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wNews: How a Dogecoin Pump Upstaged the Coinbase Listing

Republished by Plato



wNews: How a Dogecoin Pump Upstaged the Coinbase Listing | Crypto Briefing

High-leverage crypto news, wrapped and bundled (almost) every Friday.

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Key Takeaways

  • After much anticipation, Coinbase’s direct listing on NASDAQ went off with much fanfare as the industry enjoyed some long-awaited validation.
  • Events outside of the United States rocked Bitcoin this week. Simultaneously, Ethereum hit a new all-time high of $2,500.
  • The market may have finally called a top as many traders are now nabbing profits and putting them to work in DeFi’s favorite “yield farm.”

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This week’s wNews digs into why various left-of-the-curve cryptocurrencies enjoyed some serious bullish attention. So hard did 2017’s favorite altcoins pump that the market quickly forgot about the industry’s first-ever direct listing.

Dogecoin swept headlines, but other altcoins like Ethereum Classic, Bitcoin Cash, and Litecoin all took flight this week. There are several reasons why this activity is strange and worrisome to investors.

Dogecoin’s repo on GitHub is absent of activity, and Ethereum Classic has already suffered from two 51% attacks. Neither facts suggest either project is fundamentally strong. As for the rest of the market, who knows.

Elsewhere, Bitcoin and Ethereum traded price action. Bitcoin dropped after being banned in Turkey, and a mining accident in China reduced the network’s hashrate. Thanks to positive scalability news, ETH hit an all-time high just a day after Coinbase was listed on NASDAQ. 

This week’s volatility has already spooked some traders, however. For those moving into stablecoins, this week’s Crypto To-Do List introduces readers to a convenient way to earn up to 15% on their idle holdings. 

All that and much more below.

Digging into Dogecoin, Not Coinbase

It’s perfectly reasonable in crypto that the industry’s greatest moment of validation is eclipsed by the inordinate pumping of a “meme coin.” Just as Wall Street finally perks up to crypto, market participants remind them that the sector is still growing. 

Unpacking this juxtaposition, however, does reveal several curious insights. First Dogecoin. 

Headline after headline, tweet after tweet, commentators overthought the underlying reasons as to why DOGE rose from $0.07 to $0.41 in under a week. The money-as-a-meme narrative was certainly at play. 

But there was another unexpected motor that pushed the coin to new highs.

DOGE price action from Apr. 12 to Apr. 16. Source: CoinGecko
DOGE price action from Apr. 12 to Apr. 16. Source: CoinGecko

Like all strange money matters, it involved a tweet from Elon Musk. Alongside the serial memester, the Dogecoin pump also involved a “truly exceptional” trader. 

When inspecting the top DOGE wallets, one particular address stood out last week. Looking through this account’s activity, one can see what looks like a massive campaign to lure and bait speculators. 

100,000,000 DOGE sold here, 250,000,000 sold there. With such volume, it’s not difficult for a single address to move prices. 

Dogecoin Activity
Source: Bitinfocharts

Once this information became clear to the public and Twitter threads revealed the carnage, another unusual document emerged: God.pdf

Written by another trader named Wolong, the document described the precise tactics put in play in the latest Dogecoin action. It revealed how whales could delicately manipulate price and volume in seven key steps. What’s more, Wolong was notorious for controlling the price of DOGE before disappearing. 

The first step is position building, or slowly making “microbuys” over a period and creating a large coffer of the specified token without disrupting prices. The second is price suppression. 

Here the whale quells rising prices through wave after wave of sell walls. Wolong writes, “our sell walls are usually just enough to appear as though as it’s the invisible hands of the market, minor supply over demand.”

Step four is the test pump to shake out weak hands and “ensure that [whales] have absolute control of the market.” Step five is the actual pump, like what the market saw on Friday. 

Step six is a re-allocation of the tokens, followed by step seven: “The Dump.”

After the general explainer, Wolong writes:

“By now, everyone should be very curious and if not dying to find out how I orchestrated my pumps and dumps, especially with dogecoin.” 

In another March 2020 article from the Daily Dot, his technique was explained thusly: 

“A Bitcoin trader who asked to remain anonymous told me Wolong was likely trading mostly with himself, ‘playing the part of the fighting whales’ (‘whales’ are traders with significant bankrolls). He described a pattern of trading where Wolong would make it appear that a whale was keeping the market below a certain price, and then play the part of a second whale buying enough Dogecoin to lift the price through the first whale’s resistance. Once the price broke that resistance, out-of-the-loop traders would buy more Dogecoin, hoping to see it rise even higher.” 

Because Wolong had been executing these tactics long before last week’s pump, many experienced traders quickly drew comparisons. 

With this bit of context in mind, calling “all money a meme” seems a bit silly. 

And just like on Wall Street, if traders don’t know why prices are moving the way they are, they probably aren’t looking hard enough. 

Either way, of course, retail will always be left holding the bags.

Market Action: Bitcoin (BTC) 

Bitcoin moved past the $60,000 resistance and recorded a 7.6% gain following the breakout. 

The price retested support yesterday as negative catalysts from Turkey and China put pressure on the price. The ascending triangle target of $76,500 is still in action, though. 

Bitcoin Price Action
Source: Trading View

The high funding rate for long BTC orders on Binance’s futures market suggests that fear is creeping among traders. 

For reference, on Wednesday, when Bitcoin broke above $60,000, the funding rates were above 0.1% across all platforms for an eight-hour interval or a 110% annual percent rate. 

Funding Rates for ETH and BTC
Bitcoin and Ether funding rate for perpetual contracts on exchanges. Source: ViewBase

The derivatives market saw a $1.1 billion liquidation dominated in long orders after yesterday’s crash. Overall, the market still seems bullish. 

The Coin Days Destroyed (CDD) metric, which gauges the movement of old and large Bitcoin addresses, possibly moving to sell, continued to decline in March, which is a positive signal. It suggests that long-term holders are willing to wait for higher prices. 

Monthly Sum of Bitcoin's Coin Days Destroyed (CDD)
Bitcoin CDD indicator. Source: Glassnode

However, since the top of $64,500, reports of exchange deposits of nearly 16,000 Bitcoin (worth nearly $1 billion) have emerged. 

First, analytics firm Crypto Quant reported a 5,047 BTC inflow on Thursday. 

Then on Friday, after Bitcoin’s dip to $60,500, Ben Lilly of Jarvis Labs recorded a massive inflow of over 11,000 BTC, adding to the negative pressure over the weekend. 

If the price drops further, the previous low of $55,600 will support the bulls. 

Market Action: Ethereum (ETH)

Ethereum’s native token ETH broke a new all-time high this week with positive development around the blockchain’s scalability issues

The comparison between the daily chart of ETH and BTC reveals that the second-largest cryptocurrency is, in fact, leading the market. 

Ether broke and retested the breakout from the ascending channel in the first week of April. In comparison, BTC followed a similar trajectory this week. 

ETH Price Action
Source: Trading View

The ETH/BTC also brings positive tidings as it trades above the pivotal value of 0.034 BTC. 

Before stablecoins like USDT took over, Bitcoin was the dominant exchange pair in the market. However, in 2019 and 2020, the volume of USD pairs exploded on the spot and even the futures market. 

Still, the levels of support and resistance in the ETH/BTC chart provide useful information about the change in market trends. 

The 0.034 BTC level marks a pivotal point of decoupling between Bitcoin and Ethereum.

During the parabolic 2017 run, breakout and retest of this point acted as a robust trading indicator. Over the last two years, the price has held near this level, seeing upward resistance at 0.045 BTC and 0.058 BTC. 

ETH Price Action
Source: Trading View

However, the funding rate of Ether is running hotter than Bitcoin, which is a concern for investors. 

While the target of $2,750 and $3,000 is still on, traders must not rule out the possibility of a retest of the $2,100 support. 

Crypto To-Do List: Use a Yield Optimization Tool 

Crypto is deep into its biggest bull run to date, which means some are already beginning to take profits.

In the past, this usually meant exchanging from crypto to fiat via a centralized exchange. With the advent of DeFi, however, users needn’t move holdings outside of the crypto ecosystem. 

DeFi, the majority of which occurs on the Ethereum blockchain, offers unrivaled yields, especially compared to any bank in the traditional world. This means that if and when a slump does hit, DeFi users will still be able to continue banking profits on their assets by putting their money to work. 

Yield farming,” as it’s popularly known, introduced a new layer to the crypto ecosystem, but it also added complexity. The best yield farming strategies can be difficult for casual users to find, however, and moving assets between liquidity pools can require heavy amounts of gas. Plus, as yield rates change with the number of assets deposited in a pool, it can be difficult to keep track of the best place to deposit funds. 

Most users don’t have a lot of capitalin time or cryptoto invest in yield farming alone. 

That problem has been solved with the arrival of yield optimization tools. Aggregators for some of DeFi’s leading projects, these protocols use smart contracts to find the best returns for users when they deposit their assets. 

By far, the best-known yield optimization tool in DeFi today is Yearn.Finance

Built by cult DeFi figure Andre Cronje in 2020, Yearn integrates Compound, Curve, Balancer, SushiSwap, Aave, and other DeFi mainstays. It offers a range of products, though they are designed to help users capture yield more efficiently (Cronje has said that he built it for himself). 

With Yearn’s Vaults, users can deposit an asset, which Yearn users can access to borrow stablecoins and farm yield. The yield then gets exchanged to the same deposited asset, which the user can withdraw. Earn is a similar product, designed specifically for stablecoins like DAI, TUSD, USDC, and USDT. It also supports WBTC. The protocol also integrates cover options to protect assets. 

Yield optimization tools like Yearn.Finance simplify the process of leveraging DeFi’s yield opportunities, creating new ways for users to move their assets without the heavy gas burden. Nonetheless, making a deposit and withdrawal from Yearn still requires gas. 

Moreover, yield optimization tools are highly experimental, designed for more proficient DeFi users. As such, caution is advised. 

Disclosure: At the time of writing, some of the authors of this feature had exposure to ETH,  AAVE, CRV, BTC, UNI, DPI, and POLS. 

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Cardano Reaches All-Time High as Founder Pitches to Mark Cuban

Republished by Plato



Cardano, the fourth-largest cryptocurrency by market capitalization, reached a new all-time high on Sunday, one day after Charles Hoskinson engaged in a conversation with Mark Cuban around the topic of Cardano’s potential.

ADA, Cardano’s token, has gained more than 60% in value over the past 2 weeks according to CoinGecko data, reaching an ATH of $2.45 on May 16th at a time when projects using Proof-of-Work (PoW) consensus protocols like Bitcoin experienced a steep drop in value.

Long seen as one of the biggest potential alternatives to the Ethereum network despite not having completed the development process, Cardano is now gaining traction as news of Tesla’s decision to stop accepting Bitcoin due to environmental concerns continue to affect projects relying on PoW.

While Ethereum will be transitioning to a Proof-of-Stake consensus protocol with the release of Ethereum 2.0, the network still uses a PoW approach that might have prevented it from being considered as a reliable alternative at this time.

This barrier should also be added to concerns about the ability of the network to escalate and operate efficiently at a time of high congestion.

Cardano’s latest releases provided developers and users with the option to create native tokens but the platform is still lacking smart contract features. The Alonzo update, which is expected to occur by the end of this month, will add smart contract support and open the doors for new uses of the network.

Hoskinson Pitches ADA to Mark Cuban Via Twitter

Mark Cuban, an American billionaire with a net worth estimated around $4.3 billion, has shown an increasing interest in cryptocurrencies such as DOGE and BTC over the past months.

The Dallas Maverick’s, an NBA team owned by Cuban, even started accepting the popular Shiba Inu-based cryptocurrency as a valid payment method for acquiring the team’s merchandise and tickets.

The entrepreneur started a Twitter discussion by asking his followers if they were” personally, able to use $ADA for anything?”, with thousands of followers quickly providing their opinions and retweeting his question.

One of such followers was Cardano’s Founder, Charles Hoskinson, who about an hour later replied with an invitation for Cuban to visit him in Colorado to chat about the project.

Hoskinson would later mention that the project has, “five million students in Ethiopia, thousands of assets issued on Cardano, a nice DApp ecosystem brewing for smart contract launch, a new VC model with catalyst, huge community.”

While Cuban seemed to find this information interesting and recognized Hoskinson’s status as an “ETH OG”, he also shared his belief that the platform was still not “there yet” in terms of applications while also mentioning the lack of smart contract functionality.

All Eyes are Set on the Alonzo Update

Like Mark Cuban, Cardano critics have been quick to point out that the network still lacks an essential aspect of blockchain technology: smart contract functionality.

This has made the Alonzo Hard Fork one of the most anticipated deployments for the network, as it will allow the network’s users to actually test the claims made by the project’s development team.

Hoskinson also Tweeted a 12-minute video in which he talked about the project’s history, goals, and status, directly addressing it to Cuban.

In the conversation with Cuban, Hoskinson replied to the concerns around Smart Contracts by tweeting:

“We rebuilt the entire smart contract model. It took four years to do it, but it’s necessary if you actually want security and scale. No more DAO hacks, less off-chain code. Consistent operating cost. Furthermore I want all devs not just solidity devs”

This smart contract model will finally be seen with the release of the Plutus Core in the Alonzo update, which the project’s developers assure will provide greater security and flexibility.

With Ethereum 2.0 also advancing on its development, the success of the Alonzo hard fork will prove to have an important impact on how the race between Ethereum and its competitors advances in the future.

Especially at a time when enterprises are paying more attention than ever to environmental-friendly alternatives to Ethereum and Bitcoin.


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Crypto Companies Raised $2.5 B in First Quarter of 2021, the Highest Ever!

Republished by Plato



2021 bull run has propelled Bitcoin, altcoins, and the whole ecosystem into the mainstream limelight as well as adoption. The growing demand for digital assets is evident from the number of mainstream financial firms adding support for cryptocurrencies as well as the number of crypto companies that have become a billion-dollar company after the latest funding round. The first quarter of 2021 saw crypto companies raise a combined capital of $2.5 billion the highest ever and nearly double of 2018 second-quarter total fundraise

Many of these crypto companies attracted funding from mainstream behemoths including Chainalysis whose valuation grew into billions after its latest funding round of $100 million that saw participation from TIME Magazine owner Marc Benioff. Apart from Chainalyis other crypto firms that raised capital to the tune of hundreds of millions in their latest funding round include BlockFi that raised a whopping $350 million in their Series D funding round and which also raised $300 million to see its valuation grow to $5.2 billion.

Crypto Companies in High Demand

The multi-fold increase in valuation of several crypto companies along with the public listing of many others reflect the growing demand for not just digital assets but also for experienced service providers from the crypto space. Coinbase created history this April after it made its public debut on Nasdaq with an $80 billion-plus valuation and over 50 million registered users.

Apart from crypto companies growing demand in the mainstream market, many traditional financial firms and payment processing giants such as PayPal and Venmo with over 300 million and 70 million customer bases respectively. PayPal that was once a part of Facebook’s infamous Libra association also opened a crypto spending option for its customers across millions of its verified vendors. MasterCard and VISA have also added crypto payment support in one form or other, not to mention, only a few years back these payment processing giants were blocking crypto-related transactions via their platform.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

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Bitcoin is more energy-efficient than Gold: Galaxy Digital Report

Republished by Plato



A report from the diversified financial services firm Galaxy Digital has revealed that Bitcoin is more energy-efficient than Gold.

Digital assets investment firm Galaxy Digital has published a report detailing that Gold consumes more energy than Bitcoin. The report also notes that banking institutions average twice the energy consumption of the leading cryptocurrency.

Bitcoin has, in the past, been frequently weighed against different assets but none more than Gold. Some industry experts have even described it as the digital version of gold. However, there have been a lot of questions surrounding its energy consumption. Bitcoin’s carbon footprint in 2019 was so huge that it was compared to carbon emissions in the cities of Hamburg and Las Vegas by the Technical University of Munich.

On more than one occasion, the flagship cryptocurrency has been criticised by individuals and institutions that believe it is not energy efficient. The report from Galaxy Digital, however, seems to challenge these claims. It comes just a few days after Tesla announced it would no longer accept Bitcoin payments for its electric vehicles. The automaker cited concerns for its energy usage as rationale for the decision.

The report pointed out that while most people are eager to criticise Bitcoin, they hardly do the same to other financial industries and assets. Galaxy Digital explained that energy usage by the traditional financial industries was harder to assess because the institutions don’t submit data on electricity consumption.

The author of the report was keen to acknowledge that the Bitcoin network consumes a lot of energy, adding that the energy consumed was vital in making the network robust. According to the calculations presented by Galaxy Digital, Bitcoin consumes 113.89 TWh per year. To put this into context, the cumulative energy used by always-on devices annually in the US is estimated to be 1,375 TWh. Bitcoin’s annual electric consumption figure is about twelve times less.

In the case of Gold, the author managed to find a workaround for estimation by evaluating all the processes involved. The author arrived at a rough figure of 240.61 TWh/year, which is more than twice the figure recorded by Bitcoin.

The report considered various aspects for the banking industry, including Automated Teller Machines, card network data centers, banking data centers, and bank branches. Based on the analysis, the average power consumption was noted to be 238.92 TWh/year — slightly less than that of Gold.

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