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Blockchain Bites: Coinbase Wants to Crowdsource Asset Listings; What’s Up With Tether’s Bank?

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Bitcoin is in the red today, following yesterday evening’s announcement of President-elect Joe Biden’s $1.9 trillion stimulus plan.

Top shelf

Stakeholders stake
The bitcoin exchange-traded product (ETP) from ETC Group (recently launched on Switzerland’s SIX stock exchange, though it trades elsewhere) has seen volumes far above all the other 1,800 ETPs listed on Deutsche Börse, the exchange said. Meanwhile, Bitwise found the number of financial advisers allocating crypto to client portfolios rose 49% year over year, according to a survey of 900 money managers.

Coinbase crowdsources coins
The popular exchange announced the Asset Hub yesterday, a new issuance portal that would allow users to nominate a cryptocurrency to trade on the exchange. “We appreciate that the growth of the cryptoeconomy depends on the success of digital asset issuers, and we are committed to supporting issuers every way we can,” an executive said.

Money moves
Blockchain mortgage platform Figure says it has closed a $100 million financing facility for its mortgage products from JPMorgan. The firm also reported its mortgage business grew nearly 50% month over month in the fourth-quarter of 2020. Coinbase’s venture arm has invested in the mining company Titan’s seed round, while merchant bank Galaxy Digital will start mining bitcoin and offering financial services for miners.

Quick bites

  • BITCOIN CORE: Bitcoin got an upgrade. Here’s what you need to know. (CoinDesk)
  • PRIVACY COINS: A number of exchanges have swepts dash, zcash and monero from their order books. At least one won’t disclose why. (CoinDesk)
  • CFTC INSIDER: What the crypto world can expect from Gary Gensler at the SEC. (CoinDesk op-ed)
  • BIDEN’S $1T: Does Biden’s stimulus plan vindicate bitcoiners? (First Mover/CoinDesk)
  • $1B TRANSFER: It only cost $7 to move a large order on Ethereum. (Decrypt)
  • ‘HIGH PRIORITY’: Jerome Powell says the Fed is working on stablecoin risks. (The Block)
  • THE EFFECT: Does Grayscale Trust affect crypto prices? (Medium)
  • NEW ERA: Of government-friendly bitcoin miners. (Vice)

Market intel

DOT matrix?
As prices for bitcoin and other cryptocurrencies continue to surge this year, many traders are looking for any indicator for when – or if – the bull market will come to an end. Some are convinced they have the answer: They are examining polkadot (DOT), the native token of the Polkadot blockchain, as a potential canary in the coal mine for cryptocurrency. CoinDesk’s Muyao Shen covers the market maneuver.

At stake

Tethered
It’s been a while since we last covered Tether here, but a recent headline related to the bank where the stablecoin issuer parks its funds is as good a reason as any to check in. In a year-end video recording sent to its customers, and recently surfaced in the crypto media, Deltec Bank & Trust Chief Investment Officer Hugo Rogers said it was investing some client funds in bitcoin.

According to the video (which I haven’t personally seen), Rogers said the bank bought bitcoin before its latest run-up, at about $9,300. “[S]o that worked very well through 2020 and we expect it to continue working well in 2021 as the printing presses continue to run hot,” Rogers said in the video. The money machines go brrr.

Apart from the revelation that an investment officer at a Bahamian bank is a bitcoin bull, the quote did raise questions about Tether’s reserves. Tether (USDT) is a U.S. dollar-pegged stablecoin. It’s issuer, Tether, a company that shares executives with the Bitfinex crypto exchange, is said to maintain the stablecoin’s one-to-one relationship with the greenback based on cash or cash equivalents held by Deltec.

Deltec has clarified that Roger’s statements “had no relation whatsoever to Tether’s depositary assets with Deltec.” So Tether’s reserves are definitely not backed by bitcoin. Or at least not bitcoin that investment officers at Deltec had begun purchasing in Q4 2020.

So what is backing tether?

There are now more than $24 billion in tether in existence, approximately a fivefold increase from the beginning of 2020, when there were fewer than 5 billion tethers. In theory, there should be approximately $24 billion in tether reserves parked in the Bahamian bank.

While many vouch for the company and coin, Tether has yet to produce a full audit of its reserves. In 2019, Bitfinex and Tether told the New York courts tether is only backed 74% by cash and short-term securities rather than maintaining a complete peg, though months later they walked back that claim.

In short, no one outside of Tether can be entirely sure what’s backing the popular stablecoin. Tether isn’t decentralized like other cryptocurrencies, nor does it have a hard cap to the amount that can be created. 

Now the third-largest crypto by market cap, tether is likely the most trafficked crypto in terms of trade volume. It’s used not only as a legitimate means of payment (CoinDesk reported it’s frequently used to skirt sanctions in China and Russia), but also as a common trading pair and a place for investors to park their money during periods of market volatility.

“Tether’s growth in 2020 has been spectacular. We are now starting to speak of the Tetherization of trading, with the lion’s share of spot trading volume now denominated in tether (USDT) tokens,” Chief Technology Officer at Bitfinex and Tether Paolo Ardoino told CoinDesk over email through a spokesperson in December. “As commercial activity rises, so does the use of tether,” he continued.

As Ardoino suggests, the amount of tether is based purely on demand for the preeminent stablecoin. The company mints tethers based on orders from exchanges, traders and others, though because of its limited know-your-customer rules it’s not always obvious who is calling to turn on the mint.

Some of these questions might soon be answered. As part of an ongoing lawsuit pursued by the New York Attorney General, Bitfinex and Tether face a Jan. 15 deadline to provide millions of pages of documents related to a loan Tether allegedly provided to Bitfinex to cover an $850 million hole.

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Disclosure

Source: https://www.coindesk.com/coinbase-tether-polkadot

Blockchain

Bitcoin Shakes Off Dollar Rebound But Beware Of Coming Bear Phase

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Bitcoin has barely flinched in the face of the dollar’s best attempt at a rebound in over a year. The greenback is trying to stage a comeback against the top cryptocurrency, which has left the global reserve currency battered and beaten.

Although Bitcoin has fended off the advance in USD, if history repeats and the dollar surges, a short term » Read more

” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear phase could be coming to the crypto market soon.

The Badly Beaten Dollar Begins Breakout And Bounce

2021 thus far has been Bitcoin’s best year on record. 2020 was among the dollar’s worst as sentiment turned negative and inflation fears pushed investors toward hard assets like gold and crypto.

However, according to the DXY Dollar Currency Index, which weighs the dollar against a bucket of other national forex currencies, a comeback is in the making.

dollar dxy bitcoin

The dollar is breaking out from a falling wedge. Will crypto respond? | Source: DXY on TradingView.com

The chart above shows the DXY breaking out from a falling wedge pattern, and coming back down to retest the former resistance line as support. With the retest complete, a stronger push higher should result.

Related Reading | Dollar, Divergences, & More: Here’s Why Bitcoin Could Soon Bounce

Thus far Bitcoin has remained largely unaffected by the dollar’s advance, despite one half of the cryptocurrency’s main trading pair featuring the fiat currency.

dollar dxy macd

A bullish MACD crossover will confirm the breakout as it has in the past | Source: DXY on TradingView.com

Coinciding with the breakout of the falling wedge, on higher timeframes, the MACD – a momentum indicator – is starting to turn upward. Past instances of the same pattern breaking upward combined with a bullish crossover on the MACD has led to sustained upside in the DXY.

How A Reversal In The Greenback Could Send Bitcoin Into A » Read more

” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>Bear Market

Although the leading cryptocurrency by market cap has shaken off the greenback’s rebound thus far, a » Read more

” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear phase could soon be coming that sets back the current uptrend for some time.

Each time the MACD crossed bullish on the DXY, it led to an extended » Read more

” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear market in Bitcoin, as pictured below.

dxy bitcoin

Each bullish crossover in the dollar led to a crypto » Read more

" href="https://www.newsbtc.com/dictionary/bear/" data-wpel-link="internal">bear market | Source: DXY on TradingView.com

Bitcoin has been an uptrend for nearly a full year – since Black Thursday in 2020 – but time could be running out. The MACD hasn’t fully crossed over just yet, but has begun to turn upward.

Related Reading | This Unique Take On Bitcoin Suggests A Bear Phase Is Near

However, not all is lost for Bitcoin and the rest of the crypto market. An inverse head and shoulders on high timeframes might have completed on the DXY, which after a throwback to the trendline to confirm it as resistance, could result in the largest collapse in the dollar’s history, and its eventual undoing.

dxy head and shoulders

Upside in the dollar could ultimately be limited, benefiting Bitcoin | Source: DXY on TradingView.com

Such a scenario would suggest a bear phase in Bitcoin will arrive sooner than later, but that it will be much shorter-lived than previous » Read more

” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear markets, and once it ends, the leading cryptocurrency by market cap could completely take over as the global reserve currency.

Of course, there’s no telling what the dollar could do from here, or if this time is actually different.

Featured image from Deposit Photos, Charts from TradingView.com

Source: https://www.newsbtc.com/analysis/btc/bitcoin-dollar-rebound-bear-phase/

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Mainnet launch and NFT sale lift Aavegotchi (GHST) to a new all-time high

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Nonfungible tokens (NFTs) have rapidly become the new hot topic in the cryptocurrency sector, as evidenced by Litecoin (LTC) creator Charlie Lee comparing the current spike in NFT interest to the ICO mania of 2017

The recent pullback in the cryptocurrency market hit decentralized finance tokens (DeFi) pretty hard, but as Bitcoin’s (BTC) price recovered the $50,000, DeFi and NFT tokens bounced back rapidly. 

One project that has successfully capitalized on the DeFi and NFT boom is Aavegotchi. The project benefits from its association with Aave, while also focusing on the creation of value-infused NFTs that are limited in minting.

Data from Cointelegraph Markets and TradingView shows that the price of GHST, Aavegotchi’s governance token, rose 35% from $1.36 on March 1 to a new all-time high of $1.86 on March 2 as the community conducted its first NFT sale.

GHST/USDT 4-hour chart. Source: TradingView

Three reasons for the GHST breakout to a new all-time high include its recent migration to the Polygon network, the successful completion of its first NFT sale and excitement about the upcoming mainnet launch.

Users bridge to Polygon for lower fees

Transaction fees on the Ethereum network have been increasing since the beginning of 2021, and they show no signs of decreasing anytime soon.

In response to this, the team at Aavegotchi announced on Jan. 26 that the project would bridge to the Polygon network, an Ethereum layer-two solution Following the migration, users are able to conduct transactions, buy items in the store and stake their GHST tokens for the cost of .0001 MATIC, a significant price reduction from the current costs of transacting on Ethereum.

GHST price rose from $0.61 on Jan. 27, when the Polygon bridge was first released, to $1.25 on Feb. 14 as users began to be more active in the community due to lower transaction costs.

Optimism grows as the mainnet launch approaches

One of the biggest drivers of GHST was its official mainnet launch on March 2.

While most NFT projects are content to utilize Web 2.0 servers or the InterPlanetary File System, Aavegotchi has taken its project to the next level by creating its own blockchain. Doing this enables each GHST token to have its unique personality traits, staked cryptocurrencies and visual elements stored permanently on the blockchain, which may help to strengthen their collectability and long-term value.

This also creates the unique opportunity where DeFi can be combined with NFTs by locking one of Aave’s wide selection of interest-generating tokens directly into a particular Aavegotchi, making each one a rare, unique form of a digital piggy bank.

NFTs sell out in under a minute

As Aavegotchi launched its mainnet, the project also conducted its first “portal drop,” which allowed tokenholders to buy a portal that is capable of summoning a yield-bearing Aavegotchi NFT.

Each portal was on sale for 100 GHST, and the demand was so high that the 10,000 portals sold out in less than a minute.

Through an integration with Aave and its aTokens, NFTs on the Aavegotchi platform create unique interest-bearing representations of funds supplied to the Aave protocol, a first for the NFT space.

Aavegotchis are designed to combine elements of gaming and collecting in an effort to tie digital collectibles to real value. This adds a new level of functionality to NFTs and is likely to help each Aavegotchi increase in value over time. In order to extract the value of aTokens locked within an NFT, the Aavegotchi must be destroyed in the process.

Future portal drops, low transaction fees and an expanding NFT store demonstrate that there is a healthy demand for GHST, and this is bound to grow as the platform expands to offer new layers of gamification.

Source: https://cointelegraph.com/news/mainnet-launch-and-nft-sale-lift-aavegotchi-ghst-to-a-new-all-time-high

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Bitcoin has brought new thinking to payments and financial inclusion: SEC chair nominee

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When it comes to Bitcoin, market opinions are often divided, with those who support the asset and those who don’t. Similar camps may now appear to take hold of US regulators and policymakers. Recently, President Biden’s nominee for chairman of United States Securities and Exchange Commission (SEC), Gary Gensler appeared to share his perspective on the crypto sector. Gensler said that cryptocurrencies “have been a catalyst for change.” 

Speaking to US Senator Mike Rounds during his Senate confirmation, Gensler added

Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion, but they’ve also raised new issues of investor protection that we still need to attend to.

His opinion on crypto is in stark contrast to Treasury secretary, Janet Yellen’s, who believed that Bitcoin is “extremely inefficient for conducting transactions” and that it is a “highly speculative asset.” It goes against Senator Elizabeth Warren’s views, who thinks Bitcoin would only “end badly.” 

However, if Gensler is confirmed, a move that many crypto enthusiasts are looking forward to, the nominee plans to work to “promote the new innovation.” 

I think, as I teach at MIT on these subjects, that these innovations have been a catalyst for change. Bitcoin and cryptocurrencies have brought new thinking to payments and financial inclusion but they’ve also raised new issues of investor protection…If confirmed at the SEC, I will work to promote innovation.

He quickly stressed on the importance of investor protection and said:

It’s always important to update our market oversight to new technologies…It’s important to stay true to our principles of investor protection.   

Furthermore, in his opening remarks, Gensler said that markets—and technology— “are always changing” and must not be taken for granted.

Our rules have to change along with them. I believe financial technology can be a powerful force for good but only if we continue to harness the core values of the SEC in service of investors, issuers, and the public.

Gensler is most famously known for testifying before Congress for crypto and blockchain several times in the past. He even argued against the notion that crypto was similar to Ponzi schemes.


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Source: https://ambcrypto.com/bitcoin-has-brought-new-thinking-to-payments-and-financial-inclusion-sec-chair-nominee

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