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Bitcoin News Roundup for Sept. 3, 2020

With the price of bitcoin pulling back sharply and U.S. legislators again advocating for blockchain, CoinDesk’s Markets Daily is back for your latest crypto news roundup!

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With the price of bitcoin pulling back sharply and U.S. legislators again advocating for blockchain, CoinDesk’s Markets Daily is back for your latest crypto news roundup!

Wednesday saw a flurry of deposits onto exchanges, indicating some investors are trying to offload their bitcoin. That could further propel prices downwards.

Robinhood is reportedly under investigation by the Securities and Exchange Commission for not fully disclosing it was passing customer orders on to market makers. 

Lawmakers are urging President Trump to consider blockchain solutions in the fight against COVID-19. 

Citizens and companies in Zug will be able to pay up to $109,000 of their tax bill in either bitcoin or ether as of next February.

Source: https://www.coindesk.com/bitcoin-news-sept-3

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Research: Altseason is Upon Us, But Not For XRP or EOS

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In its latest ‘State of the Network’ bulletin, industry data provider Coin Metrics has delved into altcoins and their impressive performance so far this year.

It acknowledged that many of the hot altcoins that surged during the 2017 crypto boom are now ‘dead and gone’, and have been replaced by a new breed of DeFi assets. It added that with new capital flowing into Bitcoin and Ethereum, some of that money may start flowing into altcoins.

The report acknowledged that institutional investment has largely been behind the current rally and institutions are very wary of altcoins.

“Altcoin investing is largely considered a retail phenomenon. Similar to penny stocks, it’s often driven by individual investors looking for outsized gains.”

XRP and EOS Missing The Party

Looking at returns since the beginning of December 2020, Bitcoin and Ethereum have outperformed most other Layer 1 blockchains, it noted. However several high-cap crypto assets have also performed well hitting their own all-time highs.

There are two notable exceptions to this trend; Ripple’s XRP and Block.one’s EOS.

The glaring red charts for these to former darlings of crypto show that XRP has lost 54.6% since December 1, and EOS has dumped 7.5% over the same period.

Ripple’s problems started when it finally lost the battle with the SEC and the selloff began. Since its late November high of almost $0.70, XRP has dumped almost 60% to today’s sub $0.29 prices. There have been reports of Ripple executives selling their stashes, while Grayscale dissolved its XRP Trust as confidence in the company dwindles.

Block.one’s problems have not been as bad, but they have had them. Company CTO Dan Larimer announced his resignation earlier this month and there has been very little on the development or product front for the project.

Over the past year, EOS has lost 23% on a chart that has been flat for months. Since its February 2020 high of $5.40 it has dumped 50%, and since its giddy all-time high in April 2018 of over $22, EOS has been smashed 87%.

Top Altcoins so Far in 2021

Those that are enjoying the altseason sun include Polkadot, Binance Coin, Chainlink, and of course Ethereum, though it shouldn’t really be termed an altcoin any longer.

Coin Metrics highlighted Cardano, Decred, and Dogecoin as three that have made three figure gains since December one, outperforming Bitcoin itself.

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Source: https://cryptopotato.com/research-reports-altseason-upon-us-but-not-for-xrp-or-eos/

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Biden’s US Treasury Secretary Nominee Raises Concerns Over Crypto Terrorism Financing

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Janet Yellen is keeping true to form as a crypto critic and has linked cryptocurrencies to terrorist financing and money laundering. Meanwhile, another report has emerged showing that virtual currencies only account for an insignificant proportion of global financial crimes.

Yellen Espouses Well-Worn Crypto FUD

Speaking during her virtual confirmation hearing before the U.S. Senate, Janet Yellen — President-elect Joe Biden’s nominee for the Treasury Department — identified cryptos as a concern in terms of terrorist financing and money laundering.

Doubling down on her anti-crypto rhetoric, Yellen remarked:

“I think many [cryptocurrencies] are used, at least in transactions sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”

According to Yellen, if confirmed, her leadership of the Treasury Department will focus on dealing with crypto-related terrorism financing, adding:

“The technologies to accomplish this change over time and we need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology, cryptocurrencies are a particular concern.”

As previously reported by CryptoPotato, Yellen is a known crypto critic. Back in 2018, she described Bitcoin as “anything but useful.” She has also countered claims of BTC being a store of value.

Cryptocurrency Crime Grossly Overstated

Yellen’s remarks are a common refrain among members of the mainstream financial establishment. However, the entire record of crypto forensic investigations do not support the claim that virtual currencies are the preferred channel for criminals and terrorists.

As part of the highlights of its upcoming 2020 crypto crime report, blockchain intelligence firm revealed that criminal transactions in the cryptocurrency space fell to 0.34% in 2020. This figure represents an even smaller percentage than the 2.1% recorded in 2019.

Reacting to Yellen’s statements, several crypto stakeholders were quick to dismiss her claims with verifiable data. Morgan Creek digital co-founder Anthony Pompliano tweeted:

Janet Yellen stated today that cryptocurrencies are concerning because of terrorist financing and money laundering. She forgot to mention that the US dollar is the choice currency of criminals around the world. The large banks launder more money than [the] entire Bitcoin market cap.”

Indeed, in its report from 2020, SWIFT revealed that crypto-related money laundering was only a drop in the ocean compared to the volume of dirty money funneled via banks. Back in May 2020, Chainalysis also issued a report debunking claims that terrorist group ISIS held $300 million in Bitcoin.

Featured image courtesy of CNBC.

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Source: https://cryptopotato.com/bidens-us-treasury-secretary-nominee-raises-concerns-over-crypto-terrorism-financing/

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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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