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Here Is Why Conservative Investors Must Embrace Bitcoin, DeFi Now

As federal authorities around the world continue to push interest rates below zero, conservative investors may find more value delving into Bitcoin and DeFi

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The global economy is arguably experiencing a downturn similar in part to the global economic crises of 2008. The current meltdown which has pushed some nations into economic recession was spurred by the COVID-19 pandemic, a highly contagious viral disease that originated from Wuhan, China. The pandemic crippled businesses, international travels, and the global supply chains as many had to adhere to intermittent lockdowns targeted at stemming the spread of the virus.

While the world fights to return to normality following the pandemic, the financial ecosystem as being driven by each country’s apex (or central) bank has had to make tremendous adjustments to keep the money flow balance to sustain businesses. From the observations seen in the past months, a ton of the monetary policies being rolled out by these central banks has formed the basis for many nascent markets such as the cryptocurrency industry to take a plunge.

A typical example is a continuous rollout of cash to strained citizens to serve as a stimulus package to help reduce the harsh pangs of the coronavirus pandemic. These stimulus packages awash most economies with excess cash, which correspondingly resulted in the plunge of the purchasing power of fiat currencies owing to the ensuing inflation. Many people turned to cryptocurrencies like Bitcoin (BTC), which helped push the coin’s price beyond $40,000 in the past days.

Recovery Measures by the Feds: Negative Interest Rates and Implications

The move to cut interest rates below zero by federal authorities in different countries is one of the most underrated bullish factors that flashes the revolutionary potentials of Bitcoin and Decentralized Finance (DeFi) applications aiming at overturning the tenets of modern traditional banking.

While there are many implications of a negative interest rate, it should be understood that governments make this move to help encourage the populace to borrow more money at no cost and with the possibilities of being paid rather than a commitment to pay interests on the borrowed funds. This strategy is usually employed to encourage engagement in productive economic activities that can help resuscitate an ailing economy. 

The involvements of banks who need to make profits while the negative interest policy is in effect somewhat complicates the arrangement as they must also develop ways to make money. As such, they tend to pass on charges to the retail customers and the public in general for depositing their cash as well as other banking activities. This makes the negative interest rate scheme antagonistic in productivity, as some (the lenders) are favored at the expense of others (general banking customers).

In the wake of the coronavirus, many countries including Denmark and Sweden have already embraced negative interest rates and there have been increasing calls to implement the same policy in the United Kingdom to fast track the nation’s recovery effort.

According to a report by The Guardian, Silvana Tenreyro, one of the nine members of Threadneedle Street’s monetary policy committee, is one of those advocating for a negative interest rate in the UK.

“My overall assessment is that, while we can never have complete certainty, negative interest rates should with high likelihood boost UK growth and inflation. Cutting bank rate to its record low of 0.1% has helped loosen lending conditions relative to the counterfactual (of no policy change), and I believe further cuts would continue to provide stimulus,” she said in a statement.

The Bitcoin and DeFi Way

READ  Swiss Fintech Firm Amun receives regulatory approval to sell crypto based ETPs in EU

While the existing monetary and economic landscape appears to be crumbling, Bitcoin and other digital assets are serving as investors’ delight, owing to the strength of their fundamentals in providing similar and better services as traditional financial institutions.

DeFi projects such as Aave, Maker, and others are providing comparative higher yield interest lending service that is made possible by well defined and functional smart contracts that have attracted over $21 billion in assets locked, according to DeFi Pulse. 

Conservative investors with a little faith can take advantage of investing in Bitcoin with its highly attractive annual yield rate (over 300% in 2020) or by embracing DeFi offerings, as either of these two moves will bring more dividends than what today’s financial institutions are willing and can offer.

#Bitcoin #COVID-19 #decentralized finance #DeFi #stimulus packages #Zero interest rates

Source: https://www.cryptoknowmics.com/news/here-is-why-conservative-investors-must-embrace-bitcoin-defi-now

Blockchain

What’s in store for SushiSwap in 2021?

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Decentralized exchanges or DEXs have been registering significant activity over the past few months and SushiSwap is right up there with Uniswap. However, the Sushi token has held its own in the market since being criticized for being another scam project.

Over the past few weeks, its performance has spoken for itself but since the collective bearish pull, few questions have again been thrown in its direction.

SUSHI registers contradictory signs

Source: Twitter

As illustrated by glassnode statistics, the transaction volume of Sushi on a 7-day average has reached an all-time high of ~$17.5 million. The transaction volume refers to the volume moved on-chain for Sushi. Higher movement on-chain is indicative of higher activity for the token but at the same time, SUSHI’s median transaction volume has reached a 4-month low, suggesting that the median value of the transaction has dropped substantially in the recent past.

Statistics drawn from Sushiswap’s website indicated that the 24-hour volume at present is around $306 million, which is still far away from its ATH of $1.6 billion registered on 23rd February. The drop in volume has been consistent with the recent pullback but over the past 24-hours, the volume is up 10.34%.

Source: Sushiswap

In contrast, total liquidity has taken a hit over the past 24-hours, dropping 13.52%, declining from $3.64 billion to $3.08 billion.

SushiSwap: Expansion is the way forward?

The on-chain metrics have not meddled with Sushi’s plan as according to Joseph Delong, CTO of Sushi.com. Sushi contracts are now deployed on different platforms which include Binance Smart Chain, Fantom, Polygon, Moonbeam, and xDai chain.

The industry is currently speculating that the move has been inspired by the current surging gas fees on Ethereum. While Ethereum is on pace to settle over $1.6 trillion in terms of transactions in Q1 2021, many projects continue to look at other scaling solutions for growth.

While Sushi will possibly continue to gain more on-chain volume from Ethereum than other platforms, its expansion to other blockchains can be taken as a sign of flexibility in terms of keeping the activity consistent for deployment.

Source: Trading View

Chart analysis suggested that the asset has dealt well during the bearish onslaught and a renewed bullish momentum may allow Sushi to scale towards a new ATH before the end of March 2021. Currently, moving above the 50-moving average, a bullish breakout could be on the cards for the token over the next few days.


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Source: https://ambcrypto.com/whats-in-store-for-sushiswap-in-2021

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Blockchain

Charted: Uniswap’s UNI Enters Top 10, Why It Could Soon Test $42

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Uniswap’s UNI climbed over 10% and it even broke the $34.00 resistance against the US Dollar. A new all-time high is formed near $34.60 and the price is likely to rise further.

  • UNI gained pace above the $30.00 and $32.00 resistance levels against the US dollar.
  • The price is trading nicely above $34.00 and the 100 simple moving average (4-hours).
  • There was a break above a key connecting bearish trend line at $28.00 on the 4-hours chart of the UNI/USD pair (data source from Kraken).
  • The pair is likely to continue higher towards the $36.50 and $40.00 levels in the near term.

Uniswap’s UNI Breaks $34

After a sharp downside correction from well above $30.00, UNI found support near the $20.00 level. It traded as low as $18.68 and it recently started a fresh increase. It broke many hurdles near $25.00 to enter a positive zone.

There was a clear break above the $28.00 resistance and the 100 simple moving average (4-hours). There was also a break above a key connecting bearish trend line at $28.00 on the 4-hours chart of the UNI/USD pair. The bulls even pushed the price above the $32.00 resistance.

Uniswap’s UNI

Source: UNIUSD on TradingView.com

A new all-time high is formed near $34.50 and it seems like the price could rise further. An immediate resistance is near the $36.50 level. It is close to the 1.236 Fib retracement level of the downward move from the $33.17 high to $18.68 low.

The next key resistance is near the $40.00 level. The next major stop for the bulls could be $42.00. It is near the 1.618 Fib retracement level of the downward move from the $33.17 high to $18.68 low.

Dips Supported?

If UNI price fails to settle above the $35.00 zone, it could correct lower. The first major support is near the $32.50 and $32.00 levels.

The main support is now forming near the $30.00 zone. A downside break below the $30.00 support might open the doors for a push towards the $27.50 support. Any more losses may possibly lead the price towards the $25.00 zone.

Technical Indicators

4-Hours MACD – The MACD for UNI/USD is gaining momentum in the bullish zone.

4-Hours RSI (Relative Strength Index) – The RSI for UNI/USD is well above the 70 level.

Major Support Levels – $32.50, $30.00 and $27.50.

Major Resistance Levels – $35.00, $36.50 and $40.00.

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Source: https://www.newsbtc.com/analysis/uni/uniswaps-uni-enters-top-10/

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Blockchain

The number of BTC held on exchanges crashed 20% in 12 months

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Data from on-chain crypto information aggregator Glassnode indicates the number of Bitcoin held on centralized exchanges has fallen by roughly 20% in 12 months.

The data suggests investors are accumulating BTC and withdrawing them from exchanges into cold storage, creating a supply crunch.

On March 6, Glassnode also shared data revealing that coins purchased during 2021 were not moved at a loss during the late February dip, according to on-chain analysis.

The firm’s “Hodlwaves” metric, which measures the time since coins were last moved on-chain, also points to increasing accumulation activity.  Hodlwaves data published on Feb. 22 indicated 57% of Bitcoin’s supply has not moved in more than one year. However, more than one-third of said BTC have not moved in more than five years, suggesting that a significant portion of the coins may have been lost.

The increasing popularity of decentralized exchanges and DeFi yield protocols may also be driving the diminishing supply of BTC on centralized exchanges.

Evidencing strong demand for Bitcoin in the DeFi ecosystem, the total value locked, or TVL, of BTC tokenization protocol Wrapped Bitcoin has increased by more than $1 billion since the start of March, according to DeFi Llama.

Wrapped Bitcoin TVL: DeFi Llama

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Source: https://cointelegraph.com/news/the-number-of-btc-held-on-exchanges-crashed-20-in-12-months

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