Here’s Why Ethereum Can Further Outperform Bitcoin and Other Large Cap Coins

The price of cryptocurrencies has started to rebound. Yesterday Ether led the market upwards, going to nearly $400 level thanks to Grayscale Ethereum product ETHE becoming an SEC reporting company that reduced its investors holding period in half to six months.

This news could bring with it “a raft of arbitrage opportunities for market participants trading across retail-focused venues vs. the more institutionally focused venues,” says Denis Vinokourov of Bequant.

Additionally, given Ethereum’s use as a hedge to DeFi exposure, “the development may result in a short squeeze, further exacerbating the likely outperformance against its large-cap counterparts,” he added.

Bitcoin also made its way above $11,700, outperformed by ETH, but today, the market is inching down.

However, unlike the strong price action, the fees are returning to normal. ETH fees continue to plummet with average transaction fees currently under $2 from August’s peak of $14.58, following the unprecedented DeFi-driven growth over the summer that topped out in August.

Interestingly, Bitcoin fees are keeping to its trend of going in the opposite direction of Ether, growing by 15.2% week-over-week and averaging about $1M per day. Average Bitcoin transaction fees started going down in Q3 and bottomed at $1.3 towards Sept.’s end only to make its way upwards to above $4 in October.

“Transaction fees currently account for 9.5% of the miner revenue, and have become a far more significant contributor to the miner revenue following the BTC halving in May,” noted Arcane Research. “The miner revenue has not been this influenced by transaction fees since the 2017 bull run.”

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Source: Bitinfocharts

Meanwhile, the hash rate of both the top networks is heading north, making new highs. Bitcoin’s hash rate reached a new all-time high this week with the 7-day average hash rate surpassing 140 EH/S, 36% higher since the beginning of this year.

Just like Bitcoin’s strong fundamentals, the Ethereum hash rate also hit a new peak at 254.36 TH/s last week, following the constant growth since mid-July thanks to the rise of DeFi.

“The large increase in fees meant more revenue for miners, which incentivized more miners to join the network and caused hash rate to grow,” noted Coin Metrics.

After rallying hard, September has been a challenging month for DeFi tokens, which crashed hard, potentially finding the bottom. However, the total value locked (TVL) in the ecosystem has jumped past $11 billion.

However, the alpha seeking capital exploiting the DeFi ecosystem could also make a temporary return to join the Ethereum rally. Even Bitcoin could help Ether run higher with Wrapped Bitcoin (WBTC), which continues to accelerate.

Meanwhile, Ethereum has successfully launched yet another dress-rehearsal testnet dubbed Zinken for the upcoming Ethereum 2.0 Phase 0. Unlike the previous failed attempt of Spadina, this was a smooth launch on Monday.

The good news for Ethereum kept on coming at the start of this week, another one in the form of Aztec announcing the launch of Aztec 2.0 — the Layer 2 scaling solution with privacy at its core. The zkRollup based network, live on Ropsten, has private sends by default for ERC-20 tokens on top of scalable private access to DeFi with 200x gas reduction compared to the previous version.

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Author: AnTy

Solana Targets Ethereum’s Scalability Issue by Introducing a Bridge called Wormhole

After launching DEX Serum, Solana Blockchain is now going for the heart of the problem.

Today, Wormhole – a secure, trustless bridge connecting Ethereum to Solana is announced.

With the DeFi frenzy, up until a few weeks ago, pushing the activity on Ethereum to new highs — fees to skyrocket and the network to clog — the market has been in serious need for a solution. As the team mentions in its official statement, speed and cost being the hurdle for adoption –

“the big leap that tips the scale towards Web3 will be propelled by scalability, and that’s exactly what Solana is solving.”

To cater to the significant growth in DeFi applications and to make sure the flow of “greater multiples of new capital” is not stopped by congestion and high gas fees as they keep money on the sidelines, Solana has joined hands with Certus One. Stating,

“Wormhole enables DeFi platforms to leverage Solana for high speed, low-cost transactions, while still allowing for settlement on another base chain.”

This bidirectional cross-chain bridge on Solana, which is just the first of many, connects ETH and ERC 20 tokens to SPL tokens, Solana token standard. When it comes out in a month, DeFi projects can move tokenized assets across blockchains running into constant issues.

Wormhole uses decentralIzed cross-chain oracles called guardians, operated by a set of node operators including Solana validators and other stakeholders who certify token lockups and burns on one chain to mint new tokens on others.

And with this, Solana Foundation is hosting a virtual hackathon, starting October 28, for the community to get together, use Wormhole and bring ideas to create highly scalable and cost-efficient web3 applications.

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Author: AnTy

Is FTX CEO Accelerating the Deep DeFi Rout?

After going through a deep pullback in the past month, most of the DeFi tokens struggle to let go of the losses.

Although the news of Square buying $50,000,000 worth of BTC has sent the market into a tisy, not all coins are moving out of the red. Coins like UNI (+22%), LRC (+13.5%), and KNC (+5%) are recording some gains. DeFi darling YFI has manged to dig itself out of the deep red into the green (+5%).

Much like the price, the total value locked (TVL) in the DeFi Sector has declined by almost 10% to $10.12 billion, as per DeFi Pulse.

Popular DEX Uniswap, however, is an exception to this, whose TVL has jumped 30% in a fortnight.

Keep on Dumping!

As we reported, numerous popular DeFi tokens have lost 80% to 90% of their value since hitting all-time highs during the period of mid-August and the beginning of September.

But still, they continue to go down more and more, which could be seen as an opportunity for the project enthusiasts to buy these tokens at low prices which might have missed them the first time around.

In the past 7 days, more losses have been incurred by the DeFi sector, with YFII leading with almost -46% drop. Other notable losers include SUSHI (-41%), CRV (-37%), YFI (-29%), SWRV (-33%), bzrx (-37%), UNI (-24%), UMA (-25%), LEND (-20%), and SNX (-17%).

As another round of losses hit DeFi tokens, Twitterati points to derivatives exchange FTX CEO Sam Bankman-Fried shorting YFI, CRV, and UNI.

Some market participants speculate that Bankman-Fried might be behind the latest dose of losses, especially for YFI, CRV, and UNI, which he has been dumping on leading spot exchange Binance.

It is worth noting that Bankman-Fried is also the CEO of the quantitative cryptocurrency trading firm Alameda Research.

The Catalyst…

While some aren’t liking it, others said Bankman-Fried is simply shorting a few cryptos, which means he believes the coin will decline in value.

Jason Choi of crypto fund The Spartan Group found it all absurd, stating, “Always find it amusing that the idea of shorting is deemed evil on crypto twitter.”

And if you think Bankman-Fried will short his FTT or SRM, that’s a big fat no, because he ain’t short on his creation, of course, rather he is “long as fuck.”

Trader Moon Overlord also pointed out the obvious nature of the situation, which is “a person apart of a trading firm does a trade.” Back in late August, when FTX acquired the crypto portfolio tracker Blockfolio, the trader said, “FTX didn’t pay for a portfolio tracker they could build in 5 minutes they paid $150M for your data and bag info.”

The market also likened Sam’s behavior with billionaire investor George Soros acting as a catalyst in collapsing the British pound in 1992 by shorting it.

In the process, Soros made an estimated $1 billion profit. While that incident was viewed as “a permanent black mark on the UK as a center of financial prestige,” following the event, “Britain entered a period of growth and prosperity,” noted Sahil Bloom, VP at Altamont Capital Partners.

If not Soros, someone else would have used the opportunity to their advantage, and he “merely accelerated” the process. The same could be seen in the DeFi market, which may finally find its bottom and embark on a new bull run.

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Author: AnTy

Get Ready for Some Action as Bitcoin Volatility Hits Historical Lows

Markets are boring right now, with not much going on.

Bitcoin is stuck around $10,700, while altcoins are oscillating between red and greens.

Basically, “all markets, including our beloved digital asset space, seem to be going nowhere fast,” said analyst Mati Greenspan.

After having a blast for about half of the year, even stocks are uncertain thanks to the upcoming elections next month.

September was actually marred with worst monthly performance since March as the broader digital assets market and equities all closed in losses. But according to Greenspan,

“Stocks remain overvalued because there’s too much money in the system that needs a home, and the lower-risk alternatives are no longer attractive.”

While the leading digital asset ended Sept. and opened October both on a negative note, at least for the S&P 500, there were some gains.

While the risk-asset rally may have legs still in this last quarter of 2020, for bitcoin, it might be time to make up for all the losses and move towards beating the 2019 high of $14,000.

“Q4 is where BTC typically makes most if its gains during bull markets. I don’t think this year will be an exception,” stated one crypto trader.

On a Downtrend

While the price isn’t doing anything, for some time now, trading volume has been the one that’s been really disappointing. Bitcoin volume, which is on a downwards trend actually hit the lowest since late February on Saturday.

“The volatility in the market is back at historical lows, and it is not unlikely that we get some more action in the market soon,” noted Arcane Research.

The 180-day volatility has fallen to a two-year low, but according to on-chain analyst Willy Woo it actually spells “bullish.”

“When volatility is at a minimum, it means trade volumes are at a low, which means exchange fees revenue are at lows, which means exchanges sell less BTC profits to fiat, which mean investor buy pressure dominates the next move,” he explained.

Volatility reaching low also means buyers have laid down a floor on spot markets as they continue to accumulate, which ultimately leads to accumulation bottoms as “this stops downward moves and lowers volatility,” added Woo.

However, what’s worth noting is that when BVOL (30-day realized volatility) hit its lowest in 2018, it was followed by the start of the 50% November crash.

Volatility will be coming if not in the near term, then the less than a month away US Presidential elections will surely get the ball rolling.

On an Uptrend

Several indicators, meanwhile, are painting a bullish picture.

To start with, “The Market Cap to Thermocap Ratio suggests that Bitcoin has massive room to grow from here. It has not even started to show the sharp increase that is typical in bull markets. Current levels are a whole order of magnitude away from previous BTC tops,” as per Glassnode.

Thermo cap is the aggregate amount of bitcoins paid to miners, which serve as a proxy metric to the true capital flow into the Bitcoin network.

Bitcoin addresses are also telling a bullish story, moving away from the usual norm of 5-10k new BTC addresses per day; last week, it grew to its highest level in over two years, peaking above 22k.

Not to mention, Tether’s market cap is ready to burst through $16 billion as well, just three and a half months after hitting $10 billion.

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Author: AnTy

YFI Ready to Take Off As The ‘Ultra High Beta’ or About to Get Smoked?

The DeFi market is going through winter right now, as prices of these tokens take a pullback after making all-time highs during August and September.

Since hitting those peaks, some Defi tokens have taken a harsh beating, like CRV, SUSHI, and bZx, which are down over 90%, some like Aave, Maker, and Loopring only went down about 40%. Amidst this, Yearn.Finance’s governance token YFI is somewhere around the middle.

In August, 1 YFI became equal to 1 BTC and then went past Bitcoin’s ATH $20,000 soon after. It was in the mid of September that YFI hit its peak at $43,678, as per CoinGecko.

Making new highs means the digital assets have to get ready for a correction, and that’s exactly what happened as the DeFi sector as a whole went through a winter.

So Much More Affecting YFI

YFI’s losses were exacerbated because of Eminence.Finance, a project by YFI founder Andre Cronje that rug pulled $16 million. Trader and economist Alex Kruger said,

“YFI has been getting Creamed. Recent underperformance relative to other cryptos has been notable. One could argue it is the chart. But it is not. One can find plenty equally poor charts across crypto. This IMO is the marketplace punishing YFI by removing the Cronje premium.”

According to him, although yields matter which has fallen, the blatant negligence around the EMN launch from Yearn and “how poorly the aftermath was handled… many exited/reduced YFI positions because of it.”

At the time of writing, YFI/USD has been trading at just above $18,000.

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Another reason for this poor performance could be the overall drop in activity in the DeFi sector. Jason Choi of crypto fund The Spartan Group said,

“August has been a phenomenal month for DeFi bulls. Now we’re in the hangover phase of the DeFi party.”

Amidst this rout, we are seeing “flight to quality in yield farming,” with Uniswap accounting for 70% of all TVL in yield farms despite its modest returns of 20%-30%. Choi said,

“The shift in sentiment was rapid. Even “degen” farms offering north of 1500% APY are only attracting ~1/10th of the TVL they did just a month ago.”

“drop is risk appetite and collapse in APY is a direct result of -ve price performance of new crop tokens.”

Moreover, with CRV “buckling under continual inflation sell pressure,” it is affecting YFI as well as yCRV APYs on Yearn.Finance accounts for 60% of its activity.

Macro in Focus

While some call for YFI to go down to four digits due to a head and shoulders pattern, trader Josh Rager sees it making new highs as it has found support at a major 0.618 fib level.

Kruger is also still bullish on this DeFi token despite the price of the token crashing 45% in six days as he said,

“The YFI bigger picture bull case remains unchanged. Odds are high this whole ordeal is short term noise.”

The EMN event, however, should remind speculators of YFI’s high ‘founder risk’ as seen in early August when an interview about Cronje “close to quitting DeFi” tanked the price of YFI.

Overall, the trader expects crypto to take off again after the elections and for DeFi to push even further “as the ultra high beta.” Kruger said,

“Macro matters now. So it makes sense to play from the long side. But if crypto crashes, YFI would get smoked, and no fundamental analysis would stop that.”

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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

Ethereum Is Making it Hard for Retail Investors to Enjoy the DeFi Craze

  • Ethereum fees have calmed somewhat since going haywire.

Average Ether transaction fees skyrocketed to $7.3 on August 13, as per Ycharts. The total daily transaction fees on the network topped at $6.87 million, eclipsing the previous all-time high of $4.55 million in January 2018. The next day, this record was broken to hit $8.61 million.

These astronomically high fees were the result of YAM mania. The distribution of YAM tokens through staking pools, the higher the stakes, the more the tokens earned, created a rush as reflected in the more than $15k worth of transaction fees generated by YAM staking pool smart contracts within hours of launch.

As we reported, a bug in rebase function disturbed the whole set up and required 35k YAM to fix the issue. Again this rush to move YAM caused fees to skyrocket.

ETH Hourly Fees, USD
Source: CoinMetrics

Such speculations, reminiscent of 2017’s ICO mania, lead to “unexpected risk and sudden surges in fees.”

While this means high demand for usage, high fees also cause network congestion and price out certain users. Coin Metrics noted,

“High fees make it less and less profitable for retail investors to put relatively small amounts into DeFi applications. DeFi is increasingly a game for whales, unless there are solutions to help drive fees down.”

In its latest report, Coin Metrics points out how it is becoming “harder for average, retail users to compete with large, whale investors who can afford to pay high transaction fees,” on Ethereum.

When mining a block, Ethereum miners select which transactions to include which are typically sorted by the highest fee as such “relatively low fees get deprioritized and included in later blocks once there’s space.”

Increasing the gas, a unit to measure Ethereum fees, increases the chances of a transaction getting included. And higher fees lead to higher revenue for miners.

As such, as average transaction fees in Ethereum increases, certain types of users and applications, especially those with microtransactions, get priced out, making it skewed towards whales at the expense of small, retail users.

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Author: AnTy

Philippines Central Bank Governor Confirms Interest in Launching A Digital Currency

  • Philippines joins the race to launch their digitized fiat, CBDC.
  • Fiat not going away soon, central bank governor says.
  • China and Japan are also focusing on CBDC.

The central bank of the Philippines, otherwise known as Bangko Sentral ng Pilipinas (BSP), expresses its interest in launching its own central bank digital currency (CBDC).

In a story first covered on Bloomberg, the governor of BSP, Benjamin Diokno, stated the country had formed a research committee on the possible launch of digital currency. The article further states that the research team is set to release its findings in the coming month.

The committee, which was formed earlier this year, started its research on the policy implications and potential feasibility that digital currencies bring to the Philippines economy. Speaking in a virtual conference, Diokno said:

“We have to first look at the findings of the group before making a decision.”

This is the first time the country is publicly declaring its interest in developing its digital currency.

Fiat Demand not Going Away Soon

The launch of digital currencies is widely considered as an end to the demand for fiat currencies, rising the skepticism on CBDCs across regulators and financial authorities globally.

Diokno, however, said the need for fiat in the Philippines would remain stable despite an introduction of the CBDC, further stating the importance of the underlying blockchain technology.

Diokno said:

“Cryptocurrency for us has always been beyond the asset itself but more on the blockchain technology that underpins it.”

Philippines will be joining a select group of countries researching and developing their CBDC’s, including its neighbors, China, and Japan. Japan announced it would accelerate its digital yen development with a new CBDC department earlier in the month, and the former is already carrying out testing on the digital yuan.

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Author: Lujan Odera

FTX Rolling Out A Derivatives DEX Is The ‘Start of an Entirely New DeFi Ecosystem’

Crypto derivatives exchange FTX is going full-on in DeFi (decentralized finance).

The exchanges unveiled its alternative exchange for the fast-growing DeFi space today that will be built on top of scalable blockchain Solana.

Why Solana?

FTX CEO Sam Bankman-Fried clarifies the reasons for choosing to run it on Solana in blunt terms. “It’s own fully decentralized blockchain, don’t need to trust centralized sidechain,” and it’s “fast as fuck.”

While Ethereum, which is facing issues of high fees, congestion, and scalability because of the ongoing DeFi craze. It can only handle 15 transactions per second; Solana can “process 10,000 times as much as Ethereum, and it’s 1,000,000 times cheaper.”

This is not only “incredibly bullish for Solana,” but makes it “one of the very few ETH killers that have a real chance. You just need one big successful project like FTX’s DEX to bootstrap an entire ecosystem,” said analyst Qiao Wang.

Dubbed “Serum,” the project touts to be “fast, and cheap, powerful, and fully cross-chain compatible, and truly, fully trustless.” It is expected to launch in the coming weeks.

The platform is permissionless, and FTX has no power over it. “It is up to you, the crypto community, to use it as you will,” it says.

This project is backed by a long list of partners including FTX, Alameda Research, Solana Genesis Block, Robot Ventures, CMS, Evernew Capital, Kyber Network, Sino Global Capital, 3Commas, Coingecko, TomoChain, Multicoin Capital, Gauntlet Network, 币coin, Factblock, Aleph.im, Folkvang.io, and AKG Ventures.

The initiative claims to solve some of the structural limitations of the DeFi space by offering a scalable and liquid DEX for derivatives.

To tap into the DeFi sector, Serum will be fully interoperable with Ethereum. A proxy bitcoin token will also be offered by the exchange to allow users to trade the leading cryptocurrency on the Solana blockchain.

The platform will have its own token SRM, 5% of which will be distributed to FTX’s FTT holders over time.

Solana’s native token has already doubled in value over the weekend and got listed on FTX as well.

Just days before, FTX listed the popular “valueless” token YFI, and the reason for all this simple, “DeFi is hot, and exciting, and messy,” and of course filled with potential, says Bankman-Fried. It has “the potential to build an entire financial ecosystem without relying on trust or censorship,” he said.

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Author: AnTy

Iranian Crypto Miners Must Register Identities, Rigs, and Overall Size With the Government

  • The government of Iran is going after illegal crypto miners with a decree from the Cabinet of Ministers’ meeting instructing cryptocurrency miners in the country to register their businesses in designated centers within the next month.

Iran is one of the few countries that has embraced cryptocurrency mining as a legal business in a bid to increase revenues and escape the tough economic U.S. sanctions placed on the country. In a bid to regulate the crypto mining industry and eliminating confusion within the industry, the government will place monitoring controls on the company’s mining activities.

Within a month, every crypto miner is now required to disclose their identities, the size of their farms, electricity consumption, and disclose the number of mining equipment they own. The new mining activities regulations follow President Hassan Rouhani’s call for more crypto mining policies to be put in place.

The statement from the Cabinet further asked the Ministry of Industry, Mines and Trade to release the center’s list of those eligible for crypto miners to receive their registration documents. Owners of the mining devices are obliged to deliver all their devices to the mentioned centers or apply for a mining activity license within one month from the date of announcement of the mentioned list.

Early last month, Mohammad Hossein Farhangi, an Iranian Member of Parliament said the central bank should take charge of crypto regulations in the country as the country tries to align its policies on digital assets.

In April of this year, Iranian crypto miners were close to 4% of bitcoin’s hashrate.

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Author: Lujan Odera