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Retail traders, not hotshots like MicroStrategy, made Bitcoin in 2020

Republished by Plato

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The twists and turns of 2020 made it arguably the best year on record to be a trader, especially if you were involved in cryptocurrencies. May’s third Bitcoin halving, coupled with the euphoric market volatility that swept global markets, made 2020 a year of gains and opportunities for crypto traders.

By November, it was already clear Bitcoin (BTC) and other major cryptocurrencies had cemented their status as a recognized asset class among retail and institutional traders alike, having outshined all other major asset classes in the world. Bitcoin’s renewed bull run deservedly grabbed the headlines across mainstream finance and made the global retail crypto trader the champion of 2020 in the investment world.

Related: Did Bitcoin prove itself to be a reliable store of value in 2020? Experts answer

Unlike the gains in mainstream financial markets, crypto’s bull run did not evolve from the massive stimulus packages unleashed by governments and central banks that helped prop up equity and bond valuations. Bitcoin increased organically thanks to a growing global retail base, compelled by the asset’s growing allure as a store of value.

Above all, crypto’s global accessibility meant retail traders across the world were able to have their voices heard beyond the crypto ecosystem. Crypto’s universality provided a growing pool of traders with the means to express their market positions and uncover newfound market opportunities. It is no coincidence then that Bitcoin finished as the best performing asset class of 2020 — in no small part, due to the newfound aspirations, entrepreneurialism and risk-taking of the global retail crypto trader.

The 24/7 nature of crypto plays into traders’ hands

The evolving 24/7 nature of the crypto market allowed traders from anywhere in the world, at any time, to capitalize on the increase in market volatility throughout 2020. In this way, the year’s energetic markets created a unique backdrop to play the markets, assisted by the growing sophistication of new trading products and services. In this evolving market landscape, global crypto retail traders began to capture the headlines in mainstream investment circles once again.

With Bitcoin’s market capitalization surpassing over $350 billion in November, crypto captured volatility better than many had anticipated. As a result, crypto proved to be a hugely efficient asset for global retail traders to successfully navigate the economic and political uncertainties of 2020 — a trend that should continue into 2021.

U.S. presidential election personifies 2020’s Bitcoin bull run

This year’s global market volatility arose largely from the macroeconomic and political decisions that unfolded in the wake of the COVID-19 pandemic. Perhaps 2020’s market volatility culminated with the U.S. presidential election. The election caused not only a stir in markets but also produced a surge in options contracts tied to the U.S. election.

Crypto played a core role in this development, with decentralized and crypto exchanges offering a plethora of prediction-based futures markets tied to the election. The surge in open interest in Bitcoin futures following President-elect Joe Biden’s nomination reflected the widening appeal of crypto as a tradable asset class. Crypto options can capitalize on that demand even further by leveraging the appeal and ease of prediction markets, with simple, engaging and intuitive products that reflect the market’s instincts and desires of a rapidly growing user base. The 24/7/365 makeup of the crypto market makes this all the more possible.

Bitcoin’s ability to withstand major macro events, such as back-to-back U.S. presidential elections, Brexit and, of course, COVID-19 are proof of its status as a more mature asset class. As John Authers recently pointed out in an opinion piece in Bloomberg:

“For the time being Bitcoin is showing some signs of growing maturity as an asset class — and it has endured far longer now than the average tulip.”

It is fair to say that cryptocurrencies have lost much of their negative associations of being referred to as “a craze” or more famously by Warren Buffet as “rat poison squared.” Larger industry players are buying Bitcoin and other cryptocurrencies because they are an alternative store of value and gaining recognition as the most complex yet desirable currency to ever exist.

As 2020 drew to a close and traditional markets were looking far more stable than witnessed earlier in the year, investors weren’t necessarily choosing between traditional investing and crypto trading, but rather recognizing how they could co-exist.

As we have entered 2021 with positivity and hope that the global COVID-19 pandemic will be neutralized, it’s safe to say that traders and investors at all levels, from retail to large corporates, will be keeping a close eye on Bitcoin and other cryptocurrencies this year.

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.

Dan Gunsberg is CEO and co-founder of Hxro. Dan began trading crypto in 2015 and quickly recognized a gap in the market for a trading experience. He co-founded Hxro in 2018 with the aim of expanding the world of crypto trading with gaming products. Now, Hxro leads in the gamification of the crypto trading market. Before Hxro, Dan spent over 20 years in derivatives trading as a trader and executive.

Source: https://cointelegraph.com/news/retail-traders-not-hotshots-like-microstrategy-made-bitcoin-in-2020

Blockchain

Polkadot Gears Up for Parachains Launch: Unveils ‘Common Good’ Parachains

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Polkadot, the interoperable blockchain protocol spearheaded by Ethereum co-founder Gavin Wood, has announced its forthcoming parachain launch.

Parachains – application-specific blockchains that connect to the main network and benefit from its security and computing capacity – are viewed as the building block of Polkadot’s ecosystem. Initially, the plan was for 100 parachain slots, with an auction process determining who gets to ‘lease’ parachains for defined time periods.

However, according to a blog post published by the team on February 25, some slots will be made available for ‘governance-allocated parachains,’ also known as common good parachains. These common good parachains have been conceived to address the so-called “free rider” problem, wherein parachains can forgo contributing to elements (such as bridges) that may benefit the ecosystem as a whole.

Solving the Free-rider Problem

The free-rider problem is best understood with reference to an analogy. Supposing a levy is imposed on car manufacturers to offset pollution: in turn, vehicles’ cost is increased, and all drivers are forced to pay extra.

Although everyone will subsequently benefit from a less toxic atmosphere, only those who actually buy a car will have contributed: the others (cyclists, for example) are considered free riders.

Polkadot’s governance process will essentially earmark parachain slots for consideration outwith the auction process, with a Council and Technical Committee representing passive stakeholders and supplying technical guidance. Both groups will then decide whether to accept or reject the direct registration of certain parachains.

According to the blog post, both system-level chains and public-utility chains may emerge as blockchain categories that qualify as common good chains.

Any parachain, in other words, that the Polkadot team deem beneficial for the overall ecosystem – bridges, identity projects, and smart contract platforms and governance would all theoretically be under consideration.

Chains that help remove transactions from the Relay Chain and enable more efficient parachain processing seem the likeliest to be considered ‘common good.’

As noted in Polkadot’s blogpost:

“By allocating a subset of parachain slots to common good chains, the entire network can realize the benefit of valuable parachains that would otherwise be underfunded due to the free-rider problem.

Polkadot’s governance system is on the bleeding edge of social coordination and it will be exciting to see how it helps the network evolve to meet the needs of its constituent parachains and stakeholders.”

Polkadot Gears Up for Parachain Launch

The Polkadot team recently published a roadmap noting that all upcoming parachains will be tested on regular parachain testnets, like Rococo and on Kusama Network. The latter being Polkadot’s canary network.

Kusama is a proving ground for parachains, allowing developers to build and deploy them and experiment with Polkadot’s governance, staking, nomination, and validation functionality.

Once parachains are live, community members will have their say on which additional features and network upgrades should be incorporated over time.

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Source: https://cryptopotato.com/polkadot-gears-up-for-parachains-launch-unveils-common-good-parachains/

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Blockchain

Cardano Price Analysis: 28 February

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While a majority of the assets are still trying to recover from the recent price drop, Cardano managed to record a new all-time high over the past week. Clocking in a value of $1.48 yesterday, Cardano is currently one of the top three assets in the world and while the asset has registered a 10% drop over the past few hours, it has maintained its 3rd position with a market cap of $38 billion.

Cardano 6-hour chart

Source: ADA/USD on Trading View

The 6-hour chart of Cardano continued to indicate a rising price but the asset was moving within the trendlines of an ascending channel. With a couple of higher highs witnessed, the asset has dipped over the past 24-hours, and the correction may go even further in the charts. A bearish breakout should allow the asset to recover its position at a previously held range before addressing the higher range again in the future.

At press time, the 50-day Moving Average has continued to act as underlying support but a possible move below $1.12 is likely.

According to the VPVR range, the support range at $0.90-$0.95 could be tested since the trading volume at the price point has been significant over the past few weeks.

Market Indicators

Source: ADA/USD on Trading View

Market Indicators appeared a little on the neutral side at press time but considering the pattern was bearish, the indicators may head in the same direction.

Relative Strength Index or RSI is currently holding a position above 50 but the indicator suggested an increasing selling pressure in the chart. Stochastic RSI is exhibiting a bearish pullback at press time, with the signal line hovering the bullish line.

MACD appeared bullish at press time, but a potential trend reversal is in the charts, with the MACD line converging towards the bearish line.

Important levels to watch out for

Resistance: $1.48
Support: $1.30, $0.92-$0.90
Entry Position for Short: $1.325
Stop-Loss: $1.48
Take Profit: $0.90-$0.92
Risk/Reward Ratio: 2.43x

Conclusion 

Cardano’s price action has been within the ascending channel formation and a bearish breakout in the coming week should not be discounted.


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Source: https://ambcrypto.com/cardano-price-analysis-28-february

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Blockchain

Bitcoin Cash, Uniswap, Zcash Price Analysis: 28 February

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Bitcoin Cash looked uncertain to flip its press time resistance as the indicators gave mixed signals regarding its future trajectory. Uniswap could move southbound from its descending triangle pattern as momentum rose on the selling side. Zcash showed some indecision in its market as the price continued to trade within a range, with a breakout unlikely over the coming sessions.

Bitcoin Cash [BCH]

Source: BCH/USD, TradingView

With weekly losses of over 33%, Bitcoin Cash slipped to the 12th position on the crypto-rankings with a market cap of $8.6 billion. On the 4-hour timeframe, the price slipped below $464 support but the bulls eyed a comeback on the charts. The RSI avoided the oversold territory but pointed lower from the 35-mark at the time of writing. The MACD was bullish-neutral as the fast-moving line floated just above the Signal line.

It was doubtful whether the aforementioned resistance mark could be flipped over the next few sessions as trading volumes and buying activity remained muted.

Uniswap [UNI]

Source: UNI/USD, TradingView

A descending triangle formed on Uniswap’s 4-hour chart after the price formed lower highs post record levels. Prices usually tend to break downwards from this pattern on low trading volumes. The Awesome Oscillator showed that momentum rested with the selling side as the red bars rose below the half-line. A fall below the lower trendline could see UNI move towards the $15 mark.

The Stochastic RSI disagreed with the AO and suggested that UNI could be up for some gains after a bullish crossover in the oversold zone. However, a move above the upper trendline was unlikely considering the state of the broader market.

Zcash [ZEC]

Source: ZEC/USD, TradingView

Zcash continued to move within a fixed channel on the 4-hour chart as equilibrium was maintained between the buyers and sellers. The Bollinger Bands also reflected the consolidation as volatility remained low in the market. The MACD line was superimposed on the signal line, reflecting the indecision in the market.

However, a sharp move in either direction could see the market tilt strongly in the favor of the side that enforces the breakout. A bullish scenario could see ZEC move towards the next resistance mark at $138.4. Conversely, a fall could see the price move towards $98.1 support.


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Source: https://ambcrypto.com/bitcoin-cash-uniswap-zcash-price-analysis-28-february

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