Crypto Exchanges and Companies React to China’s Ban, PBoC Injects 100B Yuan Liquidity in Markets

Despite boosting the net liquidity injection of 510 billion yuan (almost $79 billion) in the preceding six days, the central bank failed to spur risk appetite; meanwhile, crypto-asset prices jumped.

China has taken even more concrete steps towards its crackdown on the cryptocurrency industry. Last week, the central bank declared virtual currency-related business activities, including the provision of services by overseas exchanges to Chinese residents through the Internet, to be “illegal financial activities.”

This time the People’s Bank of China involved the Supreme People’s Court of the Central Cyberspace Administration of PBOC, Ministry of Industry and Information Technology, Ministry of Public Security, China Banking and Insurance Regulatory Commission, and China Securities Regulatory Commission Foreign Exchange Bureau in the crackdown.

Given that the notice that appeared on PBOC’s website was dated Sept. 15, some local crypto users maintain that there was a lot of chatter about the ban in the community before it was announced, while others say while rumors were swirling for weeks, the actual confirmation made it a “material event.”

In response to this, cryptocurrency exchanges Binance, Huobi, and OKEx stopped allowing new users from mainland China to register with the platform.

On Saturday, Huobi Global officially announced that in order to comply with the local laws and regulations, they have already ceased new account registrations and will further “gradually retire existing Mainland China user accounts by 24:00 (UTC+8) on Dec 31, 2021.”

“We have not allowed Chinese people to use it since 2017, and we have no exchange business in China,” the exchanges then told the Chinese media over the weekend.

Besides these popular exchanges, BiONE, TokenPocket, BHEX, HyperDAO (HDAO) Foundation, Loopring Technology Limited, and ZKSwap stated that they would stop providing their services to Chinese users and are withdrawing business in mainland China.

Ethereum mining pool Xinghuo Pool also announced that it wouldn’t provide its mining pool services to users in mainland China the same as graphics card mining machine management software NBMINER, which would no longer provide technical support either.

In Inner Mongolia, so far, authorities have closed 45 crypto mining farms, “theoretically saving 6.58 billion kilowatt-hours of electricity per year,” and confiscated over 10,000 mining machines in its latest operation.

Crypto prices have already taken a hit from the news, and a “panic selling” of USDT was also seen, which went from 6.40 to 6.01 against RMB.

Amidst this, on Monday, the PBOC injected 100 billion yuan (US$15.5 billion) into the local banking system through open market operations, boosting the net liquidity injection of 510 billion yuan (almost $79 billion) in the preceding six days.

Still, the central bank failed to spur risk appetite as crypto-linked stocks Huobi Technology, OKG Technology, and Meitu slumped, and Hang Seng Index lost almost all its advance with no sign of a resolution to Evergrande’s debt crisis, reported SCMP.

The prices of crypto assets, however, have recouped most of their losses and especially the DeFi sector, which is seeing traction among Chinese users.

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Author: AnTy

SHIB Token Is Sending Ethereum Gas Prices Higher

The Dogecoin knockoff, up 30,120% in the last four days, is also the one behind Ethereum co-founder Vitalik Buterin’s $8 billion fortune.

Ethereum gas fees are back to skyrocketing.

The gas prices calmed down and fell to about 40 Gwie earlier this month after the Berlin hard fork went live in mid-April, layer 1 solutions like BSC and Solana (SOL) gained traction, and layer 2 solutions like Polygon (MATIC) started to see usage.

Average gas prices are currently 150 gwei, as per Blockchair.

This has the average transaction fees on the network going to $30 after falling under $8 on May 2nd, but we have yet to climb to the late February level of about $43.

The USD rate has been on the spike as the price of Ether made a new all-time high today at $4,175.

However, this has been in line with the second largest network’s growing usage as transaction count exceeds 1.7 million, up from a 2017 peak high of 1.4 million. On May 9th, it reached the height of 1,716,600, only to fall just under 700k today.

Since last month, transaction volume has also been strong, seeing a significant jump last week, from 7.1 million on May 6 to nearly 42 million on May 8. Today, it is back to 3 million ETH.

According to Lex Moskovski of Moskovski Capital, the surge in gas prices has been due to the SHIB token.

“Ethereum gas price is skyrocketing due to TikTok influencers shilling SHIB token in anticipation of a DOGE pump. Currently, the token’s contract is the 4th most used right after Uniswap’s and Tether’s,” he noted.

Interestingly, the Dogecoin knockoff is the token behind Ethereum co-founder Vitalik Buterin’s $8 billion fortune. Buterin actually received 50% of the SHIB token supply from the token’s developers over the past year.

Shiba Inu is a canine-themed meme token inspired by Dogecoin (DOGE), which is up 30,120% in the last four days and is currently trading at $0.00003054.

And Buterin is its highest holder with 505 billion SHIB, which is now worth more than his $1.3 billion in ETH.

Buterin, however, is in no way related to the cryptocurrency. Moving 50% of the coin’s supply to Buterin was actually the SHIB’s anonymous developers’ decision to remove them from circulation, as shared in the cryptocurrency’s white paper or “woofpaper.”

While the community is cautious and feels Buterin may rug them, “Will he do it? Certainly not. There’s no incentive for him to tarnish his reputation for 200 ETH,” tweeted WARONRUGS back in January.

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Author: AnTy

Value DeFi Exploited Yet Again This Week? TVL Collapses by 80% Days After $10M Exploit

Value DeFi Exploited Yet Again This Week? TVL Collapses by 80% Days After $10M Exploit

$829 million have been wiped out from the project’s TVL, and withdrawals are halted, while Value DeFi reports “one single large withdrawal from one user caused the balance of the vault to be off.”

Audited decentralized finance project Value DeFi saw the total value locked (TVL) in it crashing by 80% in a single day.

On May 4th, the project had almost $1 billion in TVL, which went from nearly $865 million on Friday to the current $180 million, as per Defi Llama.

The project, which was initially launched on the Ethereum mainnet in August 2020, had recently expanded to Binance Smart Chain (BSC). The project offers features like automated market maker (AMM) and decentralized exchange (DEX) aggregator (vSwap).

According to the BSC project, Value DeFi is handling just over 9k transactions and nearly 3.5k addresses interacting with the project.

There is currently $10.18 million in TVL in the protocol, while less than 24 hours back, $839M was reported.

On Friday, the project announced on Twitter that they are taking additional steps to protect its users and, as a first step, implemented a new 12hr timelock on all critical functions for vFarm.

This improved security update came after earlier in the week. Its vStake profit-sharing pool for vBSWAP was exploited resulted in a loss of $10 million user deposits in that pool due to losing a line of code by “human error.”

“All other pools and funds are SAFU,” it reported in the post mortem of the incident.

At the time, the VALUE team said part of the Reserve Fund would be spent to buy the insurance and further proposed two approaches to help affected users.

All vBSWAP within the Reserve Fund (2802.75 vBSWAP) and 205,659 BUSD from the ValueDeFi deployer will be used to compensate all users at the pool. The remaining 4540 vBSWAP will be minted and either used to compensate all affected users immediately or in two parts.

But it seems like just days after the exploit; something else is going on with the project as its TVL sees such a crash. Trader @depression2019 noted that VALUE seems to be hacked and its pools drained for well over $100 million that could make it the “biggest hack in DeFi history.”

“For those wondering why they can’t withdraw from the WBNB vSafe, your funds are safe; we only disabled deposits and withdraws after noticing one single large withdrawal from one user caused the balance of the vault to be off. There is something wrong with the Alpaca strategy, and we are currently working with Certik and the Alpaca team to resolve the problem. Until then, we will continue working on solutions for all affected users during today’s exploit,” reads the pinned message on the project’s Telegram while the community members berate the project for rug pulling them several times.

This project lost $7 million late last year after they bragged about their “flash loan protection.”

Unlike the last time, the price of the VALUE token fell over 21% this time and is currently trading at $3.86, down 91.7% from its all-time high of $46.90 in Sept. 2020, as per CoinGecko.

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Author: AnTy

Billion Dollar Stablecoin Fei Protocol Struggles As Token Drops Below USD Peg

Billion Dollar Stablecoin Fei Protocol Struggles As Token Drops Below USD Peg

Barely days after the stablecoin project Fei Protocol launched, it appears to be struggling—so much so that its 1:1 USD pegged token has dropped well below its targeted $1 value. Currently at $0.7916.

Fei in Free Fall

The stablecoin project, meant to be algorithmic and without volatility, lost its peg to the U.S. dollar this week. The asset was down by almost 80% at a time.

This caused an uproar on social media, with users complaining about the project and others suggesting solutions.

Compound (COMP) founder Leshner stated that the protocol was in this state due to a bug.

“Folks are watching Fei, a project that raised $1.3B, struggle at launch. It raised way more ETH than needed; most buyers were looking to immediately sell FEI back (peg pressure); then, to top it off, a bug disabled the primary stability mechanism. Not a recipe for stability.”

Meanwhile, the company has responded via its Twitter account. It disclosed that there was a vulnerability through its bug bounty program. This made the development team suspend mint rewards on Fei buys to ensure the protocol and PCV were secured.

Mint rewards are incentives users who buy Fei get to help it return its value to the dollar.

Fei Protocol added that the protocol is still overcollateralized, meaning more cryptocurrency collateral backing the set of Fei tokens. It assured users that the token’s value would return while also thanking users for their suggestions on solutions.

Fei Protocol Fighting Stablecoin Issues

Backed by many high-value investors, Fei Protocol aimed to create a stablecoin protocol that would outrightly buy assets with its token, rather than holding them as collateral for loans.

Fei had pointed out the obvious issues in already established stablecoins that were centralized and controlled by corporations with the focus of fighting them.

The stablecoin introduced the model called ‘Protocol Controlled Value’ (PCV) which means when users deposit collateral, the protocol owns and manages it so that liquidity cannot just be pulled out. The PCV is a subset of TVL (total value locked), in which a platform outright owns the assets locked into the smart contracts.

However, it appears Fei Protocol did not anticipate the high demand it received.

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Author: Jimmy Aki

Mark Cuban Compares the Ongoing Blockchain & DeFi Development to the “Early Days of the Internet”

Mark Cuban Compares the Ongoing Blockchain & DeFi Development to the “Early Days of the Internet”

Blockchain and digital goods, according to the Dallas Maverick owner, the “Money 2.0,” are the future.

Shark Tank’s Mark Cuban’s enthusiasm about the cryptocurrency market, especially the decentralized finance (DeFi) sector, continues to grow, which he eagerly shares with the world.

In an interview with the Defiant podcast, the billionaire owner of the Dallas Maverick shared that he is a DeFi and Ethereum bull and that “ETH has an advantage over BTC as a store of value.”

While his general stance isn’t changed and Bitcoin can’t be used as a currency, he believes the digital currency can become powerful enough to be a store of value.

But smart contracts is what has him more excited as it allows developers to lay the foundation for “friction-free banking.” Ethereum is the blockchain where this is all happening, and that makes ETH far more of a store of value than BTC, as per Cuban. This is why he is buying more ETH on pullbacks and not Bitcoin.

This makes sense given that Ether is outperforming Bitcoin in 2020 with 150% gains YTD compared to Bitcoin 62%. Eth also outperformed Bitcoin last year and during the 2017 bull run.

In a separate interview with Real Vision founder and CEO, Raoul Pal, Cuban talked about blockchain technology, which, if you don’t understand, “is going to smack you down and make you bleed,” he said.

“What we’re seeing right now with this communal effort, and the foundation of blockchain-type applications that people stuck at home can use to try to make money … just changed the game 180 degrees.”

To him, the development going on in the space reminds him of the “early days of the internet,” which is brand new, and “no one really knows what it’s going to be.”

That’s why the high fees on Ethereum and DeFi make sense as the billionaire points out how it was about two decades into the internet that bandwidth became available and cheap enough to make streaming possible, and “we’re only 10, 12 years into crypto after starting with bitcoin,” he said.

According to him, the evolution of blockchain and digital goods is the future, which, as we have seen Cuban himself partake in by selling several NFTs. He said,

“Now this is America 2.0. This is money 2.0. And I don’t mean currency money, I mean being able to earn money via digital has all changed. The only thing we don’t know is who are the Amazons and who are the Pets.coms.”

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Author: AnTy

Gold Is Trashed As USD Regains Strength; Will Bitcoin Hold Onto its Gains?

The traditional safe-haven asset has lost 5.6% of its value in three straight days of losses. The digital gold is still strong above $41k but the market needs to pay attention to the macro environment to see if USD gains take its toll.

Today, gold lost 3.14% of its value while USD gained some strength to move above 90 and Treasury yields made some recovery.

The yellow metal had a good couple of days entering into 2021 as it jumped back above $1,900, but it hasn’t been long that the bullion went down again.

Today the third day in a row that the precious metal has been going down, losing 5.6% of its value since Wednesday.

“It is the first week of January and the staying power for positions tends to be low so moves can get exaggerated,” Tom Fitzpatrick, a Citigroup’s technical strategist, told Bloomberg. Fitzpatrick has been the one that predicted a $318,000 BTC target.

The weakness in gold coincides with the greenback bottoming at 89.2 on Jan. 6 to find its way back above 90 after 10 days.

“Gold and metals getting trashed. The dollar incredibly bottomed on the elections … should have gone down, but didn’t. Rates behaved as expected, but the dollar turned,” noted trader and economist Alex Kruger.

Pay Attention

Unlike gold, the stock market continued its uptrend amidst the growing speculation on further stimulus but despite a sharp slowdown in US hiring.

With the U.S. President-elect Joe Biden getting full control of Congress after the two Democratic wins in Georgia’s Senate runoffs this week, the expectation for more stimulus and higher spending on economic reconstruction has been bolstered.

Bitcoin has also been making strong moves, with this week being yet another wild one for BTC in which the cryptocurrency went from $29,000 on Monday to nearly $42,000 today.

However, trader TheCryptoDog suggests to “pay attention to the macro environment,” adding, “Is the Fed really going to continue such wanton debasement of the dollar?”

Kruger also feels that “If this dollar trend were to continue for much longer it will likely take its toll on bitcoin.”

“This parabolic move upwards, with normally staid Wall Street firms including JP Morgan calling $146,000 as their price target for Bitcoin, and Guggenheim called $400,000, feels like it has a long way to go before exhausting,” is what Guy Hirsch, managing director for the U.S. at eToro believes. “It wouldn’t be all that surprising to see $100,000 at some point this year, given the current momentum.”

While making these new highs every day, Bitcoin has been time and again giving small pullbacks, only to make these daily tops support the very next day for another push higher.

But the market believes that despite being in this new paradigm, “brutal retracements are still possible.”

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Author: AnTy

YFI Plunge Might be Over After Record Number of Addresses Unload All their Tokens

In the past three days, the DeFi darling YFI has lost more than 36% of its value, going from $34,400 to $21,950 today.

At the time of writing, the 28th largest cryptocurrency with a market cap of $719 million, has been trading over $23,900, slightly in the red.

The governance token of Yearn.Finance has been plunging recently, which in part, is because of over 55% uptrend it experienced before that. Just this month, the token also hit a new all-time high of $43,678, and after such a peak, a correction is to be expected.

Moreover, the DeFi ecosystem at large hasn’t recovered from the losses yet, following the rally it has been recording from the past few months.

So, YFI is not alone in these losses; as a matter of fact, many like bzrx, SWRV, CRV, UMA, and MLN are down 60% to 85% in the past 30 days.

However, for YFI, there is an additional driver behind the downtrend.

As we reported, Eminence.finance was launched and exploited to drain $15 million, all within a few hours of the project getting in the limelight.

The unannounced and unaudited project was Yearn.Finance founder Andre Cronje’s creation.

Trader and economist Alex Kruger, who has been a YFI bull, revealed that he no longer holds any YFI as he took the profit. “My assessment made on the fly indicated YFI could crash. When shit hits the fan, it usually pays to react fast and hit it,” he said.

He further said trust in founder matters and “Cronje simply made the YFI trade more difficult.”

Kruger wasn’t alone in that given that on Sept. 29, with a 16% drop in price, the number of addresses that transferred out all their tokens and have zero balance reached its highest number ever at 1.72k addresses, as per IntoTheBlock.

In the EMN debacle, not only YFI’s communications lead was involved in promoting the project, but Cronje himself also retweeted Eminence.Finance’s ambiguous tweets.

“EMN is a Yearn product, contract deployed by Yearn #2 Blue muppet, a Yearn team member, shills EMN #3 Cronje talks surprise launches #4 Cronje promotes eminencefi while people buying EMN #5 EMN exploited, everyone gets rug pulled.”

To Cronje’s credit, the crypto community voted to be surprised by the project launch!

In the end, Degen investors might have learned a few things here, especially not to go all rushing-in in barely researched or audited projects.

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Author: AnTy

UNI Shorts Get REKT As it Goes Into Price Discovery While Uniswap TVL Hits a Record $2B

It has been only three days since Uniswap launched its governance token UNI.

The free $1,200 crypto stimulus saw 32k accounts selling their 400 UNI instantly, under $5.

This much activity resulted in ETH gas fees skyrocketing to $11.60, yet again and seeing a level of congestion; the Ethereum network has “never” faced before. The good thing is ETH price also spiked to $392 amidst the ETH balance on exchanges reaching the lowest levels so far this year.

But what these sellers didn’t anticipate was the price discovery the token would go on. Yesterday, UNI hit an all-time high above $8.37, and currently, it is trading at $7.13.

“UNI shorts getting rekt. I’m pretty sure there’s a lot of farmers that leverage hedge yields because I do that often, but Jesus this chart looks like someone got rekt, futures were 35% below index and it teleported to the index in a few ticks,” noted trader CL.

These sellers also didn’t take notice of the fact that the decentralized exchange (DEX) handles the same level of volume as the top centralized exchanges such as Coinbase.

“There are VERY few productive assets in crypto space,” said Dovey Wan of Primitive Crypto. “Uniswap Protocol operational efficiency is an order of magnitude higher than Binance and Coinbase.”

Uniswap is currently the dominant force (19.4%) in the DeFi space with a record of $2 billion in TVL, as per DeBank.

This week, the volume on the platform is also gradually growing to over $600 million, which is much more than the likes of Coinbase, Gemini, Poloniex, and Bitfinex.

The token has already been listed on the top cryptocurrency exchanges with futures contracts, providing the opportunity to short or long the crypto asset. DeFi options protocol Opyn also launched the UNI put options.

“DeFi will devour CeFi, piece by piece. It will be very difficult for proprietary, closed platforms to compete with neutral, open infrastructure,” said Jake Chervinksy, a legal counsel at Compound Finance, about the ongoing development in the DeFi space.

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Author: AnTy

Bitcoin Must Outperform Altcoins To Kick Off A Long-Term Bull Market

For the past four days now, bitcoin has been hovering around $11,000. Trading in the green, the digital asset today went as high as $11,185 but with the ‘real’ volume only about a billion dollars.

Much like the spot trading volume, futures had a lackluster performance as well. From $28 billion on Sept. 3rd, it has come down to just $7.2 billion. On CME, the volume kept between $262 million and $445 million since the mid of last week.

Open interest also followed the same path, going down from $5.1 billion to $3.7 billion in the first few days of September. But unlike futures volume, OI has been slowly trending upwards, making it to $4 billion. On CME as well, OI jumped back to $500 million.

However, during this whole ordeal, Bakkt came out the winner, making new records. On Monday this week, the total volume (physically-settled + cash-settled) was $183 million. Then on Wednesday, this record was broken with $191 million. But the OI on Bakkt had no such fun as it remains near $10 million.

What’s Looking Good?

While bitcoin looked good this week, with the price around $11,000, analyst DonAlt is all about the $10,600 area, which according to him, “is still one of the most important areas on the chart.”

“This week closes below it? I’ll assume the top is in, and we’ll trade towards $8k. We close above it? I’ll close shorts and see what happens next,” he said.

Amidst this, European Central Bank will disburse its latest rounds of loans with interest as low as -1% that has led the funding costs to fall. ECB’s liquidity injections may raise excess cash in the euro area above 3 trillion euros ($3.6 trillion) for the first time.

Today, while BTC is looking green, altcoins are not having that great of a time which includes SAFE (-25%), BAL (-16%), KNC (-10%), CRV (-9%), Tezos (-8%), YFI (-7%), and LINK (-4%), with the top ones down between 1% to 3%.

Still, the likes of CREAM (43%), SASHIMI (42%), UNI (40%), YAMV2 (16%), BASED (8%), and Aave (5%) are making gains.

Signs of New Money Moving into Crypto

The leading cryptocurrency is taking its sweet time moving upwards. Up 50.5% YTD, in Q3 bitcoin, has made gains of only 20%, about half of Q2’s 42% returns. But it is still better than gold’s 10.15%, SPX 7%, dollar’s -3.69%, and WTI’s -6.5%.

Quarter third, however, hasn’t really been good for the cryptocurrency, except for in 2017, or stocks for that matter. The next quarter, on the other hand, historically has been dominated by greens — 82.8% in 2015, 62.60% in 2016, and 210% in 2017. In 2014, 2018, and 2019, however, Bitcoin recorded losses of 18%, 42.5%, and 13.60% respectively.

Also, as Juan Villaverde of Weiss Crypto Ratings notes, underneath the surface, we are seeing “crypto-assets establishing a solid base for a potentially explosive rally as we head into the final quarter of 2020.”

His takeaway from the current market action, where bitcoin is moving higher while altcoins are struggling in sharp contrast to the past couple of months,

“Bitcoin remains the benchmark for outside investor interest in the asset class.”

“I’ve often noted on these reports how no crypto bull market is sustainable without Bitcoin leading the way, at least in the early stages,” said Villaverde adding:

“it’s only when we see Bitcoin outperform the rest of the markets to the upside that we can say that new money is moving into the crypto space — a necessary prerequisite for a long-term bull market.”

But it also remains to be seen if bitcoin will continue to outperform over the next few weeks.

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Author: AnTy

Dave Portnoy’s Crypto Stint Already Over with Buying at the Top & Selling at the Bottom

About ten days back, Barstool Sports president Dave Portnoy who became a day trader during the coronavirus pandemic, jumped in bitcoin — million dollars deep in it.

Earlier this week, in his BlockFi sponsored session, he called himself the “Baron of bitcoin,” stating that he is up to $100,000 in his investment only to declare yesterday that he currently has zero bitcoins.

“I currently own zero bitcoins. I will wait and watch,” tweeted Portnoy to his 1.7 million followers. “I may or may not be done.”

“Just like with the stock market, it took my brain time to figure it out,” he said.

Thanks to his venture into shitcoins, he reportedly lost $25k. Blaming the crypto market, which he said doesn’t keep on going up like the stock market, he added, “The Link Marines are weak, and the orchid flowers do die in the crypto world.”

But according to trader and economist Alex Kruger, “Link Marines are not weak. Link marines dumped on Portnoy.”

The day Portnoy talked about pumping LINK to the moon, a week back, the digital asset made a new all-time high to $20. However, before that, LINK had already become the fifth largest cryptocurrency with its explosive gains and repeated new highs.

Since that day, LINK has corrected nearly 20% and is currently trading at $15.52.

As for the Orchid (OKT), the day Portnoy shilled the altcoin, one of the handful cryptos available on Gemini — the Winklevoss twins’ founded cryptocurrency exchange that has been sponsoring Portnoy’s crypto stint, the token dumped, having already rallied over 200% in the weeks before that.

Portnoy, who was heralded as the one bringing a mass of new investors into the market, was torn into by the crypto community for being a bad cryptocurrency trader.

Many weren’t happy with Tyler and Cameron shilling him “shitcoins” and that he should have just stuck to bitcoin because “they are designed to separate people from their BTC (or their money generally),” said Adam Back, co-founder of Blockstream who further advised HODling BTC or went with leveraged perpetual futures if one wants to day trade BTC.

bitcoin 101

Others meanwhile pointed out how, “No suits to beat here, Dave. It’s a pure street fight,” and “saying a prayer for his next pump and dump attempt.”

portnoy bought the top

And as one crypto trader said, “This is what we qualify as a noob trader.”

hype make oney lose it all

According to Dan Tapiero, co-Founder of 10T Holdings, the Winklevoss twins “did him the disservice of not explaining bitcoin; instead of focusing on the absurdity of gold asteroid mining and chainlink, which itself is complex.” Portnoy cried for some mentorship on BTC, but “no one answered his call,” he added.

As we reported, Portnoy first got into Bitcoin during the bull rally of 2017 when he said he doesn’t understand it but can’t get enough of it either, calling it “Mario Brothers.”

It’s to be seen if Portnoy will re-enter the market once bitcoin starts flying again or if it’s finally over for the so-called “King of Bitcoin.”

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Author: AnTy