Fed Is Investing ‘Time and Labor’ As A Digital Dollar is ‘High Priority’ says Chairman Powell

Fed Is Investing ‘Time and Labor’ As A Digital Dollar is ‘High Priority’ says Chairman Powell

The Federal Reserve is also “committed” to solving the tech problems. Treasury Secretary, unlike her predecessor, also says it “makes sense for central banks to be looking at.”

Federal Reserve Chairman Jerome Powell told Congress on Tuesday that a digital dollar is a “high priority project for us.”

While the central bank is “looking carefully” at the prospect of issuing a digital currency, Powell said there are “significant technical and policy questions” related to it. Powell said,

“We are committed to solving the technology problems and consulting very broadly with the public and very transparently with all interested constituencies as to whether we should do this.”

Much like always, the Chairman said that as the world’s reserve currency, the US doesn’t have to be the first, but the point is in getting it right.

“This is something we’re investing time and labor in, across the Federal Reserve System.”

Just this week, Treasury Secretary Janet Yellen also said that the Biden administration supports research into the viability of a sovereign digital currency, unlike her predecessor Steven Mnuchin who didn’t see any need for that at the point.

“It makes sense for central banks to be looking at” issuing a digital dollar, Yellen said at a virtual conference on Monday hosted by the New York Times.

According to her, the digital version of fiat currency can help with the financial inclusion of lower-income groups.

“Too many Americans don’t have access to easy payments systems and banking accounts, and I think this is something that a digital dollar, a central bank digital currency, could help with.”

“It could result in faster, safer, and cheaper payments, which I think are important goals.”

Janet Yellen Treasury Secretary

While positive about a digital dollar, Yellen echoed Powell’s views about needing to address the issues first.

“There’s a lot to consider here, but it’s absolutely worth looking at,” she said.

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Author: AnTy

Ether Crashes to $700 on Kraken; High Network Activity Leads to Withdrawal Delay & Suspension

Ether Crashes to $700 on Kraken; High Network Activity Leads to Withdrawal Delay & Suspension

In Monday’s crypto carnage, the market provided a hefty discount that people have been calling out for some time now, with the digital assets rallying hard.

The overall cryptocurrency market lost $240 billion, but since then, it has gained some $86 billion back as the prices of cryptocurrencies make a recovery.

While Bitcoin went under the $50,000 level, Ethereum went under $1,550. But what has been interesting and for some devastating, the price of Ether went to $700 on Kraken.

The cryptocurrency exchange had some wild price action on Ether as after such a discounted opportunity, it went back right above $1,700 and caught up with other exchanges soon after.

This hasn’t even been a one-time thing as popular crypto personality, CryptoCobain, tweeted, “People trading on Kraken are masochistic. Once per month they get completely fucked by the matching engine.”

While for leveraged traders, it was a disaster, this also turned out to be a perfect opportunity for spot buyers.

“Unbelievable, my fishing ETH orders below $1.2k have been filled on Kraken,” tweeted one trader, who is extremely bullish on Ether and has long been calling out for a $10,000 price target for the second-largest cryptocurrency in this cycle.

On top of the deep red market, this much price volatility sent the gas prices on the network soaring. This made trading on-chain nearly impossible, let alone allowing traders to front-run.

Exchanges were already struggling with too much activity, with Kraken reporting, “Due to heavy traffic you might experience some connectivity issues. We are working to resolve the issue as soon as possible.”

Then, this congestion due to demand spikes on the Ethereum network led to delays with ETH and ERC20 token withdrawals.

Besides Bitstamp, Binance, as usual, felt the heat and suspended withdrawals.

“Binance has temporarily suspended withdrawals of ETH and Ethereum-based tokens due to high network congestion. Rest assured funds are SAFU, and we apologize for any inconvenience caused,” informed the leading spot exchange.

For now, things are slowly coming back to normal, ETH is currently around $1,750, and Bitcoin is back above $53,500.

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Author: AnTy

Ether’s Bullish Momentum Continues with Institutional Demand

Just like Bitcoin surged to a record high, nearly $52,700 on Wednesday, Ether has broken past the $1,900 level, hitting nearly $1,930.

For Bitcoin, “what stands out most is the trend that MicroStrategy started, and Tesla popularized: moving institutional balance sheets into Bitcoin to hedge against inflation,” said Nicholas Pelecanos, head of trading at NEM.

The Bitcoin futures market sees a lot of activity, with volume keeping above $50 billion this month and at times hitting $100 million.

CME Group is particularly getting traction, hitting a record $5 billion mark for the first time on Tuesday.

Interestingly, hedge funds continue to be record short on Bitcoin on CME, but at the same time, they are record long on Grayscale, capturing the premium on GBTC. They are also earning over 50% annualized funding from the basis trade on their USD.

As of writing, the price of Bitcoin on Coinbase was $51,525 and $52,090 on CME.

Earlier this month, CME also launched Ether futures, which started slowly, much like Bitcoin futures when they were listed in Dec. 2017.

But “it will likely not take as long for Ethereum futures to begin gaining traction as it initially took for Bitcoin futures, as investor interest in cryptocurrencies has had a few years to mature,” noted JPMorgan strategists.

Already daily trading volume of Ethereum futures on CME has doubled, and open interest surpassed $60 million.

The growing institutional demand for Ether can also be seen on Grayscale, the largest digital asset manager, which bought over 20k ETH in the last 24 hours, bringing its total holdings to 3.15 million ETH.

As we reported, the fundamentals of the second largest cryptocurrency are very strong. The fees are crazy high and never seen before levels of addresses continue to interact with Ethereum.

The network is also seeing an average of 1.2 million daily transactions and an average of 550k daily active addresses. Large transactions, more than $100k, that act as a proxy to institutional activity, have also recorded an increase of 45x in the past year.

Even on social media, conversations around ETH have nearly doubled since the beginning of the year, with over 20.6k tweets (on average) sent out about ETH every day, up from 10.9k on January 1st, as per data provider The TIE.

In that regard, the price of Ether is slow-moving, though it outperforms Bitcoin with 160% YTD gains compared to leading cryptocurrency’s 75%.

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Author: AnTy

Another One Bites the Dust; Ethereum’s Insanely High Fees Force A Project to Shutdown

Another One Bites the Dust; Ethereum’s Insanely High Fees Force A Project to Shutdown

As average fees on the second-largest network continue to rise, Unite.Community kills its project.

Crazy high fees on the Ethereum network continue to price out smaller users. This time, a small social network project called Unite.Community has been the victim of this.

“We are unfortunately no longer actively developing Unite,” announced the project on Twitter this week. The project blamed the high fees for its shut down, which has been making it hard to make the project a reality.

“Gas prices mean the original idea for Unite isn’t feasible and after several months of work and many conversations we’ve decided against building a social token platform on a L2.”

This isn’t the first time a project has shut down because of the extremely high fees of the Ethereum network.

Back in September, during the DeFi mania, which pushed the prices to even higher levels, Unilogin had to shut down because, at times, it was paying $130 to onboard new users.

Around the same time, Publish0x, a platform that paid writers in Ether tokens, had to first delay its payments and then switch to a monthly system of payment to avoid the high gas fees.

Interestingly, while in USD terms, the average transaction fees on the second-largest network continue to hit new highs, going to $24 earlier this week, in Ether terms, at 0.015 ETH, we are nowhere near the Sept. levels of over 0.03 ETH. Average gas prices that are currently keeping between 100-300 Gwie are also high but still far off of June 2020 levels when it was over 700 Gwei and above 535 Gwei in September.

These fees rise further when interacting with DeFi protocols and for faster transactions, which are making it harder for small users to actively use DeFi platforms. However, for miners, it means earning a fortune, already they have raked in $283 million in transaction fees in February so far. In January, Ethereum miners earned $325.45 million from transaction fees.

On Thursday, miners’ one-day revenue from fees was 28.45 million, hitting new records.

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Author: AnTy

Jerome Powell: Fed is Studying Risks of Stablecoins As A ‘Very High Priority’

Jerome Powell: Fed is Studying Risks of Stablecoins As A ‘Very High Priority’

Meanwhile, the central bank isn’t feeling the “urge or need to be first” on CDBC’s as they already got the first-mover advantage with the U.S. dollar being the reserve currency.

The US Federal Reserve Chairman, Jerome Powell, said on Thursday that the central bank needs to find “better regulatory answers” for global stablecoins, and it is their “high-level focus.”

“That’s been a high-level focus, and that will continue to be a high-level focus because they could become systemically important overnight,” Powell said while speaking at an online event hosted by Yahoo Finance and conducted by the Princeton economist Markus Brunnermeier in New Jersey.

“We don’t begin to have our arms around the potential risks and how to manage those risks. The public will expect that we do and have every right to expect that. So that’s something that we’ve been working on with our colleagues around the world… It’s a very high priority.”

Just last month, the U.S. President Trump’s Working Group on Financial Markets said stablecoins must meet the same regulatory standards as banks and other financial institutions.

European Central Bank President Christine Lagarde shared similar views when in November, she warned in an op-ed that if stablecoins became widely adopted, they could “threaten financial stability and monetary sovereignty” around the world.

This week, she called Bitcoin a “highly speculative asset” that is facilitating “funny business.” As such, “there has to be regulation,” Lagarde added, “This has to be applied and agreed upon.”

No Need for CBDC Yet

The Fed, meanwhile, is in no hurry regarding a central bank digital currency (CBDC); it is actually estimated to take “years rather than months” before the central bank releases a CBDC, said Powell. “We don’t feel an urge or need to be first” on CDBCs, reiterated Powell while continuing,

“Effectively, we already have a first-mover advantage because (the U.S. dollar is) the reserve currency.”

Still, the Fed is “investing heavily” in understanding the technology and studying all the policy risks CBDCs pose.

According to him, it was when private-sector money, like Bitcoin and other cryptos, was created that the Fed looked into CBDC. But while people think of these cryptocurrencies as money, “at some point, they find out that it’s not money and that’s a really bad thing we need to avoid,” he said.

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Author: AnTy

Even Billionaires Complain About the High DeFi Uniswap Fees; Aave Users Get Excited

Even Billionaires Complain About the High DeFi Uniswap Fees; Aave Users Get Excited

“Defi has incredible potential,” says Mark Cuban but cautions that much like derivatives, “risk never leaves the system” here as well.

Ethereum is notorious for its extremely high fees when the network activity amps up.

In January, with ETH and DeFi tokens enjoying an uptrend and offering buy the dip opportunities, too much activity is making the platform costly to use. Popular DEX Uniswap, which has long been the biggest gas guzzler, has spent $28.3 million in gas in the last 30 days.

“The high gas costs are a direct result of *huge demand for trading on Uniswap,” said Hayden Adams, the creator of Uniswap, earlier this month when the fees skyrocketed yet again.

“Scaling is a huge problem. It absolutely sucks small transactions are sometimes priced out during volatility.”

But it looks like it’s not only the smaller users that are feeling the brunt of the hefty fees; even the billionaires are complaining. This billionaire, is none other than crypto skeptic Mark Cuban.

Cuban mentioned that gas was always an issue when Haralabos Voulgaris, Head of Quantitative Research at Dallas Mavericks, suggested there being real value in sending money over a decentralized, permissionless network. Cuban feels,

“Except the gas is always an issue. Just the cost of moving crypto to AAVE is crazy expensive, and the number of non crypto options will increase.”

With the Shark Tank investor who finds more worth in bananas and compares crypto trading with the dotcom bubble,  name dropping popular DeFi project, AAVE got the CT excited AAVE 10.31% Aave / USD AAVEUSD $ 140.95
$14.5310.31%
Volume 509.28 m Change $14.53 Open $140.95 Circulating 12.2 m Market Cap 1.72 b
8 s Even Billionaires Complain About the High DeFi Uniswap Fees; Aave Users Get Excited 1 d A ‘Massive Transfer of Wealth Among Traders’ Sees DeFi Tokens Winning the Round 1 w Three Arrows Capital Holds 36,969 Bitcoin ($1.24B) via An Over 6% Stake in GBTC
.

“One of the most high-profile billionaires trying out DeFi. I am liking this trend,” noted one such DeFi investor.

However, just because Cuban publicly doesn’t find worth in crypto doesn’t mean he isn’t trying things out, as he responded,

“I don’t think people realize I try to test and use all this stuff and have for years. I still have crypto from the early days of coinbase. I’ve never sold anything.”

As for decentralized finance itself, Cuban says, “DeFi has incredible potential.” Still, according to him, much like derivatives, “risk never leaves the system” as it faces the risk of a dominoes-like collapse. Cuban said on the prospect of Defi fixing the problem of underbanked,

“It’s a long way off for the unbanked. Most deal with cash or lack compute power so they need intermediaries. That’s costly. As DeFi grows away from overcollaterization, it will be interesting to see if access expands or contracts.”

But here, the CT takes over and points out that while “the system is only as strong as its weakest link.” We do, in fact, need better insurance models; the missing point is “unlike tradFi, DeFi is a perfectly transparent system that allows you to measure risk in real time,” said Santiago R Santos, a partner at Parafi Capital.

The DeFi space has grown to over $20 billion in total value locked (TVL) as the DeFi project continues to grow and rise in value. This week, the top US banking regulator actually talked about the opportunities of DeFi and regulators needing to be ready for it.

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Author: AnTy

ETH Rips to Jan 2018 High As The Market Rotates Bitcoin Profits into Ethereum

ETH Rips to Jan 2018 High As The Market Rotates Bitcoin Profits into Ethereum

After Bitcoin went ballistic over the course of the last three months, now it is time for Ethereum.

The second-largest digital took just one day to go from $750 to $1,170, a level last seen in January 2018. ETH is now just 38.75% away from its ATH at about $1,600 on Coinbase.

ETH ETH 6.26% Ethereum / USD ETHUSD $ 1,002.16
$62.74 6.26%
Volume 57.98 b Change $62.74 Open $1,002.16 Circulating 114.12 m Market Cap 114.36 b
5 h Ethereum Blockchain Becomes Absolutely Unusable Yet Again as Average Fees Hits ATH at $20 6 h Too Afraid to Buy the Dips; Too Much FOMO to Resist Buying The All Time Highs 8 h ETH Rips to Jan 2018 High As The Market Rotates Bitcoin Profits into Ethereum
and other altcoins have been lagging behind Bitcoin’s bull market BTC -7.43% Bitcoin / USD BTCUSD $ 30,943.32
-$2,299.09 -7.43%
Volume 80.55 b Change -$2,299.09 Open $30,943.32 Circulating 18.59 m Market Cap 575.26 b
4 h Why Does Bitcoin (BTC) Continue to Tear Up Without Ever Stopping? 5 h Ethereum Blockchain Becomes Absolutely Unusable Yet Again as Average Fees Hits ATH at $20 6 h Anthony Scaramucci’s SkyBridge Capital Launches Institutional-Grade Fund to Directly Invest in Bitcoin; Offers GBTC Swap Too
which finally caught up to the crypto leader.

“What we’re seeing is the standard moving of the crypto markets from Bitcoin to the Altcoin market led by Ether,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “This rotation happens usually when Bitcoin has a large rally and investors rotate profits” into other digital coins, he said.

According to Ryan Watkins of Messari, if bitcoin is like gold, ETH is like money, “the most liquid asset in Ethereum’s on-chain economy that is demanded for a wide range of economic uses.”

These gains came while Bitcoin started consolidating, going to about $28,550 after making a new ATH at $35k. In the past 24-hours, Ether recorded more ‘real’ volume at $15 billion than Bitcoin’s $12.53 billion, as per Messari.

“A remarkable bullish BTC crash, making ETHBTC pop. All alts ripped,” noted trader and economist Alex Kruger.

“Looks like a trend change. Think it is. Good to internalize that with dominance at 70% a small outflow from bitcoin to ethereum and alts makes sysmic waves.”

Just last week, as we reported, Bitcoin dominance hit 73.6% last seen in July 2017. Bitcoin hasn’t reached these high levels of dominance since ICO bubbles. Following the rally in ETH and other major altcoins, today Bitcoin’s dominance dropped to 68%.

For now, the market has given back some of these crazy gains. After dropping to about $885, ETH is now back above $900 while the funding rates on derivatives go crazy.

“Grayscale’s ETHE subscriptions will reopen this week. Should see heavy inflows,” further noted Kruger.

Grayscale Ethereum Trust currently holds 2.94 million ETH. The world’s largest crypto asset manager hasn’t bought any ETH since the holidays started on Dec. 25.

ETHE is currently trading at a premium of over 103%.

“2021 might just be the year of ETH thanks to DeFi & PoS staking – the ETH staked on the ETH2 deposit contract has soared to $2B in value,” noted Jay Hao, CEO of crypto exchange OKEx.

While DeFi TVL rose to new highs of $17.87 billion thanks to a jump in the prices of cryptocurrencies, the ETH locked in the space has come down to under 7 million ETH.

Meanwhile, the ETH locked in the deposit contract for ETH 2.0 for staking has gone above 2.2 million ETH worth over $2 billion.

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Author: AnTy

Coingecko Crypto Market Report Highlights Bitcoin’s Reign In November; DEX Use Dropped 15%

  • The Crypto market cap hits a yearly high at $554B as BTC reaches an all-time high price.
  • XRP, AAVE, and ETH also recorded impressive performances across November.
  • Trading volume, derivatives volumes, and open interest also set new yearly highs.

The month of November was a successful one for cryptocurrency bulls as the price of Bitcoin (BTC) set an all-time high, pushing up the altcoin market along with it. In its monthly report, Coingecko, a crypto data analysis firm, states that the overall crypto market capitalization hit a yearly high of $554 billion in November too. Other metrics such as derivatives trading, open interest, and trading volumes also set record highs last month.

However, the total monthly value of decentralized finance (DeFi) attacks rose to $70 million across five projects during November, with only $2.5 million being recovered.

According to Coingecko’s Nov 2020 monthly report, the top 30 largest crypto tokens, led by Bitcoin and Ethereum, grew over 46% in November to $554 billion, the highest yearly mark. The surge in market capitalization is heavily influenced by BTC’s rise to ATH prices of $19,886 on November 30th, and ETH ran past $630, its highest price in over two years.

The report explained the healthy crypto market as “institutional-led” as corporations such as Blackrock and the S&P 500 recognize Bitcoin as an investment asset. Bitcoin’s market dominance reached a high of 65.7% in November, representing a 1.5% drop as other top coins – ETH and XRP gained 1.1% and 2.6%, respectively – in dominance.

XRP, in particular, was the stand-out star registering a 177% month-on-month increase as retail investors rushed to purchase the third-largest crypto. Other standout coins include AAVE (LEND) and Yearn Finance Token (YFI), who recorded an impressive 156% and 150% last month, respectively.

The trading volume on exchanges also spiked during November – surging 72.8% – as CryptoCompare report shows. The top-ranked exchanges recorded $616 billion in total crypto traded as Bitcoin trading volumes increased by 59% last month to over $300 billion.

Binance, the largest crypto exchange in trading volume, recorded over $176 billion in volume, representing a 133% increase. Huobi, OKEx, Coinbase, and Kraken rounded up the top five centralized exchanges in trading volume across November.

image1
Image: Coingecko

Trading volumes across the top-7 centralized and decentralized exchanges increased by a staggering $172 billion (97.8% increase), hitting the 2020 high of $348 billion monthly volume. However, DEXes saw a slight decrease of $3.3 billion in trading volumes across the month.

Derivatives trading volumes also witnessed copious growth, doubling across November. According to CryptoCompare, the total derivatives volume rose 108% last month to $1.32 trillion, showing an increase in investors’ interest in making future bets on cryptocurrencies. The surge in derivatives volumes sees the futures and options market capture 60% of the total crypto market, representing a 7% increase from October.

Notwithstanding, Bitcoin’s perpetual swaps open interest set a new yearly high at $3.1 billion on November 23, representing a 21% jump from November 1. Binance led the charts with a total OI of $845 million, followed by Bybit exchange with $700 million, representing a monthly growth of 40% and 39% respectively.

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Author: Lujan Odera

GBTC has Greater Market Penetration than the Most Popular S&P 500 ETF

Last week, Bitcoin hit a new high on several cryptocurrency exchanges, but it has been stuck in a range since then.

At the time of writing, BTC/USD has been trading around $19,000 with $1.86 billion in trading volume.

However, the digital asset is still up over 167% run-up YTD and made an all-time high weekly close over the weekend.

As we have been reporting, unlike the retail-driven bull run of 2017, 2020 is looking more institutional driven where the financial industry is playing a bigger role.

“The multitude of regulated crypto exchanges and custodians has eliminated the ‘career risk’ for institutional investors,” PwC’s Hong Kong-based Global Crypto Leader Henri Arslanian said in an interview with Bloomberg.

“In 2017, there was retail FOMO. The question is whether we will see institutional FOMO in 2021.”

GBTC’s the Way to Go

According to JPMorgan Chase strategist, Grayscale Bitcoin Trust (GBTC) points to the institutional demand, taking the crypto market beyond millennials’ retail demand.

GBTC’s “exponential” growth, which has swollen to over $10 million from $2 billion in Dec. last year, suggests that institutional investors like family offices and asset managers played a bigger role in the recent rally, a team of JPM strategies led by Nikolaos Panigirtzoglou wrote in a note.

GBTC is currently trading at a 27.52% premium to the price of Bitcoin.

The firm saw about $720 million of inflows in the third quarter, 81% of which came from hedge funds. According to Michael Sonnenshein, managing director of Grayscale Investments, the size of investment allocations is also growing.

GBTC actually stands out as a market leader in terms of market penetration, as per TradeBlock. GBTC’s AUM is just shy of 3% of the total BTC market cap, which is much larger than other investment trusts and ETFs in different markets. GBTC is followed by the most popular S&P 500 ETF, SPY, at 1.25% market penetration.

image1

Last month, Guggenheim Partners reserved the right for its $5.3 billion fund to invest in Bitcoin via GBTC.

“Institutional investors are keen on portfolio construction in the wake of Covid, and the ways they need to reposition themselves given how governments have injected stimulus into the system,” said Sonnenshein.

Compared to $52 trillion funds managed by institutional investors, the Bitcoin market at $355 billion and the crypto market at $570 billion are still very small.

But as legendary investor Paul Tudor Jones himself said, because of this gap between Bitcoin and the market of equity, gold, and other assets, the digital asset has immense potential for growth and upside.

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Author: AnTy

This Altcoin is Beating Bitcoin With its 2020 Gains & Development Activity

It was mid-August that LINK set its all-time high at about $20. After over a 62% drop in the subsequent month’s price, the digital asset started pacing up a bit.

Just a couple of weeks back, we were around $15.7 only to get down to $13 today. The latest LINK price decline coincides with the percentage of LINK supply held by the top 10 largest whale addresses. The whale supply first started declining in November and continues into December.

Simultaneously, the network growth in terms of new addresses created has picked up, as per data provider Santiment.

Still, among the top digital assets, LINK is the biggest gainer with about 630% gains YTD compared to Bitcoin’s 167%, Ethereum’s 355%, and XRP’s 217% year-to-date performance.

However, in the past 30-days, LINK recorded 12% greens only while falling 8% in the past week.

Like the price, LINK is ahead of Bitcoin in terms of daily activity rate, although ETH development activity makes it the dominant project.

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Source: Santiment

The popular decentralized oracle network works as middleware — a bridge between smart contracts and the outside world while providing a security framework for protecting against any single point of failure.

Chainlink recently revealed that its platform enabled 77 different smart contract use cases. Chainlink offers Pre-Built Decentralized Price Feeds, Verifiable Random Function (VRF), Modular External Adapters, and several additional oracle services.

The project offers developer tools to deploy various oracle networks and solutions to implement highly-technical smart contracts,

“particularly those that execute based on market data like FX rates, interest rates, asset prices, indices, and more.”

Chainlink’s solutions are also used to support real-world assets, tokenized portfolio management, credit default swaps, bonds, synthetics, and futures.

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Author: AnTy