Crypto Guides, Knowledge & Insights

Was Bitcoin’s rally overextended? If yes, what next

After an action-packed week, Bitcoin is trading at $35468 after having endured a flash crash. However, the price action left traders asking why the flash crash in Bitcoin took place？ Also, does this mean the rally is over and it was over-extended？ As per the data, there may have been excessive speculation in Bitcoin‘s price, to begin with. Bitcoin’s price dropped nearly 27% after hitting the new ATH and there were several reasons for the same. The most prominent ones include the increasing active supply on exchanges and bullish sentiment on derivatives exchanges despite massive liquidations. A few signs that Bitcoins rally was over-extended were noted as well. A rapid surge in open interest and interest in general on exchanges, in the short-term which was the highest in the past 3 years, since the historic bull run of 2017.　　Alongside that, a surge in addresses with non-zero balance was noted, on Glassnodes metrics. This rapid increase in addresses with balance 0.1 and above and 1000 and above, indicated that both whales and retail traders are buying. In the long-term this buying may increase the accumulated Bitcoin in wallets and lead to a drop in exchange reserves, starting the cycle all over

2021-01-18Deep Dive

65% Say They Would Consider Selling Bitcoin If The Price Reaches $100,000

The cryptocurrency market has enjoyed the past several months with impressive gains, including all-time highs for bitcoin and several more tokens.　　As such, a couple of crypto analysts initiated Twitter polls to ask the community when they plan to sell their positions and realize profits.　　How Much Would You Sell At The Next BTC Top　　The primary cryptocurrency has led the 2020/2021 bull run. Bitcoin had quadrupled its value since early October when it dabbled with the $10,000 mark to an all-time high of $42,000 charted earlier this year.　　Despite retracing with a few thousand dollars, BTC is still about 10% up in 2021 alone. This has raised discussions within the community if or when most plan to dispose of some of their holdings.　　Crypto analyst Josh Rager took it to Twitter to ask: “how much Bitcoin from your holdings do you plan to sell at the next peak high？”　　Interestingly, the answer that received the most votes (34.4%) suggests that investors plan to dump most, if not all, BTC holdings in case of another price peak.　　However, its also worth noting that a very close percentage (31.6%) said that they would sell less than 25% of the BTC positions.　　While some comments indicated that many investors plan

2021-01-18Deep Dive

TrustToken integrates with Secret Network to enable private stablecoins

TrustToken, the team behind the TrueFi uncollateralized lending platform and stablecoin protocol including TrueUSD, a dollar-backed stablecoin with live on-chain audits, today announced a partnership agreement with Secret Network, a public blockchain to provide privacy-preserving smart contracts.　　Through the partnership, TrustToken‘s TUSD becomes Secret Network’s first asset-backed stablecoin partner, paving the way for private stablecoins and fully secret transactions.　　Blockchain transactions may be anonymous, but theyre far from private, with every transaction publicly and permanently visible on-chain. While early blockchain adopters praise this transparency, institutional investors, businesses, and individuals wishing to transact privately have been reluctant to switch their business to most crypto assets; especially not when these assets fluctuate wildly with the market.　　Secret Network a blockchain with privacy-preserving smart contracts, which means applications built on the network can utilize encrypted data without revealing any of it, including the nodes on the network, to anyone. This allows developers to build powerful, permissionless, and privacy-preserving applications—or Secret Apps—which can then through secret nodes be secretly deployed onto the Secret Network.　　“We‘re thrilled to collaborate with TrustToken as a stablecoin partner for Secret Network,” says Can Kisagun, CPO and Co-Founder of Enigma. “Secret’s unique front-running resistance and privacy features enable DeFi to scale from billions

2021-01-15Deep Dive

Gnosis receives $2.3B Ethereum in a day, now 3rd largest ETH holder with 2.2% of supply

Decentralized finance platform Gnosis is now the third-largest holder of the Ether (ETH) coin supply. Gnosis multisignature storage safe received a deposit of 1,500,000 ETH on Thursday — worth over $1.7 billion at the time of the transaction.　　Although its foray into the storage industry began a little over a month ago, a vast majority of the ETH in the Gnosis safe appeared in the past 24 hours. Up until a few days prior, the address contained just 250,001 ETH. But a 600,000 ETH ($677 million) transaction on Wednesda, followed by Thursday‘s, sent Gnosis from 32nd to third among Ethereum’s largest custodians.　　These two deposits increased the number of ETH in Gnosis safe to over 2.5 million, equating to a total dollar value of over $2.9 billion. That moved Gnosis up the Ether rich list, making it the third-largest holder of the ETH coin supply, behind only Binance and Ethereum itself.　　Top 10 Ether rich list. Source: Etherscan.io　　Although 16.7% of the ETH coin supply is held by just 10 addresses, all are either storage addresses used by cryptocurrency exchanges or function as smart contracts on the Ethereum blockchain.　　The densest accumulation of ETH is currently found in the Wrapped Ether (WETH) contract, which contains

2021-01-15Deep Dive

Winklevoss twins consider taking Gemini crypto exchange public

Bitcoin billionaires Cameron and Tyler Winklevoss said theyre considering taking Gemini Trust Co. public amid the resurgence of interest in cryptocurrencies.　　“We are definitely considering it and making sure that we have that option,” Cameron Winklevoss, co-founder and president of the New York-based digital-asset firm, said in an interview. “We are watching the market and we are also having internal discussions on whether it makes sense for us at this point in time. We are certainly open to it.”　　Bitcoin has more than quadrupled in the past year, evoking memories of the 2017 mania that first made cryptocurrencies a household name before prices collapsed the following year. Volatility remains a defining characteristic of the dominant cryptocurrency, with it spiking to almost $42,000 last week before dropping back to around $37,000.　　An initial public offering, direct listing or even a merger with special purpose acquisition company would be the latest attempt by early advocates of Bitcoin such as the Winklevoss brothers to unlock their digital wealth. Coinbase Global Inc., the biggest U.S. cryptocurrency exchange, filed in December with the Securities and Exchange Commission to go public. Bakkt Holdings LLC, the cryptocurrency platform majority-owned by Intercontinental Exchange Inc., plans to go public through a merger

2021-01-15Deep Dive

Pantera's ICO fund ends 2020 up more than 500%, bitcoin fund up nearly 300%

Pantera Capital ended 2020 on a high note.　　The investment firm clocked in triple-digit percentage gains across its three digital asset funds, according to an investment note shared with The Block. The firms ICO fund, which previously was up more than 300% earlier in the year, ended 2020 up more than 500%, according to the note. Its bitcoin fund, meanwhile, ended 2020 up 299%.　　To be sure, the bitcoin funds performance was slightly less than bitcoin, which ended the year with a 303% gain.　　In the note, CEO Dan Morehead argued that the ongoing rally in the digital asset market is less about hype than the previous rally in 2017, adding that focus has shifted from altcoins and initial coin offerings to bitcoin and ethereum.　　“There has been a massive shift from highly speculative, mainly non-functioning tokens having roughly half of the total market cap in 2017 – to today when the market cap is mainly in the two proven, functioning chains: bitcoin and ethereum,” Morehead wrote. “Those two chains have 86% of the value. The other 5,000 chains have 14%.”　　Pantera was an active investor amidst the ICO mania, investing in projects like Filecoin and 0x.　　Unsurprisingly, the firm is bullish on bitcoin, highlighting a

2021-01-15Deep Dive

Why institutional investors will support Bitcoin above the $30k level

Institutional buying that started when Bitcoins price was as low as $19000 has continued well into the $40000 level. Institutions like Grayscale have consistently added to their Bitcoin holdings irrespective of the price rally and the subsequent correction. Based on data from the Coinbase chart, there is a possibility that institutional investors have bought $BTC at the $30000-$32000 level. Additionally, the Coinbase outflow in the first week of January 2021 was the highest since 2017.　　Coinbase Outflow of Bitcoin || Source: Cryptoquant　　If the Bitcoin bull run was driven by these institutional investors, then there is an increased possibility that there will be support for Bitcoin above the $30000 price point. This might help sustain Bitcoins price above $30000, protecting it from further dips. Earlier in January, Raoul Pal had tweeted about the trend at the start of the year, and how it reverses. After starting the year with zero P&L, and allocating new risk buckets, and post a 2-week break, there is an increased possibility of a trend reversal or a massive correction. This takes most open positions to negative or P&L grind again.　　Institutional investors‘ support above $30000 may safeguard Bitcoin’s price rally and protect the portfolio of retail traders. Based

2021-01-15Deep Dive

Kim Dotcom Wants to Fund Bitcoin Cash Development

Kim Dotcom, founder of the infamous file sharing site Megaupload, has announced plans to fund Bitcoin Cash (BCH) development.　　Why Dotcom Favors BCH　　Dotcom endorsed Bitcoin Cash during an interview with Bitcoin.com. There, he argued that BCH is undervalued based on the fact that it handles about 10% of Bitcoin‘s transaction load but has just 1% of Bitcoin’s market cap. He also alluded to Bitcoin Cashs lower transaction fees as his reason for favoring the coin.　　The move resembles an earlier announcement made by Twitter and Square founder Jack Dorsey. In 2019, Dorsey stated that he would pay people to work on Bitcoin. That eventually led to the creation of Square Crypto, which is currently examining grant proposals.　　Dotcom, however, has a more controversial business history. His original file-sharing site, Megaupload, was seized and shut down in 2012 due to copyright infringement. He also cut ties with its replacement site, MEGA, in 2015, though the site is still operational.　　In light of Dotcom‘s controversial reputation, it will take time to see whether his soon-to-be-recruited Bitcoin Cash developers produce apps of lasting value to the cryptocurrency’s ecosystem.　　K.im Will Use BCH　　Dotcom also has a more practical reason to support the cryptocurrency. His newest app, K.im, plans to

2021-01-14Deep Dive

Bitcoin’s Wild Price Action Will Benefit PayPal and Square Even if BTC Plummets, Says Analyst – Here

Mizuho Securities analyst Dan Dolev says payment giants Square and PayPal are poised to benefit from Bitcoins wild price movements even if the leading cryptocurrency falls off a cliff.　　In a new CNBC interview, Dolev explains that Squares revenues have traditionally gone up even when Bitcoin was in bearish territory.　　“We did some work. We looked all the way back to 2017 and what we found out is that the revenue from Bitcoin for Square continues to go up even in periods where Bitcoin actually doesn‘t go up. So right now we’ve had a rally, a massive rally, since December or even November. So thats easy to think about Bitcoin going to a $100,000. But historically even in periods where it was going down, the gross profit from Bitcoin has been going up.”　　And the reason for that is two-fold. One, there is more users actually using or trading Bitcoin on the Cash App. And two, the number of transactions per user is going up. So what weve said in the note is that even if Bitcoin goes up to you know a $100,000 or stays at $30,000 or $10,000, Square will still benefit from it.　　The Mizuho analyst points out that users holding

2021-01-14Deep Dive

Rapid Profits: Bitcoin Hashrate Accelerates While Mining Difficulty Touches All-Time High

One aspect of the Bitcoin (BTC) network that people look at to measure the protocol‘s overall health and growth is the hashrate. At the time of publication, the BTC hashrate is processing at speeds of around 165.38 EH/s and the miner’s collective hashpower has been nearing all-time highs again. For instance, on December 30, 2020, the network hashrate spiked to a colossal 178.6 EH/s and 12 days later the hashrate hit 171.2 EH/s.　　What has surpassed its ATH is BTC‘s network mining difficulty or difficulty adjustment algorithm (DAA). This week the mining difficulty is the highest the difficulty has ever been in Bitcoin’s lifetime to-date. After the significant price dip on Monday and the accelerated hashrate the same day, the protocol pushed the mining difficulty to 20.61T.　　Bitcoin (BTC) mining hashrate is operating at 165,376,566,182,178,200,000 H/s on Wednesday, January 13, 2021, at 8:00 p.m. (EST).　　Because the hashrate is so high entering the second week of January 2021, the Bitcoin networks difficulty will increase +9.98% or 22.66T, another ATH in less than two weeks. This will take place in roughly nine days from now, give or take, depending on the average output of blocks per day.　　Bitcoin (BTC) mining difficulty is approximately 20,607,418,304,385 (20.61T)

2021-01-14Deep Dive

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