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Bakkt may go public through rumored $2B merger

Regulated Bitcoin futures platform Bakkt is reportedly eyeing going public through a rumored merger.

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Bakkt, the cryptocurrency trading platform majority-owned by Intercontinental Exchange, is rumored to be deep in discussions to go public through a merger with VPC Impact Acquisition Holdings.

On Jan. 7, Bloomberg published a story citing anonymous sources “with knowledge of the matter” who claimed Bakkt is already in advanced talks regarding the merger, predicting that an official announcement on the matter could be published as soon as next week.

The sources estimate the combined entity could be valued at more than $2 billion should the merger be completed.

VPC is a special purpose acquisition company closely affiliated with Victory Park Capital — an SEC-registered alternative investment firm. VPC chief executive John Martin has described the firm’s core strategy as seeking to “identify, partner with and help grow a business in the fintech sector.”

Bakkt launched in 2019 and is an institutional focused, regulated platform offering “physically-delivered” Bitcoin futures contract. The exchange’s futures drove $286 million in trade volume over the past week.

Bakkt’s founding CEO and outgoing U.S. Senator, Kelly Loeffler, lost Georgia’s run-off election on Jan. 6.

Source: https://cointelegraph.com/news/bakkt-may-go-public-through-rumored-2b-merger

Blockchain

3 reasons Bitcoin abruptly dropped by 7.4% overnight

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The price of Bitcoin (BTC) dropped sharply from $37,800 to $35,000 overnight, liquidating $572 million worth of cryptocurrency futures positions.

There are three major reasons why the price of Bitcoin declined steeply in the past 12 hours. The reasons are an overheated derivatives market, growing doubt in the market, and the lack of upside volatility.

BTC/USD 15-minute candle chart (Bitstamp). Source: Tradingview

Derivatives market was overheated before the correction

Before the pullback occurred, the Bitcoin derivatives market was extremely overheated. The futures funding rate was hovering at around 0.1%, which is 10 times higher than the average 0.01%.

BTC futures perpetual swaps funding rates. Source: Digital Assets Data

The futures funding rate is a mechanism that achieves balance in the futures market by incentivizing long or short contract holders based on market sentiment.

If there are more long contracts or buyers in the market, then the funding rate turns positive. If it becomes positive, then buyers have to compensate short-sellers with a portion of their contracts every eight hours, and vice versa.

Almost all major cryptocurrencies saw their funding rates spike to around 0.1% to 0.3%, which meant the market was extremely overleveraged.

When the market is this overcrowded, the likelihood of a long squeeze increases, which could cause many futures contracts to get liquidated in a short period.

Growing market uncertainty

According to researchers at Santiment, there is “trader doubt” in the market on whether BTC would hit $40,00 again. They wrote:

“Thinking face There is an increasing amount of trader doubt that #Bitcoin will revisit $40,000. But according to address activity and trade volume, the long-term trend still looks plenty healthy. Keep a close eye on whether $BTC’s usage rate stays propped up.”

Bitcoin price causes concern among traders. Source: Santiment

The fundamentals of the Bitcoin blockchain network, such as address activity and trade volume, remain strong. However, the market sentiment has dwindled in the past week as BTC continues to struggle to break out of the $38,000 resistance area.

Lack of upside volatility

Bitcoin has been seeing weak reactions from buyers throughout the past several days, compared to the initial rally to $42,000 in early January.

During the early phase of the rally, whenever Bitcoin dipped to key support levels, like $35,000, there was often a big reaction from buyers.

However, since mid-January, there have been weaker reactions from buyers at key support levels. This indicates that the expectations of a rally toward the $40,000 to $42,000 resistance area have subsided, at least in the near term.

The selling pressure on Bitcoin mostly came from Asia in the first two weeks of January. But, as shown in the overnight correction on Jan. 19, Bitcoin has started to see weakness in the U.S. market as well.

The combination of limited upside volatility and the lack of upside momentum is seemingly causing traders to become cautious in the near term. This likely means that BTC sees a prolonged consolidation phase until February.

Source: https://cointelegraph.com/news/3-reasons-bitcoin-abruptly-dropped-by-7-4-overnight

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Brave private browser integrates IPFS support to desktop version

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Brave Browser, a popular blockchain-enabled web browser, has integrated native support of InterPlanetary File System, or IPFS, to strengthen the access to the decentralized web.

According to a Jan. 19 announcement, Brave has integrated IPFS into its desktop web browser for Windows, macOS and Linux, enabling users to install the protocol in a couple of clicks.

IPFS is a peer-to-peer hypermedia protocol designed to make the web faster, safer, and more open. The protocol aims to supplement or possibly even replace the Hypertext Transfer Protocol, or HTTP, which is a major client-based protocol used to transfer web pages across a network. In the announcement, Brave pinpointed some crucial issues associated with HTTP:

“The underlying protocol of the web today is HTTP, which dictates where power exists in those applications. HTTP puts publishers in complete control of service availability and data access, making end users passive receivers instead of having agency in the relationship.”

As such, the IPFS integration with Brave browser is a big step toward redefining existing internet architecture, putting individuals in control instead of publishers, Brave said. “IPFS changes this dynamic by enabling direct communication and sharing between users over a cooperative public network,” the firm added.

The initial release of native support for IPFS provides basic node functionality, and Brave plans to introduce more IPFS implementations in 2021 including adding IPFS support to Brave’s Android browser. The firm will also experiment with integrating the features and economic models of the Brave network’s utility token, Basic Attention Token (BAT) and Filecoin (FIL).

Brave is not the only company actively experimenting with IPFS. In March 2020, Opera browser officially released IPFS native addressing in their Android browser, introducing default support for IPFS on Android 57.

Source: https://cointelegraph.com/news/brave-private-browser-integrates-ipfs-support-to-desktop-version

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Charted: Chainlink (LINK) Holding Uptrend Support, Why It Could Rally Again

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Chainlink (LINK) rallied towards the $24.00 level before correcting lower, similar to bitcoin and Ethereum. The price is now trading near a major support zone at $20.00.

  • Chainlink token price traded as high as $23.79 before starting a downside correction against the US dollar.
  • The price is trading above the $20.00 support and it is well above the 100 simple moving average (4-hours).
  • There is a connecting bearish trend line forming with resistance near $21.70 on the 4-hours chart of the LINK/USD pair (data source from Kraken).
  • The price could extend losses towards $18.20 before starting a fresh increase in the near term.

Chainlink (LINK) Corrects Lower

After a clear break above $20.00, chainlink (LINK) extended its rally. It even surged above the $22.00 level and settled well above the 100 simple moving average (4-hours).

It traded as high as $23.79 before starting a downside correction. There was a break below the $22.00 and $21.20 support levels. There was also a clear break below a contracting triangle with support near $21.50 on the 4-hours chart of the LINK/USD pair.

The bulls lost control and the price spiked below the $20.50 level. However, the decline was limited and the price traded as low as $19.90. LINK is now trading above the $20.00 support and it is well above the 100 simple moving average (4-hours).

Chainlink (LINK)

Source: LINKUSD on TradingView.com

An initial resistance for LINK is near the $20.80 level. It is close to the 23.6% Fib retracement level of the recent decline from the $23.79 high to $19.90 low.

Moreover, there is a connecting bearish trend line forming with resistance near $21.70 on the same chart. The trend line is close to the 50% Fib retracement level of the recent decline from the $23.79 high to $19.90 low. A clear break above the trend line resistance and $22.00 could open the doors for a fresh push towards $24.00 and $25.00.

More Losses?

If chainlink’s price fails to continue higher above $21.70 and $22.00, it could correct further lower. The first major support is near the $20.00 level.

The next major support is near the $18.20 level (the last breakout zone), where the bulls are likely to take a strong stand in the near term.

Technical Indicators

4-hours MACD – The MACD for LINK/USD is gaining momentum in the bearish zone.

4-hours RSI (Relative Strength Index) – The RSI for LINK/USD is currently close to the 50 level.

Major Support Levels – $20.00, $19.10 and $18.20.

Major Resistance Levels – $20.80, $21.70 and $22.00.

Source: https://www.newsbtc.com/analysis/link/chainlink-link-holding-uptrend-support-20/

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