Only 15% of Crypto Exchanges Hold User Funds in Cold Wallets: CryptoCompare Report

According to the monthly crypto exchange benchmark report by CryptoCompare, Gemini and Coinbase are at the top of the top crypto exchanges list with the highest score and “AA” grade. At the same time, Binance DEX grabs the first spot on the decentralized crypto exchanges’ list.

Top-tier exchanges like Coinbase and Binance are pushing the lower-tier ones such as Bitexbook out of the market. Top tier exchanges that have the lowest amount of risk for traders have been increasing their market share throughout 2020, which could be taken as a sign of a more mature market.

Source: CryptoCompare

In Q4 of 2019, the top tier exchanges accounted for 32% of global volume, which jumped to 40% in Q2 of 2020. Lower tier exchanges’ market share meanwhile has continuously been on a decline from 68% in the final quarter of 2019.

Record Low Funds Lost in Exchange Attacks

Security at crypto exchanges at large, however, remains poor. Only a meager 15% of exchanges claim to hold 95% of user funds in cold storage, wallets that aren’t connected to the internet, and as such resistant to hackers.

12% of crypto exchanges use a third party custody provider to store user assets, up from 9% from Q4 2019.

4% of exchanges have been hacked in the last year. Most recently, UK-based crypto exchange Cashaa lost 336 Bitcoin, worth about $3 million in an attack, which resulted in a breach of one of its wallets.

The attack came when the industry is seeing a record low in funds lost in exchange attacks. Cashaa was one of the largest attacks of this year.

Source: TradeBlock

Just last week, a report from the Financial Action Task Force (FATF) came in, which the international financial watchdog said regulators need to meet in October to create a more robust global framework for crypto exchanges.

The report also found that about 5% of exchanges offer insurance on digital assets.

Inorganic Traffic Growth

June wasn’t a good month for crypto exchanges. As we reported, the volume dropped dramatically last month.

The same was the case for web traffic with Huobi losing the most – 31.7% between Q1 and Q2. Unlike other exchanges, OKEx saw an increase of nearly 240% in web traffic. Binance also saw a 9% increase.

“However, our research suggests that traffic growth for certain exchanges may be inorganic, as top traffic referrers were crypto ad or faucet sites,” said the quarterly report by CoinGecko for Q2 2020.

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Author: AnTy

Bitcoin Sells Off Like Stock Market Even After The Fed Cuts Rates by 50bp; Trump Wants More

Today, in a surprise move, the US Federal Reserve cut its benchmark interest rate by a half-percentage point to help mitigate the impact of the coronavirus on the market and economy.

The officials were in unanimous agreement for an emergency cut to a range of 1% to 1.25%. The Fed also said the “fundamentals of the U.S. economy remain strong,” but added that Fed policymakers “don’t think we have all the answers.”

On Monday, the promise of the interest rate cut had the stock market surging, the Dow Jones Industrial Average jumped a record 1,294-points. Today, the Dow initially added to the gains after the Fed announced the rate cut but soon went down.

The Dow was down more than 700 points, or 2.7% after rising nearly 400 points at one point in the day. The S&P 500 was down 2.5% while the Nasdaq Composite dropped 2.5%.

According to investors, the Fed’s rate cut was bad news. This also means the market had already priced in a rate cut, aggressively.

The market was expecting an interest cut from the Fed in the March 18 meeting and even though the Fed officials spoke out against the cut right away last week, they made the first such emergency cut since the financial crisis.

However, President Donald Trump, who called for a rate cut today early in the day after Australia’s central bank did, pushing its rates to a record low, yet again called out for another cut.

“The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to the USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!,” Tweeted Trump.

The crypto market is reacting the same way as the stock market. Bitcoin also jumped to about $8,870 but soon after followed stocks and dropped below $8,700. However, the volume is extremely low, only $400 million exchanged hands on the top ten exchanges in the past 24 hours.

Source: Coin360

However, stock markets are more volatile than bitcoin today and trader Crypto Micheal notes, “BTC is stabilizing, while some alts are gaining momentum already.”

However, traditional safe-haven assets like gold and silver are surging. Gold prices rose sharply, with April futures were last up $51.20 an ounce.

Lower Fed rates also have investors paying attention to treasury yields, with the 10-bond yield hovering above 1% near an all-time low.

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Author: AnTy

Bitcoin and Gold Feeling the Pressure while Stock Market Makes a Fresh Record

Today, the market has hit yet new highs.

The benchmark S&P 500 Index, up 22.7% so far this year, is on track to rise for a fifth week in a row while Nasdaq is eyeing its sixth straight week of gains. The Dow Jones Average that spiked 150 points yearly has its 2019 gains climbing to 18%.

These gains came on the back of the comments from senior officials in Beijing, suggesting that the US and China will cancel planned tariffs on each other’s billions worth of goods in stages, as part of the first trade pact between the world’s two biggest economies that is due to be signed in the next few weeks.

“In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately,”

Ministry of Commerce spokesman Gao Feng told reporters in Beijing.

“Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations,”

added Gao.

However, strategists are concerned that the market is placing too much emphasis on the “Phase One’ of the trade deal coming to fruition.

Meanwhile, as global stocks extended multi-year and multi-month highs, US equity spiked on the comments as well.

The European market also rallied, with Stoxx 600 benchmark is hitting a four-year high. Global oil prices went up amidst the broad market rally.

While the stock market is surging gold is in the red hitting new daily lows.

Bitcoin has been outperforming gold for the past nine years but today the digital gold is falling the same as gold.

The leading cryptocurrency is trading at $9,199 with 24 hours loss of 1.13%, as per Coincodex while managing the daily trading volume of just about $200 million.

Bitcoin might not be seeing the greens currently but as we reported the market is giving the signs that we are getting ready for an “explosive” move. The low volume, tight range, CME gap being filled and BTC entering the overbought levels are pointing towards this move.

Another positive factor for BTC is the open interest on Bakkt that has doubled to $2 million, as reported by Skew Markets. As Bitcoin Exchange Guide shared, these increasing numbers suggest that new money might be coming into the market.

This current phase, according to prominent analyst Willy Woo is just a “prolonged consolidation inside a macro bull market.”

Many have already called out the bottom of the market and being in the “blow-off” phase, the question remains whether we are taking a detour around $8k first or going straight to a new 2019 high.

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Author: AnTy

Interest Rates Cut by Federal Reserve, Though A Pause Is Coming

  • The cuts lowered benchmark funds rates to 1.5% to 1.75%.
  • The likelihood of another cut in December’s meeting is only about 25%, according to traders.

Just as expected, the Federal Reserve approved a quarter-point interest rate cut today, which is the third cut that the authority has performed this year. The financial market was anticipating this vote, according to reports from CNBC, during which time the Federal Open Market Committee lowered the benchmark funds rate to 1.5% to 1.75%, which was a difference of 25 points.

This rate outlines the fees charged by banks for overnight lending, but it is also directly connected to the majority of revolving consumer debt. The cut is being called a “midcycle adjustment” by Fed. Chairman Jerome Powell, as the economy expands. With the decrease, it seems that language was also introduced to establish a higher bar for the future.

A key clause was removed by the FOMC that was recently in post-meeting statements dating back to June, which indicated that the entity would “act as appropriate to sustain the expansion.” Powell had used the phrase during the rate cut in July, and it has remained in the official language since then.

Now, a new statement has replaced it,

“The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.”

In a news conference, Powell aimed to be clearer, commenting that the officials of central banks “see the current stance of monetary policy as likely to remain appropriate.”

Participants in the market have been observing tentatively, waiting to see if the chairman may signal the end of the policy accommodation. With the new language, it appears that the data dependence is increasing, rather than keeping a focus on lowered adjusted rates. During this meeting, market pricing had remained at approximately 100% for a cut, while traders are only predicting a 25% likelihood of a move in the meeting in December.

In recent speeches, federal officials have continually highlighted the strength of the US economy, driven by consumer spending. However, they have also expressed that global weakness, Brexit-related uncertainties, and the tariff war with China has been a threat to that strength. While the labor market reportedly “remains strong,” nearly every other activity benchmark has remained the same.

The government today is reporting 1.9% GDP growth, though the original estimate by Wall Street was 1.6%. Through recent months, despite 109,000 citizens remaining unemployed, the rate is still at a 50-year low at only 3.5%. Stock market averages are also recording new highs.

Even with these cuts, President Donald Trump has pushed to prevent these rate cuts, hoping to go back to the quantitative easing program employed by the central bank at the time of the financial crisis.

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Author: Krystle M

CryptoCompare Created An Exchange Benchmark, Here’s Why

CryptoCompare Created An Exchange Benchmark, Here’s Why

As you may know, CryptoCompare created its own exchange benchmark. Why? The company recently posted in order to explain its decision.

According to the company, exchanges changed in many ways in the last few years, however, there was one aspect that called out everybody’s attention: fake volumes. More and more people started to affirm that most of the trading volumes were actually fake or manipulated.

The volumes were manipulated because many companies were actually involved in wash trading, which is basically the semi-illegal practice of trading with yourself to fake your volumes to look higher than they are.

This is why the Exchange Benchmark is an important tool, as it will help the company to create the trusted volume of the exchanges, which helps to address the fake volume issues. The technology uses a qualitative and quantitative metric which will show the adjusted trusted volume of exchanges.

CryptoCompare also explained that the issue with fake volumes started last year. After the crypto mania, trading volumes started to decline a lot. This made several companies see their quantity of users go down radically, which prompted them to fake their volumes in order to continue looking relevant in this scenario.

In fact, the low-value exchanges were the most with higher volumes when compared to 2017 exactly because they were faking them. The company correlated the spikes in trading with the value of BTC and the exchanges that passed the benchmark with high grades saw their trading went up as the prices did and down following the prices too.

The low-quality exchanges, however, saw their volumes spike a lot when the prices started to crash. Many of these exchanges appeared out of thin air during 2018. They are not as respected as Coinbase or Binance, just have high volumes, which are not even real.

Some of the bad exchanges, such as Coinbene and CoinEx, for instance, offered their tokens to traders. These tokens lost most of their value soon. They do not have a healthy business and they know it.

Binance, however, which uses its tokens to offer traders a chance to pay fewer fees, is only seeing the prices of its BNB tokens go up. Why? Because Binance does not have to fake volumes in order to be the most important exchange in the world.

The Bitwise report, which proved that most volumes were fake, was actually not that surprising for who was following the market during 2018. A certain collapse happened and many bad actors appeared. Companies with low volumes and suspicious of wash trading flourished.

Why use the benchmark? To give credit to the companies that deserve it. Not everybody is faking volumes and people have the right to know which are the companies that are.

The methodology enabled CryptoCompare to define which exchanges were engaged in healthy trading without needing to tie this to their rankings in rough numbers. The main page of the company was now also ordered by the grade of the companies, which goes from A to F, instead of their volumes.

The crypto market may be the victim of fake volumes from time to time, but it is also the truth that some companies are making an important effort to change this reality.

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Author: Gabriel Machado