On July 10, the Bitcoin Gold team saw an extremely long attack chain of over 1300 blocks, which have been mined since July 1, 2020, against the BTG network.
As per the announcement, the team has prevented the attack after detecting it early on and alerting the exchanges and mining pools about the potential attack.
The team released a new updated version of the Bitcoin Gold network at block 640,650, the most “honest” block mined by MiningPoolHub before the attack. This update, which wasn’t public knowledge, rejected the attacker’s chain when it was released on Friday.
For the attack, the perpetrator rented hash power on July 1 from NiceHash, a mining service provider, to secretly mine an alternative chain. The chain was mined for ten days and was 1,300 blocks long. On July 10, the secret chain was released by the attacker in an attempt to steal 8,000 BTG worth over $75k.
Now, everyone is required to upgrade their nodes to make sure they are on the honest chain.
“51% attack on BTG defeated by a user-activated soft fork providing a checkpoint and hence explicitly banning the attack chain. Excellent news,” commented Ethereum co-founder Vitalik Buterin. “In PoS, in such cases, the attacker would lose many millions of dollars to slashings/inactivity leak,” he added.
Bitcoin Gold might have successfully stopped a block reorganization attack, but it’s not the first time such a thing happened. The network has a history of reorg attacks, it faced a $70k attack earlier this year and then back in May 2018 lost $18.6 million in a double spent attack.
After a long hard fight to launch and distribute the GRAM tokens, Telegram and the U.S. Securities and Exchanges Commission (SEC) agreed to settle.
The messaging app will pay the SEC an $18.5 million fine and distribute $1.22 billion back to its investors within the next four years.
According to a court filing on June 24, 2020, the U.S Southern District Court of New York Judge Kevin Castel, ordered Telegram to pay a civil penalty of $18.5 million to the SEC within the next 30 days for violating the securities laws in issuing its GRAM tokens during its public offering.
The court also ordered the disgorgement of the $1.7 billion ICO raised in 2018, asking Telegram to return $1.22 billion (72% of the ICO amount) as agreed in the ICO contract – if the project failed to launch. Telegram already stated that U.S. investors will receive 72% of their investment back with non-U.S. investors having the option to defer their payment for one year and receive 110% of their funds back.
A three-year watch
Telegram will also have a three-year “baby-sitting” period whereby they will need to give the SEC a 45-day notice before the launch or issuance of a similar token to GRAM –
“cryptocurrencies, digital coins, digital tokens, or (and) similar digital asset issued or transferred using distributed ledger technology.”
However, the company is only obliged to give notice to the SEC and does not constitute SEC giving approval or consent on the asset. The statement further reads,
“Nor should this [notice] be construed to require Defendants to provide the Commission with any information beyond the notice contemplated herein.”
A fair ruling?
Lawyer and governing council at Compound Finance, Jake Chervinsky, weighed in on ruling stating it may be the best outcome for Telegram. He tweeted,
“Telegram’s SEC settlement seems fair given the facts & circumstances surrounding the TON project & Grams offering (which were very bad for Telegram).”
The six-month-long court battle finally comes to a close but “sadly ends [this saga] on a confused District Court opinion”, Jake said on the court’s decision to use the Howey Test to prove Telegram’s token is a security. No more GRAMs, but TON blockchain lives on as an open-source network.
Bitcoin (BTC) has long been referred to as ‘digital gold’ with the prospect of becoming a store of value. However, the digital coin has not lived to its said expectations to the shiny metal but one exchange is aiming to change this with the launch of Bitcoin priced futures tracking the price of Tether Gold (XAUT).
BTSE cryptocurrency exchange announced the launch of future contracts of Tether Gold (XAUT) priced in BTC rather than the dollar or Tether (USDT). This raises the questions of volatility and the possible forced liquidations of these contracts in case of wild price swings.
However, a statement from the company assures traders that the contract is bound to be less volatile than the dollar, as Gold and BTC price enjoy a positive correlation to each other.
The ‘safe haven race’
According to one of the spokesperson at BTSE Exchange, the new derivative products will allow the traders bet between Bitcoin and Gold as their preferred safe haven asset. The BTC-priced perpetual contract tracks the value of one Tether Gold (XAUT) token, which in turn tracks the value of one ounce of gold.
This is a first-of-its-kind product allowing traders to directly bet on whether the demand and value of BTC competes favorably with its physical gold counterpart as a store of value.
Perpetual contracts always run the risk of forced liquidations, especially on margin trades if the price variates too much, leaving the holder of the contract at a loss. In the past few months the Bitcoin derivative traders have witnessed millions of dollars’ worth of contracts liquidated as the price of BTC swung wildly between $10,000 and $3,500 in 2020.
Gold uncharacteristically also witnessed wild price swings in the first half of 2020 as COVID-19 pandemic affected a class of assets. Such wild swings may set the XAUT/BTC futures contract on a high liquidation ratio that may well keep most traders from it. However, the BTSE spokesperson said,
“If the two assets are positively correlated, then the price volatility of this new instrument is, by right, even lower than Gold/USD.”
The price of gold and BTC however does not show a strong positive correlation since the March “Black Thursday crash” when both SoV assets fell and rose dramatically in a week.
BTSE Exchange is quickening its steps to introduce new products on its platform, recently adding Turkish stablecoin, Bilira, to help the struggling economy.
Bitcoin and cryptocurrencies, in general, have come a long way from the early days when they were regarded as an internet bubble waiting to burst.
However, even after a decade, one constant criticism is that digital assets haven’t found a niche, and cannot be spent as easily as it has been advertised for long.
The one feather that these digital assets can borrow from the traditional financial world is lending and borrowing, which is the backbone of the majority of the financial ecosystem and banks. This interest-based income, lending and borrowing have already gripped the digital asset world which is evident from a report from Credmark.
The Credmark report suggests that the crypto lending market has already peaked $8 billion in loan amount by the end of the fourth quarter of 2020.
At present, the market size has grown to $10 billion and expected to grow exponentially as the popularity rises overtime. Not only that the global peer-to-peer lending marketplace has also registered annual transaction volumes in upwards of $85 billion.
Lending and Credit Gaining Popularity in Crypto Verse
Genesis Capital, one of the leaders in the crypto credit market, registered its best quarterly performance in the first quarter of 2020, registering $2 billion in the new loan organizations. The firm doubled on its previous quarterly performance and also registered a 20% spike in active loans from the previous quarter.
Celsius Network, the retail-focused crypto lending platform, registered similar growth and currently boasts of 100,000 retail clients and 260 institutional clients spread across 160 countries. The firm has registered $8.2 billion in coin loans to institutional clients since its inception in 2018.
Crypto lending is mostly based on the underlying assets, which makes an easier process as debt is collateralized with the crypto asset. Apart from these asset-backed crypto lending, another form of a lending ecosystem has risen in popularity over the last year in the crypto space i.e decentralized finance (defi).
Defi is an Ethereum based ecosystem which offers decentralized credit system to users based on the collateralized asset.
Users can lock their Ether, Wrapped Bitcoin and other ERC-20 based tokens in smart contracts and withdraw a loan in non-asset backed stablecoin like Dai and USDC. The defi ecosystem has gained massive popularity in the past year, and the value of assets locked as collateral has already crossed the $1 billion mark.
Thus, looking at the popularity, demand and success of lending and borrowing ecosystems in the decentralized space, it could pave the path for mass adoption of crypto in the long-term.
Long term holders’ confidence largely unaffected by Bitcoin’s price drop
Investors capitalized on the discounted BTC and increased their positions
In less than a fortnight, Bitcoin reward halving would be here that will cut down Bitcoin’s inflation rate in half. And it’s to be seen how this supply deficit would be greeted by the market this time.
While price-wise the world’s leading cryptocurrency has already started to see action, in the past five days BTC/USD has jumped over 13% to $7,700.
Just like price, on-chain metrics are also suggesting bullish sentiment among the market with investors increasing their positions and HODLing on tight to their BTC.
Investors optimistic as halving approaches
According to crypto analyst Glassnode, long term hodlers remain unfazed by the volatility, with 42.83% of all circulating BTC not moved for at least two years. In the past year, it increased by 10.4% despite the investors experiencing one of the largest market crashes in history.
One month from the Black Thursday, the number of BTC last active between one and three months ago also began to spike and has now hit YTD highs to 2,037,503.
This lack of movement means those that bought the bottom have been holding onto their new positions and market recovery has market participants favoring mid to long term holding strategies.
HODLer Net Position Change also remained positive during the bear onslaught only to climb to yearly highs in the latter half of April, suggesting long term holders not only held steady but also capitalized on the BTC discount to increase their positions.
Interestingly, the BTC balance on exchanges declined by over 10% since the February high. The outflow trend briefly interrupted when the price crashed only to accelerate after and since continuing.
“Withdrawal of funds from trading platforms could further reinforce the idea of more bullish long term expectations from traders,” noted Glassnode.
The increased interest in bitcoin is primarily from the retail sector as the total number of addresses holding BTC grew by nearly 25% with lower balance brackets hitting all-time highs.
Whales meanwhile are also making a comeback, with those entities holding at least 1,000 BTC hitting a 2-year high “exhibiting an accumulation pattern similar to one that we had seen in the lead up to Bitcoin’s previous halving.”
Both price and on-chain metrics are pointing towards an “optimistic outlook” from the investors ahead of halving but we are still in the midst of instability and uncertainty in both traditional and crypto markets.
As such, it is to be seen if the bullish momentum will continue or take a back seat after halving.
Tether (USDT) has long been accused of manipulating the price of bitcoin, especially during the bull rally of 2017. Tether and its sister company crypto exchange Bitfinex are actually fighting a suit alleging such claims.
Now, as per the latest column, there is “no systematic evidence that stable coin issuance affects cryptocurrency prices.”
The writers of the article, Richard K Lyons, Chief Innovation & Entrepreneurship Officer at UC Berkeley and Ganesh Viswanath-Natraj, Assistant Professor of Finance at Warwick Business School, points out how the evidence states stablecoins “consistently perform a safe-haven role in the digital economy.”
As per the significant premiums recorded during the COVID-19 panic in March, it was seen that stablecoin issuance “endogenously responds to deviations of the secondary market rate from the pegged rate.”
Over the last two years, stablecoins have risen dramatically, the total trading volume of BTC/USDT actually exceeded the volume of BTC/USD in 2019.
In 2020 especially, the growth has been off the chart, with the total market cap of stablecoins surpassing $9 billion. A vast majority, about $7.5 billion of this is from the popular stablecoin Tether (USDT).
“That stable coin use should be growing so rapidly is consistent with their ‘raison d’etre’ – to solve the store-of-value problem by pegging their value to the US dollar,” reads the article.
To talk about that creation of Tether, the authors explain that every Tether is issued “in principle” 100% backed by a dollar deposit. It is created when an investor deposits dollars into Tether’s account, creating an equivalent supply of USDT introduced in circulation.
Before 2018, nearly all the Tether was immediately distributed to Bitfinex and other exchanges. But after that, Tether Treasury started retaining a fraction of total Tether in circulation, having the capacity to sell Tether for dollars if the stablecoin’s price is above parity in the secondary market.
The authors found “no significant effect” of Tether flow to the secondary market on major non-stable crypto prices. Although results do not preclude the possibility that price manipulation occurred there has been no systematic effect either.
The paper further argues that stablecoins are used as a vehicle currency and dependent on other factors such as an incentive to arbitrage deviations of Tether’s market price from the peg. The analysis found “strong evidence that one cent increase in the dollar price of Tether results in $0.3 billion to the market.
Another support factoring to Tether flows is the role of the stablecoin as a vehicle currency is that “in periods of risk, some investors will choose to exchange into a better store of value.”
Lyons and Natraj point out that portfolio rebalancing toward Tether has minimal intermediate costs. It has been seen during the period of collapse in the bitcoin market in Jan-Feb 2018 and recently in 2020 during the COVID-19 panic that there have been premiums in Tether and other stablecoins and “a significant rebalancing of portfolios away from Bitcoin and towards Tether.”
Ethereum 2.0 might be months away still, having been in the works for a long time now with no definite date yet but enthusiasts are already very excited about what the future will bring.
Adam Cochran of Metacartel Ventures in his Twitter thread talked about why this could be the “largest economic shift in society.”
Short-Term Driving Prices
Rent seekers, large investors eyeing stable returns are the first economic case for Eth 2.0. With the new phase, when ETH switches to staking, Cochran says large investors will put money in the lock-up.
As we have seen in the crypto space, staking is the hottest trend, with nearly 80% of Tezos (XTZ) locked up for staking. And if 10% to 30% of all circulating Ethereum gets locked up, the supply shock could work in the digital asset’s behavior.
“Supply Shocks typically cause a drastic increase in the price of a good.”
The price spike because of scarcity would have these rent-seekers getting much higher returns from their fiat principle as such pushing them to go for a second round to buy and stake ETH.
“This is a ripple effect with diminishing returns where each round gets smaller and smaller in terms of its price impact” might not have the same impact as the initial round but some.
This heightened supply shock means the market starts to move upwards, creating FOMO among the retail investors who will “hammer in market buys to make sure they don’t miss out.”
As we saw during the 2017 bull rally, retailers tend to flood markets and unlike the last time, we have increased cash onramps with millions of verified users on crypto exchanges like Coinbase.
“With no stop gap this time around, that means these users can all FOMO at the same time.”
Mainstream media headlines would further create a flurry of these buyers. This demand shock means everyone wants a piece of it. This, in turn, ignites FOMO and drives prices to new highs in the short term, said Cochran.
Long-Term Factors Driving Growth
In the long-term, other factors will build a strong “Background Rate of Growth.” These factors include actual demand from a faster network and whale cycle buying because the ROI rate is up.
According to Cochran, these whales will put more ETH into staking, creating more nodes which means proportionally lower payout. As a result, creating a race to buy more to maintain earnings rate.
Besides this insane demand and supply shock that send the price skyrocketing, Cochran believes, “burning for Flat Supply with EIP-1559,” is the most important reason for ETH2.0 driving critical growth.
This means more efficient payments and no miner cabals voting on fees and burning of BASEFEE. And all of this means “Blue Diamond Go Up.” Cochran said,
“It is the perfect combination of instant spikes, repetitive buying loops, competitive race conditions to drive up a short-term price, and just the right amount of background growth rate to catch that price before it falls, and offer a steady growing network thereafter.”
These are some lofty dreams for Ethereum like any other crypto enthusiast has of different cryptocurrencies. Many others have talked about the trillion-dollar case for Ethereum, but for now, the most pressing issue is the constant delay in Eth 2.0 and its full rollout could take years.
Long term sentiments bullish but in the short term, the market is still fearful of another decline
Since yesterday’s lowest point, Bitcoin has risen over 20%, going to nearly $6,900 on Bitstamp. At the time of writing, BTC/USD has been trading around $6,700 while managing $2.5 billion on top ten exchanges with real volume.
Bitcoin has made a good jump that according to some traders could go to $7,500 level with the “crucial area to break is still the $6,800-6,950 zone.”
Last week, before the weekend, the world’s leading cryptocurrency jumped to about $7,000 level but the same day we went down to below $5,700. So, there’s yet to be known if we would be holding this level this time.
According to Trader XO, this rally might not be a real one as bitcoin tends to revisit the previous levels after making a pullback. He said,
“Don’t be surprised if we see one more raid around $6,500s before a bigger drop – wiping out a large number of late shorts / tight stops.”
Another trader Jonny Moe, who is “bullish as hell” where Bitcoin is heading fundamentally in the next few months, sees a “large bear flag right into horizontal resistance” that could see us revisiting the $3,000 to $4,000 range.
Tuur Demeester of Adamant Capital is also “not sure” that bitcoin will hold the current levels and believes it to be in the re-accumulation phase.
Bitcoin back in the box, imo we’re still in the re-accumulation phase. Looks messy technically, but the rebound is encouraging so far. $6,300 could be key resistance level before bull market can resume. pic.twitter.com/NnO9ALySxm
Over the past few weeks, the price of bitcoin has been in a downturn that saw the digital asset crashing to $3,850. Could it be the bottom of this cycle? According to many, it might not be and we could very well visit new lows.
If equities fall another 30%, BlockTower Capital CIO Ari Paul says, both bitcoin and gold could go lower. Although they are still risk assets, with Wall Street focusing on inflation and depreciation 10x as much as 2009 and Fed announcing “infinite” money supply, both the assets can “catch a sustainable bid even before equities start recovering.”
US stocks limit up. Gold back to the highs. That escalated quickly.
In the long term, the market is confident and bullish on cryptos while seeing the pullbacks as buying the dip opportunities. But in the short term, the market is having a mixed reaction, with some expecting the world’s leading digital asset to continue to see high volatility and fall back to $4,200 level while others believe it’s time for BTC to soar 50 days before the halving. Analyst with pseudonym Ceteris Paribus said,
“Bitcoin is going to pump so fucking hard at some point, but there can be some nasty swings before it happens. Cut down on your margin positions heavily, hold the majority spot. Don’t get wiped out.”
“You think the worst case scenario is being in cash during the BTC pump? It’s not. It’s being early, getting liquidated before the pump, and then missing out on all the gains you could have had if you played it conservatively.”
Bitfinex traders long on not only Bitcoin but also on Ethereum, XRP, and EOS
Even if Bitcoin climbs to $9,000, it won’t be out of the woods because “bear markets have rallies too”
Mayer Multiple is sitting at 0.75, which is lower than 84% of history
It’s been over two weeks that Bitcoin has been stuck with the world’s leading cryptocurrency still trading at $7,086.
Today, however, has been a big day for BTC. Exactly a year back, on Dec. 15th, Bitcoin found its bottom at around $3,200 after crashing from its all-time high $20,000, losing 84% of its value.
Since hitting that bottom, Bitcoin is up about 122% and in the first half of the year it even went to $13,900.
This is why the majority of the traders on Bitfinex are long. However, not just for Bitcoin but Bitfinex traders are also long on Ethereum (ETH), XRP, and EOS.
However, while BTC is up about 87% in 2019 to date Ethereum is up only about 4.50%. XRP meanwhile is the biggest loser of 2019 among the top 10 cryptos at almost 40% losses followed by EOS which is down by 1.60% YTD.
In the short term, analyst Magic Poop Cannon says even if we see a rally here, Bitcoin remains in a bear market downtrend. “Bear markets have rallies too,” he explains.
Bitcoin, he says is in a technical bear market and until we see higher highs and higher lows, the trend remains bearish. This holds true even if BTC rallies to $9,000.
Though he isn’t sure how low Bitcoin will fall here he warns BTC bottoms might be much deeper than expected.
Mayer Multiple says Stack some Sats
Bitcoin might be boring right now but it is the perfect time to stack some sats, according to Mayer Multiple.
The Mayer Multiple is the ratio of the Bitcoin price to its 200 days moving average which is a measure of the deviation of BTC price to its long term trend.
Currently, Mayer Multiple is sitting at 0.75, which is lower than 84% of history. A historically low value of Mayer multiple indicates that Bitcoin is cheap relative to its long term trend meaning it is a good time to buy the crypto asset.
This time to stack some sats is warranted because when the market is in fear and there’s blood on the street, that is the time for you to get in.
The market is in extreme fear right now with the Crypto Fear and Greed Index giving a reading of 21 on a scale of 1 to 100, where a value of 0 represents “Extreme Fear” while a value of 100 means “Extreme Greed.”
We are going to $100,000
With the predictions of $100k floating around, it makes sense to ensure that you are in before the next bull market starts.
This week another person joined the $100k BTC price prediction list, Ross Ulbricht, the founder of the now-defunct dark web marketplace Silk Road.
In his six-part blog published from letters he wrote in prison, Ulbricht applied Elliott Wave Theory to predict BTC price. The theory forecasts the highs and lows in the market cycles by identifying the changes in investor sentiment and psychology.
Per this theory, “We have a price target… of ~$100,000 some time in or near 2020,” he wrote. “However, there is no rule that market moves have to be proportional. This is just a patter we see unfolding that may or may not continue.”
As long as the BTC price stays below $8,300, the next target is $6,000
Anything between $10 trillion to $100 trillion is fair game – Analyst Willy Woo
November was the worst month for Bitcoin in the past 11 months.
Last month, Bitcoin recorded the highest losses of more than 20% despite seeing gains towards the end of the month.
Bitcoin started the year on a red note as January was a red month for the world’s leading cryptocurrency but only with a small percentage of loss that was followed by five consecutive months of green candle. This was when BTC topped at $13,900 and Bitcoin experienced three more months of red candles. October provided us with relief but November wiped out all those gains.
Now, December has started on a red note.
Bitcoin today went down to as low as $7,233 and has been trading around $7,300 at the time of writing, as per Coincodex while managing the daily trading volume of just $302 million.
In Thanksgiving day after pump, Bitcoin jumped to $7,800 level but as the market feared this has been only short-lived and we are back around $7,000 level.
Crypto trader with the moniker CryptoBirb says for bullish divergence Bitcoin must reclaim $7,960 to swing to $9,100 level. The early signal for that would be the 3-day close above MA 100 and anything below this means $5,400.
For now, trader Crypto ISO doesn’t see $8,000 coming.
Crypto investor and trader Nebraskan Gooner also points out that the all-knowing fractal that predicted Bitcoin’s drop to $6,600 and then to about $8,000 in the past few days is now calling out a drop of over 13% from current BTC price level.
“The all knowing fractal says the top is likely in for now. Trend line breakdown retest looks completed. $6,300 incoming?” notes Gooner.
Anything between $10 trillion to $100 trillion is fair game
These fluctuations in price isn’t anything new for the cryptocurrency market, actually as Nigel Green of deVere Group says it is no different than the volatility prevalent in other markets.
“There are peaks and troughs in all financial markets; the cryptocurrency market is not — and should not be — any different,” said Green.
On a bullish note, on-chain analyst Willy Woo says Bitcoin has a long way to go to discover its price ceiling.
“Anything between a (market cap) of $10 trillion to $100 trillion is fair game,” Woo said.
Currently, the flagship cryptocurrency has a market capitalization of just about $134 billion and has scope for growth of 100x to 1,000x.