Crypto Currencies

I started exploring Bitcoin first in 2012 and, still today, I am fascinated by the opportunities and future potential digital assets pose as an emerging alternative asset class.

One of the most relevant recent developments, which is often not covered, is the emergence of crypto hedge funds.

Compared to the early days of crypto assets, when there were mainly private investors or traders in the space, a massive inflow of professionals entering the market has begun with the emergence of crypto hedge funds.

In fact, looking at data from 150 of the largest global crypto hedge funds, 63% were launched in 2018 and 2019, according to a survey by Big Four audit firm Pricewaterhouse Coopers and Elwood Asset Management Services earlier this year.

Related: Today’s cryptocurrency trusts and hedge funds amid financial crisis

It is all about the performance

Based on the annual PwC–Elwood Crypto Hedge Fund Report, the most common crypto hedge fund strategy is quantitative (48% of funds), followed by discretionary long-only (19%), discretionary long/short (17%), and multi-strategy (17%).

When it comes to crypto fund performance, systematic crypto funds have been outperforming passive strategies (investing long-only), discretionary long/short, and multi-strategies quite significantly.

In 2019, the average crypto hedge fund performance by strategy was as following:




In 2018 — which was a very challenging year for digital assets — quant trading was the only strategy that generated positive returns:



These numbers suggest that systematic hedge funds are the best performing strategy for digital assets, but, in general, all crypto hedge fund strategies are able to generate sustainable alpha.

The ecosystem for crypto assets and crypto hedge funds is growing

The vast majority of investors in crypto hedge funds are either family offices or high-net-worth individuals. A growing number of funds of funds have been investing in crypto hedge funds, causing the whole ecosystem to evolve quite quickly.

The fact that the percentage of crypto hedge funds with assets under management of over $20 million nearly doubled to $44 million last year indicates that more funds are reaching a critical size, which enables them to sustain their strategy.

More and more talent from the traditional hedge fund world is moving into digital assets, including established hedge fund titans like Paul Tudor Jones.

Wall Street is also becoming more open to Bitcoin (BTC) as a new asset class, and well-known Wall Street names including George Ball, the former CEO of Prudential Securities, suggested Bitcoin or other cryptocurrencies could be “a safe haven” for investors and traders as an alternative investment.

The news of MicroStrategy buying $250 million in Bitcoin (60% of their treasury) in August 2020 and stating:

“Bitcoin is digital gold — harder, stronger, faster, and smarter than any money that has preceded it” have been a big boost for established investors looking into the crypto markets.

Back in May 2020, I explained why Bitcoin is an ideal inflationary hedge, and institutional investors are increasingly looking at this emerging asset class from a hedging perspective.

It is obvious that investments in crypto hedge funds will be a big part of these additional inflows of capital.

A massive increase in investor demand

Given the transparency among most regulated crypto hedge funds with external investors regarding the fund’s performance and assets under management, the growth in investments is becoming apparent.

Total assets under management of crypto funds worldwide doubled from 2018 to the end of 2019 (from $1 billion to $2 billion); and there are clear indications that this number will have roughly tripled by the end of 2020.

Compared to other alternative asset classes, these are still rather small sums, but the growth rate indicates the direction the industry is moving in.

Increases in assets allocated to crypto hedge funds and further indications that Bitcoin is a digital store of value and a new hedge against inflation show why and how demand from investors has been accelerating.

Interesting times ahead for crypto hedge funds

Looking at the talent moving into the space and the increasing demand from institutional investors makes me quite confident about the near future.It will be crucial for the industry to generate sustainable alpha in the future and prove that active investment strategies among crypto hedge funds are superior to a passive long-only approach, such as “holding.

” This performance was demonstrated to date by the outperforming of successful crypto fund managers.This article does not contain investment advice or recommendations.

Every investment and trading move involves risk, readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Marc P. Bernegger founded his first online company in 1999, followed by several tech companies, which he later sold.

He got into Bitcoin early in 2012 and has been involved in digital assets ever since. He is a board member at Crypto Finance AG and the Swiss Blockchain Federation, and he is a co-founder of the Crypto ­Finance Conference in St. Moritz. Marc is also a member of the World Economic Forum’s Expert Network for blockchain and the digital economy.

It is not just about rankings and  the volume of transactions when choosing a cryptocurrency exchange. You need a broader comparison, based on fees, affordability, trading instruments or other common features.

Most exchanges aim to support a certain type of customers based on their location, experience, payment method, need for anonymity, etc. At the same time, very few of them can be considered universal, intended for the non-existent “average consumer”.

So which are the best cryptocurrency exchanges?

Coinbase

Coinbase was created to become the most trusted name among cryptocurrency exchanges. In this respect, it is more or less without competition in the market.

Coinbase is regulated as a U.S. financial institution that includes Federal Deposit Insurance Corporation (FDIC) insurance for $ 250,000 or less in U.S. deposits. The platform operates in accordance with key EU financial regulations.

Coinbase is also supported by major investors, such as banks and investment funds. Coinbase margin trading is a top choice for most cryptocurrency investors. The design of the platform is simplified and adapted to this customer base.

Unfortunately, this focus on trust means that Coinbase trades only a limited number of coins, although it offers the most popular of digital currencies. The platform is also available only to users in a relatively limited number of countries in North America, Europe and Oceania.

Bitfinex

Bitfinex is one of the most modern platforms for trading fiat to digital currency, as well as digital currency to fiat money. The platform offers some of the highest liquidity and trading volume among exchanges.

Bitfinex has few competitors when it comes to cryptocurrency traders who try to apply modern trading techniques and trade on a larger scale.The exchange offers the full range of features that merchants expect from a single platform.

This includes advanced order types, margin trading, and a large number of pairs to exchange cryptocurrencies and fiat money.

Bitfinex also has low fees, which are aimed at traders with a high volume of their trading, as the fees drop dramatically with increasing trading volume.

Bitfinex has suffered two major hacker attacks in the past, as huge volumes have made it a major target for hackers.

Binance

Binance was founded by Changpeng Zhao – a Chinese software developer. Prior to this platform, he built systems for the Tokyo Stock Exchange and developed futures trading software for the Bloomberg Trading Book.

Although the platform was originally based in China, a change in cryptocurrency regulations has led to its relocation to Japan.

However, when the Japanese Financial Control Authority (FCA) warned Binance, the exchange’s headquarters moved to Malta. Binance is a cryptocurrency trading platform that trades one type of coin directly for another.

The exchange is one of the largest in terms of the number of available pairs of digital currency and the volume of trading in the crypto industry.However, Binance does not deal with fiat currency at all, which makes it strictly based on crypto exchange. In this case, the base unit of exchange is not USD, but rather bitcoin.

Binance also has low trading fees and withdrawals.

Kraken

Kraken is one of the oldest and largest cryptocurrency exchanges. The platform trades in both cryptocurrencies and fiat money. It offers a larger number of pairs available than most similar exchanges, although the quantity is not huge.

Kraken entices advanced cryptocurrency traders by offering them features such as cryptocurrency trading with leverage, OTC and futures, although it is making efforts to make it accessible to beginners as well.

More experienced cryptocurrency users will find all the features they expect from an advanced platform, as well as low fees, which decrease with increasing trading volume.Kraken advertises its main features, among which are:

• A comprehensive approach to increase security
• Intuitive platform for cryptocurrency trading
• Fees up to 0%
• Round-the-clock support team globally
• Various funding opportunities

Coinmama

Coinmama offers consumers a quick and easy way to buy coins using fiat currency without having to store them on other exchanges. Coinmama is ideal for users who just want to buy cryptocurrency using fiat money without wasting time, nerves, going through a long registration or being at risk of hacker attacks.

Most often, people make an initial purchase of a cryptocurrency with the help of Coinmama and then deposit the received coins from their personal digital wallet in a digital currency exchange, where it is traded directly from cryptocurrency to cryptocurrency.

Coinmama charges relatively high fees for its services, so it is only recommended for users who are willing to pay more for the speed, discretion and convenience of the platform.




JAKE SIMMONS

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

The cryptocurrency market can be a very lucrative realm for investments, but it also can be an extremely punishing one.

People will often try to apply the knowledge they have gained from the stock market to crypto, but unfortunately, this market is an entirely different beast.

You have to be prepared to learn a whole new language and learn to study trends across the market until you have gained a basic understanding. It is only then that you can begin to make some money.

Along the way, you will have some profits, but you will also have some losses. Some of these will be inevitable. However, some of these will be due to mistakes that you have made during trading.

By learning about these mistakes and learning to avoid them, you can open up the opportunity for a lot of money to be made. Here are some of the most common mistakes crypto traders make.

Not Selling or Buying At the Right Moment

No one on Earth can predict what is going to happen with the crypto market and how it is going to change from day to day. Therefore, there will be times when you could have held onto your coins a little longer before selling or buying a little earlier than you should have. These things aren’t always mistakes, however.

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The mistake here comes from failing to understand the market and not tracking bitcoin. The cryptomarket is interesting in the fact that the other currencies tend to follow bitcoin and how it trends. As bitcoin rises, so do the other currencies and vice versa. 

You can use this knowledge to your advantage to make money. If a cryptocurrency is rising while bitcoin is falling, this is a necessary time to sell.

 The experts at insidebitcoins.com recommend always following bitcoin and watching for these trends. Eventually, a correction will come, and the currencies will start to follow each other again.

You begin to risk your money by failing to either buy at breakout low or selling at a breakout high. While there is always the dream of further profits, you have to understand how these coins work.

Learn when to sell and when to buy and learn to read the signs of the market. Failing to know what to do with your cryptocurrency is one of the most common mistakes traders make.

Starting Out with Real Money

One of the best strategies recommended by experts is that you don’t jump into the market with real money right away. Instead, use a platform that will allow you to practice without suffering any actual losses. This will help you to understand the market and see the volatility of it. 

The more that you can learn about it, the better you will do when you switch to real money. During this time period, you should devise strategies and take note of any trends that you are seeing within the market itself.

Once you feel that you are ready to move on, put some money aside, and buy a few of the cryptos you think are the most profitable.

Failing to do this will result in you losing money quickly without learning from it. Generally, with the crypto market, you aren’t investing small amounts.

Therefore, any loss will hurt you financially. Take the time to practice and learn before you make a huge mistake. You always have to learn to walk before you can run.

Not Accepting a Loss

While we all want our coins to do well and be profitable, unfortunately, we have to accept that that is not always going to be the case. While coins will often drop below the value you bought in at; they will quickly reset and rise above.

There will be times, however, when a coin drops and keeps dropping. An amateur trader will not have a set amount for when to pull out of the coin. Instead, they watch their investment keep fading away until nothing is left.

Having a stop limit is essential in any stock market. Just as it is important to know when to sell your coins for profit, you also have to know when to cut your losses and get out of there.

While you will lose, you at least have the opportunity to invest some of it back into different crypto. Don’t be one of those traders who can never accept losing money on their investments.

Risking Too Much Money

The dream of becoming a millionaire is expected in the crypto market, especially with the number of people who made large amounts of money after bitcoin exploded overnight. As a result, people throw huge sums of money into the market, expecting it to grow and make them rich rapidly.

Unfortunately, these massive jumps in value do not happen much in the crypto market, and by investing a large amount of money, you stand to lose a lot of money as well.

If you can afford to lose it, then there is nothing wrong with what you are doing. If you are going to be put in a position where your life becomes a struggle, however, then you might be investing too much money into the market.

The saying goes, only invest what you can afford to lose. That way, if things don’t go your way, it’s fine. If things do, though, you now have even more money that you can use to invest. Don’t be one of those few people who don’t know how to stop throwing money into the market.

By carefully reading this article and avoiding all of these mistakes, you can put yourself in the best position to make money on the market. Always remember that nothing is guaranteed, however, and even if all trends are looking good, things can change instantly.

The crypto market is one that is extremely volatile and has to be monitored very often. Failure to do so will result in you missing out on opportunities to buy and sell. In worst-case scenarios, you might come back to find all of your money gone to a poor investment.

Be patient with the market, and always do your research. What cryptos do you plan on investing in?

The Evolution of Cryptocurrency Since its Creation

Since cryptocurrency gained fame in the mainstream, it has been showing rapid growth in the economic realm. But, why so?

There are several reasons behind it. Being fraud-proof, cryptocurrency does not permit any authorities to control it, not even the Government.Blockchain technology guarantees safe transactions that make it completely out of the reach of hackers or any scammers.

Over “two Billion” people are accessible to the Internet who do not have proper access to the conventional system, so they are advised to go for crypto.However, you need to keep one thing in mind, and that is once your crypto holdings gush in value, it will get much attention from the scammers.

It might sound unpleasant, but the truth is unavoidable. To prevent such unsettling events, holders are decentralizing crypto storage by eliminating cryptocurrency from the exchange. This is where purchasing wallets for your crypto assets becomes the most necessary to keep them secured.

7 Mandatory Wallets for Keeping your Crypto Safe

It would be best if you had wallets to protect your currencies, and this is what you will exactly get to know in this article. Know how to keep digital cryptocurrency protected with the 7 must-have wallets.

Keepkey

Keepkey is not that old in the business. It has come up with a hardware wallet with a very clean design. This wallet is commonly recognized as a port of Trezor’s code and firmware. It is like a premium wallet. However, it might be a bit on the heavier half, and resultantly it becomes more vulnerable to drops. In short, it is created with standard and is quite straightforward to operate client UI.

Atomic Wallet

This one has become a lot popular in its ground even being quite new in the market. It is a new non-custodial creation that has acquired a huge user base. It should be a primary pick as it already has the place to support more than 300 major coins and tokens. All the major operating systems such as Windows, Linus, Mac, Android, and iOS have the place for Atomic Wallet as it is easily available for all of them at present.

Another benefit of going for the Atomic Wallet is that it bestows a long-range of specifications, such as a default option for purchasing cryptocurrency just with a debit/credit card, “decentralized storage for private keys”, and instant exchange of assets.

That was all about its typical features.But, do you know what sets Atomic Wallet apart from the other wallets? It is none other than Atomic Swaps. It is a new decentralized transaction technology created based on hash timelock contracts.

This particular feature is only obtainable for Bitcoin (BTC), Litecoin (LTC), and QTUM. Recently, Atomic Wallet also added the name of Ethereum in the list of Atomic Swaps.

Guarda Wallet

Guarda is a wallet made for software, and it is running successfully in the business for over 5 years.

This one originally joined the market as an open-source single currency wallet when the market was in need. Now, it has evolved more than expected, and it has grown as a prospering ecosystem of products along with crypto monitoring services.

Several creativities have been applied during productivity. Nonetheless, the preliminary plan was really transparent as ever. The whole team aims to make an easy, completely decentralized, and pretty flexible cryptocurrency wallet fitted for all the beginners and the advanced users.

Guarda Wallet has evolved much and has a room for 45 leading blockchains with their tokens. It is also inclusive of the ones that are also not normally seen in multi-asset wallets.

For instance, Monero XMR which has the support of the web version. Guarda is proving every time being the best as it stays user friendly besides applying high-quality solutions for making the wallet set itself apart.

Trezor

It is another quality hardware wallet. Trezor is one of the very first ones in the realm of hardware wallet business. It is considered as the grade A space created to secure cryptocurrency.

What is it so popular for? Well, Trezor is the one to provide high-quality protection to your crypto assets, keeping it safe from both physical and virtual theft.It might not bear the look to turn many heads but can definitely show its capability through the work it does in securing the crypto assets.

The best part of using a Trezer wallet is that even if your computer bears the chances to get exposed to malware, your private keys will always be in the safe hands of Trezor. Trezor basically acts more as a treasury than a wallet in such scenarios. So, once you own one Trezor wallet, you can sleep peacefully.

Nano Ledger S

This is another hardware wallet that has mainly got fame for its work at a comparatively lower price. It costs as low as 65 USD. It is cheaper than its competitors. It is portable and easier to carry from one place to another compared to Keepkey. The lower price of the wallet actually made it quite highlighted in the market.

MyEtherWallet

This is a paper wallet. A paper wallet becomes quite necessary for the ones who desire to possess their very own personal wallets. They will be able to use their saved money for investing in the coins. You can create your wallet online on myetherwallet.com.

A good thing about this platform is that it does not store any of your personal data. It also comes with an offline version that you can download before use in case you are in doubt with the online one.

Download it from GitHub and use it offline as much you want. It is better to keep it in your head that paper wallets are free to use, but it can be operated successfully only when you gain enough knowledge about it.

Coinbase

Have you used GDAX? Coinbase is exactly the novice version of “GDAX”. Coinbase is a “hot wallet” which can be easily transferred to the “GDAX exchange” without any hindrance, and the transaction is completely free. It is only limited to Bitcoin and Ethereum wallets.

Electrum

Being a software wallet, it is a lightweight crypto wallet for mobile and desktop users. It has various features that have given it the position of the most flexible wallet of the present decade. It also comes up with a collaboration with hardware wallets like Trezor and Keepkey. In short, it is quite the one to make your crypto assets safer than ever.

Last Note

No wallets have been released till now that can be all in one. You have to go for the right wallet based on your assets and the protection you need. Always understand what your primary requirements are. Then, go for choosing the perfect crypto wallet to keep your assets completely safe from the scammers’ sight.

A trading venue’s liquidity represents how easily a trader can use the platform to exchange one asset for another.

If a trader sends a market order to buy or sell an asset and the venue can’t find enough buy or sell orders to complete the transaction at a reasonable price, the venue is likely struggling with low liquidity — and the trader is likely to take their future business elsewhere. 

Venues that provide adequate liquidity and competitive market pricing tend to experience a rewarding cycle, with traders who find their liquidity needs met, returning for more transactions, which provides liquidity to other traders acting as counterparties.

Liquidity can also help lessen the effects of individual transactions on an asset’s marketplace conditions. A venue struggling with low liquidity for a given asset will see a large portion of its order book eaten up by a single transaction.

This means that the order will crawl higher up the order book and incur a higher average price (or a lower one for traders trying to sell).

The orders left standing are less likely to accurately represent the asset’s price averaged across many venues.

A venue with high liquidity, however, can withstand a flurry of quick transactions before consuming a large portion of its order book, leading to better fills and happier customers.

Liquidity is essential for success, both in crypto exchanges and in far older and traditional financial markets. That’s why institutional venues such as the New York Stock Exchange often partner with in-house liquidity providers.

Those providers act as market makers, playing a major role in defining an asset’s short term market value by readily providing liquidity when the buy/sell orders that traders send to them are executed.Liquidity can be a little harder to come by for venue builders in the much younger world of crypto — but that doesn’t mean venue operators are out of options.

As crypto finance becomes more and more sophisticated, venue operators are finding ways to provide traders with the liquidity they crave. Three promising options are third-party market makers, cross-exchange market making and liquidity mining.

Different liquidity solutions can tie up different amounts of capital and operational capacity, so there is no one-size-fits-all strategy.

Related: Can a liquidity marketplace advance the crypto industry?

Third-party market makers

Crypto market maker agreements essentially replicate the in-house liquidity solutions that are popular in institutional finance venues. A venue makes the agreement with an outside liquidity provider — most commonly a hedge fund.

These providers usually trade in many different venues at once and can source the liquidity they need for one venue by executing trades at other venues.

Unlike market takers, who are willing to pay more than they’d prefer to obtain an asset because they value holding the asset itself, market makers are willing to buy or sell any asset as long as they can capture a marginal profit by hedging their trade on another venue and maintain their desired inventory levels.

To stabilize a long-term partnership, market makers and trading venues will often agree on a certain profit level that makers can expect to generate each month.

If the maker’s profit falls below that amount, the venue agrees to pay the difference.Venues may add extra incentives in the agreement.

For example, some makers will agree to provide loss leader pricing, which quotes the lowest price found across multiple exchanges in order to attract traders from other venues.

Trading platforms also sometimes offer makers increased margin levels. Venues regularly review their market makers’ balance sheets to ensure the maker’s creditworthiness. This review process helps venues decide which accounts will be allowed to temporarily trade to negative account balances.

Approved market makers can settle their obligations daily and, under some circumstances, weekly, which may mean that the trading venues’ short term liabilities will temporarily exceed the assets under their management until settlement occurs.

Market makers with increased margin levels can lend out inventory and/or arbitrage for other opportunities within settlement windows to increase their returns.

Market makers or exchanges that enter a formal liquidity environment may also have specific requirements when it comes to technical integration between the venue and the liquidity provider.

Makers who represent a financial institution often prefer to interact with exchanges via Financial Information Exchange, or FIX API, a standardized communication protocol for financial data.

This protocol is fast, efficient and optimal for co-located servers. Some less institutional traders may prefer to use a WebSocket protocol, which is mostly targeted at retail investors.

This method is still viable for high-frequency trading but is often slower than FIX and can handle fewer requests per minute due to rate limit restrictions.

Cross-exchange market making

In this strategy, traders can still turn to a market maker — but the maker is the venue operator rather than a third party. Thanks to cross-exchange transactions, the venue can source liquidity without risking significant losses.

Venue operators serve as market makers at their own venues — the “maker exchange” — and simultaneously act as market takers at one or more other venues — the “taker exchange.

” Those external taker exchanges — also known as source exchanges — have their own liquidity providers, who set bid and offer prices for other market participants to take.

Operators on the maker exchange use those bid and offer prices to set market-making conditions at their own venue, oftentimes with a markup to the source exchange.



In the example above, the venue operator will buy an asset sold on the maker exchange for $98, the lowest price available, while simultaneously selling that asset on the taker exchange for $99.

Their inventory levels remain the same, and they not only haven’t lost capital but have actually made a small profit of $1.

Likewise, the operator can sell an asset for the best offer they encounter on the maker exchange — $101 — while simultaneously recovering that inventory without losing any capital by repurchasing it on the taker exchange for $100.

The exchange operator can continue this process repeatedly to generate revenue.

Cross-exchange market making lets venue operators source liquidity without paying a third party to do it for them, but this strategy comes with capital efficiency issues.

The market maker service providers we discussed in the prior section often have lines of credit at multiple venues, letting them trade on margin rather than collateralizing the full amount of asset inventory they post for each trade.

A venue operator practicing cross-exchange market making without access to credit has to keep significant inventory in their taker exchanges, making it difficult to use that capital for any other profit-generating purpose or for frequently necessary rebalancing across trading venues.

Liquidity mining

Market making was an important service in traditional financial venues before crypto even existed, and cross-exchange market making between different crypto venues is a logical extension of this traditional finance concept.

Liquidity mining, however, is a strategy with much closer ties to crypto itself as an asset class.

Cryptocurrency has gained (and continues to gain) traction because of its uniquely decentralized structure. That decentralization is deeply tied to community participation.

Many blockchain protocols, for example, reward individual participants for staking coins or running nodes.

When structured properly, these rewards incentivize the distribution of computing power across a wide network of independent participants, which, in turn, makes the protocol itself more decentralized and thus more resilient.

Liquidity mining extends the blockchain tradition of turning to the community for decentralized support of important crypto functions.

Venues that turn to liquidity mining eschew any singular market-making source whether it’s a partnership with a professional market-making firm or their own cross-exchange market-making algorithm. Instead, they distribute open-source software to any participant who wants to download it.

These newly enlisted liquidity miners connect their crypto wallets and set parameters for the software to automatically execute market-making trades on participating exchanges.

A pool of rewards is algorithmically generated and distributed among miners, with miners who tolerate more risk receiving greater rewards.

Final thoughts

There is no one-size-fits-all liquidity solution, and every strategy features drawbacks and inefficiencies.

Liquidity mining is a theoretically promising strategy that’s now being implemented on-the-ground in a handful of crypto venues, but it still has a long way to go before it’s proven scalable for mainstream trading.

Cross-exchange market making not only creates capital inefficiencies but can also drive traders away due to the venue’s conflicted interests:

Though venue operators execute the strategy to provide liquidity, they do so by trading against and sometimes profiting off of exchange clients.

Market-making agreements have put off some crypto enthusiasts who prefer a decentralized approach and a definitive movement away from the world of traditional finance, but for many exchange operators, these agreements are realistically by far the most effective liquidity solution, providing access to credit lines and highly liquid non-crypto venues.

This article does not contain investment advice or recommendations.

Every investment and trading move involves risk, readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article was co-authored by Warren Lorenz and Aly Madhavji.

Warren Lorenz is the chief strategy officer of Pipefold — a non-custodial clearinghouse for digital assets that eliminates counterparty risk, liquidity risk and hacking risk, helping institutions to efficiently allocate capital across crypto markets.

Warren is also a limited partner at Weave Markets — a digital asset hedge fund — and was the previous managing director of trading operations at Amplify Exchange.

As an entrepreneur, Warren has built multiple products that were licensed and sold to hedge funds, proprietary trading offices and family offices.Aly Madhavji is the managing partner at Blockchain Founders Fund, which invests in and builds top-tier venture startups. He is a limited partner at Loyal VC.

Aly consults organizations on emerging technologies, such as INSEAD and the United Nations, on solutions to help alleviate poverty. He is a senior blockchain fellow at INSEAD and was recognized as a “Blockchain 100” Global Leaders of 2019 by Lattice80.

Aly has served on various advisory boards, including the University of Toronto’s Governing Council.

Key Takeaways
Coincheck, a Japanese exchange, will offer support for Minecraft-compatible items based on Ethereum non-fungible tokensThese blockchain-based items will work inside the Minecraft game through Enjin's EnjinCraft pluginThe project is unofficial, but there is considerable overlap between the Minecraft and crypto communitiesMinecraft players will be able to use in-game items imported from non-fungible Ethereum tokens. The feature will be rolled out with a third-party plugin from blockchain gaming company Enjin.

In-Game Cryptocurrency Swag

Enjin, a blockchain company that offers in-game items, has partnered with the Japanese crypto exchange Coincheck to support the trading of in-game Minecraft cryptocurrency tokens, Coincheck said in an announcement today.

The tokens in question can be imported into the game via Enjin’s EnjinCraft plugin. Each token corresponds to a separate item.

For example, the screenshot below shows one user holding the Forgehammer item, which the user imported from a non-fungible token in Enjin’s Multiverse series.



It is not clear whether Coincheck plans to issue its own series of Minecraft-specific tokens, or whether it merely intends to support Enjin’s existing line of non-fungible tokens.

Neither firm has replied to Crypto Briefing’s request for comment. It should also be noted that these tokens can be used in games other than Minecraft.

Enjin’s Multiverse standard means that several other games also support the company’s NFT tokens.

Minecraft and Cryptocurrency

This is not the first time that third parties have attempted to integrate Minecraft and cryptocurrency. Players have created unofficial servers that support Bitcoin payments such as BitQuest, MinecraftCC, PlayMC, and SatoshiQuest.

Those servers reward players based on their activity, or reward players for finding items.

Third-party developers have also created Minecraft clones such as Cryptovoxels and Craft.cash, which record land ownership on the Ethereum and Bitcoin Cash blockchains, respectively.

Minecraft itself does not have any official support for cryptocurrency, but that lack of support has clearly left room for fans to integrate cryptocurrency in creative ways.

Frances Coppola, a CoinDesk columnist, is a freelance writer and speaker on banking, finance and economics.

Her book “The Case for People’s Quantitative Easing” explains how modern money creation and quantitative easing work, and advocates “helicopter money” to help economies out of recession.

The 2008 financial crisis created an extraordinary financial melting pot. Into the soup went the legacy system, now shown to be unfit for this purpose: new ways of transacting in old currencies and new types of money.

This witches’ brew has now been stewing for over a decade, but the type of potion it will eventually produce is still unknown. Will it be a financial system fit for the digital age? Or will it simply be a souped-up version of the old system, with all its flaws and toxicity?

The immediate response to the 2008 crisis was to tie down the banks that had so nearly blown up the world. New rules were created to restrict their activities. New regulators were created to police their activities and prevent them doing anything that looked too risky.

New capital and liquidity requirements were imposed on them so they were less likely to run out of money in a crisis and, if they did, less likely to need bailing out by taxpayers.

Subscribe to Crypto Long & Short, our weekly newsletter on investing.

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See also: Frances Coppola – Mr. Powell, If You Want Higher Inflation, Give People Money


But preventing banks from crashing the financial system and wrecking sovereign finances didn’t necessarily mean making them safer for their customers. In 2014, the government of Cyprus, egged on by the International Monetary Fund and the European Central Bank, imposed losses of more than 50% on uninsured bank deposits in the island’s two largest banks.

The shockwave from this reverberates around the world to this day. The financial crisis had been destructive, yes, but depositors had been protected: The U.S. government had temporarily removed the limit on FDIC deposit insurance, and governments in other countries had guaranteed all deposits in failing banks.

But after the Cyprus haircuts, bank deposits were no longer safe. And it wasn’t just large deposits that were suddenly at risk. The Cypriot government originally intended to impose losses on smaller deposits – deposits that were supposedly 100% guaranteed.

Fortunately, the Cypriot Parliament had the sense to refuse to pass the legislation. But what is to stop the government of another country, one with a more compliant legislature, from reneging on deposit insurance?

While European governments were busy making bank deposits less safe, central banks were preventing depositors from earning anything. Interest rates were cut to nearly zero at the time of the financial crisis. Twelve years later, they are still nearly zero.

At the time of writing, the average interest rate on U.S. bank savings accounts is 0.06%. So central banks are chasing a target of 2% price inflation while keeping the return on savings at close to zero.

You’re being robbed, folks. THE FINANCIAL CRISIS WAS THE BANKING EQUIVALENT OF THE ASTEROID THAT KILLED THE BIG DINOSAURS.

The effect of all this was to give impetus to new providers. The burgeoning fintech sector offered higher-yield savings accounts to bank depositors desperate for return. But even these are only offering an average yield of about 1%. If you want better than that, you have to look elsewhere. 

And you don’t have far to look. The cryptocurrency marketplace offers yields of hundreds and thousands of percent for people who are willing to risk it. Freed from the regulation that prevents banks, and even new fintech providers, from taking the risks that are necessary for high returns, the cryptocurrency has become the go-to place for tech-savvy people who want to make a lot of dollars. 

But in becoming a high-risk, high-yield playground for dollar investors, the cryptocurrency world sold its soul. The early adopters of Bitcoin believed it would replace the financial system that had crashed and burned so badly.

And today there are still people who believe bitcoin will become the new “gold” in a global cryptocurrency system that will eventually replace the dollar for international transactions. 

But most people now playing in the crypto shark pool aren’t interested in world domination. Bitcoin replacing the dollar as the global reserve currency would seriously interfere with their plans to become dollar billionaires through crypto trading.

What they want is cryptocurrencies to be securely tethered to the major fiat currencies, especially the dollar, so they can be confident that when they have made their billions of notional dollars, they will be able to convert them to real ones.

So now we have “stablecoins” to protect them from the extreme volatility in cryptocurrency prices that can, in a heartbeat, wipe out their notional dollar returns. “Stablecoins” such as tether are the ropes that tie the cryptocurrency system firmly to the fiat currency system.

And even though everyone knows stablecoins aren’t dollars and the guarantees provided by stablecoin issuers are no more reliable than the deposit insurance guarantees provided by governments, these ropes are getting ever stronger. 


See also: Frances Coppola – The Stablecoin Surge Is Built on Smoke and Mirrors


As investors’ confidence in the dollar backing of the cryptocurrency ecosystem grows, the risks they are prepared to take in search of yield increase. “Yield farming” is all the rage. True, you might get scammed and lose your shirt – indeed as more sharks enter the pool, the likelihood of this happening is rising fast.

But there will be plenty more opportunities to make megabucks.  

So what began as a simple transaction system independent of the dollar has evolved into a complex ecosystem backed by billions of faux dollars in which the chances of getting defrauded are high but the returns for the lucky – or the fraudulent – are even higher.

It even now features cryptocurrency versions of the toxic derivatives that trashed the global economy in 2008. Whatever Satoshi’s vision for Bitcoin was, I doubt if it was this. 

Depressing though I find this digital version of the Devonian ocean, there is still hope. The bloodthirsty monsters that roamed that ocean drove some creatures onto the land, where they  became the ancestors of today’s land-living vertebrates.

Eventually the monsters died out, apparently because of competition from something that wasn’t even in the ocean. Their nemesis was trees, which fundamentally changed the global climate, making it impossible for them to survive. 

See also: Frances Coppola – Why Bitcoin-Like Scarcity Would Be a Disaster for the Dollar

What will be the nemesis of the cryptocurrency monsters? Perhaps it could be the quiet growth of digital money transmission services. Or maybe the – now inevitable – introduction of central bank digital currencies (CBDCs).

Perhaps some cryptocurrency providers will tether to CBDCs instead of relying on the faux dollars created by tether and its kind. It’s hard to say how this will evolve.

The death of the cryptocurrency monsters, when it comes, won’t mean the end of cryptocurrencies. When monsters die, the smaller things on which they preyed become free to grow and develop. Like the Devonian vertebrates, cryptocurrencies may evolve into new forms but they are here to stay. 

They will become a familiar and vital part of tomorrow’s global financial system.Conversely, traditional banks do seem to be on their way out. The financial crisis was the banking equivalent of the asteroid that killed the big dinosaurs.

Ever since, they have bumped along the bottom in terms of profitability while failing to develop the services or deliver the returns their customers want. I cannot see a future in which banks as we know them now still exist.

But they, too, might evolve into something different. After all, though the big dinosaurs are long gone, dinosaurs are still with us today. We know them now as birds.

Nowadays affiliate marketing is more popular than ever. Many online businesses offer affiliate programs to promote their products and services and online cryptocurrency exchanges are no exception.

Almost every similar platform has a special program that many affiliate professionals (or even beginners) can use to earn some money. If you have at least some knowledge about how to get bitcoins, crypto exchanges, blockchain, or digital marketing, you might want to check out the five cryptocurrency platforms that we’re about to present in this article.

But before that, let’s take a quick recap of what an affiliate program actually is.

What Is an Affiliate Program?

All kinds of businesses offer an affiliate program. They basically allow anyone to promote them and receive adequate compensation for their work.

Here’s a simple example. Let’s say that I sell computer keyboards on the web and that you’re a person who knows a lot about them and has some digital marketing knowledge. We can make a deal so that you promote my products, and I give you a cut for every keyboard I sell to the customers that you brought to my store.

How Does Affiliate Marketing Works with Online Cryptocurrency Exchanges?

That’s pretty much how affiliate programs in online exchanges work. The only difference is that most of the things are automatized, meaning exchanges have entire platforms for their affiliate partners. Moreover, they could easily track users coming from different affiliate sites just by using code.

Exchanges That Offer The Best Affiliate Programs

If your goal is to trade cryptocurrencies, then the part about affiliate programs wouldn’t be very interesting to you. However, it happens that some of the best crypto exchange platforms also have the best programs for their affiliate partners.If you’re interested in becoming an affiliate partner to some of the online cryptocurrency exchanges, make sure to take a look at the following five platforms.

CEX.IO

CEX.IO is widely regarded as one of the most lucrative platforms when it comes to the cut that affiliate partners receive when they bring new users to the site. Moreover, it’s also a very secure and decent bitcoin exchange if your goal is to make transactions rather than engage in its affiliate program. So, how does this program work in CEX.IO?

You’ll receive a unique link that people must use if they want to register on the platform. If they sign up via your link, they’ll be considered your referrals. After that, every transaction they make on the site will be profitable for you, as CEX.IO shares 30% of the fee charged on transactions.

Coinbase

Coinbase is one of the biggest brands out there, and its affiliate program (or referral program, as it is referred to on the site) is worked out in detail. The site can track cookies for 30 days, meaning that a referred person will still count as your referral even if they will register after some time (up to a month).

The good news about Coinbase’s referral program is that it offers a 50% cut on the fees for transactions that your referrals make. However, the bad news is that this lasts for only three months, meaning you have to act quickly to get the most out of it.

Changelly

Changelly is also a top-rated online cryptocurrency exchange platform, offering a great affiliate marketing tool. You can use the special dashboard to track everything you need, including your referrals, earnings, and more.It also allows you to customize the referral link so that your referrals can see a different currency and the amount when they click on it, which is a pretty nice way to make your offer more inviting.

Similar to Coinbase, this platform will share 50% of its earnings made by your referrals. Unfortunately, this is also active for a limited period – 90 days only.

Coinmama

Coinmama has a great affiliate program that will pay 15% of its commission on all purchases that your referrals make. The good news about this platform is that it’s available in 190 countries, so the potential number of referrals could be quite high.Moreover, Coinmama has no limitations, such as the ones set by Coinbase and Changelly. In other words, as long as your referrals are active and trading, you’ll be receiving your cut.

Payouts are mainly made in Bitcoin, and you need at least three successful orders from three referred users to get paid. Payments are conducted on a monthly basis.

Kucoin

Kucoin has managed to establish a name for itself in a relatively short period. Its affiliate program is actually pretty lucrative, as you may receive a 30% to 50% cut from the trading fees that your referrals pay. The actual percentage is determined depending on the number of referred people your bring to the platform.

That’s an excellent system to keep you motivated in your effort to bring in new users.The only downside to Kucoin is that its affiliate program is much younger compared to other cryptocurrency exchanges. Therefore, you’ll have to be manually approved to become an affiliate partner.

Final Thoughts: The Rest Is up to You

Now that you know what exchanges are willing to share part of their income with their affiliate partners, make sure to pick one that seems interesting to you. However, after you select it, you should take into account that it’s just the start of an exciting journey called affiliate marketing.

What you need to do next is try to invite as many people as possible to the platform. Ideally, those people will be willing to trade actively, making you a nice revenue stream.

Naturally, pulling that off isn’t very easy, and it takes a lot of learning, patience, and determination. For platforms such as Changelly and Coinbase, you need to rely on the element of time, as their referral links tend to expire. Therefore, if you’re new to the industry, we suggest you start with a site that doesn’t have limits.

• The Global Crypto Adoption Index from Chainalysis shows Venezuela, Russia, and Ukraine lead the world in crypto adoption.
• The only developed economies in the top 10 are China and the US.
• Three African countries made the top 10.

If cryptocurrency adoption is making any headway in breaking into mainstream economies, it isn’t necessarily the world’s economic superpowers that are leading the way.

According to a new report from blockchain research firm Chainalysis, of the 10 nations where cryptocurrency use is highest, only two are even developed economies: China and the United States.

The research firm developed a new methodology, the Global Crypto Adoption Index, to measure cryptocurrency activity among ordinary citizens around the world. “The intention is to highlight the countries where the most residents have moved the biggest share of their financial activity to cryptocurrency," Chainalysis wrote in a blog post.


Bitcoin

Crypto map reveals the most ‘Bitcoin maximalist’ country on earth
“While trading and speculation are important to the cryptocurrency economy, we wanted our index to emphasize grassroots adoption by everyday users," it said.

The firm’s Global Crypto Adoption Index accounts for each country’s population and the size of its economy when assessing four metrics: on-chain cryptocurrency valued received, on-chain retail value transferred, number of on-chain crypto deposits, and exchange trade volume.Of the 154 countries that the firm analyzed, it found that Ukraine, Russia, and Venezuela lead the world in terms of crypto adoption. Rounding out the top 10 are China, Kenya, the United States, South Africa, Nigeria, Colombia, and Vietnam.



Top 10 countries with most crypto adoption. Image: ChainalysisThe firm’s data lines up with that of independent researcher Matt Ahlborg, founder of Bitcoin analytics site Useful Tulips.

Ahlborg had previously noted that Africa and Latin America are currently showing huge growth in interest in cryptocurrencies such Bitcoin.

Venezuela, Colombia lead crypto adoption in Latin AmericaIn Latin America, for instance, it is Venezuela and Colombia that currently lead the way in terms of Bitcoin trading volume, according to data from Useful Tulips, as well as crypto adoption as defined by Chainalysis.

Venezuela, in particular, attracted Chainalysis' attention since current geopolitical conditions make it an almost perfect "case study" for the ecosystem: "Venezuela represents an excellent example of what drives cryptocurrency adoption in developing countries and how citizens use it to mitigate economic instability,” the firm wrote.

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“Our data shows that Venezuelans use cryptocurrency more when the country's native fiat currency is losing value to inflation,” the report reads, “suggesting that Venezuelans turn to cryptocurrency to preserve savings they may otherwise lose.

"Colombia, meanwhile, ranks ninth in the world in crypto adoption despite strict regulations that govern the industry in the country and act as a bottleneck for wider acceptance.

Lawmakers in Colombia, however, are actively working to make the country more “Bitcoin friendly,” attempting to ease regulations that limit trading and other activities.

The rising number of Bitcoin ATMs and payment fintechs in Colombia may also be a signal to foreign investors, developers, and entrepreneurs that the region is primed for a crypto boom.

• Ethereum's technical picture implies that the coin is vulnerable to further losses.
• The daily SMA100 creates strong support at $300.

Ethereum (ETH) hit the recent high at $488.88 on September 1 and has been in free fall ever since. The second-largest coin by the market capitalization dived to $335.23 on Saturday before recovering to $354 by the time of writing. ETH has lost over 6% on a day-to-day basis and over 10% in the last seven days amid a major sell-off on the global cryptocurrency market. 

ETH/USD: The technical picture

Ethereum's price dropped below the daily SMA50 at $370 and extended the sell-off towards $335 during early Asian hours on Saturday. While the losses have been partially recovered, the short-term trend is still bearish as long as ETH stays below the above-said SMA. A sustainable move above $370 will improve the immediate technical picture and allow for an extended recovery towards the psychological $400. A move higher will negate the bearish scenario and bring the resistance of $440 into view. 

ETH/USD the daily chart

Meanwhile, the RSI on a daily chart points downwards, signaling that strong upside momentum is less likely at this stage. A failure to regain the ground will worsen the technical picture and lay the ground for the further sell-off towards psychological support created by $300.

This barrier is reinforced by the daily SMA100 and has the potential to slow down the bears. IntoTheBlock's "In/Out of the Money Around Price" (IOMAP) model reveals that 3.76 million addresses have their break-even point around $300.

This cohort adds credibility to this support area and suggests that bears will struggle to push prices down.

However, if they succeed, another crucial barrier of $244 (daily SMA200) will come into view. 

DeFi (decentralized finance) is a revolution, but all uprisings can implode with the smallest of hitch or get crushed by the boot of the established order. They are also mostly brought down from within. Crypto is plagued by hitches.

How could it be otherwise? If you can’t make omelettes without breaking eggs, you can’t build a crypto future without breaking heads, wallets, smart contracts, laws, rules of established common sense, etc.

Ethereum, the blockchain on which the DeFi revolution is built, is meant to be a decentralized computing device that can be used to run programs that in turn speak to a Bitcoin-style blockchain. You can think of it as a virtual ATM if you like, if that is how you want to use Ethereum.

This is how the DeFi people want to program Ethereum and the programs are called “smart contracts.” There is no reason a smart contract could not obsolete all the tens of thousands of bank branches in the world that put even Bitcoin to shame for its colossal global energy footprint. In fact, computers are doing that slowly but surely anyway but in a centralized way the banks still own.

So far so good. Think of the glory of a financial world run by no one but enabled by disparate and diverse owners of a vast network of computers. All those government and corporate wonks would be obsolete, too and at last we would all be free of middlemen scamming, chiselling and slicing and dicing us out of our hard earned cash.

An explosion of tech genius will sweep away all the old disreputable gatekeepers. Hurrah!This breakthrough is why DeFi tokens are exploding in value. Their price charts look like 1999 (for stocks) and 2017 (for crypto) all over again. I myself am up to my ears in these tokens and have made amusing money from them so far. But there is a huge black cloud hanging over the whole arena.

Transaction fees.As DeFi exploded, so has Ethereum, and the cost of executing smart contracts for DeFi applications has gone ballistic. It is simply not viable to use these sites at the current costs unless you are swinging in big sums.You are talking of $10, $30, $100 in Ethereum to execute a single transaction on various of the significant platforms.

I won’t name and shame any particular one but when you go to pop $1,000 on deposit and earn 3% a year on a stablecoin, expect to be asked for $10, perhaps $20 or more to do so.

That’s a “nope” for lodging that money on the hope of earning $30 in a year. Sure, it makes sense if you are dropping $50,000 to $100,000 into one of these systems, but I for one don’t have that much trust to do that right now with all that might go wrong, and most simply don’t move money on that scale, period.

 I’m happy to play with a few thousand, but not when suddenly I’m $20 a click away for doing anything, including withdrawing it, with my money.Right now, at these costs, DeFi is a non-starter.

I’m not going to place a bet on Donald Trump losing the election if it costs me $80 in fees.

Is anyone? I don’t think so.These charges were meant to be cents not dollars, but the boom in DeFi has stuffed up the Ethereum network and the transaction costs have gone ballistic. So a cynic would say, “Well that was a quick bubble to get busted. DeFi is over already.”It could be.

But crypto has an amazing way of getting around its problems. Here is an off the cuff list of ways that will fix this issue:

1)     Ethereum is changing the way it operates from miners to “staking” nodes. This should crush transaction costs.

2)     Ethereum could tweak its current system to increase its computing power and make the network less congested some other way.

3)     DeFi platforms could shift to other Ethereum-a-like blockchains, which can cope with DeFi’s demands. (A good punt for speculators to play.)

4)     Platforms could re-engineer their (likely bloated) code to run faster and cheaper

.5)     Other technical solutions can be magicked up to decongest the current process like the sort of voodoo behind Bitcoin’s lightning network or some other nerd sorcery.

It’s easy to look at new tech and say, that is impractical, it doesn’t operate on current available technology fast enough to be viable, but that is always a mistake. I know I made it in computer games 35 years ago.

The winner in tech development always abuses computer resources and wins because those resources always balloon to catch up and the greedy code dominates the lean code with its juicy plumpitude.“It will never work” is famous last words in technology.

What is more, DeFi is a cat and it is out of the bag, and while the barn door might be jammed the horse has bolted. If you have tried DeFi, you will have had an epiphany moment, and even after later being dismayed at the current transaction costs, you still know this hitch is just a hiccup.

The key players now will form the core of this DeFi future and while some will wither through bad luck, hubris or incompetence, many crypto tokens in this segment, now worth hundreds of million, will in 10 years be worth hundreds of billions.

Once again, this is a buy and hold and buy the dips game where the smart investor will ride the oncoming roller coaster, winnowing away the losers from the winners.

So when you start hearing doomsters moaning about DeFi transactions invalidating the whole idea, you can rest easy that this will be the typical pothole in the technology road that all the titans of the Nasdaq had to jar through on their road to global dominance.

DeFi will be the same old bumpy track to glory.——-Clem Chambers is the CEO of private investors website ADVFN.com and author of 101 Ways to Pick Stock Market Winners and Trading Cryptocurrencies: A Beginner’s Guide.

Clambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards in 2018.

• This means that Security Token Offerings offer an extra layer of protection when it comes to protecting the investor’s funds.
• The possibilities of tokenizing these real assets have been huge.
• in Security Token Offering, only the security token will take place and be sold to various users across the world.

Crowdfunding models are a recent trend in the blockchain industry. Most of the startups and entrepreneurs raised their funds through crowdfunding platforms. In the blockchain industry, people raise their funds quickly through three methods.

Such as security token offering, initial exchange offering, and initial coin offering. But some people have confusion about which model to choose for the fundraising process. Because each model has its own functionalities.ICO is the first model launched in the crypto industry. But later on, they came to know that most of the ICO’s are scams.

This made many people avoid ICO and also trust became less. But IEO entered into the market as an evolution of ICO. As the cryptocurrency market keeps growing terrifically in the blockchain industry. People who tend to be more optimistic have now emerged towards a promising money future strategy called “Security Token Offering”.

Everyone has started to analyze the advantages and disadvantages of this new crowdfunding scheme. Also, how to launch a crowdfunding platform in accordance with the perfect SEC regulations. Countries around the globe are hopping on the path of digitization in the upcoming years.

In this blog, let us figure out the evolution of security tokens. Also, why organizations will adapt to Security token offerings in the future. Let us explore the solution. so keep on reading!.What is a Security Token?

Security Tokens are essentially financial securities.

These tokens are issued in the form of digital tokens. Also, they are developed with some security laws. This means that Security Token Offerings offer an extra layer of protection when it comes to protecting the investor’s funds. Security Tokens give the purchaser the ownership of the tokens.

For example, it can be a Real Estate, Equity, or any real-time asset. These security tokens are intended to bring in more liquidity and make it easy access for the investors. It is excellent to consider Security Tokens if your company is:

• Having a need to provide higher liquidity for Stakeholders.
• An Elevated growth organization.
• Operating a global business.
• Issuing transferable assets.

What is Security Token Offering (STO)?Security token offering entered into the cryptocurrency marketplace to replace the Initial Coin Offering websites. STO is one of the finest crowdfunding platforms where security token sales will happen.

 In ICO and IEO modules, only the utility tokens will be there for the token sales. But in Security Token Offering, only the security token will take place and be sold to various users across the world. You can list only the security tokens in security token offering websites.



Security Tokens are essentially financial securities.In this crowdfunding model, all the security tokens are backed with some real-time assets. It must definitely cross the KYC/AML verifications. It has all the ownership information of the investors in the digital format.

All digital information will be first recorded digitally in the advanced blockchain. Also, you should do all these things by the SEC rules and native government rules. This STO offers a high standard of security to investors. So this might reduce the risk factors of new crypto token issuers.

As we already know that all the security tokens backed with any real-time assets. so there will be very few possibilities of scammed tokens and other illegal activities. Some experts in the crypto space say that STO is trusted and more secure compared to other crowdfunding models in the blockchain industry.

Also, the Security Token Offering is more useful for long-term investment. This made most of the startups, entrepreneurs, and business people prefer STO for raising their funds in a secure manner.Importance of Security Token Offering:

There are already many stakeholders involved with Security Token Offerings such as token issuer, buyers, regulators, and exchanges.

The process of accessing the markets as a funding source was only possible for some big companies. but in the case of Security tokens, even some small companies can find their accurate target market and raise their funds easily.Any real-time assets can be tokenized as security assets.

The possibilities of tokenizing these real assets have been huge. One such instance is a Virtual Capital firm that could raise the money through Security Token Offerings by issuing a highly liquid and legal token.It has already started to build its momentum with where mature businesses tap into a highly liquid and decentralized market.

STO’s will have a great impact on the internal structures of the organizations. Just think of intermediaries, back-office work who are involved in payments are easily going to get streamlined with tokens and smart contracts.

Security token offering services bring some huge benefits for startups and entrepreneurs. such asLiquidityLiquidity is very high in Security Token Offerings compared to other fundraising models. But the only work is to find out the desirable cryptocurrency exchanges.

Therefore to bring out high liquidity, it is crucial that your tokens are listed in popular crypto exchanges. So those crypto exchanges would expand the liquidity factor, it might bring a good number of trusted investors.

Cost-EffectiveSmart Contracts avoid the need for middlemen. which cut downs the cost of service and delivery charges. Also, the administrative costs of buying and selling tokens are zero percentage here.

GlobalThese security tokens are acceptable for global trading depending on their set up. This means that until you have your cryptocurrency wallet you can trade from anywhere at any time.

Legality

Security Token Offerings are completely developed with some rules and regulations. These regulations and conditions vary depending on the location where the company launches Security Token Offering websites.What will be the Future of Security Token Offering (STO)?As for now, we can see an increasing number of Security Token Offering websites are launching in the digital platform.

We can predict that there are over 60% of STO websites built with top-notch security token offering services. which may be either active or upcoming.There are some key factors that say STO’s will be the future of fundraising capital. They are

• A good number of STO Software websites and other platforms are ready to be launched.
• With the massive growth of digital currencies, crypto startups will be looking for funds to raise their projects.
• Investors will be in need of High Liquidity.
• Since they are well-regulated, there are more chances that a huge number of investors will emerge towards Security Tokens development.

Moreover, a large number of Governments and Banks will start welcoming Security tokens development. since it provides a higher level of financial safety and protection. Thus, it will be more beneficial for both the people and financial governments.

Also, the fundraising market will see its rebirth with the enhancements of security tokens in the future.

Undoubtedly, a good number of investors globally emerge towards investing opportunities with security tokens development. Finally, we can expect that the STO process will be slow. but surely it will have a great impact on Fundraising campaigns.

Summing up:

There is no doubt that Security Token Offerings will be the future for investment capital. They will be legalized, well-regulated and token issuers can invest in them with more expectations of return. Security Token development also has the potential of opening up asset ownership to many people.

Keeping all these facts in mind, we can see the massive growth of Security Token Offering in the upcoming years.If you are looking to start a unique STO website then buy bug-free STO software from the trusted STO service provider.

 So that you can launch your STO website within a few days at a reasonable price.

A global pandemic, massive and worldwide protests, job automation, environmental issues and geopolitical tensions are just a few of the challenges facing humanity today.

Amid the chaos, keystone global institutions and bureaucrats have openly discussed the present day as an opportunity to remake the world.

“The Great Reset,” as the plan has been called, represents a radical initiative by world leaders — many of whom are unelected — to transform the global economy.

The World Economic Forum, for instance, claims there is an “urgent need” for “global stakeholders” to manage the direct consequences of what the International Monetary Fund has called “the Great Lockdown,” referring to the quarantines and social distancing practices implemented to contain the pandemic.

At a WEF meeting in early June, the world’s most powerful business leaders, government officials and activists first announced the proposal to reset the global economy in the aftermath of the COVID-19 lockdown.

The WEF sees a “unique window of opportunity to shape the recovery.

” The Great Reset will inform the “future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of the global commons.” In short, the Great Reset represents a new social contract for the world. The WEF also stated: 

“The inconsistencies, inadequacies and contradictions of multiple systems — from health and financial to energy and education — are more exposed than ever.”

Writing for The Hill, Justin Haskins calls the Great Reset “the most ambitious and radical plan the world has seen in more than a generation.” Even the British monarchy has weighed in.

“We have a golden opportunity to seize something good from this crisis — its unprecedented shockwaves may well make people more receptive to big visions of change,” said Prince Charles at the meeting, adding: 

“It is an opportunity we have never had before and may never have again.”

Many details of the Great Reset won’t be rolled out until the WEF meets at Davos, Switzerland, in January 2021. It is clear, however, that world leaders have big plans of a new world order and, contrary to the founding principles of Bitcoin (BTC) and crypto, centralization appears to be a big part of it.

“Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed,” wrote Klaus Schwab, the founder and executive chairman of the World Economic Forum, in an article published on the WEF’s website. He added: 

“In short, we need a ‘Great Reset’ of capitalism.”

Schwab said that “all aspects of our societies and economies, from education to social contracts and working conditions” must be “revamped.

”The cryptocurrency industry has been planning its own “Great Reset” as well — one based on decentralization.

While global governments want to put the world on a distributed ledger in order to digitize finance so governments can have more control, there are very smart people on this planet who have their own plans.

We in the crypto industry, for example, want to put everything on a blockchain. Instead of social credit systems and centralized fiat currencies, we want each individual to be in control of their own money, to be less dependent on banks, and to be in control of defining what money and real value is.

The Great Reset will be a revolutionary upheaval. It will create many hardships but also opportunities for companies, which recreate financial products in a decentralized fashion on blockchain, and for individuals, who no longer must rely on the traditional financial system.

As we find ourselves in a digital and technological revolution, hastened by the Great Lockdown, we as an industry cannot underestimate the implications of a crisis that has only just begun.

We must now change our mindsets in order to properly bear witness to the Great Reset and turn it into “The Great Awakening.

” That’s how we come out stronger on the other side.We’ll need to reconsider everything, including money. We must ask ourselves questions such as:

What is this abstraction we call money? As an industry, for instance, we’ll need to place less emphasis on price.

We’ll need to stop celebrating the development of central bank digital currencies as victories for cryptocurrency. The fact is CBDCs are not cryptocurrencies. They’re more like credit cards than cryptocurrency.

Satoshi Nakamoto saw an economic dislocation like the Great Reset coming. He etched the now famous line into the Bitcoin network’s genesis block:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” The 2008 financial crisis and the consequent bailouts of “too-big-to-fail” banks had inspired him to release open-source and peer-to-peer money.

“The root problem with conventional currency is all the trust that’s required to make it work,” wrote Satoshi, adding:

“The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.”

While world leaders openly announce the Great Reset, imploring the world to trust their vision, they paint a picture of a future, more centralized world. Contrarily, Satoshi stressed the importance of decentralization.

“A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s,” he wrote, adding: 

“I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.”

Satoshi believed peer-to-peer solutions and decentralization gave people back their freedom. He thought decentralization was a poignant answer to centralization and monopolies.

“[...]You will not find a solution to political problems in cryptography.

Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years,” he wrote. “Governments are good at cutting off the heads of centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.

”For how many years we can hold this “new territory of freedom” depends entirely on how well the cryptocurrency industry adapts to the Great Reset. People have only just begun to lose their livelihoods — that is, their businesses, their jobs, and so on — as a result of “the worst economic downturn since the Great Depression.

”We’ve seen increased digitization in 2020, and from artificial intelligence to blockchain to distributed ledgers, the Great Reset will only hasten this trend as the Great Lockdown hastened similar trends.

As central banks create their own digital currencies, the cryptocurrency industry is building its own digital economy, too.

After PC World published an article commenting on Wikileaks’ adoption of Bitcoin to circumvent a financial blockade against the whistleblower organization, Satoshi wrote: 

“It would have been nice to get this attention in any other context. WikiLeaks has kicked the hornet’s nest, and the swarm is headed towards us.”

It would have been nice to get the coming attention in any other context, but the Great Lockdown and subsequent economic depression has kicked the hornet’s nest, and the swarm is headed toward us in crypto.

The Great Reset might come down to central bank digital currencies versus the cryptocurrencies of the people — centralization versus decentralization.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Raoul Milhado is an entrepreneur with deep roots within the crypto and blockchain industry since 2015.

As the CEO of Elitium.io, he has been building businesses from the ground up for the last 10+ years and has been working hard on building a brand that lays the foundation of capitalizing on the ever growing crypto industry by introducing new age investment possibilities that would let clients explore a life of luxury they never thought possible.

He is actively working on expanding the new digital economy to help others live a life of independence, value and growth.

As American borrowers face an upcoming credit crunch, with average debt levels higher than 2008, many crypto investors are seeking to cash out their digital currency holdings in exchange for a dollar-denominated loan.

But as crypto loans grow, the loosely regulated industry is also drawing increasing government scrutiny.Despite being outside mainstream financial markets, these new lending products are catching a lot of investor attention. 

In 2019, crypto loans grew 700% from the year before, from $1 billion in loans originated globally to $8 billion, according to Credmark, a crypto credit research and data firm based in Singapore. Over the same time, total collateral deposited grew from $1.5 billion to $13.5 billion, roughly equivalent to the nominal GDP of Mongolia. 

See related article: Are US regulators finally warming to crypto and digital assets?

Even the coronavirus has not been able to keep the crypto loan industry down. While cryptocurrencies and exchanges convulsed with the rest of the Covid-ravaged global economy earlier this year, the crypto loan industry kept growing.

 According to Credmark, active crypto debt in the first three months this year grew by 44%, while assets under management grew by 75%.

Private crypto credit firms “continue to demonstrate impressive stability in an industry built upon inherently volatile assets,” Credmark concluded, in its 2020 Q1 report. Private firms are especially optimistic for 2020, the report added, “maintaining a bullish outlook for the rest of the year.”  

Crypto loans have grown in popularity along with the rise of decentralized finance (DeFi) as they offer several advantages to consumers. They allow the leverage of dollar-denominated loans with the arbitrage of future crypto gains.

For some borrowers, they can provide reduced tax penalties. They can also potentially earn more money for consumers with their higher return on investment (ROI). Compared to traditional finance, crypto loans have much more relaxed barriers to entry for lenders and especially borrowers.

Even subprime borrowers with poor credit can qualify for crypto loan products so long as they put up enough collateral, which is typically 150% of the loan amount. 

Most crypto loans, especially those sponsored by European crypto loan companies, offer loans that average around US$20,000, with some HODLrs taking out loans in the hundreds of thousands, according to BlockFi and YouHODLer.

American companies tend to deal with smaller loan amounts, usually averaging around $10,000. “We’re really where lending is when it comes to small businesses,” said Saher Zoabi, operations director of German crypto loan provider Bitbond. Unlike many crypto loan services, which offer loans in-house, Bitbond provides peer-to-peer lending with corporate support, Zoabi said.

“Bitbond connected global lenders to those unserved by banks, whether they can’t get to one or are high risk borrowers, especially in terms of credit.”Crypto loans are booming, industry insiders say, because of growing interest in alternative currencies as well as greater crypto adoption.




The SEC and CFTC have cracked down on Abra, a DeFi platform. Image: Shutterstock, Decrypt


“More people are getting into the market — and [the market is] active enough to maintain short positions,” Ilya Volkov, founder and CEO of YouHODLR, told Forkast.News. He also credits bitcoin halving — which some investors believed would cause a rise in BTC value.

“The recent discussion brought new people along for the market.”Crypto loan borrowers are typically long-time crypto users who are seeking liquidity in USD, having accumulated tens of thousands worth of cryptocurrency through mining or investment.

Borrower creditworthiness requirements vary between companies, with most operating similarly to a pawn shop — using only the transferred crypto collateral to secure a loan. But regulatory storm clouds may be gathering over this nascent industry.

The IRS is placing cryptocurrency users, including lenders and borrowers, under increasing scrutiny, tax experts say.

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — are also sending a public message to the industry by targeting Abra, the crypto app, in a coordinated manner.

The DeFi platform, which allows users to trade tokenized equities, also offers peer-to-peer lending as a potential use case.

The SEC charged Abra with offering and selling security-based swaps without registration, and CFTC accused the company of entering into illegal off-exchange swaps in digital assets and foreign currency.

On the same day last month, the regulators announced that the DeFi company settled the charges with each agency by agreeing to cease-and-desist orders and pay $150,000 in penalties. 

Regulators’ ire over users being able to purchase equities with “synthetic exposure to price movements of stocks and exchange-traded fund (ETF) shares” through a blockchain service may offer a clue as to where government scrutiny could go next, considering the international markets and tax issues involved with crypto loans.

Are crypto loans “helicopter money”?

Other than possible tax savings (or avoidance), what are borrowers doing with their crypto loans?While the phrase “free money” has been used by economists to describe the purchasing price of capital at near zero interest rates, crypto loans may tell a different story. 

According to David Olsson, Global Managing Partner of Europe and APAC at Consensys-backed BlockFi, crypto loan borrowers have been using their borrowed fiat currency to invest in other asset classes.

BlockFi has more than 90 institutional clients, including international financiers and private hedge funds, and has raised more than $100 million in capital funding. 

“With rates where they are, we may see a turn in the cycle — where right now is an uncertain time to invest,” Olsson told Forkast.News.

“However, people may want to take out loans through BTC to invest in other asset classes. That’s the most probable use case.

” While that may be the case for many BlockFi users, YouHODLR CEO Volkov says the Cyprus-based firm’s user base tend to use their loans to finance mining expenses or engage in arbitrage trading against the market. 

“We have two main borrower types. The first is a traditional HODLR — a crypto enthusiast. They are open minded and have decided to invest in [cryptocurrency], but they need cash for expenses,” Volkov said.

“The second type is a crypto trader who uses loan collateral to buy more crypto, someone of an active investor profile.

”The inherent risk in doing so, in taking out a crypto loan is, of course, the volatility of cryptocurrency prices. In case of default, if the borrower doesn’t pay back the loan, the lender gets to keep — or would be stuck with the cryptocurrency collateral.

But with no unified exchange, no defined regulatory framework and no physical asset base, how can submitted collateral match to a USD loan if a cryptocurrency’s price were to drop dramatically?

The risks may be magnified in the current coronavirus recession. According to Olsson, addressing this concern was a strong priority for the BlockFi ecosystem, especially in light of emerging cryptocurrencies and the recent BTC halving. 

“We have continuous risk systems [for distributed loans] running 24/7 to react as quickly as possible,” Olsson said. 




The trend of borrowing USD against crypto holdings is growing. Photo: Alexander Mils


Another factor driving crypto loans’ increasing popularity may be the interest rates, which are much higher than those on traditional loans. Compared to the estimated up to 8 to 9% ROI on a crypto loan, you would be lucky to have half that on a traditional investment account, which also carries risks.

With a 2% ROI on a Treasury index and the uncertain outlook for the stock market in the pandemic economy, the case for crypto loans may be highly persuasive to some lenders. Corporations also promote themselves as groups that merely link lenders to borrowers — largely avoiding the question of taxes or other regulations. 

Faced with the threat of near-zero interest rates in interbank lending, YouHODLR’s Volkov believes that crypto loan companies should integrate with traditional Wall Street financiers.

If many are seeking a way to earn interest on financial capital, why not provide one through crypto — and give them an incentive to further integrate into the blockchain ecosystem?

“I see good synergy between crypto and the traditional banking industry,” Volkov said. “On one hand, we have banks who are really tired from zero or near-zero interest rates. They face significant losses in their revenues, but they have really good financing infrastructure.

On the other hand, we have crypto companies with high interest rates, but little infrastructure.

”Others disagree. After all, cryptocurrency is not embraced in every financial circle.

While crypto is gaining a solid foothold in fintech, it’s still not adopted at a marketable rate for some consumer-focused financial institutions. Widespread acceptance may still be a long way away. 

“The opportunity for BlockFi is still in the asset class that needs widespread acceptance,” Olsson said. “I don’t see major banks coming in to provide these loans.”

Great Crypto Recession

While the crypto loan market continues to grow and shows no sign of leveling off, the next frontier, industry insiders say, may be the securitization of crypto loans. 

SALT Lending, a Denver-based crypto loan company, announced plans to securitize crypto loans in 2018, packaging crypto loans to sell to institutional investors.

Through a proprietary interface for loans, the company has expanded its user base and now accepts collateral in a variety of forms, including Dogecoin and PAX Gold. Recently, the company partnered with Cadence, a leader in digital asset securitization.

SALT Lending’s planned offering is now outside the public sphere — raising questions whether the offering is ongoing or even cancelled. And with that comes the nightmares of how mortgage-backed securities caused the Great Recession. 

SALT Lending did not respond to inquiries regarding securitization of crypto loans at the time of writing.What happens when these loans go into default? If crypto prices crash, will DeFi lenders, too — like banks did during the 2008 housing bust?

In these pandemic times as bitcoin and other alt currencies are riding high, crypto loan companies don’t seem much concerned.BlockFi, for example, says it has a zero percent loss rate.

“BlockFi has a proprietary risk model that is equipped to handle market volatility, which has enabled them to maintain a strong balance sheet and zero loss record for [lending and borrowing clients],” Alexi Foster, a BlockFi media relations contractor, told Forkast.News. 

Is the IRS on the move

A further benefit to crypto loans is reduced tax burdens. But that could also be changing soon.




The IRS is cracking down on underreporting of crypto taxes. Photo: meddygarnet, CCBY

David Kemmerer, Co-Founder and CEO of CryptoTrader.Tax, believes there has been increased demand for crypto loans due to the IRS’s crackdown on those underreporting their crypto taxes.

People are trying to hop on the crypto loan train while they still can. “People use crypto loans for a number of reasons — one of them is the tax advantage,” Kemmerer said. “If I borrow USD against my crypto holding, I don’t have to pay capital gains taxes. These loans could give them some liquidity, and that’s very sustainable.

”But the Internal Revenue Service is now also showing signs it is not pleased with the crypto industry.

“In 2019, we saw the IRS send out over 10,000 warning and action letters to those who they suspected of underreporting with the Coinbase subpoena,” Kemmerer said.

“That’s either from capital gains from long-time investors or those who didn’t report the interest from another crypto account.” Even as CryptoTrader.Tax’s user base has increased, Kemmerer estimates that more than half of crypto users out there are still not reporting their capital gains when it comes to crypto.

That’s concerning to the IRS, not only as an issue of underreporting, but of understanding currency flows of USD outside the United States. “They’re really focused on making sure that [crypto] doesn’t just become a safe haven for tax evasion,” Kemmerer said.

“As more and more pressure [against crypto] gets applied by governments around the world, tax tools like ours become more in-demand.

” Sharon Yip, the founder of Crypto Tax Advisors, a Washington D.C.-based crypto accounting firm, noted that cracking down on crypto tax delinquency, especially in those not reporting interest on crypto loans, is becoming a top priority for the IRS.

“Although I’m limited in what I can say, the IRS has gone after clients with full force regarding people who have underreported on their taxes,” said Yip, in an interview with Forkast.News.

“They’ve filed subpoenas, sent out demands and, yeah, made arrests.”Atomic Loans, a Toronto-based crypto loan firm promising a way for borrowers to control their crypto assets while receiving an instant loan, recently received $2.5 million in funding from Initialized Capital and ConsenSys.

Their loan management system is designed to give users access to a loan through their personal Atomic account. “Atomic Loans seems to be doing it in a legal way -— but that sort of tax loophole can’t last forever,” Yip said.

“Eventually, you have to pay capital gains taxes on whatever happens.

If you take out a loan in USD against your crypto, that may be beneficial in getting instant liquidity, but eventually, you’re going to buy/sell crypto — and that’s an additional taxable event.

”Others don’t see a need for the increasing regulation of cryptocurrency, contending that crypto-based financial products are not only more transparent but also more publicly accessible than traditional forms of investment. 

“No one can have inside information on Bitcoin, Ethereum, Litecoin or Ripple,” said Olsson, of BlockFi. “It’s a store of value. It’s a method of monetary transfer and payment.

It doesn’t give you a right to own anything else.

”While that may be the case, Yip’s recent experiences has led her to the conclusion that the IRS isn’t messing around when it comes to crypto tax underreporting. 

“Due to the growth in crypto loan demand, they’re really concerned about how the industry is growing from now,” Yip said.

“That’s one of their top priorities in the coming months. I wouldn’t be surprised if the [federal government] moves forward with cracking down more after this pandemic subsides.”

Reports suggest that PayPal (NASDAQ:PYPL) is finally jumping into the cryptocurrency pool with both feet. That news broke shortly before Square (NYSE:SQ) reported massive revenue growth driven primarily by bitcoin.

Proponents of cryptocurrency (crypto) believe this transaction medium will eventually supplant cash and card transactions. PayPal hopes adding crypto to its offerings will allow it to garner even more wallet share. Given PayPal's much larger user base and superior financials, this development should be a major worry for Square investors.

Why crypto?

Before we get into why crypto could be a big deal for PayPal, let's quickly define how it works. Crypto is a term representing any virtual currency that can be transferred directly from one owner to another through blockchain technology.

The transaction is decentralized, transparent, secure, and reliable.In the banking system, when you make a debit card purchase, your information moves from the retailer, to the merchant processor, to a payment network, then to the bank that settles the transaction.

A crypto transaction would directly transfer your crypto to the person or business you are paying.

Crypto holders use different versions of software and hardware wallets and a growing number of exchanges to deposit, withdraw, and exchange crypto at any time, day or night.




IMAGE SOURCE: GETTY IMAGES. 


Two quick comparisons make the crypto concept easier to understand:Debit cards have largely supplanted cash transactions, allowing each payment to be recorded electronically.Stocks used to be bought and sold using a certificate. Individuals had to hold on to these certificates and sign them over to sell the shares. Today, most stocks are bought, sold, and held electronically.
Cryptocurrency is seen as the next evolution of money, allowing users to buy, sell, and pay each other directly without the need for multiple intermediaries.

 When it comes to the size of the market, a recent Forbes article reported the cryptocurrency market is estimated to be worth $270 billion.

Fortune Business Insights projects the crypto market will grow by just over 11% annually between 2020 and 2027.It seems that crypto is largely being bought and sold by individuals, as Binance Research found just 7% of crypto assets are held by institutional investors.

Financial advisors seem to be picking up on the idea of crypto as a potential investment.

A Bitwise survey suggested that only 6% of advisors were recommending crypto for their clients last year, yet this figure is expected to reach 13% during 2020.

PayPal and its subsidiary Venmo have significant name recognition among individual users. Given the size and growth potential of the crypto market, it makes sense for the company to begin offering cryptocurrencies.

Who are the competitors?

The initial information about what crypto PayPal will support is limited. However, looking at what some other companies offer gives us a good idea of what PayPal is up against.

It bears mentioning that PayPal's Venmo system ended 2019 with over 52 million users and the pandemic has driven significant user growth among its peers.

In addition, PayPal's total active users last quarter approached 350 million. In order for PayPal to effectively compete against Square and others, it will need to offer the ability to buy and sell crypto, and it should allow deposits and withdrawals to and from external wallets.

When the company releases more details, these are key factors for investors to look for.

What's in it for PayPal?

The simplest explanation for why PayPal would offer crypto is the company is looking to be a one-stop shop for personal finance needs. Venmo is so well-known that to "Venmo" someone has become synonymous with making a payment.

In PayPal's Q2 2020 conference call, CEO Dan Schulman said in the U.S. alone, there were 150 million to 175 million people using a digital wallet from either PayPal or Venmo.PayPal is also leaning into the trend of touchless payments during the pandemic. 

Cryptocurrencies fit perfectly, since a crypto payment requires neither card, cash, or physical contact. Square's Cash App reported that bitcoin revenue jumped 600% annually in its last quarterly results.

PayPal likely believes its brand awareness, and larger user base, will allow the company to attract significant interest in its crypto offerings.

The one negative surrounding Square's bitcoin business is its razor-thin margins. Last quarter, Square generated a measly $17 million in gross profits on $875 million of bitcoin revenue. However, Square is seeing attachment gains from users who came to the Cash App because of bitcoin.

Some of these users have expanded their relationship into more profitable options like direct deposit, the Cash Card, and more. The key difference between PayPal and Square is that PayPal seems to be able to afford bitcoin's thin margins.

PayPal generated over $2 billion in free cash flow in the last three months, whereas Square burned through more than $200 million in cash over the last six months. In addition, PayPal is sitting on $7.3 billion in net cash and investments, whereas Square has a little over $1 billion. 

In short, PayPal has more users, better free cash flow, and more net cash on the balance sheet. If PayPal puts its marketing muscle behind its upcoming crypto offering, it looks like Square investors should be worried.

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Cryptocurrency trading has firmly taken its place in the financial market, and has been generating profits for professionals for many years. Of course, successful digital asset trading, like any other type of trading, requires a lot of knowledge and experience.

What to do for those who, for a number of reasons, cannot devote time to studying technical and fundamental analysis, as well as trading strategies and market principles?

Especially for crypto enthusiasts who are not ready to devote their lives to new science, the Crypto Accelerator project can help.

Passive earning technology involves storing WEC tokens on your wallet, during which new coins are mined. The average investor income is 50 per cent per year.Crypto Accelerator offers an option thanks to which income can be increased several times.

ACC standard unit of capacity allows to accelerate WAC production by 100-300 per cent. The mining accelerator ACC can be obtained in two ways: purchase on the exchange and for inviting referrals.

ACCs are freely traded on the exchange in a pair with USD, and their price depends on the volume of ACC sold and the supply/demand balance in the platform's internal market.

The number of ACC accelerators available to each user depends on the selected investment package and the amount of the deposit.The following license types are available on the Crypto Accelerator platform:         

               

If you have decided on the amount that you are ready to invest in the system of long-term passive earnings, you should follow 3 simple steps: register for crypto-accelerator.io; purchase a license;and replenish the deposit and block the tokens on the account.

You can transfer money to your personal account both in WEC and in USD. A dollar account can also be replenished with cryptocurrencies BTC, ETH, USDT, which are automatically converted to fiat at the current rate.

Do not worry that your money will be blocked on the platform account under the terms of the agreement.

Each investor can withdraw funds from the account at any time along with all the interest earned.In addition, as mentioned above, Crypto Accelerator provides the opportunity to earn WEC mining accelerators and bonuses in USD for inviting referrals.

The affiliate program has 4 levels, and depends on the investor's license:       


 

In order to build your strong financial future now, follow the link and register on the new cryptocurrency platform.

MOST PEOPLE USE either an app, an online platform, or a small hardware device as a wallet to store their cryptocurrency safely.

The exchanges through which cryptocurrency changes hands, though, and other high stakes operations need something more like a massive digital bank vault.

At the Black Hat security conference on Thursday, researchers detailed potential weaknesses in these specially secured wallet schemes, including some that affected real exchanges that have now been fixed.

The attacks aren't the digital equivalent of jackhammering a weak point on a safe or blowing up a lock.

They're more like opening an old-timey bank vault with six keys that all have to turn at the same time. Breaking cryptocurrency private keys into smaller chunks similarly means an attacker has to cobble them together first to steal funds.

But unlike distributing physical keys, the cryptographic mechanisms that underly multiparty key management are complex and difficult to implement correctly. Mistakes could be costly.

"These organizations are managing a lot of money, so they have quite high privacy and security requirements," says Jean-Philippe Aumasson, cofounder of the cryptocurrency exchange technology firm Taurus Group and vice president at Kudelski Security.

"They need a way to split the cryptocurrency private keys into different components, different shares, so no party ever knows the full key and there isn't a single point of failure. But we found some flaws in how these schemes are set up that are not just theoretical. They could really have been carried out by a malicious party."

For the work, Aumasson, a cryptographer, validated and refined vulnerability discoveries made by Omer Shlomovits, cofounder of the mobile wallet maker ZenGo. The findings break down into three categories of attacks.

The first would require an insider at a cryptocurrency exchange or other financial institution exploiting a vulnerability in an open-source library produced by a prominent cryptocurrency exchange that the researchers declined to name.

The attack takes advantage of a flaw in the library's mechanism for refreshing, or rotating, keys. In distributed key schemes, you don't want the secret key or its components to stay the same forever, because over time an attacker could slowly compromise each part and eventually reassemble it.

But in the vulnerable library, the refresh mechanism allowed one of the key holders to initiate a refresh and then manipulate the process so some components of the key actually changed and others stayed the same.

While you couldn't merge chunks of an old and new key, an attacker could essentially cause a denial of service, permanently locking the exchange out of its own funds.

Most distributed key schemes are set up so only a predetermined majority of the chunks of a key need to be present to authorize transactions. That way the key isn't lost entirely if one portion is accidentally eliminated or destroyed.

The researchers point out that an attacker could use this fact to extort money from a target, letting enough portions of the key refresh—including the one they control—that they can contribute their portion and restore access only if the victim pays a price.

The researchers disclosed the flaw to the library developer a week after the code went live, so it's unlikely that any exchanges had time to incorporate the library into their systems.

But because it was in an open-source library, it could have found its way into numerous financial institutions.In the second scenario, an attacker would focus on the relationship between an exchange and its customers.

Another flaw in the key rotation process, in which it fails to validate all of the statements the two parties make to each other, could allow an exchange with malicious motivations to slowly extract the private keys of its users over multiple key refreshes.

From there a rogue exchange could initiate transactions to steal cryptocurrency from its customers. This could also be carried out quietly by an attacker who first compromises an exchange.

The flaw is another open-source library, this time from an unnamed key management firm. The firm does not use the library in its own offerings, but the vulnerability could have been incorporated elsewhere.

The third attack begins when all the trusted parties originally derive their portions of the key.

As part of this process, each party must generate a couple of random numbers that will be publicly verified and tested for use later in "zero knowledge proofs," when the different key holders verify that they have the right key information without revealing the content.

This time, the researchers found that a protocol in an open-source library developed by the cryptocurrency exchange Binance didn't actually check these random values.

As a result, a malicious party in the key generation could send specially constructed messages to everyone else that would essentially choose and assign all of these values, allowing the attacker to later use this unvalidated information to extract everyone's portion of the secret key.

"This is the one that is instantly fatal," says KZen Networks' Shlomovits. "For the attack here you would craft a specific message, send it at the time of key generation, wait until the first signature, and then you're done. You would have enough information to learn all the other keys.

"Binance fixed the vulnerability in March and pointed out that it's only present during initial key generation. It does not introduce a lasting vulnerability—unless, of course, your organization's initial key generation included a malicious party from the start.

"We recommend that users upgrade to this new version of 'tss-lib' as soon as possible," the company said in a March security bulletin.

"Signing groups should only be re-created if any parties were untrusted or potentially malicious at the time of keygen.

"The attacks Shlomovits and Aumasson identified would not be trivial for an attacker to carry out.

They all involve a somewhat privileged position within an exchange, whether taking control altogether or controlling one portion of a distributed key.

Beyond identifying individual vulnerabilities, though, the two say that the goal of the research was to call attention to how easy it is to make mistakes while implementing multiparty distributed keys for cryptocurrency exchanges.

And how impactful those mistakes can be when they're in open-source libraries that can proliferate widely.

Using distributed key schemes is an important defense against takeover, but the cryptography is complicated enough that the development process can't be taken lightly.

"It takes a lot of time, a lot of expertise, and everyone makes mistakes," Shlomovits says.

"Literally everyone, because it’s really hard to do this translation from paper to an actual production system that holds funds."

The idea of an average investor being able to afford a luxury car, fine art or even a Class A real estate property has previously been thought to be unattainable.

However, tokenization is revolutionizing the investment process by offering fractional ownership of assets via security token offerings, and creating more opportunities for small investors to get involved.

Tokenization would not be possible without the adaptation of blockchain technology, which offers new layers of transparency, security and liquidity to investors.

Tokens are a newer way to invest in many types of assets, and many believe that security tokens will ultimately replace traditional stock ownership in the future, while also offering a way to invest in asset classes that were previously unavailable to all but the largest investors. Examples of the latter include the tokenization of high-end vintage cars, which have generated an average 330% ROI to UHNW investors in the past decade, according to Knight Frank, a global Real Estate consulting firm that created a luxury investment index for a variety of assets.

 Two companies, CurioInvest and MERJ, recently partnered with plans to offer 500 vintage cars, worth over $200 million, through a security token offering. Although token holders will not be able to use the vintage cars, the expected ROI on their investment would theoretically provide sufficient incentive to invest.

Tokenization has also created the opportunity to offer fractionalized real estate property ownership via security tokens, rather than through a traditional REIT offering. In 2018, 19% of the St. Regis Aspen Resort was sold for $18 million via a security token sale. Investors participated at $1 per token with a minimum required investment of 10,000 tokens or $10,000.

The property manager received necessary capital for the ongoing development and operations, and investors received the ability to invest in a very unique property with anticipated long-term appreciation.Ultimately, tokenizing real estate presents the opportunity for investors to invest in high end properties via a unique investment mechanism.

Houston-based digital investment bank Entoro Capital is currently collaborating with Red Swan CRE Marketplace, a business-to-business CRE tokenization system, with plans to offer a $2.2 billion portfolio of Class A commercial properties in Houston, Brooklyn, Austin, Oakland and San Jose. 

Tokenization of these high-end properties will enable investors to participate in ownership of Class A real estate property via security token offerings.  According to the firm’s website, this will provide investors “a substantially easier and more efficient process for acquiring commercial real estate investments (and enable) global investors to grow their portfolio of high-quality assets in a decentralized manner.

”As more people invest in token offerings around previously unattainable assets such as Class A real estate, fine cars, and more, the potential exists for smaller investors, previously shut out from these types of investment instruments, to realize ROIs previously only available to the UHNW and institutional investors.Patrick Doyle is an intern at Entoro Capital.

Ethereum’s biggest-ever upgrade is supposed to make the blockchain network faster and more efficient. But the new “staking” system could lock up so many of the network’s native ether tokens that investors who want to trade them may have to rely on derivatives markets. 

The blockchain, the world’s second-biggest, currently uses a validating mechanism similar to larger Bitcoin’s known as “proof-of-work,” where new data blocks and transactions are confirmed via power-hungry computers solving complex cryptographic puzzles.

Under Ethereum’s multi-year upgrade now underway, the network would shift to a “proof-of-stake” model, where investors validate transactions by staking ether on the blockchain in exchange for token rewards. It’s a bit like depositing dollars into a bank account for interest, paid out in dollars. 

Related: DeFi Traders Are Gaming Ethereum for Higher Profits, Researchers Say

A possible consequence, though, is the new staking system could soak up as much as 30% of the ether tokens in circulation, based on estimates from Adam Cochran, a partner at MetaCartel Ventures, a decentralized investment firm.

An address needs to stake at least 32 ether tokens, worth about $12,400 at the current price, to become a validator in the proof-of-stake model. “It’s possible to see a future scenario where the incentive to keep assets locked up on-chain is so great as to remove some liquidity from the market,” says Diogo Monica, co-founder and president of the digital-asset custodian Anchorage, told CoinDesk in an email. 

Lost liquidity

In May, a survey by the Ethereum developer Consensys found that 65% of ether investors were planning to stake the cryptocurrency under the new system, known as Ethereum 2.0, and half of those wanted to run validator nodes. Most staking mechanisms have a lock-up period.

Rocket Pool Staking, an Ethereum 2.0 staking service, offers staking terms ranging from three months to a year. 

Related: Blockchain Bites: Square's Revenue Surge, Eth 2's Final Testnet, c-Lightning's Latest Update

Some ether tokens might get locked in staking as the network upgrade proceeds. Ethereum 2.0 is being rolled out in three phases of what could end up being a multiyear process, with the original proof-of-work blockchain running in parallel until the two networks are merged at “Phase 1.5.” Wilson Withiam, a research analyst at the cryptocurrency data firm Messari, told CoinDesk that “ethers sent to the deposit contract will likely remain locked up” until Phase 1.5, and “that could cause a decline in the amount of ether readily available.”

Staking derivatives market?

Cryptocurrency analysts say ether-staking yields of 3% to 5% would be so tantalizing – at a time when government bonds carry near-zero or even negative yields – that few investors would opt to leave their tokens in Uniswap or other decentralized trading systems where they could be accessed by traders. 

“In that case, people will have an incentive to create ways to buy and sell ether shares that abstract whether the underlying asset is currently being staked,” Monica said. Derivatives might be a solution.  

Fixed income from staking could even be packaged as a distinct product. Holders who stake their coins could create voucher tokens representing a claim on the stake.

Then they could trade the tokens for ether or other cryptocurrencies. So buyers could capture the yield without having to own the underlying asset. As an alternative to selling voucher tokens, holders could deposit ether as collateral on decentralized lending and borrowing platforms. 

Messari’s Withiam says he thinks staking derivatives are inevitable.“It will give traders access to tradable assets so that they can continue to do what they do best,” Withiam said. “Exchanges will be able to offer new markets around these assets and potentially lock customers within their product suite if the synthetic assets aren’t transferable outside of the exchange.

” For now, all this really just amounts to speculation over how speculators will want to speculate on ether. But there’s no lack of motivation: Plenty of cryptocurrency analysts say it’s possible ether’s price could jump as demand increases for tokens to stake.

Ether’s price has tripled this year to about $390. Such returns far exceed bitcoin’s 56% gain on the year.  

In brief

• Although there is a huge number of Bitcoin wallet providers, many new users still struggle with creating a wallet.
• Mobile, hardware, and cryptocurrency exchange wallets are three of the most popular options, but beware of fakes and scams.
• Many cryptocurrency wallets allow users to generate multiple Bitcoin addresses, but this feature is rarely available on cryptocurrency exchanges.

When taking your first steps into the Bitcoin and cryptocurrency space, your first challenge is finding a safe, secure way to store your crypto.Fortunately, there's a huge variety of Bitcoin wallet providers available. These allow you to create a Bitcoin address (also known as a public key) that can be used for sending and receiving Bitcoin (BTC).

Some of these wallets also provide access to the private keys (essentially the key that controls the public address), allowing you to quickly move your funds into another wallet if needed.

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It's important that you don't get your public and private keys mixed up—you should never give out your private key, as anyone who has access to this can control your funds. 

Method 1: Download a mobile wallet

Mobile wallets are fast gaining popularity as a simple and efficient way to store cryptocurrencies. Part of the reason they're so popular is down to their accessibility and ease of use.

Most cryptocurrency mobile wallets are capable of storing a wide range of cryptocurrencies in a single place and can be used on both Android and iOS devices. Popular Bitcoin mobile wallets include Electrum, Jaxx Liberty and BRD.

Your first port of call for a mobile cryptocurrency wallet will likely be the Google Play Store or Apple App Store, depending on your smartphone operating system. Search for terms such as "Bitcoin wallet" or "cryptocurrency wallet" to find a mobile wallet that meets your requirements.

It's important to pay close attention to the reviews; a number of fake wallet apps designed to steal cryptocurrency private keys and seed phrases have been known to slip past checks and end up on these app stores. We recommend sticking with wallets that have a large number of users and excellent reviews.


You can also check the Decrypt reviews section, which is continually updated with our latest reviews of trustworthy mobile wallets.Once you've chosen a suitable mobile wallet, you'll be able to create your Bitcoin wallet in the app.

 This usually involves creating a unique security PIN to control access to the wallet.

You'll also likely need to write down a 12 to 24-word recovery phrase; this is extremely important as it's used to restore your wallet if you lose access to your device.

People have been known to go to extreme lengths to keep their seed phrases secure, from etching them on metal plates to splitting them up and storing them in separate safety deposit boxes (the approach taken by Bitcoin billionaires the Winklevoss twins).

Method 2: Use a hardware wallet

Arguably the most secure way to create a Bitcoin wallet is by using one of the many cryptocurrency hardware wallets available. These are essentially physical vaults that allow users to store cryptocurrencies in an offline environment and are secured by a number of hardware and software-based security layers.

These security layers can include a bank-grade secure element as with the Ledger Nano X, physical biometric security with the D'CENT Biometric Wallet, or the unique 'duress PIN' feature of the Coldcard Mk3.

Most cryptocurrency hardware wallets are secure against a wide range of attacks, but they can be costly, making them best suited for those with an extensive cryptocurrency portfolio.

Like most modern cryptocurrency wallets, hardware wallets generally allow users to generate addresses for a wide variety of cryptocurrencies, but Bitcoin, Ethereum (ETH), and Tether (USDT) are supported by most offerings.

To create your Bitcoin wallet on a hardware wallet, you'll first need to set up the device.

During this process, you may be asked to select which cryptocurrencies you want to manage on the device. Alternatively, some hardware wallets, like those produced by Ledger, allow you to quickly add and remove support for different cryptocurrencies using a companion app.

Depending on the device you use, you'll then be able to generate your Bitcoin wallet either on-device or using the associated app. Again, this will generally involve recording a recovery phrase and setting a PIN to limit access to the device.

Method 3: Register at a cryptocurrency exchange

Cryptocurrency exchanges are an extremely popular way to store Bitcoin, since they also typically offer a free cryptocurrency wallet.


A large proportion of the most popular cryptocurrency exchanges allow users to store and manage a wide variety of cryptocurrencies after simply opening an account, but others require users to complete identity verification and an anti-money laundering (AML) questionnaire before this feature is enabled.

Once you've enabled the wallet feature on your cryptocurrency exchange of choice, you'll be able to find or generate a deposit address in your account, usually in the deposit or wallet section of the website. Most cryptocurrency exchanges do not allow users to generate multiple addresses for a single cryptocurrency, forcing them to reuse the same address for each transaction.



Bitcoin

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Although most cryptocurrency exchanges provide users with a cryptocurrency wallet, it's important to note that not all exchanges are trustworthy.

There are number of fake exchanges that exist for no other purpose than to steal the deposits of the unfortunate individuals who register there.Because of this, it's important to do your own research before choosing an exchange, being wary not to use platforms without a good reputation.

Some of the most established and trustworthy names in the space include Coinbase, Binance and Gemini, but there are many other options available.

AnalysisThe Price of LINK Has Increased 55% this Month: What’s All the Fuss About?
The price jump in ChainLink's native token seems to be driven in large part by an increase in users andAs Bitcoin is entering its 9th (10th? 11th?) week of stagnancy, it seems more and more like the cryptocurrency may be in the midst of what could become an extended ‘alt-season’: a period of time in which altcoins outperform Bitcoin in terms of price (and, as a result, media attention.)

Last week, Finance Magnates reported that quite a few altcoins seemed to be making upward movements in leaps and bounds: Tezos (XTZ), Cardano (ADA), Dogecoin (DOGE), Stellar Lumens (XLM), and many others have climbed up significantly in recent weeks.

The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation

One of the fastest-climbing coins in terms of price (if not the fastest-climbing), however, is ChainLink (LINK).

The token powers the ChainLink ecosystem, which is a decentralized oracle network that feeds data from the “real world” into smart contracts on any blockchain; LINK is used to pay for services on the ChainLink network.

The value of LINK seems to have been climbing at a rather steady rate since mid-March, following the ‘Black Thursday’ price crash that took place on March 12th and 13th.

However, LINK’s bull run really seems to have accelerated starting in July.

Indeed, at the beginning of the month, LINK was sitting around $4.60; the coin reached a new all-time high on July 15th, when it moved just over $8.70 (an increase of nearly 90 percent.)





At press time, the value of LINK had corrected to $7.16, shaving off the increase to 55 percent since the beginning of the month. Still, the token’s price increase represents one of the largest altcoin price movements over the last several months.

What’s driving LINK up? Is the value based on increased usage or speculative hype?And will the current price correction continue, or could LINK’s bull rally just be beginning?

Evidence of increased usage on ChainLink’s network is strong

It’s important to note that Chainlink’s price increase has been coupled with a verifiable increase in activity on its network, which seems to suggest that the asset’s price growth has been at least partly organic.

Indeed, blockchain analytics firm Into the Block tweeted findings on July 19th that “the number of transactions over $100,000 in #ChainLink has increased 15x in 3 months while in #Bitcoin has remained boringly steady.

”“Our analysis shows that there were only 22 $LINK transactions over $100,000 in mid-April,” the tweet continued. “Well, that number skyrocketed to over 300 n July 13rd.”

   Additionally, Spencer Noon, investor at DTC capital, posted on Twitter today that “the number of active $LINK wallets with more than ten tokens has tripled from 10k to 35k” over a roughly 12-month-long period, and that “10k of these new addresses have appeared in the last few weeks alone.

”   Noon added that the Chainlink network is also “doing 90k transactions per day, up from 30k a year ago.”  

ChainLink’s deep involvement with the growing DeFi movement could explain some of the new user activity

Where are all of these new users coming from?Vance Spencer, co-founder of investment company Framework Ventures, explained to Finance Magnates that he believes that much of LINK’s price increase–and the corresponding increase in usage–has to do with heightened activity in another part of the blockchain world: decentralized finance, or DeFi.




Vance Spencer, co-founder of investment company Framework Ventures.“This rise could be attributed to Chainlink’s scaled usage in the DeFi space,” Spencer told Finance Magnates in an email.

“The market cap for DeFi projects has grown tremendously in the last half-year, and a significant part of the ecosystem now relies on Chainlink for oracle functionality.

”And the DeFi sphere has grown tremendously, indeed–Will McCormick, director of communications at global cryptocurrency exchange OKCoin, told Finance Magnates last week that the value of assets “locked” in DeFi networks has increased “almost 5X in the last 12 months.

”The increased focus on DeFi platforms and tokens is also evidenced by price rises in a number of other DeFi-associated assets, such as Compound (COMP), which famously peaked at nearly $370 in late June following its mid-June launch at roughly $90.

Dave Parkinson, the chief operating officer of international media and publicity firm Lamourie Media, also previously told Finance Magnates that “platforms that participate in decentralized finance like Chainlink and Compound” have also caught the attention of institutional investors.

ChainLink appears to have been working to position itself as an important partner of projects in and out of the DeFi space

In an article published by CoinDesk earlier this month, eToro market analyst Simon Peter also said that the connection between ChainLink and the DeFi sphere hasn’t happened by coincidence:

“ChainLink [has been] making all the right noises by partnering with a number of projects in the decentralized finance (DeFi) space,” he said.

Chainlink’s partnerships have also extended far beyond the DeFi ecosystem. Most significantly, perhaps, were the network’s partnerships with Google and Oracle, which were formed in 2019.

During May and June of 2019–when these partnerships were publicly announced–the price of LINK skyrocketed from roughly $0.48 on May 1st, 2019, to around $3.95 on June 30th, 2019, a whopping increase of approximately 720 percent.

The @chainlink ecosystem growth never ceases! 🔥This month lets welcome:@etherisc@SwipeWallet@0xProject@OffchainLabs@ChorusOne@QANplatform@StakingFac @Easy2Stake@ngrave_official@SetProtocol@NexusMutual@etclabs#4IR #PoweredByChainlink $LINK pic.twitter.com/qbMcaNFIQP— TheLinkMarine (@TheLinkMarine1) February 28, 2020

   LINK’s most recent big rally also seems as though it may have been largely driven by another significant partnership: SmartContract, the company behind the Chainlink oracle network, announced in mid-June of 2020 that it would be assisting China’s state-backed Blockchain-Based Service Network (BSN) with sourcing of reliable information about the real world.   “Additionally, the decision by the Chinese government-backed BSN to adopt Chainlink is an important move with very long-term implications,” Vance Spencer told Finance Magnates.   

ChainLink seems to have orchestrated its own ‘network effect’

Some analysts believe that ChainLink’s efforts toward partnership-building have positioned it at the top of the market.Indeed, Vance Spencer explained to Finance Magnates that “in the oracle space, Chainlink is the market leader and has developed a network effect, similar in nature to Ethereum’s first-mover advantage on the smart contract platform layer.

”The term “network effect” describes a phenomenon in which the value of a product or service increases according to the number of others using it–the more users that Chainlink has, the more valuable it becomes. In ChainLink’s case, the value of the network (and the LINK token) seems to increase with each new partnership it forms.

Therefore, it may well be that much of the price increase of the LINK token is part of a new movement of altcoin rallies based on usage and viability, unlike the largely hype-driven rallies that took place during the last altcoin season in 2017 during the ICO boom (when just about anything with the word ‘blockchain’ on it was going through the roof.)

Indeed, Andrea Zanon, chief executive of the Nimbus Platform, said to Finance Magnates last week that “each of [the] tokens” that has recently experienced a price rise “has its own fundamentals.”




Andrea Zanon, chief executive of the Nimbus Platform.

Staking could bring more hodlers to ChainLink in the future

In other words, even if the price rallies–including LINK’s–are partially driven by hype, they seem to also be largely driven by genuine usage.

“Users are excited by Chainlink because the technology theoretically solves a longstanding problem with smart contract platforms,” Vance Spencer said.

“If their mission is successful, they’ll have moved us beyond the realm of simply moving tokens around to a world in which blockchains are used to interact with events and important financial transactions.

”Vance also pointed to an important piece of ChainLink’s roadmap: “additionally, ChainLink will eventually have staking, meaning that normal users will be able to earn income streams by providing useful data to smart contracts,” he said.

Indeed, staking, yield-farming, and other forms of passive-income generating models on various cryptocurrency networks and platforms are becoming increasingly popular. 

Finance Magnates reported in September of last year that “staking provides a financial incentive for people to provide the network resources for validating transactions and for maintaining the integrity of a network’s services.”

Difficulties along the way

Of course, it’s not all sunshine and roses for ChainLink or its token–a twitter poll by renowned broadcaster Max Keiser found that out of more than 1,000 respondents, 72.4 percent of respondents believe that LINK buyers are “new, unique suckers.”

Additionally, LINK seems to have been the target of a number of financial manipulation schemes.

For example, the asset may have been a part of at least one pump-and-dump scheme in the past, though it’s unclear who orchestrated the scheme: 

Venture Beat reported in September of 2019 that blockchain analytics company AnChain.ai found that “the trading pattern of Chainlink’s Link cryptocurrency suggests a suspicious ‘pump-and-dump’ scam, or an attempt to manipulate the price of the cryptocurrency token.

”Additionally, earlier this month, CoinTelegraph reported that “a suspicious asset manager” known as Zeus Capital “is claiming to have entered into a short position targeting a 99% crash in the price of Chainlink,” following allegations that ChainLink was “Crypto’s Wirecard.

” However, the company appears to have been a malicious entity formed specifically to spread negative rumors about ChainLink; its motivations are still unclear.

Therefore, it’s possible that the recent slump in the price of LINK could be a sign that the token is somewhat overvalued:

that its partnerships–while impressive–still need more time to flourish, and that its reputation may need more time to gain trust that may have been damaged by the alleged outsider pump-and-dumping, as well as the reputational attacks from Zeus (false though they may indeed be.)

Still, the amount of usage that the ChainLink network seems to be getting could point to a longer-term upward trend–one that will undoubtedly be filled with necessary price corrections along the way

NEW YORK — The coronavirus pandemic is far from over and it’s anyone’s guess as to just how much worse things will get. Its impact on the global economy poses an equally worrisome mystery.

With so much uncertainty surrounding jobs and money, many young investors are looking for whatever sure thing they can find. A new report reveals millennials are leading the rush to buy gold and cryptocurrency stocks as the virus spreads.

A survey by MagnifyMoney finds one in six consumers is investing in gold or other precious metals over the last three months. The poll of over 1,000 Americans adds that nearly a quarter are seriously thinking about buying gold.

Feeling secure with gold

Researchers say millennials, 24 to 39 year-olds, are making 21 percent of these stock purchases during the pandemic. They are closely followed by members of Generation Z (18 to 23 year-olds) and Generation X (40 to 54 year-olds).

The survey finds only five percent of baby boomers are buying metals right now. Gold has a storied reputation for being very stable and resilient, regardless of how the stock market turns.

Seeking a secure place for their money, nearly 30 percent of Americans say investing in gold is safer than stocks. Although it’s stable, 35 percent still believe buying precious metals when the economy is down is a bad idea.

Men are more likely to make an investment switch, outnumbering women buying metals 3:1 amid the pandemic.

Taking a chance on Bitcoin

Young people are also going digital in an effort to make money during the stock market’s rollercoaster ride. Three in 10 Americans who now own Bitcoin or another cryptocurrency are millennials.Nearly the same number of 40 to 54 year-olds are also investing in the trendy virtual currencies. 

Members of Generation Z make up 25 percent of these purchases.Despite the rush into cryptocurrency, these young investors know they’re taking a big risk. Researchers find 29 percent believe buying crypto is actually less safe than buying stock. Over 40 percent say both are risky in this economy.

Just 15 percent of investors say Bitcoin and other digital money is a safer investment.

Fears about the future

After a devastating downturn at the start of the pandemic, the U.S. economy continues to build itself back up to its 2019 levels. With COVID-19 still a concern, many Americans have doubts about their post-pandemic futures.The poll reveals 27 percent of the country is considering shifting their retirement funds into metals or cryptocurrency.

A third of Generations X, Z, and millennials are all thinking of making a change to their retirement savings plans.On March 23, the Dow Jones Industrial Average crashed to 18,591 as the pandemic began. As of July 23, the DOW stands at 26,652. Investors now wait to see which way the market turns as the world searches for a vaccine to COVID-19.

VALR, one of South Africa’s leading cryptocurrency exchange, announced today that it has raised R57-million (US$3.4-million) to advance the adoption of cryptocurrencies.

The Series A equity round of funding was led by 100x Ventures, (the investment arm of 100x Group who are behind cryptocurrency derivatives trading platform BitMEX), with participation from 4DiCapital, and FNB CEO Michael Jordan and US-based company Bittrex.

VALR has raised R57-million in funding

Founded in 2018, VALR was established to bridge the gap between the traditional financial system and the new world of cryptocurrencies.

In June 2019, VALR launched bitcoin-rand trading and has since grown to become one of South Africa’s leading bitcoin trading platforms.

VALR claims to offer it’s over 40 000 customers the ability to buy and sell more than 50 cryptocurrencies including bitcoin and ether, at the lowest fees in the market.Farzam Ehsani, VALR CEO and co-founder comments on the funds raised.

“I am very grateful that despite the challenging global COVID-19 pandemic that has adversely affected many businesses around the world, VALR has been able to grow at a phenomenal pace and we’ve been able to raise funds and partner with a set of world-class investors, adding to our already distinguished group of shareholders,” he said.

VALR will use the proceeds from the capital raise to build new products and services, expand into new territories, and continue to build its team of professionals, particularly in the technology, regulatory and compliance, and client service domains.

Arthur Hayes, CEO and co-Founder, 100x Group, says, “South Africa has an incredibly exciting and fast-growing cryptocurrency ecosystem, and we believe VALR is well-placed to capitalise on future growth of bitcoin trading.

In VALR we’re backing not only a successful early stage business, but a management team with the ability to scale operations significantly.

”VALR has raised R79-million to date, including an equity funding seed round of R20-million in July 2018.

Justin Stanford, Co-Founding General Partner at 4Di Capital comments on the growth of the cryptoasset ecosystem in South Africa.“At 4Di we have been looking for appropriate investment in the crypto sector for some years, and we are delighted to be backing such a high-quality business and management team.

VALR has shown great integrity and leadership coupled with impressive growth, and delivers a mature, institutional-grade offering to the local market. This is becoming a necessary component in all markets the world over, as the crypto-asset ecosystem becomes increasingly more accepted and integrated into the global financial system.”

In brief

• Venture capital funding for the crypto and blockchain industries has all but flatlined in the wake of the coronavirus pandemic.
• Some VCs believe that blockchain is poised to benefit from the aftermath of the pandemic; others caution against a post-COVID "gold rush."
• Investors are taking an interest in "digital transformation" and companies in the "virtual world".

The coronavirus pandemic has changed the world. From the way we work to the way we socialize, nothing will ever be quite the same again. For the blockchain and cryptocurrency industry, the pandemic caused an even wilder ride than usual—and that’s in an industry famed for its volatility.

The cryptocurrency market tumbled alongside global ones in the middle of March, but it made a stunning recovery by the time Bitcoin underwent its third “halving” in early May. 

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But the question remains: what happens next? The battering taken by the global economy could mean that less money is directed into the crypto and blockchain industry. Less money flowing to new products could deflate the expansionary bubble of, say, decentralized finance (DeFi). So, where is venture capital money going, post-coronavirus? 

Crunching the numbers on VC funding

In April, at the height of the pandemic, disclosed VC funding for crypto projects dropped by more than 50%. Since then, overall funding in the blockchain industry has stagnated, according to Crunchbase.

For two groups on the site, one with 1,306 top blockchain companies and another with 5,878, there hasn’t been much in the way of new funding this year. The former records a $10 million increase in funding, from $7.1 billion in Q1 to $7.2 billion in Q3 (with no increase in Q2).

The latter, larger group also reports an increase of $10 million, from $21.1 billion to $21.2 billion, (also with no increase in Q2.)Crunchbase, of course, doesn’t tell the whole story—many funding rounds are still crowdfunded through ICOs. Just a month ago, the Celsius Network reported a $10 million investment led by Tether, while DeFi Money Market reported a $6 million token sale. 


 Coronavirus

COVID-19 sets crypto startup funding back a year

However, most venture capitalists Decrypt spoke to corroborated the funding squeeze during the lockdown. Some said that funding has since recovered as countries start to reopen.Wayne Lin, founder of Axia8 Ventures and a former senior partner of Shanghai-based BN capital, estimates (as a “snap judgment”) a 40% decline in crypto funding since the start of the year.

Of that, he attributed 20% to the coronavirus, which crashed the global economy, seized up funding and niche crypto industries, like the Bitcoin mining industry. The other 20% he put down to dwindling interest in an industry that for years had over-promised and under-delivered. 

“We're roughly back to where we were a year ago.”Jamie BurkeJamie Burke, CEO of London-based Outlier Ventures, said that global venture capital funding dropped by about 20% since December, to lows of $50 million—although this picked up to $93 million in May.

“Whilst there was a significant drop throughout corona, it's actually picking up significantly,” he said. “We're roughly back to where we were a year ago,” he said. Burke said that around a third of new funding is going to decentralized finance companies.


 Coronavirus

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Ran Neuner, CEO of OnChain Capital and host of CNBC Africa’s Crypto Trader, said much the same. “Many of the VC funds paused all investments, sometimes even those with signed term sheets and the like,” he said. 

Neuner operated a “Runway Fund” to keep crypto companies afloat during the pandemic (in exchange for equity). But as markets recover, “they continue to invest and in fact they are chasing deals like they did in the raging bull market.”

Could the coronavirus be a boon for blockchain?

Neuner thinks that COVID-19 even increased interest in Bitcoin. “This pandemic and the related flow into Bitcoin have certainly cemented BTC as a bona fide asset class that is here to stay,” he said (something elite investment bank Goldman Sachs vehemently disputes).

“There are many solid deals out there today and a whole lot of capital to fund them,” Neuner added. “Crypto is now a much more mature asset class and even the more traditional investors are deploying in the space.”

“Crypto is now a much more mature asset class."Ran NeunerKailin O’Donnell, Co-Founder and General Partner at NEM Ventures, is equally full of gusto.

“The blockchain industry seems to have for the most part dodged the worst impacts of the virus, and in many respects has benefited from the vast shift towards digital,” he said. “Large swathes of the industry were entirely digital and remote-based, allowing many blockchain companies to continue operating as normal.” 


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 Lin, however, is hesitant to look forward to a gold rush once the coronavirus subsides. “There has not, in my eyes, been a super, world-changing development or progress on blockchain tech,” he said. Which suggests there’s no reason to expect more funding.So, where will the attention of VCs focus, now that the world is starting to emerge from lockdown?

The post-lockdown crypto "opportunity"

O’Donnell, of NEM Ventures, said that funding will (obviously) toward ending the pandemic and also streamline remote working.Simon Kim, Managing Partner and CEO at Korean-based VC fund, Hashed, said that investors are “taking greater interest in companies in the virtual world.

” Kim’s firm has observed “an increasing demand from investors for investment opportunities in digital transformation—from contactless to automatization technologies—without sacrificing trust and integrity,” he said. 

“For crypto, COVID-19 is an opportunity.”Simon KimBoth Kim and O’Donnell think that this could be blockchain’s time to shine. The pandemic “opens up more investment opportunities for blockchain-based projects,” said Kim. VCs “understand the need for Web 3 technologies,” he said. “For crypto, COVID-19 is an opportunity,” he said. 

Nevertheless, he's treading lightly: “We still want to be cautious (conservative) considering the macroeconomic trend,” Kim said. The global economy has collapsed and excessive money printing could cause the depreciation of fiat currencies, like the dollar or the yuan. Kim is looking for “companies that can survive for a long time with a low budget.

” Still, where possible, he’s interested in investing. Blockchain is “able to enhance the trustworthiness of user privacy and data of participants” and its infrastructure “can reduce the cost of cross-border transactions and transaction fees online,” he said. 

 Coronavirus

Crypto startup funding down 50% as economy battles with COVID

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That’s why Hashed has invested in Voithru, a platform that crowdsources translations for 90% of Korean Youtubers’ foreign language subtitles and pays out in stablecoins.

Foreign interest in Korean content has increased after Parasite won the Oscar, he said, watched by quarantined Americans with more time on their hands.However VCs invest, it is clear that, at least among those that still believe in the capability of Web3, the funding will keep coming. 

“Blockchain and crypto are clearly here to stay,” said Alexander S. Blum, co-founder and COO of crypto asset management firm Two Prime.

DISCLAIMER

THE VIEWS AND OPINIONS EXPRESSED BY THE AUTHOR ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE FINANCIAL, INVESTMENT, OR OTHER ADVICE.

1.

What does the Forex market look like?

The Foreign Exchange market deals in international government-issued currencies, is open 24 hours a day, five days a week, and consists of decentralized, over-the-counter trading.

The Forex market is the largest trading market in the world, with a daily trading volume of about $5 trillion. The market comprises financial institutions, banks, businesses and retail investors, all of which exchange national currencies either as a matter of doing business or as a means to make a profit. 

This market emerged out of the creation of the gold standard in the 19th century and the subsequent establishment of the United States dollar as the world reserve currency in the 20th century. It wasn’t until the 1970s, though, that a rise in institutional and retail investing began to create the type of system we see today.

Finally, the advent of internet trading in the ’90s has made Forex more accessible and more automated than ever, which is what has allowed the market to blossom to its current size.As opposed to stocks, which are more often traded on exchanges, most of the Forex market is OTC.

This means that traders negotiate without any governing authority over them that guarantees the trades. Terms are agreed upon, and trades are made between the parties directly or through a broker, who is a middleman who facilitates transactions on behalf of clients.

The market operates 24 hours a day, Monday through Friday, though there are four main “sessions” each day that overlap based on the business hours of different global regions.Forex is known as a market that can move fast and be fairly volatile, which is exactly what has attracted traders over the last several decades.

It is just this volatility that provides opportunities for a lot of money to be made. Often, this volatility is derived from political and economic news, as the strength of a nation’s economy, as well as its international relationships, weigh heavily on the value of its currency against others.

For this reason, Forex traders pay a lot of attention not only to charts but to things like economic calendars, gross domestic product reports and updates on any conflicts unfolding on a global stage.

2.

What does the cryptocurrency market look like?

The cryptocurrency market is incredibly young — about 11 years old — and exclusively deals with digital assets. It operates 24 hours a day, seven days a week, and while OTC trading exists, much of the volume is channeled through exchanges.

Cryptocurrency trading started in 2009 with Bitcoin (BTC), though it would be a couple of years before the first exchanges would open. However, once they did open, and with the rise of many different altcoins, a vast ecosystem of trading different digital assets quickly blossomed.

Today, the market has a daily volume of about $100 billion, with most of that going through exchanges. These exchanges are open 24/7/365, however, trading regulations on many of these platforms can vary wildly due to different parts of the world having different rules and attitudes concerning cryptocurrency.

These markets are known to be highly volatile and open to manipulation. However, much like Forex, the volatility is seen by some as advantageous. While definitely susceptible to industry news and scams, in general, cryptocurrency markets are less affected by global events or traditional financial markets.

Traders are less likely to be scanning headlines and more likely to be paying attention to charts and technical analysis.


3.

What are the similarities between the two?

There are many parallels between these two markets, such as the fact they both deal in currencies, are fast-paced and volatile, and both rely on modern-day communications technology in order to operate.Maybe the most basic comparison to make between these markets is the fact that they are both based on currencies as opposed to other tangible commodities.

While not everyone actually grants digital assets the title of “currency,” it is this basic type of instrument that Bitcoin and others seek to emulate. Similarly, both markets are made up of a variety of players ranging from individuals to massive financial institutions, all of whom are either conducting regular business or attempting to earn a profit on volatility. 

One other major connection between these realms is the way that computers and internet technology play a role in the creation of their markets. While Forex emerged well before the IT age, it is no secret that it has exploded as a result, and today, the internet is the primary way that these trades are executed.

Cryptocurrency just takes this one step further, as it only exists in the digital realm, and in fact, couldn’t in any meaningful way be traded without computer networks.

4.

What are the differences?

Despite many similarities, key differences between these markets remain. One of the largest is the nature of OTC trading versus using exchanges but also how these markets respond differently to global economic pressures.

You’ve likely already picked up on many of these differences, and a major one is the nature of exchanges versus OTC trading.

OTC trading offers global liquidity, but trades often must be facilitated by a broker, as mentioned before. It is possible to get an account that gives direct access to the market, but this is highly regulated.

Going through a broker, however, is more straightforward for many investors and traders, but the broker is going to take a cut.

How much will depend on many variables, such as the actual institutions involved, the trading pair you choose and current market conditions. Cryptocurrency is most commonly bought on exchanges. An exchange, much like a broker, acts as a middleman and will take a cut.

Unlike brokers, though, the exchange acts as the singular authority over buying and selling and usually has a fixed rate (or rate structure) that will always apply to trades. There is no negotiating; there is just the exchange’s terms.

Therefore, this can simplify the process for users in some ways, but it does mean that user activity will be under the watchful eye of a central authority.Global currencies are also not the same as cryptocurrencies — a fact that proponents on both sides are usually quick to point out.

Traditional currencies (fiat) can be pegged to an asset, other currencies or nothing at all, but they are regulated by governments and central banks. The systems in the world that define their interactions are old and well established.

The value of a global currency will always be dependent on things: what commodities they produce and how their nations are doing against other global players.Cryptocurrencies, however, have very little of this.

None of them existed before a little over a decade ago, and none of them are tied to a particular nation or bank. While they can be pegged to other assets, most of them are not, and they rely on a combination of their own utility and speculative faith to derive value.

The intrinsic usefulness of a digital asset can vary wildly, and the market is fairly competitive, often with multiple projects vying to fulfill the same niche. Meanwhile, virtually none of them are well regulated, and the future of how legislation will play out is uncertain at best.

Some may speculate that fiat currencies can potentially collapse; however, they are much more tried and true investment vehicles on average than the majority of cryptocurrencies available.


5.

Which one is right for you?

Of course, this is a question that all traders have to ask themselves, but a lot of it comes down to which type of trading environment sounds better to you. Forex trading can offer more built-in stability, as well as an industry with deeper roots, more infrastructure and clear regulation.

However, the room for upside in this market may not be as extreme as cryptocurrency can offer. If you’re interested in finding a broker to get involved, check out FX-List for a comprehensive collection from around the world.

Also note that many FX brokers are now offering cryptocurrency options, though the terms on these trades will obviously vary case-by-case.

Cryptocurrency trading is certainly more of a “wild west” market, and the risks are greater, but there is potential for massive returns that would be unlikely to be found by investing in traditional currencies.

If this sounds better, then getting involved with one of the larger and more reputable exchanges is probably your best first step. Companies like Coinbase, Binance and Gemini all offer straightforward access for beginners, as well as more advanced tools for if and when you want to take your trading to the next level. 

Whichever way you go, or if you wish to dabble in both, the key is always going to be education. Staying educated will help you make the best trading decisions and hopefully stay ahead of rough times in the market.

With this guide, you should now be prepared to take your first steps onto either of these financial paths with enough information to find the type of trading you’re looking for.

Learn more about FX-List

• Bloomberg expects bitcoin to revisit its record high reached in 2017 and double to $20,000 this year, an analyst note published Tuesday said.
• The firm sees bitcoin breaking away from other cryptocurrencies and says the digital currency has increasingly favorable fundamentals and technicals.
• Bloomberg says that the same forces pushing gold higher also support bitcoin and that the coronavirus is accelerating bitcoin's maturity relative to the stock market.
• Visit Business Insider's homepage for more stories.

Bloomberg is taking the opposite side of Goldman Sachs, saying in a note published on Tuesday that bitcoin could double to $20,000 this year.Last week, Goldman listed five reasons investors should avoid bitcoin.

The most popular cryptocurrency has so many favorable fundamental and technical factors that "something needs to go really wrong for bitcoin to not appreciate," Bloomberg said.


The company said history indicated that bitcoin should return to $20,000 in 2020, representing roughly double its current levels.

"Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016's trend," Bloomberg said.

Bitcoin's maturation, fueled by the growing acceptance of digital currencies, the ability to trade bitcoin futures, and a steady decline in volatility, should keep it tilted toward price appreciation, the research note said.

Read more: The head of BlackRock's $1 trillion ETF-investing business told us the 3 biggest growth opportunities on his radar - and explained how to start taking advantage of them now

Additionally, Bloomberg said it expected bitcoin to appreciate if the stock market rolls over.

Technically, bitcoin has solidified the $8,000 level as support and could move higher if it decisively breaks above the $10,000 level — that echoes recent comments from the technical analyst Katie Stockton.

Bloomberg said it thinks bitcoin is benefiting from the coronavirus pandemic, for several reasons.First, historic declines in equity markets because of the virus didn't spill over to bitcoin, as a brief dip in the cryptocurrency was "promptly rejected," Bloomberg said.Second, the virus is accelerating the shift away from paper currency toward digital.

And third, new quantitative-easing policies from central banks around the globe are "helping independent stores-of-value such as gold and bitcoin," Bloomberg said.

Read more: 'I'm buying the property with 100% of other people's money': Here's the creative real-estate investing strategy Josiah Smelser used to complete almost $4 million in deals over the past 12 months

But Bloomberg's bullish view on bitcoin doesn't translate to other cryptocurrencies like ether.

"We see little upside in the ETH price absent a rising tide from bitcoin," Bloomberg said, adding that bitcoin "is breaking away from the pack in terms of adoption and is supported by almost-ideal macroeconomic conditions for stores-of-value amid quantitative easing.

"Bloomberg joins other influential investors in being bullish on bitcoin, including the hedge-fund manager Paul Tudor Jones and the billionaire investor Chamath Palihapitiya.

Bitcoin traded up 1%, to $9,762, on Wednesday.

The price of Bitcoin (BTC) suddenly dropped from $10,000 to $8,600 on BitMEX as nearly $140 million worth of long contracts were liquidated. The pullback came merely 16 hours after BTC surged to $10,473, testing the dreaded $10,500 resistance level.

Bitcoin typically sees a heightened level of volatility when it approaches key dates. Crucial periods in the cryptocurrency market include CME futures expirations and the closure of a weekly or monthly candle.

The 14% price plunge, which happened within merely five minutes, occurred without any futures or options expiration dates on the horizon. Cryptocurrency trader Hsaka emphasized the abrupt spike in volatility coincided with “no daily, weekly, monthly close. No exchange maintenance.

No major options expiry. No CME futures expiry.

”The intensity of the drop of BTC at a pivotal area at $10,500 without any other catalysts such as news or key events indicates that Bitcoin simply broke down from a multiyear resistance level.

In the near term, top traders remain divided. Some state that the price of Bitcoin could fall to the $6,000 to $7,000 range.

The primary reason behind predictions of a continued downtrend is the fact that the recent price action destroyed the short-term market structure of BTC. Others believe that Bitcoin is likely to rebound at $9,400, which has historically been a strong support level, and retest $10,500 again.

The bearish scenario for Bitcoin

Technically, the fall in the price of Bitcoin from $10,000 to $8,600 was a perfect liquidity grab. BTC has ranged between $8,600 to $10,000 since May 14. In a single five-minute candle, BTC took both the high and low points of the range. Cryptocurrency trader Cred said:

“Still within daily range ($8600 support, $10000 resistance). Testing midrange + monthly S/R at $9300s. Failed breakout usually leads to opposite boundary, so I'll look to sell the underside of $9300s if it fails. Boring, but watching developments at $9300s before acting.”

The bearish scenario for Bitcoin in the short term is quite simple: Reject $9,400 and fall below $9,000 down to lower support levels. The $9,400 level has served as an important area of rejection or recovery since early May for Bitcoin.

A clear breakdown below it would indicate that the short-term trend of BTC has shifted.

Traders like Salsa Tequila noted that the price of Bitcoin will likely reject upper resistance levels such as $9,900 as it sees a relief rally following a brutal correction.

If so, it would mark a rejection of the $10,500 resistance level for the third time since mid-2019. It raises the probability of the start of a new bearish trend.

The Bitcoin trader known as DonAlt said that BTC is now close to falling to lower support areas, including $7,700 and $6,400. Since both attempts at a breakout in October 2019 and in February were stopped at $10,500, the trader emphasized the possibility of a “triple top” formation being printed in the near term.





Speaking to Cointelegraph, technical analyst Eric Thies said that he favors a bullish scenario in the short term. But if the price of Bitcoin rejects $10,000 again and drops below $9,000, Thies said a drop to the $7,000s is a possibility in the third quarter of this year:

“If BTC can not reclaim $10k, the ceiling will eventually lower to $9.5k and push us to potentially lower $7ks over the summer.”

The recent correction also put the monthly candle of June at risk of evolving into a bearish one.




If the price of Bitcoin falls further to the low $8,000s, there is a possibility that a similar monthly candle as occurred in February, which led to a drop to $3,600 the following month, can be printed.

That opens the possibility of BTC seeing a multimonth correction.Cryptocurrency chartist Dave the Wave suggested BTC could see a consolidation period lasting until September, similar to previous bearish trends in late 2019 and early 2020.





Historically, Bitcoin tends to see a strong performance in the second quarter of every year. In the third and fourth quarters, however, Bitcoin often pulls back and sees a three-month-long correction.

The bullish scenario for Bitcoin

The bullish scenario for Bitcoin in the short term is to establish $9,400 as a support level and remain above it to climb back over the $10,500 mark. Thies told Cointelegraph:

“If BTC should reclaim $10k in the short-term, without dipping below $8.6k, we will see $11k thereafter, and ideally retest $10k before continuing even higher. Given the technicals available to us at this time, I’m expecting [the bullish scenario], with the bulls regaining $10k shortly and then to gain momentum to continue onwards thereafter.”

Similarly, Bitcoin trader Satoshi Flipper laid out a bullish pattern for Bitcoin to retest $10,500. But it would require BTC to remain above $9,400 and show strength at a key support area.





Matthew Ficke, the head of market development at OKCoin, told Cointelegraph that the perception of Bitcoin as a hedge against inflation and government influence is increasing, which may make Bitcoin more attractive:

"BTC’s move back above $10,000 coincides with civil and economic unrest throughout the US. Some argue the environment reminds the market that BTC can act as a hedge against excessive government influence. As equities are near pre shelter in place levels, many seem to view crypto as relatively attractive."

Ideally, the volume of the Bitcoin spot market has to maintain its momentum for the uptrend to continue. So far, major spot exchanges such as Binance have seen a decline in Bitcoin-to-Tether (USDT) volume, which may hinder the possibility of a major breakout above $10,500.

There is a possibility that the rapid pullback was a move to shake out weak hands, and that is what buyers are relying on. Bitazu Capital‘s founding partner Mohit Sorout said:

“Market liquidated over-leveraged participants on bitmex. $123M in shorts $96M in longs, all in a span of 24 hours. A healthy $btc sentiment reset. Range a couple days, trap late bears then run it back up.”

All bullish cases in the near term require BTC to remain above $9,400 and initiate a swift move back to the $10,000 to $10,500 range, which so far seems to be playing out.

Variables that may affect the price

The entire move up from $8,800 to $10,440 was mostly futures driven, and the pullback to $8,600 on June 1 was also caused by a cascade of liquidations in the futures market, as economist Alex Kruger said:

“Many traders decided last night’s $BTC pump was a response to Trump’s speech. That was a leverage driven breakout. OI increased even as liquidations exploded while predicted funding and futures’ basis turned extreme. Then levered longs got nuked today. No need for narratives.”

As seen in the steep pullback, when the futures market is behind a major rally to a multiyear resistance level, the probability of a correction increases. 

Before the drop to $8,600, the open interest of BitMEX’s Bitcoin futures contracts was at $718 million.

The funding rate was also at 0.16%, which indicates the overwhelming majority of the market was anticipating BTC to go up in value.A study by Coin Metrics also found that the derivatives market is now much larger than spot markets.

For BTC to see a proper bull market, a balanced distribution of volume across futures, options, spot and institutional markets is ideal. The report read:

“The largest increase is observed when derivatives markets are added to the mix. Similar to other asset classes, derivatives markets in Bitcoin are several times larger compared to spot markets. If reported volumes are to be believed, gaining exposure through derivatives markets may be the most efficient path.”

The futures market accounting for the majority of Bitcoin trading activity is a variable that may leave BTC vulnerable to a continued downtrend in the coming months.

Related: Crypto Funds in Demand, Institutions See Bitcoin as Alternative Hedge

However, a big positive point for Bitcoin is its steadily growing institutional adoption. Since May 11, investment firm Grayscale has been purchasing 1.5 times more Bitcoin than is being mined, absorbing a significant amount of circulating supply of BTC.

• On Wednesday, Goldman Sachs released a report that outlined five reasons that cryptocurrency is not an asset class or a suitable investment.
• The report drew backlash from cryptocurrency fans, mostly on Twitter. 
• "Hey Goldman Sachs, 2014 just called and asked for their talking points back," Cameron Winklevoss, the co-founder of cryptocurrency exchange platform Gemini said in a tweet. 
• Watch Bitcoin trade live on Markets Insider.
• Read more on Business Insider.

Goldman Sachs just made new enemies in the world of cryptocurrency. On Wednesday, the bank released a report that outlined five reasons that crypto is not an asset class or a suitable investment, drawing the ire of those that support the digital currency. 

"We believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients," said Goldman.

The bank also called out cryptocurrency's popularity with hedge funds, saying "while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale."It didn't sit well with supporters of cryptocurrency.

The Winklevoss twins, who co-founded Gemini, a cryptocurrency exchange platform, responded with vocal backlash to the report. "Hey Goldman Sachs, 2014 just called and asked for their talking points back," Cameron Winklevoss said in a tweet. His brother, Tyler Winklevoss, also joined in the fray, tweeting, "the more I think about it, the Goldman report is probably a head fake.

" Read more: A Wall Street firm studied every crash over the past 100 years — and concluded that the unusual performance of 7 tech stocks is masking the risk of a prolonged meltdown

In addition, Goldman compared crypto's popularity and epic 2017 rally to Dutch tulip mania, which occurred in the 17th century and is one of the most famous examples of a speculative bubble. 

"Goldman Sachs served a cold dish to the crypto community, which was largely expecting them to come out with a bullish call on the world's number one digital asset," Mati Greenspan, founder of Quantum Economics, wrote in a note, Bloomberg reported. 

He continued: "Perhaps Goldman is just trying to jawbone Bitcoin to buy more for themselves at a cheaper price. Who knows?"

Bitcoin and cryptocurrency investors have been nervously eyeing the bitcoin price since its highly-anticipated supply squeeze earlier this month.

The bitcoin price took a big step down this week, dropping 10% to under $9,000 per bitcoin after failing to pass the psychological $10,000 level.

Now, with investors desperately seeking reliable returns amid the coronavirus crisis, one top wealth advisor has said it's the wrong time to bet on bitcoin.

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As Bitcoin Struggles, This Tiny Cryptocurrency Has Soared A Massive 230%By Billy Bambrough

Bitcoin has so far weathered the coronavirus crisis well though some fear the bitcoin price could be ... [+] NURPHOTO VIA GETTY IMAGES

"Every bear market presents opportunities and it's tempting, particularly for younger generations, to look for speculative assets," Peter Mallouk, chief investment officer at wealth management firm Creative Planning, told CNBC, pointing to bitcoin and cryptocurrencies, gold and cannabis stocks.

"There is no need to go over into the speculative world," Mallouk said, warning speculative assets like bitcoin have "a lot more booms and busts.""It's a lot sexier to buy things like cryptocurrencies, gold and silver but ... they don't bring any income to the investor."


Bitcoin is famously volatile, gaining worldwide recognition in late 2017 after the price soared from under $1,000 per bitcoin at the beginning of the year to around $20,000 by December.Since then bitcoin has crashed to lows of $3,000 before bouncing back up to around $14,000 last year.

Mallouk, who defines "speculative" as "anything that doesn’t produce income and bring it to you as an investor," thinks bonds and certain company stocks are a lot more attractive than the likes of bitcoin in current market conditions, naming entertainment giant Disney, fast food chain McDonald's and consultancy Accenture as better bets.

"A bear market puts everything on sale. You have incredible companies that we know are not going anywhere, selling for half off," said Mallouk, who has previously warned bitcoin is a "dead man walking" and in a "death spiral.

"The coronavirus pandemic and subsequent lockdowns put in place to contain it sparked a massive stock market rout in March before central banks around the world, led by the U.S. Federal Reserve, promised to back the vast majority of markets.



The bitcoin price has climbed over the last 12 months but has swung wildly, soaring to over $13,000 ... [+] COINBASEThe Fed has pumped trillions of dollars into the U.S. economy over recent months in a desperate bid to prop up the market though some have warned the unprecedented action has artificially inflated stocks.

The tech-heavy Nasdaq is now in positive territory for the year, boosted by the likes of Google and Amazon, while the S&P 500 has almost recovered all of its March corona-crash losses.

However, bitcoin, as well as some smaller cryptocurrencies, have outperformed most other assets so far this year.Bitcoin is currently on course to be one of the year's best performing assets, though many bitcoin and crypto analysts have warned a planned bitcoin supply cut earlier this month could mean it's hurtling toward a sudden crash.

The bitcoin price had been holding up since its third supply cut, known as a halving, on May 11—although cracks began to appear this week when the price moved sharply lower, losing around $500 in a matter of minutes.Follow me on Twitter. 




Billy Bambrough

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported… Read More