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tweet on the official page of the crypto asset.

Through its Buy Crypto tool, Kraken allows its users to purchase cryptocurrencies via their MasterCard or Visa Card. According to the crypto exchange firm, before a user can access this tool, he needs to have fulfilled specific requirements like verifying his account to a particular level. He must also be residing in one of the countries supported by the exchange.

Not only that, but the crypto firm also insists that users’ names on the account and the card must align for any card purchase to be successful.

It is expected that the firm would charge a transaction fee of 3.75% of every purchase. The minimum amount that could be spent on a transaction is €10 ($12.14), while the maximum is €400 ($485.53) over seven days.

Kraken would also be keeping records of every transaction in Monero to comply with regulations guarding the exchange’s operations.

Due to the level of crackdown imposed on the authorities’ privacy coins, some crypto exchanges have begun delisting privacy coins like Monero, Zcash, and Dash on their platform.

We reported the case of top crypto exchange firm, Bittrex, who cited the changing regulations and policies guiding the industry as to delisting privacy coins.

The authorities believe that privacy coins like Monero and the rest are being used to sponsor illegal activities. Dark web market site, White House market, only accepts Monero transactions because of its privacy feature, and the site is notorious for selling illicit drugs and other law-breaking acts.

Q1. 

The rally of altcoins has in part been led by the momentum of Ethereum. After ETH surpassed a major resistance level at $600, it continued to rally above $1,000.

ETH is now close to reaching its all-time high above $1,400, rising 60% in the first two weeks of 2021. Pal wrote:

Possibly due to the improving market sentiment around ETH, altcoins have also performed particularly well in the past week.

As Cointelegraph reported, large-cap altcoins, such as Polkadot (DOT) and Cosmos (ATOM) have seen large gains against both Bitcoin and the U.S. dollar so far in January.

At the same time, decentralized finance (DeFi) tokens, such as Aave, Yearn.finance, and SushiSwap heavily outperformed both Bitcoin and Ether in the last two weeks with data confirming a continuous rise in sentiment and social media activity in recent months.

Meanwhile, the uptrend of DOT and ATOM could be driven by the frenzy around DeFi tokens, considering that the demand for alternative blockchain networks has increased.

The Ethereum blockchain network has become increasingly congested as of late, as the user activity on DeFi protocols significantly rose to push up fees in the process.

Protocols like Aave, SushiSwap, and Synthetix saw rapid growth since November, propelling Aave and Synthetix to billion-dollar market caps.

Wangarian, a capital allocator at the DeFi-focused fund Defiance Capital, told Pal:

On Jan. 7, in a tweet thread, Pal said that he believes Ether could achieve $10,000 to $20,000, if it follows the same cycle as Bitcoin.

Pal pinpointed Metcalfe’s law, which states the effect of a telecommunications network is proportional to the square of the number of connected users of the system, to support a bull case for Ether. He wrote:

Although there is no specific correlation between Ether and the rest of the altcoin market, if Ether grows to a trillion-dollar blockchain protocol, major projects developed on top of Ethereum could grow proportionally.

Most notably, DeFi tokens would likely benefit the most from Ethereum’s network effect and rapid growth if it grows at the pace of Bitcoin in 2016.

that the entire crypto industry can contribute to it. In the exchange, Hoskinson revealed that IOHK was working on a mysterious project that could solve Twitter’s decentralization problem.

After Twitter removed standing U.S. President Donald Trump from its platform, the move sparked a worldwide conversation about censorship and centralization. Many have seen the cross-platform removal of conservative and republican voices as a coordinated attack that could only be solved through decentralization.

Surprisingly enough, Jack Dorsey, the founder, and CEO of Twitter was among a few tech leaders to agree with this.

In a Twitter thread explaining the company’s reasoning behind Trump’s removal, he said that his passion for Bitcoin stems from his appreciation of its foundations—a lack of control and influence by any single individual or entity.

This, he explained, was why he started Blue Sky in 2019, an initiative focused on creating a decentralized standard for social media. Twitter’s goal, he explained, was to ultimately become a client of that standard and facilitate public conversation on the internet.

Charles Hoskinson, the CEO of IOHK, chimed in the discussion to address the issues behind Dorsey’s proposed decentralization model.

Hoskinson said that a decentralized standard for social media shouldn’t be developed within the same company that runs Twitter. A vocal proponent of decentralized systems governed by the community, Hoskinson called on Dorsey to make Blue Sky and other decentralization efforts coming from Twitter open-source. This way, he tweeted, the entire crypto industry will be able to contribute.

His brief comment on the tweet also revealed that IOHK, the company behind the Cardano blockchain, was working on something similar to what Dorsey was trying to achieve with Blue Sky. While Hoskinson only said that the company was “working on something,” the broader crypto community immediately assumed that IOHK was developing a decentralized social media platform based on the Cardano blockchain.

— Charles Hoskinson (@IOHK_Charles) January 14, 2021

Neither Dorsey nor anyone associated with Twitter has addressed this yet. At least two dozen comments on Hoskinson’s original tweet have been removed from Twitter, despite the post garnering hundreds of likes.

The Twitter founder is a known Bitcoin advocate.

Jack Dorsey, the founder and CEO of Twitter, revealed that the company will be spearheading an effort to create an open standard for decentralized social media.

Jack Dorsey, the CEO of Twitter, officially confirmed on Twitter that the platform has extended the Bitcoin emoji until the year 3000, which is 979 years from now.

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.

A large narrative over the past few months is the introduction of institutional capital to the Bitcoin space.

Both Bitcoin and Ethereum have faced sharp declines over the past few hours despite the move to $40,000 on Thursday.

The price of Bitcoin has recovered strongly overnight, rising from around $34,000 to $38,500.

However, it quickly gained momentum and reached the 24-hour high of $156. The cryptocurrency remained unstable, fluctuating greatly. At the time of writing, Litecoin was priced at $147. 

The overall market sentiment for the cryptocurrency is bullish. 14 of the total 28 technical indicators are standing at buy, nine are neutral, and five are sell indications. Eight of the oscillators are neutral, whereas two are at buy with only one indication of sell. 12 of the moving averages are giving out a buy signal with one neutral indication and four sell indications. 

Analyst Mountain Trader FX had identified the cryptocurrency in an ascending channel formation in their Litecoin price prediction. However, during the corrective move, Litecoin fell out of the channel as bearish pressures dominated. The analyst then pointed out the formation of a bear pennant by the price action of the cryptocurrency. The formation is indicative of the strong bearish pressures that currently have a hold on Litecoin; hence, the analyst believes that Litecoin will be falling soon.

At the time of writing, a break-out from the bear pennant had been identified, although it is not confirmed yet. If the LTC break-out from the bear pennant is confirmed, the analyst believes that the cryptocurrency’s first target price will be $122. And if Litecoin continues the downward trajectory, Litecoin is likely to reach the second target price at $98. The analyst also believes that the cryptocurrency can pick up its growth from the identified target price levels.

Analysts are not all bearish on the future outlook of Litecoin as some analysts have predicted very optimistic price targets for the cryptocurrency. Analyst Bitcoin Guru has identified a mega-bull in their Litecoin price prediction. The analyst has based their analysis on the historic mega-bull fractals that formed parabolas. The cryptocurrency is currently developing a bullish fractal.

Per the analyst, Litecoin has completed a long-term double bottom bull reversal of the bear trend during 2019 by establishing a rounding bottom, indicating an optimistic future for the cryptocurrency. The analyst has set high price targets for the cryptocurrency, which would hold if the mega-bull is confirmed. The first target price is at $2,300, followed by $3,700 and finally $4,900.

Another analyst, Chris Ptaco, is also very hopeful for Litecoin’s future. The analyst hopes for a price level of $3,000 by 2022 for the cryptocurrency in his Litecoin price prediction. He further establishes the cryptocurrency is in a sharp ascending channel formation. He believes that Litecoin needs to stay above the resistance-turned-support level of $145 to cross the $350 price level. Per the analyst, once the cryptocurrency crosses the $350 price level and stabilizes, it is very likely for Litecoin to continue upwards on a straight trajectory to the $3,000 price level.

same period. Similarly, Chainlink (LINK) is trading at $18.4 in the wake of a 15% upswing. As reported earlier, Cosmos (ATOM) intends to rally to $10 but currently holds above $8.

Bitcoin revisited $40,000 during the Asian session on Friday but failed to sustain the uptrend. A correction came into play, sending Bitcoin back to the support at $38,000.

The President of the European Central Bank, Christine Lagarde, in an interview at a Reuters, hosted conference reckoned that the largest cryptocurrency had some “funny business” that need stemming out by a global layer of regulations. Lagarde also said that a digital euro is likely to see the light of day in nearly five years.

The pioneer cryptocurrency is fighting to remain afloat at $38,000. This comes after BTC suffered rejection at $40,000 earlier in the day. Marginally under $38,000, the 50 Simple Moving Average is in line to offer support.

Holding above the moving average might help the bulls avoid declines while refocusing Bitcoin on the uptrend to $40,000. However, the Relative Strength Index highlights that bears have more influence, at least for now.

BTC/USD 4-hour chart

Notably, Bitcoin may resume the uptrend if the prices manage to close the day above the 50 SMA if not $38,000. Some delays should be expected at $40,000, but Bitcoin would gain the proper momentum to achieve a new record high if broken.

The smart contract giant has brought down a couple of crucial resistance zones; $1,100 and $1,200. However, its immediate upside is limited at $1,240. Ether must hold firmly above the 50 SMA to sustain the uptrend. Besides, price action beyond $1,240 may help validate the gains to $1,300.

The Moving Average Convergence Divergence or the MACD shows that the trend is leaning slightly to the bullish side. However, losses will come into the picture if the MACD (blue line) crosses below the signal (orange line).

ETH/USD 4-hour chart

If the price is rejected at the 50 SMA, we can expect Ether to seek support at the 100 SMA. The 100 SMA may absorb some of the selling pressure and could be the barrier that prevents the price from retesting $1,200.

Note that, Ethereum has been bouncing off ascending trendline support from the beginning of the week. Therefore, it is likely that the losses will be mitigated at this level and allow ETH/USD to rebound strongly.

XRP is pivotal in a narrow range running from $0.29 and $0.3. Countless attempts have been made to clear the immediate resistance to no avail. On the other hand, bulls have ensured no significant declines into the picture by vigorously defending the short-term support at $0.29.

Other vital levels to keep in mind during this consolidation period are the 50 SMA (resistance slightly above $0.3) and the 100 SMA (critical support around $0.27). Trading above the former may validate an uptrend to the 200 SMA ($0.35).

XRP/USD 4-hour chart

On the flip side, massive price drops could engulf Ripple if the 100 SMA support is broken. The bearish leg is likely to stretch to $0.25 before the price rebounds for another shot at $0.3.

successful break and a follow up move above $36,000, bitcoin price started a strong increase. BTC broke a couple of key hurdles near the $38,000 level to move further into a bullish zone.

The price gained pace and broke the $39,200 resistance. It even spiked above the $40,000 resistance and settled above the 100 hourly simple moving average. A high is formed near the $40,212 level and the price is currently consolidating gains.

It corrected below the $39,500 and $39,200 levels. A low is formed near $38,052 level and the price is currently forming a breakout pattern. It climbed above the 50% Fib retracement level of the recent decline from the $40,212 high to $38,052 low.

It seems like there is a key contracting triangle forming with resistance near $39,425 on the hourly chart of the BTC/USD pair. The triangle resistance is close to the 61.8% Fib retracement level of the recent decline from the $40,212 high to $38,052 low.

If there is a clear upside break above the triangle resistance, the price could clear the $40,000 level. In the stated case, bitcoin price might aim a strong surge and the bulls are likely to aim a new all-time high in the coming sessions.

If bitcoin fails to clear the triangle resistance and $40,000, there is a risk of a fresh decline. An initial support is near the $38,500 level.

A downside break below the $38,500 and $38,000 support levels may possibly push the price towards the main $36,000 support zone in the near term.

Technical indicators:

Hourly MACD – The MACD is slowly losing momentum in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is moving lower towards the 50 level.

Major Support Levels – $38,500, followed by $36,000.

Major Resistance Levels – $39,450, $40,000 and $41,800.

hacker.

According to a report by India Today, the hacker named Srikrishna alias Shreeki was arrested on 18 November for allegations of breaking into government websites. During the investigation, police discovered that Shreeki had hacked 3 Bitcoin exchanges and 10 poker sites to steal more than 30 Bitcoin.

The hacker used malware to target government websites, he also hacked online gaming portals and other websites to win money and crypto assets online. According to a report by ANI, Srikrishna has apparently confessed to hacking the e-procurement website of the Karnataka government in 2019.

The crypto hacks around the world are on the rise, several attacks were reported in recent months. A significant rise in hacking activities is mainly due to a jump in cryptocurrency prices. The cryptocurrency market cap jumped above $1 trillion earlier this month as the value of the world’s largest cryptocurrency Bitcoin now stands at around $38,000.

Stocks to Watch This Week – Expedia Group, IncGo to article >>

India has encountered several hacks in the past related to Bitcoin and other crypto-assets. Microsoft released a report earlier in 2020 and mentioned that Indian users have a relatively higher chance of facing a crypto attack.

“India recorded a cryptocurrency mining encounter rate that was 4.6 times higher and drive-by download attack volume that was three times higher than the regional and global average. India registered the seventh-highest malware encounter rate across the region, at 5.89 percent in the past year. This was 1.1 times higher than the regional average. The report also found that India recorded the third-highest ransomware encounter rate across the region, which was two times higher than the regional average,” the report from Microsoft stated.

In the recent case, Bengaluru police are investigating the matter to check if there are other hackers associated with such incidents.

and even more over the past six months. Other cryptocurrencies aside from BTC have also done well.

But what is behind the ongoing bull market? A Singapore-based trading desk suggests that the Bitcoin rally is largely a byproduct of institutional inflows entering the Bitcoin market via Grayscale. Grayscale Investments is a digital asset manager focused on institutions based in New York.

Prop trading company and liquidity provider QCP Capital commented on Friday morning that Bitcoin’s recent rally has largely been a byproduct of Grayscale’s Bitcoin Trust, an institutional investment product for BTC.

Bitcoin began to show signs of weakness (spot buying pressure shifting to futures buying pressure) when Grayscale temporarily suspended inflows at the end of December.

The sell-off peaked early this week when the fund suspension came to an end, QCP explained:

“Previously we highlighted GBTC as too big to fail in our new year update, and the sell-off on Monday/Tuesday peaked at the end of their 2-week fund suspension to new investors. On Wednesday they reopened again and this stemmed the selloff, as ~5k of BTC was added to their fund in just the 2 days since.”

— QCP Capital (@QCPCapital) January 15, 2021

The firm believes that this is a sign that Grayscale’s inflows are actually a large amount of the demand for Bitcoin on the spot side:

“No doubt GBTC flows will remain the driving force for the market, at least until a US ETF is approved – something which we don’t yet foresee anytime soon.”

On the technical outlook for BTC, they seem to be certain that the overall macro trend remains bullish for the leading crypto asset.

Bitcoin held its parabolic uptrend this past week despite falling as low as $30,000, traders say.

They added that while the increased volatility has begun to be a worrying sign, it is thus far “perfectly consistent with an exponential trend at this stage.”

Earlier this past week, analysts noted that the extremely high volume seen in the Bitcoin market on Monday’s $30,000 correction was likely a sign that a reversal was near.

Volume spikes are often indicative of price reversals, as they mark an exhaustion of either a bull trend or a bear trend.

One reason that some are concerned is that there has been development in the Mt. Gox case that may result in an influx in the supply of Bitcoin to the market.

COINLAB SAYS AGREEMENT SUBJECT TO CREDITOR ACCEPTANCE

CREDITORS CAN CLAIM 90% of BITCOIN THEY ARE OWED FROM MT. GOX

— light (@lightcrypto) January 15, 2021

A prominent Singapore bank said Bitcoin and other public cryptocurrencies present a “new frontier” for contactless payments and digital money, one that’s past their days of being dismissed by bankers.

East Asian nations are forging ahead with their digital currency and blockchain plans, with most being largely lenient towards large-cap digital assets like Bitcoin.

Singapore’s financial regulatory authority announced that it is evaluating whether to allow crypto derivatives to be traded in the nation.

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.

Both Bitcoin and Ethereum have faced sharp declines over the past few hours despite the move to $40,000 on Thursday.

The price of Bitcoin has recovered strongly overnight, rising from around $34,000 to $38,500.

Bitcoin bounces at $30k support to allay fears of a complete capitulation.

assets has since been created. Despite the cryptocurrency’s longevity and staying power, there’s still debate amongst policy makers, regulators, and even investors, if the asset class should be defined as “money.”

A recent survey conducted by the International Monetary Fund has respondents overwhelmingly saying “yes” that Bitcoin and other altcoins are indeed money, and should be viewed as such.

Bitcoin price is trading at under $40,000, a few thousand from its recent high. And while a drop of that magnitude in the past would bring forth obituaries about Bitcoin, today, its viewed as an opportunity to get in slightly cheaper.

Investors and institutions are voting with their capital that the cryptocurrency will outperform the dollar and help to offset the coming bout of hyperinflation. Bitcoin is up more than 500% against the dollar since the pandemic struck, and while the short-term trend might be taking a breather, the long-term trajectory has always been up.

BTC is now the 16th world’s largest currency and climbing. It could some day become the global reserve currency, and be the first non-sovereign currency that’s used worldwide. There’s been over $10 trillion in value transacted across its network. Yet for some reason, there’s still debate over if cryptocurrencies are money.

The word currency is in the name, and Satoshi Nakamoto had every intention of his invention acting like money. And according to the general public, they also view cryptocurrencies as “money.”

The International Monetary Fund’s official Twitter account recently shared a survey asking followers if “digital currencies” are “really money?” Out of nearly 100,000 votes, the poll is currently leading around 80% in favor of crypto as money.

The IMF is a global organization consisting of “190 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade,” and more.

— IMF (@IMFNews) January 14, 2021

Recently, central banks in the US received the green light to begin using digital currencies to transfer money. Each passing day, cryptocurrencies take another step toward becoming “money.”

The debate exists, however, because although Bitcoin itself can easily be used as “money” to spend, few who buy the cryptocurrency plan on using it that way. But this is how superior forms of money first emerge. Owners of the old form of money begin to exchange it for what they perceive as the better form of money, and hold onto it because they believe it is more valuable.

Eventually, when enough people do this, the currency itself becomes undeniably money on its own. Could this be the path crypto is currently on?

institutions to comply to its rules, Ripple still has a huge chance of beating the suit.

XRP previously trialed as a virtual currency

For starters, Ripple has already been formally assessed by the Financial Crimes Enforcement Network (FinCEN) as a virtual currency. In the official civil money penalty charge of $700,000, XRP is addressed as nothing other than a virtual currency.

According to FinCEN, in 2015, Ripple Labs was in violation of the Bank Secrecy Act and Anti-Money Laundering (AML) regulations with XRP. The assessment by financial regulators over XRP was concluded by Ripple’s agreement to take further steps in ensuring compliance with AML/CFT obligations, and by the fintech firm coughing up $450,000 as forfeiture in the action.

Per the US Attorney Melinda Haag in charge of the penalty: “Ripple Labs Inc. and its wholly-owned subsidiary both have acknowledged that digital currency providers have an obligation not only to refrain from illegal activity but also to ensure that they are not profiting by creating products that allow would-be criminals to avoid detection.”

If law regulators had classified XRP as a virtual currency previously, it would make the Securities and Exchange Commission’s arguments over XRP being a security null.

Chairman of the SEC

During an MIT lecture, Gensler had said that he did see XRP as a security but that its true definition will be up to the courts, and not himself.

However, who he will be engaging with during the lawsuit may likely play in XRP’s outcome, as there is a familiar face on Ripple’s legal team: Mary Jo White. White and Gensler had both previously served as a Chairman of the SEC, under Barack Obama. During that time, Gensler was appointed Chairman of the CFTC by Obama. The likelihood that these two prominent financial figures have previously crossed paths is huge, as they worked under the same administration. While this is not to say that XRP’s outcome is definitive, it goes to point out that there is a likelihood that XRP’s lawsuit may be settled before it reaches trial. Currently, the pretrial court date for ripple is set for February 22.

XRP operations outside of the US

Regardless of the Securities and Exchange Commission’s lawsuit, XRP operations may remain inhibited, except for the fact that its founding company will be targeted for a hefty penalty. In the UK and in many countries in Asia, such as Japan, XRP has already acquired the title of crypto asset, therefore rendering its classification as a security invalid in those regions. XRP is also primarily traded outside of the US, especially in Asia.  

No consensus on cryptocurrencies in the US

The cherry on top of it all is that US regulators seem to disagree on the definition of cryptocurrencies overall. This was previously criticized by Ripple’s CEO Garlinghouse, who pointed out that the US Department of Justice’s Cryptocurrency Enforcement Framework report failed to reach a definitive conclusion of cryptocurrency.

In the report, eight separate regulatory bodies have all provided their own definition of cryptocurrency, some classifying it as a commodity while others said crypto should be listed as a security.

Dubbed Galaxy Digital Mining, the unit will be led by Fidelity’s former director of mining, Amanda Fabiano. The firm described that it will offer services like trading and risk management, investing and lending and corporate advisory to Bitcoin miners.

Additionally, the business wing will directly engage in Bitcoin mining as well. It set up its facility in a third-party datacenter in the United States.

“Bitcoin mining is the foundation of the Bitcoin network,” Fabiano said. “By mining ourselves, we are able to deeply understand and solve for the financial needs of miners, while also enhancing the strength of the industry and thus the strength of the Bitcoin network.”

Stocks to Watch This Week – Expedia Group, IncGo to article >>

Galaxy’s trading business covers a basket of digital assets and runs an OTC sales desk to facilitate trades on behalf of institutional investors.

Last November, the company made two key acquisitions, one is crypto lender, DrawBridge and the other proprietary trading firm, Blue Fire Capital, to diversify its businesses.

It is diving into the crypto mining business when the industry commercialized heavily with the setting up of many major mining facilities. Additionally, the recent influx of miners in the United States and Canada positioned itself well to offer services to the industry.

“We see major opportunities in mining project financing, equipment financing, digital asset-backed financing, as well as working capital optimization and hedging solutions for mine operators and investors utilizing Galaxy Digital Trading’s industry-leading capabilities,” Galaxy’s Co-President, Chris Ferraro, said.

recent price dip, said Changpeng Zhao, co-founder and CEO of leading cryptocurrency exchange Binance, in an exclusive interview with Forkast.News. 

Bitcoin hit a new all-time high (ATH) on Jan. 8, peaking at nearly US$42,000. But bitcoin prices fell more than 20% this week, from US$41,940 on Jan. 8 to US$31,698 on Jan. 12. It is currently trading just above US$38,500 as of publishing time. 

On bitcoin’s price growth from around US$10,000 to US$41,000 in recent months, Zhao — also popularly known as “CZ” — told Forkast.News Editor-in-Chief Angie Lau: “When that kind of price rises, a 20% correction is very, very normal, especially considering a lot of new guys coming in, buying at the new higher prices.”

“They are not the sort of what we call ‘strong hands’ holders that are in this for the long term. Many of them are for short term gains, and then as soon as they see any price drop, they rush to sell. They’re not yet the core believers.” he added.  

According to Zhao, there is volatility in every market, and price discovery and mass psychology are at play. 

“Everyone wants to rush in, and then the price goes up, and then somebody says, ‘Okay, now the price is high enough’, they want to cash out a bit and they start selling. Sometimes that triggers a cycle and then everyone wants to sell,” Zhao said. “We’ll continue to see corrections and volatility going forward, but compared to other similar market size market cap assets, bitcoin is actually not that volatile now…. Bitcoin’s volatility is actually lower than, for example, even Tesla’s. Tesla is going up really a lot. And then they have corrections, of course, then there’s volatility.”

The total global cryptocurrency market cap now exceeds US$1 trillion, with bitcoin’s market cap at more than US$700 billion, according to crypto data aggregator CoinGecko. Bitcoin’s market cap during its recent peak surpassed that of Facebook’s, as noted by Tyler Winklevoss, co-founder of cryptocurrency exchange Gemini.

“#Bitcoin just became more valuable than $FB, next up $TSLA,” Winklevoss tweeted.

Bitcoin’s price rally over the past year has drawn immense interest from institutional as well as retail investors. Binance has been seeing a “massive” number of new users and higher peak user trading volume than during the 2017-2018 bitcoin peak. “Everything is in high gear,” Zhao said.

A confluence of factors — in particular the fiscal and monetary policies by governments in response to the Covid-19 pandemic — have driven the demand for bitcoin. 

“2020, that was a pretty crazy year. Covid paused all economic activity globally, and then this quantitative easing by every country,” Zhao said. “I think like 20% to 30% of the U.S. dollars were printed last year, and other countries are probably printing more than that. So basically, if you’re holding fiat currencies, your purchasing power [has been] probably devalued by 20% to 30% if you keep holding onto it.”

“We’re also seeing a lot of new institutions coming in this round. So I think now, especially given the high profile institutions coming in the U.S., worldwide, there are many institutions coming in now,” Zhao  said. “They [corporate treasurers] have to manage their corporate treasuries. They’re now allocating into bitcoin or other cryptocurrencies.”

“And then this kicks off a race — that’s the institutional race right now that we’re seeing in North America and also in the rest of the world. And then once the price starts to go up, all the retail guys flood in as well, because everyone wants a piece of the rising value.”

With so much institutional capital capable of following the lead of MassMutual and Morgan Stanley, the question then is — where will bitcoin prices go from here? Zhao expects bitcoin prices to increase by another five to 10 times this year alone. “I will put it somewhere around like US$150,000… to US$400,000-ish, in terms of bitcoin price, and the other assets [are] probably going to rise more or less with bitcoin,” he said. Zhao’s predicted bitcoin price range follows similar calls made by JPMorgan strategists in a note to investors early this month, forecasting bitcoin prices could rise to as high as US$146,000. 

Scott Minerd, global chief investment officer at macro hedge fund Guggenheim Partners, predicted late last month that bitcoin could reach as high as US$400,000. But when bitcoin prices soared above US$35,000, Minerd pulled back.

“Bitcoin’s parabolic rise is unsustainable in the near term. Vulnerable to a setback. The target technical upside of $35,000 has been exceeded.  Time to take some money off the table,” Minerd said in a tweet. 

See related article: New 2021 bitcoin price report forecasts risks and opportunities

Bitcoin’s all-time highs have also led to all-time highs in traffic for the crypto exchanges handling the buy and sell transactions, and their systems have been straining to cope. Binance and other major exchanges like Coinbase and Kraken have been reporting sporadic system outages due to the surge in trading activity on their platforms.  

According to Zhao, since 2018 Binance has been working on scaling up the exchange’s infrastructure “to be ready for the next wave.” But he admits that they could do better.

“To be very honest, even today, we have expanded so much capacity, [but] we’re still struggling a little bit,” Zhao said.

“There’s a few different parts. There’s a system which [has] got to stay up when there’s peak volume, and we’re seeing 20 to 30x volumes on a 5% rise of bitcoin. So the volumes on the systems are growing much more exponentially than bitcoin prices,” he added. 

“We’ve done a lot of work in the last two years, but the system’s not production-tested at those volumes.” Given the complexity of the system with many moving parts, Zhao added, “we actually had to see the new volume coming in and then adjust as we grow.”

Customer support, on the other hand, has been more difficult to scale. After all, a large portion of customer support at crypto exchanges like Binance is still managed by people. 

“You can’t just hire a 10x team before the volume gets there and everybody will be bored, and that’s demoralizing. But when the volume hits, you want to hire 10x people, it doesn’t happen that quickly. So we’re struggling a little bit on that front,” Zhao said. “We’re making a lot more automated tools to help users, etc. But it’s going to take some time.”

See related article: What’s Next for CZ? Binance CEO on Getting Hacked, Being Compliant, and His Future

The trend towards institutional adoption of cryptocurrencies, in particular bitcoin, is likely to accelerate in 2021, especially in corporate treasury. Zhao predicts that will “push the price of bitcoin and other cryptocurrencies up quite significantly.” 

Zhao said he can also see Tesla’s CEO Elon Musk, who frequently tweets about cryptocurrencies, “[using] Tesla’s corporate treasury to buy first before he buys personally.” 

“I wouldn’t be surprised if in a few months he announces that finally Tesla owns, I don’t know, how many bitcoins,” Zhao said. “And that’ll be really good for the industry. I think it’s going to happen sooner or later — maybe this year, maybe next year. Who knows?”

Looking to the more distant future, Zhao believes crypto will “be everywhere” in 10 to 20 years, and the “market cap will be 100x, 1,000x from where it is.”

“But of course, there’s also a chance we enter another crypto winter — I think the chances are smaller,” Zhao said. “It’s very hard to put accurate numbers on those, but we are prepared for both scenarios, so we’ll just see where the market takes us.”

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