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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

The post BiC’s Crypto Video News Show – BTC Liquidity Crisis: What You Need to Know appeared first on BeInCrypto.

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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/

Blockchain

Facebook’s Diem Unveils Its Latest Stablecoin Plans and Strategic Move to the United States

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Diem, the cryptocurrency project headed by Facebook originally known as Libra, recently announced its plans to launch a stablecoin with its focus scaled back to the United States. 

The company stated earlier this year that it would be relocating its primary operations from Switzerland back to the United States, and would withdraw its payment system license application from Switzerland’s financial regulators. “Diem is simplifying its plans for [its] USD stablecoin issuance by shifting its main operations from Switzerland to the United States,” they said.

This decision was later confirmed by the Swiss Financial Market Supervisory Authority. 

Stablecoins are digital currencies pegged to a fiat currency, with Tether (USDT) and USD Coin (USDC) being two prominent examples. California-based Silvergate Bank will become the sole issuer of the Diem USD, while also managing its dollar reserves. 

Diem to Launch Wholly New Subsidiary Diem Networks US Alongside Crypto Bank Silvergate

In a strategic partnership, the two firms have created a new subsidiary called Diem Networks US — which will run the Diem Payment Network (DPN) to facilitate transactions of Diem stablecoins within its network. 

“Silvergate is a leader in financial innovation and an ideal partner for Diem as we move forward with a blockchain-based payment system that protects consumers and enhances the integrity of the financial system,” said Stuart Levey, chief executive officer of Diem.

“We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper, and takes advantage of blockchain technology to bring the benefits of the financial system to more people around the world. We look forward to working with Silvergate to realize this shared vision.” 

Diem’s strategic shift to the United States comes at a time of a rapidly evolving regulatory environment for cryptocurrencies and blockchain technology. 

Some municipalities and states such as Miami and Wisconsin have embraced the recent innovation, whereas regulators such as the newly-appointed SEC Chair Gary Gensler have critiqued the autonomy of the crypto industry. 

With crypto ETFs and related financial products under intense scrutiny by the SEC, it remains to be seen whether Diem’s decision to relocate back to the United States will bear any fruit.

Featured image from ShutterStock

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinist.com/facebooks-diem-unveils-its-latest-stablecoin-plans-and-strategic-move-to-the-united-states/?utm_source=rss&utm_medium=rss&utm_campaign=facebooks-diem-unveils-its-latest-stablecoin-plans-and-strategic-move-to-the-united-states

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Blockchain

Crypto Research Firm Delphi Digital Launches Latest NFT Fund

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Delphi Digital, a New York-based crypto research and venture firm, recently launched its latest on-chain fund to invest in non-fungible token (NFT) projects. 

The fund, referred to as Delphi InfiNFT, is based on decentralized finance (DeFi) investing protocol Syndicate. “It will enable automation of deposits, cap table, distributions, fund management, reporting, etc.” said Anil Lulla, co-founder of Delphi Digital. 

“NFT’s are changing digital ownership rights, as well as how creators are interacting with their communities. Along with the growth of the NFT space, there is supporting infrastructure that needs to be built alongside it. The goal of this fund is to find the protocols that are moving the NFT space forward and building the infrastructure that is needed.”

Delphi Digital has partnered with NFT investor Gmoney for its NFT fund, who famously purchased a CryptoPunk NFT for a record price of 140 Ethereum worth approximately $180,000 at the time. Gmoney and Delphi will co-manage the fund together. 

According to their website, the fund will look to create an investment portfolio consisting of 20 protocols through InfiNFT. “We plan to deploy at least 80% of the fund’s capital in the first 6 – 9 months as we find protocols that fit with our thesis,” the team report read. 

“We will identify and select leading NFT networks through our networks and communities. We’ll be working directly with the teams we invest in to help them become a core piece of the NFT ecosystem long-term.

Delphi’s InfiNFT is backed by IDEO CoLab Ventures, Divergence Ventures, Axie Infinity, Compound Finance, and Fractional, among others. 

The recent steep Ethereum selloff led to massive losses in market cap across the NFT markets. According to NFT Valuations, Cryptopunks’ total market valuation dropped $600 million this past week — representing over a 66% loss. In spite of the recent volatility, investors like Delphi Digital appear to be confident in the long-term prospects of the non-fungible token space.

Ethereum (ETH/USD), alongside the broader crypto market, suffered week-long losses following the news of Tesla cutting its Bitcoin payments. At press time, Ethereum is down 9.3% in the past week. Source: Tradingview.com
Featured image from UnSplash 

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinist.com/crypto-research-firm-delphi-digital-launches-latest-nft-fund/?utm_source=rss&utm_medium=rss&utm_campaign=crypto-research-firm-delphi-digital-launches-latest-nft-fund

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Blockchain

Cardano, Uniswap, Chainlink Price Analysis: 16 May

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Cardano introduced some target levels at $2.53 and $2.69 via the Fibonacci Extension tool. Uniswap needed to garner bullish strength for a break above $43-$45 resistance. Lastly, a descending triangle breakdown on Chainlink could see a 7.5% retracement towards its 50-SMA

Cardano [ADA]

Source: ADA/USD, TradingView

If buyers were looking to make profits on large-cap alts during the recent turbulent broader market, Cardano was a must inclusion in every portfolio. Weekly gains of 36% were the highest among the top 10 coins by market cap and underlined ADA’s independence from broader market sentiment. Fibonacci Extension tool was used to identify potential target points for the current rally. The 372.2% and $361.8% extension levels stood at  $2.53 and $2.69, respectively. With buying pressure still on the rise according to Awesome Oscillator, ADA made a strong case for an extended rally.

In case of pullbacks, these extension levels can also act as support lines. RSI’s overbought territory indicated the need for stabilization and a dip in volumes could mean some southbound action. Nevertheless, key factors could allow ADA to sustain higher levels moving forward.

Uniswap [UNI]

Source: UNI/USD, TradingView

A descending triangle breakdown showed losses of 8% from the bottom trendline, but buyers stepped in at $35.6-support. In fact, this support has been under the spotlight during recent dips and only reinforced the area as a buffer against extended losses. On the 4-hour timeframe, OBV’s sharp fall was an interesting development which explained why bulls have failed to topple $43-$45 resistance. Considering the dearth of constant buying pressure, Uniswap could trade between $44.4 and $35.6 over the coming days.

A breakout above $44.4 on high volumes would result in a bullish trend but the market was not yet ready for such a swing. Awesome Oscillator’s wavy trajectory suggested that neither side had been fully able to assert dominance.

Chainlink [LINK]

Source: LINK/USD, TradingView

While Chainlink did see losses over the last 24 hours, the bulls held on to $41.2-support – an important development. A descending triangle was prominent on the daily timeframe and a breakdown could see a sell-off between $35.7-39.1. Those hoping to trade on a breakdown can observe the 4-hour timeframe for more sensitive price action.

Awesome Oscillator registered a series of red bars as selling momentum dragged  LINK from a high of $61.9 to a low of $39.7 during the present downtrend. MACD also confirmed a bearish presence in the market. To negate LINK’s pattern, buyers would need to target a rise above $45.6-resistance.


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/cardano-uniswap-chainlink-price-analysis-16-may

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