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BiC’s Crypto Video News Show – BTC Liquidity Crisis: What You Need to Know

Bitcoin’s popularity, coupled with the entrance of institutional and enterprise investors, is driving up demand. Overall corporate demand is more than double the entire monthly amount of bitcoin created per month. While the cryptocurrency community celebrates the arrival of Grayscale, MicroStrategy, and PayPal, these companies alone are hoovering up supply. At the same time, retail … Continued

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In today’s video, host Jessica Walker takes us through the possibility of exchanges running out of bitcoin. Will there be enough BTC to go around?

Bitcoin’s popularity, coupled with the entrance of institutional and enterprise investors, is driving up demand. Overall corporate demand is more than double the entire monthly amount of bitcoin created per month.

While the cryptocurrency community celebrates the arrival of Grayscale, MicroStrategy, and PayPal, these companies alone are hoovering up supply. At the same time, retail demand is skyrocketing.

Watch BiC’s Latest Crypto Video News Show Here:

Will a Bitcoin liquidity crisis bring the prices up? | Bitcoin News Update

BTC Demand Rising

The upshot is that exchanges are seeing unprecedented demand. PayPal trading volumes increased 905% and soared past $242 million in one 24-hour period.

Demand has risen to the point that exchanges are mulling restrictions. PayPal is already restricting high-frequency day-trading. And an eToro manager recently warned about purchasing restrictions that will take effect on the weekend of Jan. 16.

Complicating the issue is that those holding bitcoin are waiting for even higher prices. Roughly 66% of the bitcoin supply has not traded hands in the last six months.

The Issue

Bitcoin’s 2020 bull run kicked into gear in July 2020. MicroStrategy bought bitcoin to replace US dollars in its reserves. Grayscale announced its Grayscale Bitcoin Fund, which gave institutional investors a way to legally gain exposure.

While this was happening, PayPal’s bitcoin platform was gaining traction. By the end of December, 2020, institutional involvement in cryptocurrency gained depth and breadth.

Grayscale opened its Ethereum-based fund. MassMutual purchased $100 million of BTC. Analysts talked of a rotation out of gold as institutional investors added more risk.

Analysts also noted that the amount of bitcoin these companies were buying staggered the imagination. Grayscale alone bought more bitcoin in November than was mined. The same occurred in December.

Market Reaction

The market reacted to the influx of enterprise investors by turning bullish. Prices broke all-time-highs and crossed $20,000 on Dec. 16. 

Trading volumes also soared. On Sep. 3, according to CryptoCompare, volume peaked at $27.6 billion on exchanges. CryptoCompare also noted a rise in purchases on decentralized exchanges (DEXs). Anonymity and self-custody were noted as primary movers for people purchasing on DEXs.

At the retail level, this changed dramatically over the course of 2020. Retail volumes fell in autumn, then surged again with the holiday season. Bitcoin hit $30,000 at year-end due to retail investors.

Trading volume in January is still ramping up. Exchanges report unprecedented volumes. Barely two weeks into January 2021, eToro sees crypto trading volumes that are 25 times higher than in 2020 as a whole.

What’s Next?

The high volumes on exchanges are a sign of new retail buyers coming to the market. Media reports relating to the rise of bitcoin and institutional purchases are a factor.

So, what can we expect? It seems that the bull run is not over yet. Senior bitcoin bulls point to higher prices and volumes that should theoretically make the market more stable. For as long as demand outstrips supply, prices will react accordingly.

One question that arises turns to the learning curve of these new investors. With prices so high and demand throttled by the exchanges, will more savvy newcomers start buying off the exchanges? PayPal is exposing great numbers of newcomers to cryptocurrency and offering convenience. How many will take the next step?

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James Hydzik is a finance and technology writer and editor based in Kyiv, Ukraine. He is especially interested in the development of regulation in the face of increasingly rapid technological change. He previously covered the CEE region for Financial Times banking and FDI magazines. An ardent believer in gut renovating eastern Europe one flat at a time, he currently holds more home renovation gear than crypto.

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Source: https://beincrypto.com/bics-crypto-video-news-show-btc-liquidity-crisis-what-you-need-to-know/

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Blockchain and crypto will challenge current finance, Nigeria VP says

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Nigeria’s vice president, Yemi Osinbajo, delivered a speech at an economic summit on Friday in which he spoke positively of crypto and blockchain. 

“There is no question that blockchain technology generally, and cryptocurrencies in particular, will in the coming years, challenge traditional banking, including reserve banking, in ways that we cannot yet imagine,” Osinbajo said on Friday during the Central Bank of Nigeria, or CBN, Bankers’ Committee Economic Summit. “We need to be prepared for that seismic shift, and it may come sooner than later,” he said.

The Nigerian vice president also noted the broadness of the crypto industry, mentioning decentralized finance, or DeFi, in the mix. “Decentralized finance, using smart contracts to create financial instruments, in place of central financial intermediaries, such as banks or brokerages, is set to challenge traditional finance,” he said. 

Osinbajo’s speech, which included a number of other points, is posted on his YouTube channel. The Nigerian vice president also tweeted out a video clip highlighting of some of his crypto comments from his talk.

“The point I’m making, is that some of the exciting developments we see call for prudence and care in adopting them and these have been very well-articulated by our regulatory authorities,” he said, adding:

“But we must act with knowledge and not with fear. We must ensure that we are in a position to benefit and in a position to prevent any of the adverse side effects, or any of the possible, even criminal, acts that may arise in consequence of adopting or taking any of these options.”

The comments come in contrast to recent developments in Nigeria. Earlier in February, Nigeria forbade banking interactions with crypto exchanges, as per a ruling from its central bank. The CBN’s governor also called crypto assets illegitimate. Bitcoin recently traded at a significant premium in the region.

Source: https://cointelegraph.com/news/blockchain-and-crypto-will-challenge-current-finance-nigeria-vp-says

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‘Bitcoin could reach $1 million or $1, and may do both of those’

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While many analysts predict that either Bitcoin could increase to a million or fall to a dollar, a popular businessman and investor based in the US thinks that the asset could do both!

In a recent interview with Joe Kernen at CNBC’s Squawk Box, Internet analyst Henry Blodget of the dot com era fame said: 

Bitcoin could go to $1 million… it could also go to $1. And in fact it may do both of those

In addition, Blodget, who also served as the head of the global Internet research team at Merrill Lynch, is unconvinced about the asset’s value proposition. He claimed that Bitcoin as an inflationary hedge and the narrative surrounding its value as ‘digital gold’ were “stories”. He further added: 

But the stories that we tell about why relative to the value of gold or other currencies, they’re ludicrous.

In his opinion, Bitcoin can trade just about anywhere because it does not have any fundamental backing. He said that unlike traditional stocks, “which usually does have some relationship ultimately to a fundamental,” of a company, “Bitcoin doesn’t, so that means it can trade anywhere.”

The entrepreneur thinks that crypto exchange Gemini’s CEO Tyler Winklevoss could eventually be “exactly right,” in his forecast that the asset could surge to a million. However, Blodget said:

If people were to decide that for the next couple of hundred years Bitcoin is where you park your money when you take it out of the fiat system, OK, it’s possible.

Interestingly, while crypto Twitter and Bitcoin enthusiasts, in particular, called out the analyst’s criticism, they commended the interviewer’s counter-argument. CNBC’s Joe Kernen seemed to even “speak the language” of the crypto space as one twitter user named @HodlBells noted:  


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Source: https://ambcrypto.com/bitcoin-could-reach-1-million-or-1-and-may-do-both-of-those

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Crypto platform NetCents to offer users access to DeFi protocols thru Vesto

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NetCents, a cryptocurrency payments company, today announced it has signed an agreement with Vesto.io to pave the way for DeFi access in the NetCents platform.

Vesto, is a San Francisco-based company that has created a platform allowing users to choose from multiple DeFi protocols in a virtual supermarket. NetCents (with regulatory approval) intends on enabling a portal to the Vesto infrastructure from the NetCents wallet in order to facilitate user’s adoption of DeFi investing in an efficient and easy-to-understand interface.

“We have seen the DeFi space explode over the past year, but for it to reach the next level – the tools and the process has to be attainable by the novice crypto investor. We will be adding a layer of simplification to the process so that individuals can have their savings actually working for them without the complexity of the current platforms. Individuals have the right to lend their money at market-based rates instead of getting 1% interest on their savings that the commercial banks are offering.”
– Clayton Moore, NetCents Founder & CEO

LOI

The Letter of Intent  (LOI) contemplates a Joint Venture between parties and an option for NetCents to invest in Vesto and hold a significant ownership stake in the company at a future date.

Management of NetCents also informed investors that many of the concepts embraced by these DeFi platforms have not been vetted by the many authorities that regulate financial products. NetCents intends to work together with regulators to navigate this landscape and resolve it with a compliant product.

For Example: Fintech businesses seeking to bring a novel product or service to the market can seek regulatory relief through regulatory sandboxes such as the Ontario Securities Commission’s LaunchPad or the British Columbia Securities Commission’s SandBox.

Furthermore, businesses that distribute, trade, or advise in crypto assets that are securities are required to comply with securities laws (in particular, registration and prospectus requirements), which can be onerous. There are many exemptions for specific types of distributions, trades, and other activities and NetCents intends to research these exemptions rigorously. These exemptions, at a high level, may limit the types of investors that can participate or the investment amounts, or may require the preparation of disclosures to investors and filing of a disclosure document.

Source: https://www.cryptoninjas.net/2021/02/27/crypto-platform-netcents-to-offer-users-access-to-defi-protocols-thru-vesto/

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