Crypto Guides, Knowledge & Insights

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

Some institutional investors taking profit as Bitcoin retraces

A new report from crypto fund provider CoinShares has indicated that some institutional investors have been realizing profits during BTCs recent consolidation.　　CoinShares‘ weekly digital asset flows report identifies $85 million in outflows from institutional crypto products this past week, asserting the data suggests “some investors are continuing to take profits after [BTC’s] strong price appreciation.”　　The report noted the rising (trade-weighted) U.S. dollar, stating the USD index “is typically inversely correlated to Bitcoin prices,” and could explain why some investors are taking profits at the current levels.　　The firm also identified modest outflows from Ethereum-derived investment products, with $3 million leaving the markets.　　Despite the profit-taking, institutional inflows remain strong, with $359 million flooded into crypto investment products this week. Institutions still appear almost single-mindedly focused on BTC, with Bitcoin products representing all but 1% of the weeks total capital flows.　　CoinShares notes that crypto inflows have returned to their pre-Christmas levels, following the 97% drop over three weeks seen after the holiday break. Daily volumes are currently up more than 450% year-over-year.　　Institutional products currently represent 6% of combined Bitcoin volume — down from 14% at the start of the month.　　Much has been lately of the growing institutional appetites for crypto, with major global

2021-01-21Deep Dive

Cryptocurrency Staking Rewards Top $20 Billion in 2020: Report

Mining Bitcoin and other cryptocurrencies has been the foundation of the digital currency industry for more than a decade. But Staked, a blockchain staking infrastructure firm, thinks 2021 could be the year that staking starts to have a major impact.　　Why？ Because 2020 was a pretty big year already: More than $20 billion in annual staking rewards were paid out over the course of the year, according to the firms State of Staking Q1 2021 report. And proof-of-stake blockchains, says Staked, now make up 25 of the 100 most valuable crypto networks.　　What‘s proof of stake, and how is it different than Bitcoin you ask？ Here’s a quick rundown:　　Bitcoin and most of the other early cryptocurrencies used hardware mining, or proof of work, to keep the blockchain secure. This involves a number of high-end computer processors solving complex mathematical problems. Small at first, the power requirements for proof-of-work mining for Bitcoin grew quickly, and now rival the energy use of some small nations.　　By comparison, proof-of-stake blockchains maintain security by having some users “stake” tokens associated with the network using lower-powered hardware nodes. If a staking node has poor uptime or sends malicious transactions, the staked tokens are at risk of being forfeited

2021-01-21Deep Dive

European Commission and ECB Unite to Discuss Advancement on the Digital Euro

The European Commission will work with the European Central Bank (ECB) to examine potential challenges in issuing the euro digitally. The collaboration targets to open the door to wealth development later this year.　　The two institutions joint statement suggests that the focus is on reviewing various political, legal, and technical issues related to the possibility of a digital euro. The currency will complement private sector money and payment solutions. Besides, the two EU institutions recognize that the spread of the digital euro can face political obstacles.　　Privacy Remains Major Concern　　Before announcing the partnership, the ECB completed a public consultation on the digital euro; talks began on 12 October 2020 with over 8,000 responses.　　The multitude of responses to the survey indicates that European citizens, businesses, and scientists are passionate about shaping a digital euro‘s vision. All stakeholders’ views are critical to them as they assess the need, feasibility, risks, and benefits of the digital euro.　　Although the ECB will publish the feedback later, the report suggests that confidentiality is a significant concern. Another essential matter concerns the security and impact of pan-European assets.　　ECB President Christine Lagarde has indicated that the digital euro will be introduced in previous engagements in the next five years. At

2021-01-21Deep Dive

$7.81 Trillion Asset Manager BlackRock May Put Some of Its Funds Into Bitcoin Futures

BlackRock, the largest asset manager in the world with over $7.81 trillion worth of assets under management, might get exposure to Bitcoin futures through two of its funds, according to its Form 497 that was filed with the U.S. Securities and Exchange Commission on Jan. 20:　　“Each Fund may use instruments referred to as derivatives, which are financial instruments that derive their value from one or more securities, commodities (such as gold or oil), currencies (including bitcoin), interest rates, credit events or indices (a measure of value or rates, such as the S&P 500 Index or the prime lending rate).”　　From skeptic to believer　　Last month, BlackRock CEO Larry Fink suggested that Bitcoin could “possibly” turn into a global market after being highly skeptical of the cryptocurrency in the past:　　“Bitcoin has caught the attention and the imagination of many people. Still untested, pretty small market relative to other markets. You see these big giant moves every day…its a thin market. Can it evolve into a global market？ Possibly.”　　Prior to that, BlackRock CIO Rick Rieder opined that Bitcoin could eventually replace gold:　　“Do I think it is a durable mechanism that, you know, that I think could take the place of gold to a large

2021-01-21Deep Dive

Dunamu launches first digital asset fear and greed index in Korea

Dunamu, the operator of the leading South Korean cryptocurrency exchange Upbit, announced on Tuesday that it has launched a digital asset fear and greed index from cryptocurrency investors in Korea. The blockchain company views the development as an important step to guiding investors decisions. The indicator analyses and reflects the current market sentiment, helping Korean digital assets investors to make rational decisions when the market is too greedy or fearful.　　First Korean digital asset fear and greed index launches　　This indicator was developed by the company‘s Data Value Team and regarded as the first-ever digital asset fear and greed index for the Korean market, according to Dunamu’s announcement. The index curates its data from the South Korean exchange, Upbit, and its refreshed every five minutes. Among other things, the Korean digital asset fear and greed index analyses the increase and decrease in the volatility and volume of digital assets.　　Per the announcement, the indicator treats increases in digital assets volatility and volume as a moment of extreme greed, while the decrease means the market is in extreme fear. An official from Dunamu notes that many digital assets in investors in the country had to refer to global indicators to analyze the current state

2021-01-20Deep Dive

Is Chainlink Centralized? A Breakdown of Token Distribution

Alex Svanevik, CEO of the Nansen blockchain AI firm, chastised media today for skirting over important details and spreading “FUD” regarding Chainlinks token distribution.　　Speaking to Crypto Briefing, Svanevik stated that “In brief, overly simplistic metrics do a disservice to the space. Reporting that 125 wallets control 80% of LINK supply doesnt take into consideration what those 125 wallets are exactly.”　　Crypto Briefing took a closer look at the data. The authors findings show that wallets holding more than 1% of the total supply account for 66.6% of the supply.　　The distribution for wallets holding over 1% is as follows:　　Smart contract for Chainlink node operators: 35%　　Chainlink team: 24.8% across five different wallets　　Binance: 3.4%　　Aave LendingPoolCore: 2.7%　　Exchanges hold 16% of the total supply. 35% of the funds are held in a smart contract that will be paid out to nodes as an incentive and the team holds 24.8%. Chainlink ambassador ChainLinkGod posted a tweet in defense of the project, stating:　　According to the ambassador, funds held by the team are being used to bootstrap future development.　　Is Chainlink Centralized？　　While the specific data on which wallets are controlled by which parties are relevant, the fact remains that the majority of circulating tokens are held by a minority of

2021-01-20Deep Dive

Bitfinex Says It’s Nearly Done Turning Over Documents to NYAG

Bitfinex expects to finish turning documents over to the Office of the New York Attorney General (NYAG) in the coming weeks, a procedural hurdle that would move the state prosecutors investigation of the alleged $850 million Tether cover-up one step closer to conclusion.　　Charles Michael, the Steptoe lawyer representing defendant Bitfinex, told the court Tuesday that parent company iFinex has “produced a substantial volume [of] material” for the NYAG already. He said the next update will come in 30 days.　　The documents could shed light into the financial goings-on of tight-lipped iFinex. New York state prosecutors alleged in April 2019 that Bitfinex papered over an $850 million loss by padding its books with a massive Tether loan. iFinex has battled those charges in front of the state Supreme Court.　　The NYAG has been fighting for those documents since mid-2019. Then, Justice Joel Cohen ordered iFinex to continue handing over documents about the alleged cover-up, only to be reversed one month later by an appellate judge, at least until a full appeals court hearing could conclude. The companies were later required to continue turning over documents by the full appeals court.　　How long is truly left in the document production phase remains to be seen.

2021-01-20Deep Dive

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