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Crypto Mom’s Prescient DeFi Warning: ‘People Can Lose a Lot of Money’

Decentralized finance (DeFi) has been thrust further into the spotlight in recent days, but unfortunately, it has been for all the wrong reasons. As fate would have it, BeInCrypto had the chance to speak with SEC Commissioner Hester Peirce just before the SushiSwap scandal on a range of topics, including DeFi. You can find the […]

The post Crypto Mom’s Prescient DeFi Warning: ‘People Can Lose a Lot of Money’ appeared first on BeInCrypto.

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Decentralized finance (DeFi) has been thrust further into the spotlight in recent days, but unfortunately, it has been for all the wrong reasons.

As fate would have it, BeInCrypto had the chance to speak with SEC Commissioner Hester Peirce just before the SushiSwap scandal on a range of topics, including DeFi.

You can find the first of that conversation here. In Part II, Commissioner Peirce, also known in these circles as Crypto Mom, shared her thoughts on the securities regulator’s role in governing this emerging space.

Commissioner Peirce presciently issued a warning to cryptocurrency investors, saying that a lot of people are making a lot of money. Still, they should be careful and know they can also lose a lot too.

She offered another cautionary statement from a regulator’s perspective, which was to think about how the rules apply to what you’re doing.

According to Crypto Mom, the growth that has been unfolding in DeFi is nothing short of “astounding.” The most interesting thing about DeFi, according to her, is that people are exploring the kinds of financial interactions that determine how they can set up a system in a decentralized way without intermediaries.

That is challenging to regulators. Commissioner Peirce explained:

It requires us as regulators to think about what our role is: If you have truly decentralized financial communities, are people building their own regulatory structure as part of what they’re doing in DeFi? Are smart contracts playing the role of regulators?

Indeed, there is still a cloud of uncertainty surrounding smart contract-fueled DeFi transactions in which ETH is used as collateral. Jesse Proudman, CEO of quant hedge fund Strix Leviathan, recently told the Coinscrum podcast,

This DeFi movement is the first time we’ve had all these interweaving smart contracts. And nobody really understands the risk factors there, particularly when it comes to Ethereum’s price point.

ethereumethereum

Security vs. Utility Token

One of the sticking points between the cryptocurrency community and the SEC has been the taxonomy of digital currencies. Entrepreneurs still aren’t clear on whether their project’s coin will be classified as a security or utility token by the regulator.

And while the heyday of ICOs has come and gone, new tokens are still being launched, including in the DeFi space where token issuance is on the rise. Commissioner Peirce said:

The question of ‘what is a security?’ is very much alive. A lot of people still have those questions and have their projects on hold and can’t figure out whether or not their token distribution event would be considered to be a securities offering. It’s very much a live issue for trading platforms that are trying to figure out what to trade or not to trade.

She pointed to Telegram’s canceled token sale as a case in point that the crypto industry is waiting for the SEC to act on the classification front. Telegram had to give back $1.2 billion to investors plus play a hefty fine for having an unregistered offering of its GRAM token.

On the other hand, the SEC seems to validate the use case for Telegram, based on Commissioner Peirce’s tweet below.

According to Crypto Mom, crypto projects are still trying to figure out how to do things the right way from the get-go. They want to be able to operate without having to worry about the taxonomy issue.

I think there’s a lot of work going on, not just thinking about the regulatory framework.

If the Wall Street watchdog waits too long to embrace innovation, it could come at a hefty price. Commissioner Peirce explained:

I hope that we can do a better job in the United States so that we at least have a regulatory framework that makes people comfortable innovating here. We have always been a country that has been really welcoming to innovation. Then there’s the question where trading is happening. But that’s why we should have clear rules about what you can and can’t do. Ultimately what I’m most concerned about is when I hear innovation is moving offshore because people are too uncertain about what they can do here. Also setting a project up that can’t have U.S. participation, that has become a concern.

Crypto Dad and Central Bank Digital Currencies

While China is already testing its central bank digital currency (CBDC), the e-yuan, the U.S. Federal Reserve has been left in the dust.

Commissioner Peirce pointed to one familiar face who is out there making the case for a U.S. CBDC — her crypto counterpart and former CFTC chairman Chris Giancarlo, also known as Crypto Dad.

Crypto Dad is out there pushing the idea of a digital dollar. There has been work going on in the private sector and the Fed has talked about it, too. One beautiful thing about being an SEC regulator is that a digital dollar is far outside of my purview. Lots of different countries are experimenting with central bank digital currencies, and it is inevitable that people in the United States will too.

Meanwhile, with regulation in the cryptocurrency industry moving at a snail’s pace, the emergence of the COVID-19 pandemic didn’t help on the competitive front.

If there’s an asset class that’s been as volatile as bitcoin, it’s equities. But that doesn’t mean crypto is no longer on the SEC’s radar. Commissioner Peirce stated:

I think a lot of the attention got diverted by the pandemic and by the related effect in the market and the broader economy. And so we had to do things like issue temporary relief. We were getting lots of questions about working from home. We as an agency are working from home, by and large. We also have a very active rule-making calendar that has nothing to do with crypto, just normal market rules. And so yes, there’s a lot going on. That said, in proportion to the size of the crypto market, I would say that we do devote quite a few resources to the industry and to thinking about the novel issues it raises.

Perhaps when bitcoin moves closer to mainstream adoption, the SEC will send in the cavalry.

Source: https://beincrypto.com/crypto-moms-prescient-defi-warning-people-can-lose-a-lot-of-money/

Blockchain

Bitcoin Falls Below $1 Trillion Market Cap Following Bloody Week: The Crypto Weekly Recap

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This week saw a serious correction in the total cryptocurrency market. This has resulted in Bitcoin falling below the $1 trillion market cap level. The price corrected by more than 20% at one point as it lost around $13,000 from the recent all-time high before correcting to where it currently trades at around $48K.

In all fairness, Bitcoin’s downturn followed that of the entire legacy market. As we reported earlier, NASDAQ saw the biggest slump since October last year as government bond yields gave the market a jolt, and investors favor companies that would benefit from a broader economic recovery throughout the rest of the year.

In any case, the correlation between the traditional financial markets in the face of some of the largest indices, such as the NASDAQ Composite and the S&P 500, is more than evident. Nevertheless, the cryptocurrency market, in general, took a beating over the last week as it saw more than $300 billion wiped off its capitalization.

Not every coin is in the red, though. Cardano’s ADA doesn’t seem to care much about the rest of the market and continues to increase. It managed to overtake Tether’s USDT stablecoin and became the third-largest cryptocurrency by means of market capitalization. Interestingly enough, a large Dubai-based investment fund said that it would sell $750 million in Bitcoin to buy more ADA and Polkadot’s DOT.

To no one’s surprise, MicroStrategy continues to buy Bitcoin at an accelerated rate. The company announced yet another $1 billion BTC buy this week which came after the convertible senior notes offering.

In any case, it might be the case that the recent correction was a healthy one. The truth is that this bull run had almost no serious corrections on the way up, and it’s entirely natural for investors to take profit. In addition to that, the market was overly leveraged, which caused a cascading effect of long liquidations on the way down, adding more fuel to the fire.

Let’s hope that the worst is over, and let’s see what the next week has in store!

Market Data

Market Cap: $1494B | 24H Vol: 233B | BTC Dominance: 59.6%

BTC: $47,820 (-7.8%) | ETH: $1,525 (-21.3%) | XRP: $0.442 (-17.1%)

3 Possible Reasons Why Bitcoin Plunged Over 15% in 24 Hours. Bitcoin dipped by more than 15 in less than 24 hours and took the entire market down with it. With this in mind, we take a look at three of the possible reasons for the most recent downturn in the market, which resulted in the loss of more than $300 billion in its capitalization.

The Laser Eyes Meme: Not a Coincidence That This Marked a Local Top for Bitcoin (Opinion). The laser eye meme on Twitter is spreading like wildfire as some of the most prominent crypto proponents and people outside of the industry change their profile pictures to include the beams. This might have been one of the signals that the market is in a state of euphoria.

Crypto Investment Fund to Sell $750M in Bitcoin for Cardano and Polkadot. A Dubai-based cryptocurrency investment fund that has more than $1 billion of assets under management (AUM) thinks that the value of Polkadot and Cardano will be higher than that of BTC in the years to come. It has announced that it will sell $750 million of its BTC to buy more ADA and DOT.

JP Morgan: Put 1% In Bitcoin as a Hedge as Demand is ‘Massively Outstripping’ Supply. JP Morgan has supported the narrative that investors should allocate 1% of their portfolio in BTC as a hedge. This was asserted by strategists of the multinational investment bank as more and more people seem to add fuel to the merit that bitcoin could protect assets against the inflating fiat currencies.

Someone Just Moved 100 Bitcoins Now Worth $5M That Only Cost $8 in 2010. An early bitcoin adopter who has mined 100 BTC back in 2010, which then had a face value of no more than $8, has moved them for the first time in over 11 years. Currently, the bitcoins are worth around $5 million.

MicroStrategy Completes Another $1 Billion Bitcoin Buy. MicroStrategy, the company, spearheaded by one of Bitcoin’s most vocal proponents, Michael Saylor, has bought another $1 billion worth of the cryptocurrency. This comes shortly after they conducted a convertible senior note offering to raise the money.

Charts

This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Polkadot, and Chainlink – click here for the full price analysis.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/bitcoin-falls-below-1-trillion-market-cap-following-bloody-week-the-crypto-weekly-recap/

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Galaxy Digital co-president explains two things deterring institutional crypto buying

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In recent months, companies such as MicroStrategy and Tesla have picked up sizable positions in Bitcoin. This trend has not yet become the norm for most companies, however. Damien Vanderwilt, co-president of Galaxy Digital, believes security and taxes may be acting as deterrents for crypto investing. 

“When we think about the conversations we have with corporates, and institutional clients, and any part of those constituencies considering investing in the sector, the first order problem is safety and are the assets that they’re buying going to be safe and available and secure,” Vanderwilt told Bloomberg in an interview on Thursday.

“The second order problem, particularly for the corporates, is tax treatment and the way that particularly under gaap accounting in the U.S., Bitcoin is viewed as an intangible asset,” he added.

The Bloomberg interviewer noted that “5% of finance executives” are considering Bitcoin purchases. This 5% figure came from a report recently published by research firm Gartner, detailing February survey results from 77 finance executives. “Just 5% of Finance Executives Polled in February 2021 Said They Planned to Hold Bitcoin as a Corporate Asset in 2021,” said a Feb. 16 public statement from Gartner on the report.

MicroStrategy, MassMutual, Tesla and Square have all allocated millions of dollars to Bitcoin. MicroStrategy spent more than $1 billion on the asset, and put an additional billion into BTC recently. Square also recently announced adding $170 million worth of Bitcoin to its stack. The firm spent $50 million on the coin last fall.

“They’re not unsolvable problems or things that companies can’t get comfortable with, but it does take a little bit of time,” Vanderwilt said of the two issues he mentioned.

Source: https://cointelegraph.com/news/galaxy-digital-co-president-explains-two-things-deterring-institutional-crypto-buying

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Price analysis 2/26: BTC, ETH, ADA, BNB, DOT, XRP, LTC, LINK, BCH, XLM

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Every bull market witnesses periodic pullbacks, where the weaker hands sell anticipating a top and the stronger hands accumulate for the long term. Data from Coinbase Pro shows two large Bitcoin (BTC) outflows this week, suggesting that institutions are likely continueing to buy the current dip.

Comparing historical data, on-chain analytics resource Whalemap, recently said that previous macro tops in Bitcoin in 2017 and 2019 coincided with thousands of large Bitcoin transactions worth $5-7 million. However, the researchers believe there is “no such FOMO in sight for BTC.”

Daily cryptocurrency market performance. Source: Coin360

JPMorgan strategists Joyce Chang and Amy Ho recently endorsed a 1% allocation to Bitcoin in multi-asset portfolios “to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.”

With gold and the S&P500 both seeing a downturn in the short term, investors looking to hedge their portfolios may look for alternatives such as cryptocurrencie, which may limit the downside for Bitcoin.

While data suggests that the downside is limited, let’s analyze the charts of the top-10 cryptocurrencies to determine where buyers may step in.

BTC/USD

There is a tug of war currently going on between the bulls and the bears. The bulls attempted to resume the up-move on Feb. 25, but could not sustain the higher levels. Bitcoin reversed direction and broke below the 20-day exponential moving average ($48,159), which shows selling by the bears at higher levels.

BTC/USDT daily chart. Source: TradingView

However, the long tail on today’s candlestick shows that bears are not able to sustain the price below the 20-day EMA. This suggests traders are buying on dips.

The flat 20-day EMA and the relative strength index (RSI) near the midpoint suggest a possible consolidation in the near term. The support of the said range could be at $41,959.63, which is just above the 50-day simple moving average ($40,914).

If bears can sink the price below the 50-day SMA, the selling could intensify and the pair could even drop to $28,850.

Conversely, if the bulls can propel the price above $52,040.95, a retest of $58,341.03 may be on the cards.

ETH/USD

Ether (ETH) could not rise above the 20-day EMA ($1,686) on Feb. 24, which suggests the bears are defending this level. The biggest altcoin turned south on Feb. 25 and fell to the 50-day SMA ($1,498).

ETH/USDT daily chart. Source: TradingView

Although the price dipped below the 50-day SMA today, the bears could not break the Feb. 23 intraday low at $1,350. This shows a lack of selling pressure at lower levels.

The bulls have pushed the price back above the 50-day SMA. If they can sustain the momentum and propel the ETH/USD pair above the 20-day EMA, it could enhance the prospects of retesting $2,000.

On the other hand, if the price again turns down from the 20-day EMA, it will suggest a change in sentiment from buying the dips to selling the rallies. If the bears break the $1,350 support, the pair may drop to $1,000.

ADA/USD

Cardano (ADA) is in a strong uptrend and has broken into the top-three cryptocurrencies by market capitalization for the first time. The bulls attempted to push the price above $1.20 on Feb. 25 but failed. However, the bulls successfully flipped $0.9817712 to support today, which suggests aggressive buying on every minor dip.

ADA/USDT daily chart. Source: TradingView

The buyers have driven the price above the $1.20 overhead resistance, indicating the resumption of the uptrend. The altcoin could now rally to the next target objective at $1.25.

Both moving averages are sloping up and the RSI in the overbought territory, suggesting that bulls are in control.

This bullish view will be invalidated if the ADA/USD pair fails to sustain the breakout and sharply reverses direction, breaking below the 20-day EMA ($0.92).

BNB/USD

The failure of the bulls to push Binance Coin (BNB) above the downtrend line on Feb. 24 may have attracted another bout of profit-booking by traders. The altcoin has pared most of the gains made on Feb. 19.

BNB/USDT daily chart. Source: TradingView

If the current rebound sustains, the bulls will make one more attempt to push the price above the downtrend line. If they succeed, it will suggest that the short-term correction could be over. The BNB/USD pair may then rise to $300 and then to $348.6969.

The upsloping 20-day EMA ($192) and the RSI in the positive zone suggest bulls have the upper hand. Falling below the downtrend line and the 20-day EMA would invalidate this bullish scenario. Such a move could pull the price down to $118.

DOT/USD

Polkadot’s (DOT) sharp recovery on Feb. 23 faltered on Feb. 24 as the bulls could not push and sustain the price above the resistance line of the ascending channel. This may have attracted profit-booking from the dipbuyers.

DOT/USDT daily chart. Source: TradingView

The buyers are currently attempting to defend the 20-day EMA ($30.30). If they manage to sustain the bounce, the DOT/USD pair will again try to break out of the resistance line of the channel and retest the all-time high at $42.2848.

Conversely, if the pair again goes down below the resistance line of the channel, the bears will try to sink the price under the 20-day EMA. If they succeed, the pair may drop to the support line of the channel.

The 20-day EMA is gradually sloping up and the RSI is above 61, indicating a minor advantage to the bulls.

XRP/USD

The long tail on the Feb. 23 candlestick shows buying on dips, but the bulls could not keep up the momentum and push XRP price above the 20-day EMA ($0.048) on Feb. 24. This showed that demand dried up at higher levels.

XRP/USDT daily chart. Source: TradingView

The price has again dipped back to the 50-day SMA ($0.40). A lack of a strong rebound could attract further selling and the XRP/USD pair may drop to $0.359. A break below this support could clear the path for a fall toward $0.25.

Contrary to this assumption, if the pair sustains the current bounce, the bulls will make one more attempt to push the price above the $0.50 overhead resistance. If they succeed, the pair may consolidate between $0.65 and $0.359 for a few days.

LTC/USD

Litecoin (LTC) rallied above the 20-day EMA ($192) on Feb. 25, but the bulls failed to sustain the higher levels as seen from the long wick on the day’s candlestick. This suggests that traders are booking profits at higher levels.

LTC/USDT daily chart. Source: TradingView

However, the long tail on today’s candlestick suggests that bulls are buying the dips to the 50-day SMA ($166). If the bulls can push the price above the 20-day EMA and the $205.186 overhead resistance zone, the LINK/USD pair may rise to $230.

Contrary to this assumption, if the bulls fail to sustain the current rebound, the pair may U-turn and drop below the 50-day SMA and the uptrend line. If that happens, the pair may slide to $120.

LINK/USD

Chainlink (LINK) could not climb back into the ascending channel on Feb. 24, attracting profit-booking from the aggressive bulls who may have purchased the dip on Feb. 23. The altcoin turned down on Feb. 25 and dipped back to the 50-day SMA ($24.70) today.

LINK/USDT daily chart. Source: TradingView

The downsloping 20-day EMA ($28.80) and the RSI in the negative zone suggest bears have the upper hand. If the price slips below the 50-day SMA, the decline could extend to the critical support at $20.111.

Contrary to this assumption, if the current rebound off the 50-day SMA sustains, the bulls will make one more attempt to push the price above the 20-day EMA. If they succeed, the LINK/USD pair may begin a new uptrend.

BCH/USD

The relief rally in Bitcoin Cash (BCH) could not even rise to the 20-day EMA ($578) on Feb. 24 and 25, indicating a lack of urgency among the bulls to buy at these levels. The price turned down on Feb. 25 and dropped to the uptrend line.

BCH/USD daily chart. Source: TradingView

The downsloping 20-day EMA and the RSI in the negative zone suggest bears are in control. If the sellers sink the price below the uptrend line, the BCH/USD could start a deeper correction to $370.

On the contrary, if the bulls can build up on the current rebound off the uptrend line, the pair may rise to the 20-day EMA. A breakout of this resistance could push BCH price to $631.71.

XLM/USD

Stellar Lumens (XLM) could not rise above the 20-day EMA ($0.430) on Feb. 24 and 25, which shows the bears are selling on rallies to this resistance. The altcoin pulled back on Feb. 25 and fell to the critical support level at $0.35.

XLM/USDT daily chart. Source: TradingView

The downsloping 20-day EMA and the RSI in the negative territory suggest advantage to the bears. If the sellers can sink the price below the support line of the descending channel, the XLM/USD pair may decline to $0.23.

Conversely, if the bulls can sustain the current rebound off $0.35, the pair may rise to the 20-day EMA. A breakout of this resistance will suggest the bulls are back in the game. The pair could then rally to the resistance line of the channel.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Source: https://cointelegraph.com/news/price-analysis-2-26-btc-eth-ada-bnb-dot-xrp-ltc-link-bch-xlm

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