Biggest News of the Week: Going Mainstream or A Sacrifice in the Name of Pump?

This week, the big news came in the form of PayPal announcing support for cryptocurrencies.

Not only the payments company would allow its users to buy, sell, and hold crypto, but soon it will also allow the users to shop at its 26 million merchants using crypto.

For now, Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC) are the ones supported directly within the PayPal digital wallet.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president, and CEO of PayPal.

As reflected in the price of Bitcoin surging past $13,000 to a new 2020 high, the market was elated. The other three digital assets had a good time with gains.

First Thing First

Why was this particular set of cryptos selected?

These crypto are actually among the digital assets approved by the New York State Department of Financial Services, and the NYDFS has granted PayPal a first-of-its-kind conditional Bitlicense.

Other coins approved by NYDFS for listing include Binance USD (BUSD), Gemini Dollar (GUSD), Paxos Standard (PAX), and Pax Gold (PAXG). Ethereum Classic (ETC) and Ripple (XRP) joined these cryptos in approval for the custody list.

Now, some feel by adding altcoins, it has just become another ‘exchange listing pump’ phenomenon.

“New bullish catalyst will be which altcoin Paypal lists news. They will be the Coinbase listing of 2020 and 2021,” noted one trader.

As a matter of fact, the company could really be setting the stage for its own dollar-pegged digital currency to “reduce their dependence on the correspondent banking system and other card networks,” as Facebook is doing with Libra, said Meltem Demirors, the chief strategy officer at CoinShares.

Bullish AF

PayPal news was met with excitement; the market celebrated it with gusto, seeing it as a sign that other institutions now would have no choice but to follow suit.

“We knew crypto trading on PayPal was coming, but to also enable crypto use for shopping at its 26 M merchant network is huge. Also, with PayPal and Venmo in the fray, every Fintech firm will now follow,” said a partner at the crypto fund, The Spartan Group.

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“If you liked the recent PayPal and Revolut launches, you’ll love the dozens of neo-banks and fintech teams currently scrambling to figure out what their “crypto strategy” is,” said Arjun Balaji.

In terms of exposure, “PayPal is bullish AF,” as the company has 487 million userbases while the bitcoin network currently has only 187 million total on-chain participants (23.4 million on-chain holders plus 101 million exchange users).

But is it Really?

While the digital asset price remains in bullish momentum, it didn’t take much time for the excitement to die down in the market.

Some even called this rally, “insiders frontrunning the PayPal news,” while others think it just “the most bullshit cope.”

For starters, PayPal has been merely playing catch up, and Bitcoin is the one providing PayPal an alternative to central banks – “archaic inflationary political central bank monopolies.”

The real caveat is that merchants won’t be receiving payments in virtual coins. But the biggest issue has been taken with the fact that PayPal doesn’t allow the cryptocurrencies in its account to be transferred to other accounts, on or off PayPal.

“So, this is all a big PayPal nothing burger, just entries in a central PayPal database, nothing to do with bitcoin,” said analyst PlanB.

Popular hardware wallet Trezor also said: “You shouldn’t use PayPal” because ‘not your keys, not your coin’ as Paypal doesn’t provide the private key of the crypto holdings.

Not only its ex-CEO Bill Harris called Bitcoin “the greatest scam ever,” but PayPal is also known for “stifling competition and preventing users from ever withdrawing their cryptocurrency to the safety of a wallet they control the keys to,” wrote Trezor in a blog post.

Amidst this hard criticism against PayPal for restricting self-custody being “objectively bad” and “necessary for Bitcoin to succeed,” others argue that this was exactly how Square’s Cash app started out, and eventually, it opened up.

“This is a great way for a risk-averse firm to offer its customers exposure to Bitcoin without worrying about “travel rule” compliance,” said Jerry Brito, executive director at crypto think tank Coin Center.

“In all fairness to PayPal, those features may come later,” tweeted Weiss Crypto Ratings.

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Author: AnTy

“Better Fiat Gateways” Is The Reason Why Binance Jersey to Shut Down on Nov 30th: CZ

The news of Binance Jersey shutting down its operations before 2020 was uncovered on Monday.

The announcement came without reason, so Binance CEO Changpeng Zhao took to Twitter to share the why. He tweeted,

“The reason is: better fiat gateways already supported by http://binance.com. No loss of features to users.”

Early in 2019, Binance announced that its Jersey-based subsidiary would allow fiat-to-crypto trading for European markets. Right from the launch, less than two years back, the support was added for top cryptos Bitcoin and Ether against the British pound and euros.

With a trading volume of a mere $210,000 in the past 24 hours, this branch didn’t really accomplish what the leading spot exchange was aiming for – be a “major driving force” in the European markets.

Cointelegraph first reported that the new deposits would be suspended from Oct. 30, and the final shutdown will happen a month later on Nov. 30. While there is still time for user accounts to be inaccessible, trading and withdrawals will be halted much before on Nov. 9.

The primary platform Binance.com meanwhile will continue to offer its services to the citizens of Jersey via “compliant banking channels.”

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Author: AnTy

Bitcoin Indicators Following the Same Trajectory They Did Before the 2017 Bull Run

Since Square’s Bitcoin investment news broke out on Thursday, the digital currency has been chasing higher levels. The first bust of momentum saw us reaching for $11,000, the second one breaking it, and then we went nearly to the $11,500 level.

At the time of writing, BTC/USD has been trading around $11,300, back to early September level, in green on the back of the gradually rising volume.

Bitcoin’s gains have brought back the greens in the crypto market, especially DeFi tokens, which have been bleeding for the past few weeks.

Odds for Parabolic Advance

These greens have also brought back the euphoria in the market, with participants expecting a strong momentum.

“New highs after explicitly bearish news is a strong indicator of underlying market strength,” said Ari Paul, the co-founder of investment firm BlockTower Capital.

According to him, “this is the common set up” for parabolic moves, which are rare. “Higher odds of a parabolic advance now than any time since March,” he added.

Interestingly, adding to this bullish case is the 2.88 million BTC that recently flowed out of centralized cryptocurrency exchanges.

As per Crypto Quant, all exchanges’ netflow of bitcoin has hit the year-low, and it is likely to keep negative “when the bull run is about to start,” much like the case was in 2017.

Whales on it

In anticipation of a strong movement towards the north, the number of whales, those entities holding more than 1,000 BTC, has been on an upwards trend for the past few months.

“An indication that more high-net-worth individuals are entering the space to invest in Bitcoin in expectation of BTC price appreciation,” noted Glassnode.

The same momentum in whales’ increased BTC accumulation was seen in 2014-2016 and before that during 2012-2013.

BTC Whales
Source: CoinMetrics

Adding to this bullishness is the Bitcoin’s Realized Cap, which has been steadily increasing just like it did before the 2017 bull market took off.

As per Coin Metrics, “If it continues as it did in 2017, 2021 should be an interesting year.”

Bitcoin MVRV (Market-Value-to-Realized-Value) is also holding the same trajectory as of the last bull run.

Bullishness all around

Interestingly, most of the post-March activity hasn’t been followed by the re-activation of long-term held bitcoin, which supports the idea that holders expect the medium price action to be positive.

The network is also growing in a healthy fashion with the network more secure than ever as hash rate hits a new peak and transfer count growing steadily, indicating an increasing user base.

Amidst all the bullishness, trader, and economist Alex Kruger shared a bearish case, “If price were to move down and linger in the low 10s – upper 9s, it would set a bull trap and could then easily breakdown.”

However, he is not expecting the trend to be bearish; rather, he is bullish, as a matter of fact, “extremely bullish, not just bullish.”

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Author: AnTy

LINK Price Not Ready to Rebound, While Chainlink’s Proof of Reserve to Audit $1 Bln WBTC

Yesterday, the crypto market took a hit on the news of BitMEX facing criminal charges. Chainlink (LINK) was one of the top cryptos that reacted the most violently, losing 15.3% of its value.

At the time of writing, LINK has been trading at $8.95 while managing just about $270 million in ‘real’ volume in the past 24 hours.

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“Chainlink traders have been hurt more than most top 100 blockchain traders over the past 30 days, and our MVRV metric is indicating that a buy-low opportunity has arisen,” noted data provider Santiment.

“While the average BTC and ETH trader is break-even in this time, LINK trader returns are at -20% in this time span. The sentiment is low, FUD is rampant, and a rebound is more likely than not under these conditions,” it added.

Chainlink Traders Show Signs of FUD
Source: Santiment

Holders’ distribution chart also reveals that the Chainlink whales, the non-exchange addresses, have also been selling some of their stash. Earlier this month, they were busy accumulating LINK, and now the signs of distress have them unwinding their position.

Addresses holding 100k to 10 million LINK have declined by over 3.5% in a fortnight.

While LINK price might be cooling off since hitting its peak in mid-August after a smoking rally in 2020, Chainlink continues to expand its ecosystem.

In the latest news, BitGo has announced that it will be working with Chainlink for the auditability of Wrapped Bitcoin (WBTC) reserves to scale its reliability and support the growing demand that brings nearly $1 billion BTC ($966 million to be exact) on Ethereum.

“DeFi applications can now receive definitive onchain proof about the fully backed collateralization of WBTC. This novel onchain proof of reserve is possible because of the openness of the Bitcoin network, transparency provided by BitGo, and the highly secure decentralized oracle network that Chainlink powers,” reads the official announcement.

BitGo has adopted Chainlink’s Proof of Reserve mechanism, which is live on testnet and soon to come on mainnet, will fully automate the auditing of BTC value custodied by BitGo.

Chainlink’s decentralized oracle will be used by WBTC Proof of reserve reference contract to check the balance of BTC custody wallets every ten minutes, and whenever a deviation is spotted, an on-chain update would be updated.

This will be beneficial for decentralized applications that use WBTC as collateral, provide Dapps additional options for protection against unexpected events, and increase the transparency in WBTC collateralization and user trust across the market.

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Author: AnTy

UMA Goes Live on Coinbase.com and Apps While Loopring (LRC) Surges on Coinbase Pro Listing

The price of LRC jumped 38% on the news that Coinbase Pro was listing Loopring.

The self-custodial Ethereum layer two solution, Loopring, will be supported in all of the San Francisco-based cryptocurrency exchange’s supported jurisdiction, except for New York state.

Today, Coinbase announced that on the coming Monday, users can transfer their LRC into the Coinbase Pro account ahead of trading.

The cryptocurrency, however, won’t be available on Coinbase.com or the exchange’s mobile apps yet.

LPC trading on Coinbase Pro will begin at 9 AM Pacific Time (PT) Tuesday, September 15.

In response, the 52nd largest cryptocurrency by market cap of $296 million jumped to $0.2875 and is currently trading at $0.253.

The zkRollup exchange and payment protocol recently saw traction after the DeFi mania pushed the fees on the Ethereum network to sky-high.

It’s zkRollup currently has more than 5000 accounts, but Loopring is “just getting started” as it says, “Layer 2 will bring Ethereum to the world, and the world to Ethereum.”

Keep those Altcoins, better yet, DeFi Tokens Coming

Coinbase, much like any other exchanges in the crypto space, has taken to list altcoins, and lately to capture the ongoing decentralized finance craze, DeFi tokens as well.

Celo (CGLD), Numeraire (NMR), Band (BAND), Compound (COMP), Maker (MKR), and OmiseGo (OMG) have been recent additions along with supporting additional European and UK order books.

Just this week, UMA-USD and UMA-BTC order books got into a full-trading mode.

Today, UMA is launching at Coinbase.com and its iOS and Android apps, which means users can buy, sell, convert, send, receive, or store UMA on the platform.

This Ethereum-based open-source protocol allows developers to design and create their own synthetic assets and financial contracts with the goal of creating universal market access (UMA).

A DeFi token with a market cap of $906 million that sits at 25th spot, UMA has also started gaining momentum as it trades at 16.81% with nearly 4% gains.

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Author: AnTy

Russian Monitoring Agency Develops Blockchain Analysis Tool To Track Bitcoin And Monero

A report from local news channel RBC confirmed on Tuesday Russian intelligence unit, Rosfinmonitoring, (Russia’s Federal Financial Monitoring Service), has proposed a cryptocurrency monitoring tool similar to U.S.’s Chainalysis. The agency, in charge of reducing cases of money laundering and terrorist financing in the country, will start tracking Bitcoin and other cryptocurrencies including privacy enhanced tokens such as DASH and XMR.

“The Transparent Blockchain”, is a new prototype built in partnership with the Lebedev Physical Institute of the Russian Academy of Sciences that will use artificial intelligence to track blockchain activity and cryptocurrency transactions. According to the report, a letter to the Deputy Minister of Digital Development, Communications and Mass Media, Maxim Parshin, has been approved by the Ministry of Telecom and Mass Communication.

So far, the Rosfinmonitoring has started preparations for widespread production of the software with the Bank of Russia and financial institutions within the country set to test it in the “near future.”

A $10 million request

The prototype is ready and tested on drug controls, the Federal Financial Monitoring Service confirmed. However, till now development of the blockchain analysis service has been constricted to extrabudgetary funds. To continue the build, the Rosfinmonitoring requested the federal government to increase their funding for the project by 760 million rubles (~$10.42 million) in the next three years.

Russia has been on the forefront in preventing money laundering and terrorist financing using cryptocurrencies. In July, President Vladimir Putin signed two digital asset bills into law – first, authorizing that crypto is property and second, digital assets cannot be used as a form of payment within the country. Earlier this month, the Russian government outlawed sending cryptocurrencies to any anonymous wallets forcing users to be fully KYC compliant.

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Author: Lujan Odera

The Good and Bad of the Crypto Going Public

This week, big news came in the form of crypto businesses that are planning to go public either later this year or next year.

Crypto lender BlockFi is looking for a veteran financial professional (CFO) that could help the company “guide and position the finance team for late-stage investment, acquisition, and/or IPO.”

The company is looking for someone with over 15 years of experience as a corporate financial leader in public markets and financial markets. It further mentions in its job posting that the person also needs to have an IPO experience and scaling teams for SOX compliance and IPO ready.

BlockFi had a successful Q2 2020, and in the same quarter, the company hired former American express vice president, Wittney Rachlin to launch the bitcoin credit card that could come in the 4Q20.

In Q1 of this year, the company raised $30 million in a Series B funding led by Peter Thiel’s Valar Ventures along with Morgan Creek Digital, Castle Island Ventures, Arrington XRP Capital.

NYSE-backed Crypto Exchange

The other company planning to go public is crypto exchange Coinbase.

For now, the company is planning to file for an IPO with the SEC but hasn’t registered with the agency yet. It is, however, actively pursuing investment banks and law firms to assist with the process. The listing could come as early as this year or next year.

Interestingly, the NYSE is one of the exchange’s investors along with the likes of Y Combinator, Andreesen Horowitz, Union Square Ventures, and Tim Draper.

Coinbase was valued at about $8 billion during its last round of venture funding and had over 1000 employees and 35 million users in over 100 countries.

The good thing is they are not going the usual IPO route but DPO, which means they bypass institutions and banks and give retail the same access as everyone.

“The real irony is that, if they did a token sale, it would only be available to accredited investors,” commented analyst Ceteris Paribus.

An Opportune Time?

San Francisco-based Coinbase is a popular cryptocurrency exchange that has the highest amount of BTC balance, and no other exchange comes any close to it. It has been close to surpassing 1 million BTC in balance only to slide down after the March sell-off but remains above 900k BTC.

Founded in 2012, Coinbase has contributed a lot to the advancement of the crypto ecosystem. And the news of it going public that is taken as a bullish narrative by the market has come at a time when the market has been rallying amidst the COVID-19 pandemic.

The Fed is pumping in trillions of dollars, which is popping the prices of almost every other asset, from the share of bankrupt companies to the latest IPOs.

Lately, altcoins have also been surging, giving off the vibes of 2017, with many expecting it to be the start of an altcoin season. During the 2017 bull run, Coinbase boasted $1 billion in revenue.

But Coinbase also faces criticism in the bitcoin community for listing the “shitcoins” and not supporting projects that are bitcoin-related such as Lighting Network.

Not to forget, the tons of controversy that continue to surround Coinbase. Recently, it came under fire for selling its customer data to the IRS and DEA, the exact opposite of what bitcoin stands for — censorship-resistant.

So, it would be interesting to see how this IPO affects Coinbase and the market in terms of mainstream adoption and attracting new investors and institutions.

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Author: AnTy

Yet Another Balancer Attack for ‘Unclaimed’ COMP; DeFi Liquidity Provider to Reimburse Hack Victims

It hasn’t been 24 hours since the news about a $500,000 hack on Balancer came that a new attack has claimed $2,300 worth of the hot Compound tokens (COMP).

Hao, a hacker and engineer at DeBank, a DeFi wallet took to Twitter to share how this time as well, someone used Andreessen-funded dYdX to flash loan and drained, yes again, unclaimed COMP stored in several pools of Balancer, an automatic market maker.

The hacker explained that the contract flash loaned some tokens from dYdX to mint cToken from these funds. Then they Uniswap v2 to flash loaned some COMP.

The contract joined COMP/cBAT/cUSDT pool to trigger Compound to send unclaimed COMP to this balancer pool. After syncing COMP balance, the contract withdrew from the balancer at an advantage and continued to do the same for other pools.

After getting all the extra COMP, it repaid Uniswap and dydx and made an exit and swapped COMP for ETH in a normal Uniswap V2 trade.

However, @FollowTheChain said the “unclaimed COMP” is just a tiny fraction of COMP that has accumulated since the last movement of each cToken that happened a few minutes before.

According to Balancer Labs, this attack wasn’t like the one from yesterday either.

Amidst this came the good news, that Balancer Labs will be reimbursing all the liquidity providers who lost funds in yesterday’s attack.

It will also pay out the “highest bug bounty available” to Hex capital, who alerted about this vulnerability to balancer Labs in May.

“This is a major issue in crypto today – creating bug bounty programs and then ignoring the results + refusing to pay out. We need to do better,” said Hex Capital.

Market Unaffected

Yesterday’s attack involved two pools of the Balancer that contained deflationary tokens STA and STONK, tokens with transfer fees, worth more than $500,000 getting drained by a hacker.

The attack happened in two separate transactions which were 30 minutes apart. And only the pools with a token with transfer fees were affected by the exploit.

DeFi aggregator 1inch in its official report said the attacker was a “very sophisticated smart contract engineer with extensive knowledge and understanding of the leading DeFi protocols.”

Not only was he organized and prepared in advance but also used Tornado Cash, a privacy-focused Ethereum mixer, to get initial funds that hid his source of Ether.

It reported that the attack on one of the Balancer Pools was caused by a complex transaction that the hacker sent to the Ethereum mainnet. Then, with another transaction, the hacker drained another Balancer Pool.

The address with the stolen funds currently has about 601 ETH worth about $133,823.

In its official report on the incident, Balancer Labs reported that it wasn’t aware that “his specific type of attack was possible” which now came to be untrue.

However, they have been warning about the unintended effects of ERC20s with transfer fees in the protocol. As such, STA wasn’t included in the recently put together mining whitelist of BAL.

Now, transfer fee tokens will be added to the blacklist and will continue to audit, the third planned audit is starting soon, and review the protocol.

However, the market seems unaffected for now, as the total value locked in Balancer is $115 million, down from the all-time high of $117 million just a day before, as per DeFi Pulse.

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Author: AnTy

Wirecard Collapses With $3.7 Billion of Debt, Leaving Crypto-Card Holders in Limbo

  • German Payment Processor, Wirecard, Collapses with £3bn worth of debt
  • The news comes as Ernst and Young refused to sign off on its payment records from 2019.

From its Chief Executive being arrested on suspicion of market manipulation to the horrific admission to the regulatory body, Ernst and Young (EY), that £1.7bn of its case “probably did not exist.” The German payment processor and Fintech, Wirecard, has collapsed, leaving many holders of its associated Crypto Card in limbo.

Within Munich’s court, the company stated that it would be filing, citing its “impending insolvency and over-indebtedness.” According to recent statements by both EY and Wirecard, this would lead to the 5,300 employees.

One of the interesting, yet disconcerting features of this collapse is that Ernst and Young, the corporate services and auditor, failed to press Wirecard for its financial history. An activity that took place over three years.

In addition to the collapse of Wirecard, its UK-based subsidiary, Wirecard Card Solutions, has been ordered to cease operations by the Financial Conduct Authority (FCA) the same day. Consequently, all cards issued by Wirecard have been deactivated, including those belonging to crypto services like Crypto.com, and TenX.

It proved to be a pretty embarrassing situation for both companies; however, tenuous links to Wirecard might be. For example, TenX and Crypto.com remained silent with the announcement by Wirecard of nearly £3bn in missing assets.

Both companies, however, have been outspoken is in their support of affected customers, however. Crypto.com’s CEO, Kris Marszalek, has since announced that cardholders will be 100% reimbursed by the company within 48 hours.

TenX has since posted that customers will not see their assets affected by the recent collapse of Wirecard; reiterating that existing assets are safe, while also stating that it is currently working on getting their cards up and operational again:

“Please be reassured that all customer funds are safe and remain accessible as the TenX Wallet is unaffected…The TenX team is working to re-enable the affected services as soon as we can. We apologize for the disruption and will continue to provide updates to you whenever we have them.”

With the ongoing developments involving Wirecard, Crypto.com’s Kris Marszalek has further added that it is also seeking alternative card providers to bring its card services up once again. This is according to a blog post the company provided recently.

“Separately, we’re working on transferring the card program to a new provider, so that we can resume the issuing of cards in the UK and Europe and allow existing and new customers to benefit from our card program again.”

However, further requests for comment regarding the collapse or activities of Wirecard have not been met with comment.

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Author: James Fox

Bitcoin to Roar Higher on PayPal Selling BTC? Time to Buy the Rumor

Yesterday, the news of fintech giant PayPal planning to roll out cryptocurrency buying and selling for Paypal and Venmo got the crypto market excited, and bitcoin went up to $9,800.

Reportedly, the company plans to build in wallet functionality for users to store their crypto in the app as well. The service could be rolled out as soon as in the next quarter.

To source liquidity, Coinbase, which has a relationship with PayPal going back to 2016 and Bitstamp, are the likely contenders.

The 300 million users base of PayPal is the reason behind this excitement as the online payments company would immediately broaden the potential investor base of cryptos. Also, Venmo comes with 50 million users, the largest consumer finance application in the US.

PayPal is also the company that froze WikiLeaks accounts, which then went the Bitcoin route. So, “It only took a decade for this to come full circle,” said developer Jimmy Song.

PayPal supporting Bitcoin no doubt will be “amazing for adoption,” but Jesse Powell, CEO of crypto exchange Kraken, warned, “don’t expect PP to change their policies on account closures. They’re still a centralized choke point, and the government will continue to commandeer the financial system for extrajudicial sanctions. Not your keys.”

On being countered by crypto exchanges being the same thing, Powell advised, “don’t leave more coins on Kraken than you need for your activity,” either.

“If we get a legit government order to close your account and hand over the coins, you can say goodbye to your precious savings. Great thing about crypto is you can self custody,” Powell said.

“Buy the Rumor, Buy the News, Sell the Implementation”

For now, the news of PayPal and Venmo looking into selling crypto-assets directly to their customers is based on some industry sources, and there is no knowing if it will be true.

“Still, the headline itself is more than enough to add fuel to this massive risk-on rally. So in the words of Louis Jordan. … Let the Good Times Roll,” wrote analyst Mati Greenspan in his daily newsletter.

Though a rumor currently, speculation around Facebook launching Libra started similarly in February 2019. And when the social media giant announced the launch in June, “the market roared higher,” said economist and trader Alex Kruger.

He also pointed out how several pieces of news paid handsomely in the past two years in the crypto space. In 2017, ETF rejection, China banning bitcoin, CME futures launch, the likes of CFTC sending subpoena Bitfinex and Tether, and fake news of ETF confirmation was such news. Then in 2019, we saw the market reacting to Libra and Chinese President Xi Jinping supporting blockchain technology.

Instead of ‘Buy the Rumor, Sell the News,” the right thing to do is ‘Buy the News’ as well, and ‘Selling the implementation’ is best, he said.

“Crypto going mainstream! This would be massive and should help prices run over those pesky call sellers,” Kruger said.

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Author: AnTy