ETH 2.0 will Restrict the Supply and Drive Prices Up, But ‘Unlikely to Succeed as Planned’

Today is a big day for Ethereum as it surpasses 10 million blocks. Unlike the Bitcoin network where it takes 10 minutes to produce one block, Ethereum blocks are mined every 20 seconds.

The digital asset Ether is also recording 57% returns YTD as currently, Ether trades at $205. Moreover, in the past 30 days, Tether paid $757,000 in fees for the processing of transactions on the Ethereum network.

Launched in 2015, Ethereum remains the second biggest network that will go through the PoW to PoS transition in the coming years.

The Ethereum 2.0 roadmap reveals that it will be launched as early as July 2020 but will be implemented in three phases — Phase 0 Beacon Chain which is the one coming by the end of Q2 2020 and will introduce staking.

Phase 2 that will make Eth 2.0 network operational after its introduction at some point in 2022 as Ethereum co-creator Vitalik Buterin recently said, Eth 2.0 issuance could take two years at most.

Back in mid-April, Prysmatic Labs launched Topaz testnet that requires a deposit of 32 ETH, the minimum requirement for staking as planned for Ether 2.0 mainnet.

July launch is likely to be testnet…

The initial launch of Ethereum 2.0 will most likely operate as a testnet network for the new proof of stake (PoS) consensus ecosystem. As such, most of the smart contracts and economic activity will remain on the original network which will exist parallel to Eth 2.0. Moreover, initially, Eth1 coins could be converted into Eth2 but not back.

The issuance rate of Eth2 will depend on the amount of Ether participating in the staking process. And the more ETH is transferred into Eth2, the more coins will be issued. But the more coins are staked the lower the investment return but also lower the annual inflation rate.

The entire economy of Eth 1.0 will be later transferred to new network Eth 2.0, a transition that is “risky, highly complex and will take a considerable amount of time,” noted BitMEX in its latest report.

For Ethereum’s growth to continue, both the full node operators and consensus agents would be required to run larger computers, this would not only become increasingly expensive but could “eventually lead to increased centralisation,” and degrade the censorship resistance characteristic of the system.

As for the much-anticipated sharding for scalability, it would be added to the system in phase 1 which has now been scaled down to just 64 from the original 1,024 shards.

The beacon chain, the parent chain will contain links to each shard. Also, in phase 1, the sharding system and staking process will become interrelated.

An incredibly ambitious project…

According to BitMEX, because of constant experimenting with new and complex systems, Ethereum “satisfies a need in a community keen on trying new ideas.”

As such, a “considerable amount of funds will move into Ethereum 2.0 and earn the staking rewards, perhaps billions of dollars worth of ETH,” predicts BitMEX.

As for what will be the effect of the launch of Ethereum 2.0 on the price, in the short term, a significant amount of ETH will be locked inside the beacon chain attracted by taking which would “restrict the supply of ETH on the market and drive up the price.”

But at the same time, it could merely end up attracting ETH from other contracts where they are locked. But in order to drive long term value, Ethereum 2.0 needs to have sustainable demand as well.

However, before that, there is a lot to be done, the proof of stake and sharding need to work and be “compelling enough to attract the economically significant components of the Ethereum ecosystem over to it.” Moreover, smart contracts and DeFi systems would have to choose between the shards.

So, overall it will be “many years” before the Ethereum ecosystem makes the switch or at least a significant part of it. It said,

“Ethereum 2.0 is an incredibly ambitious project and we consider it highly unlikely that it will succeed as planned, without major hiccups.”

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Author: AnTy

“Bakkt Launch Will Be Anti-Climatic,” Says Trader But That’s Not the Key Question

  • A series of long wick down, not bearish
  • The volume takes a drop while the price continues to move downwards
  • Today could be the day we see the defining move with Bakkt around the corner

Bitcoin is struggling to stay above $10,000 ahead of the Bakkt launch.

Yesterday, Bitcoin went down to nearly $9,900 level and then today, dropped even lower to $9,842 before going back to $10,000. But we are back on a downward move.

Currently, BTC is trading at $9,959 with 24 hours loss of 0.44%, as per Coincodex.

“A ridiculous 4 hour chart, where every single candle has a down wick,”

shared trader Scott Melker. These series of long wick down he explains,

“implies dips being bought. It’s not bearish.”

Bitcoin’s bounce from just under $9,850, analyst The Cryptomist describes as the “perfect bounce of RSI support as suggested previously!”

And today she says “could be the day we see the defining move with weekly close” with Bakkt’s physically delivered daily and monthly Bitcoin futures launch just around the corner.

She, unlike Melker, however, is short on BTC price.

As we recently reported, veteran trader Peter Brandt is also bearish on price as he warned,

“Descending triangles are most often bearish.”

There is much speculation about Bakkt launch in the market, with the CT divided on the event turning out to be bearish or bullish.

“I have a feeling Bakkt launch will be anti-climatic. Perhaps a small fakeout up followed by price bleed after,”

said CryptoSqueeze.

But the key variable, as economist and trader Alex Kruger points out is “How much volume will Bakkt attract,” when VanEck’s “fake ETF” traded $0 in its first week while CME Bitcoin futures traded $460 million — with the current volume being around $700 million — on its first week.

As Jefferey Sprecher, the CEO of ICE, the company behind Bakkt, himself said, it is about curiosity and demand isn’t there yet.

The daily trading volume of BTC has further slipped down to $380 million.

However, Melker says,

“the volume on this weekend drop is non existent and there’s a potential bull div forming on the hourly,”

despite Bitcoin looking weak and everyone being bearish.

As such, “not all cloudy skies,” he added.

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Author: AnTy

Altcoins Surge As Bitcoin Price And Dominance Takes A Drop; BTC Rally Coming Soon

  • EOS, Tezos, and Maker leading the pack
  • BTC dominance takes a hit as well as price did of $200
  • However, A monster rally could be on the way

Bitcoin price took a hit before the weekend, going from $10,950 to about $10,200 level. However, soon after BTC price recovered.

Today, Bitcoin has been trading around $10,542 when it took another dump of over $200 in less than half an hour, going to $10,320.

Currently, BTC/USD is trading around $10,375 with 24 hours loss of 0.03%, as per Messari.

This year, while Bitcoin price soared over 200%, altcoins failed to show any signs of life.

However, this time, altcoins are taking over Bitcoin.

Majority of the digital currencies have been enjoying greens with EOS in the lead with 12.36% gains followed by Tezos, (9.11%), Tron (9.08%), and Maker (8.17%), at the time of writing.

Top altcoins like Cardano (6.34) Ethereum (5.97%), Bitcoin Cash (5.54%), XRP (4.53%), Bitcoin SV (3.71%), IOTA (3.56%) among others are also registering a fresh wave of greens after much time.

The total market cap in response rose to $269 billion, up from yesterday’s $260 billion but still need to catch up to $274 billion on Sept. 6.

BTC dominance meanwhile has gone down to 72.6 percent from the high of 73.4% on Sept. 6.

A Monster Rally on the Way?

There is no knowing yet if and when altcoins will start their bull run, as a good number of these digital currencies are still down between 85 to 95 percent. Some like Cardao are down even more than 95% from their all-time highs.

However, Bitcoin’s journey to a new high seems to have started.

For starters, the three consecutive negative weeks that we saw recently was last seen during the bull run of 2017.

Moreover, Bitcoin traders are increasing their exposure to the digital asset on futures trading platform BitMEX. As we recently reported the open interest on XBT (that represents Bitcoin) against USD has crossed $1 billion, reaching $1.06 billion mark.

It is fast approaching its all-time high of $1.22 billion, set on July 10.

This willingness of traders to risk more of their money on the future outcome of the leading cryptocurrency, however, fails to provide clarity on which direction BTC price will move as it is split between “shorts” and “longs” by 51.02% and 49.08% respectively.

However, recently trader Jonny Moe took to Twitter to advise investors to place their positions cautiously as chart suggests a potential drop to around $6,000 level.

“Update: Still anticipating a return to the parabolic trend. Previously had ~$5,500 on this chart, assuming a quicker return to mean. Since we’ve consolidated sideways for about 2 months, the downside is more like $6,000 now,” he said.

A good thing is, popular analyst PlanB emphasizing that BTC price, as it has been, will likely be below and above stock to flow model value every year, “cointegration, not correlation, is key.”

“Proof is in: bitcoin price is mainly driven by stock to flow, not by any other factor.”

As per this model, the Bitcoin price will go beyond $1 million.

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Author: AnTy

Bitcoin Gearing Up For A Price Move; Will It Hit $13k or $8k Is The Question

  • Weekend is here, get ready for fireworks
  • Bitcoin takes a hit, goes down to $11,200, this could eventually push to the daily s/r 10.7-8k says trader
  • A retest of the $11,120 is expected

Bitcoin went above $11,000 on August 4th and since then it has been trading above this level. Though the flagship cryptocurrency breaks above $12,000 a few times, during the same period, it couldn’t stay above this level for long.

Currently, BTC/USD is trading at $11,300, after a sudden loss of 3.92 percent in a few minutes, while managing the daily trading volume of $1.13 billion, which has come down from $1.9 billion, this week.

Weekend Is Here

Now, we have entered the weekend which during the last uptrend saw heightened activity.

Bitcoin, that trends 24/7, tend sot spike on weekends. Since the beginning of May, the surges in weekend activity has accounted for roughly 40% of BTC price gains.

In December 2017, Bitcoin peaked at $19,666 on a Saturday.

Cryptocurrencies trade around the clock, unlike securities on most traditional exchanges.

As for why prices tend to spike on weekends, there are some potential reasons such as crypto investors spend the weekends discussing news items with friends and other investors, moving them to trade crypto assets, and crypto companies choosing Mondays for announcements that has many traders trying to get ahead of the news by trading over the weekend.

FOMO Also Play a Part.

But even as prices rise on weekends, fewer people might be trading altogether, accounting for more pronounced price moves.

Bitcoin Propped For a Move

As we make it to the weekend, trader Credible Crypto is expecting more sideways movement before we ultimately continue to the upside. However, once we clear highs, he sees a strong rejection coming that a loss of $11,450 will confirm.

“Here is a very viable alternate count that may have us visit 11k sooner rather than later…Ultimately, still looking to long 10.8-11k and expecting continuation up after.”

Bitcoin, today did just that, fell down to $11,200 in a sudden and sharp move on the weekend.

Similar sentiments are shared by market analysts and trader Benjamin Blunts who says this move could turn out to be a B wave that could take us to $11,200 before we breaking down for wave C that will take us to $12,923.

According to analyst, The Cryptomist, RSI pennant has broken up and had a re-test which she says is often followed by bullish price action.

Bitcoin currently has resistance at $11,905 and support at $11,730.

A retest of the $11,120 is expected says trader Scott Melker in his BTC Adam & Eve update. However, trader CryptoISO says, “this could eventually push to the daily s/r 10.7-8k.”

Bitcoin looks to be prepared for a big move, but it’s to be seen if it would be to the upside or downside.

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Author: AnTy