BTC is Stuck But its Correlation with Equities Is Increasing, Real Yield at Historic Low

Bitcoin is still up over 100% YTD and Ether 469%, while the total crypto market cap is holding on to its 116% gains from July low. MVRV ratio is currently low as well, at about 2.1.

The crypto market continues to feel the weakness that was first seen on Monday. Late on Tuesday, Bitcoin price fell as low as $58,570 and Ether to almost $4,055.

Crypto assets are still struggling to recover from the losses, with the total crypto market cap further sliding under $2.7 trillion today.

“After several days of gains, which saw Bitcoin hover near its all-time high as many other altcoins managed to reach new highs, we are seeing a significant pullback,” said Walid Koudmani, an analyst at XTB Market.

“The extreme volatility that the market is prone to could lead to a potential domino effect if more negative news were to emerge and take prices to new lows.”

Some market participants attribute the dip to the new tax reporting requirements for cryptocurrencies as part of the infrastructure bill signed into law by President Joe Biden on Monday. The bill includes an overreaching definition of ‘broker’ covering node operators and even developers to report information on their customers.

“While many have dismissed this as priced-in and somewhat nominal, seemingly innocuous tax measures have been notorious for marking highs in bull markets,” said QCP Capital.

According to QCP Capital, another potential reason for the pullback includes US inflation printing at 6.2%, the highest since November 1990, which has created a ‘risk-off sentiment across global markets.

The SEC is rejecting VanEck’s physical Bitcoin ETF proposal, disappointing reaction to the successful BTC taproot upgrade, and China’s National Development and Reform Commission reiterating their firm no-crypto stance are other reasons.

“Overall, we’ve turned quite neutral after this awaited leverage wash-out. We expect BTC to be stuck around 60,000 given the strike gravity. And perhaps more volatility in ETH and Altcoins,” said QCP Capital.

Still, Bitcoin is up more than 100% YTD and Ether 469%, while the total crypto market cap is holding on to its 116% gains from July low.

Amidst all this, Bitcoin’s correlation with equities continues to increase over the past few months, after falling to close to 0 earlier in 2021, as bitcoin increasingly responds to news from the Fed, as per Coin Metrics.

Historically, digital gold has been mostly uncorrelated with the S&P 500, but the correlation jumped to an all-time high last year following the global onset of COVID-19. But even then, it peaked at 0.48, so it never grew particularly strong.


The positive thing right now is Bitcoin’s free-float market value to realized value (MVRV) ratio is currently relatively low despite hitting a new ATH at $69,000 last week.

MVRV has historically been one of the most reliable on-chain indicators of bitcoin market tops and bottoms, which during previous cycles marked a top at 3.0 or above, and below 1.0 has indicated the bottom of the cycle. Currently, the free float MVRV is about 2.1.

Additionally, the Fed’s accommodative monetary policy and surging prices have pushed real yields, which are inflation-adjusted, into negative territory over the past 19 months.

Bitcoin vs US Real Yields

Real yield at historic low means long-asset allocators face challenges in terms of expected returns and risk.

“With pension funds flush with cash and growing inflation worries, asset managers may start looking to diversity into riskier alternatives (such as crypto),” noted data provider Kaiko’s latest report.

Last month, we saw the Houston Firefighters’ Relief and Retirement Fund becoming the first U.S. public pension plan to invest directly in BTC and Ether.

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Author: AnTy

Japanese Art Commission Platform With Over 1.5M Users is ‘Very Interested’ in Accepting Crypto

Japanese Art Commission Platform With Over 1.5 Million Users Is ‘Very Interested’ in Accepting Crypto as Payment

Japanese artwork commissioning service Skeb took to Twitter to share that it won’t be joining the non-fungible token (NFT) mania.

Last week, Skeb said that it has “no plans to issue NFTs,” and if it does, these digital artworks will belong to the creators. If they issue NFTs to clients, this will be the proof of “I requested it,” but the company noted NFTs can shift ownerships and that “will be meaningless.”

Non-fungible tokens are unique assets stored on a digital ledger that uses blockchain technology to establish a verified and public proof of ownership, and this year they have exploded into popularity and usage, recording more than $10 billion in sales.

“NFTs are now heating up as targets for investment, and creators may be issuing them without fully understanding how they work. It is also important to note that the ownership of NFTs is not in sync with the ownership of arts associated with them,” wrote the company on Twitter.

Skeb further said that NFTs are like museum memorabilia, and they should not be associated with copyrights or real properties. “NFTs should not be used as proofs of ownership of them,” it added.

As of Sept. 25, the company’s total number of registered users exceeded 1.5 million.

While not interested in NFTs, Skeb is “very interested” in using cryptocurrency as a payment method. This payment method will allow them to “keep the freedom of expression without any influence of credit card companies.”

This makes sense given that the platform accepts Visa and MasterCard but can’t accept PayPal as the payment giant doesn’t provide support to them. PayPal actually started offering crypto buying, selling, and storing last year, while Visa and MasterCard have also become crypto-friendly. This year, Visa also joined the NFT trend by buying a CryptoPunk and recently announced an NFT program to help creators.

“It isn’t that Skeb does not accept PayPal. It is that PayPal denied Skeb,” wrote the company on Twitter earlier this year.

As such, the company is actually currently having internal discussions regarding how it can be involved with cryptocurrency.

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Author: AnTy

OpenSea Killer, Coinbase NFT Marketplace, Sees ‘Insane’ Interest, Over 1M Users on the Waitlist

OpenSea Killer, Coinbase NFT Marketplace, Sees ‘Insane’ Interest, Over 1 Million Users Sign-up on the Waitlist

In a matter of 24 hours, Coinbase’s NFT marketplace has garnered an extremely positive response.

“We are getting a LOT of signups – so grateful for all your interest,” Coinbase vice president of product Sanchan Saxena wrote on Twitter.

“We are seeing insane loads on our servers and our team is working hard to get this resolved.”

The yet-to-be-launched marketplace for NFTs saw more than one million sign-ups on its waitlist on the very first day it opened, reported Bloomberg citing a person familiar with the situation.

In August, Coinbase had said that its customer usage had slowed at the start of the third quarter due to the crypto prices going down and that in response, it is seeking to diversify its revenue. NFT marketplace is the move in that direction.

“Fees are more likely to mirror retail than institutional crypto-trading commissions,” wrote Bloomberg Intelligence’s senior fintech analyst Julie Chariell in a report.

“NFT trading at our 3% fee estimate would bring much more revenue per trading dollar, along with less volatility to Coinbase operations than the crypto trading platform.”

While some of the signups could be duplicates and spam, it is extremely clear that Coinbase’s NFT extension has become a hot topic already. These numbers will beat the popular marketplace OpenSea very easily.

OpenSea’s total traders’ overtime on Ethereum, those registered users who have made at least one transaction, are currently at 535,345 while monthly active traders made a 281,400 high in September, according to Dune Analytics.

In the first half of 2021, Opensea had increased its market share from just 35% to a whopping 95%. Of the $2.8 billion spent on NFT marketplaces last month, the majority of it, $2.72 billion, changed hands on OpenSea.

But now, this dominance is being threatened by other entrants. After the leading crypto exchanges Binance and FTX jumped in this week, Coinbase also entered this race to lead the NFT marketplace space.

With its 68 million users, Coinbase can further expand the NFTs audience by making it “more accessible,” effortless, and putting the complexity behind the scenes.

In other news, OpenSea said it recently patched security flaws that would have allowed bad actors to loot its users’ digital crypto wallets. The issue was first brought to the attention by the researchers of Israel-based cybersecurity company Check Point, which noted that the attacker used “malicious” NFTs to lure users in.

“Security is fundamental to OpenSea….we investigated the matter and implemented a fix within an hour of it being brought to our attention,” said the company in a statement.

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Author: AnTy

Bearish Still? Coinbase CoFounder’s VC Firm Is Raising Over A Billion Dollars to Invest in Startups

Bearish Still? Coinbase CoFounder’s VC Firm Looks to Raise Over a Billion Dollars to Invest in Startups

Cryptocurrency venture capital firm Paradigm is looking to raise more than $1 billion for its new fund that will invest in startups.

The fund could weigh between $1.25 billion and $1.5 billion, first reported by CoinDesk citing an investor deck.

Co-founded by cryptocurrency exchange Coinbase’s Fred Ehsram, the firm aims to close its fundraising efforts on November 12.

Besides raising funds from its limited partners, they are also reportedly seeking a minimum general partner commitment of 1%. The firm has also been doing the rounds among family offices recently.

Additionally, the firm is hiring Matthew Mizbani of hedge fund Coatue Management as a partner. Reportedly, Mizbani, who previously worked at Morgan Stanley and Two Sigma, has been hired for the new fund.

While crypto prices are slowly moving still, money in the private market continues to flow. According to a report from Bank of America, VCs poured in $17 billion in crypto projects in the first half of 2021, “dwarfing” the $5.5 billion from the same period last year.

In Q3, another $8 billion have been injected in private investment across 423 deals.

In late June this year, VC giant Andreessen Horowitz (a16z) had also announced that it had raised a whopping $2.2 billion for its third crypto fund — the industry’s largest crypto-related fund to date.

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Author: AnTy

Lebanese Rush into Crypto as Fiat Currency Loses Over 90% of Its Value and Inflation Soars

Lebanese Rush into Crypto as Fiat Currency Loses Over 90% of Its Value and Inflation Soars

Lebanese people are turning to cryptocurrency as their fiat currency continues to lose its value drastically.

The Lebanese pound, or lira, has lost more than 90% of its worth in a matter of two years. At the same time, inflation is skyrocketing, with food prices increasing by up to 400% as of December 2020 while clothing prices have risen 560% and furnishing, household equipment, and maintenance soaring by 655%.

“(Security) officers, politicians, media personalities, everyone is buying crypto,” a Lebanese cryptocurrency trader Mario Awad told Reuters.

“Increasingly, it’s also your average person who is trying to get out of the collapsed banks and cut their losses.”

The cryptocurrency market is fueled by the collapse of Lebanon’s financial system in 2019.

The Lebanese pound has been pegged to the US dollar for more than two decades, and by September this year, it slid from 1,500 to the USD to roughly 15,000 on the parallel market.

Citizens are forced to withdraw money in local currency at a passive loss. Even if they take out US dollar-denominated cheques that are sold for a fraction, currently about 20%, of their price.

Last year, the government proposed a recovery plan to the International Monetary Fund (IMF) that estimated the losses in its financial system at about $83 billion.

“It’s funny when people say crypto isn’t real because what we found out in Lebanon is that this digital currency is 100 times more real than the lollars (slang term for USD stuck in Lebanon’s financial system) we have in the bank,” said a crypto enthusiast.

In Lebanon, the popular mode of transaction is peer-to-peer (P2P) on popular apps like WhatsApp and Telegram. The majority of these transactions ranging between a few hundred and a few thousand dollars’ are happening in stablecoins like Tether (USDT).

According to a World Bank report, the country’s economic crisis is likely among the world’s worst since the 1850s due to systemic corruption.

“The developers of bitcoin were definitely thinking about the exact things that happened here … about corrupt institutions with bad monetary and fiscal policies leading to the debasement of currencies,” said a cryptocurrency user.

Lebanese, however, are not just trading crypto but also mining them in a country that suffers power cuts. Crypto miners, however, can take advantage of heavy fuel subsidies that make electricity available in the region at some of the cheapest rates in the world.

However, regulation is still a grey area, with a Lebanese executive at a crypto exchange called CryptoLira saying, “It’s a regulatory desert.”

“For many, that’s seen as good because we’re not living in a country where regulations and politicians give us hope – quite the opposite. But it does harm widespread adoption (of cryptocurrency),” he said.

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Author: AnTy

OpenSea Bug Transfers Tokens to Burn Addresses, Over $100K Worth of NFTs Lost

OpenSea Bug Transfers Tokens to Burn Addresses, Over $100K Worth of NFTs Lost

Despite the success of the crypto market, the sector has found it hard to shake off the constant security issues that plague the industry.

This week, the non-fungible token (NFT) space got a brutal reality check after NFT marketplace OpenSea was hit by a bug that destroyed multiple tokens.

Burning Tokens Without Permission

On Wednesday, Nich Johnson – a lead developer on the Ethereum Name Server (ENS), announced on Twitter that he had accidentally “burned” the first ENS ever registered. The developer explained that he had tried to transfer the ENS – named “rilxxlir.eth” – to one of his personal accounts.

While Johnson had planned to offer the ENS as an NFT through PaperclipDAO, it would have been impossible to do this until he transferred the ENS as an ENS account held the name. The developer moved to OpenSea to process the transfer, where he discovered a glitch in the marketplace’s code.

Rather than send the ENS to Johnson’s address, OpenSea sent the NFT to a burn address-never to be seen again. OpenSea has reportedly patched the issue, but not before it affected 32 other transactions – involving 21 users and 42 traded NFTs. At the time of his tweet, all NFTs affected were collectively valued at 38.44 ETH.

“It transpires I was the first and apparently only victim of a bug introduced to their transfer page in the past 24 hours, which affected all ERC721 transfers to ENS names. Ownership of rilxxlir.eth is now permanently burned,” Johnson said.

Not the Best Time for OpenSea

The transfer glitch on OpenSea is quite disturbing, considering how important the marketplace is in the sector. But this was expected considering their staffing problems. In late August, the company’s head of product, Nate Chastain, posted that they had been severely understaffed, with only 37 people processing 98 percent of all NFT volumes.

OpenSea’s careers page also shows various open positions, from business development officers to finance professionals and full-stack engineers. Chastain added that OpenSea is looking to expand its team to take the stress off its existing workforce.

The company’s security flaws and staffing issues are also coming at a bit of a challenging time, with competitors now coming into the market. This week, top decentralized exchange and derivatives trading platform FTX launched a native NFT marketplace on the Solana blockchain.

As the company explained, the NFT marketplace is exclusive to American customers, and it will enable users to buy, sell, and mint NFTs. All tokens are tradable across the Etheruem and Solana blockchains, with deposits and withdrawals coming in the next few weeks. The deposits and withdrawal feature will essentially allow users to deposit external NFTs on the platform too.

Top crypto exchange Binance also launched an NFT marketplace in June. The company is looking to reduce transaction costs, and it will be based on the exchange’s blockchain infrastructure.

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Author: Jimmy Aki

Crypto Companies Raising Capital, Working with Regulators, and Building Cash Reserves for Prolonged Downtrend

Amidst the increasing regulatory scrutiny over the cryptocurrency industry, UK-based crypto exchange Coinpass said it had received approval from Britain’s Financial Conduct Authority (FCA) to operate in the country as a crypto asset company.

“We’re exceptionally pleased to be among one of the first UK-based cryptocurrency Trading Exchanges for retail investors and businesses to be fully registered with the Financial Conduct Authority as a crypto-asset firm,” Coinpass CEO Jeff Hancock said in a statement.

Prepare For A “Crypto Winter”

In the meantime, UK-based Blockchain, which is one of the longest operating firms in the crypto space, is building out its cash reserves in preparation for a ‘crypto winter’ on the horizon.

“I think when I look out over the space right now, there’s going to be a lot of folks who are unprepared for that,” said CEO and co-founder Peter Smith in an interview.

But not just for a prolonged downturn, a bear market, but Blockchain is working on making sure they’re here in 2030 too. The company recently obtained a $5.2 billion valuation after several rounds of funding this year alone.

Much like Blockchain, US-based Coinbase has also amassed $4.36 billion in cash to prepare for a “crypto winter” so that they can “continue to grow our products and services” even then, said Chief Financial Officer Alesia Haas last month.

Besides a bear market, the funds were stockpiled to weather a host of other business risks, including the stricter regulatory regime, potential trading declines, or possible cyberattacks, she added.

According to The Scoop podcast, 75% of Coinbase’s large hedge fund clients own assets outside of Bitcoin. Also, its institutional division has hundreds, about 250 outstanding requests from traditional finance firms to leverage their technology to build crypto products.

Shifts In The Crypto Industry

Leading cryptocurrency exchange Binance, as we reported, is planning to take its US-based entity public in the next three years. Also, the exchange is rumored to be considering obtaining investment from government funds at a valuation of $200 billion.

“Likely that soon binance will publicly confirm their raise rumored at $200bn. This will catalyze a fire under the exchange token sector as late-stage beta chasers scramble for exposure,” noted mgnr. “FTT is likely the largest beneficiary of this rotation.”

FTX’s native coin is already enjoying an uptrend, up 40% in the last 7-days and trading around $69 after hitting a new all-time high of almost $70 a few hours back.

Just this week, FTX.US acquired CFTC regulated LedgerX in order to offer its US-based users the option to trade derivatives products, futures, options, and swaps for Bitcoin and Ether.

While Binance has been in the regulatory limelight and other popular exchanges Huobi and OKEx have been tightening their derivatives rules following China’s crackdown on leverage trading, with FTX following the regulatory rule book, it is working in the exchange’s favor.

FTX’s partnerships and regulatory relationships, while aggressively ramping up its marketing efforts, push it among the top crypto trading platforms.

“Binance still reigns supreme in global spot markets,” Kaiko wrote in its weekly report, “but as we know by now in the rapidly shifting crypto industry, exchange dominance is tenuous.”

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Author: AnTy

Billionaire John Paulson Prefers Gold Over BTC; “There’s A Very Limited Amount Of Investable” Bullion

‘Big Short’ Billionaire John Paulson Prefers Gold Over Bitcoin Because “There’s A Very Limited Amount Of Investable” Bullion

And yet he doesn’t understand Bitcoin; it looks like he’s married to his gold bags. And he can’t put a short on crypto either because “there’s unlimited downside” to them, and he doesn’t want this trade to outdo his “greatest trade” made a decade ago.

Billionaire John Paulson, who netted $20 billion from the 2008 ‘Big Short’ crisis, says cryptocurrencies are a bubble that will “eventually prove to be worthless.”

While Paulson made it big by betting against the U.S. housing market more than a decade ago, the same can’t be said of the crypto market, where the easiest trade seems to be long or going ultra-long.

Things don’t seem to be going well with his firm. According to Bloomberg, he turned his hedge fund into a family office last year after assets dropped from their peak of $38 billion in 2011 to about $9 million in 2019, and “he found himself managing mostly his own money.”

Much like Paulson, ‘Big Short’ fame hedge fund manager Michael Burry also described Bitcoin as the “greatest speculative bubble of all time” in March and then three months later, following the big sell-off. He said the crypto-asset would collapse, but since then, BTC has retraced sharply and is back to make its way to $50k.

Now, in an interview with Bloomberg, Paulson, 65, dismissed crypto assets, saying, “I wouldn’t recommend anyone invest in cryptocurrencies.”

This makes sense that he is invested in gold and believes the precious metal “does very well in times of inflation,” noting the last time the billion was parabolic was in the1970s when there were two years of double-digit inflation.

He further explains why exactly gold does parabolic, which is basically “a very limited amount of investable gold.”

‘As inflation picks up, people try and get out of fixed income. They try and get out of cash. And the logical place to go is gold, But because the amount of money trying to move out of cash and fixed income dwarfs the amount of investable gold, the supply and demand imbalance causes gold to rise.”

And yet, he doesn’t get Bitcoin. He could very well be married to his gold bags.

According to him, when it comes to cryptocurrencies, they are “a limited supply of nothing,” and they have “no intrinsic value.” “So to the extent there’s more demand than the limited supply, the price would go up. But to the extent the demand falls, then the price would go down,” he said.

Paulson added that crypto assets “will eventually prove to be worthless” and will go to zero once the exuberance wears off or liquidity dries up.

Given his confidence in cryptos going to zero, it would make sense that Paulson would put a big short on them. But not according to the billionaire because “there’s unlimited downside” to them.

“Even though I could be right over the long term, in the short term, I’d be wiped out. In the case of Bitcoin, it went from $5,000 to $45,000, It’s just too volatile to short.”

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Author: AnTy

Substack, with over 500,000 Paid Subscribers, Adds Bitcoin Lightning Payments

Substack, with over 500,000 Paid Subscribers, Adds Bitcoin Lightning Payments

Online publisher Substack announced Monday that it has integrated Bitcoin Lightning payments.

This option to pay in BTC is only made available to select publishers for now and will be further rolled out broadly based on the feedback and demand from early experiments, said the company.

“Today, we enabled Bitcoin payments, beginning with select crypto publications. We will continue to invest in features that offer writers more control over their subscriptions and community,” tweeted Substack.

This integration with Bitcoin Lightning payments was made in collaboration with OpenNode, a Bitcoin payment processor. OpenNode will power both on-chain and off-chain Bitcoin and Lightning payments on the subscription-based online media company.

“With this new integration, writers and publications on Substack can now earn Bitcoin for paid subscriptions,” said OpenNode.

For now, the limited rollout for the service means subscribers to those select few publications will be able to pay their fees in BTC, and the publications can withdraw their earnings in the cryptocurrency as well. Publications have the option to retain their earnings in Bitcoin or convert it to their preferred currency.

As of writing, BTC/USD was trading at $49,600, up 68.6% YTD.

According to Bloomberg Businessweek, Substack has more than 500,000 paying subscribers, and writers can earn well over $1 million per year on the platform.

“Writers and podcasters have flocked to Substack to regain creative and financial freedom, and Bitcoin is a natural fit,” said João Almeida, Co-founder & CTO at OpenNode.

Earlier this year, the company closed a $65 million in Series B financing and got a valuation of $650 million following the fundraising. VC firm Andreessen Horowitz, which is very much involved in the crypto space, led Substack’s fundraising.

“We’re excited to be working with OpenNode to enable independent publishers on Substack to accept crypto payments,” said Nick Inzucchi, product designer at Substack.

“Having this option will give writers more flexibility and freedom, and we look forward to doing more in crypto as our users demand it.”

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Author: AnTy

Cross-chain Poly Network Gets Hacked for Over $600M, Networks Act to Save the Lost Funds

Cross-chain Poly Network Gets Hacked for Over $600M, Exchanges & Stablecoin Issuers Act to Save the Lost Funds

In what appears to be the largest DeFi attack to date, cross-chain protocol Poly Network has been hacked for more than half a billion dollars.

“We are sorry to announce that PolyNetwork was attacked on BinanceChain, Ethereum and Polygon,” tweeted the team on Tuesday while sharing the hacker’s address where the assets have been transferred.

“We will take legal actions, and we urge the hackers to return the assets,” it added.

Crypto assets involved in the hack include USDC, WBTC, WETH, RenBTC, BUSD, ETHB, BNB, BTCB, DAI, UNI, SHIB, and FEI, as shared by the team.

The team further said that they are calling on the miners of affected blockchain and also cryptocurrency exchanges, including Binance, Coinbase, OKEx, and Huobi, along with stablecoin issuers Tether and Circle, to blacklist tokens coming from the addresses tied to the hacker.

Already many are responding with Paolo Ardoino, CTO at Tether, saying that they have frozen $33 million USDT as part of the Poly hack.

“Address got blacklisted right as attacker tried to deposit into Curve where it would unreachable. Just 9 blocks difference between transactions. $30 million saved,” commented Banteg, a core developer at DeFi projet Yearn Finance as he commended Ardoino for his fast reaction.

OKEx and Binance have also responded with affirmation that they are onto this, with Binance CEO Changpeng Zhao saying,

“While no one controls BSC (or ETH), we are coordinating with all our security partners to proactively help. There are no guarantees. We will do as much as we can. Stay SAFU.”

Poly Network is a protocol for swapping tokens across multiple blockchains as it aims to build “the next generation internet.”

Formed by an alliance between multiple platforms; Ontology, Switcheo, and Neo, currently, it offers interoperability between Bitcoin, Ethereum, BSC, Ontology, Neo, Elrond, Zilliqa, Switcheo, and Huobi ECO Chain.

As a result of the hack, trading pool O3, which makes use of Poly Network to trade tokens, was also affected and has suspended its cross-chain functionality while “the non-cross-chain function is available and can be used normally.”

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Author: AnTy