Fidelity Digital Assets Exploring the Possibility to Offer Yield Funds, Stablecoins, and DeFi Tokens

Fidelity Digital Assets Exploring the Possibility to Offer Yield Funds, Stablecoins, and DeFi Tokens

Fidelity Digital Assets also plans to increase its employee headcount by up to 70% by the end of the year. Meanwhile, its survey reveals over 60% of US investors are neutral to positive about a Bitcoin ETF.

Fidelity Investments is growing its digital assets team to expand its cryptocurrency-related products in response to the increasing interest from financial advisors, family offices, and other institutional investors.

Tom Jessop, president of Fidelity Digital Assets, said in an interview that the company is planning to increase its employee headcount by up to 70% by the end of the year.

Fidelity’s digital asset arm that provides institutional services including trade execution and custody is also exploring the possibility of offering yield funds and other products that may involve stablecoins or DeFi tokens, said the managing director, Peter Jubber.

“All of these are candidates for us as we begin this exploration.”

“Could they result in actual products? Early days.”

Fidelity also published a survey this week that showed that in the US, 79% of family offices have a neutral, positive view of digital assets. The survey of 1,100 professionals was conducted between early December and early April.

It further showed that factors such as fear of inflation due to financial stimulus was a catalyst for many investors to enter the crypto market.

“A catalyst for a lot of industries was the start of the pandemic.”

“Our clients said the factor to get them off the fence were the macro economic issues in the pandemic.”

For the first time, Fidelity surveyed Asian investors and found them to be the most accepting of digital assets, with more than 70% of those surveyed currently invested in them.

Investors are particularly looking for institutional investment products to hold digital assets. More than 60% of U.S. investors express a neutral to positive view about a potential Bitcoin exchange-traded fund (ETF). Fidelity itself has filed an application with the SEC for a Bitcoin ETF.

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Author: AnTy

Solana Based DeFi Protocol, Luna Yield, Goes Dark as Customers Fear An Exit Scam: Report

Solana Based DeFi Protocol, Luna Yield, Goes Dark as Customers Fear An Exit Scam: Report

While the market appears to be rallying once more, this month hasn’t been all sunshine and rainbows for crypto platforms. In what is growing to be an alarming trend, it appears that a rug pull might have duped some crypto investors.

Nowhere to be Found

Earlier today, SolPad, an Initial Digital Offering (IDO) platform built on the Solana blockchain, confirmed that one of its platforms has gone completely dark. The platform, named Luna Yield, offers yield farming with vaults that are available on Solana (SOL), Polygon (MATIC), and the Binance Smart Chain.

In its tweet, SolPad explained that the platform appeared to have been witnessing problems. The service scrubbed its online presence, deleting its websites and social media channels. The website is still available on Google’s results page, but it can’t be reached.

Luna Yield was the second IDO to debut on SolPad, going live earlier this week. According to news sources, the platform had gotten $6.7 million in user funds and was building a relatively strong community. Now, it appears that all of those funds have been stolen.

According to an anonymous source, the platform’s founders reportedly took all of the SOL tokens in the platform and converted them to Ether. From there, they transferred the money to Tornado Cash – a decentralized, non-custodial privacy solution that’s built on the Ethereum blockchain. Put simply, those funds are gone and can’t be recovered.

Although the SolPad team has requested patience as they try to contact the Luna Yield developers. However, this situation already has the trappings of an exit scam – a case where a platform’s developers take off with investors’ funds. If indeed it is an exit scam, it would be a first on the Solana blockchain.

Criminal Activity Making a Comeback

The situation marks just the latest criminal event that will befall the crypto space in the past few weeks. Last week, cross-chain decentralized finance (DeFi) protocol Poly Network was hacked, with investors losing up to $610 million in digital assets. After multiple investigations, the hacker was said to have exploited a vulnerability between contact calls to conduct the hack.

Eventually, nearly all of the funds were restored after the hacker seemed to have grown a conscience.

Poly Network eventually claimed that the hack was filled with “white hat behavior” and even offered the hacker a job. They turned it down, along with the company’s $500,000 bounty.

While the industry was reeling from that, Liquid Global, a popular crypto exchange, was hit in a hack just yesterday. The Japanese exchange confirmed the hack on Twitter, noting that only its hot wallets had been affected.

Although Liquid has yet to confirm anything, news sources believe that the exchange lost about $80 million to the hack. There are also unconfirmed reports that the funds belonged to the Celsius Network, which integrated with Liquid in April to offer the latter’s customers a compounding return on their crypto purchases.

Efforts are being made to get the funds back, with fellow crypto exchange KuCoin blacklisting all addresses involved in the hack.

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Author: Jimmy Aki

Yield Compression Continues as More Money Seeks Yield while Avoiding Capitulation

Yield Compression Continues as More Money Seeks Yield while Avoiding Capitulation

Activity in the crypto market and DeFi has taken a hit as prices either dump or trade sideways. When it comes to the Ethereum network, gas prices have fallen to early DeFi summer levels, a mere 10 gwie which skyrocketed to 2,000 gwei for a brief period in May.

Amidst this, the total stablecoin supply has reached nearly $108 billion, adding more than $47 billion in just the last three months. trader CL of eGirl Capital said,

“The rate of USDC minting concerns me, the more money-seeking yield in crypto, the more alpha decay in futures curve. The pool of yield-seeking money only gets bigger, leverage traders seem to perpetually lose money. 1 day we might never see quarterlies above 20% again.”

While “good for price… it will make speculation way more competitive,” he added.

In the meantime, this growth in stablecoins supply is crypto market participants looking for risk-off yield farming opportunities or even traditional market participants bypassing directly investing in crypto. Glassnode noted,

“Among the bearish sentiment, liquidity remains strong on-chain as core DeFi participants seek out the highest yields in stablecoins, accumulate governance tokens, and continue to hold spot ETH.”

However, yields have already started to contract as demand for leverage slows. With funding on perpetual contracts normalizing and going negative, yield in DeFi is bound to go down even more as well. Meanwhile, the low volatility interest rates have arisen, giving stablecoin farmers and short-sellers access to cheap borrowed capital. Glassnode says,

“As long as liquidity stays strong and demand for borrow lessens, yields will continue to stay low in borrow/lend markets.”

The latest sell-off in the market saw Bitcoin crashing 55% from its all-time high and Ether experiencing a drawdown of over 66%. But while short-term ETH holders see their unrealized gains evaporate as the loss enters the capitulation zone, long-term holds remain firmly in profit.

Unlike previous times of capitulation, this time, these long-term holders have the opportunity to deploy their assets in DeFi. Fiskantes said,

“One of the reasons this down cycle could be shorter than 2018-2020. Money don’t have a reason to leave if they can stay in stables -> compressed yields -> higher yield seekers increase risk appetite -> buy pressure for “productive assets.”

As we reported, both the lending protocols Aave and Compound have seen over $4 billion in outstanding deposits.

These protocols allow ETH holders to borrow stablecoins against their deposited crypto asset, which can be used for attractive risk-off yields or speculate on token prices and gain governance tokens, stablecoin balances, and crypto assets by buying the dips, all the while keeping their exposure to ETH.

“Stablecoin yield farmers remain healthy profiteers during downturns,” states Glassnode, noting the competition is waging on in the Curve Finance ecosystem as Yearn, Convex Finance, and Stake DAO compete for deposit dominance.

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Author: AnTy

Rising Treasury Yields are a Danger to Bitcoin & They Are Soaring Right Now

The ongoing yield debacle is not good for risky assets and gold, and the leading digital currency is still struggling to recover from the losses.

Risky assets are back on the incline as Treasury yields ease off after hitting multi-year highs on Thursday. Also, the Federal Reserve Chairman calmed the nerves by committing to keeping the interest rates low and that it will continue to pump money into the economy.

In the early hours of Thursday, 10-Treasury yields jumped to 1.427%, last seen in March 2020, but ended the day lower at 1.3740%. Yields on 30-year Treasury soared to 2.888%, Dec. 2019 high to end lower at 2.226%. Bond prices and yields have an inverse relationship.

Today, they both are back on the rise by about 0.059%.

“Bonds puking, again… Need this to stop going down (i.e., rates going up) to have nice things,” said trader and economist Alex Kruger.

The 30-year German yield has also turned positive, rising to 0.2% from -0.2% in three short months. German 10-year yields are still negative though at -0.3%.

This spooked the central bank, and now “the ECB is closely monitoring the evolution of longer-term nominal bond yields,” said European Central Bank President Christine Lagarde this week.

Fed, however, is not that concerned when asked about the rise in yields; Jerome Powell said, “It’s a statement of confidence on the part of markets that we will have a robust and complete recovery.”

Rates going up is negative for stock valuations, particularly tech, and assets that benefited from negative real yields the most, gold and bitcoin, Kruger said,

“The thesis is the Fed will intervene to bring rates down.”

“If that trend is not stopped hold on to your horses because risk assets, gold and highly likely bitcoin as well are all in for a very rough ride down. You want to watch interest rates like a hawk.”

Risk On or Off?

This fall in yields, meanwhile, has sparked a rally in stocks. S&P 500 is yet again reaching its peak at nearly 3,935 from Feb. 12.

Tech-heavy Nasdaq, which slid 5.6% this week, is back at 13,600, still in need of a pump to hit its 14,095 all-time high from Feb. 12.

“In institutional circles, corporate treasuries are often looked down on as dumb money,” notes Kruger.

While stocks are clearly enjoying this fall in Treasury yields, the same is not the case for the traditional safe-haven asset.

Gold is not having a good week, and today the spot gold went under $1,790 per ounce. The precious metal is on a downtrend ever since it hit a new high in August at about $2,075.

The US dollar is also not enjoying the increase in yields and is back under 90, aiming to go for fresh multi-year lows at 89.2 in early January.

Coming to digital gold, Bitcoin had a brutal week, losing 23% of its value with a drop under $45k. For now, the market struggles to recover completely despite the price of Bitcoin going above $50,000. Trader Cantering Clark said,

“Rates are rising. Risk-on assets don’t really benefit in that situation. All assets would get hurt with a rapid rise. Saylor purchase and Tether news came out, and we don’t have a very obvious response. Would not get overly bullish.”

However, according to him, this is all just short-term as “Bitcoin has already cleared the runway and is now on its way to further appreciation and adoption.”

Alex Kruger is of a similar opinion as he notes that there’s a chance Bitcoin will do its thing as “institutional penetration remains very low.” This means the institutional inflow may continue, and retail will be busy stacking regardless. Also, corporates may join in and “be more focused on inflation or digitalization than rates.”

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Author: AnTy

OFF BLUE NFT Project Returns Customer Funds After Rarible Suspension

As the craziness in the DeFi market wanes, especially the mania around high APYs and yield farming cooling down, market participants have shifted their focus to non-fungible tokens (NFTs).

With the DeFi tokens down 80% to 90% in the past two months, people have to find excitement in something else.

And it was NFT, which has been seeing a lot of limelight lately. Even Christie’s sold its first NFT with Block21 at 7x the estimated price.

Ethereum’s ERC-721 standard made for DeFi degens, the fact that these digital collectibles can be used for yield farming is just cherry on the top, satisfying their appetite following the absence of food tokens every other day.

Dapper Labs has also taken advantage of the NFT trend and closed an $18 million token sale on CoinList on the back of its collectibles game, NBA Top Shot. The funds were raised with participation from 13,000 people between Sept. to Oct. 2.

Shutting Down

Amidst this, the popular marketplace to create and sell the NFTs Rarible, which launched the first governance token RARI in this space, suspended the OFF BLUE team account over the weekend.

“We have suspended the OFF BLUE team account until further examination due to potential violations of our terms of service. Rarible is not intended to facilitate capital-raising transactions.”

The project has been accused of rug pulling millions of dollars, which has now been refunded, 1 ETH for 1 NFT, as it closes.

Going with doxxing, threaten, and cancel, FTX CEO Sam Bankman-Fried says, the internet overreacted by not going with the path of “ask questions, give feedback, wait for responses, don’t buy unless/until you’re comfortable.”

A few days back, Twitter user @CL, who works at Yearn.Finance, shared his conversation with Blue Kirby — who was the communications manager at the project, and later made an exit after he promoted YFI creator Andre Cronje’s Eminence.Finance, which was exploited for $16 Million — which reflects on the shadiness of the project.

Still Building

OFF BLUE’s idea was to use the proceeds from their several art sales to fund a “custom platform further.” They planned to acquire some epic art, Banksy, KAWS, Warhols, to auction on OFF BLUE but didn’t communicate the game plan over the concern of someone else beating them to it. The official closure statement reads,

“This would have created unimaginable hype for OFF BLUE and positioned the decentralized Sotheby’s for long-term success.”

The team is now returning the Ether, a claim process that will go on for the next 14 days. In case one does not claim the refund, it will go towards the development of the OFF BLUE, which the team continues to build.

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Author: AnTy

Survey Suggest 40% of Yield Farmers Can’t Read Smart Contracts; Still Pulling 500% Returns

A recent survey from Coingecko revealed that almost half of the DeFi yield farmers couldn’t read the smart contracts of the project they join. A majority of these yield farmers depend on auditors to monitor the security aspects of the project.

The survey revealed that 40% of the yield farmers could not read the smart contracts of the project they joined in; the report also revealed that the defi yield farming is dominated by males with 90% representation. It further showed that despite these yield farmers not able to read or understand the project, they still managed to make hefty profits; in fact, 90% of the respondents said that they had made a 500% return or more.

Yield Farming Dominated By Limited Users

The Coingecko survey found 1,347 respondents, out of which only a minor 23% of the respondents had participated in some of the yield farming, despite more than 80% being aware of the trend.

However, the most surprising aspect of the survey was that almost half of the respondents never read the code or researched about the projects they were participating in. This is extremely troubling, given the hype around the defi space. This trend could lead to a number of major scams arising; similar to the ICO era of 2017.

Coingecko, in its statement, noted that,

“All farmers should conduct their research before farming in any pools, as there are more copy-paste yield farming tokens that could potentially expose them to a greater risk such as code vulnerability or scams.”

Decentralized Finance (DeFi) has been the trend of the crypto town in 2020, where its market cap grew from a few million to over $15 billion in just nine months, and more defi projects have debuted given the rising hype around the space. People joining the hype wagon is understandable, but one should be aware of the risk factor involved. In fact, in the past couple of months, many meme defi projects have launched, managed to raise millions, see it’s market cap grow into billions, and make an exit scam.

All this happened in a matter of a few days.

The Coingecko survey report suggested that astonishing returns like the current times might fade away from the defi space as the hype fades out, but some projects would still allow for it to garner attention.

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Author: Rebecca Asseh

Binance Adds More Value to BNB through Yield Farming on Launchpool Platform

Centralized cryptocurrency exchanges, OKEx, and Binance, are now jumping on the bandwagon of yield farming, the hottest thing in the DeFi.

After launching the mainnet of its smart contract-enabled blockchain and an AMM called Binance Liquid Swap recently, popular crypto exchange Binance released Launchpool to take advantage of the leading DeFi growth driver.

The exchange clarified that Launchpool is a new product, different from Launchpad, which will continue as normal, that allows users to earn yields from farming new coins while staking BNB and other digital assets. “BNB staked in Launchpool also counts for Launchpad,” it says.

Binance announced this latest product over the weekend, which will allow users to earn income by staking their tokens.

For now, users will be able to stake Binance’s native token BNB and its very own stablecoin BUSD, along with another token, ARPA.

Launchpool has also announced the first project it is hosting, which is Bella Protocol, which raised $4 million in a seed funding round led by Arrington XRP Capital last month. The project aims to enhance the user experience when interacting with DeFi assets by removing complex issues like high gas fees and hopping to different protocols in search of high yields.

Users can start providing staked liquidity this Wednesday for 30 days in three separate pools. A week from that, the exchange will list the BEL token against four crypto assets BTC, USDT, BNB, and BUSD.

Binance is offering BEL rewards at 90% for staking BNB, 9% for staking BUSD, and 1% for ARPA.

“If you think CeFi farming yield won’t be higher than DeFi, think again,” said Binance CEO Changpeng “CZ” Zhao.

In decentralized finance, however, it can be much higher.

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Author: AnTy

People Using Cash-Savings to Load Up on BTC as Protection in a Record Low-Interest Rate World

The 10-year Treasury note yield fell to its record low stretches, not seen in 234 years, according to Deutsche bank.

“The U.S. has been through depressions, deflations, wars, restrictive gold standard regimes, market crashes and many other major events and never before have we seen yields so low back to when the Founding Fathers formed the country,” said Jim Reid, chief credit strategist at the bank.

“In the year 2007, it was normal to get a fixed return of 5% when lending your money to the U.S. government for ten years. Today, you’ll be lucky to get 0.5%,” wrote analyst Mati Greenspan in his daily newsletter Quantum Economics.

With yields falling into negative territory — if we factor in inflation over the next 10-years, you are going to lose even more — and the Fed deciding to keep the interest rates virtually zero, investors are running out of ways to get meaningful returns. And this is why gold and digital gold make an attractive option.

As such, people are increasingly using their interest-earning cash savings to load up on bitcoin, especially as volatile assets take off, said Bloomberg.

The coronavirus pandemic has actually been a boon for account balances — not only lockdowns cut consumer spending, but central banks also injected money at a record pace. The personal savings rate in the US rose to a record 32.2 in April but fell to 19% in June, still at historically high levels. Also, between March and June, customers deposit 16% more into their accounts compared to last year.

What’s Attractive

But is it really the time to hold onto money when the US dollar continues to lose its value thanks to the Fed printing trillions of dollars and the interest rate on traditional safe vehicles falling.

Being up 58.81% in 2020, Bitcoin sure looks appealing just like gold, which has risen 29%, setting a new record. The largest cryptocurrency has been actually the best performing asset of the last decade.

A few months back, billionaire investor Paul Tudor Jones also announced that between 1% and 2% of his assets were held in bitcoin as protection in a low-interest-rate world.

Stocks that have been surging since bottoming out in March — recording its best 100-day performance between March 23 to July 1 since 1933 are also preferred by people in such an environment.

Americans have gained confidence in the market in the long run. A Bankrate survey found 28% of Americans, up from 20% last year, said the stock market was their top choice for long term investment. Cash investments meanwhile hit their lowest level in eight years at 18%.

Bitcoin coming to your near bank

While bitcoin started rallying last week, hitting a new 2020 high today, national banks have got the green light from OCC to offer custody services, which may open new doors for the crypto industry. It may have started with national banks, but it won’t be surprising if state-chartered banks jump in too.

“The door’s just been opened for funds, institutional players, and investment advisers” to expand their relationships to crypto, Kari Larsen, partner at Perkins Coie LLP in New York, told Bloomberg.

This decision has been made after the OCC received questions from several banks about holding digital assets, said acting Comptroller of the Currency Brian Brooks, a former Coinbase employee.

Agency’s decision to allow banks to hold bitcoin and crypto is “a recognition that tens of millions of Americans are invested in this asset,” he said at a virtual conference hosted by the American Bankers Association.

The OCC’s decision would also make it easier for crypto companies to work with banks, which viewed them as high-risk customers due to concerns regarding anti-money laundering (AML) and compliance with the Bank Secretary Act.

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Author: AnTy

Fintech Startup Yield To Roll Out Tokenized Zero-Coupon Bonds Using ERC20-Based yTokens

Yield, a fintech startup is developing a new protocol for the Ethereum network on the issuance of fixed-rate lending and borrowing. In traditional finance, such issuance is called a zero-coupon bond, where the buyer can only cash out once the bond reaches its maturity stage and they are guaranteed to receive a higher amount than what they invested.

Yield’s first product would be called yTokens or yDAI, an ERC-20 token which would be used to issue tokenized zero-coupon bonds. Yield’s CEO Allen Niemerg believes zero-coupon bonds is the need of the hour for Ethereum and it would be a novel primitive which can be further implemented in other systems too.

The Defi ecosystem has emerged as a viable lending and borrowing option for many where people put their crypto in collateral using smart contracts and withdraw loans in stablecoins. The borrower can always take out their collectivized crypto asset, but they are required to return the borrowed loan along with the interest rates. As the popularity and demand for the collectivized loan in defi soared, so did the interest rates.

For example, MakerDAO’s stability fee was at 0.5%at the start of the year and it has peaked to 20.5% by now. Thus, something like fixed-rate borrowing and lending would really help the ecosystem become more accessible and viable.

The zero-coupon bonds would provide the exact future projection about the cost of capital for investors. Niemerg described Yield as,

“a standard for a token that settles based on the value of a target asset on a specified future date, and which is backed by some quantity of a collateral asset.”

Yield became the first company to be incubated by blockchain research firm Paradigm and they also announced a seed funding which will be utilized by the startup to develop their first product called YTokens.

How Do yTokens Work?

yTokens will be an ERC-20 token which would act as a bridge currency for people to access zero-coupon bonds. Users can deposit their collateral in a vault governed by smart contracts and in return mint the yTokens. During the starting phase, users can deposit Ether as collateral and the borrowers can issue these tokens with different redeemable time periods ranging from a week to a month and even a year. These tokens will be fungible and would trade at a floating price.

Once the maturity period of the bond expires the collateralized ETH would be automatically transferred to the vault of the user. The CEO also revealed that they are developing a mechanism that can liquidate uncollateralized vault which could occur due to a sudden drop in the price of the collateralized asset.

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Author: James W

Negative Interest Rates Driving Institutional Investors to Bitcoin: Crypto Trends Report

  • Lower yield prompt institutional investors to seek riskier investments
  • Negative interest rates, easy monetary policies, Brexit, and upcoming US elections driving the demand
  • Bitcoin’s physical markets have advantages over gold

With negative interest rates making their way into major economies around the world, what impact it will have on Bitcoin?

CoinShares, a digital asset management firm released its Crypto Trends Report for November 2019, where it talks about how the negative interest rates are pressuring the traditional banking model and shifting the investment strategy.

As such, concerns regarding a recession cycle have risen and the contagion that could spread quickly across even the healthiest for markets.

The prices of hard assets might be above pre-crisis levels on the back of “cheap money” but “median income trails far behind median house prices.”

These concerns have investors returning to gold markets which are on a steady rise. Bitcoin, that has established itself as an “institutional store-of-value asset class” is also seeing interest from new funds.

Lower Yield Prompt Institutional Investors to seek Riskier Investments

As we can see currently the economies are making a shift from cash but demand for cash is still on the rise. The report mentions the Euro’s total cash value outstanding in banknotes is now exceeding €1.25tn with the US following the same trend. To control this upward trend, regulators are placing ceilings on potential cash use.

“Without cash, depositors would have to pay the negative interest rate to keep their money with the bank, making consumption and investment more attractive. This would jolt lending, boost demand, and stimulate the economy,” says IMF in one of its posts.

Cash is a liquid asset but returns no yield and is subject to inflation by default.

Purchasing Power of the Consumer Dollar in US Between 1913 and 2018

Purchasing Power of the Consumer Dollar in US Between 1913 and 2018

Purchasing Power of the Consumer Dollar in US Between 1913 and 2018

Purchasing Power of the Consumer Dollar in the US Between 1913 and 2018

According to the IMF, “lower-for-longer yields may prompt institutional investors to seek riskier and more illiquid investments to earn their targeted return.”

Bitcoin’s easier self-custody & trading gives it Advantages over Gold

In 2019, gold hit a six-year high, climbing to 2011 peak, marking the return of demand into the traditional asset class from central banks and investors alike. Negative interest rates, easy monetary policies, Brexit, and upcoming US elections contributing to the gold demand.

Worldwide Google Search Interest for ’Gold’

When it comes to the digital gold, the CoinShares says having checked off the requirements by regulators and shedding a near-decade of concerns on its viability, Bitcoin has “firmly established itself” as an institutional asset class, since the start of futures on the Cboe and CME.

Bitcoin’s physical markets have established on and off-ramps on a global scale and this the report says gives it advantages in terms of easier self-custody over gold. Moreover, global trade is easier to facilitate with BTC than with physical gold markets, especially with settlement finality.

Though Bitcoin was designed to address the payments industry, it has swung into Store-of-Value asset class with the additional benefit of total ownership and ability to transfer value easier and faster than other SoV assets.

As the price of Bitcoin recovers to $8,660 today and has been hovering around this range the past six days, many are optimistic yet some wonder if we will see a new high in 2019 or the 2020 bitcoin halving will kick in to effect during Q1. Time will tell, but for now this is great data and research to digest to keep understanding the number one blockchain-based crypto asset in Bitcoin, now over 11 years since its whitepaper release by Satoshi Nakamoto.

“}” data-sheets-userformat=”{“2″:13057,”3”:{“1″:0},”11″:3,”12″:0,”15″:”Open Sans”,”16″:11}”>Latest Bitcoin Price News and Crypto Market Updates

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Author: AnTy