crypto news

How Crypto Twitter reacted to Kim Kardashian’s $1.26M SEC fine

The crypto community reacted with a mix of disbelief and amusement after reality star Kim Kardashian was fined for promoting the cryptocurrency EthereumMax (EMAX). 

The United States Securities and Exchange Commission (SEC) fined Kardashian $1.26 million on Oct. 3, for “touting on social media” about the EMAX without disclosing she was paid $250,000 to post about it.

Kardashian has neither admitted to nor denied the SEC’s allegations, but settled the charges and agreed to not promote any cryptocurrency assets until 2025.

SEC chairman Gary Gensler tweeted the fine was a reminder that celebrity endorsement of investment opportunities doesn’t “mean those investment products are right for all investors.”

Following Gensler’s tweet, the online crypto community expressed their thoughts on the fine, with some calling out the SEC for its inconsistent enforcement decisions. 

Economist Peter Schiff, known for his anti-Bitcoin (BTC) stance, pointed out what he perceived was an unfair targeting of Kardashian as the SEC hasn’t fined MicroStrategy co-founder Michael Saylor who he believes has “more to gain pumping crypto.”

Saylor responded saying Bitcoin isn’t a security but a commodity and its promotion would be “similar to promoting steel…or granite” and the coin’s open protocol offers “utilitarian beliefs similar to roads.”

Crypto-personality and author Layah Heilpern shared she believed “the SEC has bigger issues closer to home it should probably focus on…” likely inferring the widely held belief in the community that certain U.S. politicians have inside traded.

Pseudonymous developer 0xBender noted a contrast between the SEC’s heavy-handed treatment of crypto promotions from celebrities, while crypto-centric influencers “have been out here shilling you garbage for 0.2 ETH (Ethereum) a tweet.”

Others such as former federal prosecutor Renato Mariotti said influencers thinking to endorse cryptocurrencies should “take note” as the regulator is showing it will “aggressively pursue enforcement actions” and those who promote crypto without considering the laws will “need to find a good lawyer.”

Meanwhile, Ethereum educator and investor Anthony Sassano told his followers he believes the SEC targeted Kardashian because it creates the illusion the regulator is “doing something” about crypto scams, and suggested it should’ve targeted the creators of EMAX instead.

Related: The SEC is bullying Kim Kardashian, and it could chill the influencer economy

Still, some saw the lighter side of investing in a tumultuous and highly speculative crypto token, with journalist Tyler Conway saying the star “got the full crypto experience” by losing more money than she’d been paid.

Self-described hacker and tech content creator Marcus Hutchins said Kardashian “would have gotten better returns” in EthereumMax as it’s down 97% since her post, compared to the -80% the promotion returned for her.

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Covalent CEO: There’s an ‘unresolved backlog’ of unfilled Web3 data roles

Ganesh Swami, CEO of blockchain data aggregator Covalent says there continues to be an “intense demand” for on-chain data analysts, that is yet to be satisfied. 

Speaking to Cointelegraph, Swami said that analysts are in “intense demand” as there’s a “real need” for data experts to “make sense” of on-chain data, explaining:

“There is an unresolved backlog of unfilled data-driven roles. This demand is a testament to how eager blockchain and non-blockchain companies alike are to make sense of their own and competitors’ on-chain data.”

Swami explained that while the demand for on-chain data analysts has yet to eclipse their Web2 counterpart, the growth of stablecoin usage, lending, and decentralized finance (DeFi) products over the last 18 months has led to increasing demand for the job title.

Swami said similar to data analysts in traditional industries, on-chain data analysts can expect to analyze a company’s “reach, retention and revenue” metrics, except, in this case, the intelligence would be found on-chain data across multiple blockchains.

For example, in the case of an NFT project, Swami explained that «reach» would look into “how many people mint your tokens” and «retention» would relate to “what is the average holding period for these tokens» which is important to know whether investors are using these for “quick flips” or “holding on to them” long term.

«Revenue» is about sales — with blockchain analysts able to determine whether the sales are “concentrated through a handful of sales or distributed across multiple collections,» he explained. 

But the role doesn’t e there. Swami said that “to make better protocols and better serve users,” on-chain analysts can “cross-target users for marketing purposes or for user acquisition purposes” by reviewing what’s happened on competitor protocols, as the blockchain leaves what Swami likes to call “historical breadcrumbs.”

Swami also predicted that “Web3 data will exceed Web2 data” at some point in the next 20-30 years, and that Web3 data analysis “will be much, much bigger than the current business intelligence market, which is currently worth hundreds of billions of dollars.”

Addressing the current deficit of on-chain analysts, Covalent is set to launch a four-week “Data Alchemist Boot-Camp” on Oct. 19, which aims to train over 1,000 individuals in on-chain analytics.

“The only prerequisite to joining our Data Alchemist Boot-Camp is a desire to learn about Web3; come with that, and we’ll pay you to learn,” said Swami.

Related: Six helpful tips for Web3 companies searching for top data analysts

Over the near term, however, Swami said on-chain analysts will likely find more job opportunities in Web2 companies which are entering Web3, rather than Web3 native projects themselves:

“It will be faster and better for a Web2 company with their hundreds of millions of players or users to add over Web3 experiences, and what we can see, immediately what we have a line of sight to is Web2 businesses, adding a Web3 experience.”

“Companies such as Adidas and Samsung also now have departments of metaverse data scientists and analysts to serve the dashboards and metrics management,” he added.

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The SEC is bullying Kim Kardashian, and it could chill the influencer economy

The Securities and Exchange Commission announced on Oct. 3 that Kim Kardashian settled an allegation that she promoted “a crypto asset security offered and sold by EthereumMax without disclosing the payment [of $250,000] she received for the promotion.” While she cooperated and closed the case with $1.26 million in penalties, the charge highlights the liability that “influencers” increasingly face as a result of an activist SEC that has failed to establish regulatory clarity.

Pushing influencers to leave the United States

Addressing the agency’s action against Kardashian, Jacob Robinson, a legal scholar and host of the Law and Code podcast, noted that “The net-positive is [that] this probably leads to less shilling by celebs who have zero knowledge of the underlying project & are just receiving a big payday.”

Thanks to the proliferation of social media platforms, content creators and influencers have emerged and are working with brands to promote products and services. Sadly, the “creator economy” has also had downsides. In particular, influencers have often sold products and services that may not serve everyone’s interests, accepting payment from companies in exchange for their support.

While that privilege can be, and often is, abused, influencers are not doing anything systematically different than what corporations do when they take out paid advertisements in the media and on television, or even when board members join and take on a retainer to share their network and promote an organization. When a corporation takes out an ad in a large paper or magazine, such as The New York Times or Vogue, are the media outlets equally liable for not disclosing their acceptance of payment to all the readers? Clearly not, and the media’s business model would quickly crumble if they were unable to accept such paid advertising opportunities.

Related: Biden’s anemic crypto framework offered nothing new

So, why are influencers treated so differently, and why can they personally be liable and targeted by a federal agency? Consider the car market: If a used car salesperson sells a customer a car that is later recalled or turns out to have some other flaw, are they singled out by a regulatory agency? The car company might be — as we have seen with Volkswagen, Toyota and others over the years — but the individual employee is generally free from such liability.

The SEC’s action against Kardashian risks alienating and stifling other members of the creator economy. While she can “afford” the $1.26 million fine — a little more than $1 million in excess of what she earned — many content creators are not making six-figure-plus salaries each year. The action also threatens to push many content creators outside the United States to countries that have more favorable policies.

Defining securities and liability

The SEC has adhered to an old Supreme Court ruling from 1946, SEC v. W. J. Howey Co., which led to what is now known as the “Howey test.” The Howey test defines an “investment contract” if the following conditions are met: 1) an investment of money 2) in a common enterprise 3) with the expectation of profit 4) derived from the efforts of others.

The test, however, was introduced in an entirely different economy than the one we have today. To be sure, many projects that involve the release of fungible tokens easily fall into the category of a security regardless of how liberal one wants to be with the definition. But other projects, especially nonfungible token projects, are in a much grayer area. Many NFT projects do not convey any expectation of profit to their potential holders but rather emphasize perks and exclusive access to events, classes or deals.

Related: Get ready for the feds to start indicting NFT traders

Admittedly, the SEC’s recent regulatory action went after Kardashian for her promotion of EthereumMax (EMAX) without disclosing that she had received payment rather than for EthereumMax being a security, as it was arguably an easier, more clear-cut case. But the case highlights a major challenge influencers will inevitably face in the Web3 economy if they have to worry about regulatory risk against themselves for promoting different projects, even if they just make a social media post.

Other countries are taking a vastly different approach toward Web3. For example, the United Arab Emirates has gone on record saying that it wants its economic success to be measured according to its “gross metaverse product” rather than the conventional gross domestic product that has become the norm for cross-country comparisons in productivity. The UAE, among others (such as Singapore), has become a hub for entrepreneurs and startups.

What happened to Kardashian could happen to others

If the regulatory concern is that influencers are abusing their authority by promoting products and services without disclosing receipt of compensation, then Web3 lends itself perfectly through greater transparency and accountability on the blockchain. In particular, influencers could have their digital wallets open for viewing so that their remuneration is open and their own purchases visible. (There is still a need for privacy-preserving blockchains since everything in everyone’s lives should not be on full display, but with the blockchain, there is much more potential for transparency and accountability where it matters.)

Web3 also allows content creators to receive payment for their creative content without having to rely as much on centralized entities for brand deals and partnerships. NFTs, for instance, allow artists to transform audiences into communities that engage with their content directly.

What happened to Kardashian could have happened to several influencers. While regulatory actions without penalties admittedly do not have much bite — and often, such penalties are needed to signal that an agency is serious — an alternative strategy would have been to reach out to Kardashian and galvanize support among a body of influencers to establish stronger, more transparent norms around the promotions of products and services, particularly crypto projects that could be classified as securities. Such an approach is more collaborative and would contribute to establishing shared norms and best practices among crypto enthusiasts.

Christos Makridis is an entrepreneur, economist and professor. He serves as chief operating officer and chief technology officer at Living Opera, a Web3 multimedia startup, and holds academic appointments at Columbia Business School and Stanford University. Christos also holds doctorates in economics and management science from Stanford University.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. 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. The author was not compensated by any of the projects cited in this piece.

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a16z leads $40M raise for decentralized knowledge protocol

Decentralized knowledge protocol Golden has closed a $40 million funding round led by venture firm Andreessen Horowitz, or a16z, with additional participation from Protocol Labs, OpenSea Ventures and the founders of Solana, Dropbox, Postmates and Twitch, among others. 

In addition to leading the Series B funding round, Andreessen Horowitz’s general partner Ali Yahya will join Golden’s board alongside a16z cofounder Marc Andreessen. The funding gives Golden additional resources to continue building its protocol, which is designed to standardize the discovery and verification of knowledge in the era of Web3.

Specifically, Golden is developing a decentralized interface that incentivizes collecting and verifying canonical data. The company claims that over 35,000 users participated in early testnet phases of the protocol.

Related: Microsoft, Avalanche, Polygon join $20M funding of Web3 automation startup

While venture financing for the crypto industry has slowed recently, 2022 has seen record inflows for blockchain-focused startups. Recently, hedge fund Pantera Capital upped the ante by disclosing plans to raise $1.25 billion for its second blockchain fund. Projects specializing in Web3, which refers to some future iteration of the internet, have attracted outsized interest from the venture capital community.

In describing its product, Golden said that incorporating Web3 technologies is “well suited to solve the core problems” of incentivization. Golden plans to use native tokens for rewarding ‘good actors” but also specified that the final product is “not simply ‘Web3 Wikipedia’.” The mainnet is scheduled for release in the second quarter of 2023.

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US Treasury recommends lawmakers decide which regulators will oversee crypto spot market

Officials with the United States Financial Stability Oversight Council, or FSOC, have recommended U.S. lawmakers pass legislation to determine which “rulemaking authority” will be responsible for regulating parts of the crypto spot market.

In an Oct. 3 meeting of the FSOC, Jonathan Rose, a senior economist at the Federal Reserve Bank of Chicago, said the FSOC had released a report in accordance with President Joe Biden’s executive order on crypto, detailing potential financial stability risks of digital assets and regulatory gaps. The report identified regulatory gaps including the spot market for cryptoassets that were not securities subject to “limited direct federal regulatory” — hinting at lawmakers stepping in to prevent possible market manipulation and conflicts of interest.

“While some firms in the crypto asset ecosystem have attempted to avoid regulation, other firms have engaged with the existing regulatory system by obtaining trust charters or special state-level cryptoasset-specific charters or licenses,” said Rose. “The report recommends the passage of legislation in providing a rulemaking authority for federal financial regulators over this [spot] market.”

According to Rose, cryptocurrencies could present financial stability risks to the U.S. economy “under certain conditions” — including growth without corresponding regulatory checks and balances. He also mentioned crypto firms operating through affiliates or subsidiaries, seemingly obfuscating offerings in the eyes of regulators, and whether companies should be allowed to offer services through intermediaries, including “broker dealers and futures commission merchants.”

In a prepared statement for the council meeting, Treasury Secretary Janet Yellen said:

“These reports provide a strong foundation for policymakers as we work to mitigate the risks of digital assets while realizing the potential benefits. They also provide a valuable addition to the public’s understanding of digital assets.”

The council’s recommendations seemed to suggest that the Commodity Futures Trading Commission, or CFTC, could be one of the regulators given authority over the crypto spot market. U.S. lawmakers have already introduced bills aimed at clarifying the roles of the Securities and Exchange Commission and CFTC over crypto. Many in the space have also criticized the two bodies for taking a “regulation by enforcement” approach to digital assets, seemingly in an attempt to gain regulatory control over the market without legislation going through Congress.

Related: Blockchain Association calls White House’s crypto framework a ‘missed opportunity’

On Oct. 3, the SEC announced it had charged celebrity Kim Kardashian $1.26 million for «touting on social media a crypto asset security offered and sold by EthereumMax» without disclosing any payment she had received for the promotion. In May, a federal court ordered the three co-founders of crypto derivatives exchange BitMEX to pay $30 million in civil monetary penalties as part of a CFTC case in which the regulator said the individuals violated aspects of the Commodity Exchange Act.

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A crumbling stock market could create profitable opportunities for Bitcoin traders

Some of the biggest companies in the world are expected to report their 2Q earnings in October, including electric automaker Tesla on Oct. 18. Tech giants Meta and Microsoft on Oct. 24, Apple and Amazon on Oct. 26, and Google on Oct. 30. Currently, the possibility of an even more severe global economic slowdown is on the cards and lackluster profits could further add to the uncertainty.

Given the unprecedented nature of the U.S. Federal Reserve tightening and mounting macroeconomic uncertainties, investors are afraid that corporate profitability will start to deteriorate. In addition, persistent inflation continues to force businesses to cut back on hiring and adopt cost-cutting measures.

Strengthening the dollar is particularly punitive for U.S. listed companies because their products become more expensive in other countries and the reduced revenue brought in from overseas negatively impacts the bottom line. Google, for instance, is expected to grow revenues by less than 10%, down from a 40% growth in 2021.

The companies that comprise the S&P 500 account for an aggregate $32.9 trillion in value and crypto investors expect some of those bets to enter Bitcoin (BTC) if earnings season fails to sustain a modest growth — signaling the stock market should continue to underperform.

From one side, traders face the pressure from Bitcoin’s correlation to equities, but on the other hand, BTC’s scarcity might shine as inflation concerns arise. This possibly creates an immense opportunity for those betting on a BTC price rally, but extreme caution would also be needed for those opening positions.

Risk averse traders could use futures contracts to leverage their long positions but they also risk being liquidated if a sudden negative price move occurs ahead of the corporate earnings calendar. Consequently, pro traders are more likely to opt for options trading strategies such as the «long butterfly.»

By trading multiple call (buy) options for the same expiry date, traders can achieve gains 3 times higher than the potential loss. This options strategy allows a trader to profit from the upside while limiting losses.

It is important to remember that all options have a set expiry date, so the asset’s price appreciation must happen during the defined period.

A cautionary approach to using call options

Below are the expected returns using Bitcoin options for the Oct. 28 expiry, but this methodology can also be applied using different time frames. While the costs will vary, the general efficiency will not be affected.

Profit / Loss estimate. Source: Deribit Position Builder

This call option gives the buyer the right to acquire an asset, but the contract seller receives (potential) negative exposure. The «long butterfly» strategy requires a short position using a call option, but the trade is hedged on both sides — limiting the exposure.

To initiate the execution, the investor buys 13 Bitcoin call options with a $20,000 strike and sells 24 contracts of the $23,000 call. To finalize the trade, one would buy 10.5 BTC contracts of the $26,000 call options to avoid losses above such a level.

Derivatives exchanges price contracts in BTC terms, and $19,222 was the price when this strategy was quoted.

Using this strategy, any outcome between $20,690 (up 7.6%) and $26,000 (up 35.3%) yields a net profit — for example, the optimal 20% price increase to $23,000 results in a 1.36 BTC net gain, or $24,782 at current levels. Meanwhile, the maximum loss is 0.46 BTC or $8,382 if the price on Oct. 28 expiry happens below $20,000.

The «long butterfly» strategy provides a potential gain that is 3 times larger than the maximum loss.

Overall, the trade yields a better risk-to-reward outcome than leveraged futures trading, especially considering the limited downside. It certainly looks attractive for those expecting deteriorating business conditions for listed companies.

It is worth highlighting that the only up front fee required is 0.46 BTC, which is enough to cover the maximum loss.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Binance burns $1.8M in LUNC trading fees following community proposal

Cryptocurrency exchange Binance has announced it completed the first burn of Terra Classic tokens’ trading fees in response to a community proposal from September.

In an Oct. 3 update, Binance CEO Changpeng Zhao said the exchange had burned roughly $1.8 million worth of Terra Classic (LUNC) — formerly Terra (LUNA) — trading fees for LUNC/BUSD and LUNC/USDT spot and margin trading pairs. According to Binance, the burn included the equivalent of 1,863,213.47 Tether (USDT) — roughly 5.5 million LUNC.

The exchange’s original announcement from Sept. 26 said the burns would be completed every Monday — making the next event on Oct. 10 — sending trading fees to a LUNC burn address. Many in the Terra community proposed the burn strategy as part of efforts to revive LUNC, whose price dropped to almost zero in May and briefly surging by more than 250% in September.

Related: Do Kwon shares LUNA burn address but warns ‘LUNAtics’ against using it

Terraform Labs co-founder Do Kwon, whom many in the crypto space want held to account for his role in Terra’s collapse, has been targeted by South Korean authorities for allegedly violating the country’s capital markets laws. A warrant has been issued for his arrest and Interpol added Kwon’s name to its Red Notice list, requesting local law enforcement — many have suggested he may be in Singapore — detain the Terra co-founder. At the time of publication, Kwon’s whereabouts are unknown, but he said on Twitter on Sept. 26 he was “making zero effort to hide.”

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Cathie Wood’s ARK Invest to offer crypto strategies to investment advisors

Cathie Wood’s investment firm, ARK Investment, is making its two actively managed crypto strategies available to registered investment advisors. The strategies will be available as separately managed accounts (SMA) through a collaboration with the digital asset platform Eaglebrook, the companies announced on October 3. 

The ARK Cryptocurrency Strategy aims to capitalize on the monetary revolution, said the companies in the statement, claiming that it «could serve as a strategic allocation in well-diversified portfolios.»

Cathie Wood, ARK’s founder and CEO, said:

«The strategies will be separately managed accounts (SMAs) designed to meet the needs of financial advisors, wealth managers, and their clients by offering direct ownership, low minimums, and portfolio reporting integration among other benefits.»

This collaboration should allow Ark to expand its services beyond exchange-traded funds (ETFs). An SMA is a portfolio created by a financial advisor or investment firm for a single investor. On ETFs, investors own shares of the fund instead of the underlying securities. 

The top-tier fund at ARKs, the Ark Innovation ETF, seeks long-term growth of capital by investing in disruptive innovation companies, according to its official website. It has $7.946 billion under management and was down 60.11% as of Sept. 30, while the S&P 500 declined 23.87% and the BTC price dipped over 58% in 2022. Wood is known for being a big Bitcoin (BTC) believer, who predicted that BTC would hit $1 million by 2030.

Yassine Elmandjra, ARK’s cryptoasset analyst, said in the statement the «much of the speculative behavior has died down». She added that the moment «presents an attractive entry point for investors.»

Ark sold over 1.4 million Coinbase (COIN) shares through three of its funds in July as regulators probed the firm for alleged insider trading. At that time, the firm was one of Coinbase’s largest shareholders.

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Upside capped at $980B total crypto market, according to derivatives metrics

It is becoming increasingly challenging to support a bullish short-term view for cryptocurrencies as the total crypto market capitalization has been below $1.4 trillion for the past 146 days. Furthermore, a descending channel initiated in late July has limited the upside after two strong rejections.

Total crypto market cap, USD. Source: TradingView

The 1% weekly negative performance in cryptocurrency markets was accompanied by stagnation in the S&P 500 stock market index, which remained basically flat at 3,650. Uncertainty continues to limit the eventual recovery as worsening global economic conditions have caused trans-Pacific shipping rates to plunge 75% versus the previous year, forcing ocean carriers to cancel dozens of sailings.

Conflicting macroeconomic signals limit risk market upside

From one side, the global macroeconomic scenario improved after the United Kingdom’s government reverted plans to cut income taxes on Oct. 3. On the other hand, investors’ fear increased as global investment bank Credit Suisse’s credit default swaps reached their highest level on Oct. 3. Such instruments allow investors to protect against default, and their cost surpassed levels seen at the height of the 2008 financial crisis.

Below is a list of the winners and losers of the crypto market capitalization’s 1% loss to $935 billion. Bitcoin (BTC) stood out with a 1% gain, which led its dominance rate to hit 41.5%, the highest since Aug. 5.

Weekly winners and losers among the top-80 coins. Source: Nomics

Quant (QNT) jumped 15% on speculation that its interoperable blockchain protocol would find adoption across governmental and regulatory bodies.

Maker (MKR) gained 10.6% after MakerDAO launched a proposal to decrease the stability fee for the Curve protocol staked Ether (ETH) pool.

UniSwap Protocol (UNI) gained 10.6% after UniSwap Labs, a startup contributing to the protocol, reportedly raised over $100 million from venture capitalists.

Still, a single week of negative performance is not enough to interpret how professional traders are positioned. Those interested in tracking whales and market markers should analyze derivatives markets.

Derivatives markets point to further downside

For instance, perpetual futures, also known as inverse swaps, have an embedded rate usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.

Accumulated 7-day perpetual futures funding rate on Oct. 3. Source: Coinglass

Perpetual contracts reflected neutral sentiment as the accumulated funding rate was relatively flat in most cases over the past seven days. The only exception was Ether Classic (ETC), although a 0.50% weekly cost to maintain a short (bear) position should not be deemed relevant.

Since Sept. 26, the yields on the U.S. Treasury’s 5-year notes declined from 4.2% to 3.83%, indicating investors are demanding fewer returns to hold extremely safe assets. The flight-to-quality movement shows how risk-averse traders are as mixed sentiment emerges from lackluster economic indicators and corporate earnings.

For this reason, bears believe that the prevailing longer-term descending formation will continue in the upcoming weeks. In addition, professional traders’ lack of interest in leveraging cryptocurrency longs (buys) is evident in the neutral futures funding rate. Consequently, the current $980 billion market capitalization resistance should remain strong.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin price sets October high with $20K in reach as US stocks rally

Bitcoin (BTC) climbed to new October highs at the Oct. 3 Wall Street open as Credit Suisse concerns heightened. 

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Traders close in on rangebound BTC

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD taking aim at $19,500 after starting the month flat.

The largest cryptocurrency reacted positively to lower than expected United States manufacturing data, while in Europe, market turmoil over Credit Suisse gathered pace despite executives’ reassurances.

“We are kicking off October trading in the same congested area we ended September,” on-chain analytics resource Material Indicators wrote in one of several updates on the day.

“The 21 DMA is behaving like a ceiling on BTC price, but expect it to be retested soon. Need it to do so for any shot at reclaiming the 20s.”

Material Indicators was referring to Bitcoin’s 21-day moving average (MA) at around $19,400, this now potentially coming in for a resistance/ support flip.

BTC/USD 1-day candle chart (Bitstamp) with 21MA. Source: TradingView

A further post revealed a proprietary trading indicator flashing “long” on daily timeframes, increasing hopes that bulls would be able to tackle the $20,000 mark.

Analyzing the behavior of derivatives traders, however, William Clemente, co-founder of digital asset research and trading firm Reflexivity Research, warned that long positions were too eager to confirm a trend change.

“Important to monitor the BTC derivatives market. For the time being, longs have been piling in on every move up in price,” he explained.

“This is not what we want to see for a full on trend reversal (similar to the end of July 2021). We want to see participants conditioned to ‘fade’ rallies.”

Order book data from Binance, the largest exchange by volume, meanwhile showed BTC/USD acting in a tight range bordered by sellers at $19,500 and bid interest around $19,150.

Below that, support lay at $18,800 at the time of writing.

BTC/USD order book data chart (Binance). Source: Material Indicators/ Twitter

U.S. stocks make up losses as dollar cools

Turning to the macro situation, U.S. Purchasing Managers Index (PMI) data coming in below expectations pressured bond yields.

Related: BTC price still not at ‘max pain’ — 5 things to know in Bitcoin this week

At the same time, oil and silver, in particular, gained, while on equity markets, the S&P 500 and Nasdaq Composite Index were 1.8% and 1.3%, respectively.

“Coming week more PMI data, unemployment and job openings will be coming in. The turn in markets? Seems like it,” Michaël van de Poppe, CEO and co-founder of trading firm Eight, responded as part of market commentary.

Van de Poppe additionally described Bitcoin’s current trading range as “ultra boring” while hoping that crypto would copy silver’s performance.

The U.S. dollar index (DXY), a classic headwind for crypto, slid below 112 points on the day.

U.S. dollar index (DXY) 1-day candle chart. Source: TradingView

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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NYDIG raises $720M as Bitcoin balance hits all-time high

The bear market has not deterred one of the biggest Bitcoin (BTC) bulls. The balances of the New York Digital Investment Group, or NYDIG, hit record highs in Q3 of this year. Plus, a United States Securities and Exchange (SEC) filing could reveal the group’s intent to add more Bitcoin to its balance sheet. 

According to a press release, NYDIG’s Bitcoin balances are “up almost 100% year-over-year, and revenue is up 130% through Q2, with another increase when the firm closes its books on Q3.” The company HODLs more Bitcoin than ever despite Bitcoin continuing to tread lower and lower over the course of 2022.

Furthermore, according to an amended SEC filing, the group has raised $720 million for its institutional Bitcoin fund. Fifty-nine investors contributed an average of more than $12 million each to the raise.

The filing states that the SEC has “not necessarily reviewed the information in this filing and has not determined if it is accurate and complete.” 

NYDIG offers cold storage custody solutions to institutional investors and high-net-worth individuals. Describing itself as a “Bitcoin company,” the group has endured several exchange-traded fund rejections by the SEC.

Related: Institutional appetite continues to grow amid bear market — BitMEX CEO

The group continues to promote all aspects of Bitcoin adoption, recently allowing participating companies to receive salaries in Bitcoin. The recent press release highlighted a newfound emphasis on the Lightning Network, stating “Now it’s time for Lightning.»

NYDIG’s move to promote Lightning Network development follows that of business intelligence firm Microstrategy. Michael Saylor, the group’s executive chairman, recently announced job postings for LN developers.

A shakeup in NYDIG’s leadership accompanied the news. Tejas Shah and Nate Conrad take on the roles of CEO and president, respectively, as the departing CEO, Robert Gutmann, and outgoing president, Yan Zhao, step down but remain at Stone Ridge Holdings Group, the parent company to NYDIG.

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XRP price could rally by 50% based off comments from a former SEC director

XRP is hoping that the token could see a massive price rally in 2022 based off the fingers-crossed assumption that Ripple will win its long-running legal battle against the U.S. Securities and Exchange Commission (SEC).

Hinman documents to save XRP bulls?

On Sep. 29, the district court judge in the case, Judge Analisa Torres, ordered the commission to release the documents penned by William Hinman, the former director of the corporation finance division at the SEC. 

Hinman may have written about Ether (ETH), the native token of the Ethereum blockchain, not being a security in the concealed documents, believes Ripple. That is primarily because Hinman had proclaimed the same in his speech at the Yahoo Finance All Markets Summit in June 2018.

Ripple’s defense could use Hinman’s writing as evidence that its blockchain’s native token, XRP, should not be treated as a security, opposite to what the SEC claims in the lawsuit filed in December 2020.

XRP has since been ousted from many regulated crypto exchanges, including Coinbase and Bitstamp. As a result, it is now among the only top cryptocurrencies that have neither reclaimed nor established a record high during the 2020-2021 crypto market boom, reflecting caution from investors.

Some might argue, that from the vantage point of technical analysis, XRP price remains undervalued compared to other top-ranking cryptocurrencies. And a Ripple win might change that, given the token rallied 20% in a day after Judge Torres’s order.

Related: CFTC commissioner proposes office focused on retail crypto investors

Resistance and confluence

From a technical standpoint, XRP is one breakout away from posting a 50% price rally.

Notably, the token now tests a resistance confluence of one multi-year descending trendline resistance, a flipped support bar, and a Fibonacci line — all pivoting near $0.57. A Ripple win could help XRP break decisively above this confluence.

XRP/USD weekly price chart. Source: TradingView

Such a breakout could have XRP eye a run-up toward the next Fib line near $0.72, up over 50% from today’s price. Conversely, a pullback could crash XRP to its previous support level of $0.31, down 35% from the current price levels.

«$XRP is basically a court case play,» noted independent market analyst DonAlt, adding:

«If they win the whole case $XRP giga pumps. if they lose it’ll be a nice -50% candle. Also, an $XRP loss would make other cryptos more vulnerable to attack, so you better cheer them on.»

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Japanese prime minister says gov’t investment in digital transformation will include metaverse, NFTs

Fumio Kishida, the prime minister of Japan since 2021, has said the government will be making efforts to promote Web3 services, including those dealing with nonfungible tokens, or NFTs, and the metaverse.

In an Oct. 3 speech before Japan’s National Diet, Kishida said the government’s investment in the country’s digital transformation had already included issuing NFTs to local authorities using digital technology to solve challenges in their respective jurisdictions, and hinted at digitizing national identity cards. In addition, the prime minister said the cabinet would “promote efforts to expand the use of Web 3.0 services that utilize the metaverse and NFTs.”

Prime Minister Fumio Kishida addressing Japan’s National Diet on Oct. 3. Source: 日テレNEWS

Kishida said Japan’s technological investments would extend to developing and producing semiconductors as part of a joint effort with the United States and work on reform regulations related to the technology sector. The current prime minister, who took office in October 2021, followed former Prime Minister Yoshihide Suga, who suggested he was in favor of taxing Bitcoin (BTC) transactions in Japan.

Related: Japan’s crypto self-regulation ‘experiment’ not working

During Kishida’s time in office, crypto users in Japan have likely seen a number of developments in the space, from Mt. Gox moving forward on repayment procedures after years of legal delays and the reintroduction of crypto ATMs in the country. In August, two of the country’s crypto advocacy groups, the Japan Crypto-Asset Business Association and the Japan Crypto-Asset Exchange Association, called for a 20% separate tax on crypto earnings for individual investors — many currently face a crypto tax rate of up to 55%.

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What remains in the NFT market now that the dust has settled?

Over the last two years, nonfungible tokens (NFTs) have emerged as one of the most active and noticeable aspects of Web3.

The data stored on blockchains by NFTs may be connected with files that include various forms of media, such as photographs, videos and audio. In certain instances, it can even be related to physical items. The owner of an NFT will often have ownership rights over the data, material or item connected with the token, and these tokens are typically purchased and traded on specialized markets. The rise of NFTs was meteoric in 2021, but it hasn’t been very steady since then, and it seems to have fallen sharply in 2022

Why NFTs exploded in popularity in 2021

In 2021, two of the most active markets for NFTs were collectible art projects and the video game industry. NFTs have ushered in a new era of video gaming, which has resulted in the proliferation of new types of games, such as blockchain-based play-to-earn games that provide players with in-game benefits. Users now have the opportunity to own in-game assets for the first time and make a possible profit from such assets by trading them on NFT platforms like OpenSea.

Axie Infinity, a game that included both NFTs and its own native cryptocurrency, became the most popular crypto game overall. Axie’s NFT market reached a milestone of $1 billion in total trading volume. In addition, the game accounted for two-thirds of blockchain-game NFT transactions in 2021, according to a report covered by Cointelegraph in March this year.

The gaming industry can help to bring NFTs into the mainstream due to their massive popularity. Pavel Bains, executive producer of Mixmob — a card strategy racing game — told Cointelegraph:

“NFTs within crypto gaming are a massive tool, probably one of the top three driving forces in crypto mainstream adoption. Right now, the biggest roadblock we’re facing is that the games aren’t very fun to play. Some will say, ‘Oh, the onboarding experience is bad… Using a crypto wallet isn’t ideal. You need to abstract it away.’ I don’t believe that. Kids will go through pain to get what they want if it’s fun.”

Fear of missing out also seemed to play a major role, with the massive success of picture-for-proof collections like the Bored Ape Yacht Club (BAYC) soaring from a mint price of $300 to up to $3.4 million for a rare golden ape.

No matter what it is, there are usually two types of adopters: those who see the potential in a trend and are willing to stick with it and those who join in because everyone else is doing it. NFTs are no different.

How NFTs have fared in 2022

NFT sales stayed fairly strong in the first half of 2022, with crypto users spending $2.7 billion on minting NFTs during that period. However, despite a strong start to the year, there have been some negatives within the NFT space.

Earlier this year, the floor prices for BAYC dropped below $100,000, only to recover, with the cheapest Bored Ape recently selling for 73 Ether (ETH) ($125,000) on OpenSea.

Recent: Music NFTs a powerful tool to transform an audience into a community

This year also saw users losing their Bored Apes due to user error. “Fat finger” errors have led to Bored Apes worth hundreds of thousands being sold for far less. For example, Ape #835 sold for 115 Dai on March 28 this year, with Ape #6462 selling for 200 USD Coin (USDC) on May 15.

In September, daily NFT trading volume on OpenSea was down nearly 99% from its May 1 peak of $405.75 million, with a daily volume of $10.29 million at publishing time. When it comes to individual collections, BAYC currently has a daily trading volume of only $400,000, according to DappRadar. According to the decentralized application explorer, CryptoPunks has no trading volume as of 7:20 a.m. UTC Oct. 3.

Due to current market conditions, one can expect to see fluctuations in the value of NFT projects, according to experts. Yaroslav Shakula, CEO of Yard Hub — a framework for NFT, Web3 and blockchain entrepreneurial ideas — told Cointelegraph:

“NFTs have surely been affected by the bear market but, in many cases, less severely than classic crypto and altcoins. What will happen next depends on the global political and macroeconomic situation. All tech stocks and risky assets are now tanking against the U.S. dollar, so in a short- and mid-term period, one might expect fluctuations in NFT prices as well.”

Despite these low volumes, NFTs continue to enjoy significant visibility.

Many people may have noticed a dramatic increase in the amount of people’s profile pictures on Instagram and Twitter that include a monkey, bear or other NFT image.

In January this year, Twitter announced that users would be able to officially use NFTs as their profile pictures via Twitter Blue. The premium, subscription-based version of Twitter allows users to connect their wallets and post a hexagon-shaped profile picture once an NFT is connected. Meta quickly followed Twitter’s lead and implemented a similar feature for Instagram and Facebook.

Celebrities continue to be involved in the NFT space, with Snoop Dogg recently collaborating with Mobland, a mafia-themed metaverse, to create digital weed farm NFTs. The weed farms were developed as a part of NFT 3.0, the third generation of NFTs.

The future of NFTs 

Not only do some industry professionals feel that the NFT market will continue to exist, but they also anticipate that it will continue to expand and play an increasingly crucial role in the digital economy. According to a report covered by Cointelegraph, the NFT market could be worth $231 billion by 2030. This is due to continued adoption within the video game, music, art and digital collectible industries.

Shakula is bullish on NFTs for the long-term, telling Cointelegraph, “In the long-term, NFTs definitely look good — I’m sure they have a big future. This technology opens many new opportunities, even for classic businesses and common users. They can be used for tokenizing assets and providing them to employees as perks and benefits.”

Experts also believe that our lives will become more virtual in the coming years. It’s possible that in the near future, people will be able to carry out their daily activities within a virtual space, using virtual assets. Essentially, this will represent the creation of a metaverse in which everything is transformed into an NFT token. Although it is unknown how this will coexist with our physical life in the “real world,” the revolution is already well on its way to being realized.

Recent: Terra could leave a similar regulatory legacy to that of Facebook’s Libra

Some experts believe that NFTs will soon reach mainstream status. Jack Vinijtrongjit, CEO of AAG — a Web3 development firm — told Cointelegraph, “NFTs are evolving from just being a collectible and speculative tool to real world use cases, such as identity and customer relationship management. We can already see companies like Starbucks using it as a replacement for their membership card and universities issuing NFTs for a diploma. I believe we are about to see NFTs moving from niche to mainstream as the result.”

The reaction of the video game industry to the introduction of NFTs has been the subject of much conjecture. Although some businesses are currently delivering digital assets as a part of blockchain games like Ember Sword, the widespread adoption of this technology has not yet occurred in the gaming community, leading many specialists to wonder how or even whether they will take off in the mainstream gaming industry.

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Bitcoin Lightning Network capacity strikes 5,000 BTC

Bear markets are for building out capacity on the layer-2 Lightning Network. Despite macroeconomic headwinds and sluggish price action the Lightning Network, the layer-2 payments solution on Bitcoin (BTC) continues to flourish.

The Bitcoin Lightning Network reached a milestone capacity of 5,000 BTC ($96 million). In effect, more and more Bitcoin is being introduced to Lightning Network payment channels worldwide, as Bitcoiners continue to support the growth of the network.

Bitcoin Lightning Network capacity. Source: Look into Bitcoin

The Lightning Network allows users to send Bitcoin (or satoshis, the smallest amount of a Bitcoin) to send or receive money faster and with lower fees. The more capacity on the network, the more liquidity is on hand. As a result, users can experience faster payment speeds and potentially larger transaction volumes. 

First created in 2018, the Lighting Network has come under fire recently. Bitcoin influencers such as Udi Wertheimer have discussed the network’s “failure,” claiming that no one uses the network. Nonetheless, the network hit 4,000 BTC capacity in June and over the past four years it has become a reliable payment networt, popular in El Salvador, the Isle of Man and Gibraltar:

Nourou of Bitcoin Senegal explains why the LN is so important. He told Cointelegraph, «In Senegal, we have an economy of 50 FCFA. That is to say that the Senegalese of the working and proletarian class, who represent the majority of the population, buy, for their breakfast, 50 FCFA (0.07€) of milk, sugar, coffee, water, and many other basic products.»

«Microtransactions are our economic reality. For Bitcoin to become the standard in the years to come, and in our economies, the lightning network would have to have enough capacity to support these microtransactions.»

Nicolas Burtey, CEO at Galoy, was one of the first to celebrate the 5,000 Bitcoin achievement. Burtey told Cointelegraph that the adoption of Bitcoin in El Salvador was the tipping point for the Lightning Network. This is where all metrics really started to take off.» He joked, «The bill should have actually been called the Lightning Law!»

Burtey continued, explaining that while the 5,000 BTC metric is important, “Payment velocity per channel is growing at an even faster rate. It’s a more meaningful metric, but only node operators can see it, so it’s not so prominent in the media.”

The Lightning Network, once a space for hobbyist Bitcoin enthusiasts, now appeals to large corporations. Microstrategy is now hiring for a Bitcoin Lightning Software engineer. Microstrategy is the largest holder of Bitcoin among publicly traded companies with 130,000 BTC on its balance sheet. 

Related: Raise a glass to Satoshi’s Place: the challenge of running Bitcoin businesses

Elsewhere, Strike, a Bitcoin Lightning company headed by Jack Mallers, raised $80 million in order to “revolutionize payments” for merchants. Mallers and Strike spearheaded El Salvador’s Bitcoin adoption plans in 2021.

For Nourou, who’s hosting Dakar Bitcoin Days in December, the first major Bitcoin conference in Senegal, the 5,000 BTC milestone is monumental:  «An increase in BTCs blocked in the network and the number of channels opened in parallel is a further step towards the democratization of Bitcoin transactions in the world.»

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Kim Kardashian pays SEC $1.26 million to settle EthereumMax charge

American socialite Kim Kardashian will pay $1.26 million in penalties for her involvement in the promotion of a cryptocurrency scheme called EthereumMax (EMAX).

The United States Securities and Exchange Commission announced the charges against Kardashian on October 3 for ‘touting on social media a crypto asset security offered and sold by EthereumMax’ without disclosing the payment received for her promotional involvement.

Kardashian has agreed to settle the charges and pay $1.26 million in penalties, disgorgement and interest and is set to cooperate with further investigations by the SEC into the EthereumMax project.

The announcement noted that Kardashian had failed to disclose a $250,000 payment she had received to publish a post on her Instagram profile promoting EMAX tokens with a link to the project’s website.

The order by the SEC finds that Kardashian violated the anti-touting provision of federal securities laws. This has been the case with other prominent cryptocurrency securities violations involving the SEC in the past.

Kardashian neither admitted or denied the SEC’s findings but agreed to settle the charges. This was broken down into $260,000 in disgorgement as well as a $1 million penalty. Kardashian has also agreed to not promote any cryptocurrency assets until 2025.

SEC chairman Gary Gensler also used the order to inform the general public to do their due diligence when investing in cryptocurrency assets, while reminding celebrities and influencers of their obligation to disclose payments relating to promotions of securities.

«This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors. We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.»

Kardashian’s legal team also filed a motion to set aside a class-action complaint aimed at the businesswoman and other American celebrities in August 2022. Kardashian and a handful of other prominent American social media influencers were served with a class-action complaint in January 2022 over claims they misled investors through the social media promotion EthereumMax.

Kardashian posted Instagram stories promoting the project in June 2021, with the likes of boxing great Floyd Mayweather also embroiled in the lawsuit after promoting the Ethereum-based token in the build-up to a celebrity boxing bout against YouTuber Logan Paul during the same period.

Fans could purchase pay-per-view tickets with the token, which surged after the promotion by Kardashian and other influencers. The value of EthereumMax dropped significantly afterward, leaving many out of pocket.

The original court filing that listed Kardashian, Mayweather and eight others claimed that company executives had collaborated with celebrity promoters to make misleading statements about the token and their control of the majority of tokens. Steve Gentile and Giovanni Perone were listed as co-founders of the project.

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Binance signs MoU with Kazakhstan to fight financial crime

Global cryptocurrency exchange Binance has signed a memorandum of understanding (MoU) with the Financial Monitoring Agency of the Republic of Kazakhstan as a part of its global law enforcement training program.

The program, which involves officials from regulatory and law enforcement organizations worldwide, aims to strengthen industry cooperation with national and international law enforcement in the fight against financial crime and cybercrime.

The program further aims to identify and block digital assets obtained illegally and used to launder criminal proceeds and finance terrorism.

Kazakhstan has emerged as one of the leading crypto nations for Bitcoin (BTC) mining and in recent times, the Central Asian nation is also developing favorable crypto regulations such as allowing crypto exchanges to open bank accounts, and even looking to legalize crypto use more broadly. Binance obtained an in-principle approval to operate in Kazakhstan earlier in August this year.

The Binance law enforcement training program has previously been conducted in Israel, Canada, Brazil, Brazil, France, Germany, Italy, the United Kingdom and Norway. The program was officially launched on Sept. 26, but the company’s investigations team has been holding workshops for law enforcement for the past year.

Related: Binance signs MOU with Kazakhstan to further crypto adoption and regulation

In the absence of any robust crypto regulatory framework among the majority of the countries, the expansion of crypto exchanges like Binance in these jurisdictions comes with its own challenges. Thus, with the help of the training program, Binance hopes to raise awareness among law enforcement agencies and officials to develop cooperation at a global level.

The crypto exchange’s focus on compliance and regulations comes after facing several warnings and investigations from financial regulators around the globe. However, the exchange has managed to improve and even returned to several jurisdictions such as Italy and France where it was deemed illegal to operate.

Binance attributed its recent regulatory approvals in France, Italy and Spain to the compliance measures it has undertaken recently.

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Ether staking is too difficult, community members claim

After the Ethereum network’s transition to proof-of-stake (PoS), staking Ether (ETH) now plays a central role in validating blocks and securing the network. However, some community members believe that the staking process is too difficult, especially for regular people. 

In the Ethereum subreddit, a member of the community raised the topic of ETH staking and its difficulties. According to the user, it took them an entire weekend just to get things up and running. The user said that this may be something that those with «unforgiving» schedules can’t accommodate. They wrote:

“The Ethereum community likes to sugarcoat usability but it’s healthier to just admit: this is not for everyone yet.”

In response to the thread, another community member also shared their experience in staking ETH and reminisced on Ethereum’s early days. The user noted that blockchain interaction back then was also difficult before more user-friendly options came out. The community member also highlighted that setting up a node needs “more effort than we can expect the average person to put in.”

Apart from the difficulties in setting up, the issue of bandwidth consumption was also brought up. Because of the high bandwidth consumption, a user said that there is a risk of being shut down by your internet service provider. Another user mentioned that the costs of going over the internet data cap can possibly kill any staking gains.

Meanwhile, another community member disagreed, arguing that staking is not intended to be an easy thing that everyone can do. «People keep treating staking as getting free cash when it isn’t. You are effectively being paid to do a job and this takes a certain amount of knowledge and effort,» they said.

Related: Staking providers could expand institutional presence in the crypto space: Report

Even though there may be some difficulties with staking, there have also been some positive developments post-Merge. On Sept. 15, the day of the Merge, the daily blocks created spiked from 6,000 to 7,100, showing an 18% increase. Apart from this, the average time that takes validators to verify transactions dropped by 13%.

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BTC price still not at ‘max pain’ — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts a new week in a precarious place as global macro instability dictates the mood.

After sealing a weekly close just inches above $19,000, the largest cryptocurrency still lacks direction as nerves heighten over the resilience of the global financial system.

Last week proved a testing time for risk asset investors, with gloomy economic data flowing from the United States and, moreover, Europe.

The Eurozone thus provides the backdrop to the latest concerns of market participants, who are watching as the financial buoyancy of major banks is called into question.

With the war in Ukraine only escalating and winter approaching, it is perhaps understandable that hardly anyone is optimistic — what could the impact be on Bitcoin and crypto?

BTC/USD remains below its prior halving cycle’s all-time high, and as comparisons to the 2018 bear market flow in, so too is talk of a new multi-year low.

Cointelegaph takes a look at five BTC price factors to watch in the coming days with Bitcoin still firmly below $20,000.

Spot price avoids multi-year low weekly close

Despite the bearish mood, Bitcoin’s weekly close could have been worse — at just above $19,000, the largest cryptocurrency managed to add a modest $250 to last week’s closing price, data from Cointelegraph Markets Pro and TradingView shows.

BTC/USD 1-week candle chart (Bitstamp). Source: TradingView

That prior close had nonetheless been the lowest since November 2020 on weekly timeframes, and as such, traders continue to fear that the worst is yet to come.

“The bears remained in full swing last night during the Asian, while the bulls failed to give us any good rallies to work off on,” popular trader Crypto Tony wrote in part of a Twitter update on the day.

Others agreed with a summary which concluded that BTC/USD was in a “low volatility” zone which would necessitate a breakout sooner or later. All that was left was to decide on the direction.

“Next big move is up,” Credible Crypto responded.

“Typically prior to these major moves and after capitulation we see a period of low volatility before the next big move begins.”

As Cointelegraph reported, the weekend was already tipped to provide a boost of volatility as suggested by Bollinger Bands data. This came hand in hand with rising volume, a key ingredient in sustaining a potential move.

“Weekly chart BTC shows a massive increased volume since the beginning of the third quarter + weekly bullish divergence on one of the most reliable time frames,” fellow trading account Doctor Profit concluded.

“Bitcoin price increase is just a matter of time.”

Not everyone eyed an impending comeback, however. In predictions over the weekend, meanwhile, trader Il Capo of Crypto gave the area between $14,000 and $16,000 as a longer-term target.

BTC/USD annotated chart. Source: Il Capo of Crypto/ Twitter

“If this was the real bottom… bitcoin should be trading close to 25k- 26k by now,” trading account Profit Blue argued, showing a chart with a double bottom structure potentially in the making on the 2-day chart.

Credit Suisse unnerves as dollar strength goes nowhere

Beyond crypto, attention is coalescing around the fate of major global banks, in particular Credit Suisse and Deutsche Bank.

Worries over liquidity resulted in emergency public reassurances from the CEO of the former, with executives reportedly spending the weekend calming major investors.

Bank failures are a sore spot for underwater hodlers — it was government bailouts of lenders in 2008 which originally spawned Bitcoin’s creation.

With history increasingly looking to rhyme nearly fifteen years later, the Credit Suisse saga is not going unnoticed.

“We can’t see inside CeFi firm Credit Suisse — JUST LIKE we could not see inside of CeFi firms Celsius, 3AC, etc.,” entrepreneur Mark Jeffery tweeted on the day, comparing the situation to the crypto fund meltdowns earlier this year.

For Samson Mow, CEO of Bitcoin startup JAN3, the current environment could yet give Bitcoin its time to shine in a crisis instead of staying correlated to other risk assets.

“Bitcoin price is already pushed down to the limit, well below 200 WMA,” he argued, referring to the 200-week moving average long lost as bear market support.

“We’ve had contagion from UST/3AC and leverage flushed already. BTC is massively shorted as a hedge. Even if Credit Suisse / Deutsche Bank collapse & trigger a financial crisis, can’t see us going much lower.”

Nonetheless, with instability already rampant throughout the global economy and geopolitical tensions only increasing, Bitcoin markets are voting with their feet.

The U.S. dollar index (DXY), still just 3 points off its latest twenty-year highs, continues to circle round for a potential rematch after limiting corrective moves in recent days.

Looking further out, macro economist Henrik Zeberg repeated a theory that sees DXY temporarily losing ground in a major boost for equities. This, however, would not last.

“In early 2023 DXY will once again rally with target of ~120. This will be Deflationary Bust — and Equities will crash in a larger bust than during 2007-09,” he wrote in part of a tweet.

“Largest Deflationary Bust since 1929.”

U.S. dollar index (DXY) 1-day candle chart. Source: TradingView

Miner revenue measure nears all-time low

With Bitcoin price suppression grinding on, it is less than surprising to see miners struggle to maintain profitability.

At one point in September, monthly selling from miners was in excess of 8,500 BTC, and while this number subsequently cooled, data shows that for many, the situation is precarious.

“Bitcoin miner revenue per TeraHash on the edge of all time lows,” Dylan LeClair, senior analyst at digital asset fund UTXO Management, revealed at the weekend.

“Margin squeeze.”

Bitcoin miner revenue per terahash chart. Source: Dylan LeClair/ Twitter

The scenario is an interesting one for the mining ecosystem, which currently deploys more hash rate than at almost any time in history.

Estimates from monitoring resource MiningPoolStats put current Bitcoin network hash rate at 261 exahashes per second (EH/s), only marginally below the all-time high of 298 EH/s seen in September.

Competition among miners also remains healthy, as evidenced by difficulty adjustments. While seeing its first decrease since July last week, difficulty is set to add an estimated 3.7% in seven days’ time, taking it to new all-time highs of its own.

Nonetheless, for economist, trader and entrepreneur, Alex Krueger, it may yet be premature to breathe a sigh of relief.

“Bitcoin hash rate hitting all time highs while price goes down is a recipe for disaster rather than a cause for celebration,” he wrote in a thread about the miner data last month.

“As miner profitability gets squeezed, odds of another round of miner capitulation increase in the event of a downmove. But hopium never dies.”

Bitcoin network fundamentals overview (screenshot). Source: BTC.com

GBTC «discount» hits new all-time low

Echoing the institutional exodus from BTC exposure this year, the space’s largest institutional investment vehicle has never been such a bargain.

The Grayscale Bitcoin Trust (GBTC), which in the good times traded far above the Bitcoin spot price, is now being offered at its biggest-ever discount to BTC/USD.

According to data from Coinglass, on Sep. 30, the GBTC “Premium” — now in fact a discount — hit -36.38%, implying a BTC price of just $11,330.

The Premium has now been negative since February 2021.

Analyzing the data, Venturefounder, a contributor to on-chain analytics platform CryptoQuant, described the GBTC drop as “absolutely wild.”

“Yet still no sign of GBTC discount bottoming or reversing,” he commented.

“Institutions are not even biting for $12K BTC (locked for 6 months).”

GBTC premium vs. asset holdings vs. BTC/USD chart. Source: Coinglass

Cointelegraph has long tracked GBTC, with owner Grayscale attempting to get legal permission to convert and launch it as a spot exchange-traded fund (ETF) — something still forbidden by U.S. regulators.

For the meantime, however, the lack of institutional appetite for BTC exposure is something of an elephant in the room.

“Objectively, I would say there isn’t much interest in $BTC from U.S. based institutional investors until $GBTC starts getting bid closer to net asset value,” LeClair wrote last week.

Charting Bitcoin’s «max pain» scenario

While it is safe to say that a fresh Bitcoin price drop would cause many a hodler to question their investment strategy, it remains to be seen whether this bear market will copy those which have gone before.

Related: Analyst on $17.6K BTC price bottom: Bitcoin ‘not there yet’

For analyst and statistician Willy Woo, creator of data resource Woobull, the next bottom could have a close relationship with hodler capitulation.

Previously in Bitcoin’s history, bear market bottoms were accompanied by at least 60% of the BTC supply being traded at a loss.

So far, the market has almost, but not quite, copied that trend, leading Woo to conclude that “max pain” may still be around the corner.

“This is one way of visualising maximum pain,” he wrote alongside one of his charts showing underwater supply.

“Past cycles bottomed when approx 60% of the coins traded below their purchase price. Will we hit this again? I don’t know. The structure of this current market this time around is very different.”

According to on-chain analytics firm Glassnode, as of Oct. 2, 9.52 million BTC was being held at a loss. Last month, the metric in BTC terms hit its highest since March 2020.

Bitcoin supply in loss chart. Source: Glassnode

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Robert Kiyosaki calls Bitcoin a ‘buying opportunity’ as US dollar surges

Robert Kiyosaki, businessman and best-selling author of Rich Dad Poor Dad has called Bitcoin, silver and gold a “buying opportunity” amid the strengthening United States dollar and continued interest rate hikes. 

In an Oct. 2 Twitter post to his 2.1 million followers, the author noted the prices of the three commodities — sometimes referred to as «safe haven» assets — would continue getting lower as the U.S. dollar strengthens, proving its worth once the “FED pivots” and drops interest rates.

In a post the day before, Kiyosaki predicted this “pivot” could happen as soon as January 2023, which would see the U.S. dollar “crash” in the same way as the recently collapsed English Pound Sterling.

“Will the US dollar follow English Pound Sterling? I believe it will. I believe US dollar will crash by January 2023 after Fed pivots,” said Kiyosaki, adding he “will not be a victim of the F*CKed FED.”

Since as early as May. 2020, Kiyosaki has been a proponent for asset classes that the Fed cannot directly manipulate, having once warned investors to “Get Bitcoin and save yourself” following the Fed’s immediate mass money printing episodes in response to the COVID-19 pandemic.

Interestingly, Kiyosaki’s liking for Bitcoin stands despite not believing there’s any value to it, he said in a recent interview on Rich Dad. The author appears to be standing behind Bitcoin again in his most recent tweet, noting: 

“When FED pivots and drops interest rates as England just did you will smile while others cry.”

In a September letter to his mailed subscribers, Kiyosaki stressed the need to invest in digital assets now in order to score outsized returns over the long term:

«It’s not enough to WANT to get into crypto […] Now is the time you NEED to get into crypto, before the biggest economic crash in history.»

The U.S. dollar has been gradually gaining strength over other major global currencies over the last year, with the GBP/USD, EUR/USD, and JPY/USD falling 18.24%, 15.54%, and 23.33% respectively, according to Trading Economics.

At the same time, the Fed’s interest rate hike, along with a strengthening USD has coincided with a 55% drop in the crypto market cap over the last 12 months.

Related: The British pound collapse and its impact on cryptocurrency: Watch the Market Report

Last month, hedge fund co-founder CK Zheng said he expected October to be a “very volatile” month for BTC.

“October is a pretty volatile period of time, especially when combined with high inflation, with a lot of debate in terms of the Fed and policy change. The concern is that if the Fed tightens too much, the U.S. economy may actually go into a severe recession.”

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Sam Bankman-Fried sheds light on how FTX would approach a Celsius bid

FTX founder and CEO Sam Bankman-Fried have shared details on how his firm would approach a buy-up of Celsius’ tassets.

The comments come in light of FTX US snapping up bankrupt crypto lender Voyager Digital’s assets for $1.3 billion via auction last week and a recent report that FTX was considering a bid for Celsius’ assets as well.

Responding to a tweet from BnkToTheFuture founder Simon Dixon alleging FTX was «raising finance at a $32Billion valuation» in order to buy Celsius’ assets at «cents on the dollar,» Bankman-Fried clarified that his firm’s bid is determined at «fair market price, no discounts.»

Bankman-Fried his company’s goal «isn’t to make money buying assets at cents on the dollar,» and is instead focused on making customers whole again, stating:

“[The] goal isn’t to make money buying assets at cents on the dollar, it’s to pay $1 on the $1 and get the $1 back to customers. If we were to get involved in Celsius, it would be the same.”

Reports that FTX had secured the winning bid for the assets of Voyager Digital first emerged on Sept. 27, with the deal reportedly valued at $1.4 billion.

Little information was given around the fate of Voyager customers andtheir crypto holdings, with the platform only mentioning that the FTX US platform “will enable customers to trade and store cryptocurrency after the conclusion of the company’s chapter 11 cases.“

However, Celsius’ depositors appear to be in a worse state of limbo at this stage, though there is a general feeling that the firm could look to auction off its billions of dollars worth of assets, although other plans could be floated, such as a customer repayment in Celsius (CEL) tokens.

Related: Celsius founder reportedly withdrew $10M before bankruptcy filing: FT

Much of this will weigh on how Celsius bankruptcy proceedings play out moving forward, with an independent examination in the works to determine the scope of the beleaguered firm’s financials.

Multiple regulators have submitted objections to Celsius selling off its stablecoin holdings, while the Department of Justice has also objected to the firm’s motion to open up withdrawals to certain customers until the examiner report is complete.

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DOJ objects to Celsius plans to reopen withdrawals and sell stablecoins

The Department of Justice (DOJ) has submitted an objection to Celsius’ motion to reopen withdrawals for select customers and sell its stablecoin holdings.

The DOJ is asserting that the state of Celsius’ financials are lacking transparency, and that key decisions like this should not be considered until the independent examiner report has been filed.

The move by the DOJ adds to the objections filed last week by the Texas State Securities Board, the Texas Department of Banking, and the Vermont Department of Financial Regulation. All three are opposed to Celsius selling its stablecoin holdings, asserting there’s a risk the firm could use the capital to resume operating in violation of state laws.

In a Sept. 30 filing with the Bankruptcy Court for the Southern District of New York, a U.S. Trustee for the DOJ, William Harrington outlined an objection to Celsius opening up withdrawals to its «custody» and «withhold» customers, citing a lack of transparency over the firm’s financials.

Harrington argues in the filing that such withdrawals should not be opened up until the independent examiner report on Celsius business operations has been completed.

“The Motions are premature and should be denied until after the Examiner Report is filed. First, the Withdrawal Motion seeks to impulsively distribute funds to one group of creditors in advance of a fulsome understanding of the Debtors’ cryptocurrency holdings.”

The DOJ has also opposed a potential stablecoin sell off, highlighting similar concerns held by Texas and Vermont regulators that Celsius’ motion doesn’t concretely outline “what impact such a distribution or sale would have” on the business moving forward.

“Second, the Stablecoin Motion seeks to liquidate stablecoins held by the Debtors without providing information regarding ownership, segregation, or the impact of such sale on later distributions to creditors who may have stablecoins on deposit with the Debtors,” the filing reads.

Independent examiner appointed

According to Harrington, the “United States Trustee appointed Shoba Pillay” the examiner on Sept. 29, with the New York Bankruptcy court approving the appointment on the same day.

Pillay will have roughly two months to prepare and file an examiner’s report on Celsius, hopefully providing a clear breakdown of its assets and liabilities.

Harrington essentially asserted that Celsius’ motions should not even be considered until well after the examiner report has been filed, noting that “any distribution or sale should be deferred until interested parties, the United States Trustee, and the Court are able to make a determination” on the value of Celsius liabilities, claims against it, its assets and what “the debtors intends to actually pay its creditors.”

Related: Crypto Biz: The Voyager Digital auction is over — What now?

Simon Dixon, the founder of crypto investment platform BnkToTheFuture — which was the lead investor in Celsius — predicted via Twitter on Oct. 1 that Celsius will look to repay its creditors in Celsius (CEL) tokens as part of a reorganization plan that ultimately “won’t get past regulators & regulators will file motions to reject” it.

If such occurs, Dixon sees it sparking a bidding war for Celsius assets, similar to that of Voyager Digital’s recent $1.3 billion asset auction that was won by FTX US.

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Transit Swap ‘hacker’ returns 70% of $23M in stolen funds

A quick response from a number of blockchain security companies has helped facilitate the return of around 70% of the $23 million exploit of decentralized exchange (DEX) aggregator Transit Swap.

The DEX aggregator lost the funds after a hacker exploited an internal bug on a swap contract on Oct. 1, leading to a quick response from Transit Finance team along with security companies Peckshield, SlowMist, Bitrace and TokenPocket, who wer able to quickly work out the hacker’s IP, email address and associated-on chain addresses.

It appears these efforts have already born fruit, as less than 24 hours after the hack, Transit Finance noted that “with joint efforts of all parties” the hacker has returned 70% of the stolen assets to two addresses, equating to roughly $16.2 million.

These funds came in the form of 3,180 Ether (ETH) ($4.2 million), 1,500 Binance-Peg ETH and ($2 million) and 50,000 BNB ($14.2 million), according to BscScan and EtherScan.

In the most recent update, Transit Finance stated that “the project team is rushing to collect the specific data of the stolen users and formulate a specific return plan” but also remains focused on retrieving the final 30% of stolen funds.

At present, the security companies and project teams of all parties are still continuing to track the hacking incident and communicate with the hacker through email and on-chain methods. The team will continue to work hard to recover more assets,» it said. 

Related: $160M stolen from crypto market maker Wintermute

Cybersecurity firm SlowMist in an analysis of the incident noted that the hacker used a vulnerability in Transit Swap’s smart contract code, which came directly from the transferFrom() function, which essentially allowed users’ tokens to be transferred directly to the exploiter’s address. 

“The root cause of this attack is that the Transit Swap protocol does not strictly check the data passed in by the user during token swap, which leads to the issue of arbitrary external calls. The attacker exploited this arbitrary external call issue to steal the tokens approved by the user for Transit Swap.”

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Celsius founder reportedly withdrew $10M before bankruptcy filing: FT

Celsius Network founder and former CEO Alex Mashinsky allegedly withdrew $10 million from the crypto lending platform just weeks before the company froze customer funds and declared bankruptcy.

The withdrawal was cited by sources from the Financial Times who said Mashinsky withdrew the funds in “mid to late May” prior to the Jun. 12 pause on all withdraws.

Celsius was a popular crypto-lending platform with 1.7 million customers and $25 billion in assets under management but the prevailing poor crypto market conditions eventually led the company to a $2.85 billion gap in its balance sheet.

This led Celsius to pause customer withdraws in June before filing for chapter 11 bankruptcy in July with Mashinksy attempting to restructure and revive the company to be based around crypto custody services.

The withdrawal raises questions about whether Mashinsky knew ahead of time that the company would be freezing customer funds and withdrawals. 

However, a spokesperson for Celsius told FT that the founder withdrew cryptocurrency at the time to pay state and federal taxes.

“In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in amounts that totaled what he withdrew in May,” the spokesperson said, adding Mashinsky and his family still had $44 million worth of crypto frozen on the platform.

Meanwhile, sources told the FT the withdrawal was pre-planned in line with Mashinsky’s estate planning.

Roughly $8 million worth of assets withdrawn were used to pay income taxes arising from the yield the assets produced, and the remaining $2 million was made up of the platform’s native token CEL.

Related: Learn from Celsius: Stop exchanges from taking your money

The questions will likely be answered when the transactions in question will be presented by Celsius in court in the next few days as part of disclosures by the crypto-lender regarding its finances.

There’s also a possibility Mashinsky could be forced to return the $10 million as in the 90 days leading up to a bankruptcy filing, payments by a company can be reversed to benefit creditors under United States laws.

Mashinsky resigned as CEO of Celsius on Sept. 27 saying his role “has become an increasing distraction” but said he would continue to focus on helping find a plan to return funds to creditors.

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The future of DeFi is on TikTok

In July 2021, TikTok hit three billion downloads. The social network boasts more than one billion active monthly users. And, in the United States, TikTok is now more popular with Generation Z than Instagram.

Over the last six months, Bitcoin (BTC) has seen a drop of more than 70% from its all-time high north of $69,000 in 2021. Market volatility is to be expected. But, if decentralized finance (DeFi) is looking to have a future, it needs to be embraced by more people. The aforementioned volatility (as well as the cynicism of cryptocurrency in general) puts many investors off. Fortunately, members of Generation Z are far from your typical investors.

Digitally savvy and financially literate

Finance on TikTok has become so popular that it has got its own portmanteau. Dubbed FinTok, finance-related content has seen a meteoric rise along with the social network itself. Last year, the #Crypto hashtag blew up, getting 1.9 billion videos. Uploads tagged #NFT increased by a mind-melting 93,000% (further fueled by the general boom in NFT interest). And, videos with the #StockTok hashtag garnered 1.4 billion views.

The glut of money management videos isn’t limited to the crypto market. Last year, the #PersonalFinance hashtag accrued more than 4.4 billion views, with content covering everything from tax and budgeting to savings and debt. Considered in the context of TikTok’s primary users — Generation Z — it shows that the youth of today have a healthy appetite for financial information. They just want to consume it soundtracked by a catchy pop song and a viral dance.

Related: Throw your Bored Apes in the trash

Young adults are also leading digital asset adoption. According to the «Invest in You» survey by CNBC, 18-34-year-olds accounted for 15% of cryptocurrency investments, compared to 11% for 35-64-year-olds and a measly 4% for 65+. The problem is, a considerable segment of that 18-34 year old demographic sees crypto as a short-term investment: 21% of 18-34-year-olds only regard it as a 12-month strategy.

15% of 18-34-year-olds say they own cryptocurrency. Source: CNBC

It’s no surprise that Gen Z is not only embracing cryptocurrency but also educating themselves regarding finance. According to Credit Suisse’s global investment returns yearbook, Gen Z will earn a third less on traditional stock and bond investments than past generations.

December’s “OK Zoomer” research report from Bank of America revealed that the COVID-19 pandemic will hit Generation Z’s professional and financial future in a similar way that the Great Recession impacted Millennials. Therefore, although the majority of Generation Z don’t have a lot of money to invest in crypto right now, they could in the future, especially if they’re as financially savvy and investment-driven as the data suggests. And, that’s where the opportunity lies for DeFi.

Building trust in digital assets through transparent marketing

For the future and health of the digital asset market, DeFi firms need to engage the right audiences in specific ways targeted to those demographics.

Similar to how DeFi promises to democratize finance, social media platforms such as TikTok have the potential to democratize the investing process. What was once a closed community only accessible for the likes of Wall Street bankers and qualified hedge fund managers is now open to everyone.

But, if DeFi is to capitalize on the opportunities available via the trendiest social media platform, it’s going to have to get better at marketing. This means clear and concise short-form videos that are tailored to the target audience, making crypto not just accessible but fun too, while also being transparent about the risks inherent in investing.

Related: The feds are coming for the metaverse — from Axie Infinity to Bored Apes

Short videos are playing well on TikTok. But, they’re predominantly top-of-the-funnel activities. That’s not necessarily a bad thing. Brands can warm up the Generation Z audience now so that in a few years, when they have the money to invest, they’re knowledgeable leads ready to be converted.

It’s this conversion content that’s needed. Crypto companies need to build trust in the audience over the next few years. No mean feat considering the turbulence and bad press the bear market has experienced lately.

DeFi firms must stay transparent, distinguish themselves from TradFi brands and figure out what forms of video content will build long-term, trusting relationships with the younger generation. If crypto companies learn how to speak their language today, tomorrow could be bright for bitcoin and other digital assets.

Zac Colbert is a digital marketer by day and freelance writer by night. He’s been covering digital culture since 2007.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. 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.

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Music NFTs a powerful tool to transform an audience into a community

As one of the oldest entertainment industries in existence, the music business has experienced many technological advances that enhanced widespread adoption. The digitalization of music meant that artists could reach any audience across the world, and digital distribution gifted people with unlimited access to music. 

With these advances in distribution came some drawbacks in music monetization. The way musicians make money in a digital format has reduced margins from media or video revenue. Artists have been pushed back to generating revenue from offline endeavors like concerts and selling merchandise as the online landscape has been filled with intermediaries that take a piece of the pie.

“Web3 and existing platforms help us build a new chapter of the music industry.” Takayuki Suzuki, CEO at MetaTokyo — Web3 entertainment Studio — told Cointelegraph, “It was hard to find good music for me, checking many record stores in Tokyo and sometimes overseas. Now it’s very accessible via streaming.”

A new paradigm of Web3 tools is giving creators the means to develop an existing audience and transform it into a community. Fan relations have become crucial and they have never been tighter with artists in Web3.

Marcus Feistl, chief operations officer of Limewire, a Music NFT marketplace that was originally a free software peer-to-peer file sharing music-based platform, told Cointelegraph:

“The music and creator industry is certainly on the verge of a step change, moving from a Web2 model focused on content consumption to a Web3 model focused on content ownership. Artists are just beginning to find their way to best utilize Web3 to interact with their audience.”

Among the many use cases for nonfungible tokens (NFTs), the most prevailing has been the ability to form communities around token holders. The rise of decentralized autonomous organizations experimented with coordinating these communities in a digitally native way. All these unlock potential opportunities for independent artists willing to innovate in the next iteration of the music space.

Disrupting the music industry once again

The music industry has always been willing to try new things. As Mattias Tengblad, CEO and co-founder of Corite — a blockchain-based crowdfunding music platform — told Cointelegraph, “When music videos came out in the 80s, it was entirely new and people weren’t sure what to make of it. Adoption of these things often starts slowly but eventually becomes mainstream.”

Web3 platforms are in their early stages. The majority of users are crypto savvy and have a basic technical understanding of how to interact on-chain. As the space develops, Web3 music platforms can become a key piece in the way labels and artists do business and market themselves.

The opportunities presented by this technology facilitate connections between like-minded individuals breaking any previous barriers to forming a community. “It was hard to maintain great relationships in the industry,” reflected Suzuki, “I’ve been constantly meeting and re-connecting with forward-thinking people.”

These innovations aren’t exclusive to incumbents of the music industry and young talent native to Web3 can open the gates for new expression and monetization. It is encouraging the relationship between artists, middlemen and fans to transition into a community.

Related: Web3 is creating a new genre of NFT-driven music

Music innovation empowers those artists testing new technologies with the opportunity to become the next established artists of the upcoming generation. This can potentially diminish the importance of record labels to an artist’s success. Many record companies are getting involved by moving some of their activity on-chain and releasing NFT collections.

“There will always be a need for record labels, but I think the ones that fail to adapt to the changing landscape are at risk of being left behind,” Tengblad said, adding:

“Once you have a loyal group of supporters, I think the technology opens the door for you to monetize your work directly, while also sharing in the benefits of your success with your supporters.”

Successful Music NFT drops show how Web3 can disrupt the fundraising model by allowing artists to go directly to fans for funding. Those artists that make an effort to engage with their community and build a direct relationship with their fanbase will benefit the most from Web3.

From audience to community

An audience is generally understood as a one-way relationship, while a community suggests a two-way communication between the artist and its fans. For a community to be productive, those involved should enrich the creative process by actively listening to each other’s needs and proposing solutions for the betterment of the community as a whole. 

As artists shift to a more community-driven approach, blockchain and NFTs allow artists to raise funds from their fans with no middlemen and offer unique benefits and opportunities back to the people who contribute to them. Prevailing platforms are still a crucial tool for community building and music distribution to complement a Web3 strategy.

“Affordable digital recording has led to an explosion of musicians on YouTube who reach out to their community for collaborations, instant feedback, live streams, etc,” commented Tengblad, “Social media and chat programs like Twitter, Instagram, TikTok, Telegram, and Discord give people who are interested in what you are doing a chance to engage with more of your content, connect with you and with each other.”

If an artist posts a new video on Youtube, their community can contribute to the artist’s work by providing instant feedback and proposing new ideas that can help the artist grow and develop further.

Activities performed by the community tend to enjoy a bigger impact and immediately affect the growth of an artist. With the backing of a strong community, artists possess a solid foundation to build a career.

Recent: NFTs will bring crypto to billions of users, explains VC investor

The engagement process between the artist and their community has to become as simple as possible. Suzuki explained:

“Web3 will give more power to artists and creators so there would be a need for education. Intermediaries could be supporters or contributors in a community not intercepting information or money.”

This starts with clear communication and by making NFTs more accessible to everyone. Bringing NFTs and the model of content ownership closer to fans is what will ultimately drive artist communities, as it creates a much stronger and more exclusive connection between fans and creators.

“For creators, this means an easy-to-use self-onboarding process where they can create their first NFT project in just a few clicks,” concluded Fesitl, “For fans this means that you can either use a fully custodial service without the need of owning a wallet or directly connecting an external wallet, providing the full Web3 experience.”

Artists who are most prepared to succeed in today’s industry are the ones who are willing to use every tool available to build an interactive and engaged community around their work.

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Next few weeks are ‘critical’ for stock market and Bitcoin, analyst says

The stock market’s movements in the next few weeks will be critical for determining whether we are heading towards a short-term recession or a long term-one, according to forex trader and crypto analyst Alessio Rastani.

During the October-December 2022 period, the analyst expects to see the S&P rallying. «If that bounces or rally fails and drops back down again, then very likely, we’re entering a long-term recession and something very close to similar to 2008», said Rastani in the latest Cointelegraph interview.

According to the analyst, such a recession could last until 2024 and would inevitably negatively impact the price of Bitcoin (BTC). 

Talking about the latest Pound sterling crisis, Rastani opined that its principal cause is the rally of the U.S. dollar, which is putting pressure on most other fiat currencies, including the yen and the euro. However, in Rastani’s view, the U.S. dollar is approaching the top.

«Once we see a clean break, a sustained break of 111.5 and 110 levels on the dollar index, then I think the top is in for the dollar. And then I’m looking for a multi-month decline in the dollar back to 104 to the 100 level on the dollar index,» he explained. 

Check out the full interview on our YouTube channel and don’t forget to subscribe!

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Terra could leave a similar regulatory legacy to that of Facebook’s Libra

New draft legislation on stablecoins in the United States House of Representatives proposed to impose a two-year ban on new algorithmically pegged stablecoins like TerraUSD (UST).

The proposed legislation would require the Department of the Treasury to conduct a study of stablecoins similar to UST in collaboration with the United States Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission.

An algorithmic stablecoin is a digital asset the value of which is kept steady by an algorithm. While an algorithmic stablecoin is pegged to the value of a real-world asset, it is not backed by one.

The stablecoin bill has been in the works for several months now and has been delayed on numerous occasions. Treasury Secretary Janet Yellen has repeatedly cited the Terra collapse when calling for more regulation of the crypto space.

The Terra ecosystem failure that began with the depegging of its algorithmic stablecoin UST eventually wiped out the $40 billion ecosystem. This led to a crypto contagion that saw the crypto market lose nearly a trillion dollars worth of market value within a couple of weeks.

Markets have yet to recover from the contagion, and the Terra collapse definitely cast a shadow on the future of algorithmic stablecoins and became a hot topic for critics including certain policymakers who have been using it to advocate for stricter policies for cryptocurrencies. The latest draft proposal to put a temporary ban on such stablecoins is one such example. Under the current draft of the bill, it would be illegal to issue or create new “endogenously collateralized stablecoins.”

The draft proposal evoked mixed emotions from Crypto Twitter. While some market observers called it a good idea, which would help avoid further such collapses, others believed the Terra fiasco has put the industry back by years. Pointing toward the two-year temporary ban, some implied that even though algorithmic stablecoins might not be the culprit, the execution by the Terra team has cast a shadow on the whole algorithmic stablecoin industry. 

Talking about the impact of Terra contagion on the stablecoin regulation, Mriganka Pattnaik, CEO of risk monitoring service provider Merkle Science, told Cointelegraph that regulators need to take a broader approach than going for a temporary ban. She believes lumping all algorithmic stablecoins together and putting a blanket ban on them will hamper innovation, stating:

“In light of Terra’s collapse and the ripple effect it created, algorithmic stablecoins will need to regain the trust of regulators and consumers alike. The regulators can push for partially collateralized models, set transparency standards, and require the issuers to submit white papers highlighting how their particular stablecoin offering works, its operational structure, mint and burn mechanism and the kind of algorithm they use to maintain the value, the unique risks the offering presents and analyze whether it can have a potential contagion effect on broader financial stability.”

It is important to understand that even within algorithmic stablecoins, there are more minute categorizations, for example, rebase, seigniorage and fractional algorithmic stablecoins. Another vertical to consider here is the fact that algorithmic stablecoins are decentralized in nature — therefore, it will be harder to enforce a ban on them. 

Patnaik added that it is counterproductive to hold onto the notion that decentralization and regulatory controls can never be in alignment. The most proactive thing stablecoin issuers can do is “come together and propose technical solutions to regulatory problems surrounding algorithmic stablecoins.”

Jay Fraser, director of strategic partnerships at Boston Security Token Exchange, explained how Do Kwon’s action and marketing tactics were to be blamed for the bad press algorithmic stablecoins received in the aftermath, telling Cointelegraph:

“There’s the issue of how Do Kwon both marketed Terra as well as how he used user funds during and after the collapse. If there were to have been good regulation in place ahead of and during the collapse, part of it would have involved clearer messaging around the risks involved in investing money in untested technology. I think a lot of investors were perhaps not aware of the risks.”

He added that the Terra debacle set a precedent for fellow decentralized finance and crypto investors to be more transparent and “regulations will be put in place to ensure consumers and investors aren’t affected by poor practices.”

A “Libra moment” for algorithmic stablecoins

The Terra stablecoin project somewhat recalls the fate of Facebook’s, now Meta, stablecoin project Libra, which was later dubbed Diem. The social media giant got involved in the crypto space in 2019 when it announced its plans to launch a universal stablecoin whose adoption would have been elevated by Facebook’s line of social messaging apps and services including Instagram and Whatsapp. 

The stablecoin was to be pegged to the value of a basket of fiat currencies including the U.S. dollar, the Great British pound, euro, Japanese yen, Singapore dollar and some short-term assets generally considered to be cash equivalents.

Facebook registered the project in Switzerland and hoped to bypass regulatory oversight from multiple nations, but unsuccessfully. Facebook faced immediate pushback from regulators across the globe and founder Mark Zukerberg even faced multiple Congressional hearings regarding the same. The name change to Diem didn’t help its cause much and the project was eventually shut down by the end of January 2022.

Like the ill-fated Diem/Libra venture, the disintegration of Terra’s $40 billion ecosystems forced regulators to show interest in the nascent industry and even forced several regulatory changes.

Just as Libra forced regulators to wake to the reality of private entities issuing money in the digital era, Terra has made lawmakers take a closer look at who can issue a stablecoin, opening the gates for banks and other financial institutions to get involved in the nascent crypto market.

Dion Guillaume, global head of communication at crypto exchange platform Gate.io, told Cointelegraph that Terra was a stress test that could benefit the industry:

“It was a huge stress test, for sure. However, I think this will eventually work out for the better. For one, crypto users need to know that when someone offers you crazy high yields, something fishy is going on in the background. Plus, projects need to know how to prioritize long-term goals over short-term pleasure. For example, many analysts have pointed out the flaws in Terra’s UST stablecoin creating a capital-efficient, decentralized stablecoin is impossible, yet users continued to use Terra, and projects continued to build on it. Let’s hope the industry learns a lesson from this setback.”

Jason P. Allegrante, chief legal and compliance officer at Fireblocks, explained that quite similar to what Diem did for regulators, Terra’s failure has accelerated Congress’s drafting of a promising bipartisan bill. He told Cointelegraph:

“We can see in hindsight that it accelerated Congress’ drafting of a very promising bipartisan bill, which will introduce stablecoin legislation, significantly normalizing the industry in the process. Not only is this a direct response to Terra’s collapse, but the impact will be transformative, providing clarity on the regulatory classifications of stablecoins, what quantity and quality they must be reserved in, how they will be backed by other assets and so on.” 

He added that the experience from the Terra implosion will unleash innovation in true stablecoin products and ultimately “drive more organizations and individuals to invest in cryptocurrencies and related technologies in the coming years.”

The Terra collapse might have led to a crypto contagion, but it created a watershed for the stablecoin industry. It has forced policymakers to look at the broader picture and find better ways to protect consumers. It has also ignited interest from policymakers in the distinct and complex nature of the industry and made them realize that a common policy won’t work for the whole industry.

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Ethereum Merge spikes block creation with a faster average block time

The Merge upgrade for Ethereum (ETH), which primarily sought to transition the blockchain into a proof-of-stake (PoS) consensus mechanism, has been revealed to have a positive impact on the creation of new Ethereum blocks.

The Merge was considered one of the most significant upgrades for Ethereum. As a result of the hype, numerous misconceptions around cheaper gas fees and faster transactions plagued the crypto ecosystem, which was debunked by Cointelegraph. However, some of the evident improvements experienced by the blockchain post-Merge include a steep increase in daily block creation and a substantial decrease in average block time.

Ethereum blocks per day. Source: YCharts

On Sept. 15, Ethereum completed The Merge upgrade after successfully transitioning the network to PoS. On the same day, the number of blocks created daily (EBC) shot up by roughly 18% — from approximately 6,000 blocks to 7100 blocks per day.

Ethereum average block time (EBT). Source: YCharts

Complementing this move, the average block time — the time it takes the miners or validators within a network to verify transactions — for Ethereum dropped over 13%, as evidenced by data from YCharts.

The above findings showcase the positive impact of The Merge upgrade on the Ethereum blockchain.

Related: Ethereum Merge was ‘executed flawlessly,’ says Starkware co-founder

Following the Ethereum upgrade, GPU prices in China witnessed a significant drop as the blockchain moved away from the power-intensive proof-of-work (PoW) consensus mechanism.

As Cointelegraph reported, the Nvidia GeForce RTX 3080’s price dropped from $1118, or 8,000 yuan, to 5,000 yuan within three months, according to a Chinese merchant. The merchant further stated that no one (in China) is buying new computers, let alone new GPUs.

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Bitcoin price starts ‘Uptober’ down 0.7% amid hope for final $20K push

Bitcoin (BTC) failed to hold $20,000 into the September monthly close as one trader eyed a final comeback before fresh downside.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Trader’s $20,500 upside target remains

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD staying lower after finishing the month at around $19,400.

Capping 3% losses, the monthly chart failed to rally on Oct. 1, with BTC/USD down another 0.7% in “Uptober” so far, according to data from on-chain data resource Coinglass.

BTC/USD monthly returns chart (screenshot). Source: Coinglass

Dismal financial data from macro markets contributed to the lack of appetite for risk assets, and among crypto traders, the outlook remained gloomy.

For popular Twitter account Il Capo of Crypto, a return above the $20,000 mark was still possible on the day, this still to be followed by a dive much lower.

An additional post noted steady buy-ins worth $192,000 on exchange FTX, something which he argued could contribute to the short-term upside.

While still at the time of writing, BTC/USD looked apt for volatility into the weekly close, as suggested by the tightening Bollinger Bands on lower timeframes.

BTC/USD 1-hour candle chart (Bitstamp) with Bollinger Bands. Source: TradingView

The September close nonetheless continued a losing streak for Bitcoin which now rivaled the 2018 bear market, as highlighted by Caleb Franzen, senior market analyst at Cubic Analytics.

“Bitcoin has officially produced 10 consecutive red monthly Heikin Ashi candles, with the September close,” he revealed.

“This is the longest such streak since the 2018 bear market, which produced 14 red candles from Feb.’18 to Mar.’19. Each bear market streak has been longer than the last…”

BTC/USD 1-month Heikin Ashi candle chart (Bitstamp). Source: TradingView

Major banks sound alarm bells among analysts

The macro story of the moment revolved around major global banks, headlined by worrying signs coming out of Credit Suisse.

Related: Bitcoin 2021 bull market buyers ‘capitulate’ as data shows 50% losses

The Swiss lender’s share price, having all but collapsed since 2021, now had concern spreading to institutions such as Deutsche Bank, UniCredit and even Bank of China.

“Credit Suisse is not the only major bank whose price-to-book is flashing warning signals.The list below is of all G-SIBs with PtBs of under 40%,” Alistair Macleod, head of research at Goldmoney, responded, uploading a comparative chart of various banks’ price to book ratios.

“A failure of one of them is likely to call the survival of the others into question.”

In a memo quoted by Reuters on Oct. 2, Credit Suisse CEO, Ulrich Koerner, cautioned investors against “confusing our day-to-day stock price performance with the strong capital base and liquidity position of the bank.”

The events follow the Bank of England returning to quantitative easing (QE) last week in an unprecedented U-turn with inflation at forty-year highs.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Transit Swap loses over $21M due to internal bug hack, issues apology

Transit Swap, a multi-chain decentralized exchange (DEX) aggregator, lost roughly $21 million after a hacker exploited an internal bug on a swap contract. Following the revelation, Transit Swap issued an apology to the users while efforts to track down and recover the stolen funds are underway.

“We are deeply sorry,” stated Transit Swap while revealing that a bug in the code allowed a hacker to make away with an estimated $21 million. Blockchain investigator Peckshield narrowed down the attack to a compatibility issue or misplaced trust in the swap contract.

Peckshield, along with other investigators, including SlowMist, Bitrace and TokenPocket joined in on the pursuit to track down the hacker. Transit Swap stated:

“We now have a lot of valid information such as the hacker’s IP, email address, and associated on-chain addresses. We will try our best to track the hacker and try to communicate with the hacker and help everyone recover their losses.”

The flowchart below depicts the flow of the stolen assets, as shared by Peckshield.

The ongoing investigation hinted that the hacker may have performed earlier withdrawals from known exchanges. Transit Swap has promised to share more details with the community in due time, adding that “Thank you for your understanding and trust.”

Transit Swap has not yet responded to Cointelegraph’s request for comment.

Related: Amber Group uses simple hardware to show just how fast, easy the Wintermute hack was

Reciprocating the updated security measures implemented by crypto businesses, hackers continue to evolve their methods to dupe investors.

Recently, a hacker used an Ethereum (ETH) arbitrage trading bot to exploit a “bad code” vulnerability for draining 1,101 ETH, which was around $1.41 million at the time of writing.

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Web3 is the solution to Uber’s problem with hackers

Uber is a staple of the gig economy, for better or worse, and a disruptor that once sent shockwaves throughout the mobility space. Now, however, Uber is being taken for a ride. The company is handling a reportedly far-reaching cybersecurity breach. According to the ride-hailing giant, the attacker has not been able to access sensitive user data, or at least, there is no evidence to suggest otherwise. Whether or not sensitive user data was exposed, this case points to a persistent issue with today’s apps. Can we continue to sacrifice our data — and thereby our privacy and security — for convenience?

Web2, the land of hackable honeypots

Uber’s track record for data breaches is not exactly spotless. Just in July, the ride-hailing giant acknowledged hushing up a massive breach in 2016 that leaked the personal data of 57 million customers. In this sense, the timing of the new incident could not have been worse, and given how long it takes to establish the damage done in such breaches, the full scale of the event has yet to reveal itself.

Uber’s data breach is not anything out of the ordinary — Web2 apps are ubiquitous, ever reaching further into our lives, and many of them, from Facebook to DoorDash, have suffered breaches as well. The more Web2 apps proliferate across the consumer space and beyond, the more often we will get such incidents in the long run.

Related: Crypto will become an inflation hedge — just not yet

The issue comes down to the very architecture of apps built on Web2. Through their centralized tech stacks, they naturally create honeypots containing users’ sensitive data from payment details to consumer behavior. As users funnel more and more data through various consumer apps, hackers have more and more honeypots to pursue.

The only true solution to the problem is also the most radical one — consumer apps should embrace Web3, restructure their data and payment architectures to grant users more security and privacy, and welcome this new era of the internet.

What would a Web3 Uber look like?

Web3 does not necessarily mean a change in the app interfaces we interact with. In fact, one could argue that continuity and similarity are key to adoption. A Web3 Uber would look and feel pretty much the same on the surface. It would have the same overall purpose and function as existing Web2 ride-hailing apps. Below the deck, however, it would be a very different beast. All the benefits of Web3 such as decentralized governance, data sovereignty and inclusive monetization models — systems that distribute earnings democratically — are engineered below the surface.

Web3 is all about verifiable ownership. It is the first time that people can verifiably own assets, be it digital or physical, through the Web. This pertains to ownership of value in the form of cryptocurrencies, but in the case of Web3 ride-hailing, it also pertains to retaining ownership of your data and ownership of the apps, underlying networks and the vehicles themselves.

Web3, Web 2.0, Uber, Hacks, Hackers, Cybercrime, Cybersecurity, Data

In practical terms, a Web3 Uber will allow users to control how much data they give, to who and when. Web3 Uber would ditch centralized databases in favor of peer-to-peer networks. Self-Sovereign Identities — decentralized digital IDs that you own and control — would allow people and machines alike to have decentralized digital passports which are not dependent on any one central authority for their proper function.

Drivers and passengers would be able to verify themselves on the Web3 ride-hailing app with their SSI in a fully peer-to-peer manner. They would also be able to choose what data they’d like to share or sell and to whom, exercising full ownership over their personal information and digital footprint.

Decentralized governance will make for another monumental shift. It will mean that all stakeholders, be it drivers, passengers, app developers and investors alike, will have the ability to co-own, co-govern and co-earn on all levels — from the infrastructure powering the decentralized application (DApp) to the intricacies of the DApp itself. It would be a ride-hailing app by users, for users.

Imagine for a moment that the fees charged by Uber were voted on by drivers and passengers, not dictated by a boardroom in Silicon Valley. Ask the next Uber driver what they think of that. Users, for their part, will be able to vote things like disaster-time price surges into the bin. For drivers all over the world, Web3 ride-hailing will mean being paid fairly without a third-party corporate intermediary taking a cut.

Related: Latin America is ready for crypto — Just integrate it with their payment systems

Web3 also enables a new kind of sharing economy, one where anyone, anywhere is able to own the vehicles being used by ride-hailing apps or any other kind of vehicle-focused app via machine nonfungible tokens (NFTs) — tokens that represent ownership over pools of real-world vehicles. It will be possible for the communities in which these vehicles operate to have ownership rights over those same vehicles, granting the ability to vote on how they’re used and giving them an income stream. The more these increasingly intelligent machines provide goods and services to the community, the more the community earns. Web3 is turning the status quo on its head.

A shift to Web3 in consumer apps will address the root cause of the persistent breaches, removing the very need for centralized data honeypots without necessarily making things more complicated for users. Despite that being an enormous paradigm shift in and of itself, data sovereignty is just one of the advantages a Web3 Uber would have over Web2 Uber.

In the future, blockchain will become something as unseen as the inner workings of Google Pay — just fully accessible to those who wish to view it. It will be something users unknowingly interact with when ordering a pizza or hailing a ride — yet absolutely fundamental to a fairer, more democratic society in the digital age.

Max Thake is the co-founder of peaq, a blockchain network powering the Economy of Things on Polkadot.

This article is for general informational purposes and is not intended to be and should not be taken as legal or investment advice. 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.

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California fraud cases highlight the need for a regulatory crackdown on crypto

The California Department of Financial Protection and Innovation (DFPI) announced last month that it had issued desist and refrain orders to 11 entities for violating California securities laws. Some of the highlights included allegations that they offered unqualified securities as well as material misrepresentations and omissions to investors.

These violations should remind us that while crypto is a unique and exciting industry for the public at large, it is still an area that is rife with the potential for bad players and fraud. To date, government crypto regulation has been minimal at best, with a distinct lack of action. Whether you are a full-time professional investor or just a casual fan who wants to be involved, you need to be absolutely sure of what you are getting into before getting involved in any crypto opportunity.

California has toyed with setting up a crypto-specific business registration process for those looking to do business in the state. The proposed framework was vetoed by Governor Gavin Newsom as the resources required to establish and enforce such a framework would be prohibitive for the state. While this type of compliance infrastructure has not been employed yet, it points to concerns that regulatory authorities have related to the crypto industry.

There appears to be a pattern that new industries, especially those that garner as much international attention as crypto, are especially susceptible to fraud. One must go only as far back as cannabis legalization to find the last time California had to deal with fraudulent schemes at this scale.

Related: The feds are coming for the metaverse — from Axie Infinity to Bored Apes

It appears inevitable that California, known to be a first mover in regulation and compliance, will create some form of crypto-specific compliance infrastructure in the name of consumer protection. If history is any indication, once California releases its framework, other states will follow.

Federal and state representatives have been attempting to draft legislation to establish financial standards for crypto with little luck to date. At the federal level, Senators Cory Booker, John Thune, Debbie Stabenow and John Boozman co-sponsored a bill to empower the Commodities Futures Trading Commission (CFTC) to serve as the regulatory body for crypto, while Senators Kirsten Gillibrand and Cynthia Lummis co-sponsored a bill to establish more clear guidance on digital assets and virtual currencies. Lawmakers have even reached out to tech luminaries such as Mark Zuckerberg to weigh in on crypto fraud.

Cryptocurrencies, California, CFTC, Legislation, Law, Scams, Fraud, Bitcoin ScamsSource: Chainalysis

None of these or other similarly crypto-focused bills are expected to pass in 2022, but this level of bipartisan cooperation has been unprecedented in recent times. The collaboration should reflect just the sheer magnitude of the need for a regulatory framework. Said another way, Democrats and Republicans speaking to one another about anything should stop the presses, but the fact that they are co-sponsoring multiple bills should tell us that there is a monumental requirement for guidance.

How should one approach investing in the crypto space if the government is not going to establish controls for crypto? There are a few general points that one should consider if they are presented with a crypto investment opportunity.

Related: GameFi developers could be facing big fines and hard time

When reviewing any opportunity, do your due diligence! Do not take anyone’s word without some level of substantive support. If crypto is not an area of expertise, reach out to professionals who do have qualified experience. Make sure to utilize crypto monitoring and blockchain analysis tools, if possible, as part of the vetting process.

A common strategy of fraudsters is putting undue pressure or artificial timelines on a potential close. Slow down the process and use any and all time necessary to make an investment decision.

If it sounds too good to be true, it probably is. As overplayed as the cliché may be, it does bring up a valid point. There have been instances of schemes offering to pay initial and ongoing dividends for any new investors that are brought in and for additional dividends to be paid from any investors that those new investors bring in. If this sounds like a pyramid or multi-level marketing scheme, that’s because it is. Terms like “No Risk Investment” get thrown around as well. Ultimately, if no one knows where the opportunity is coming from, beware.

While crypto can be a fun and electrifying topic with many legitimate opportunities, there are bad players who will take advantage of the lack of government oversight and the excitement of overenthusiastic or undereducated investors.

Zach Gordon is a certified public accountant (CPA) and vice president of crypto accounting for Propeller Industries, serving as fractional chief financial officer and adviser to a portfolio of crypto and Web3 clients. He has been named a Forty Under 40 CPA, sits on the Digital Assets Committee for the NYSSCPA and has been working with crypto clients in a variety of capacities since 2016.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. 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.

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Putin gives Snowden citizenship, Interpol elicits help in Do Kwon search and FTX US buys Voyager: Hodler’s Digest, Sept. 25-Oct. 1

Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Pro-centralization Russian president grants citizenship to Edward Snowden: Report

Edward Snowden has reportedly received Russian citizenship via a decision from the country’s president, Vladimir Putin. Snowden has been a permanent resident in Russia since 2013 after he exposed secrets relating to the United States National Security Agency. However, Snowden favors less government involvement than Putin’s approach to leadership. Snowden has offered comment on crypto multiple times and helped build crypto asset Zcash.

Breaking: Interpol ‘Red Notice’ issued for Do Kwon — South Korea prosecutors

Global criminal police organization Interpol has put out an alert known as a Red Notice in order to help locate and arrest Terraform Labs co-founder Do Kwon, wherever he may be. Terra’s ecosystem fell apart earlier in 2022. Charges were brought against Kwon in South Korea for his involvement in the Terra project. Kwon has tweeted that he is not hiding. He was thought to be in Singapore, although Reuters reporting has indicated a possible change in location. Authorities in South Korea have also taken steps to freeze funds reportedly associated with Kwon.

FTX US wins auction for Voyager Digital’s assets

The auction to acquire Voyager Digital assets ended this week when crypto exchange FTX US emerged as the winner, edging out competing bids from CrossTower and Binance. The U.S. exchange paid around $1.4 billion for Voyayer’s assets, which is roughly the same as the lender’s remaining assets. The deal is pending approval from a U.S. bankruptcy court. Wave Financial also participated in the bidding and has since debated the outcome.

Judge orders SEC to turn Hinman documents over to Ripple Labs after months of dispute

U.S. District Court Judge Analisa Torres ruled that the U.S. Securities and Exchange Commission (SEC) must provide information about comments from a former government official that could impact Ripple’s fight against the securities regulator. In a 2018 speech, former SEC Corporation Finance Division Director William Hinman noted that Bitcoin and Ether did not classify as securities. The ruling from Torres means the SEC must not hold back documents related to that speech. The battle between Ripple and the SEC began in 2020, with the commission calling XRP a security.

Pantera plans to raise $1.25B for second blockchain fund: Report

After launching its first blockchain fund in 2021, crypto-centric hedge fund Pantera Capital is reportedly looking to raise a whopping $1.25 billion for a second fund targeting digital asset projects. “We want to provide liquidity for people that are kind of giving up because we’re still very bullish for the next 10 or 20 years,” Pantera CEO Dan Morehead told Bloomberg.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $19,777, Ether (ETH) at $1,356 and XRP at $0.47. The total market cap is at $954.03 billion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Quant (QNT) at 37.76%, Terra Classic (LUNC) at 21.41% and Helium (HNT) at 20.93%.  

The top three altcoin losers of the week are Chiliz (CHZ) at -9.29%, Lido DAO (LDO) at -6.82% and Cronos (CRO) at -6.31%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“The most important thing is that [the Ethereum Merge] was executed flawlessly. Everything that was supposed to happen did happen. And none of the things that people were worried about did happen.”

Eli Ben-Sasson, co-founder of Starkware

“I think the world is just waking up to reality and Ethereum just went way off into fantasyland at the exact wrong time.”

Cory Klippsten, CEO of Swan Bitcoin

“In DeFi, you can’t get away with letting one borrower be half of a lending pool because people see that and they question the risk management there.”

Sid Powell, CEO and co-founder of Maple Finance

“In our genres that we’re hitting, there might be roughly 500 million people that we can bring in that literally won’t know that they’re playing a crypto game.”

Kieran Warwick, co-founder of Illuvium

“People need to be able to interact with apps and services and content and transactions without knowing that they’re using crypto.”

Jeremy Allaire, CEO of Circle

“SMS 2FA is better than nothing, but it is the most vulnerable form of 2FA currently in use.”

Jesse Leclere, security expert for CertiK

“I’m writing code in my living room. […] I’m making zero effort to hide.” 

Do Kwon, co-founder of Terra

Prediction of the Week 

Bitcoin price due ‘big dump’ after passing $20K, warns trader

Bitcoin largely remained below $20,000 this week, though the asset successfully broke above that level several times, according to Cointelegraph’s BTC price index. After zipping past $20,000 on Sept. 30, Bitcoin fell right back down below the level, seeming to line up with the timing of a recent speech by Russian President Vladimir Putin. Pseudonymous Twitter user “Il Capo of Crypto” predicted the price action in a Sept. 30 tweet: “Pump to 20000-20500 before Putin’s speech. Then big dump.”

FUD of the Week 

California files order against Nexo interest account, says it’s 8th state to take action

Crypto lending platform Nexo has been ordered by California’s Department of Financial Protection and Innovation (DFPI) to halt the operation of its Earn Interest Product. The agency asserted that the product does not fall in line with regulatory approval requirements. Nexo essentially froze the product for U.S. customers earlier in 2022, although not fully, according to the DFPI. Nexo reportedly faces similar action from New York, Vermont and five other state regulators. Nexo explained to Cointelegraph that it has been working with regulatory authorities in the U.S.

MEV bot earns $1M but loses everything to a hacker an hour later

A Maximal Extractable Value (MEV) bot capitalized on an arbitrage opportunity on decentralized exchange Uniswap V2, tallying about $1 million worth of Ether in profits in a single day. The fanfare was short-lived, however, as the bot’s apparently questionable code left it vulnerable to exploitation, with a hacker apprehending the funds on the same day.

SEC alleges fintech and ‘market maker’ firms manipulated crypto market in token scheme

Hydrogen Technology Corporation and market maker Moonwalkers Trading Limited face action from the SEC for alleged market manipulation. In 2018, Hydro tokens were dispersed via multiple avenues, including an airdrop. Hydrogen and Moonwalkers then allegedly collaborated to make it seem like the asset was significantly active on the market and subsequently dumped Hydro tokens for profit.

Best Cointelegraph Features

5 years of the ‘Top 10 Cryptos’ experiment and the lessons learned

“Index investing can be boring, but it saves you from the worst possible outcomes.”

Throw your Bored Apes in the trash

From carrying medical data to streamlining royalty payments, nonfungible tokens serve a variety of important technological purposes. Bored Apes are a demeaning distraction.

Tax on income you never earned? It’s possible after Ethereum’s Merge

IRS rules weren’t ready for the Ethereum upgrade. It’s unlikely to become the fiasco that taxpayers experienced when Bitcoin forked in 2017, but there are measures they can take to prepare for whatever the IRS decides.

The best of blockchain, every Tuesday

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NFT space bridges passions for tennis legend Maria Sharapova

Tennis legend Maria Sharapova appeared at the Binance Blockchain Week Paris 2022 to share her interest in nonfungible tokens (NFTs).

During an exclusive interview with Cointelegraph, Sharapova mentioned that “she is exposing herself to this new world of crypto and Web3,” noting that the sector will help her better engage with her fans. Sharapova was also one of the strategic investors behind MoonPay’s Series A financing round, yet she mentioned that she aims to bridge her personal experiences to the digital world moving forward.

Maria Sharapova (right) with Cointelegraph senior reporter Rachel Wolfson (left) at Binance Blockchain Week Paris 2022. Source: Rachel Wolfson

Cointelegraph: What are you doing here today at Binance Blockchain Week Paris?

Maria Sharapova: I’m crypto curious and would like to figure out how to bridge the incredible physical experiences that I’ve been able to have with my fans over so many years. I’m now finding ways to include experiences in the digital world, so that’s what I’m most excited about. Also, as a female entrepreneur, I believe it’s important to pave the way for other women to enter Web3. Money is a topic that I feel we don’t speak enough about as women.

CT: Do you have plans to launch an NFT project?

MS: I’ve been looking at this space for several months now, as I’m someone who is more in favor of opportunities for the long haul. When I saw the opportunity to bridge physical with digital experiences, I knew I wanted it to be a long-term experience for myself. Storytelling is very important and it’s a huge component of Web3. I think stories will be told better for both parties when thinking about a project long-term.

Recent: The Caribbean is pioneering CBDCs with mixed results amid banking difficulties

CT: Do you think NFTs can help create better fan engagement?

MS: Absolutely. NFTs are about finding ways to communicate with the right communities interested in what I’m doing within a different type of space. For example, I was seen on a television screen every week playing tennis for so many years, yet I no longer have that platform on a daily basis because I retired a couple of years ago. The Web3 experience has given me access to my fans in entirely new ways. I feel like I’m more engaged with them, as opposed to them just being engaged by watching me compete.

CT: As a female entrepreneur and former athlete, do you have plans to get more women involved in Web3?

MS: I want to allow women to have a space where they experiment with Web3. For example, I was 17 when I won my first grand slam and social media was in no way part of that experience. It took years for me to get comfortable with social media over time. I think Web3 is also an area where one has to get out there in order to learn and grow from it. As I mentioned earlier, the conversation about money, finance, crypto and blockchain is a taboo conversation. People may feel that unless they know about these topics, they shouldn’t speak up. But I think this should be the other way around — you learn a lot more if you ask questions and get involved.

CT: Why did you decide to invest in MoonPay?

MS: I want to diversify my portfolio. In the beginning, my investments were around consumer goods. For example, I invested in the sunscreen brand Supergoop early on. I am now exposing myself to an entirely new category.

CT: What do you think are the biggest challenges associated with Web3 and how can we overcome these?

MS: I’d love to see the quality of Web3 experiences come through a bit more and improve, specifically in the digital space.

Recent: Are decentralized digital identities the future or just a niche use case?

CT: Any additional comments?

MS: I’m really interested in the NFT space because it bridges my passion for fashion, interior design and creating spaces that are unique to individuals and communities. I’ve become more interested in this space because it has more of a design perspective. It’s also an entirely new revenue stream that both artists and women are discovering.

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What is the economic impact of cryptocurrencies?

Although the cryptocurrency market appears to grow in a positive feedback loop, that does not mean that (un)expected events may not impact the trajectory of the ecosystem as a whole. 

Although blockchain and cryptocurrencies are fundamentally meant as ‘trustless’ technologies, trust remains key there where humans interact with one another. The cryptocurrency market is not only impacted by the broader economy, but it may also generate profound effects by itself. Indeed, the Terra case shows that any entity — were it a single company, a venture capital firm or a project issuing an algorithmic stablecoin — can potentially set into motion or contribute to a “boom” or “bust” of the cryptocurrency markets. 

The impact of such crypto-native events with systemic impact mirroring traditional finance domino effects, and the consequential falls of Celsius and Three Arrows Capital, all indicate that the crypto-economy is not immune to failures. Indeed, while traditional finance has institutions that are too big to fail, the crypto sector does not.

Looking in retrospect is always easy, but the Terra project was fundamentally flawed and unsustainable over time. Nevertheless, its downfall had a systemic impact as many projects, venture capital and standing companies were exposed and heavily impacted. It indicates that investing in cryptocurrencies is all about thinking about risks and potential rewards. 

The fall and domino effect across the board indicate the lack of maturity of the very sector itself. 

Since innovation and prices are inherently connected and the early-stage development of the crypto-economy offers lots of untapped potential, the said economy may continue to see events that temporarily undermine growth. 

Yet, many working in the sector have a “trustless” conviction that strong projects will keep up during temporary corrections and that the cryptocurrency winter will clean up the path for a cycle of unlimited, novel disruptive innovation.

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What is wrapped Ethereum (wETH) and how does it work?

Traders who use the Ethereum network are familiar with the ERC-20 technical standard and have most likely traded and invested in tokens that utilize it. After all, its practicality, transparency and flexibility have made it the industry norm for Ethereum-based projects.

As such, many decentralized applications (DApps), crypto wallets and exchanges natively support ERC-20 tokens. However, there’s one problem: Ether (ETH) and ERC-20 do not exactly follow the same rules, as Ether was created way before ERC-20 was implemented as a technical standard.

So, why does wrapped ETH matter? Briefly put, ERC-20 tokens can only be traded with other ERC-20 tokens, not Ether. In order to bridge this gap and enable the exchange of Ether for ERC-20 tokens (and vice versa), the Ethereum network introduced wrapped Ethereum (wETH). That said, wETH is the ERC-20 tradable version of ETH.

What is wrapped Ether (wETH)?

As mentioned, wETH is the wrapped version of Ether, and it’s named as such because wETH is essentially Ether “wrapped” with ERC-20 token standards. Wrapped coins and tokens virtually have the same value as their underlying assets. 

So, is wrapped Ethereum safe to trade and invest in? The answer is yes, as far as Ethereum is concerned. wETH is pegged to the price of ETH at a 1:1 ratio, so they’re basically the same. The only difference between wrapped tokens and their underlying assets is their use cases, especially for older coins like Bitcoin (BTC) and Ether.

Wrapped tokens are like stablecoins, to a certain degree. Come to think of it, stablecoins can also be considered “wrapped USD,” since they have the same value as their underlying asset, the United States dollar. They can also be redeemed for fiat currencies at any time.

Bitcoin also has a wrapped version called Wrapped Bitcoin, which has the same value as Bitcoin. The same goes for other blockchains like Fantom and Avalanche.

Wrapped Ethereum tokens can be unwrapped after they’ve been wrapped, and the process is simple: Users just have to send their wETH tokens to a smart contract on the Ethereum network, which will then return an equal amount of ETH. 

Wrapped tokens solve interoperability issues that most blockchains have and allow for the easy exchange of one token for another. For example, users cannot normally utilize Ether on the Bitcoin blockchain or Avalanche on the Ethereum blockchain. Through wrapping, underlying coins are tokenized and wrapped with a certain blockchain’s token standards, thus allowing for their use on that network.

How does wrapped Ethereum (wETH) work?

Unlike Ether, wETH cannot be used to pay gas fees on the network. Because it is ERC-20 compatible, however,  it can be used to provide more investment and staking opportunities on DApps. wETH can also be used on platforms like OpenSea to buy and sell through auctions.

Wrapping Ether tokens involves sending ETH to a smart contract. The smart contract will generate wETH in return. Meanwhile, ETH is locked to ensure that the wETH is backed by a reserve. 

Whenever wETH is exchanged back into ETH, the exchanged wETH is burned or removed from circulation. This is done to ensure that wETH remains pegged to the value of ETH at all times. wETH can also be acquired by swapping other tokens for it on a crypto exchange, such as SushiSwap or Uniswap.

So, what is the point of wrapped Ethereum? According to WETH.io, the ultimate goal is to update Ethereum’s codebase and make it ERC-20 compliant in itself, eventually eliminating the need to wrap Ether for the purpose of interoperability. But, until then, wETH continues to remain useful in providing liquidity to liquidity pools, as well as for crypto lending and NFT trading, among others. 

In short, it’s not really a matter of ETH vs. wETH since wrapping Ethereum is more of a workaround than a permanent solution. With the number of upgrades slated to happen on the Ethereum network over the years, Ethereum seems to be moving closer toward better interoperability by the day.

How to wrap Ether (ETH)?

There are several ways to wrap Ether. As mentioned, one of the most common ways to do so is by sending ETH to a smart contract. Another method is swapping wETH for another token via a crypto exchange.

Let’s look at three ways to generate wETH in the sections below:

Using the wETH smart contract on OpenSea

In this example, we’ll be using the OpenSea platform to convert ETH to wETH using the wETH smart contract.

First, click on “Wallet,” located at the top-right corner of OpenSea. Then, click on the three dots next to Ethereum and select “Wrap.”

Step 1: Select Wrap to convert ETH to WETH on OpenSea

Next, enter the value for the amount of ETH to be converted to wETH. Then, click “Wrap ETH.” This will call the wETH smart contract to convert ETH into wETH.

Step 2: Enter the amount of ETH that you want to convert to WETH

A MetaMask pop-up will appear, prompting the user to sign the transaction. 

Step 3: Confirm the transaction

A confirmation message will then appear once the wrap is complete.

Step 4: Confirmation of conversion of tokens

The converted wETH will show up in the wallet portion of the user’s OpenSea account. The wETH will bear a pink Ethereum diamond as its logo, distinguishing it from ETH.

Generating wETH via Uniswap

When using Uniswap, a user first has to connect their wallet and ensure the Ethereum network is selected.

Step 1: Connect your wallet and select the Ethereum network on Uniswap

Then, click “Select Token,” located at the bottom field, and select wETH from the list of options. 

Step 2: Select

Now, input the amount of ETH to be converted to wETH and click “Wrap.”

Step 3: Enter the amount of ETH that you want to convert to WETH and click

The transaction will then need to be confirmed from the user’s crypto wallet. Gas fees in ETH will also need to be paid at this stage. Once all the details are in order and the transaction has been confirmed from the user’s end, all that’s left to do is to wait for the transaction to be confirmed in the blockchain.

Generating wETH with MetaMask

Upon opening the MetaMask wallet, begin by ensuring that the selected network is “Ethereum Mainnet.” Then, click “Swap.”

Step 1: Select

Then, select wETH from the “Swap to” field.

Step 2: Select WETH from the “Swap to” field

Next, input the amount of ETH to be swapped. Then, click “Review Swap.”

Enter the amount of ETH you want to swap and click Review Swap

A window displaying a quote of the conversion rate will appear. Since it involves the conversion of ETH to wETH, the rate should be 1:1. To finalize the transaction, click “Swap.”

Step 4: Click

How to unwrap Ether (ETH)?

Unwrapping Ether can also be done manually, such as by interacting with a smart contract. For instance, ETH can also be unwrapped in the same way that it can be wrapped via the wETH smart contract on OpenSea. The only difference is that instead of clicking “Wrap ETH,” the user has to click “Unwrap wETH.”

The same goes for swapping wETH back to ETH, which can be done by using Uniswap or MetaMask. The process for unwrapping is essentially the same as the process outlined above for wrapping ETH on both platforms. The only difference is that the values should be changed (from wETH to ETH).

What are the risks of using wrapped tokens?

Ethereum co-creator Vitalik Buterin himself pinpointed one of the main disadvantages of wrapped assets. According to Buterin, the main problem with many of these wrapped assets is their sensitivity to centralization. 

Currently, wrapping assets are not Turing-complete and cannot be automated via the Ethereum blockchain. As discussed, wrapping is usually only carried out using central programs, thus the concern for possible manipulation and abuse.

Issued wrapped tokens depend on the third-party platforms that issue them, inevitably subjecting decisions pertaining to wrapped assets to central entities. Buterin voiced his concerns about the possibility of such a mechanism undermining the core principles of decentralization and transparency that the blockchain industry stands for.

Future of wrapped tokens

Currently, wrapped tokens make it possible for blockchains to interact with one another. This allows for a much more decentralized ecosystem, where tokens can be easily traded or exchanged between different platforms.

Better interoperability solutions are on the horizon, such as updating blockchains’ codebases to be compatible with each other or using bridge chains. For Ethereum, at least, the plan is to eventually phase out the use of wrapped tokens like wETH alongside network developments.

This does not mean that wrapped tokens are going away anytime soon. They will continue to play an important role, providing valuable service to those who need it. For one, wrapped tokens can serve as a stabilizing force between different blockchains, as they help maintain consistent prices between them.

They can also help facilitate cross-chain atomic swaps, which are becoming increasingly popular. In the long run, however, wrapped tokens will likely become less and less necessary as blockchains become more interoperable.

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Nexo-labeled address withdraws $153M in Wrapped BTC from MakerDAO

Just a few days after market analysts predicted a 50% drop in NEXO price due to regulatory pressure and investor concerns, a crypto wallet address labeled as NEXO 0x8fd withdrew 7,758.8 Wrapped Bitcoin (WBTC) — roughly worth $153M — from MakerDAO.

On Sept. 26, regulators from eight U.S. states filed a cease-and-desist order against Nexo under the allegations of offering unregistered securities to investors without warning. Moreover, Kentucky regulators accused Nexo of insolvency owing to liabilities exceeding assets when excluding Nexo.

Following suit, on Sept. 30, blockchain investigator Peckshield alerted the transfer of 7,758.8 WBTC from MakerDAO. One of the main reasons the crypto community chose to link the funds’ withdrawal with Nexo’s insolvency rumors is the name of the wallet — Nexo: 0x8fd.

MakerDAO details overview. Source: Peckshield

As shown above, the total value locked (TVL) on MakerDAO has suffered a decline of 43.3% over the past year, which currently stands at $7.11 billion.

Transaction details overview. Source: Peckshield

Transaction details show the transfer of DAI tokens worth $50.1 million from Nexo: 0x8fd to a null address (possibly a burn address) via DSProxy. As highlighted in the above screenshot, the transaction hash also confirms the transfer of $153.2 million in WBTC.

While the crypto community suspects wrongdoing, further investigations on the matter are underway.

Nexo has not yet responded to Cointelegraph’s request for comment.

Related: Nexo ‘surprised’ by state regulators’ actions, says co-founder

Despite the ongoing FUD, Nexo continues to broaden its business. Most recently, on Sept. 27, Nexo purchased a stake in Hulett Bancorp, a holding company that owns a federally chartered Summit National Bank.

The acquisition allows Nexo and its customers to open bank accounts with Summit National Bank. In addition, Nexo’s retail and institutional clients based out of the US will get access to asset-back loans, card products, and escrow and custodial solutions offered through Summit.

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Net Bitcoin ATMs growth drops globally for the first time ever

The domino effect of a prolonged bear market seeped into the Bitcoin (BTC) ATM ecosystem as September 2022 recorded negative growth in global net installations for the first time in history — primarily driven by a slowdown in the United States.

The total number of Bitcoin ATMs installed over time fell to 37,980 in Sept. from an all-time high of 38,776 ATMs in August — resulting in a drop of -2.05%, as evidenced by data from CoinATMRadar.

The number of Bitcoin machines installed over time. Source: CoinATMRadar

Data on net changes of crypto ATM installations confirm that, in September, 796 crypto ATMs were pulled off from the global network. The United States alone recorded a reduction of 825 ATMs. However, Europe, Canada and a few other jurisdictions cushioned the downfall with new installations locally.

The net change of cryptocurrency machines number installed and removed monthly. Source: CoinATMRadar

Despite the setback, data based on 60 days suggest that nearly 14 crypto ATMs are being installed globally per day, with Genesis Coin representing a 40.3% share of ATMs among other manufacturers. Other popular crypto ATM manufacturers include General Bytes and BitAccess.

The sudden reduction in the crypto ATM installations can be attributed to geopolitical tensions among factors, including lack of regulatory clarity and market uncertainties.

Related: How Bitcoin ATMs in Greece fare during a record-breaking tourist season

Although crypto ATM installations have taken a temporary hit due to external factors, countries continue to show interest in having functional crypto ATMs within their borders.

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Most recently, Japan decided to reintroduce crypto ATMs after 2014, spearheaded by local crypto exchange Gaia Co. Initially, new ATMs will be installed across Tokyo and Osaka. The firm plans to set up 50 BTMs across the country by August 2023.

As Cointelegraph reported, Gaia became the first locally-registered crypto company to have installed crypto ATMs in Japan.

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US senator bill seeks to cushion crypto exchanges from SEC enforcement actions

United States Senator Bill Hagerty, a member of the Senate Banking Committee, introduced legislation seeking a safe harbor for cryptocurrency exchanges from “certain” Securities and Exchange Commission (SEC) enforcement actions.

The Digital Trading Clarity Act of 2022, introduced by Sen. Hagerty, aims to provide regulatory clarity around two primary concerns plaguing crypto exchange establishments — (i) the classification of digital assets and (ii) related liabilities under existing securities laws.

A bill to provide digital asset intermediaries with a safe harbor from certain enforcement actions by the Securities and Exchange Commission, and for other purposes. Source: congress.gov

Sen. Hagerty outlined an overview of the problems amid regulatory hurdles:

“The current lack of regulatory clarity for digital assets presents entrepreneurs and businesses with a choice: navigate the significant regulatory ambiguity in the U.S., or move overseas to markets with clear digital asset regulations.”

The aforementioned regulatory uncertainty, according to Sen. Hagerty, discourages investments in the crypto spaces and hampers job creation opportunities in the US. As a result, the blockade “jeopardizes the United States’ leadership in this transformational technology at such a crucial time.”

The senator believed that the legislation, when passed, would not only provide “much-needed certainty” to crypto businesses but also improve the growth and liquidity of U.S. cryptocurrency markets.

To establish the legislation as law, the bill needs approval from the Senate, the House and the President of the United States.

Related: US lawmakers propose amending cybersecurity bill to include crypto firms reporting potential threats

Running parallel to the regulatory reforms recommended by the US senators, the federal government amped up efforts to study the feasibility of central bank digital currencies (CBDCs) in the American market.

Under Biden’s directive, the Office of Science and Technology Policy (OSTP) analyzed 18 CBDC design choices — outlining various pros and cons of each system:

“It is possible that the technology underpinning a permissionless approach will improve significantly over time, which might make it more suitable to be used in a CBDC system.”

The technical evaluation for a U.S. CBDC system highlighted the department’s inclination toward an off-ledger, hardware-protected system.

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