Coinbase Premium Tanks to an All-Time Low During Bitcoin Sell-Off

But soon it skyrocketed to nearly +$500.

The price of cryptocurrencies continued its downwards journey until a good bunch of longs was liquidated, and the price of Bitcoin went under $50k.

BTC went down as low as $48,250, down 27.5% from Sunday’s all-time high around $58,300.

With this latest dip, the leading digital currency has turned the old ATH of $46,700 into new support, noted analyst and trader Rekt Capital. However, the trader says this is not a Bitcoin correction because, historically, the trend tends to between 30% to 40%.

“But there are many more dips along the way which are much shallower than -30%,” added Rekt Capital.

This pullback pushed Coinbase Premium, the gap between Coinbase Pro price (USD pair) and Binance price (USDT pair) to an all-time low of -$1,020. Soon after, this premium skyrocketed to +486. Coinbase whales are actually the ones driving the market, and they took this opportunity to accumulate more BTC.

MicroStrategy and Tesla also availed Coinbase’s services to make their Bitcoin purchases.

This means, “Even if there are more corrections, it’s unlikely to go down below 44k,” said Ki Young Ju, CEO of CryptoQuant.

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Source: CryptoQuant

While after a wild rally that pushed us past the $1 trillion dollar market cap, correction is sometimes expected, we are also to blame for this correction because last week, the Crypto Twitter (CT) went crazy with red lasers, quipped another trader Josh Rager.

What actually exacerbated this sell-off was the degens that were trading with high leverage. In the last 12 hours, $3.64 billion worth of liquidation happened. In the past 24 hours, it was nearly $4 billion, as per Bybt.

Binance lead in these liquidations, accounting for $1.58 billion of them, followed by Huobi ($878.53 million), OKEx ($426.63 million), and Bybt ($322.49 million). Bitfinex and Deribit saw the least amount of liquidations at 8.74 million and $55.14 million, respectively.

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Source: ByBt

The liquidation helped the funding rate on BTC perpetual contracts to come down between 0.0068% on Deribit and 0.0686% on Binance. On OKEx, funding is negative.

For now, the market has recovered from the lows as Bitcoin now trades around $52,644.

Amidst the red market, good news came from Vancouver-based cannabis company Vinergy that announced the expansion of its investment policy to include Bitcoin and cryptocurrencies as the “influx of investment and increased institutional adoption is creating a highly lucrative opportunity.”

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Author: AnTy

Standard Chartered Bank CEO: Digital Currencies Will ‘Inevitably’ Become Mainstream

Standard Chartered CEO, Bill Winters, has said that digital currencies will soon become mainstream as more people adopt this new tech. Winters shared his sentiments during the Singapore FinTech Festival, where he signaled that the bank would soon be announcing some exciting developments in this field.

Speaking at the virtual conference, the Standard Chartered Bank CEO touched on matters CBDC and private stablecoins. Winters’s approach on both digital asset classes as relaxed as opposed to recent takes by monetary authorities to phase out private stablecoins like Tether (USDt).

According to the initial reporting by CNBC, Winters particularly highlighted that,

“I think there is absolutely a role for central bank digital currencies as well as non-central bank-sponsored digital currencies.”

Giving an example of the voluntary carbon market, Winters noted that the concept of having crypto assets to represent an underlying is more intriguing to him,

“The exciting development for me is to have currencies that don’t match a currency in and of itself but are intended to capture either a superset of a subset.”

Despite being bullish on the fundamentals, the CEO was also keen to highlight the existing gap in merging the world of traditional finance and crypto. Per Winter’s view, the two industries can only merge if organizations embrace critical fundamental cultural shifts. He also hinted at they may be developing their own digital currency, stating, “I think there is a whole new world that’s opening up for us.”

Standard Chartered & UnionBank $187 Million Tokenized Bond

Meanwhile, the bank is still making strides through blockchain tech itself; an update yesterday by both Standard Chartered and UnionBank revealed that the two completed a PoC bond issuance worth 9 billion Philippines pesos ($187 million). This bond targeted retail investors and was issued within a blockchain ecosystem to make it more accessible.

Standard Chartered head of capital markets ASEAN, Aaron Gwak, said that this innovation changes the bonds market dynamics, where institutional investors dominate the game.

“The bond infrastructure around the world has been designed primarily for institutional investors and involves several intermediaries to buy and subsequently trade bonds, making it less accessible to retail investors.”

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Author: Edwin Munyui

Ethereum 2.0 Deposit Contract Only at 18% Staked; Will It Launch on Dec 1?

The Ethereum 2.0 upgrade may not happen as soon as the community expected if the minimum threshold of 524k ETH isn’t met within the next week. Currently, 99,488 ETH has been staked in preparation for the launch, roughly 18.97% of the required ETH. Nonetheless, Ethereum 2.0 developers are still optimistic about the Dec 1 launch.

While there is a target date for the ETH 2.0 launch, hiccups hitting the minimum threshold could mean that this date will have to be rescheduled. Going by the updates from Dune Analytics, the eventuality of postponing the launch is more likely than not.

This is because all the ETH must be deposited seven days before the target launch date of Dec 1, according to Danny Ryan, a core researcher at the Ethereum Foundation. If the threshold is not met within the expected time frame, Ryan noted that the genesis would be triggered at a later date when it is achieved,

“If not … genesis will be triggered 7 days after this threshold has been met (whenever that may be).”

So far, a total of 458 contributors have deposited to the ETH 2.0 deposit contract, totaling 3,023 transactions as of press time. Some of the largest contributors include Ethereum’s co-founder Vitalik Buterin who has allocated 3,200 ETH, which is over $1.4 million as per the prevailing market prices.

With the December launch set to mark phase 0 of ETH 2.0, the upgrade to a PoS ecosystem will still be far from over. This will only lay the groundwork for phases 1 and 2, which are expected to roll out in the coming year as part of a full migration from the PoW consensus.

Notably, the Ethereum and larger crypto community have been waiting patiently for this shift. Basically, a migration from the PoW consensus means that Ethereum’s blockchain will be more scalable since less computing power is needed in the PoS model. If successful, the Ethereum blockchain will solve the underlying scalability challenges, which are a pain point to its booming ecosystem.

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Author: Edwin Munyui

EU Draft Proposal Seeks to Access Data from End-to-end Encryption Platforms

The European Union (EU) could soon limit end-to-end encryption according to a draft leaked by the German Presidency, which seeks to increase the monitoring efficiency by Intelligence authorities and police.

This development comes in the wake of Vienna’s terrorist attack that took 4 lives and left 23 others with injuries. The news, which was initially reported by an Austrian media dubbed ‘FM4’, noted concerns on the accessibility of data from encrypted platforms like WhatsApp and Signal.

According to a draft deciphered by the Associated Press, this proposed piece will harmonize the process of accessing encrypted data,

“Competent authorities must be able to access data in a lawful and targeted manner, in full respect of fundamental rights and the data protection regime, while upholding cybersecurity.”

The draft, which is dated Nov 6, goes on to highlight those technical solutions to enable data access in encrypted platforms must be in line ‘with the principles of legality, transparency, necessity, and proportionality.’ However, it is quite noteworthy that the draft proposal does not call for total encryption; instead, it is set to initiate an exploratory phase that will guide stakeholders, including the EU, towards adopting favorable legislation in matters of end-to-end encryption.

Activists Decry the Move

As expected, the draft has already been met with opposition from rights activists who place fundamental importance on privacy and security. In fact, a German lawmaker Anke Domscheit-Berg, a left-wing politician, has voiced their concerns about the proposed draft. The lawmaker accused EU governments of masking under the extremism narrative to introduce higher surveillance within their jurisdictions.

According to Anke, the logic of accessing end-to-end encryption platforms does not make sense. He gave this example to support the argument,

“Anyone who finds an open back door into my house can enter it; the same is true for back doors in software …

The proposed EU regulation is an attack on the integrity of digital infrastructure and, therefore, hazardous.”

It appears he is not the only one who has called out the draft proposal; other stakeholders that have voiced their opinions against it include the executive director of Open Privacy Sarah Jamie Lewis and the director of Cybersecurity at Electronic Frontier Foundation, Eva Galperin. With the document set for presentation to the EU council on Nov 19, only time will tell if this draft will be adopted into law by member countries.

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Author: Edwin Munyui

Euro’s Dominance at Risk of Replacement by Digital Yuan in the Next Five Years: dGen Report

The Euro might be overtaken by China’s digital Yuan as soon as 2025 if the European Union will not have launched a CBDC by then, highlights the latest research report by German-domiciled think tank, dGen. This release which was published on September 9 focuses on the ramifications a major CBDC on the Eurozone as well as the potential of a digital Euro to be ahead of the pack.

As the crypto industry comes of age, regulators have found themselves at a cross-road in the creation of oversight mechanisms. Well, China which began research in this space as early as 2014 recently launched its digital yuan ‘DC/EP’, sparking a hype towards the global adoption of CBCD’s. Since then, a number of central banks including the European Union have floated the idea of piloting their own digital currencies.

The EU progress on CBDC’s has, however, been criticized by prominent contributors in Europe’s blockchain ecosystem including the Head of Frankfurt’s School Blockchain Center, Philipp Sandner,

‘[The] ECB’s reaction has been too slow. Especially, the benefits from a CBDC for the industry, e.g., based on programmable money, are currently neglected. Given Libra and the DC/EP, the ECB has to react quickly to keep its geopolitical position’.

According to the report, the launch of a digital Euro would be strategic for the region to continue its global dominance as the second most held fiat reserve; only this time a digital Euro will be used instead. Consequently, the research notes that a digital Euro has the potential to transform the global economy while acting as the fundamental pillar of a virtual monetary ecosystem in the Eurozone.

U.S Dollar Still Safe!

Unlike the Euro whose odds against the DC/EP are less favorable, dGen predicts that the digital yuan will not unseat the world’s reserve currency, at least not yet. The research highlights China’s political unrest as one of the factors that could hinder its CBDC’s global adoption at level to compete with the U.S dollar. In addition, smaller nations are more likely to adopt a digital dollar as opposed to the yuan given its already established dominance and ease of access globally. The research reads,

“In the coming decade, with the launch of a digital Dollar, digital Yuan, and digital Euro, we predict that smaller nations will take the path of least resistance, and opt for using and storing the digital Dollar.”

Global CBDC Integration Could Hit 60% in the next Decade

Other predictions made by the German think tank include the possibility of a 60% global CBDC integration by 2030. As per the dGen insights, three out of five nations will have completely replaced their fiat currencies with a central bank backed digital asset by then. On this front, China and Bahamas in the West Indies Caribbean have already set a pace based on the CBDC progress within the two jurisdictions.

Last but not least, the report predicted that CBDC’s will have to co-exist with private stablecoins which have now been in the crypto space for quite a while. This is because of their value proposition in the volatile cryptocurrency market as well as the ability to circumvent authorities through blockchain tech, regardless of their position when it comes to digital assets.

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Author: Edwin Munyui

Zcash Source Code ‘Halo 2’ Set to Eliminate the Need for Trusted Setup; Integration In 2021

The Zcash source code will soon be updated to a more efficient version of the underlying recursive proof composition, the basis of this privacy-focused project. According to a blog announcement by its parent company, Electric Coin Co. (ECC), they have since opened the source code of the latest product ‘Halo 2’ set for integration with Zcash (ZEC).

Halo 2, which has been touted as a game-changer in recursive SNARKS projects,’ seeks to remove the need for trusted setups in these ecosystems. Also, this technology increases the scalability of the Zcash blockchain and interoperability with other chains,

“An updated more efficient version of ECC’s recursive proof composition that eliminates the need for a trusted setup in Zcash. It may also advance a promising scalability solution for Zcash and other blockchains.”

Notably, Halo 2 has gathered support from prominent stakeholders in the crypto industry, including Ethereum Foundation, which allocated the team $120,000 back in July. With a launch date scheduled for early 2021, ECC is also in discussions with other players. This initiative might see the debut of Halo 2 on multiple blockchains, given a probable value in flexible and trustless cross-chain interoperations.

Halo 2 Fundamentals on Recursive SNARKs Tech

Halo 2 is different from the original Halo in that it uses ‘PLONK’ to verify transactions while the latter implemented ‘Sonic.’ The blog announcement details that the latest approach proposes more value to recursive SNARKS projects by compressing history and distributing computation through recursive proof composition. In doing so, the underlying blockchain transactions become lighter and faster, which eventually improves efficiency and eliminates the need for trusted setups. The original halo announcement in 2019 noted,

“Recursive proof composition holds the potential for compressing unlimited amounts of computation, creating auditable distributed systems, building highly scalable blockchains, and protecting privacy for all humanity.”

While it is yet to be voted for integration by the Zcash community, Halo’s fundamentals ideas are already being leveraged in recursive SNARKS innovations. Some notable projects that have adopted these ideas include Mir (Plonky) and Coda (Pickles). Mir which is being developed by Predicate Labs acknowledged the Halo 2 positive effect through the firm’s CEO, Brendan Farmer,

“Halo is a significant breakthrough in making recursive SNARKs practical: We now have a smaller field, faster provers, and no trusted setups.”

IOHK CEO and Cardano (ADA) founder, Charles Hoskinson called this new source code “halo is one of the most exciting workstreams that I’ve seen in the industry.” It will be interesting to watch the developments of the new Halo 2 over the coming months.

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Author: Edwin Munyui

Filecoin Is Currently Testing EIP 1559, A Proposal to Restructure Ethereum’s Gas Fees

The issue of rising gas costs on Ethereum might soon come to an end, should an Ethereum Improvement Proposal (EIP) currently being tested on the Filecoin network go through. Dubbed ‘EIP 1559’, this proposal is among those that have been suggested to reduce Ethereum’s network fees.

Announcing the development on Twitter, Ethereum’s founder Vitalik Buterin, highlighted that the solution seems to be working well on Filecoin,

“In case you missed it: recent writing on fee market reform (EIP 1559) …. Oh and it seems to be working great on Filecoin:”

Notably, Filecoin, which is a decentralized storage network, shares fundamentals with Ethereum hence the compatibility of innovations within both ecosystems. The project is, however, still in its early stages and is set to launch a Mainnet in September as per the latest Filecoin progress update.

The EIP 1559 Proposed Network Fee Solution

With activity rising in DeFi, Ethereum’s network continues to suffer congestion problems to an extent where profits end up being eaten up by transaction costs. The suggestions to work on these shortcomings gained momentum back in 2019 but have now become more critical than ever for Ethereum’s survival in the blockchain space.

Well, ETH-oriented developers seem to be catching up and could soon solve the rising gas cost problem. The EIP 1559 proposal, in particular, suggests the use of a ‘base fee’ for dynamic fee adjustments on Ethereum’s network. Ideally, this approach will constrain gas fee increments by altering the current calculation of gas fee on Ethereum.

The proposal introduces an automatically increasing base fee if the network is more than 50% utilized while decreasing the same if it is below 50%. In doing so, ETH users still have an option to get ahead of the queue by paying a tip in addition to the base fee. These funds will then be delivered to miners while the ETH used for paying the base fee is burnt.

Filecoin Marking Milestones!

As EIP 1159 makes progress, the Filecoin testnet in totality is also marking milestones as its native ‘FIL’ token launch approaches. The project recently incentivized developers to stress test its network under the ‘Filecoin Space Race’ program,

“Compete and collaborate at the same time. The top 50 miners in each region and the top 100 globally are eligible for rewards. The greater the total storage power, the bigger the total prize pool.”

This incentivized testnet has since recorded around 22 petabytes in total raw byte storage power with contribution from 295 miners. Going by the International Electrotechnical Commission 1998 metrics, this data can roughly be compared to 12,500 two-hour-long films.

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Author: Edwin Munyui

Bitcoin’s ‘Very Attractive’ as a Safe Haven, Many Wealthy Investors & Traders will Turn to it

Ex-Prudential CEO George Ball says Bitcoin could soon become sought after as a safe-haven asset, and many wealthy investors or traders will consider buying it after Labor Day.

In an interview with Reuters, the current chief executive officer of Sanders Morris Harris said he “always” has been an opponent of bitcoin, cryptocurrency, and the technology underpinning them blockchain.

But with all the monetary stimulus from the government, these digital assets make sense because “the government can’t stimulate the markets forever,” and the “liquidity flood will end,” sooner or later.

For now, thanks to government policies, stocks have been flying with S&P 500 just inches away from its all-time high.

“You’ve got a wash of liquidity, which is really what’s driving and holding the stock market up right now, the risk of an election,” said Ball.

He also clarified that Joe Biden’s win wouldn’t be a “catastrophe for the stock market,” as his tax policies are “benign.”

Precious metals have also been surging with gold hitting a new high above $2,000.

But when the money printer’s ink gets run out, which could happen around the fourth quarter, both traders and investors are going to need to “realign their portfolios substantially” in favor of the cryptocurrency.

And “if they print money, that debases the currency and probably even things like TIPS — Treasury inflation-protected securities — can be corrupted. So the very wealthy investor or the trader probably turns to Bitcoin or something like it as a staple,” said Ball.

So, it’s a win-win for bitcoin as in both cases, investors will be turning to Bitcoin and the time for that is now — “before the fuse is lit or when the fuse is lit and hasn’t expanded – exploded yet, which is probably now.”

He also points out how the largest digital asset isn’t about seeking a tax refuge, but it is something the government can’t undermine, and unlike fiat currency, bitcoin “won’t become worthless” either.

“There’s no yield today. And so Bitcoin or another cryptocurrency becomes very attractive either long term, I want to make a safe haven for my money or a short-term speculative bet… I think it’s where many people will turn after Labor Day.”

For Robinhood traders as well, when they don’t want to trade stocks down the line, as they have been doing throughout 2020, Ball believes they will be putting their money into the cryptocurrency market.

On Bitcoin skeptic Jamie Dimon, who once called it a “fraud,” talking about the digital asset, Ball thinks “Jamie’s at least a partial convert. I’m not sure that he’s a total convert.”

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Author: AnTy

Popular Bitcoin Payment App, Square CashApp, Considers Launching Short-Term Loans

Jack Dorsey’s Square might soon be offering loans of up to $200 through its P2P service platform, CashApp. This revelation follows a recent report by TechCrunch, which highlighted that the firm is testing the new feature with about 1000 users as of press date.

Notably, Square attributed this strategic move to some factors, including the uncertainty of a second U.S stimulus. According to the firm, the market demand for loans between $20 and $200 might expand significantly as a result.

Users who qualify for these loans will be given a one-month payback period with a 5% flat fee charged on leveraged funds. Calculated annually, the interest translates to around 60%. However, it may seem quite high; it is more favorable compared to average payday loans in the U.S, which in some cases are charged as much as 700%.

Should the borrowing parties default, Square intends to put a one-week grace period, after which a non-compounding interest of 1.25% will be added to the cost every week. With the testing still in play, a CashAPP spokesperson mentioned that they are looking forward to feedback from the 1,000 clients featured:

“We look forward to hearing their feedback and learning from this experiment.”

Square’s BTC Streak Continues

Other than its prospectus loan product, Square has been making headlines in the crypto scene and is now positioning itself as the go-to platform for Bitcoin purchases. The company’s Q2 revenue from Bitcoin totaled $875 million, with $17 million as the gross profit from BTC related transactions.

These stats are up by 600% and 711% YoY, respectively. Going by these stats, a move towards loan issuance might even expose a more significant population who initially couldn’t afford a stake in the crypto market.

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Author: Edwin Munyui

Coinbase More Likely to Opt for Direct Listing Given $8 Billion Valuation

Coinbase might soon forge a path for crypto exchanges to launch IPO’s or direct listings in the U.S following rumors that the San Francisco based firm is set to go public. A recent publication on Bloomberg Law by L2 Counsel founder, Louis Lehort, now argues that Coinbase is more likely to opt for a direct listing as had earlier been reported by Reuters. He said,

“Today, Coinbase is archetypal for the sort of company that might consider a direct listing: it is wealthy, having raised over $500 million during its time as a private company, and has a significant brand and following.”

He went on to add that the firm’s latest private financing round, which saw it raise $300 million, scaled the crypto exchange’s value significantly. While Coinbase is yet to confirm on which path it will take ongoing public, a direct listing would be in line with recent trends in Silicon Valley where startups are gradually embracing this approach in a bid to get better deals for their ideas.

Normally, it is the underwriters who include investment banks that take up the role of transitioning a private entity into a public one. This is done through the creation of new blocks of shares that are then sold in secondary markets like Wall Street. With a direct listing, underwriters who have been acting as ‘middlemen’ are eliminated from the process, an approach that could save companies tens or hundreds of millions, according to Lehort.

Should Coinbase choose to go this direction, its existing shareholders will sell their shares directly to the public through secondary markets. Though a rally in its share price is not guaranteed, the crypto exchange has done quite well for itself, given a 35 million strong customer base in its 8-year existence period.

It has since earned a reputational slang in the crypto industry ‘Coinbase Effect,’ which means that a digital asset price is likely to go up. This stems from the platform’s significant market share that has, in the past, boosted liquidity and rates for new digital currencies listed within its ecosystem.

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Author: Edwin Munyui