Ethereum Exchange Reserves on a Sharp Decline While Locked ETH Continues its Uptrend

Activity on the second-largest network is thriving.

Since early this year, daily transactions on Ethereum have been growing, hitting an all-time high last month. Although it has come down some as DeFi mania cooled down, daily transactions are keeping to July-August level.

Ethereum fees have also gone back to normal levels as the DeFi rush came to an end, which in August sent average fees to $10 for the first time, bringing Ethereum’s scaling issues into glaring light.

With the upgrade coming up to keep the fees down for another potential growth spurt, it “would mean less demand for the token because people would need to buy fewer coins to do the same operations. From developers to end-users, it will largely reduce the buying pressure,” wrote analyst Mati Greenspan.

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Moreover, as per Glassnode, the popular stablecoin Tether transaction volume on Ethereum also saw a 20% spike over the past 30 days. It reached a new milestone of $600 billion.

“Tether’s important role in the digital asset ecosystem… If you were to add tether’s usage on other chains such as Tron, Omni, and Algorand, the headline figure would be higher still,” said Paolo Ardoino, CTO at Tether and its sister company crypto exchange Bitfinex.

Out of the total supply of $16 billion, USDT’s supply on Ethereum has also exceeded $10 billion, representing nearly 65% of the Tether token supply on a blockchain.

7.6% of ETH’s Total Supply Out of the Market

Amidst this growing activity, Ether’s amount on exchange wallets has been declining ever since May, as per Crypto Quant. Ethereum exchange reserves have fallen to 11.8 million ETH from the mid-May high of 14.14 million ETH.

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This trend coincides with the ETH that hasn’t been moved in over a year, which has reached 60%.

Additionally, 8.7 million of ETH are currently locked in the decentralized finance (DeFi) sector, as per DeFi Pulse.

“7.6% of ETH’s total supply is currently locked in the DeFi ecosystem. The amount of ETH locked in DeFi increased by a record high of 3.3M in September and has grown by 5.6M in 2020. That’s 2M more than the total supply of ETH has increased this year,” as per The TIE.

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The only factor lagging is Ether’s price, which is currently trading around $380, up only 188% YTD and still down 75.76% from its ATH.

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Author: AnTy

PwC: “Large Crypto Unicorns to Become Increasingly like ‘Crypto Octopuses'”

The value of the M&A’s in the cryptocurrency world saw strong growth this year as it exceeded the total of 2019 just in the first six months of 2020, according to PwC’s latest report on the crypto merger, acquisition, and fundraising landscape.

Compared to last year’s $481 million, the first half of this year recorded $597 million in global deal value as tie-ups became less frequent but bigger.

In the first half of 2020, there were 60 tie-ups versus 125 in the whole of 2019, said PwC.

However, activity continues to shift away from the US as the volume in Asia-Pacific and Europe, the Middle East, and Africa was 57% compared to 51% last year.

The biggest deal of 2020 was made by Binance Holdings, which purchased CoinMarketCap for $400 million. PwC Crypto Leader Henri Arslanian said,

“We expect crypto M&A activity to remain strong for the coming months particularly with some of the larger or more profitable players acquiring firms that offer ancillary services to their current offerings.”

“We should expect the large crypto unicorns to become increasingly like ‘crypto octopuses’ by acquiring or investing in various ancillary businesses in order to remain dominant.”

Digital asset manager CoinShares also anticipates the materialization of a “more robust M&A market” but says significant industry consolidation is likely to come first to clean up the market fragmentation.

According to them, crypto companies need to demonstrate the ability to generate recurring revenue and stable cash flow, consistent delivery on growth metrics, low margin volatility and above-average margins, low revenue concentrations, and low founder involvement.

According to PwC, the first of the year also saw a spike in fundraising involving trading companies or cryptocurrency exchanges, which has been attributed to the rising digital asset prices, greater regulatory clarity, and increased institutional interest.

2020 saw legendary investor Paul Tudor Jones putting money in crypto, boosting demand from bigger players and MicroStrategy and Square making bitcoin a part of their Treasury.

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Author: AnTy

MetaMask Active Monthly Users Grow 400% Thanks to Mobile App And ‘DeFi Revolution’

With a growth of more than 400% in the last year, crypto wallet MetaMask has reached the milestone of one million monthly active users on both mobile and desktop apps combined.

According to Talia Knowles-Rivas, Head of Marketing, Developer and Consumer Products at ConsenSys, the recent launch of MetaMask Mobile played an “important role” in bringing new users.

USA, India, Nigeria, and the Philippines are the top four countries in mobile users’ volume.

Just a couple of months back, the popular Ethereum wallet’s open-source code was taken over by ConsenSys.

On the Back of DeFi Boom

Over the last twelve months, significant growth in the adoption of Web3 games, DAOs, and the rapid consumer uptake of DeFi products and services further accelerated this growth curve.

“This 2020 curve parallels the trend in DeFi adoption, indicating that new users are coming to MetaMask specifically to participate in the decentralized finance revolution,” noted Knowles-Rivas.

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Instead of buying and storing ETH, MetaMask’s new phase of growth is powered by much more than just that. It was actually driven by providing the ability to invest, sell, lend, and borrow and use the popular DeFi protocols like Uniswap, Curve, Yearn, Aave, and Maker.

In the past few months, the Decentralized Finance (DeFi) sector has exploded into popularity, with more than $10 billion locked in it.

With most of the DeFi projects asking users to connect their wallets and MetaMask being the wallet provider the most used on them, it makes sense that just like DeFi bloom, activity on MetaMask also exploded.

With Metamask, users can not only purchase and store ETH but also browse DeFi protocols and exchanges and connect their wallets directly to start trading.

Be Careful!

MetaMask allows one to run Ethereum decentralized applications (Dapps) without running a full Ethereum node. As such, the DeFi boom especially helped in achieving this milestone.

But amidst this, one user, who professionally stops hacks from happening, shared the incident of getting hacked for $40,000 secured through his Metamask and Ledger.

He advised people to wake up and secure their funds as there are so many different easy to get hacked.

With the hackers always on the lookout to steal funds, to minimize the risk of getting your MetaMask hacked, secure it with hardware wallets like Ledger or Trezor, revoke access to apps used, and change wallets regularly.

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Author: AnTy

Crypto Funds Reporting ‘Impressive’ Performance This Year

Bitcoin had a good start in 2020, starting the year at around $7,200. During the market-wide crash in March, the digital asset crashed to $3,800 but only to surge to the yearly high of $12,630 in mid-August.

Up until August 31st, bitcoin recorded a return of 66.6%.

During the same period, Pantera unveiled returns of over 100% across various funds the firm manages, with its bitcoin fund gaining 61%, revealed the firm in its September 2020 investor letter. It was the company’s digital asset fund that recorded 168% returns and the ICO fund having a whopping 323% uptrend while the long-term ICO fund had a 270% return.

The outperformance of other funds has been primarily because of DeFi tokens that rallied hard between May and September of this year. The firm had invested in about 40 ICOs over the years.

Pantera’s Chief Investment Officers also pointed to DeFi as the main driver behind their portfolio performance. “We’ve been positioning the funds towards decentralized finance,” which they started acquiring some years back.

One of the largest digital currency funds in the space, Pantera, has reportedly nearly $500 million in AUM, compared to the largest asset manager Grayscale’s $5 billion AUM.

Also Read: Grayscale Bought 17,100 BTC Last Week, Now Holds 2.4% of Bitcoin’s Supply

Promise for value investing in crypto

Off The Chain Capital is another one that saw returns of 93% YTD compared to 57.2% returns posted by crypto funds during the same period.

The $40 million fund is also in talks to purchase about 1% of crypto-payments processor BitPay and another stake in the crypto exchange Kraken. Back in March, the Florida-based company bought 1% of Polychain Capital and then a year ago a stake in Digital Currency Group.

Additionally, Off The Chain has been buying claims of creditors of Mt.Gox every week and is its largest buyer.

“I learned about Bitcoin” in 2014, said Brian Estes, who runs the fund. “Coming from traditional finance, I thought it was just a scam. After the Mt. Gox hack, my value instincts kicked in, I started doing due diligence. I read the Satoshi white paper, and it clicked with me.”

It was when he started investing in bitcoin and crypto startups like Coinbase. His son actually grew his money from $500k to almost $10 million at the end of the 2017 bull run, which Estes then bought and opened to outside investors last year.

Additionally, it is packaging Bitcoin and Ether into equity-like investments to sell them through brokerage firms.

“Even if Bitcoin doesn’t move, we are making 40-60% a year on harvesting these premiums,” Estes said.

“Off The Chain’s reported performance this year has been impressive and may indicate promise for value investing in the crypto space, even as it has fallen out of favor with traditional equity investors,” said Josh Gnaizda, CEO of CryptoFundResearch.

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Author: AnTy

Grayscale Bought 17,100 BTC Last Week, Now Holds 2.4% of Bitcoin’s Supply

As the bitcoin price continues to remain under $13,000 for over a year now and around $10,000 for more than the past month, there is no better time to stack some sats.

With the leading digital currency still 45% away from its peak of $20,000, ‘buy the dip’ opportunities are being taken advantage of not just by small players but also big ones.

Grayscale Bitcoin Trust (GBTC) added 17,100 BTC to its coffers the past week, increasing its aggregate bitcoin position to 449,900 BTC. With this, Grayscale now holds 2.4% of the current bitcoin supply.

September has been a dull month, not just for the price of bitcoin but also for Grayscale. While BTC price is down -8% this month, Grayscale barely saw any change in its total bitcoin position up until Sept. 22nd, as per the data provided by Bybit.

This latest accumulation could be why bitcoin price didn’t dip further despite strong bearish market expectations.

“What’s interesting about Grayscale Bitcoin Trust is it’s Hotel California, those coins are free to come in, but they can never leave. It’s quite brilliant to perpetually drive more coins into the Trust, at the sacrifice of decentralisation,” said on-chain analyst Willy Woo.

“Investors can sell. Doesn’t mean coins in the Trust get released, just means the Trust becomes undervalued, attracting new investment. It’s a smart “one way valve” to ensure assets grow, including the fees over the long run,” he added.

More and more institutional players are taking an interest in bitcoin this year, especially after the central bank started printing money. Just last month, we saw MicroStrategy added bitcoin as an inflation hedge to its reserve. Then this month, it added more BTC, bringing the total to 37,800 BTC.

Interestingly, with this, MicroStrategy’s biggest investors that include major asset managers BlackRock and Vanguard and Norway’s $1 trillion oil fund — having a combined holding of about $100 million — also have indirect exposure to bitcoin.

As Micah Erstling, a trader at crypto market maker GSR, said, “Institutional curiosity and explorations continue to increase.”

Also Read: Bitcoin Scales Just Fine As A Store Of Value Says MicroStrategy CEO

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Author: AnTy

These DeFi Tokens Continue to Rule the Market while $12,000 Remains Elusive to Bitcoin

It was last weekend that the price of bitcoin surpassed $12,000 for the first time in a year, only to come crashing back down to $10,500 minutes after. A week after that and we haven’t achieved that level yet.

Sure, bitcoin futures contracts on CME hit $12,000 briefly this week, but on the spot market, we remain elusive of the level that is expected to take BTC back to June 2019 high $13,900.

For now, $12k might take some time as analyst Mati Greenspan said, “Personally, I think it would be nice if the bitcoin price would cool down a bit into a more sustainable rally, for example experiencing a bit of a retracement before blasting through $12,000 sometime next week.”

A similar opinion was voiced by Matt Maley, chief market strategist at Miller Tabak & Co, who says the best thing to happen right now for bitcoin is to go back down a bit and then “successfully test that support level and bounce off that. You get that kind of move, and it’s going to be very bullish.”

However, the 29% uptrend by bitcoin in the past 20 days has the mainstream media talking about bitcoin mania being back almost in full bloom.

The largest cryptocurrency is surging alongside gold that is hitting fresh highs and other risk-on assets such as stocks that are also approaching record highs.

According to investors, a collapse in real yield, return once inflation is taken into account, on government bonds is what is driving “everything rally.” Not to mention “QE addiction,” in which the Fed will need even greater stimulus to prevent the market from falling.

It’s DeFi Time!

While bitcoin action has been a bit subdued, altcoins took this opportunity to record some gains. Ether continues to make its way to $400 while Tezos is up 7% which trader Jonny Moe says “after nearly 6 months of consolidation (…) finally looks ready for more,”

Even Litecoin might get to see some movement as analyst Rekt Capital notes, “Litecoin is once again peaking past its multi-year downtrend. BTC and ETH have already confirmed new bull markets. A Weekly Close above the multi-year diagonal confirms a new bull market for LTC.”

However, the top performers of the market are none other than the same old DeFi tokens that have been rallying hard throughout 2020.

No surprise there, given that the DeFi space continues to be a hot sector as seen in the record $4.5 billion total value locked in it, as per DeFi Pulse.

Also, yield turning negative in the real world is not only driving the assets higher but also these DeFi projects, which offer interest ranging from 7% to 35%.

“So you can imagine in a ZIRP [zero interest-rate-policy] environment, people are pretty excited,” said Meltem Demirors of CoinShares. What the giant decentralized risk market, “seeing is people chasing liquidity,” she said.

Additionally, it might just be the perfect environment for the decentralized space to thrive.

Who’s the Winner?

It’s a no brainer either that the hottest coin of 2020 is back onto making new highs. LINK didn’t waste any time to fly just as bitcoin took a breather.

The 8th largest cryptocurrency by market cap of over $4 billion is up 22%, trading at a new high of $11.82. This ATH came after six green candles in a row on the 4-hour chart with sight at yet new high at over $12.

“Bubbles are mathematically impossible in this new paradigm. So are corrections and all else,” said trader Hsaka about the unstoppable rally of LINK.

This has been despite Zeus Capital trying its hardest to prove LINK a scam and crash it.

But LINK is not the only star performer, BAND, which is going to be listed on Coinbase Pro on Monday next week is currently up a whopping 40% trading at $11.19.

Other DeFi winners include Akropolis (31.79%), Melon Protocol (27.18%), Balancer (23.46%), Kava (23.40%), ThorChain (18.11%), and Aave (11.21%).

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Author: AnTy

After Swipe Acquisition, Binance to Roll Out Crypto Powered Card in EU This August

Binance Card set to launch in August this year in the European Economic Area (EEA) with the U.K to follow later, a statement from Binance confirms. The debit card allows users to shop and buy from millions of VISA accepted merchants across the world using four cryptocurrencies.

The announcement by Binance confirmed that its users in the EEA and the U.K would be able to start applying for Binance Cards beginning August. This comes barely a week after Binance announced its acquisition of credit card manufacturer, Swipe.

The Swipe-powered card allows users to use four cryptocurrencies to shop for their goods and pay for services, including Bitcoin (BTC), Binance Coin (BNB), Swipe’s native currency, Swipe Coin (SNX) and Binance USD (BUSD).

Binance CEO, Changpeng Zhao, CZ, revealed over the weekend he had tested the Binance Card teasing he might now be able to go 100% crypto. Speaking on the planned launch in August, CZ said:

“Giving users the ability to convert and spend their crypto directly with merchants around the world will make the crypto experience more seamless and applicable.”

Binance Card offers a point-of-sale conversion meaning that the debit card will work like the traditional bank cards. Once you top up your card directly from your spot wallet on Binance, the card will automatically convert the crypto balance once you purchase something hence no need to convert your crypto to fiat manually.

Explaining the process at the point of sale, Swipe CEO Joselito Lizarondo said:

“For example, if I have 50 euros in BTC and 50 euros in BNB, if I made a transaction for 75 euros, it would be approved, and then it would deduct my crypto in the order I selected.”

BEG reported earlier in March the beta release of the Binance Card with Vietnam and Malaysia, leading the market test.

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Author: Lujan Odera

PayPal’s Letter to European Commission Confirms Its Plans to Develop Crypto Capabilities

In a letter to the European Commission published in March this year, the global payment service, PayPal, stated they are in works to enable cryptocurrency capabilities on the platform. The company has yet to disclose plans in the digital assets arena completely, but the addition of Bitcoin (BTC) to the platform could be on hand.

PayPal’s ambition in the cryptocurrency space has been clear since its entanglement with the Libra stablecoin project. In the letter to the European Commission responding to the consultation by the regulators on building an EU framework for markets in crypto assets, PayPal confirmed its interests in the digital asset space. The report reads,

“Since the project’s [joining the Libra Foundation] inception, PayPal has taken unilateral and tangible steps to further develop its capabilities in this area,” the report reads. “And to continue to focus on advancing our existing mission and business priorities to democratize access to financial services.”

PayPal’s entry into the cryptocurrency asset space will open up the crypto market to over 300 million global customers (95 million in the EU). In June, BEG reported the global online payment giant had started researching into integrating buying and selling crypto.

Read More: PayPal CEO Dan Schulman Reveals He Only Owns One Cryptocurrency, Bitcoin

A clear developmental EU framework

PayPal recommends a developmental framework that enables a well-regulated industry, promoting clarity to enable innovation and evolution of the industry. The letter recommends three fundamental principles that the EU could follow to ensure a stable developmental structure in crypto regulation.

First, the EU should subject cryptocurrency service providers to the same scope of applicable KYC/AML compliance rules as other financial institutions to prevent money laundering and other illicit online trading activities.

The EU should also set clear definitions and rules on licensing and regulation to avoid loopholes and uncertainty. Finally, the EU regulators should take a step back not to stifle innovation in the rapidly changing world of cryptocurrency. The letter reads,

“Any regulatory framework in Europe should strive to be technology-neutral to support innovation and competition in this fast-evolving space.”

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Author: Lujan Odera

Here’s Why DeFi Tokens Can Still Rally After Seeing A Massive 2,600% Gains This Year

2020 seems to be the year of Decentralized finance (DeFi). In a matter of months, the market cap of the DeFi space has gone from a billion-dollar to nearly $8 billion, as per DeFiMarketCap.

In 2020 so far, Aave (LEND) has surged a whopping 2,600%, Kyber network (KNC) 800%, Bancor (BNT) 511%, Republic Network (REN) 495%, Loopring (LPC) 413%, Synthetix (SNX) 174%, 0x (ZRX) 118%, and Augur (REP) 105%.

There are only a few DeFi coins that have recorded either shallow greens or losses such as Maker. But despite these massive gains, 2020 might not be done with these yet!

More Gains for DeFi

“We are still early in the DeFi cycle, and while valuations are no longer cheap, they are not exuberant either,” said Spartan Black, a partner at crypto hedge fund The Spartan Group.

He argues that those who joined this cycle early on are still allocating more capital to DeFi. In contrast, new pools of DeFi allocated capital are being formed, which will get allocated in the coming months.

On top of that, many investors are still “heavily overweight” BTC, ETH, and other legacy digital assets.

“Driven by the rise in the valuation of listed DeFi assets, we are also starting to see inflation in the valuation of DeFi assets on the private side (notably for “series A” rounds),” he noted.

Interestingly, these assets are not widely available on centralized exchanges, which are starting to play catch up as these projects see a spike in prices and increased valuation.

“As more exchanges list these assets in the coming months, opening them up to more investors, this will facilitate the re-allocation of funds to these newer DeFi assets causing them to re-rate further in absolute terms and relative to legacy crypto assets,” said Black.

But Not for ETH or BTC

Ethereum-based DeFi tokens have been flying, recording substantial gains to Ethereum, which is only up 86% YTD.

But while Defi tokens can still rally despite these massive gains, it’s harder for the second-largest network to see such gains yet, or Bitcoin for that matter. This is because “DeFi can rally without a ton of new money coming in, but BTC/ETH is at the point where they need real, institutional/macro fund flows to take it to the next level,” said analyst Ceteris Paribus.

Crypto investor, co-founder, and CIO of BlockTower Capital – Ari Paul – is also of this opinion. He explains that most of the new money in the crypto space first flows into BTC and some other large-cap cryptos, allowing crypto insiders to profit in those coins, before looking at riskier investments like DeFi tokens.

Moreover, the same amount of dollars funds will have a bigger impact on DeFi tokens than the $27 million market cap Ethereum.

“Recycling of profits is real when there’s new real money entering the system, but likely has a pretty small impact on BTC and ETH since they’re so much bigger than the token profits that can be recycled,” Paul said.

As such, the analyst is not excited about a big ETH rally right now, even though Crypto Twitter is calling for it.

“Can ETH be a higher beta play in a full-on bull? Sure. But it’s hard to see ETH making a huge move with BTC range bound. Just a different level of capital needed for that,” Ceteris Paribus said.

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Author: AnTy

Has 2020 Really Been a Bad Year for Bitcoin Amid Global Economic Turmoil?

“It’s been a disappointing year for Bitcoin,” writes Bloomberg editor, Joe Weisenthal in his Monday newsletter.

2020 continues to be a tragic year, the world struggling with the coronavirus pandemic, its economic impact, and protests worldwide. In March, COVID-19 triggered a sell-off in the global markets as investors sought the safety of cash.

Bitcoin wasn’t immune to that sell-off either and crashed as low as $3,800 on the majority of crypto exchange and $3,600 on BitMEX. But since then, the leading cryptocurrency has recovered over 135%.

But Weisenthal argues that bitcoin is making a general trend of lower highs. “Despite the extraordinary market volatility, it hasn’t surged to new heights,” he said. And this question if an economic crisis can really be a boom for bitcoin.

He also points out how bitcoin has been basically following the S&P 500 throughout this period of volatility. During the March sell-off, bitcoin’s correction with equities jumped to all-time high. Although it dwindled since then, Federal Reserve Chairman Jerome Powell’s remarks yet again fueled this correlation.

So, does it really provide diversification to a portfolio, further questions the editor. According to analyst Mati Greenspan, the correlation will only increase from here because,

“the more big money is involved, the more managers of large portfolios will see it within the context of the traditional markets and use it as a tool to hedge their investments.”

What happened to “digital gold” and “halving” narratives?

Moreover, the “extraordinary” expansion of the Fed’s balance sheet hasn’t led to inflation or currency collapse as many bitcoiners predicted so what would exactly “catalyze a Bitcoin boom?”

Historically, halving has led the bitcoin rallies but this time it “went without much impact,” said Weisenthal.

He further questions bitcoin’s “digital gold’ argument which is supposed to separate it from other cryptos in a crisis but bitcoin moved roughly in line with Ethereum this year and “did not exhibit any special safe haven properties.”

But even if we look at gold’s performance during this period, it also experienced a massive sell-off along with bitcoin and other asset deposits being a traditional safe haven asset and continues to move up and down.

Millennials ditching bitcoin?

Now, it looks like millennials have found the alternative to cryptocurrencies and getting “their thrills elsewhere.” Locked in their homes during the pandemic with stimulus money and the internet at their disposal, they have discovered the stock market via platforms like Robinhood. He said,

“To the degree that people were putting money into Bitcoin because they liked volatility and action, there’s a new competitor on the block for those dollars.”

And the competitors are bankrupt companies. In the past few weeks, these young people have taken to invest in stocks of companies filing for bankruptcy, one of which (Hertz) has gotten permission to issue its worthless stocks.

Weisenthal believes the “crisis may yet be good for Bitcoin,” but only if “we get infringements on privacy that create new demand for payments that can’t be blocked.”

The narratives may get debunked but market participants aren’t really bothered about bitcoin’s bullishness in the long term as demand for the world’s leading cryptocurrency only continues higher while its supply is limited.

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Author: AnTy