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Blockchain Bites: JPMorgan’s $146K BTC Target, Crypto Responds to US Treasury’s Proposed Wallet Rule

PLUS: The OCC’s green light for banks to use stablecoins, Brazil’s booming crypto sector and the bitcoin mining machine supply crunch.

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Hello. A late night interpretative letter from the Office of the Comptroller of the Currency (OCC), the U.S.’ federal banking regulator, saying banks can act as stablecoin nodes was the juice needed to push bitcoin out of the doldrums. JPMorgan analysts see a future where 1 BTC could trade hands near $150,000, according to a new report. 

In other regulatory news, the comment period for a controversial wallet rule closed, with many heavy hitters coming out against the U.S. Treasury’s proposed rules to increase exchange surveillance. More on that later, first the top stories for the day.

Top shelf

Banking on stablecoins
A new letter from the U.S. federal banking regulator could give stablecoin networks the same status as other global payments networks like SWIFT or FedWire. In a possible last act from Acting Comptroller Brian Brooks, U.S. banks can now operate as stablecoin nodes and are free to send transactions, so long as they comply with securities and other regulations. Bitcoin markets rebounded on the news.

Supply crunch
Bitcoin mining machine prices are soaring along with bitcoin’s price. According to data reviewed by CoinDesk, a surge in mining revenue, limited manufacturing capacities and a number of new mining entrants has led to a supply shortage. It doesn’t help that established players like Riot and Marathon (both publicly traded) have been buying up the most up-to-date ASICs miners.

Brazil’s market
The battle to control Brazil’s growing crypto retail sector is heated, with Argentina’s Ripio acquiring BitcoinTrade, the second-largest crypto exchange in South America’s largest economy. Last month, Mexico City-based crypto exchange Bitso raised a $62 million funding round, a chunk of which was earmarked for a Brazil push, the company said.

Quick bites

  • RIPPLE EFFECT: Grayscale drops XRP from Large Cap Crypto Fund following Ripple/SEC suit. (CoinDesk)
  • TRADEBLOCK BUY: CoinDesk has acquired institutional analytics and data provider TradeBlock. (WSJ)
  • MINING PIVOT: Two former Canaan directors are helping a Chinese mobile gaming company enter the crypto mining sector. (CoinDesk)
  • VOYAGING OUT: Cryptocurrency broker Voyager Digital says Q4 revenue is expected to reach around $3.5 million, an increase of 75% from the previous quarter. (CoinDesk)
  • TOKEN GENERATOR: Crypto exchange LCX is now licensed in Liechtenstein to help banks create their own digital assets and security tokens. (CoinDesk)
  • FIRST MOVER: DeFi keeps astounding. (CoinDesk)
  • KNOWN UNKNOWN? One River has completed “one of the largest digital asset trades in history,” according to facilitator Coinbase. The amount is unknown. (Decrypt)

Market intel

Gold bugs
A new investment report from JPMorgan has set a $146,000 price target for bitcoin. The bullish target is the latest analytical note that wagers bitcoin will become a popular alternative to gold. “Bitcoin’s [current] market capitalization of around $575 billion would have to rise by 4.6 times – for a theoretical bitcoin price of $146,000 – to match the total private sector investment in gold via exchange-traded funds or bars and coins.” The one thing holding the bitcoin beast at bay? Volatility. 

At stake

11th hour?
A comment period for a proposed set of rules that would increase reporting requirements for crypto exchanges and minimize blockchain user privacy closed yesterday, with many major crypto firms rejecting the maneuver.

Spearheaded by the U.S. Treasury Department in December, but shaped primarily by the global Financial Crimes Enforcement Network (FinCEN), the set of rules would see exchanges implement know-your-customer (KYC) requirements for transactions sent to unhosted wallet addresses, or addresses that exist outside a centralized or custodial setting.

This would mean many types of personal wallets as well as counterparties to exchanges’ customers would need to be identified. Reporting limits would be set for private wallets that receive more than $10,000 in 24 hours, and record-keeping rules for transactions valued at over $3,000. FinCEN and the Treasury Department claim the increased surveillance will aid criminal enforcement and reduce financial malfeasance.

The proposal was rushed out late on Friday, Dec. 18 – a week before many U.S. employees might expect to break for the winter holiday season – with the Treasury setting only a 15-day comment period. Many crypto industry commentators referred to the rushed timeline as onerous and potentially illegal.

Still, some 6,000 comments were filed with FinCEN within this narrow window, with firms such as Square, Andreessen Horowitz (a16z), Kraken as well as civil liberties organizations including the Electronic Frontier Foundation (EFF) and Coin Center coming out hard against the proposal. The reporting period has since been “extended” until Jan. 7.

“The process itself is fraught with an ‘us-versus-them’ hostility to the industry’s views – as seen by the breakneck schedule for a major rule, the thinness of Treasury’s justifications, and the lack of meaningful engagement before the eleventh-hour holiday rule making,” cryptocurrency platform Coinbase said, in a prepared statement.

While the rushed timeline was a frequent target – the rule was proposed as United States Secretary of the Treasury Steven Mnuchin is set to leave office – others noted the perverse effects these new reporting requirements could have for the fledgling crypto industry.

“This creates unnecessary friction and perverse incentives for cryptocurrency customers to avoid regulated entities for cryptocurrency transactions, driving them to use non-custodial wallets or services outside the U.S. to transfer their assets more easily,” Jack Dorsey, CEO of payments company Square, wrote.

In a press release, Kraken noted the proposed rule would be a “substantial departure from existing law.” And one, that if passed, Coinbase and a16z have pledged to fight in court.

In defense of the proposal, CoinDesk columnist and financial blogger John Paul Koning tweeted the rules would bring the crypto industry in line with practices already in place for money transmitters, such as those followed by remittance giant MoneyGram.

“Coinbase sending cryptocurrency to an unhosted address is like MoneyGram remitting physical cash to a stranger. MoneyGram has to collect personal information about the stranger. Shouldn’t Coinbase have to collect information about the unhosted wallet?” Koning wrote.

In response, Coin Center Director of Research Peter Van Valkenburgh, wrote that “equating a blockchain transaction to a funds transfer ignores the obvious difference … blockchain transactions can happen peer to peer while wires are always intermediated.”

Indeed, there are notable differences between the two systems of value transfer. With blockchains providing a public ledger of all transactions, an increased reporting rule could be a great intrusion into an exchange user’s financial privacy than simply identifying the recipient of a remittance – the total history of both counterparties financial lives would be on full view, including those that are unrelated to any centralized exchange.

As the EFF said in its statement against FinCEN’s rules: “Anonymity is important precisely because financial records can be deeply personal and revealing: They provide an intimate window into a person’s life, revealing familial, political, professional, religious and sexual associations.”

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Source: https://www.coindesk.com/150k-btc-crypto-wallet-rule-stablecoins

Blockchain

Litecoin Price Analysis: 07 March

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The cryptocurrency market has been recovering from the sudden selling pressure it witnessed a few days back. Litecoin [LTC] has been trying to find a stable price level in the market currently, however, there have been recurring sell-offs pushing the coin even lower.

At the time of writing, the digital asset was trading at $182.68 with a market capitalization of $12.16 billion.

LTC one-hour chart

Source: LTCUSD on TradingView

The above chart of Ltiecoin highlighted the rise and fall of the price. Although a small surge carried the value higher, selling pressure has now replaced it. The price has been testing the support at $182.13.

If the price fails to hold onto this support, we may be seeing another sell-off in the LTC market.

Reasoning 

The Bollinger Bands have been diverging which was a sign of increasing volatility in the market. As the volatility in the market increases, there is a possibility for a trend change. However, the signal line along with the 50 moving average has remained under the candlesticks noting that a certain level of bullishness still exists.

However, the momentum was on a decrease as the selling pressure continued. The momentum has shifted towards the sellers’ side and may fall into the negative zone if the price breaches the support.

Meanwhile, the relative strength index has also moved away from the equilibrium zone. However, despite a selling pressure, the buyers were trying to level the market as the RSI was heading closer to the overbought zone.

Crucial levels

Entry-level: $181.89
Stop-level: $184.50
Take profit: $179.14
Risk to Reward: 1.06

Conclusion

The current trends in the Litecoin market were more bearish than bullish. As the coin tests support, there is a potential fall that looms at large. It may drop to $176 in the short term, however, the price may see a further retrace from this point if a bullish trend reversal fails to materialize.


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Source: https://ambcrypto.com/litecoin-price-analysis-07-march

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Decentralized finance may be the future, but education is still lacking

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Engaging in the traditional financial markets has become less appealing to consumers and institutional investors as of late. New opportunities are plentiful, with decentralized finance getting a lot of attention. However, that new movement is not without its risks and flaws, either.

For decades, consumers and institutional investors have explored the many different options presented to them in the financial world. This approach has worked out rather well, as one could even earn passive revenue on their savings account. Today, things look very different, as many banks charge negative interest rates and continue to exploit their customers.

Another problem compounding the lessening appeal of centralized finance is the ongoing impediments in the industry. More specifically, banks are forced to settle lawsuits regularly, mostly due to their wrongdoing. This ranges from opening accounts for clients without their knowledge, masking products under different names while providing the same service, money laundering and so forth.

Despite all of this, many people remain loyal to their banks or other financial institutions. Or that used to be the case, as decentralized finance has a lot of people interested today. Unlike traditional finance, DeFi has no exorbitant fees, unfair terms or financial exclusion. Instead, it is a movement that aims to bring financial services to everyone regardless of their current access to these products.

Making DeFi more accessible

While it may seem as if decentralized finance is destined to disrupt traditional finance, there is still a lot of work to be done. In its current state, DeFi primarily caters to users who have sufficient knowledge of the cryptocurrency market. Unfortunately, the crypto industry remains a niche market even today despite prices for Bitcoin (BTC) and Ether (ETH) moving up quickly in the past few months.

In fact, there are no viable guides on how to prepare yourself for these new financial opportunities. Every existing guide assumes the reader already knows the ins and outs of cryptocurrency, which is usually not the case.

Education is the first big step

Wading through the complex nature of DeFi requires clear and concise education. There is a rising need for educational platforms that address beginner levels of investing. Publications contributing educational content around DeFi noted significant growth throughout 2020 and early 2021. Educational initiatives have a goal to lower entry barriers to decentralized finance by educating people on cryptocurrency and the opportunities the broader industry provides. Ultimately, a good goal for DeFi would be for 100 million more people to have deposited at least $1 each into decentralized finance by 2025. It may seem like an easy goal, yet convincing millions of people to partake in this industry isn’t easy. Many people remain unconvinced by cryptocurrencies in general, and they will likely feel the same about DeFi.

We as an industry need to acknowledge that things need to improve to be taken more seriously by the masses. Making a global impact with complex structures and technologies and requiring the use of cryptocurrencies warrants clear and concise education.

A big catalyst for launching more educational initiatives now is the recent r/Wallstreetbets and GameStop saga. People worldwide suddenly found themselves in a position of power to make the financial market dance to their tunes. It depicts the need to make financial markets accessible to everyone, yet the current financial industry doesn’t always allow this to happen. This became apparent when the trading of GameStop stocks was halted by several providers to protect larger investors. It serves as an excellent example of how unfair the financial industry can be.

Creating a level playing field

At its core, the financial sector can operate without gatekeepers or centralized intermediaries. The DeFi industry has shown that this is possible, even though the industry is still in its early stages. Creating an environment where anyone can safely borrow, lend and trade directly is possible, but the educational aspect needs to come first.

As the public perception of traditional finances keeps taking blows to the chin, it is a matter of time until large groups begin exploring other horizons. Investing in cryptocurrencies has given many a taste of what financial freedom can entail. However, it is crucial to understand that this is only the first step along a long road toward achieving that freedom.

There is a lot more to DeFi than just owning Bitcoin, Ether or any other crypto assets. While that does grant one access to decentralized finance, the educational initiatives led by industry leaders will help explain how you can use these assets for more than speculative purposes. Through education, research and guidance, a new era of finance may just be around the corner.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Piers Ridyard is the CEO of Radix, the decentralized finance protocol. A Y Combinator Alumni, Piers joined Radix after exiting his previous company, which built DLT-based deal rooms for clearing syndicated insurance contracts.

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Source: https://cointelegraph.com/news/decentralized-finance-may-be-the-future-but-education-is-still-lacking

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How DAFI Protocol Rewards Long-Term Token Holders and Supports Sustainable Project Growth

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As more cryptocurrency projects are beginning to understand firsthand, keeping key stakeholders and early investors involved in a project’s ecosystem long-term is tough. With increasing speculation around new blockchain networks, specifically DeFi-focused platforms, cryptocurrencies can see instant price growth as they hit the market. With these profits too high for early investors to forgo, the people who supported the project earliest can end up cashing out, which is bad for the overall ecosystem.

DAFI Protocol has come up with an innovative solution to this problem, rewarding long-term users with a metric-based reward structure that allows new crypto projects to maintain their original community over time.

Synthetic Tokens Are the Answer

DAFI Protocol’s solution revolves around synthetic tokens, or newly minted tokens produced to represent the value of other assets. Using synthetic tokens, new projects can deposit a portion of their total supply into the DAFI protocol. Following the deposit, synthetic tokens representing ownership rights to the original coins will be minted and distributed to holders. These tokens are not tradable, meaning original token holders cannot monetize these synthetic tokens while they hold them. Their only use is exchanging back for the initial token after a predetermined time period runs out.

This may seem like it only benefits project development teams, but it rewards early token adopters as well. Following the distribution of the initial synthetic tokens, the number of tokens a user holds will change based on a smart contract algorithm that allows for the flow of token supply. Using a decentralized oracle, DAFI will be able to evaluate off-chain metrics such as token price, platform adoption, and trading volume to determine the platform’s growth. The more usability the platform receives over time, the larger the amount of synthetic tokens distributed to each token holder.

Creating Holders Out of Sellers

With DAFI, platforms are not discouraging speculation on their native cryptocurrencies; they just want the commitment to become a longer-term arrangement. With its innovative solution, DAFI turns investors from sellers to holders, incentivizing them to realize their investment value if the platform sees measurable growth.

This is extremely beneficial to new projects, as they need to establish a base of platform usage so they know what works well and where they need to improve. This structure will serve the best interests of projects and token holders going forward, as tokens will realize value based on the actualization of the network. Considering some projects worth hundreds of millions or billions of dollars receive almost no network usage, DAFI promises to properly incentivize stakeholders based on more than broad speculation.

There is currently no link between token holder rewards and network adoption; this needs to change. Although users may not be able to profit from short-term speculation through DAFI, they have a much better chance of generating value long-term alongside adoption. This mechanism will scare away gamblers and speculators hoping to get rich quick on the next hyped-up project, leaving investment opportunities for those who plan to stay with the project over an extended period of time. With this superior token distribution method, projects will utilize DAFI to deposit a portion of their token supply in favor of non-tradable and elastic synthetic tokens for users, rewarding them over time.

Image by anncapictures from Pixabay 

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Source: https://www.newsbtc.com/news/company/how-dafi-protocol-rewards-long-term-token-holders-and-supports-sustainable-project-growth/

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