Crypto Market in Recovery Mode After ‘Fake’ News Volatility Amidst Increased Regulatory Scrutiny

The mainstream media outlets decry crypto after jumping fast on the fake Walmart press release announcing support for Litecoin payments while CT started dissecting the news right from the moment it got published and declared it “fake.”

The crypto market had a rough Monday as rumors of crypto derivatives exchange FTX being hacked floated on Twitter which turned out to be fake.

FTX CEO and founder Sam Bankman-Fried then took to Twitter to clarify that,

“For those who don’t know, Bitcoin withdrawal processing involves combining together UTXOs from deposit addresses etc; a few days ago we consolidated some UTXOs into an address to make processing quicker.”

Before this, Litecoin (LTC) pump and dump news shook the market as crypto asset prices experienced a bout of volatility. Today, we are back on track, i.e., upwards with Bitcoin (BTC) trading above $46k, Ether (ETH) $3,300, and the total market nearly at $2.2 trillion.

However, the mainstream media outlets picked up on the fake Walmart press release announcing support for Litecoin payments pretty quickly.

This news sent the price of Litecoin up by more than 30%, only to tumble back on the ground after it became clear that the press release sent out by GlobeNewswire was fake. Walmart spokesman also confirmed the inauthenticity of the PR.

GlobeNewswire then issued a “notice to disregard” the original release and said that a fraudulent user account was used to issue the release. A spokesperson said,

“This has never happened before, and we have already put in place enhanced authentication steps to prevent this isolated incident from occurring in the future.”

“We will work with the appropriate authorities to request – and facilitate – a full investigation, including into any criminal activity associated with this matter.”

Even the Litecoin Foundation tweeted out the fake news, which was then quickly deleted. In a statement, the Litecoin Foundation said one of their social media team members “was a little too eager” and shared the story and that they have taken steps to correct the future issues.

Charlie Lee, the creator of Litecoin and managing director of the Litecoin Foundation, also described the incident as an “unfortunate situation.”

The Crypto community started dissecting the news right from the moment it became public and already declared it “fake” with Neeraj Agrawal of CoinCenter noting how it was not in Walmart’s newsroom, the wire account for “Walmart Inc” didn’t post anything, and Walmart’s contact email in the PR was owned by a squatter. Not to mention, ​​the retail giant’s email domain used in the PR was registered just last month and didn’t link back to any official website.

In the aftermath, mainstream media is now talking about the industry needing regulatory oversight.

“It’s hard to know what’s legitimate in the anything-goes world of cryptocurrencies,” reads an opinion piece on Reuters.

Bloomberg also wrote that the incident “will only add to the perception that cryptocurrency is at best a play thing for investors and at worst a hotbed of corruption.”

Meanwhile, the article on Reuters talked about US regulators routinely cracking down on such scandals in the stock market and expects similar enforcement here.

“This happens with the regular stock market also. It happens a lot more with the regular stock market than with crypto,” said Litecoin creator Lee.

The Securities and Exchange Commission, meanwhile, has said it does not comment on such matters.

SEC Chair Gary Gensler has recently called crypto the “Wild West,” adding,

“This asset class is rife with fraud, scams, and abuse in certain applications. We can do better.”

Regulators around the world have already increased their scrutiny of the cryptocurrency industry and are working on trying to strike a balance in regulating the market to protect investors and punish the wrongdoers while ensuring that innovation continues to flourish.

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Author: AnTy

Bitcoin Skeptics Busy Talking About Bananas, 2018 Bear Market & Missing Price Discovery

Despite the price of Bitcoin jumping more than 220% this year, billionaire Mark Cuban still isn’t interested in the leading cryptocurrency.

“My thoughts haven’t changed,” Cuban told Forbes a week before Bitcoin surged past an all-time high of $20,000 to hit a record $23,800 on Wednesday, in a story that was published Thursday.

Bitcoin is “a store of value…that is more religion than solution to any problem,” said Cuban adding that the cryptocurrency won’t be replacing government-backed currency.

“No matter how much (bitcoin) fans want to pretend that it’s a hedge against doomsday scenarios, it is not,” Cuban said.

“Countries will take steps to protect their currencies and their ability to tax, so the more people believe this is anything more than a store of value, the more risk of government intervention they face.”

However, Cuban does agree that bitcoin is like gold in the way that it is a store of value. Although with its supply being limited, as the demand for the digital currency fluctuates, so will the price, which will be volatile, “as long as people accept (bitcoin) as a digital version of gold, it’s investable,” he said.

Despite this optimistic view, Cuban went back to his banana having “more utility” because it has potassium, a “valuable nutrient to every person on the planet,” while Bitcoin is what it is because “enough people have agreed upon” it as an investable asset.

Absolutely crazy right now

Another person that remains skeptical of Bitcoin is the Rosenberg Research chief economist, who calls it a “massive bubble.”

However, given his Bitcoin issues, it looks like it’s him who is in a bubble because he didn’t even take time to understand it before ranting about it.

“You speak to most people that are asking me to put money in bitcoin, they can’t even tell you who the person was that developed it or even how it’s actually mined,” said David Rosenberg. Alright, uninformed boomer!

“It’s just a classic, follow-the-herd, extremely crowded trade. It’s in a massive bubble.”

He had a particular nugget to share with that “there’s really nothing in the protocol to suggest that the supply of bitcoin can’t go up once we hit that limit.”

From the March low of $3,800, during the coronavirus pandemic-induced sell-off recorded in gold, stock, especially oil prices, and every other asset class, BTC has seen a whopping 525% uptrend.

Since October, Bitcoin has rallied 114%, and the chart of the digital asset is looking “absolutely crazy right now” to Rosenberg, who took it as his civic duty to remind everyone of the 2018 bear market after the last time bitcoin behaved with such a “speculative fervor.”

Meanwhile, BTC/USD is holding firm around $23,000, embarking on its price discovery journey.

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Author: AnTy

Chinese Investors Turn to Yield Farming Despite The Recent Crash of DeFi Token Prices

Chinese investors are jumping onto decentralized finance (DeFi) despite the recent collapse in crypto markets. In an observation first published on Twitter by Chinese journalist Colin Wu, Chinese crypto exchanges are facing a log-jam of withdrawals as users rush to invest in DeFi tokens.

Over the past few weeks, searches for the word “DeFi” have skyrocketed on the popular Chinese messaging app, WeChat, reaching a high of 900k searches on September 7th. The increase in anticipation and demand for these tokens arises from the supernormal growth and APY returns offered by farming protocols, a trend Wu believes will continue in the future.

Wu also reported a shrinking liquidity pool on local crypto exchanges as investors withdraw large amounts of crypto to cycle them into DeFi. The withdrawals caused several exchanges to shut down operations to prevent a bank run on their liquidity pools.

The Chinese crypto community has since responded to exchanges locking them out of their fund’s launching, a “coin withdrawal campaign.” The campaign calls on all investors from troubled centralized crypto exchanges to withdraw their tokens and “delete their trading accounts.”

Data shows the reserves of crypto exchanges present in China have been depleted with the rise of decentralized finance. Following a massive bull run on the majority of “farming tokens,” the recent slowdown in price has seen Chinese investors rush to fill their bags with ETH in preparation for the net mega bull run. Colin Wu wrote on Twitter,

“[…]The recent sharp drop in the price of ETH, many users buy bottoms on exchanges and then transfer to DEX for farming. The stock of ETH and other farm cryptos on the exchange is falling frantically.”

According to Wu, these exchanges are being forced to list these DeFi farming tokens to keep the investors on their platforms and prevent the move to DEXs.

The DeFi ecosystem has a total locked value (TVL) of $7.7 billion, falling from an all-time high of $9.5 billion recorded earlier in September, according to DeFi Pulse. The DeFi ecosystem started off the year with a TVL of $674 million, experiencing over 9X growth in the past nine months or so. With Chinese investors getting into the ring, the DeFi space could be set for another soar in the near future.

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Author: Lujan Odera

Binance Adds More Value to BNB through Yield Farming on Launchpool Platform

Centralized cryptocurrency exchanges, OKEx, and Binance, are now jumping on the bandwagon of yield farming, the hottest thing in the DeFi.

After launching the mainnet of its smart contract-enabled blockchain and an AMM called Binance Liquid Swap recently, popular crypto exchange Binance released Launchpool to take advantage of the leading DeFi growth driver.

The exchange clarified that Launchpool is a new product, different from Launchpad, which will continue as normal, that allows users to earn yields from farming new coins while staking BNB and other digital assets. “BNB staked in Launchpool also counts for Launchpad,” it says.

Binance announced this latest product over the weekend, which will allow users to earn income by staking their tokens.

For now, users will be able to stake Binance’s native token BNB and its very own stablecoin BUSD, along with another token, ARPA.

Launchpool has also announced the first project it is hosting, which is Bella Protocol, which raised $4 million in a seed funding round led by Arrington XRP Capital last month. The project aims to enhance the user experience when interacting with DeFi assets by removing complex issues like high gas fees and hopping to different protocols in search of high yields.

Users can start providing staked liquidity this Wednesday for 30 days in three separate pools. A week from that, the exchange will list the BEL token against four crypto assets BTC, USDT, BNB, and BUSD.

Binance is offering BEL rewards at 90% for staking BNB, 9% for staking BUSD, and 1% for ARPA.

“If you think CeFi farming yield won’t be higher than DeFi, think again,” said Binance CEO Changpeng “CZ” Zhao.

In decentralized finance, however, it can be much higher.

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Author: AnTy

Current Market Structure Reminiscent of Period Preceding Bitcoin’s Historic Bull Run: Grayscale

The gains in the crypto market have digital asset manager Grayscale Investments AUM jumping to $5.8 billion.

In its latest report titled “Valuing Bitcoin” written by Grayscale research director Phil Bonello, he points out that a plethora of blockchain metrics indicate that “the current market structure is reminiscent of early 2016, the period that preceded Bitcoin’s historic bull run.”

On the supply side, never has the current level of Bitcoin ever been owned for more than one year while exchange balances continue to be at their lowest levels since May 2019.

On the demand side, daily active addresses are at its highest level since 2017 with the mining profitability ratio stating it a good buying opportunity. Whale Index, that tracks the number of unique BTC addresses with balances over 1,000 Bitcoin is also near its ATH.

Additionally, in the current environment, Bitcoin has become even “more important than ever.”

In 2020, in order to prop the coronavirus pandemic battered economy, governments introduced ultra-loose monetary policies, printing money faster than ever – QE, and continued to increase the debt which has made the situation worse than 2008 Great Recession.

Source: Grayscale

In this environment, investors are now searching for ways to protect against an ever-expanding monetary supply, and Bitcoin’s limited supply which isn’t controlled by any authority makes it an attractive option. The report states,

“We believe demand for a scarce monetary asset like Bitcoin grows as global monetary inflation accelerates.”

Because bitcoin isn’t a cash-generating asset, traditional investors struggle to assign a fair value to it. As such, in many ways, it is similar to how gold is valued — relative valuation and supply/demand analysis.

In May this year, billionaire investor Paul Tudor Jones in his investment case for bitcoin, which he called an inflation hedge, suggested Bitcoin should have a far higher market capitalization than it currently has. Jones at that time wrote,

“Bitcoin had an overall score nearly 60% of that of financial assets but has a market cap that is 1/1200th of that. It scores 66% of gold as a store of value, but has a market cap that is 1/60th of gold’s outstanding value. Something appears wrong here and my guess is it is the price of Bitcoin.”

According to Grayscale, as the demand for the store of value grows during monetary inflation, Bitcoins’ unique quality of being scarce, makes it well-positioned to be a safe haven.

“Bitcoin continues to command global investor attention, there is scant supply to meet growing demand, and the infrastructure is now in place to satisfy that demand.”

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Author: AnTy

Geopolitical Risk Is Back & It’s Bullish for BTC; Bulls Going Parabolic Now Is Not Healthy

For now, Bitcoin is keeping just under $9,000 after jumping to nearly $9,500 during this recent rally.

These gains also have the world’s leading cryptocurrency outperforming other assets in 2020. While bitcoin is up 20% YTD and gold about 12%, equities are down -9% YTD with oil in the lead with -80%.

As the crypto community repeatedly points out, all of this has been without the Fed bailout or stimulus support of any kind. Trader Cantering Clark said,

“Even with this recent correlation, Bitcoin is still making quite a case for itself as a higher beta gold 2.0. All it needs to do is capture a bit more market-share,”

“I think over the next 10 year period it is one of the best performing assets.”

Source: CanteringClark

April Rocking the Gains but Consolidation Needed

Interestingly, April has been a month of bulls for the past many years. In 2016, bitcoin recorded 8% gains then 28% in 2017, 33.5% in 2018, 30.7% in 2019, and this time yet again we continued the cycle of much higher returns at 34.6%.

“Q2 has been strong in 3/4 past years,” noted analyst Ceteris Paribus.

Some like trader Crypto Yoda however, are still not trusting this BTC rally fully yet because of its significant correlation to the traditional markets in the past months.

According to him, a consolidation period will be healthy for the long-term trend to build as continued push through the current level would force bulls to go parabolic and make the market more unstable and increase the “risk of a violent breakdown.”

Although the correlation between bitcoin and the S&P 500 remains at unprecedented levels, it is unlikely to persist in the medium-term.

But “heightened geopolitical risk would be a good trigger for BTC and stocks to finally decouple,” said economist and trader Alex Kruger.

And this geopolitical risk is already back on as US President Donald Trump said on Thursday that he was confident the coronavirus originated in a Chinese lab.

Earlier in 2020, when the US airstrike killed Iran’s general Qassem Soleimani, gold and bitcoin surged. Now as the countries make plans to reopen the economies, the geopolitical risk might get back in focus and this could help strengthen bitcoin’s role as a safe-haven asset.

Bullish Tailwinds

For now, bitcoin is following the stock market, and this means macro events might continue to affect the digital currency. But the stock market is divided if it is going to revisit new lows or the bottom is in.

The good thing for bitcoin is that central bankers remain committed to liquidity growth and bitcoin will benefit from this tailwind along with “increasing inflationary/debasement risks within traditional monetary systems,” said Richard Galvin CEO of Digital Asset Capital Management.

Also, the tech sector is leading the recovery in global markets and because “crypto provides pure, super-high-growth tech exposure so it should outperform,” he added.

The upcoming halving is another bullish tailwind but as we reported it could turn into a “buy the rumor, sell the news” event.

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Author: AnTy