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First Mover: Ether Steals Limelight With New All-Time High Price as Bitcoiners HODL

Republished by Plato

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Bitcoin (BTC) was higher for a second day, staying in the past two week’s range between roughly $34,000 and $40,000.  

“This period of consolidation is building a solid base, giving those who wish to sell bitcoin plenty of time,” according to the cryptocurrency exchange firm Diginex. 

Ether (ETH), the second-biggest cryptocurrency, rose Tuesday to a new all-time high of $1,499.33, reaching price levels not seen since early 2018. The LINK token from Chainlink, which provides price feeds to decentralized trading and lending systems built atop blockchain networks, also set a record price.   

Read More: Ethereum’s Ether Cryptocurrency Sets New Price Record on Major Exchanges

With the bitcoin market trading sideways, some investors might be rotating into so-called alternative cryptocurrencies for faster returns, Edward Moya, a senior market analyst for the foreign-exchange broker Oanda, said in emailed comments.  

“The cryptoverse is growing again, and right now many cryptocurrency traders are diversifying into other coins,” Moya said. 

In traditional markets, Asian and European shares rose and U.S. stock futures pointed to a higher open ahead of Treasury Secretary nominee Janet Yellen’s confirmation hearing. The former Federal Reserve chair is expected to call for the government to “act big” on stimulus borrowing and spending, to aid the economic recovery. 

Gold strengthened 0.2% to $1,845 an ounce. 

Market Moves

With bitcoin prices up 26% so far in January after quadrupling in 2020 and doubling the year before that, a trader might be forgiven for looking to take some profits. 

But based on data extracted from the underlying blockchain network, investors appear content to sit tight, apparently betting a new rally could quickly take the cryptocurrency to fresh all-time highs. 

Delphi Digital, a cryptocurrency analysis firm, noted last week in a report that bitcoin balances on cryptocurrency exchanges had decreased to about 2.3 million from 2.4 million over the past month as prices rose. Often, when prices rise, the balances increase, as more investors transfer bitcoins to the exchange to be liquidated. 

“The net outflow this time around is potentially indicative of the long-term focused nature of recent investors,” according to the Delphi analysts, Yan Liberman and Kevin Kelly. 

Bitcoin balances on exchanges have declined even as prices for the cryptocurrency rose, indicating holders are in no hurry to take profits.
Source: Delphi Digital

The exchange outflows dovetail with other blockchain data showing more bitcoin being hoarded by investors for the long term, known in crypto-industry jargon as HODLing.  

Analysts for Glassnode, a blockchain-data firm, noted Monday that the number of bitcoins held in “accumulation addresses” has climbed by 17% over the past year to more than 2.7 million. These are addresses that have only ever received bitcoin and never spent them. 

“This increase highlights the massive supply restriction that is occurring in the BTC market, with almost 15% of the total supply held in these addresses,” according to the firm.

Some 14.6 million out of the 18.6 million bitcoins mined over the blockchain network’s 12-year history are “either lost or being HODLed long term,” Glassnode says. That means new buyers coming in, such as big investors or companies looking to use the cryptocurrency as a hedge against potential inflation, would have to compete for the remaining 4 million or so bitcoins still circulating. 

“When combined with the general decrease in bitcoin’s liquid supply and the number of lost coins, this leads to an even more limited supply, which is helping BTC maintain the highest prices it has ever seen,” the analysts wrote

– Bradley Keoun

Past episodes of a decreasing “liquid supply” of bitcoin have preceded price rallies.
Source: Glassnode

Bitcoin Watch

Bitcoin’s hourly chart, with bull-bear tug of war represented by “contracting triangle” price pattern.
Source: TradingView/CoinDesk

Bitcoin remains locked in a narrowing price range despite resurgent institutional demand.

The top cryptocurrency has charted a symmetrical triangle over the past few days, as seen on the hourly chart. It’s a sign both buyers and sellers are unwilling to lead the price action.

Grayscale Bitcoin Trust (GBTC), the biggest publicly traded crypto investment trust, purchased a total of 16,244 BTC ($607 million) on Monday, taking out 18 times more supply from the market than what miners added. This was after the trust reopened last week following a month-long pause and quickly accumulated another 4,700 BTC. (Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.)

Even so, the cryptocurrency is struggling to gather upside traction. The bulls look to be taking a hiatus, having engineered a rally of more than 200% over the past three months. 

Digital-asset traders appear to have shifted toward alternative cryptocurrencies such as ether, the second-largest cryptocurrency, which rose to a new record high early Tuesday.

The focus could move back to bitcoin if the largest cryptocurrency breaks out of its hourly chart triangle pattern. That would imply a resumption of the broader trend and put $50,000 on the map, as noted by Vinny Lingham, investor and founder of crypto wallet and identity verification firm Civic.

– Omkar Godbole

Read More: Bitcoin Becomes Most-Crowded Trade in Bank of America Survey After Passing ‘Long Tech’

Token Watch

Enjin (ENJ): Enjin Coin becomes first gaming cryptocurrency whitelisted for use in Japan (CoinDesk)  

Tether (USDT): Anonymous columnist questions whether Tether’s true peg is distorted by promotional awards (Medium

Celsius (CEL): Alex Mashinsky, CEO of crypto lender Celsius, says in interview that company filed SEC exemption form on CEL tokens “because the regulations are not clear” (CoinDesk

XRP (XRP): Kraken exchange becomes latest to halt XRP trading for U.S. residents after SEC suit against Ripple Labs (CoinDesk

What’s Hot

Goldman Sachs reportedly planning to enter crypto market soon with custody play (CoinDesk)  

Huobi Global connects to European banking system via UK’s BCB Group (CoinDesk)

Coinbase cryptocurrency exchange, hounded by snarky social-media comments about reliability, plans improvements to infrastructure (CoinDesk)

CoinShares starts exchange-traded bitcoin product (Bloomberg

MetLife’s investment arm predicts “true central bank digital-currency launch among Western countries seems unlikely to occur anytime soon” (CoinDesk

Bitcoin takes over as “most-crowded trade” in Bank of America survey after passing “long tech” (CoinDesk

“No, bitcoin is not in a bubble,” CoinDesk Research Director Noelle Acheson writes in Crypto Long & Short newsletter (CoinDesk

JPMorgan analysts see $40,000 as a key bitcoin price threshold before bullish uptrend continues, Bloomberg reports (CoinDesk

Former Canadian Prime Minister Stephen Harper, in interview, lists bitcoin among U.S. dollar alternatives that could make inroads as an international reserve asset (CoinDesk

Wall Street chief financial officers (CFO) are more wary of putting company funds into bitcoin after last week’s 30% price plunge (CoinDesk)

Bitcoin is “two bets in one: a sound, unimpeachable monetary protocol and the reserve asset for a rapidly expanding crypto-financial network,” Castle Island Ventures’ Nic Carter writes (New York Magazine

South Korea’s Dunamu launches its own bitcoin “fear and greed” index (CoinDesk):

Dunamu’s new index is pushing toward the red zone, indicating “extreme greed.”
Source: Dunamu

Analogs

The latest on the economy and traditional finance

Biden Treasury secretary nominee (and former Federal Reserve Chair Janet Yellen) says in prepared remarks for Tuesday’s confirmation hearing that “with interest rates at historic lows, the smartest thing we can do is act big” (FT

Jamie Dimon says JPMorgan Chase should absolutely be “scared s—less” about threat from fintech rivals, names PayPal, Square, Stripe, Ant Financial, Amazon, Apple, Google (CNBC

Beleaguered U.S. bank Wells Fargo targets $8B in cost savings over three years, including job cuts, and considers options for exiting asset-management and corporate-trust businesses (Pensions & Investments

Foreign investors expect U.S. dollar to remain weak under Biden (WSJ

U.S. corporate bond spreads shrink to 0.93 percentage point, narrowest since January 2020, at least partly reflecting investor confidence in ongoing economic stimulus and easy money from the Federal Reserve (WSJ)  

Reserve Bank of Australia could shut down quantitative easing program in April (Australian Financial Review)

China’s GDP grew 2.3% in 2020, lowest lowest in 44 years (Nikkei Asia Review)

Taiwanese chip maker startup Kneron eyes global expansion, aims for 8x growth in 2021 as U.S. blacklists hit Chinese rivals (Nikkei Asia Review)

Southeast Asian ride-hailing company Grab considers U.S. IPO estimated at $2B (Reuters)

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Disclosure

Source: https://www.coindesk.com/first-mover-ether-all-time-high-price-as-bitcoiners-hodl

Blockchain

$250M Fund to Invest in Polkadot and Cardano Launched in India

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FD7 Ventures, the cryptocurrency-oriented fund that recently vowed to dispose of its BTC holdings for ADA and DOT, has set up a $250 million micro-fund focusing on investments in teams working on the ecosystems of Polkadot and Cardano.

FD7 Goes to India for DOT and ADA

Based in Dubai, UAE, FD7 is a crypto-oriented investment fund with over $1 billion in assets under management (AUM). The firm recently announced somewhat bold plans to dispose of $750 million of its BTC holdings and allocate the sizeable amount into ADA and DOT.

At the time, the company’s Managing Director blasted the primary cryptocurrency and highlighted the potential for Cardano and Polkadot to further rise in popularity and utilization.

FD7 Ventures doubled-down on its belief in the two projects, according to a more recent press release. It reads that the firm has opened an office in Bangalore, India, with the primary focus of offering financial assistance to Polkadot and Cardano.

To do so, FD7 has established a micro-fund targeting $250 million to invest in teams working on the two projects. The statement described this move as part of the overall “strategic road map to build its presence in Bangalore” and further reaffirm its support for Polkadot and Cardano.

“Positioning our new location where we have in Bangalore gives us a home-field advantage to tap into some of the world’s best future talent in blockchain and cryptocurrency development.” – commented Prakash Chand, Global Managing Director at the company.

The new venture plans to invest $1-5 million across 50 companies yearly, with about “thirty percent of those Polkadot and Cardano ecosystem-based companies receiving secondary investments of $5-20 million.”

NFTs Are the Future

The statement also touched upon the growing craze of non-fungible tokens (NFT) and Polkadot’s role in some particular cases. More specifically, it breached the recent partnership between the famous YouTuber Paul Logan and Bondly, which resulted in an impressive popularity boost.

“Just look at Bondly, which is built on Polkadot. It literally blew up overnight when YouTuber Paul Logan sold more than $5 million worth of NFTs in just 24 hours. This is not just a space to watch but one which is proving its investment-worthiness with almost daily records being set with increase use cases for non-fungible tokens that support cryptographic art, collectibles, gaming, and more.” – said Chand.

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Source: https://cryptopotato.com/250m-fund-to-invest-in-polkadot-and-cardano-launched-in-india/

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Blockchain

China restricts crypto mining in Inner Mongolia

Republished by Plato

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China has been at the forefront of developing its digital yuan or DECP [Digital Currency Electronic Payment] but has continued to maintain a distance from the cryptocurrency ecosystem. The growing crackdown on Bitcoin mining firms in China has been impacting the sentiment in the area and according to reports, it has now extended a ban on mining projects in Inner Mongolia.

The country will end all cryptocurrency projects associated with mining. This decision followed China’s effort to meet energy efficiency targets. The large amounts of energy consumed by crypto and other industries like steel, coke, and methanol production have resulted in the government’s stringent decision to ban mining activity in the region.

The autonomous region of Inner Mongolia has been a hub for cheap power due to which the mining industry was drawn to it.

The aim of the region has been to cut emission per unit of gross domestic product by 3% this year and gradually control the massive boom in the consumption of standard coal. Although small, the region accounted for 8% of global Bitcoin mining hash power.

China has a 65% hold of the total network hash power allotted to Bitcoin and the above map highlighted that among other regions Xinjiang was the highest contributor to the hash rate in a month.

The abundant supply of coal and the relative remoteness of the region made it more convenient and cheap for miners to set base here. However, no strict actions have been taken to curb this problem by the Chinese government. If the country continued its mission to become more energy-efficient, it won’t be long before miners have to find alternatives to cheap electricity available in various regions in China.


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Source: https://ambcrypto.com/china-restricts-crypto-mining-in-inner-mongolia

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Blockchain

Central bank digital currency a mixed blessing, says RBI

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India’s central bank has recognized the potential benefits of central bank digital currencies but not without including a few pitfalls.

The Reserve Bank of India offered its assessment of CBDCs as part of its report on currency and finance issued on Feb. 28.

As part of the report, the RBI noted that several countries are exploring the creation of their own sovereign national digital currency.

According to the central bank’s report, CBDCs can help to promote financial inclusion and transactional transparency. The RBI also stated that national digital currencies could be useful as an instrument of monetary transmission by helping to engineer public consumption towards specific categories of products and services.

Detailing the benefits of CBDCs, the RBI also remarked that digital counterparts to sovereign fiat currency could be used by central banks to pump “helicopter money.”

In its analysis, the RBI also expressed concerns about the potential negative impacts of CBDCs on the legacy financial system, noting:

“CBDC is, however, not an unmixed blessing — it poses a risk of disintermediation of the banking system, more so if the commercial banking system is perceived to be fragile.”

For countries with significant credit markets, the RBI argued that CBDCs could threaten the primacy of commercial banks as the primary channel for the transmission of monetary policy.

As previously reported by Cointelegraph, India is looking to emulate China in creating its own CBDC. According to RBI governor Shaktikanta Das, the central bank is “very much in the game” of developing a digital rupee.

However, the RBI report did not include any details about the central bank’s digital rupee project. In another portion of the document, the central bank did concede that internationalization of the rupee was inevitable but added that such a move would complicate monetary policy formulation and implementation.

With several countries looking to create their own sovereign digital currencies, CBDC interoperability is becoming a concern among stakeholders. Meanwhile, reports indicate that China’s digital yuan will have a more domestic focus.

Source: https://cointelegraph.com/news/central-bank-digital-currency-a-mixed-blessing-says-rbi

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