On-chain Activity Suggests Bitcoin Price Volatility Will Continue, Thanks to ‘Whales’

On-chain Activity Suggests Bitcoin Price Volatility Will Continue, Thanks to ‘Whales’

Bitcoin’s (BTC) price volatility spiked in January and could further increase over the near term because “whales” have surfaced. The cryptocurrency’s annualized volatility grew roughly eight percentage points in January to a three-month high of 58.2 percent, according to Kraken’s monthly report.  Volatility rose as bitcoin’s price rallied from lows near $6,850 on Jan. 3 to a three-month high of $9,570 on Jan. 31. The cryptocurrency closed out January with 30 percent gains, registering its best January performance since 2013.  With the price rally, whales – those buyers of large numbers of coins – seem to have woken from their long slumber. The number of whale addresses – ones with balances ranging from 1K BTC to 10k BTC – ticked higher in the second half of January, as noted by Kraken’s researchers.  Whale addresses and volatilitySource: Kraken The number of whale addresses increased from 2,000 to 2,030, marking a transition to an “accumulation” phase from the “wait and see” phase seen in the last four months of 2019.  Historically, that transition has injected volatility into the bitcoin market. For instance, whales began accumulating coins in September 2018 and entered wait-and-watch mode in early 2019. Meanwhile, the annualized volatility bottomed out below 20 percent by mid-November and skyrocketed to 100 percent by the end of December.  On similar lines, the spike in price volatility in the second quarter of 2019 was preceded by accumulation by large wallets.  The peculiar behavior could be associated with whales having the resources to affect the market with large orders.  “During the accumulation phase, whales eat into market liquidity,” Ashish Singhal, co-founder and CEO of CRUXPay and CoinSwitch.co told CoinDesk. “That affects the supply-demand ratio and causes volatility to re-enter the market.” Sudden price swings have been observed during whales’ accumulation period. The cryptocurrency’s sharp rise from $4,100 to $5,100, seen on April 2, 2019, was reportedly caused by an order worth about $100 million spread across three exchanges.  Whale action has also led to big price sell-offs in the past; a bitcoin flash crash from $12,600 to $12,100 in less than 15 minutes on July 9, 2019, was triggered by a massive sell order of 6,500 BTC on cryptocurrency exchange Binance.  Singhal added that HODLers – addresses with balances ranging…

EU Official: We Can’t Regulate Libra Without More Details

EU Official: We Can’t Regulate Libra Without More Details

The European Union is still trying to figure out what to do about Libra, according to a memo released Tuesday by European Commission Executive Vice-President Valdis Dombrovskis. The indecisiveness stems from a lack of actionable information. Specifically, Libra “lacks detail,” according to Dombrovskis.  Despite repeatedly asking the Facebook-launched Libra Association for information about its payments ecosystem and eponymous stablecoin, the Commission – the EU’s executive branch – has yet to determine what, exactly, Libra is. “As Libra is still a project, and thereby a moving target, the information provided remains insufficient for determining the precise nature of Libra and, by extension, its relation with existing EU law,” he said. But he said the Commission wants to “act swiftly” in creating regulations for Libra, stablecoins and other EU crypto-asset projects. This reaffirms the Commission’s Dec. 5, 2019, declaration that it will police stablecoins and their “risk” to financial stability. Libra faced regulatory backlash after it was announced last year, with lawmakers and agencies worldwide calling for a halt to its development until the Facebook-led project could be scrutinized. Zuckerberg said in testimony before a U.S. congressional committee last year that Facebook would withdraw from the project if the association chooses to launch before securing regulatory approvals. Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Chainlink’s Sergey Nazarov on What DeFi Can Learn From Early Exchange Hacks

Chainlink’s Sergey Nazarov on What DeFi Can Learn From Early Exchange Hacks

Sergey Nazarov joins today’s episode of The Breakdown to discuss the role of price oracles in the recent DeFi attacks, plus what DeFi can learn from early exchange hacks. The DeFi world continues to dissect the recent attacks on bZx. To most, the amount lost in the attacks is far less relevant than what the attacks suggest about how DeFi applications need to be designed.  Within that, one key topic of conversation is the role of price oracles – the systems by which DeFi applications check the prices of assets that dictate what happens in a given smart contract. Since asset price manipulation was at the core of the recent attacks, this is a particularly pertinent area of inquiry.  Yesterday, Chainlink announced it would be helping bZx upgrade its systems, taking advantage of Chainlink’s recently launched “meta oracle.” On this episode of The Breakdown, Chainlink founder Sergey Nazarov discusses: Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Defi for Bitcoin: Collateral Peg Platform Provides Noncustodial BTC Lending on Ethereum

Defi for Bitcoin: Collateral Peg Platform Provides Noncustodial BTC Lending on Ethereum

During the second week of February, a new project called tBTC was unveiled that is similar to the Wrapped Bitcoin (WBTC) created with the Ethereum network. However, the tBTC effort claims to be a noncustodial application that allows users to deposit BTC, mint tBTC, and lend it with interest. Also Read: Market Update: Bitcoin Halving Hype, Golden Cross Signals, and GBTC’s 41% Premium tBTC Project Launches on Ropsten Testnet On January 30, 2019, the Wrapped Bitcoin (WBTC) project launched on the Ethereum network using the ERC20 standard. WBTC allows people to wrap collateralized BTC in Ethereum but the method has a custodian. The WBTC custodian is Bitgo and the project is also backed by Kyber Network and Ren (formerly Republic Protocol). Last August, software developer Matt Luongo told people about his work on Twitter and published the tBTC specifications. Luongo tweeted that the “cat’s out of the bag” and he and his team were working on tBTC for 10 months prior. Then on February 13, Luongo announced the first release of tBTC on the Ropsten testnet. The software engineer stressed that this was the first of a “few planned releases leading up to mainnet” and the team is still auditing. Luongo added: tBTC opens the entire Ethereum ecosystem to Bitcoiners. What happens when Bitcoiners can choose between Coinjoin and Tornado.cash for fungibility? #tBTC is live on testnet! https://t.co/k8q5WLmOFu pic.twitter.com/FxA5moyi3c — Keep #tBTC (@keep_project) February 14, 2020 Luongo’s announcement was welcomed by a handful of bitcoiners and the Ethereum community as well, although the recent exploitation of Bzx has had a lot of skeptics questioning decentralized finance (defi) this week. Eric Wall from the trading and clearing technology firm Cinnober tweeted that concepts like tBTC should be embraced. “Stop thinking of Ethereum/DeFi as this crazy neighbor who’s always up to no good,” Wall wrote. “tBTC just launched on testnet. As it approaches mainnet, the hedge between our gardens is cut. Their garden becomes our garden. It’s time to start looking after each other.” “Wouldn’t it be funny if tBTC enables a Bitcoin fee market built on Ethereum,” another crypto Twitter personality commented. “Then, this fee market enables Bitcoin to maintain it’s monetary policy — A policy which would be secured by ETH,” they added. Project Developers…

Tron Community in Uproar as Genesis Coins Used in Super Reps Vote

Tron Community in Uproar as Genesis Coins Used in Super Reps Vote

The Tron (TRX) community was beside itself on Wednesday, Feb. 19 after founder Justin Sun’s address was shown to have voted in two Tron Foundation apps as a Super Representative (SR). Both Tron-Ace and Tron-Bet were voted in as Super Representatives by the Zion address, the same account which received 99 billion TRX from the coin’s genesis block. Super Representatives are responsible for overseeing block production on Tron’s blockchain. As such, they receive a sizable portion of the coin rewards from each block. In plain terms, this means that Tron’s community rules were bypassed, arguably to further enrich its own foundation. That’s despite Tron CEO Justin Sun’s insistence that he and his foundation have nothing to do with community voting. Tron founder in vote buying controversy? The candidate addresses with 200 million and 310 million votes belong to Tron-Bet and Tron-Ace respectively. The address shown happens to be the Zion address, the same account that received 99 billion TRX following Tron’s mainnet launch in 2018. This equates to the entirety of the TRX coin supply at the time. Tron Super Representative vote results from Feb. 19. Source: tronscan.org The use of an address so clearly affiliated with the Tron Foundation has upset many members of the coin’s community. One Tron Society member took to Twitter on Wednesday morning to demand an explanation from founder Justin Sun: “The vote in of the Tron-Bet and Tron-Ace was done using the ZION account. Can we get an explanation please.” The same user later added to the statement that the Zion account “ was used to vote in SRs which Justin is ‘invested’ in even after the statement from Justin [saying neither] he nor the foundation have participated in voting.” TronWalletMe marketing and communications director Misha Lederman later noticed a third SR voted for by the Zion account. Lederman pointed out that the Poloniex SR had also benefited from Tron’s Zion account. The Poloniex exchange was purchased by Tron founder Justin Sun in November 2019. Tron founders flout community rules Tron dApp developer Rovak summed up the situation for non-technical users, noting: “It is not OK to use these tokens if the elections are supposed to be 100% community driven.” Tron documentation written by Justin Sun clearly states that…

Price Analysis Feb 19: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LINK

Price Analysis Feb 19: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LINK

Eurekahedge’s index of crypto hedge funds have clocked 21.15% returns since the start of 2020 and this is the best performance from the firm since the index started in 2013. Even in 2017, which was the blockbuster year for cryptocurrencies, the January returns were a modest 4.85%. If the crypto hedge funds maintain their stellar performance this year, they are likely to attract further investments in this space. Coinbase is now a Visa principal member, the first crypto pure-play company to receive the membership. This will help the company to offer more features and services to its customers of Coinbase cards that are available in 20 markets. Coinbase believes that this step would be “another significant milestone in the mainstream adoption of crypto as a genuine utility.” Daily cryptocurrency market performance. Source: Coin360 After the recent dip, most major cryptocurrencies are attempting to resume their up move, with a couple close to new lifetime highs. This shows that the sentiment remains bullish and traders are willing to buy the dips. After every rise, expectations of a similar rally to the one seen in 2017 dominates the limelight. Though anything is possible in crypto markets, it would be better to see a gradual rise to new highs, instead of the vertical rally, which is unsustainable. Let’s analyze the charts to see if there are any patterns pointing to a parabolic move. BTC/USD Though Bitcoin (BTC) dipped below the 20-day EMA on Feb. 17, the bears could not sustain the price below it. This shows that the bulls continue to buy the dips. The failure to drag prices lower has attracted buying and some short-covering by the aggressive bears. BTC USD daily chart. Source: Tradingview Currently, the price is back above $10,000 and the bulls are likely to attempt a breakout of the overhead resistance at $10,360.89. If the BTC/USD pair can sustain above $10,360.89, it can move up to the long-term downtrend line at $11,400, which is likely to act as a stiff resistance. A break above this line will be a huge positive that can open the doors for a rally to $13,973.50. However, if the bulls fail to push the price above 10,360.89, the pair might remain range-bound for a few days. It will…

The Flash Loan Attacks Explained (For Everybody)

The Flash Loan Attacks Explained (For Everybody)

Today we’re breaking down the flash loan attacks that rocked the DeFi community in a way even your grandpa can understand, presented in both audio and full-text format below. For early access before our regular noon Eastern time releases, subscribe with Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica or RSS. John: The world of cryptocurrency is no stranger to fast money… Bitcoins, ethers, and thousands of others like them take just minutes or even seconds to send across the street or to the other side of the world. The technology has been described as cash with wings, and it’s not a bad way to think about it. But last week, as we walked the floor at ETHDenver, an annual gathering of ethereum fans, that speed became a liability. Sophisticated attackers took advantage of that speed to steal nearly a million dollars in less than a second.  Hello, and welcome to CoinDesk Explains, an occasional series where we break down the complex world of cryptocurrency.  I’m John Biggs Adam: And I’m Adam B. Levine, we’ve both been following this technology for way too many years but this latest incident is pretty fascinating by any standard.  On today’s show we’ll break down The Flash Loan Attacks that rocked the DeFi community and, depending on who you ask, either demonstrated fundamental flaws in the world of “DeFi”, or simply show how early we are in this technology. John: Okay, if you’re new to the sector or haven’t been paying that much attention to Ethereum you’re probably wondering “What is DeFi, and what are flash loans?”   This story is really about flash loans, but before we get there let’s talk about Decentralized Finance, better known as DeFi. Adam: So John, think back to when you were a poor college student, to that time you pawned your electric guitar.   John: I’ll never admit that I did this, but for the sake of argument let’s say I went down to Uncle Sams’ Pawn Shop in Columbus, Ohio at the age of 18. On Thursday. At like 11am. So the guitar was worth about $300 but the pawn shop only gave me $150 in exchange for it.   Adam: So why did you sell it to a pawn shop? John:…

Openfinance Lists New Security Token in Charity Fundraising Effort

Openfinance Lists New Security Token in Charity Fundraising Effort

Openfinance, a platform for secondary market trading of digital assets, is listing Lottery.com’s LDCC security token for U.S. investors. Both accredited and unaccredited investors can buy and trade the LDCC token on Openfinance’s alternative trading system (ATS), the company announced Wednesday. Issued on the ethereum blockchain, the token was designed to entice investors into raising funds for charities across the globe. “We believe that digital security offerings are the future of fundraising. The transparency inherent in this type of offering aligns with our overall mission,” Lottery.com CEO Tony DiMatteo said in a press release. Digital securities refer to a digital representation of a security and aim to reduce the friction caused via paper-based processes while enforcing relevant regulations automatically. The LDCC token forms part of Lottery.com’s digital strategy and is now free to trade on Openfinance’s ATS, alongside other digitized security assets including real estate, private equity and real assets.  An ATS is a U.S. regulatory term for non-exchange trading platforms that match buyers and sellers to locate counterparties for transactions. An ATS is generally regulated as a broker-dealer rather than as an exchange. “We’re thrilled to broaden the trading of Lottery.com’s LDCC token and give more opportunity for exposure to this unique offering,” Openfinance Co-CEO Juan Hernandez said. Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Blockstation Builds Disclosure Tool for Security Token Issuers on Jamaica Stock Exchange

Blockstation Builds Disclosure Tool for Security Token Issuers on Jamaica Stock Exchange

Blockstation, a Canadian digital asset trading systems firm, has built a fast-track disclosure filing process for companies hoping to list security tokens on the Jamaican Stock Exchange (JSE). Announced Tuesday alongside JSE’s launch of a tokenized Initial Public Offering (IPO) platform, Blockstation’s new tool, called the Smart Listing Accelerator Process (SLAP), is designed to streamline the filing of required regulatory disclosures and prospectuses, said CTO and co-founder Jai Waterman. Waterman said SLAP “lowers the barrier to entry” for companies that want security token offerings (STOs) but do not know how to sift through the corresponding paperwork. The companies may not realize how many disclosure requirements the JSE – and its regulator, the Financial Services Commission – have to inform the public about an investment’s risks.  “Full disclosure needs to be there in order to make sure that these investors know what they’re getting in to, and that they’re protected,” said Waterman.  Every potential risk has to be laid out in the company’s prospectus. SLAP helps companies do so with a veritable “library” of business risk factors – far more than any one capital-seeking company could guess to include, according to Waterman.  “There’s hundreds of risks that people are not necessarily thinking of,” he said. “When you see that huge library, you’re like, ‘oh you know what, that kind of applies to us.’ So you can take that concept and make it specific to your business.” Building out their filings on SLAP, companies can tailor their prospectus and have a lawyer review the result. Once the filings are finished the companies can submit directly to JSE and FSC. Four companies have already begun the regulatory filing process with SLAP, Waterman said. The new service is the latest advancement in JSE and Blockstation’s digital asset partnership. Since joining forces in August 2018, the pair have developed and launched a cryptocurrency trading platform. They announced their plan to list security tokens in early 2019. Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Financial Services: The Coming Cataclysm

Financial Services: The Coming Cataclysm

Alex Tapscott is a venture capital investor, co-author (with Don Tapscott) of Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies is Changing the World and co-founder of the Blockchain Research Institute, in Toronto. The following excerpt, written by Alex Tapscott, is from his new book Financial Services Revolution, available in all good stores now. Facebook’s foray into cryptocurrencies should surprise no student of technology. After all, the digital revolution has transformed nearly every aspect of our lives, except banking. Financial intermediaries depend more or less on pre-internet technologies. Libra is simply the latest innovation to punch holes in the old model, establishing the battle lines for the future of our digital economy. The stakes are high: the next era of commerce, economic activity, and money is uncertain. Computer scientists are rewiring the economic power grid, and software engineers are re-coding the order of human affairs, exposing our lack of understanding of fundamental concepts like privacy, free speech, and the role of large corporations in our lives. As the digital landlords of this new economy – Facebook, Google and others – challenge the supremacy of big banks, decentralized cryptocurrencies like bitcoin force us to confront our understanding of money, value, and the fortress of regulations erected around these concepts, originally to protect those who used the system, and now to preserve the status quo. This is ultimately a struggle for control, as many parties – totalitarian governments in China and elsewhere, legacy financial institutions, big social media companies and other digital conglomerates, technology upstarts, and other stakeholders – vie for even greater influence. Human beings have become increasingly comfortable with software and technology replacing human actors in many industries and many facets of daily life. Finance is the largest, most consequential, and thus far most immovable industry of them all. The legacy banking system, digital conglomerates like Facebook, free and open cryptocurrency platforms such as bitcoin, and, of course, governments are heading inexorably for a collision of historic proportions. The crash will be cataclysmic. Prepare for impact. Crypto assets and open finance “They say that software is eating the world. Soon, tokens will be eating the world,” said Tyler Winklevoss. He’s right. Blockchain is the first native digital for value: we can use it to program virtually every…