Investors Pump Millions into The NFT Market, Analysts Debate – Good Or Bad Investment?

  • Non-fungible token (NFT) markets are quickly catching the eyes of venture capital firms.
  • Critics claim investment in NFTs is akin to “gambling in a casino.”
  • Are NFTs being used for money laundering?

Over the past few months, there’s been a boom in demand for non-fungible tokens (NFTs) in tandem with the growing cryptocurrency market. However, this rise in demand has not gone unnoticed as venture capital firms have poured over $90 million in NFT projects so far this year representing a sharp 150% increase from NFT projects’ investment last year, a CNBC report states.

According to Pitchfork, Sorare, a blockchain-based football digital collectibles game, has raised the most from VCs this year, $48.8 million, including Accel, Benchmark, and former Manchester United F.C. defender, Rio Ferdinand.

Andrei Brasoveanu, a general partner at Accel, labeled the expansive growth of NFTs as “one of the most exciting tech developments” shortly after the “record-breaking” investment became public. Brasoveanu further stated,

“It’s one of those developments that have mass-market appeal and could potentially impact a world outside the crypto niche.”

Notwithstanding, reports have linked popular NFT marketplace, OpenSea, which has previously sold some of the top-selling NFTs, with a possible $250 million raised at $2 billion valuations. The DApp creator, Dapper Labs, raised $23 million in a seed funding round for OpenSea led by Andreessen Horowitz in 2020.

Dapper Labs is well-known for its NBA Top Shot application that creates and sells to users NBA players’ NFT collectible cards. However, the funding rumors were quashed by Roham Gharegozlou, CEO and founder of Dapper Labs, who said the rumors were “baseless.”

A Critical Stand Against the Booming NFT Market

Despite VCs opening up their checkbooks to invest in NFT-related firms, some critics believe the NFT market is a fad in the crypto world. CEO of L’Atelier BNP Paribas, John Egan, compares buying NFT collectibles to gambling in a casino. “I think it’s probably akin at this stage to going into the casino,” he said.

In the past week, Beeple, a digital artist, made huge waves in the crypto world as his collection of NFTs sold for $69 million, making this art the third most expensive art from a living artist. Elon Musk, Jack Dorsey, and athletes such as Ron Gronkowski have all offered their unique NFTs to the public amidst the surging demand.

Despite his skepticism, Egan stated the NFT world possesses highly risky assets, but he believes the ecosystem will play a key role in the future. He stated the unique and cryptographic secure nature of NFT provides “the bedrock economic infrastructure within the virtual economy.”

The Path to Darkness – Money Laundering?

Apart from an ensuing “bubble” that most critics have prophesied, others claim NFTs are headed to a regulation path, similar to the cryptocurrency assets preceding them. One of the most practical dangers lingering above NFTs is money-laundering, which is also a grave issue in the crypto field.

According to Jesse Spiro, the chief of government affairs at the blockchain analysis firm Chainalysis, NFTs present a harder challenge to single out money laundering. Spiro said,

“One of the ways to identify trade-based money laundering with [traditional] art is that [an appraiser] comes up with a fair market value for something, and you’re able to measure that fair market value against the pricing that’s involved [and flag] over-invoicing or under-invoicing.”

“This is either selling that asset for less than it’s worth or for more than it’s worth.”

While noticing money laundering patterns in well-established markets such as the NBA Top Shot is easy, random or one-off NFT sales is much more complicated, he explained.

“All that’s needed is two parties that are involved to execute that [transaction] successfully effectively.”

However, a former Deutsche Bank and Credit Suisse fund manager argued that money laundering using NFTs “does not make sense.” The fund manager stated,

“I certainly see the potential for money laundering here, but given that there are lots of assets out there on the blockchain that people can use for that, [NFTs] may not be best-suited.”

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Author: Lujan Odera

New Zealand’s Financial Markets Authority Warns Crypto Investors to Watch Out for Scams

New Zealand’s Financial Markets Authority Warns Crypto Investors to Watch Out for Scams

New Zealand’s Financial Markets Authority (FMA) has become the latest financial watchdog to issue cryptocurrency risk warnings to crypto holders and investors.

The warning is coming as the crypto market is witnessing a gradual contraction in market prices. The financial watchdog has warned citizens dealing with crypto assets to be wary of the risks since digital assets are not regulated in the country. FMA stated,

“Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers.”

A rise in crypto scams

Based on NZ Herald’s report, the FMA has expressed worries about the increasing cryptocurrency scams in New Zealand, with several unregulated digital exchanges promising unusually high returns that are unrealistic.

This latest announcement from the FMA is coming barely 24 hours after the UK’s Financial Conduct Authority (FCA) issued a warning about the risk of cryptocurrency investments in the country.

Highly volatile market

The watchdog added that New Zealanders looking to invest in Bitcoin and cryptocurrencies should be very careful because they are highly volatile and risky investment vehicles.

The FMA said it shares the FCA concerns, and crypto holders and investors should be prepared to lose all their invested funds if they continue in the highly volatile crypto market.

Many cryptocurrency exchanges based overseas are not regulated, as they carry out their business exclusively online. As a result, investors of such exchanges are at high risk of losing their entire investments if something goes wrong in the market. The FMA noted that there is no assurance that their funds will be safe since it’s difficult to find out who is selling, buying, exchanging, or offering the cryptocurrencies.

In the past year, the crypto market has risen substantially, as almost all the digital assets added considerable gains. Now the overall market cap of crypto assets stands at over $1 trillion, with Bitcoin having about 70% of the share.

In 2020, the world’s most valuable cryptocurrency rose by more than 300%. But with the rise in the value of cryptocurrencies, more people became interested in the crypto market. As a result, crypto scams more than doubled as well.

Elliptic, a crypto assets risk management provider, reported recently that threat actors are hiding stolen Bitcoin in privacy wallets. Some criminals are also using pictures and details of famous people to deceive crypto holders on fake news websites.

The threat actors have used scam Bitcoin ads featuring unauthorized pictures of celebrities and personalities like Waleed Aly, Chris Hemsworth, and Andrew Forest to lure their victims to part ways with their cryptocurrencies. The report revealed that these cybercrimes are linked to threat groups from Moscow.

Verifying registration status of the exchange

New Zealand’s watchdog has also issued an advisory to crypto investors who deal with crypto exchanges. According to the regulator, users should verify whether the exchange holds their New Zealand dollars in a trust account. They should also ensure that the exchange is dully registered with the Financial Service Providers Register (FSPR), which is required in the case of a dispute resolution.

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Author: Ali Raza

Trump Calls for $2,000 Stimulus Checks; Pelosi Agrees to Push Markets to the Moon

Trump Calls for $2,000 Stimulus Checks; Pelosi Agrees to Push Markets to the Moon

The US government is preparing to push the prices in all markets higher.

Calling the recently-passed coronavirus relief bill a “disgrace,” President Donald Trump is demanding Congress to increase stimulus payments from $600 to $2,000 and get rid of “wasteful and unnecessary items.” Trump said in a video,

“I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000, or $4,000 for a couple.”

However, the $900 billion COVID-19 stimulus bill was passed on Sunday in both houses of Congress with veto-proof majorities which means Trump might not be able to raise the direct payment limit. The good thing is top Democrats in Congress are in favor of bigger cheeks to people.

“Democrats are ready to bring this to the Floor this week by unanimous consent. Let’s do it!” House Speaker Nancy Pelosi tweeted in response to Trump’s video.

It is not known if the $2,000 will replace the $600 check yet. Meanwhile, the recently passed pandemic recovery bill includes direct payments of up to $600 to eligible adults plus $600 per child dependent. Individuals earning up to $75,000 in adjusted gross income, or $112,500 as head of household and $150,000 as a married couple qualifies for the maximum benefit of this stimulus payment.

As we reported, Treasury Secretary Steven Mnuchin said on Monday that qualifying Americans could get their direct benefits as early as “at the beginning of next week.”

Now, if the latest $2,000 direct payments become a reality, “All markets will moon,” said one trader.

Up over 14% YTD, S&P 500 hit a new all-time high last week while the US Dollar index is at multi-year lows, down more than 12% from its March uptrend. When it comes to precious metals, gold is enjoying a 22.3% uptrend this year trading at $1,862 but down from its August peak of $2,075. As for silver, it rallied 47% year-to-date, currently at $25.5 but down from August’s nearly $30 high.

Bitcoin, however, is the leading asset with 227% gains in 2020, making a new ATH at $24,300 just this past weekend.

Canadian fund managers are also revamping their portfolios and bringing BTC into the mix as COVID-19 vaccines roll out and central banks provide a historic level of stimulus. The Bitcoin Fund has actually soared 65% since it began trading in Canadian dollars in October.

“It’s a hedge against all the money printing that is going on,” said Arthur Salzer, chief executive officer of Northland Wealth Management, noting “institutional investors are embracing” this asset class.

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Author: AnTy

USD Spoils the Party as Bitcoin, Precious Metals, & Stock Market Record Massive Reversals

After last week’s crazy performance, markets are experiencing a massive reversal on the first day of the week.

Starting with Bitcoin, the digital asset had made a yet new all-time high just last night, or for some early Monday morning, at about $24,300 amidst the heightened institutional interest.

But after surging 28% in just last week and breaking multiple levels, today it is bleeding red.

Dropping just under $22,400, BTC/USD rebounded some and is trading around $23,050, down about 2.5% on the back of $5.32 billion in ‘real’ volume.

In tandem with Bitcoin BTC -4.74% Bitcoin / USD BTCUSD $ 22 930,0532
-1,086.88 -4.74
Volume 47.02 b Change -1,086.88 Open $22 930,0532 Circulating 18.58 m Market Cap 425.98 b
1 h Crypto Exchange EXMO Hacked; BTC, ETH, XRP, ZEC, USDT, and ETC Stolen By Attacker
, altcoins are falling even harder.

ETH has gone down 6% to nearly $600 while Litecoin fell 11%, Bitcoin Cash 9%, Chainlink and XRP 8%, and Polkadot, Stellar, Tron, and Cardano are in the loss by over 7%.

More Volatility

This price action over the weekend was actually led by retail investors than institutional investors. The consistent decline in OI shows that institutional investors were taking profits and missed out on the latest rally.

As per CME’s latest report, asset managers’ long positions fell from 544 to 492, while short positions increased from 11 to 26. Leveraged funds’ long positions declined from 4,365 to 3,946, along with the short positions that declined from 9,354 to 8,702. Non-reportable accounts also increased in short positions from 506 to 606, while long positions fell from 3,403 to 3,134.

The jump in price came on the back of the high volume, which is rising rapidly. The futures market has been particularly active, with the aggregate weekly volume of BTC futures hitting $270 billion across derivatives exchanges. Open interest (OI) also reached a new ATH of $8.9 billion on Saturday.

This bullish price action has the BTC perpetual swaps price exceeding the index price with funding rates hitting a peak; excessive funding rates indicate rising leverage. With quarterly futures and options settlement coming up this Friday, more volatility is expected.

Other Markets

Much like digital gold, the risk-off market has precious metals, also having a bad day. Gold fell 2.7% to $1,854 before finding support around $1,874, for now. Silver meanwhile crashed over 9% to just under 25; currently, it is around 26.

S&P 500 futures plunged 2.5% on the first day of the week, right after the Index made a new ATH at 3,722 just before the weekend. Tesla fell 6.3% in pre-market trading on its first day on the S&P 500 index, after catapulting 731% this year.

Today’s winner is the US dollar, which breached above 91, from Friday’s low of 89.7. The USD is gaining against several currencies after European nations began imposing travel bans on the UK after it reported a more-infectious and “out of control” coronavirus variant.

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Author: AnTy

Cboe Feeling the Bitcoin FOMO; Will Launch a Crypto Index Next Year With CoinRoutes

Now, CBOE wants in on crypto, too, again.

Cboe Global Markets is planning to launch a suite of tools including crypto indexes, real-time ticks, and historical data by the end of the first quarter of next year, in partnership with CoinRoutes. Catherine Clay, Senior Vice President and Head of Information Solutions at Cboe Global Markets, said,

“Together, we can help bring transparency to the asset class and its market models by using RealPrice data to potentially create indices and tools that help clients better understand cryptocurrencies and encourage their participation in a nascent market.”

As Bitcoin continues to rally, up 175% YTD just blew right through the all-time high, hitting $20,800, along with the rest of the crypto market, institutions have been rushing in to jump on this bandwagon.

Everyone is long on Bitcoin, and earlier this month, S&P 500 revealed its crypto index plans through Lukka in early 2021.

Now, Cboe wants to provide data for the explosive cryptocurrency market. Interestingly, Cboe launched Bitcoin futures, along with CME, at the peak of the last bull market, in December 2017. But only to close its bitcoin futures in March 2019.

Now, Cboe wants back in, although apparently their corporate interest in digital currencies never declined.

Cboe has signed an exclusive licensing agreement with CoinRoutes, a New York-based trading software firm.

One of the largest stock exchange operators in the US, Cboe aims to reach a customer base of at least thousands initially with its real-time index data and then grow it to a global level. Michael Holstein, Chief Revenue Officer, CoinRoutes said,

“We believe existing arbitrarily weighted indices that do not take into account the different fees or actual liquidity available on crypto exchange platforms do not represent the true cost of buying or selling a given cryptocurrency.”

The company’s algorithmic products are built for both spot and derivatives products.

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Author: AnTy

Here’s Why BTC and Gold are Getting Hammered while Stock Market Hits New ATHs

On Monday, US markets saw one of their strongest openings in months on the back of progress on the COVID-19 vaccine and Democrat Joe Biden’s electoral victory.

Markets soared even before they opened and after that, it was all-time new highs.

S&P 500 made a new peak at 3,628 with a 1.3% move today, beating early September’s record of 3,580.

Much like the equity market, Dow Jones hit a new high at 29,632, with a 1.8% upwards move while tech-heavy Nasdaq fell short of hitting its high.

Not just US stocks but global stocks also surged on Monday after drugmaker Pfizer said that early data from its coronavirus vaccine shows it is more than 90% effective.

France’s CAC 40 jumped 7%, Germany’s DAX climbed 5.4%, and the FTSE 100 in London spiked 4.7%.

Even the price of Brent crude oil vaulted nearly 8% to $42.45 a barrel.

Unlike the mania seen in the stock market, gold crashed hard. The precious metal took a dive to $1,850, with a drop of almost 5.8%. Much like the yellow metal, silver had a bad time today, falling 9.2% to $23.6.

The US Dollar index meanwhile only oscillated between 92 and 93.

When it comes to Bitcoin, initially, it held strong only to fall 6.5% on Bitstamp. Today, BTC moved between the range of $14,824 and $15,854. The leading digital asset remains 24% away from its ATH.

“This volatility is just fast money funds that play BTC as a higher beta GOLD dumping on vaccine news. The players that enter on behalf of the longer-term thesis for Bitcoin are not changing their positioning,” noted trader Cantering Clark.

At the time of writing, BTC/USD has been trading around $15,200 in the red (-2%) with $3.81 billion in volume.

BTC’s downward movement had altcoins trailing down as well, with top cryptos down between 3% to 8%.

Before the vaccine news even broke out, stocks were already rallying as investors reacted positively to political certainty following Joe Biden’s victory. During his victory speech on Saturday, Biden announced his plans to assemble a coronavirus task force to help curb the virus’s spread.

Coronavirus cases are rising at an alarming rate in the US, forcing some states to shut down parts of the economy. Recently, several major countries in Europe have imposed nationwide lockdowns again.

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Author: AnTy

Cue to Buy BTC: Fed and Bank of England Vows to Do ‘Everything’ to Help their Economy Recover

Markets are flying right now. And the central banks are ready to give them even more reason to continue to do so.

We are less than a week into November, and the S&P 500 has already pumped 7.35% as the US dollar struggles, and yields on US Treasury debt securities remain unchanged.

Gold and Bitcoin particularly enjoy the greens as the precious metal goes back to the $1,950 level, and BTC makes 35-month highs, itching to break $16,000.

While green is splashed across the markets, the Federal Reserve pledged again to do whatever it can use “full range of tools” to sustain the speed at which the US economy is recovering.

Amidst the uncertainty around the still undecided US presidential election, the Fed kept the loose monetary policy intact — asset purchase and interest rate (near zero) remains unchanged.

Chairman Jerome Powell said the Fed has begun to consider whether it needs to extend the emergency credit facilities beyond their expiration on Dec. 31.

But the Fed chief said the economy is now recovering at a slower speed after being boosted earlier in the year by fiscal aid and re-opening of businesses adding the recent rise in coronavirus infections in the US and abroad was “particularly concerning.”

The same day the Bank of England governor also vowed to do “everything we can” to support the economy amidst the resurgence of Covid-19 cases.

As the central bank announced another £150bn of support, Andrew Bailey said it was important policymakers acted “quickly and strongly.”

However, with new restrictions in England and tighter lockdown rules, a slower and bumpier recovery is expected. “We are here to do everything we can to support the people of this country – and we’ll do it and will do it quickly,” said Bailey.

All of this basically, “is code for buy Bitcoin.”

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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

EU’s Draft Regulation to Fragment the Crypto Market with Special Focus on ‘Subset’ Stablecoins

The 168-page long leaked version of the draft legislation of “Markets in Crypto Assets (MiCA)” by the European Commission provides legal certainty about digital currencies.

To be issued later this month, the set of regulations will be covering the issuance and trading of digital assets across the bloc.

Europe is basically planning to regulate crypto-like other financial instruments with the purpose to “further enable and support the potential of digital finance in terms of innovation and competition while mitigating the risks.”

However, the European Commission is putting a particular focus on stablecoins, a “subset of crypto-assets” leading to market fragmentation.

This is no surprise given the calls for regulating them for some time now. As we reported, this month, first, Bank of England governor and then five of the European countries supported regulatory oversight for asset-backed coins like Facebook’s Libra.

Additionally, regulators believe stablecoins have the potential to become widely accepted and potentially systemic, and of course, the plans for CBDC are behind the decision.

The new regulation will establish specific rules for ‘stablecoins,’ including when these are e-money.

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Author: AnTy

Bitcoin’s Role as a Hedge Against the Global Financial System Back in Question

As markets go through a rough time, along with the bitcoin, people are back to questioning the largest cryptocurrency’s role as a hedge against the macro disorder.

The same was said in March when bitcoin crashed along with the rest of the stocks, oil, gold, and other assets.

That time, the coronavirus pandemic rattled the markets that pushed oil futures into negative for the first time ever and bitcoin to $3,800.

Unlike the traditional markets, crypto markets don’t have any plunge protection, no circuit breakers to prevent the asset from plunging further.

However, crypto derivatives exchange BitMEX did prevent BTC from going to zero by shutting the exchange down because of a DDoS attack, and the digital asset only plummeted to $3,600 level on the platform.

This time again, as markets make a U-turn after flying high since the March crash, bitcoin followed suit.

According to on-chain analyst Willy Woo, this is because bitcoin is still finding its foot and isn’t big enough yet.

Additionally, the asset that has replaced cash as a reserve asset in the balance sheet of three companies in the past month wasn’t the only one to plunge.

Traditional safe-haven asset gold is down just the same. This week, the precious metal lost 3.8% of its value.

Does it mean the bullion is no more a store of value? Not at all!

As a matter of fact, Warren Buffett, for the first time ever, invested in gold after ditching his bank shares.

This move from the billionaire came after the yellow metal crashed hard during the March sell-off, just like it did in 2008 before surging upwards.

The same could be said for the digital gold, which is still a nascent asset class with a growing adoption rate and still down 50% from its all-time high, which means a lot more potential for a new peak.

Why the Pullback?

The flagship cryptocurrency briefly breached $12,000 on Tuesday only to drop to about $10,000 level on Wednesday. The asset has fallen 16% since Tuesday that puts in on pace for its worst two-day stretch since the second week of May.

“Part of the reason for the sell-off is technical in nature; its price broke below key support, confirming a head and shoulders pattern, which accelerated the decline,” noted research firm Delphi Digital.

The short-term pain in the crypto market has come amid the worst daily decline for the S&P 500 since early June and the largest one-day spike for the VIX Index in almost three months.

This sell-off, besides being technical in nature and mirroring the broader sell-off in traditional markets, is also because of the DeFi craze that was “overdue for a pullback.”

According to some like trader Crypto Whale, the digital asset can still go down to $3,500 and fill the CME gap, which has happened 99% of the time.

“I believe there’s still a likely chance Bitcoin drops below $3,500 and fill the lowest CME gap before we see a real bull market,” he said.

Could this happen, sure, but will this happen, that’s to be seen. The market already saw it in March, and after falling momentarily to this level, it went back to $6,000 level the next day.

For now, bitcoin is struggling at the key psychological level of $10,000, having fallen under it today.

The fall in price had the open interest in CME bitcoin futures continuing its correction that started last week, shedding another 1000 contracts this week. While Leveraged Funds increased their shorts positioning noticeably this week as did the asset managers long.

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Author: AnTy