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Kimchi Premium Puts Bitcoin Lower Ahead of Fed Minutes; What’s Next?

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Bitcoin prices dropped lost 3.12 percent in early trading Monday, while the rest of the crypto market followed suit, turning lower aggressively after their record-setting bull runs at the start of this week.

Bitcoin wobbles around $56,000. Source: BTCUSD on TradingView.com
Bitcoin wobbles around $56,000. Source: BTCUSD on TradingView.com

At first, it appeared like a regular profit-taking exercise among western day-traders against overvaluation risks. Nevertheless, blockchain analytics platform CryptoQuant noted that the sell-off appeared out of South Korea-based crypto exchange Upbit Global. It happened after a so-called “Kimchi Premium” indicator reached its three-year peak.

What is Kimichi Premium?

In retrospect, Kimchi Premium a metric which represents the difference in the bitcoin prices on South Korean exchanges and other global trading avenues. Arcnae Research analysts note that when the indicator peaks, it somewhat ends up blowing up the bitcoin bullish bubbles. The metric reached 47 percent in January 2018 and 63 percent in 2017, and followed up with vast price corrections in the global bitcoin market.

Bitcoin Kimchi Premium plunges alongside global price. Source: CryptoQuant
Bitcoin Kimchi Premium plunges alongside global price. Source: CryptoQuant

Nevertheless, Kimchi Premium formed dwarfed peaks of 6.5 percent in January 2018 and 63 percent in May 2019 — also leading to major bitcoin price corrections lower. As of this week, the metric peaked around 18 percent, before dropping lower during the European session Wednesday, as shown in the chart above.

“It seems someone finally figured out how to arbitrage this Kimchi premium opportunity,” said Ki-Young Ju, the CEO of CryptoQuant. “The trading volume in 30min time frame on Upbit Global, the largest Korean exchange, was bigger than Binance‘s. This drop seems related to Kimchi pullback.

Mr. Ju also told CoinDesk that the Kimchi Premium won’t impact the Bitcoin market like the previous times, noting that South Korea’s volume compared to the global one has significantly reduced — from 7.9 percent in 2017 to 2 percent.

Fed Minutes

Bitcoin also dropped below $56,000 during the US session Monday as investors awaited minutes from the Federal Reserve’s meeting in March to look for clues on how central bankers view inflation and US economic recovery speed.

Some investors fear that vaccine rollout, easing coronavirus restrictions, and the latest $1.9 trillion stimulus package would pent-up consumer demand, leading to a higher inflation. In turn, it would prompt the Fed officials to hike interest rates from near-zero earlier than 2024.

“When you have all this money that has been pumped into the system and into people’s pockets, but that hasn’t been spent yet, then you know inflation is going to come at some point,” said Brian Walsh, Jr., senior financial adviser at Walsh & Nicholson Financial Group.

Higher inflation prospects make the US dollar more attractive to foreign investors. Meanwhile, the greenback’s weakness tends to benefit Bitcoin.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.newsbtc.com/news/bitcoin/kimchi-premium-puts-bitcoin-lower-ahead-of-fed-minutes-whats-next/

Blockchain

Real Estate Giant Teams up with Gemini to Buy Bitcoin and Allow BTC Rent Payments

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Caruso, one of the largest estate companies in the US, has entered the BTC space with an undisclosed investment. The organization also revealed it will begin accepting bitcoin as payment for rent following a partnership with Gemini – the cryptocurrency exchange founded by the Winklevoss twins.

Pay Rent with Bitcoin

Without specifying the precise amount, Caruso announced earlier that it had made a “significant initial investment” in the primary cryptocurrency as part of its treasury management strategy. The move has made the company “the first to adopt the technology in the real estate industry.”

The firm completed the purchase through a partnership with Gemini, a US-based cryptocurrency exchange and custodian. The innovation reinforced the company’s confidence in the digitizing space.

Additionally, the firm enabled its tenants to pay rent with bitcoin, should they choose to do so.

Rick Caruso, founder, and CEO of the company weighed in on the topic:


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”We believe that cryptocurrency is here to stay. We believe that bitcoin is the right investment for us. We’ve allocated a percentage of what would normally go into the capital market into bitcoin.”

The billionaire went further and stated crypto is a long-term resolution and ”it’s not about the next year or five years”.

”We are thrilled to partner with Caruso as they continue to push the real estate sector to new heights by embracing cryptocurrency for the benefit of both their customer experience and their own business operations. We are excited to help them execute their digital asset treasury strategy and advise them more broadly throughout their cryptocurrency journey.” – commented Gemini’s CEO Tyler Winklevoss.

The Los Angeles-based company has become a part of the growing institutional adoption of bitcoin around the globe. According to experts, companies like MicroStrategy, MassMutual, Tesla, and more are a vital factor behind BTC’s recent price increase.

Bitcoin as a Form of Payment

While Caruso may be the first firm from the real estate industry to adopt BTC as a payment method, companies from other sectors have well preceded it. Most recently, the popular NBA team Sacramento Kings said it will give the option to its players to receive their salaries in the primary cryptocurrency.

Another fresh example is the UK private jet company – PrivateFly. The organization revealed that nearly 20% of its yearly payments were paid in bitcoin.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/real-estate-giant-teams-up-with-gemini-to-buy-bitcoin-and-allow-btc-rent-payments/

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Blockchain

Bitcoin Bull Mike Novogratz Predicts Existential Crisis Unless the US Creates a Digital Dollar

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Mike Novogratz, a veteran investor, and a huge Bitcoin supporter noted the U.S. is currently in a good economic position. Still, the nation can face a major competitive disadvantage unless it engineers a digital dollar soon.

The Importance Of An E-Dollar

Novogratz, chief executive of digital merchant bank Galaxy Digital GLXY, underlined the value that a digital dollar could bring to the US. In a Friday interview with MarketWatch, he stated:

”To me it is an existential crisis, we need a digital dollar.”

Furthermore, the investor expressed his view over the current COVID pandemic and the negative impact on the U.S. market and the world, in general. He referred to the trillions of dollars of monetary and fiscal spending done to help eliminate the worst of the economic aftershocks the disease caused:

”If our fiscal and monetary policy starts looking like it’s from a Banana Republic…you are going to run into some Minsky moment where confidence breaks down.”

With his statement, Mike Novogratz referenced Hyman Minsky, who exposed a view in the recent past that a period of distortions in the financial system eventually ends very badly.


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The existence of a digital dollar sounds even more important after some stock-market investors have been warning about a surge in US inflation in the past weeks.

The Competition With China

During the interview, Novgorotz claimed that while in the U.S., the development of an e-dollar is still under question and researches, China has fired the first salvo on the digital currency front.

The biggest economy in Asia conveys great support to its digital yuan. According to some experts in the field, its new currency is a weapon that the country can use to compete with the U.S. and other developed economies.

As CryptoPotato recently reported, PayPal CEO Peter Thiel said that Bitcoin could be used as a Chinese financial weapon against the U.S.

In the meantime, Novogratz said that there is ”zero evidence of the Chinese government buying Bitcoin” much less weaponizing it, referring to the comments made by Peter Thiel:

”Sometimes he likes to say things that are provocative.”

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Source: https://cryptopotato.com/bitcoin-bull-mike-novogratz-predicts-existential-crisis-unless-the-us-creates-a-digital-dollar/

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Blockchain

Canadian Broker Enables Bitcoin, Ethereum, and Ripple Payments

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The narrative that cryptocurrencies are not used as payment methods continues to be debunked, with numerous companies enabling such transactions lately. One of the largest Canadian brokers, Matrix Mortgage Global, is the latest to introduce payments with Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ripple (XRP), and some stablecoins.

Mortgage Payments with Crypto

Founded in 2008, Matrix Mortgage Global enables customers to receive financing on housing that has carried out over $1.5 billion in mortgage originations. The company has “championed alternative lending” since its inception, and its latest announcement could be regarded as another step in that direction.

Through a partnership with the US-based crypto service provider BitPay, Matrix Mortgage Global will enable all customers to pay for goods and services with some of the most popular crypto assets. Namely, those Bitcoin, Bitcoin Cash, Ripple, Ethereum, and several dollar-pegged stablecoins. However, the announcement didn’t specify which stablecoins the firm will implement.

The introduction of digital assets aims to expand the company into international markets where “accepting credit cards is not practical.” Furthermore, the addition will increase payment transparency, speed, and efficiency, while reducing high fees.

Matrix Mortgage Global’s initiative works in line with the Canada Revenue Agency’s views saying that crypto assets “can be used to pay for goods and services and shall be treated as a barter transaction.”


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“As an innovator in the mortgage industry, we decided to accept cryptocurrency to better align ourselves with the shift towards the global adoption of digital currency. Blockchain technology with the use of smart contracts is going to change the way mortgages are processed.” – commented MMG Founder Shawn Allen.

Increased Acceptance

Matrix Mortgage Global’s introduction of crypto payments comes amid a growing trend among other companies to do the same. Perhaps the most well-known name to do so since the start of the year is Elon Musk’s Tesla. After a massive BTC purchase, the electric vehicle giant said it will allow bitcoin payments for its cars.

The US has been at the forefront of this trend, including some of the country’s most popular sports leagues. The National Basketball Association has at least two representatives that accept crypto payments.

The Sacramento Kings do so since 2014, and the club’s chief said earlier this week that all employees could start to receive as much of their salaries as they like in BTC. On the other hand, the Dallas Mavericks went in another direction and enabled merchandise and ticket payments with the popular meme coin – Dogecoin.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/canadian-broker-enables-bitcoin-ethereum-and-ripple-payments/

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