Is Bitcoin’s Bullish Run Over?

Some hours ago, Crypto bulls propelled Bitcoin and many crypto assets into want crypto pundits called a relief rally, however recent market actions reveal such moves stalled as investors became unsure of what might happen next.

Adding credence to such bias is data collated by Glassnode that shows as Bitcoin price plunges the supply of the three major stablecoins namely Tether, Circle, and DAI has break record highs, suggesting, investors are mostly staying on the sidelines.

About $20 billion of long positions were liquidated in the past week, according to Sam Bankman-Fried, the helmsman behind crypto derivatives exchange FTX. “In terms of price movements: the biggest part of it is liquidations”

Short-term traders are currently having a tough task breaking into profits on the bias that reveal 70% of all short-term Bitcoin holdings are currently at a loss.

After a recent attempt by Bitcoin buyers in pushing the flagship crypto above $40,000 price levels, it only took few hours for it to fall back on the $38,000 support level.

Weakened market sentiments were triggered when the Chinese government in the past few days issued a crackdown on the Bitcoin mining industry coupled with exclusion from its financial ecosystem as the Chinese Apex bank reaffirmed rules curbing crypto transactions, thereby pushing the Crypto market to lose more than $500 billion in value.

Indeed, it’s no longer a hidden fact that the pioneer crypto asset is still the engine that drives the crypto market. Market analysts still expect more headwinds over growing calls for stronger regulations.

Consequently, Fink the leader of the world’s biggest asset management company advised investors that it was too early to know whether crypto assets like Bitcoin were “just a speculating instrument and buttressed on broker-dealers being the biggest gainers amid the crypto’s high volatility.

This further suggests though BlackRock has some of its funds exposed to the world’s most popular crypto asset, considering it owns a 15% stake in MicroStrategy, managed by Bitcoin supporter Michael Saylor, experts anticipate the $9 trillion asset management company would prefer to see more stability from Bitcoin before directly exposing its clients to them.

The flagship asset has already lost more than a third of its value since its mid-April record high as worries about the pioneer crypto negative environmental impact has dented the argument that Bitcoin will inevitably draw more mainstream investment.

Bitcoin’s Hybridization With The U.S. Dollar, The Buck Stops Here

Their rise continued into today as Visa announced in a statement stating, “Visa’s standard settlement process requires partners to settle in a traditional fiat currency, which can add cost and complexity for businesses built with digital currencies. The ability to settle in USDC can ultimately help Crypto.com, and other crypto native companies evaluate fundamentally new business models without the need for traditional fiat in their treasury and settlement workflows. Visa’s treasury upgrades and integration with Anchorage also strengthen Visa’s ability to directly support new central bank digital currency (CBDC) as they emerge in the future”.

This new method for swiftly exchanging and spending cryptos without exchanging them into fiat currencies through a third-party exchange is a new development for the cyrpto.com card or any credit card, for that matter. However, the technology behind USDC and other stable coins such as “Tether” (the most widely used stable coin, created in 2014) this widespread adoption and true integration is something of a recent development. Stable coins have helped people in making cross-border transactions both quicker and cheaper without the volatility associated with other cryptocurrencies. This is due to the fact that they are pegged to a fiat currency, almost always being the U.S. dollar.

In fact, taking a quick glance at coinmarketcap.com, one can easily see how Tether has been utilized as a means for sending or receiving funds more than Bitcoin and Ethereum combined. Today, for example, tethers volume in the last 24 hours was over $80 billion and has for the past few years held the title of the most widely used way to transfer funds via blockchain.

monmon#3

Tether is supposed to be backed by cash reserves or reserved assets, although there has been some mistrust dealing with how much reserves they actually have on hand. USDC has overcome these concerns by having complete transparency — and giving users the assurance that they will be able to withdraw 1 USDC and receive $1 in return without any issues. To this end, it says a major accounting firm is tasked with verifying the levels of cash that are held in reserve and ensuring this matches up with the number of tokens in circulation. Although the volume in this stable coin is currently 80 times smaller than that of Tether, which has been in circulation for over six years, it offers so obvious advantages, and the three-year-old USDC will surely grow at a quick pace, especially with these new developments.

Bitcoin rose about steadily over the weekend, and the additional 3% earned today puts BTC futures at approximately $58,000, forming a sizable gap between today’s candle and Friday’s. At the same time, Ethereum gained a full 8% today alone. This is likely due largely to the fact that while Tether has been programmed to run on several blockchains, USDC is running exclusively through the Ethereum blockchain. Another aspect of stable coins that I think is being overlooked by other market technicians is their effect on the U.S. dollar. Not only does their increased usage reaffirm the dollar as the world’s reserve currency, but their spike in the digital currency world benefits the dollar directly instead of going against it as cryptocurrencies innately do. They are considering the fact that the more stable coins are used and in circulation directly equates to more purchasing of U.S. dollars and U.S. treasury bonds in the case of USDC.

chart monm#2#2

To illustrate this point, consider the following circumstances of the U.S. dollar index. After a rough four months of declining value in the U.S. dollar, in which time the index lost a whopping 11% in value. Now consider that a month ago, we had a reversal in the USD, a pivot from bearish to bullish. Now consider it was exactly one month ago when Visa announced they were going to soon be implementing the use of USD coin on their crypto.com card. Since then, the dollar has seen one golden cross between the 50- and 100-day moving averages and a stellar 3% increase in value drastically different than the months prior. I cannot claim this is entirely due to USDC, but I will put my neck on the line to suggest that it had a huge part in the dollar’s sudden reversal from bearish to bullish.

chart #1 monmon

This is a narrative where people have wanted to take part in the many benefits of Blockchain and decentralized ledgers but were stuck on the fact that digital currencies are not backed by any guarantee and are wildly volatile. These problems have had been remedied many years ago by the introduction of stable coins. In essence, these coins bridge the gap between fiat and crypto while at the same time guarantying value and minimizing their volatility. This topic is one that I will dive into in the future, most assuredly probably do that myself. All my editing show is your show part of it.

How to Earn Passive Income with DeFi

Contents

Decentralized Finance

While Satoshi Nakamoto’s Bitcoin creation was to bring an alternative to fiat currency, DeFi is looking to take it one step further.

After the evolution of centralized finance in the crypto space, DeFi is looking to battle global finance and the long-established financial sector head-on.

As the name suggests, DeFi looks to bring a truly decentralized, community-driven financial services platform.

DeFi is designed to be both “Permissionless” and “Trustless” in a decentralized world akin to that of Bitcoin.

This is in contrast to the world of CeFi, where there are governance and control over the financial platforms.

As the market leaders look to innovate and deliver an alternative to the existing banking model, there are a number of ways in which crypto holders are able to generate income.

When considering the lack of KYC and AML requirements, due to the decentralized nature of DeFi, DeFi is not only targeting the banked but also the non-banked that is estimated to sit at around 1.7bn.

As is the case with more traditional financial products, investors have the option to generate active or passive income.

Active income would include the trading of assets available across DEX platforms, these being decentralized exchanges. Similar to trading cryptos and other asset classes, this is a hands-on practice and even more so in the volatile crypto world.

Passive income is just the opposite, where investors and crypto holders may earn income from cryptos held but are not being actively traded.

Passive Income

While DeFi is in its very early days, there are a number of ways in which investors can earn passive income. The entire reason for the existence of such platforms and products is to deliver liquidity to the DeFi space through incentivization.

Income-generating DeFi products currently include:

  • Yield farming
  • Liquidity mining
  • Staking
  • Decentralized Exchanges (“DEX”)

Unlike the CeFi space, there is also a low barrier to entry, supporting innovation that will be key in delivering an alternative financial services platform.

So, for those holding stablecoins looking to generate a steady income stream, the DeFi world offers just that.

Taking a closer look at the passive income products on offer:

Yield Farming

Yield farming is the generation of yield from crypto assets.

The product is comparable to bank deposits, fixed-term deposits, and even government bonds.

Investors deposit fiat money into financial institutions via bank deposits and fixed deposits, which gives the institution liquidity. Investing in government bonds gives governments liquidity. The liquidity is then used to generate growth by the institution or government.

Not only can the community generate income from crypto assets already held. Yield farmers can also borrow crypto and generate income. This is profitable when interest rate differentials are aligned in favor of the borrower.

Yield farmers can farm yield from DeFi money markets, liquidity pools, and incentives.

As an example, a yield farmer places 10,000 USDT into a DeFi protocol, delivering liquidity to the platform. The protocol gives the yield farmer a reward for depositing the USDT.

The yield farmer then takes the rewarded USDT or other tokens that may be given and deposit it into a DeFi liquidity pool accepting USDT or the token received. The yield farmer then receives a yield kicker from the incentives.

While at present there is an element of active management of assets, the DeFi space is evolving. Currently, yield farmers are manually in search of the best yields on offer. There are new protocols on offer, however, that can do the work for you. These are known as Robo-Advisors or Robot yield toppers.

Smart contract systems use “Oracles” in order to automatically transfer Robo-managed tokens to protocols offering the highest yields for a fee.

“Oracles” are services that provide “off-chain” data to smart contracts. “Off-chain” data is typically market prices of assets and world events, such as sports scores, weather, etc.

Revenue Streams

The types of returns that a yield farmer can earn are as follows:

  • Capital growth: Assets, fees, and rewards may be in stablecoins or non-stablecoins. Capital growth during a staking period is a passive income source. There is a risk, however, of “Impermanent Loss”.

“Impermanent Loss” is an opportunity cost incurred between supplying liquidity to an AMM pool vs simply holding the tokens in a wallet. The loss happens when asset prices diverge from original levels when tokens were first deposited.

Additional income streams include:

  • Token rewards
  • Transaction fees

Liquidity Mining

The 2nd step that yield farmers take in yield farming is liquidity mining.

From a protocol perspective, a token issuer or DEX rewards liquidity miners for providing liquidity to a specific token.

Here token holders deposit collateral into a liquidity pool offered by an automated market maker, (“AMM”).

Once you have identified a mining pool that accepts your idle tokens, simply stake your token in exchange for incentives. Incentives are normally tokens that holders can later exchange on a DEX.

It’s worth noting that liquidity pools tend to offer better yields than money markets. There is a greater risk, however, which justifies the greater reward.

Automated Market Makers

Automated market makers, more commonly known as AMMs, offer the liquidity pools to enhance farming yields.

In essence, the community trades with smart contracts and not with other community members.

AMMs are smart contracts that create liquidity pools, typically traded by an algo or “Robots” rather than order books.

From a DeFi perspective, AMMs are pivotal in its evolution. The liquidity is a must for the DeFi space to continue to evolve and deliver new protocols and products to the community.

The Risks

As is the case with any investment, yield farming is not risk-free.

Such risks stem from:

  • Smart Contracts: Developers can’t change smart contracts once the rules are baked into the protocol. This makes bugs permanent and could result in the material loss of assets.
  • Exchange Rates: Asset price volatility is unavoidable. As previously mentioned, “Impermanent Loss” is one risk related to exchange rates.
  • Price Oracles: Price-feed providers rely upon the quality of the data. That leaves “Price Oracles” exposed to price tampering. In an automated world, there are no audits to verify the accuracy of the data.
  • Hacks: Thieves and hackers target AMMs, particularly in the early days.

In conclusion

For the crypto market evolution, the most enticing element of DeFi must the offering of financial services without KYC and AML requirements. The DeFi community can enjoy full anonymity, while also enjoying the products on offer than range from trading to taking out loans…

Passive income is a key element, as the DeFi world innovates to even greater automation.

Investing does not come without its own risks, however. In the Trustless and Permissionless world of DeFi, there is no governance to identify the good from the bad.

As we saw in the boom days of crypto, however, this will eventually stabilize. Until then, investors need to tread cautiously when investing in the DeFi space.

Recommendations include:

  • Try to avoid investing in unaudited protocols unless you are fully aware of the risks and can stomach the loss.
  • Don’t invest money that you cannot afford to lose. There are Ponzi schemes abound.
  • Do some research and identify protocols that are likely to exist for the longer term. The longer the vesting periods and incentives for communities to remain in place for the long haul the better.

 

Stablecoins: New Crypto Market Trend

As the Bitcoin continues to trade sideways near $6,300, leading commentators declare they are “pleasantly surprised” with the market stability simultaneously changing their forecasts from “20k per BTC” by the end of 2018 to another 18 months of a bearish trend (BitMEX). It seems that now it is really very difficult to determine the future market direction given the weak reaction to the news background, as well as the lack of correlation with stock market which lost about 9% in October.

Stablecoins can be new crypto market triggers as recently they have been actively gaining capitalization and has grown numerically. There is no common opinion in the crypto community regarding this process. While Tether lost about $1 billion of capitalization only in October, Gemini Dollar (GUSD), Paxos Standart (PAX), TrueUSD (TUSD), USD Coin (USDC) altogether attracted more than $400 million. Different large projects are standing behind these tokens, but overall they may have one goal: to have at their disposal the “manual analog of digital liquidity” in order to be able to influence the market in future. As of Tether, the experts and crypto community suspect that USDT was used to “pump up” the market, which also contributed to the explosive growth of cryptocurrency at the end of 2017.

The experts also suggest that the BTC flat dynamics may be associated with the USD stable positions and if the prospects for main reserve currency will change due to potential effects of a trade war, the benchmark cryptocurrency can benefit from it. The BTC price dynamics can also be influenced by emerging markets movement, which together with cryptocurrencies showed highs at the beginning of the year and then moved into the downtrend phase.

The launch of the Bakkt and Fidelity platforms in the near future, which will allow institutional investors to buy and store safely cryptocurrencies, is also considered a very strong news trigger. On the one hand, the market perceives this news with hope, on the other hand, with a great deal of apprehension recalling how the launch of the Bitcoin futures last year had influenced the market dynamics. Nevertheless, this time everything may be different due to a change in the attitude of Wall Street towards the cryptocurrency.

Fundstrat Global Advisors analyst Tom Lee conducted a survey among 25 Wall Street companies on his Twitter account and 44% of the respondents said that the BTC had already reached its minimum point. So the launch of new tools can help rather than harm future prospects of the crypto market.

This article was written by FxPro

USDT Sell-Off Briefly Breathed Life Into Bitcoin (BTC)

The beginning of the week for crypto investors was unexpectedly positive: Bitcoin (BTC) and other digital currencies rose sharply by 10% or more. The benchmark coin reached almost $7,000 on CoinMarketCap and on Bitfinex and on several other crypto exchanges, BTC traded with a premium up to $7,500. One of the possible reasons for the sharp growth was Tether (USDT) sale-off on Bitfinex crypto exchange, OKEx and Huobi also intensified downward pressure, as these exchanges are also actively using USDT. As a result, its rate fell by almost 6% to $0.94.

The sell-off and reputational issues to the USDT, including manipulating of BTC rate at the end of last year, as well as deep doubts about the existence of real dollars on company’s bank accounts, provoked demand for other stablecoins. Gemini Dollar (GUSD), Paxos (PAX) and TrueUSD (TUSD) are regulated and have the support of banks that’s why the traders are more confident in them. It is likely that in the medium term one of the new stablecoins could be a serious competitor to USDT which until that moment had been the only substitute for fiat dollars in digital trading.

The BTC growth could also be linked with the Asian money inflow into the crypto sector. The trading volume of Bitcoin jumped by 138% in a day to $7.4 billion. Nevertheless, on Tuesday morning Bitcoin was in the red zone, losing just over 1%. Altcoins as often happens are mirrored the dynamics of the benchmark cryptocurrency.

Over the past day, the BTC was unable to hit the important resistance level at $6,800, and at the moment BTC is losing momentum in terms of trading volumes. Once again, the bulls can only hope that the “bottom” near $6,000 will be impenetrable and BTC will outlive another sale.


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Meanwhile, the list of the richest Chinese, considering an almost full-scale ban on the crypto industry in the country, includes the founders of Bitmain, which produces equipment for mining, as well as the owners of the largest crypto-exchanges OKCoin, Binance, and Huobi. Miners and traders, as expected, were not included in the richest list proving again that only “shovel sellers” and intermediaries are the biggest beneficiaries of “hype”.

Since we are talking about new technologies, it is worth mentioning hackers as another one winning party. According to CipherTrace, in 2018 hackers stole $927 million of cryptocurrencies. Up to now, the market suffers from regulatory uncertainty, speculators and scammers. How long the “whales” will silently watch the “collapse” – no one really knows.

This article was written by FxPro

What is Tether (USDT) and How to Buy It?

We have been going on and on about the capability of the blockchain technology that is getting us out of the autocratic management of money exercised by centralized institutions like central banks, normal commercial banks, and mobile money transfer institutions.

Governments, on the other hand, have been up in arms over the increasing popularity of blockchains and how their currencies carry a latent threat of enabling illegal practices through the obscuration of financial transactions that is now possible using the blockchain technologies.

The Epic Battle Between Blockchain, Fiat, and Regulation.

So the battle of the ages has been on since Satoshi mined the genesis block in January 2009.

Blockchain developers have been working day and night to defeat all manner of stifling regulation through innovative cryptographic ingenuity, while governments have been trying to outguess the geeks to ensure continued sanity in the world order and retain control of creation, storage and movement of money.

So when someone came with a cryptocurrency called Tether, both worlds were caught in the battleground, dumbstruck, and are trying to understand how this peacemaker can make them re-sheath their bloodied swords, shake hands, and co-exist in some restless harmony.

What is Tether (USDT)?

If you grew up on a livestock farm, you know that to tether an animal is to keep it near a structure you select, by tying it to that structure using a rope.

If you love Bluetooth technology, you know it is possible to tether a nearby device to another and make it enjoy connectivity.

Well, Tether is an innovation in the blockchain space that has made it possible to convert any fiat currency into a corresponding cryptocurrency. Tether Limited will then immediately accord the resultant tether coin all the functionalities of the blockchain, while at the same time allowing the tether retain the simplicity, stability, and usability of the ‘tethered’ fiat currency.

So if you submit some USD to be converted to Tether, you get the same amount of USDT, which is USD Tether, that can now be tradable, exchangeable and redeemable as a cryptocurrency.

Wow… This is huge.

In one stroke, the technology manages to eliminate the volatility associated with Bitcoin and its siblings, while retaining all the other blockchain capabilities and awarding them to the world’s assets.

Tether is made possible by the Omni layer Protocol operating on the bitcoin blockchain. It uses what is known as Proof of Reserves. Tethers maintain a near-perfect 1:1 parity with their underlying assets.

Tether

How to Buy Tether (USDT)?

Buying Tether (USDT) can be a similar process to other cryptocurrencies. It is a simple process that can be done quickly. The first thing to do is to create a digital wallet that supports USDT.

Tether (USDT) Digital Wallets

You can hold USDT in any hot wallet or exchange that offers the coin, including Binance, OKEx, Bittrex, Kraken, Poloniex, and ZB.com.

The main crypto wallets for semi-hot storage include Holy Transaction and Omni wallet.

Tether (USDT) Best Exchanges

The lion’s share of USDT trades is shared between Binance and OKEx, With Huobi, HitBTC, and Bitfinex bringing up the rear. You will also find crypto to crypto trading pairs at smaller percentages and for a variety of coins at other exchanges like Poloniex, Bittrex, Change.io, and ZB, com.

In light of these numbers, we will review how to buy USDT from Binance, as one of the major exchanges.

Buying Tether (USDT) with Credit Card/Other Cryptocurrencies

Acquire Tether from Tether Limited

Because Tether is leverage crypto that puts its value on a 1:1 ratio with the underlying currency, USDT can be acquired by submitting US dollars to Tether Limited, which then issues the equivalent number of USDT to an appointed user’s compatible wallet, and holds the reserves for US dollars. All that is needed is to carry out the normal sign – up and follow the deposit instructions to load up your account and get the USDT sent to a wallet of your choice.

Acquire USDT with other cryptocurrencies

One of the easiest ways to cash out to USDT is through Binance.

They have the easiest and fastest crypto to crypto exchange from Ethereum, Bitcoin and other major cryptocurrencies to USDT.

What you want to do with USDT is to bring all your crypto holdings to USDT for safeguarding against day to day or periodic volatility.

You can, therefore, convert all your redeemable crypto into Tether for safekeeping.

At Binance, there are USDT pairs of Bitcoin, Ether, Litecoin, Neo, BCC (Bitconnect) and BNB (Binance Coin). This means you can import any of these currencies to Binance and trade them for USDT.

How to Buy Tether (USDT) via Binance?

Register with Binance

The registration to Binance is straightforward and is completed after you carry out an email verification and 2-factor authentication.

Once in Binance, select funds – Deposits; Bring your crypto to Binance for exchange to USDT.

You will find your appointed pairs, and you can then acquire your USDT and spirit it off to cold or semi cold wallets for hodling or to use as normal dollars, but on a blockchain.

This is the main method that most traders will be familiar with because of its familiarity and ease.

Import funds and buy USDT

You will be given the Crypto Address on which to send any of the options given above. Don’t send any crypto to an address belonging to another.

Once you have the crypto balance on Binance, proceed to Exchange – Advanced and select the USDT;

Tether Binance

Once that is selected, click on the appropriate pair that matches the crypto you have deposited, and open in order to buy USDT.

You can now buy as much USDT as you can afford on the dashboard below the graph by selecting the quantity you want and matching it with the available crypto balance you have for appointed Crypto.


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Tether Use Cases

For Exchanges

At current, crypto traders go through hell identifying payment avenues for converting fiat to crypto.

From having to find the right exchange that will accept your fiat and provide the crypto you are looking for to engaging in long security protocols and wait times for wire transfers to clear, many newbie traders simply give up in the middle of the process.

Exchanges also have to integrate with banks that may not have necessary APIs, making the transfers extremely hard and expensive. Tether relegates this problem to the backburners of history. The risk of handling fiat is handled by Tether Limited, which in turn can simply provide the tethers.

Exchanges can then provide Tether Pairs, and enable blockchain movement of fiat assets across networks and borders seamlessly

Individuals

With USDT and other Tethers, it is now possible to HODL crypto that is pegged on a fixed fiat value and avoids the hassle of withdrawing crypto assets that someone wants to remove from the sometimes unforgiving volatility of cryptos like bitcoin.

All the other characteristics of bitcoin are made possible with Tethers. And all one needs is an Omni Layer Protocol enabled wallet like Omni or Holy Transaction. This means that you have pseudo-anonymity, peer-to-peer flexibility, cheap and fast cross-border transfers of fiat based crypto.

To the Merchants

Tethers bring a breath of fresh air to merchants allowing them to concentrate on their core business and not on payments. Transfer of USD/fiat is now made possible without the hassle of centralized money movement systems, chargeback risks and intermittent conversion across fiats.

Tether (USDT) Challenges and Prediction

The Bitcoin Baggage

If the Launchpad for the Tethers is the Omni Layer Protocol laid on the bitcoin platform, and it has not tried to address the scalability problems that bedevil the bitcoin blockchain, then questions still abound about the problems that affect bitcoin and whether they also manifest in Tether.

The Fiat and Centralization Curse

For the simple reason that the Tether is generated after fiat is deposited somewhere, the question of anonymity cannot be wished away. Just how is Tether a cryptocurrency when it is permanently tied to a fiat value? Proof of Reserves is a distant call from decentralization, the main drive that makes cryptocurrency a choice for financial libertarians.

Prediction

But we are talking about a currency that is running on major exchanges and carrying fiat value. That in itself makes the Tether a highly attractive compromise that promises a piece of both conflicting worlds. It is now easier to offload gains to a fiat simulator crypto and be assured of the stability of fiat in a blockchain setting, which is refreshing.

Final Thoughts

As much as the Tether is designed to work with many world’s cryptos as underlying assets, The USD Tether is the world’s first Tether, and the technology is simply in its earliest stages.

It is possible to now download crypto to crypto that retains fiat properties. It is called a Tether, and the USD Tether is the first among many.

The most relevant purchase of a USDT is as an exit of crypto loot from trading to USDT for consolidation and security of accumulated value.

It is easy to bring Eth or Bitcoin from any wallet to Binance and purchase USDT which can be stored on an Omni or Holy Transaction Wallet, or any other Omni compatible wallet, as the Tether runs on the OLP which is layered on top of the bitcoin protocol.

But this must be said: Cryptos are always volatile assets. Do not trade in cryptos what you cannot afford to lose.