVRV, which assesses the behavior of short term investors by taking into account only those UTXOs younger than 155 days, remains bullish by keeping above 1.

“Coming from below 1 and reaching the current level (1.25), has previously marked the start of bull markets,” said Rafael Schultze-Kraft, CTO at Glassnode. And as long as MVRV stays above 1, one can remain bullish.

BTC Short Term Holder MVRV
Source: Glassnode

While one on one side, bitcoin’s price is aiming for $12,000 after closing above the important $10,500 level, on the other side, the realized price, which is realized cap divided by the current supply, has hit $6,000 for the first time.

This means, realized market cap continues to surge to all-time highs as well, hitting $111.2 billion, surging nearly 10% in 2020. Back in April, realized market cap fell to just under $101 billion, to early January 2020 levels.

Unlike market capitalization, where each bitcoin in circulation is multiplied by the current price, the realized cap has it multiplied by the price at the time it was moved last.

BTC Realized Price
Source: Glassnode

Not only is the current price is giving bullish signals, the realized BTC price is just another factor adding to all the bullishness.

It is not only the price of bitcoin that is enjoying an uptrend; the fundamentals of the world’s largest cryptocurrency are just as strong and continuing to grow.

Bitcoin user adoption is also pacing up as we have reported a 1-year active supply has already hit new ATH, and a 1-year active supply percentage is at 10-year lows. Hash rate and difficulty had been recovering for quite some time now, hovering around their all-time highs.

Another network fundamental, daily transactions, also recorded over $2.5 billion. The weekly transaction volume is almost $21.6 billion, with 2.2 million in transaction count, as per ByteTree.

Amidst this, the number of new addresses created is growing rapidly, reaching almost the peak of the 2017 bull market level of 1.29 million. Currently, sitting at June 2019 levels, on August 6th, 478,000 new BTC addresses were created.

Source: CryptoCompare & IntoTheBlock

Another bullish facet includes the number of bitcoin addresses holding at least $10 worth of the digital asset surging to a record high of 16.6 million, up 14% from previous a peak of 14.5 million in January 2018.

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Author: AnTy