Crypto Guides, Knowledge & Insights

BITCOIN ON-CHAIN DATA REVEALS CHINESE MINING POOL BEHIND ITS CRASH

An otherwise decentralized cryptocurrency, Bitcoin, might have become a victim of a centrally orchestrated price dumping attempt.　　According to data fetched by CryptoQuant, a South Korea-based blockchain analytics firm, Bitcoin miners at Chinese mining firm F2pool started the massive sell-off that crashed the BTC/USD exchange rate by almost 20 percent in just less than 24 hours.　　Bitcoin outflow from F2Pool to all exchanges. Source: CryptoQuant　　OVERSUPPLIED BITCOIN　　CryptoQuant CEO Ki-Young Ju listed a series of bearish alerts he received when Bitcoin started plunging on early Friday. As per the data he provided, the Miners‘ Position Index went above 2.5, reflecting growth in Bitcoin units that miners moved from their wallets. Meanwhile, the CryptoQuant’s All Exchange Bitcoin Transaction Count Inflow surged, showing F2pool as a major BTC depositor.　　“The dump might have started from BTC miners in F2Pool,” Mr. Ju added. “ 569 people deposited BTC in a single block (10 min). 78 miners deposited BTC in a single block (10 min).”　　Miners typically sell their BTC rewards to cover their operational costs (including electricity bills, equipment handling, and maintenance). Many of them prefer to hold a portion of their Bitcoin holdings for speculations, thereby effectively limiting the cryptocurrency‘s supply from entering the retail markers. That, in

2021-01-25Deep Dive

Ampleforth-like Bitcoin rebasing token DIGG drops: crypto stimulus checks

The latest crypto stimulus (or DeFi stimulus check, to be more accurate) has just dropped.　　Badger DAO, a Bitcoin-focused decentralized finance project based on Ethereum, just rolled out a new coin called DIGG. BADGER, the governance token for the protocol, already exists.　　DIGG is a new token that works much like Ampleforth, a supply-elastic cryptocurrency that changes its supply based on the price of the coin at each time. Instead of being pegged to a dollar, DIGG pegs to the price of one Bitcoin. Although this may sound like a small nuance, many in the DeFi space have said that this change may result in more reflexivity in the coins price action.　　That being said, DIGG was distributed to users of the Badger DAO protocol on a semi-quadratic basis on these three key factors:　　BADGER staked in the protocol.　　BADGER earned by the user. BADGER could and still can be earned by users by depositing liquidity into the protocol for farming purposes.　　How much BADGER has been earned by the user relative to the coins they have staked.　　Regarding the semi-quadratic basis, this was done to make the distribution of DIGG more fair:　　“Other details regarding the distribution were outlined in the BIP 14 forum post, including the

2021-01-25Deep Dive

Is Bitcoin losing its dominance? Analyst picks best altcoins that will explode

The performance of the leading cryptocurrencies has slowed down. Investors are therefore turning their attention to cryptocurrencies or tokens with smaller market caps that are ready to explode at any moment. Trader and influencer Elliot Wainman shared his list of these tokens, with the focus being on Ethereums DeFi.　　Wainman believes that Bitcoin has lost its market dominance due to new projects that have caught the attention of investors. Due to Bitcoins price decline, the trader believes that the market dominance of the first cryptocurrency by market cap will continue to decline in favor of altcoins. The trader believes that the “alt season” is right around the corner, and explained:　　As people started to get too bearish yesterday, I started to get quite bullish. When people were overextended on Bitcoin, I was looking at the altcoins. This is the nature of predicting the next move and being a step ahead of the game. That‘s how you don’t just get a little 20%, 30% pump. Thats how you get those Xs and gains.　　Ethereums DeFi will offer the highest profits　　In that sense, the trader thinks it “nonsense” that Bitcoin has the greatest dominance and most capitalization of the crypto market. Therefore, he believes that

2021-01-25Deep Dive

Ethereum will become the main asset for investors in 2021

During the second half of 2020, we saw a growing interest in cryptocurrencies from institutional investors and big capital. However, all the attention of the whales, as well as all the attention of the public, was fixed on Bitcoin (BTC). Today, we will look at why Ether (ETH) is a more attractive asset and why this cryptocurrency should become the “first cryptocurrency” for every investor.　　Lets start with the numbers: ETH‘s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. Of course, against the backdrop of record highs for Bitcoin, whose price reached $ 40,000, the rise of Ether to $1,400 does not seem so impressive. Moreover, the market capitalization of ETH is five times less than the volume of the BTC market. But what is more important for an investor: nice numbers and records of an asset from a portfolio or high income？　　There are very strong reasons to believe that Ether will continue to rise in price in 2021 and bring more profit to investors than

2021-01-25Deep Dive

DeFi on Cardano will enable users to earn yield on staked ADA

Once Cardanos Goguen era is launched, users will be able to earn additional yield on their ADA without having to unstake their funds. Liqwid Finance, a DeFi solution built on Cardano, will enable users to earn governance tokens by providing liquidity to the ADA market on Liqwid—all the while their tokens remain staked on the mainnet.　　Goguen set to unlock vas new DeFi capabilities on Cardano　　Most of the conversation focusing on Cardanos upcoming Goguen era seems to be analyzing the steps needed to unlock the smart contract functionality. However, the concrete things Goguen will bring to the blockchain seem to be seldom, if ever, discussed.　　Liqwid Finance, a DeFi project built on Cardano, highlighted some of the upcoming features Goguen will enable, giving the Cardano community a rare glimpse into what the future will look like on Cardano.　　Namely, the project, which won the first prize on IOHKs Wyoming Hackathon in October, said that they received a lot of inquiries from the Cardano community about their upcoming Liqwid tokens. The DeFi platform focuses on peer-to-peer lending and is set to launch governance tokens that will be distributed as rewards for users providing liquidity.　　The company said that the tokens will launch through user distribution

2021-01-22Deep Dive

Leading Crypto Derivatives Exchange Bit.com Set to Launch Bitcoin Cash Options

On January 21, the derivatives exchange by Matrixport, Bit.com, announced the launch of the first bitcoin cash perpetual swaps and options. The exchange says before the product launch there was no options market for bitcoin cash and the firm believes theres room for improvement in this arena of crypto derivatives.　　　　Bit.com to Launch Crypto Economys First Bitcoin Cash Options Market　　Bit.com, one of the leading derivatives trading platforms developed by Matrixport, has revealed the exchange plans to launch bitcoin cash (BCH) perpetual swaps and options. The exchange detailed that Bit.com will introduce the perpetual swaps product on January 20 and the BCH options trading will begin on the 1st of February.　　The announcement notes that BCH is a major crypto-asset “recognized by institutions,” and remains in the top ten positions among the leading crypto market capitalizations.　　News.Bitcoin.com recently reported on Bit.com as being among the exchanges with the most open interest in terms of BTC and ETH options. Bit.coms BCH options announcement details that both bitcoin (BTC) and ethereum (ETH) derivatives markets “grew tremendously during the past few years.”　　“Currently, the cryptocurrency perpetual swaps market is dominated by BTC, which accounts for ~53% of the market share, while ETH attributes to 20%,” Bit.com said. “BCH

2021-01-22Deep Dive

Increased Mainstream Adoption of Bitcoin Cuts Diversification Benefit, JPMorgan Says

JPMorgan strategists questioned bitcoins utility as a reliable investment hedge in a memo published Thursday.　　Calling bitcoin the “least reliable hedge during periods of acute market stress,” strategists Federico Manicardi and John Normand questioned bitcoins ability to function as reliable diversification investment through times of economic uncertainty.　　“Mainstreaming is reducing diversification benefits and leading to underperformance during crises,” the memo said.　　Bitcoins recently heightened correlation with traditional markets, moreover, could “erode diversification value over time” if the strong positive correlation continues, they wrote.　　Per Coin Metrics data, bitcoin and the Ss close relationship with price movements in legacy markets and the “mainstreaming” of cryptocurrency investing generally is “potentially converting them from insurance to leverage,” the strategists wrote.　　Bitcoin prices to date have pulled back slightly to below $32,000 at last check after nearly touching $42,000 the first week in January.　　A similar sentiment was expressed in October 2020 by other JPMorgan strategists who wrote that bitcoin has proven itself to be more of a risk asset, than a safe haven.　　What could change this pattern, however, is “a more unique macro shock related to much higher U.S. inflation or a breakdown of the payments system,” the analysts said.

2021-01-22Deep Dive

Crypto ETP Market Up 95% to $35 Billion Since December: Report

The industry of crypto ETPs is booming: assets under management (AUM) across all ETPs shot up 95% since December to $35.96 billion, according to a report released today.　　The Digital Asset Management Review report, by research firm CryptoCompare, says that the majority of AUM for ETPs is in the Grayscale Bitcoin Trust (GBTC)—which increased its AUM by 93.7% in the past 30 days to $22.6 billion.　　ETPs (exchange traded products) track the value of an underlying asset—just like stocks. Bitcoin or crypto ETPs allow people or companies to invest without actually holding the asset themselves.　　As the prices of Bitcoin and altcoins have increased, more people have become interested in investing in the asset—especially institutional investors (a company that invests on behalf of others.)　　They are useful for those who dont want to worry about holding Bitcoin or Ethereum but still would like to invest.　　CryptoCompares report says that these regulated products are becoming more available than previously.　　“These products make it easier for investors because they can be traded on traditional stock exchanges, with the complexities of custody and storage abstracted away from the end user,” the report notes.　　Crypto ETP volumes almost tripled this month, CryptoCompare notes, to $837 million a day. Again, the GBTC

2021-01-22Deep Dive

Grayscale May a Have Secret Chainlink Trust

Grayscale Investments appears to have incorporated a Chainlink (LINK) trust, as well as trusts for other smaller-cap altcoins. Are there more trusts on the horizon？　　Grayscale Investments has been one of the loudest voices in crypto. And the first firm to offer crypto exposure to institutional investors.　　The company has been a vocal supporter of crypto. And previously said that Ethereum was of greater interest to its clients. So is this the beginning of the institutional foray into altcoins？　　Well, according to the State of Delaware, Grayscales altcoin trusts are secretly growing in number.　　Documents available on the State of Delaware Division of Corporations show several Grayscale products that are not open to the public or listed on its website.　　The State of Delawares site shows a Grayscale LINK trust Source: Division of Corporations　　Perhaps most notable among them is the Chainlink (LINK) Trust. LINK has been one of the hottest and fastest-growing cryptos, which made headlines late last year with its epic rise. It also claims it has over 300 major partnerships.　　A Grayscale Chainlink Trust could be seen as a huge vote of confidence in LINK and altcoins in general. The more publicly-traded entities out there exposed to altcoins, the more the public will understand

2021-01-22Deep Dive

HOW DEFI IS EXPANDING BEYOND ETHEREUM IN 2021

The launch of Ethereum 2.0‘s beacon chain marked a significant milestone at the end of 2020. Several years in development and subject to substantial delays, many were skeptical that it would even happen before the end of the year. Even now it’s launched, theres still a long road ahead as the core developer team wrangle with the challenges of implementing a sharded blockchain.　　Furthermore, the events of 2021 only underscored just how badly scalability is needed for Ethereums applications. The explosion of the DeFi markets – almost entirely dependent on Ethereum – resulted in yet more network congestion and spiraling transaction fees. In early January, fees hit a new all-time average high of $9.79.　　Given the long timeline for a scalability upgrade, along with the increasing fees and general poor user experience resulting from slow block times, DeFi developers are now starting to look to other blockchain platforms. What‘s more, doing so no longer means choosing to isolate themselves from Ethereum’s buzzing ecosystem.　　2020 was a landmark year for blockchain interoperability, with several platforms, including RSK, Solana, and NEAR Protocol rolling out bridges between their own networks and Ethereum. In May, the long-awaited launch of Polkadot on main net gave interoperability a further

2021-01-21Deep Dive

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