“Fear” in The Crypto Market And Bitcoin’s Correlation With S&P 500 Climbs to Highest Level of 2021

Crypto assets are not really having a good time, with Bitcoin stuck around $56,500 and Ether below $4,300.

But crypto assets are not alone in that as speculative stocks aren’t any different as losses picked up in very-high-priced technology names as the bond market started to price in higher odds of rate hikes next year following President Joe Biden picking Jerome Powell for a second term as the Federal Reserve chairman.

“The big-cap tech names have become synonymous with the risk-on/risk-off trade. When the big-cap tech names move in a significant way, other risk assets move in tandem,” said Matt Maley, chief market strategist for Miller Tabak + Co.

This has the 100-day correlation coefficient of Bitcoin and the S&P 500 climbing to 0.33, which is among the highest readings of the year.

image1

A coefficient of 1 shows a strong correlation, while minus-1 would show they’re moving in opposite directions. The current figure means when stocks move up, Bitcoin is likely to do the same, and vice versa.

“The recent drawdown in Bitcoin and the rest of the cryptocurrency ecosystem has been tied to the selloff in the more risky growth names,” Art Hogan, chief market strategist at National Securities. “So you’re seeing cryptocurrencies come off, and you’re seeing the high-flying growth names come down.”

The lack of bullishness in the crypto market, except for particular crypto-assets, has the market sentiments turning to “fear,” as per Crypto Fear & Greed Index.

While some may feel this might be the end of the crypto market, others believe this could be a sign of an extended cycle.

“It’s very possible “extended cycle” could partially play out. Bitcoin could top early January or whatever. ETH a bit later on. Alts in April and maybe DeFi even separately from other alts. Not everything must converge on one top point in time,” said popular crypto investor @bitcoinpanda69.

Currently, there are a few potential factors that are playing a part in the market weakness, including a shifting macro outlook and crypto market conditions.

Within crypto, as price drops, open interest for BTC and ETH, which is a proxy for leverage, has “started to decrease as pressure is placed on existing long positions,” as per Coin Metrics.

As for Bitcoin miners, who are natural BTC sellers, their selling pressure has been minimal and is trending lower. Moreover, they use OTC desks to minimize their impact on the price. Recently, miners have started to HODL their BTC mining rewards.

image2

On a macro front, with the US bond yields, especially with shorter-duration maturities, on a sharp rise over the last few weeks, capital might be reshuffling from riskier crypto assets to a “risk-free” rate of return.

Amidst all this, JPMorgan Chase CEO Jamie Dimon couldn’t help but poke at cryptocurrencies. “It is not really a currency,” Dimon said at the Boston College series of CEO interviews.

These “crypto tokens” have no intrinsic value and have rallied on speculation fueled by government stimulus payments, he said, adding, “It is hysteria.”

Read Original/a>
Author: AnTy

Bitcoin’s Taproot Upgrade Explained – Privacy, Security, Scalability And Truly Decentralized Application Protocols

With Taproot only a few hours from activation, it seems like a good time to expand on the Taproot part from a previous ELI5 from a few months ago explaining what makes Bitcoin valuable, Lightning Network, and Taproot.

Taproot is arguably the biggest upgrade to Bitcoin’s base-layer protocol, introducing a new signature algorithm and scripting language. It brings a set of protocols that enhance Bitcoin’s privacy, security, scalability, fungibility and unlocks the infrastructure that will allow for seamless integration of L2/sidechain application protocols on Bitcoin.

Taproot was activated through the “speedy trial” approach. Under the speedy trial, miners were given three months to signal support for Taproot after the code was shipped. This required 90% of the blocks in a difficulty epoch (2016 blocks) to signal for Taproot. Activation was achieved at block height 687284 back in June.

Although some of the ideas included in the upgrade have been discussed for many years, the final iteration of Taproot was proposed by Bitcoin developer Gregory Maxwell in 2018. The upgrade is named after one of the three Bitcoin Improvement Proposals (BIPs) included in the upgrade – Schnorr Signatures(BIP 340), Taproot (BIP 341), and Tapscript (BIP 342).

By combining the Schnorr signatures with MAST (Merklized Alternative Script Tree) and introducing a new, slightly modified scripting language called Tapscript, Taproot expands Bitcoin’s smart contract capabilities while offering more privacy and security by making multi-signature transactions and complex smart contracts indistinguishable from regular bitcoin transactions.

Schnorr Signatures (BIP 340)

This part of the upgrade is a change to Bitcoin’s cryptographic digital signature algorithm. In asymmetric cryptography (public-private key pairs), digital signature algorithms define the generation of digital signatures using a private key that proves the ownership of a corresponding public key.

The existing Elliptic Curve Digital Signature Algorithm (ECDSA) of Bitcoin will not be replaced, but Schnorr signatures will be implemented in addition to it.

The Schnorr digital signature algorithm allows for something called key and signature aggregation using a protocol known as MuSig – multiple signatures created using multiple private keys corresponding to multiple public keys are combined to produce a single cryptographic digital signature corresponding to a single public key recorded on the blockchain.

keyaggregation

Key and Signature Aggregation

In addition to Schnorr signatures and public keys being smaller than ECDSA signatures and public keys, aggregation further helps reduce the footprint of multi-signature transactions and complex smart contracts, which will take up the same space as regular single-signature transactions and as all transactions will look indistinguishable on the blockchain, the privacy benefits are fairly obvious. The privacy also extends to Lightning Network as on-chain transactions to open and close Lightning channels can no longer be identified from the keys and signatures in the channel or the script used.

Unlike ECDSA signatures, Schnorr signatures are provably secure and inherently non-malleable, meaning a third party cannot alter an existing valid signature under any circumstance. Segregated Witness (SegWit) addressed transaction malleability, Schnorr signatures address signature malleability.

There are also significant computational benefits for nodes, as key aggregation will allow nodes to verify signatures in batches, but these benefits can only be realized with time once Schnorr signatures become widely adopted.

Modifying the digital signature algorithm, per se, doesn’t affect anything on the blockchain. Schnorr is a different, more efficient way of generating digital signatures.

When Satoshi originally developed Bitcoin, Claus Peter Schnorr, the inventor of Schnorr signatures, had a patent on it. It is speculated that Satoshi may have otherwise opted for Schnorr signatures over ECDSA, which was a rigorously tested open-source alternative developed later, even if in a somewhat obligately inefficient manner as not to constitute an infringement of the patent, which expired in 2008.

There was a suggestion to use a different name, Discrete Logarithm Signatures was briefly mooted while adapting Schnorr signatures for Bitcoin as some people felt that Claus Peter Schnorr’s name shouldn’t be used in association with Bitcoin after he prevented the widespread use of such a powerful signature scheme for over 20 years.

Taproot (BIP 341)

This part of the upgrade leverages the Schnorr signature scheme to enable Merklized Alternative Script Trees (MAST) and defines the rules for a new output type based on SegWit known as Pay-to-Taproot (P2TR), which leverages the capabilities of Schnorr signatures.

MAST is a privacy solution that uses Merkle trees as part of the script’s structure to address some long-standing issues with transactions using Pay-to-Script Hash (P2SH) and Pay-to-Pubkey Hash (P2PKH) locking scripts where all possible spending conditions of a transaction are revealed.

Screenshot122

P2TR Significantly Optimizes for Block Space Economy

P2TR combines two separate locking scripts – P2SH and Pay to Pubkey (P2PK), which is a simpler version of P2PKH that locks an output to the public key rather than a hash of the public key.

This allows P2TR outputs to be spent by either a script (smart contract) or a public key, but by allowing different spending conditions of the output to be individually hashed, only the specific spending condition met is revealed, and thanks to Schnorr signatures, they’re all indistinguishable on the blockchain.

Tapscript (BIP 342)

This part of the upgrade modifies Bitcoin’s scripting language to enable the new transaction types introduced by the two proposals above using new opcodes (operation codes), which are commands in Bitcoin scripts with predefined functions.

The goal of Tapscript is to make Schnorr signatures, batch verification, and signature hash improvements available to spends that use the script path as well as the public key path. It enables nodes to create and validate P2TR outputs.

Existing signature opcodes for ECDSA are modified to verify Schnorr signatures. Two existing opcodes that define verification of multi-signature transactions are disabled and replaced with a new opcode (OP_CHECKSIGADD) to enable batch verification of signatures.

Tapscript also allows adding new signature validation rules through softforks and introduces another new opcode (OP_SUCCESS) to enable the seamless introduction of future opcodes to Tapscript.

Impact of Taproot

Bitcoin’s script is deliberately limited and intentionally non-Turing complete in order to retain simplicity, security, and efficiency. Linear optimization is one of the main considerations for upgrades to the script to ensure decentralization – that any individual can economically self-host a node and trustlessly validate the blockchain.

Taproot is a forward-compatible soft fork, meaning old non-upgraded nodes will recognize the new blocks as valid. At the time of writing, more than 53% of ~ 60,000 Bitcoin nodes support Taproot. Non-enforcing nodes will reject transactions spending from P2TR outputs until they upgrade node software but will accept blocks containing transactions spending from P2TR outputs.

The significance of Taproot cannot be measured merely by what the above proposals enable for Bitcoin but what they represent for the future of Bitcoin by introducing new tools to make future upgrades easier to implement, simpler, safer, and more private.

Such upgrades waiting in the wings include cross-input signature aggregation, channel factories, state chains, and covenants, which enable advanced application protocols to be built on top of Bitcoin without placing any undue burden on full-node users, thereby preserving Bitcoin’s inviolable security and decentralization.

Read Original/a>
Author: Lamps T

“I’m Spending Almost All My Time” on Regulatory Compliance, says Binance CEO

“I’m Spending Almost All My Time” on Regulatory Compliance, says Binance CEO

The leading cryptocurrency exchange is currently on a hiring spree to increase the size of its compliance and legal teams along with remedying the issue of not having a headquarters which was a move towards a “decentralized organizational structure.”

The number one priority of Binance right now is to hire people with compliance and regulatory experience, said Chief Executive Officer Changpeng “CZ” Zhao.

“I’m spending almost all my time” on the compliance drive, Zhao said in an interview with Bloomberg TV. “I’m not really involved in the day-to-day operations of the exchange.”

However, he is hopeful that the regulators will get things right, if not right away.

“When new crypto regulations come in, many of them are restrictive and that is expected, but over time we think regulations will adjust with market demand and hopefully will get better.”

According to him, the US is “very mature” on the crypto regulation part and is, in fact, “leading now.”

Zhao is also “fairly confident” that SEC commissioner Chair Gary Gensler will “do the right thing” when it comes to regulating the crypto space and on the prospect of a Bitcoin ETF.

“Gary is one of the most knowledgeable people in the regulatory space about crypto.”.

Besides increasing the size of their compliance and legal teams, Binance is also working on remedying the issue of not having a headquarters which was a move towards a “decentralized organizational structure.”

Meanwhile, commenting on the recovery in crypto prices, CZ said they are seeing “more people buying.”

Hiring Spree

The leading cryptocurrency exchange is on a hiring spree and is also seeking regular meetings with US officials.

The exchange is currently in talks with a former senior Singapore bourse executive, Richard Teng, who stepped down as head of the Abu Dhabi Global Market in March after six years, to be the chief executive officer at its local business in the Asian financial hub, reported Bloomberg citing people familiar with the matter. The exchange has reportedly also approached other executives about the position.

Teng spent 13 years at the Monetary Authority of Singapore (MAS) and was previously Singapore Exchange Ltd.’s chief regulatory officer.

Its Singapore unit, Binance Asia Services Pte, is currently operating within a grace period while the MAS reviews its application for a license to provide digital payment token services. The regulator granted two such “in-principle approval” this month.

Another one is the latest hire Greg Monahan, the former US government criminal investigator at IRS and will lead Binance’s global money laundering reporting.

The exchange faces a probe by the Internal Revenue Service (IRS) and the Department of Justice into potential illicit activities. Monahan said in a statement,

“My efforts will be focused on expanding Binance’s international anti-money laundering and investigation programs, as well as strengthening the organization’s relations with regulatory and law enforcement bodies worldwide.”

The firm said that Karen Leong, who previously held the top money-laundering role at the exchange since 2018, will become a director of compliance. CZ in the statement said,

“We are always expanding our capabilities to make Binance and the wider industry a safe place for all participants.”

Read Original/a>
Author: AnTy

Another Futures-backed Bitcoin ETF Filed for “Significant Investor Protections”

This time it’s from Mike Novogratz’s Galaxy Digital under the Investment Company Act of 1940.

Mike Novogratz’s Galaxy Digital has filed for a Bitcoin futures exchange-traded fund (ETF) with the SEC.

The Fund will not invest directly in Bitcoin rather in the futures trading on the regulated platform CME.

This prospectus has been filed under the Investment Company Act of 1940, much like four other applications from VanEck, ProShares, Valkyrie, and Invesco, after SEC Chair Gary Gensler signaled openness to futures-based ETFs that provides “significant investor protections.”

The SEC, however, has yet to approve a single crypto ETF while several, in double digits, have been filed with the US regulator.

Unlike the physically-backed ETF that would track Bitcoin more closely, “Bitcoin futures ETFs, if approved by the SEC, could cost investors 5-10 percentage points in annual returns by rolling contracts from one month to the next, potentially limiting their appeal,” wrote ETF Analysts for Bloomberg, Eric Balchunas and James Seyffart in a note.

Galaxy also filed for a Bitcoin ETF in April and is the sub-advisor to the CI Galaxy Bitcoin ETF, which has $256 million in assets along with the CI Galaxy Ethereum ETF, which has almost $510 million in assets.

Read Original/a>
Author: AnTy

Not the Time to Pick Winners or Losers in Crypto Tech, says Tesla CEO as Treasury Crusades Against the Industry

Not the Time to Pick Winners or Losers in Crypto Tech, says Tesla CEO as Treasury Crusades Against the Industry

The controversial bipartisan infrastructure bill with its crypto tax provision gained new supporters in the form of Tesla CEO Elon Musk, who tweeted early on Saturday,

“This is not the time to pick technology winners or losers in cryptocurrency technology. There is no crisis that compels hasty legislation.”

This support came in response to cryptocurrency exchange Coinbase co-founder and CEO Brian Armstrong discussing the competing amendment proposed by Mark Warner and Rob Portman and calling it “disastrous” because it supports one foundational technology over the other.

White House actually came in support of the Warner-Portman amendment as we reported, and according to a WSJ report, Treasury Secretary Janet Yellen has spoken to lawmakers to raise objections to the effort led by Senate Finance Committee Chairman Ron Wyden along with Cynthia Lummis and Pat Toomey, which the crypto community supports.

“Word in DC is that this whole thing was Treasury’s idea. They don’t like what we’re building & their solution is to obtain jurisdiction over non-custodial actors. They tried this via FinCEN’s proposed rule last year & failed. Now they’re trying again,” said Jake Chervinsky, general counsel at Compound Finance.

Senator Toomey also spoke against Treasury’s attempt to gain maximum flexibility to regulate and tax crypto as they see fit, which he urged Congress shouldn’t allow to happen.

“Good policy apparently isn’t the priority here. Instead, this looks like a continuation of the US Treasury Department’s embrace of warrantless surveillance & crusade against financial privacy in crypto,” said Chervinksy.

The Portman-Warner amendment only protects proof-of-work (PoW) miners and some wallet projects but excludes the likes of Lightning node operators, software developers, PoS validators, DeFi aggregators, DEX liquidity providers, and many other non-custodial actors who can’t comply with the law.

“This is the government trying to pick winners and losers in a nascent industry today, where some new technology is being developed every month. They are guaranteed to get it wrong, by writing in a few exceptions by hand today,” said Coinbase CEO.

According to Armstrong, the Warner-Portman amendment will only result in driving the future development of blockchain technology offshore at a time when crypto is still in its early stages.

Innovators in the US are working to make crypto networks better, which will bring enormous benefits to Americans and help ensure its place as a financial hub, he said, added: While everyone must pay their taxes that can’t be ensured by destroying the innovations in the process.

“We can all agree that centralized exchanges should be subject to the reporting requirement included in this bill, just like brokers would be subject to report other assets. But why rush and get it wrong?” said Toomey.

Read Original/a>
Author: AnTy

Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report

Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report

After five weeks of consecutive outflows, digital asset investment products finally saw inflows last week totaling $63 million in the week ending July 2nd, according to CoinShares’ data.

It was also the first time in nine weeks that inflows were seen across all individual digital assets, “implying a turnaround in sentiment amongst investors.”

Bitcoin saw the most inflows at $39 million, a minor update to the previous weeks’ data highlighting a two-week run of inflows now.

Compared to Bitcoin’s (BTC) two consecutive weeks of inflows, Ethereum (ETH) had three weeks of inflows totaling $18 million. BTC -3.93% Bitcoin / USD BTCUSD $ 33,931.74
-$1,333.52-3.93%
Volume 26.85 b Change -$1,333.52 Open $33,931.74 Circulating 18.75 m Market Cap 636.18 b
6 h Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report 7 h Aave Pro for Institutional Investors Is Coming This Month ‘Due to Extensive Demand’ 8 h Grayscale Bitcoin Trust (GBTC) Unlocks Coming to an End, They Aren’t Bearish But Bullish for BTC Price
ETH -4.59% Ethereum / USD ETHUSD $ 2,217.74
-$101.79-4.59%
Volume 20.24 b Change -$101.79 Open $2,217.74 Circulating 116.57 m Market Cap 258.53 b
6 h Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report 7 h Aave Pro for Institutional Investors Is Coming This Month ‘Due to Extensive Demand’ 10 h Smart Money Is Becoming Bullish on Ether, Bitcoin, and Cryptocurrencies Again

image1

While inflows have finally come in, Bitcoin investment product trading turnover was the lowest since November 2020. According to CoinShares, a similar observation was seen more broadly across the whole of the Bitcoin ecosystem, with volumes down 38% relative to the average for 2021.

Among altcoins, Polkadot (DOT) had the highest inflows of $992.1 million followed by XRP and Cardano (ADA) at $512 million and $90.7 million respectively. DOT -4.11% Polkadot / USD DOTUSD $ 15.36
-$0.63-4.11%
Volume 844.83 m Change -$0.63 Open $15.36 Circulating 957.84 m Market Cap 14.71 b
6 h Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report 5 d After Compound Finance, Now Coinbase is Offering Users 4% APY on USDC 6 d Coinbase’s Goal is to List ‘Every’ Crypto Asset, says CEO Brian Armstrong
XRP -5.18% XRP / USD XRPUSD $ 0.66
-$0.03-5.18%
Volume 2.08 b Change -$0.03 Open $0.66 Circulating 46.15 b Market Cap 30.45 b
6 h Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report 3 d BIS: Crypto Investors’ Objectives Are Same as Other Asset Classes, “So Should Be The Regulation” 4 d Japan’s SBI Holdings Says XRP Ledger Can Be Used To Build NFT Markets
ADA -2.86% Cardano / USD ADAUSD $ 1.42
-$0.04-2.86%
Volume 1.78 b Change -$0.04 Open $1.42 Circulating 31.95 b Market Cap 45.22 b
6 h Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report 1 d Cardano (ADA) Gains 3rd Largest Weightage in Grayscale’s Rebalanced Large Cap Fund 1 w Three Consecutive Weeks of Bitcoin Outflows Mark the Longest Bear Run Since Feb 2018

Inflows of $0.6 million were seen into multi-digital asset investment products; however, this was much smaller than previous weeks suggesting investors were less interested in diversification.

When it comes to digital asset managers, the largest one in the world, Grayscale still hasn’t seen any while its AUM is currently at just above $30 billion. Meanwhile, the second-largest CoinShares had net outflows with its AUM now at almost $3.3 billion, with 3iQ also recording net outflows.

Read Original/a>
Author: AnTy

Lightning Network Hits 1,500 BTC Capacity For the First Time as it Gains Traction in El Salvador

Lightning Network Hits 1,500 BTC Capacity For the First Time as it Gains Traction in El Salvador

Bitcoin layer 2 payments solution Lightning Network that enables faster and cheaper transactions has grown to surpass the capacity of 1,500 BTC for the first time.

Between the period of March 2019 and May 2020, the Lightning network capacity has been pretty stagnant, keeping between 800 and 1,100 BTC.

But about a year back, it started seeing growth which started to record a serious uptrend only this year. In January, LN capacity remained above 1,000 BTC only to hit 1,200 BTC for the first time in April this year.

image1

Besides network capacity, the number of channels is close to hitting 50,000, another new all-time high, which started to increase in August last year.

The number of nodes with and without channels is also on the same path, ready to hit 21,500 for the first time. Lightning nodes basically open payment channels with each other that are funded with BTC. When transactions are made across those channels, the channel balance is reflected without having it to be broadcasted on-chain creating a second layer on top of the bitcoin network and expanding its capabilities.

This growth can be attributed to El Salvador, which recently declared Bitcoin legal tender. Currently, Lightning-enabled wallets, Strike and Bitcoin Beach are the top free financial apps in the country followed by Binance and Crypto.com.

Interestingly, last week, Jack Dorsey hinted that Twitter will be integrating the payments network.

Lightning Network integration into Twitter or BlueSky is “only a matter of time,” said Dorsey in response to someone asking about the same after the Twitter founder appreciated Lightning Network-powered messaging app Sphinx Chat.

The long-term Bitcoin proponent recently also shared that his payments company Square is considering making a Bitcoin hardware wallet.

Read Original/a>
Author: AnTy

PwC Report: Boom Time For DeFi Sector As Crypto Hedge Funds Show Growing Interest

PwC Report: Boom Time For DeFi Sector As Crypto Hedge Funds Show Growing Interest

A newly released report by PricewaterhouseCoopers (PwC) and Alternative Investment Management Association (AIMA) has shown that hedge funds’ interest in decentralized finance (DeFi) is growing.

The research titled the 2020 Global Crypto Hedge Fund Report was conducted in Q1 2020, polling responses from the world’s largest global crypto hedge funds by assets under management (AUM). It specifically focused on funds that invest and trade in cryptocurrencies.

Chainlink, Polkadot, Aave Lead Altcoins In Survey

The report indicated that Chainlink (LINK), Polkadot (DOT), and Aave tokens had grown in popularity as they were in the top five cryptocurrencies hedge funds were investing in.

While the report showed Bitcoin leading as the most popular asset among funds, Ethereum and Litecoin followed suit, featuring 67% and 34% respectively of all crypto hedge funds surveyed. DeFi tokens Chainlink and Polkadot closed up the top five crypto assets with 30% and 28%, respectively, while Aave came at number five with 27%.

The research also noted that some altcoins were more popular than their market capitalizations would suggest. The research reads,

“Among the top 15 traded altcoins, some of them are considerably more popular than their market capitalization would suggest. Litecoin and Chainlink are the second and third most traded altcoins, but their market capitalizations are far lower than Polkadot and Cardano, which fare lower in the trading ranks.”

Also shocking was the discovery that almost 31% of crypto hedge funds use decentralized exchanges (DEXs), according to the report. With Uniswap being the most widely used DEX (16%), followed by 1inch (8%) and SushiSwap (4%).

According to PwC, the total number of assets under management of crypto hedge funds globally doubled in 2020, climbing from $2 billion in 2019 to $3.8 billion.

Crypto hedge funds were also found to be actively involved in staking, lending, and borrowing activities.

Crypto Hedge Funds Push Bitcoin Price By Buying The Dip

According to reports, Crypto hedge funds bought the dip as they saw the crypto market crash as a chance to buy Bitcoin for less.

This was after former Morgan Stanley Trader, Felix Dian encouraged hedge funds to buy the dip, suggesting that this was why they were in the digital currency market.

Professional investors also treated the Bitcoin crash as an opportunity to buy Bitcoin at a discount. Institutions reportedly bought 34,000 Bitcoin on Tuesday and Wednesday last week after selling as much as 51,000 Bitcoin over the previous two weeks.

The buyer pressure was said to have impacted Bitcoin’s price positively by briefly pushing it up to $42.172 before it later dropped to $36,808, following the news of China’s crypto crackdown.

Meanwhile, in recent times banks have launched several cryptocurrency offerings. The latest move was made by investment bank Cowen which partnered with blockchain technology provider PolySign earlier this month to provide qualified institutional clients access to cryptocurrencies.

Read Original/a>
Author: Jimmy Aki

China Bans Crypto For the 100th Time; Hong Kong to Restrict Retail Traders From Exchanges

Breaking: China Bans Crypto For the 100th Time; Hong Kong Proposal Seeks to Restrict Retail Traders From Exchanges

Cryptocurrency exchanges in Hong Kong are set to be prohibited from offering services to retail crypto traders following a new government proposal.

Hong Kong Floats New Proposal On Licensing Crypto Firms

The legislative proposal, which Hong Kong’s Financial Services and Treasury Bureau (FSTB) floated, has now moved past its consultation period, Reuters report.

During its consultation conclusions, the FTSB disclosed that all virtual asset service providers (VASPs) or cryptocurrency exchanges operating in Hong Kong would need a license to do so once the law is passed.

The regulator also said the services of cryptocurrency exchanges would now be restricted to only professional investors. The exchanges would be prohibited from offering services to retail traders until the initial stage of the licensing regime is over.

According to Hong Kong law, an individual must have a portfolio of HK$8 million ($1.03 million).

Hong Kong has one of the largest cryptocurrency exchanges in operation. Its opt-in approach under which exchanges can either choose to apply to be licensed by the regulator or not has provided a flexible environment for exchanges to operate in.

This new rule could drive exchanges out of Hong Kong and push investors onto unregulated venues.

Hong Kong Tightening The Noose On Anti-Money Laundering Regulations

Like many other countries, the Hong Kong Government has been assessing how they can regulate the cryptocurrency industry. Lack of investor protection and money laundering are particular concerns of the country.

Today’s announcement forms the conclusion of a consultation process that ran from November 2020 to the end of January 2021.

The Hong Kong government is also reportedly planning to empower the city’s Securities and Futures Commission (SFC) to withdraw the licenses of already authorized crypto exchanges.

When signed into law, the proposal would see the SFC provided with necessary intervention powers to impose restrictions or prohibit companies from providing crypto services.

Away from the companies, the proposal would also bring the SFC more powers to protect clients against potential misconduct from VASPs.

Other Asian countries like Singapore and China also have their regulations regarding cryptocurrency. Singapore requires all crypto exchanges to be licensed before they can operate, however unlike Hong Kong, retail traders can invest.

China recently reiterated its tough stance on cryptocurrencies. On Tuesday, the country announced a ban on banks and payment companies offering crypto-related services.

Read Original/a>
Author: Jimmy Aki

Bitcoin Dominance on a Decline for 8 Weeks Straight to Hit Three-Year Low

Time and again, the Bitcoin price will make a strong upward movement, but instead of continuing the momentum, it ends up back down again. As of writing, BTC/USD has been trading around $57,500.

It has been due to lack of momentum in Bitcoin and the surging Ether prices, which hit a new all-time high yet again at $3,550 and 0.06348 BTC, that the dominance of the leading cryptocurrency continues to decline. ETH -1.11% Ethereum / USD ETHUSD $ 3,488.63
-$38.72-1.11%
Volume 44.11 b Change -$38.72 Open $3,488.63 Circulating 115.77 m Market Cap 403.87 b
8 h Tala Partners With VISA To Drive USDC Adoption in Emerging Markets 9 h Bitcoin Dominance on a Decline for 8 Weeks Straight to Hit Three-Year Low 10 h Uniswap V3 Recording $265M in Liquidity and $70M in Volume After Going Live on the Ethereum Mainnet

Bitcoin dominance has been declining throughout this year, so far, and for seven straight weeks, it has printed only red candles.

On Dec. 28, 2020, BTC dominance was at 73.67%, which has now fallen to nearly 45%, last seen in mid-July 2018. The lowest it even went down was at 35.5% on Jan. 8, 2018, when altcoins peaked during the last bull market.

image1

Since the beginning of 2017, when initial coin offerings (ICOs) first became popular in the market, Bitcoin dominance has been on a decline. The metric, however, has become meaningless over time, noted Qiao Wang.

“BTC dominance is now at ~45%, and is probably heading lower,” because of a combination of reasons including the success of Ethereum and other smart contract crypto-commodities, the proliferation of crypto-equities, and froth, he added.

Party to Continue

With Bitcoin price around $58,000, Ether around $3,500, and the total crypto market cap on its way to hit $2.5 trillion, we are experiencing a bull rally, which according to some, could very well be a super cycle.

While that remains to be seen, the ongoing lack of momentum in Bitcoin along with other risky assets is the result of inflation expectations keep on rising and bond yield having stalled, which has real rates falling and deep into negative territory, said Charlie Morris, founder of ByteTree.

“It’ll be back when yields turn up assuming inflationary pressures remain,” he added.

This week, as we reported, Treasury Secretary Janet Yellen, who previously served as the chairman of the Federal Reserve, spooked the market with the talks of raising the interest rates to prevent overheating of the economy.

But Yellen does not directly impact rates in her current position, and the markets have recovered nicely since then.

It is Fed Chair Jerome Powell who is in charge, and he remains dovish as he has repeatedly said that rates will be kept low at zero and inflation target 2% until full employment and economic recovery is achieved.

So, “the party will continue for as long as the fundamentals stay the same,” writes analyst Mati Greenspan.

Read Original/a>
Author: AnTy