range will eventually turn into another buying opportunity, as proven in the recent past.

The long-term weekly outlook is still very much bullish. The recent correction has skewed the medium-term outlook towards the bears. A combination of geopolitical crisis and a strong dollar is building a negative Bitcoin trend analysis.

The BTC/USD pair went down south on Wednesday after a massive rally took it to fresh new all-time highs. Profit-taking and a rising US Dollar saw the price plummet below the $30,000 level as bulls struggled to understand what was happening. The quick bout made Bitcoin trend analysis negative, which was expected after technical indicators turned excessively overbought.

At the time of writing, the price is hovering near a crucial pivot point of $35,000. On the daily and hourly charts, the $35k pivot point means a lot as it is a crucial support level built to withstand extended selling bouts in Bitcoin trend analysis. After many days of heightened volatility, the long-term support levels have risen following an ascending price channel. So, any break below this level can mean weakening bullish resolve on the daily timeframe.

Other altcoins like Ethereum and Cardano are also experiencing similar volatility and consolidation phase. In the past five months, the BTC price has gone up by almost 230 percent, and the cryptocurrency market is experiencing a massive boom. Thus, talks of speculations and bubbles are also propping up rapidly in Bitcoin trend analysis.

After an approximately 11 percent price drop, Bitcoin trend analysis is now stabilizing, albeit in a tight range. The trendline support is waning fast, and the price is moving lower towards the $33,500 support level. Currently, the price is near the 23.6 percent Fibonacci retracement, close to the $35,700 level, and well above the support region.

A zone of resistance near the rising price channel on the hourly charts between $36,000 to $38,680 may prove a tough spot in the short term. The 20-day SMA is providing support to the price. The ‘Relative Strength Index’ is comfortably beneath the 70 reading, indicating that a bull run is sustainable. The MACD is giving mixed signals since the price is unable to break to either side. Also, the Bollinger Bands are closing in on the range-bound price.

If bulls can gather liquidity to build volumes, the price can cross the present resistance channel. The bull run must also strive to close the price above $37,670 resistance soon if they want to sustain the long-term bull run and retest $40,000 soon. However, there is strong opposition lined up near the $38,000 level.

When famed investors like Mark Cuban compare crypto with the 2000’s Dot Com bubble, his comments will undoubtedly reverberate through the investor community. The current meteoric rise does raise eyebrows, especially considering the overbought technical indicators. Traders and investors are worried about the extremely bullish daily charts and hoping for a healthy correction with minimal volatility.

The present correction saw the price decrease from $42,000 highs to the current $35,000 level within just four days. Such a volatile move does raise questions about the bubble bursting phenomenon. However, unlike 2017, crypto markets are now much more mature, and regulations are in place globally. Even if a catastrophic bubble bursting event occurs, Mark Cuban believes some coins will come out unscathed while the weaker counterparts may not survive.

Profit-taking and lack of confidence in price action may spark another bearish run on the BTC price. However, the downturn may prove short-term since the financial markets are already pricing in some correction post the December rally.

As the BTC price retreats to $35k, the technical charts paint a critical picture. The current Bitcoin trend analysis reveals that a weekly close above $38,000 is needed to rekindle a bull run. Remember, the long-term Bitcoin bull rally is very much alive on the daily charts.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

EllioTrades, picks 14 crypto assets that could provide traders with major gains in the next few weeks.

First, Wainman predicts big things are in store for decentralized liquidity network THORChain (RUNE), which is currently trading at $1.76 with about a $278.28 million market cap at time of writing, according to CoinMarketCap.

The altcoin analyst predicts THORChain will reach a $1 billion market cap and potentially even higher.

“I’ve always been a fan of THORChain, I’ve always been a fan of RUNE, because it allows for yield to be extracted by locking up Bitcoin, and anything that’s DeFi and Bitcoin related to me is set to go absolutely bananas as Bitcoin also grows. So in my mind, a project like RUNE was and always is set to do really well on the back of Bitcoin and DeFi growing together.” 

Another crypto Wainman says is set to grow with Bitcoin and Defi is REN, a protocol that enables the transfer of crypto assets between blockchains. The trader says he’s “betting big” on REN, which is trading around $0.42 with $369 million market cap at time of writing.

Wainman is also bullish on AllianceBlock (ALBT), a “decentralized, blockchain-agnostic layer 2 that bridges traditional and decentralized finance” with only a $46 million market cap. The trader highlights AllianceBlock’s new partnership with data storage project Ocean Protocol as a bullish sign of things to come.

Next up, the crypto trader mentions two related projects that help miners extract the greatest possible value from confirming transactions. Wainman says KeeperDAO (ROOK) and Archer DAO (ARCH), which is up 128% on the day, can multiply in value during this bull cycle.

Wainman then moves on to the decentralized insurance sector, which the analyst labels as one of the most important portions of the decentralized space. Wainman chooses to spotlight Polkadot-based Bridge Mutual (BMI) as an exciting project in the sector.

“Bridge has been at this for two years and has a very interesting complex web of mechanisms that they use to ensure that insurance is provided accurately, that the right policies get approved, that when people are harmed that they actually get the coverage that they’re entitled to.”

Next on Wainman’s list is decentralized derivatives platform, Injective Protocol (INJ). With a market cap of $88 million, the trader points out that the project, which just announced the first decentralized Tesla futures market is now available on its Solstice testnet, has a lot of room to grow considering the traditional derivates market is worth tens of trillions of dollars.

Wainman’s next three picks are also decentralized derivatives related products. The trader highlights Oiler Network, which has not yet had its token launch, Hegic, and a project built on top of Hegic, Whiteheart (WHITE).

Wainman then highlights REVV which is a project in the NFT space, a sector which Wainman is particularly bullish on.

Next on his list is PARSIQ (PRQ), which Wainman labels as an undervalued project that boasts high profile partnerships and great tech.

“They’ve partnered with some of the biggest and most influential coins and projects and chains in the entire ecosystem and I believe they are just getting started as their technology is being recognized a one of the most superior infrastructure projects in the entire space.”

The last two assets Wainman mentions are Akash (AKT), a decentralized cloud storage project, and RAMP which as of writing stand at $27 and $28 million market caps respectively.

Featured Image: Shutterstock/Marc A

296% in 2020, the overall crypto market topped $1 trillion last week for the first time, and digital assets are back in the conversation on Wall Street.

Whether the Coinbase listing happens as soon as this month, or takes many months (Lyft and Uber filed their confidential forms in December 2018, then took until March and May 2019, respectively, to debut), it is likely to enjoy a big pop, if recent unicorn listings like Airbnb and DoorDash are any indication. The company has 35 million customers, an $8 billion valuation when last reported in 2018 (likely much bigger now; Coinbase pre-IPO shares that trade on crypto exchange FTX have soared), and has been profitable for years, a rarity amid the recent unicorn parade.

But Coinbase will also carry significant controversy for some investors—and not just crypto skeptics.

The SEC is known to move at a glacial pace with approving new listings, and Coinbase, the closest thing to a crypto household name in the U.S., presents a litmus test that regulators will want to get right, since there will be more to come. (Bakkt, the crypto exchange launched by Intercontinental Exchange in 2018, announced this week it will go public via SPAC merger, which means it will likely beat Coinbase to market, but with far less fanfare, attention, and scrutiny.)

Coinbase has already dealt with regulator interference over the years.

As a custodian of customer crypto funds, the site submitted information on 13,000 customers to the IRS in 2018, in compliance with a 2016 request for information on all customers who held more than $20,000 of cryptocurrency between 2013 and 2015.

In 2018, Mashable uncovered more than 115 Coinbase customer complaints filed with the SEC over issues ranging from missing funds to outages to lack of customer service. Over the years, Coinbase has not infrequently suffered website outages during key price rallies or crashes, at times when users were eager to sell or buy, not unlike stocks app Robinhood. The outages have become a reputation hazard for Coinbase.

Story continues

Given this history, regulators might hold up the Coinbase listing with red tape.

On the other hand, many inside the crypto industry welcome imminent regulation, and some see the Coinbase IPO as a chance to start a new phase of cooperation with regulators.

“There’s been an increased focus on regulators, in terms of looking at this asset class,” says Flori Marquez, founder of crypto lender BlockFi, in which Coinbase is an investor. “To know that you have a crypto company in front of the SEC, having active conversations in terms of thinking, How do we make it easier for U.S. consumers to invest in this asset class, is just huge news for the space as a whole… I think it bodes extremely well for future development within bitcoin and what companies can do in the space going forward.”

On Dec. 22, the SEC charged money-transfer software startup Ripple Labs with conducting a $1.3 billion unregistered securities offering in 2013 when it began selling the cryptocurrency XRP, the No. 4 token by market cap. Since then, XRP has fallen 35% in value. Ripple Labs has vowed to fight the lawsuit in court.

Here’s where Coinbase comes in: Coinbase added support for XRP trading in February 2019. In response to the SEC action, Coinbase will halt trading in XRP on Jan. 19. Now a Coinbase customer in St. Louis has sued the company in California for the trading fees it collected on XRP transactions, arguing that the company should have known XRP was a security.

READ MORE: Ripple CEO: 3 reasons XRP is not a security

The lawsuit, which seeks unspecified damages, is from a single customer, but it’s indicative of a larger liability Coinbase faces with every cryptocurrency it adds to its platform. Coinbase’s listing could get caught up further in problems stemming from the SEC labeling XRP a security.

Cryptocurrency is still new and nascent, even if the wild 2020 price surge makes it look otherwise. Bitcoin, the first cryptocurrency, has only been around for 12 years, and has had an active trading market around it for less than 10 years. Ethereum, the second-largest blockchain and the network on which the majority of new tokens created during the ICO boom were created, came around in 2015.

Most retail investors (not to mention sophisticated institutional firms as well) still find crypto confusing. It is a space with a multitude of misconceptions around it. Will investors want to rush in to buy shares of a company that represents an industry they don’t understand?

David Trainer, CEO of IPO research firm New Constructs, thinks they will.

“Given the stimulus-driven fever pitch we’re seeing, I think it’ll do great,” Trainer says. “It’ll be buoyed by the clamoring we’re seeing for all things current and popular—and popular doesn’t even have to be tech. DoorDash isn’t really tech. Is bitcoin tech, separated from blockchain? I don’t know that it is. Coinbase is a derivative of blockchain technology, which is a democratization of secure transactions to the greater public. And people make justifications for a lot of tech because they ascribe magical powers to things they don’t understand.”

In other words, Coinbase, which has been called the “Goldman Sachs of bitcoin,” could frame itself more as a financial services IPO than a tech unicorn IPO.

This is why it will be fascinating to see how Coinbase describes itself in its eventual public S-1 form: Will Coinbase say it’s a bank, and downplay the crypto part to the extent that’s possible? (Snap, infamously, led its S-1 by calling itself “camera company”; Casper was widely mocked for saying it created the “sleep economy.”) Coinbase’s current About page leads with: “Coinbase is how the world uses crypto.”

And then there’s the bad press.

In September, Coinbase CEO Brian Armstrong issued a public memo declaring that he wants Coinbase to be an apolitical company where employees don’t discuss politics or social issues. Tech media reports soon framed the memo as a form of further explanation after Armstrong was asked about his stance on the Black Lives Matter movement at an internal employee town hall. At a time when so many companies are actively taking a stance on divisive political issues, Armstrong’s attempt to stay out of it backfired; 60 employees, or 5% of the workforce, left the company after his memo.

READ MORE: How the Coinbase Memo exemplifies Silicon Valley’s political crisis

Since the Coinbase Memo and the conversation it prompted about Coinbase’s culture, the New York Times has twice reported on internal culture problems at the company, including allegations from Black former employees of discriminatory treatment, and data that shows a larger pay disparity between men and women than the average gap at other tech companies.

It is possible that none of this reporting will damage the appeal of Coinbase stock. (In a preemptive Coinbase blog post before the first New York Times story ran, Coinbase declared, “We don’t care what The New York Times thinks.”) And investors focused on financial performance can take heart in Armstrong’s own line in his infamous memo: “We are a for-profit business… We shouldn’t ever shy away from making profit, because with more resources we can have a greater impact on the world.”

Still, considering all the newness of the offering and potential regulatory hurdles it could attract, there’s good reason why Coinbase might end up going the direct listing route (a la Slack, Spotify, and Palantir), which involves no road-show, no new shares being offered, and less hype.

Daniel Roberts is an editor-at-large at Yahoo Finance and has covered bitcoin since 2011. Follow him on Twitter at trong>Read more:

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commissioner Hester Peirce in an exclusive interview with Forkast.News Editor-in-Chief Angie Lau. 

“It is really quite challenging right now for projects, and people are thinking about different ways to do that in a way that’s compliant. But there are no easy answers because we haven’t provided that clarity on how to do it,” Peirce said.

The SEC’s recent lawsuit against cryptocurrency platform Ripple Labs Inc., its CEO Brad Garlinghouse and Chairman Chris Larsen for allegedly raising over US$1.3 billion through the sale of the company’s cryptocurrency, XRP, in an unregistered securities offering has also intensified industry concerns regarding different U.S. agencies being misaligned or even at odds with one another over their individual rules and policies toward digital assets.

See related article: SEC ‘Crypto Mom’ Hester Peirce: US will lose out in crypto innovations if regulations remain in limbo

According to Peirce, each agency has its own rulebook to follow. “I think that’s not only a problem with respect to digital assets, it’s actually a broader problem because we have this very open-ended category called an ‘investment contract’ that’s intended to capture anything that looks like a security and acts like a security, but might not be called a stock or a bond,” Peirce said. “So something might be characterized as one thing by another agency, yet still be a security under our rules.”

With a new Presidential administration coming in, the leadership at federal agencies is also in a state of flux. The SEC ‘s charges last month against Ripple were brought when Jay Clayton was still chair of the agency. Clayton has since left the SEC, and Elad Roisman is now the acting chairman. But SEC’s leadership will likely soon change again. After U.S. President-elect Joe Biden is sworn in, he could make new commissioner appointments that could reshape the agency’s rulemaking and enforcement actions in the months ahead. 

“I do think that there’s interest, generally among institutional investors, to see more clarity in the space,” Peirce said. “As the industry matures and gets more people involved, I suspect we’ll feel a little bit more pressure from the outside too.”

See related article: New year brings new crypto actions from FinCEN, OCC and IRS

Not only could a new administration’s appointments lead to greater regulatory clarity for the industry in 2021, but Peirce also expects the SEC to tackle decentralized finance (DeFi) regulations for the first time. 

“We can provide clarity with respect to DeFi, which is something that we haven’t talked about yet, but I think has had quite a year in 2020,” she said.

Peirce is currently serving her second term as one of the SEC’s five commissioners. She is also known as “Crypto Mom” because of her positive regulatory stance on digital assets. Prior to joining the SEC, Peirce was the director of the Financial Markets Working Group and conducted research on financial markets regulation at George Mason University’s Mercatus Center. 

Peirce emphasizes that the views expressed during this interview are her own and not necessarily those of the commission or her fellow commissioners. 

Watch the full interview with Peirce and Forkast.News Editor-in-Chief Angie Lau to learn more about the commissioner’s perspectives on the SEC lawsuit against Ripple, crypto regulations across different government agencies, her three-year safe harbor proposal for token sales, and what could lie in store for DeFi in 2021. 

Angie Lau: What can the crypto industry expect from the SEC in 2021? How are regulators observing the ongoing crypto bull run? And will we see more SEC action against cryptocurrencies?

Welcome to Word on the Block, the series that takes a deeper dive into blockchain and the emerging technologies that shape our world — at the intersection of business, politics and economy. It’s what we cover right here on Forkast.News. I’m Forkast Editor-in-Chief Angie Lau.

It is my pleasure right now to welcome back Commissioner Hester Peirce of the Securities and Exchange Commission, arguably the most well-versed in digital assets, crypto, and blockchain among the five commissioners — and given the moniker ‘Crypto Mom’ by the industry, as she does important work at the highest regulatory level for deeper understanding of the space. 

Commissioner Peirce, welcome back.

Hester Peirce: Angie, it’s great to be here.

Lau: Well, it was a busy holiday! The SEC dropped a bombshell right before Christmas: a lawsuit against Ripple. After eight years of XRP operating in the market, comes this lawsuit. Can you help us understand the thinking here? What is the message that the SEC is sending with this lawsuit against Ripple?

Peirce: So, let me start by saying that the views that I represent are my own views and not necessarily those of the commission or my fellow commissioners. On an issue like this, where we’re in active litigation, I really can’t speak to the specifics. So, I’ve gotten a lot of questions about how I feel about the lawsuit. But, those questions are better saved for later. I will say more generally — that we will continue our efforts in this space.

And so I think, by now, people realize that we’re active in this space. And so, people should continue to watch; both on the enforcement side, but we also took some steps, some important steps, right at the end of the year — on the regulatory clarity side by providing some clarity for brokers that want to engage in digital asset securities. And so, I hope that people will pay attention to that and give us some feedback on that. One of the things we did in connection with that was to ask for comments. And so I hope that people will respond to our request there, and then continue to ask for clarity in other places where they need clarity.

Lau: Yeah, that clarity is a little muddied right now, and I absolutely understand that we can’t talk specificities, but it’s remarked that we see misalignment from different U.S. agencies on how cryptocurrencies are regarded. For example, XRP was determined to [be a] currency by the DOJ and FinCen in 2015. So, disregarding the specificity of that example — for the intent of this question — why is there a current misalignment between U.S. agencies?

Peirce: One thing people should bear in mind is that each agency has to look at its rulebook and align the things that it sees with its rulebook. And so, for us at the SEC, the question that we get asked most often is, “Is this particular digital asset a security or not?” And in determining whether it is or isn’t, we — and lawyers in the field and people in the industry — need to look at the SEC’s specific rules. And we have a specific definition of security, which is actually quite broad. And that has caused some people consternation and difficulty in trying to figure out exactly what the parameters of a security might be in our space.

And, I think that’s not only a problem with respect to digital assets, it’s actually a broader problem because we have this very open-ended category called an ‘investment contract,’ and that’s intended to capture anything that looks like a security and acts like a security but might not be called a stock or a bond. So you’ve got this very broad ‘investment contract’ category, but it can be difficult to figure out whether something fits within that category. And that’s where most of the problems arise. So something might be characterized as one thing by another agency, yet still be a security under our rules, and that can be frustrating for people.

Lau: It certainly is causing a lot of strife and concern, that’s for sure. How is the U.S. moving towards filling the gap? We are noting the Digital Commodity Exchange Act that is proposed, that would create a national regulatory framework for, at least the CFTC, to regulate digital commodity exchanges. Does that clarify and simplify things for all agencies?

Peirce: Well, I think that Congress can play a role in providing clarity — whether it gives the SEC jurisdiction or the CFTC jurisdiction, or some other agency jurisdiction that can be helpful. I will note that we have made some progress this year. Last year, I should say in 2020, in the sense that the OCC (Office of the Comptroller of the Currency) has taken some steps to provide clarity, both in 2020 and just now in 2021. And we’ve also seen clarity coming out of places like Wyoming, so on the state level. I’m hopeful that we will — the SEC will take some more steps to provide greater clarity. But I think it has to be a combination of legislative, potentially, and then each agency working individually to address specific questions in its domain and then having some cross-agency work — which is happening. But I think we could do more cross-agency coordination.

Lau: Yeah, there’s certainly a chill right now. Are other cryptocurrencies that raised, and are active over the past couple of years — should they be worried?

Peirce: Well, again, I think that in each instance, we’re looking at it on a facts and circumstances basis. And I don’t want to speak to any particular cryptocurrency, whether it’s in litigation with us or not in litigation with us. But I think everyone has to look at the facts and circumstances. And that’s why I have called for more clarity, because I actually think it can be difficult to determine whether something fits within the security bucket or not. And I think we could do more to provide some guideposts for what that would be.

Or, as I’ve called for: a safe harbor, which recognizes, yes, there is a little bit of uncertainty, but if we can get these digital assets to a point in their life where it becomes much clearer which side of the line they sit on, I think everyone would be better off. So, I’m hopeful that, maybe that’s something that we could actually get done in 2021.

Lau: That deeper understanding is exactly why the industry has given you this moniker of ‘Crypto Mom.’ You proposed that three-year safe harbor period for crypto token sales, really kind of creating a sandbox, if you will, that allows innovation and the sales to exist without fear of direct regulatory action. Where’s the appetite on this, do you think, from your fellow commissioners? Can we see this enacted in 2021?

Peirce: Well, I think a lot is going to depend on who the chairman is under President Biden. And so that will, I think, help determine the direction that the commission goes on a lot of issues, but cryptocurrency being one of them. And so, it remains to be seen.

That said, I do think that there’s interest, generally among institutional investors, to see more clarity in the space. And so, as the industry matures and gets more people involved, I suspect we’ll feel a little bit more pressure from the outside too.

Lau: Yeah, and I know that there has been such blowback and certainly a lot of people trying to understand your perspective on Ripple. And I absolutely know that you must adhere to the guidance of SEC rules and that you can’t necessarily talk about it. But I do note that in one of your tweets, you noted -— and you pointed to the fact that this needs to be a majority decision by the commissioners, though the votes cannot be revealed until the resolution, which could be a few years from now. My question to you, Hester is: was this a unanimous vote?

Peirce: I can’t answer questions about what the vote was. As I mentioned, not only can I not say how I voted, I can’t say how others voted or how the commission [voted]. I mean, obviously the commission as a whole, is evident how it voted because a suit can’t get authorized unless the majority [of the commission] authorizes it. But, I know that that can be frustrating for people to wait to see what the vote is. But, I think that it’s important for the agency to be able to litigate the action.

Lau: Hester, you note that, you just said that you expect the litigation to continue for Ripple. The comments that you made — do you want to clarify that?

Peirce: Yeah, so when the majority of the commission authorizes the lawsuit, the lawsuit will proceed. And so, people at the commission, commissioners and others generally don’t speak about cases once they’re in litigation, we let the litigation play out. And then we can have a conversation about the litigation, if that’s appropriate, after the fact.

Lau: So, I’m hearing, to be clear, this is not — this may or may not be your personal view — but it is the fact that litigation will continue because the authority of the SEC, the regulatory body that you are a part of, has to continue.

Peirce: Yeah, I think one thing that sometimes can be a bit difficult for people from outside the agency to understand in it, because every agency is different and ours is one that’s run by this commission, which is made up of five people, and I’m one of those five people. And so, when we adopt a rule or when we authorize an enforcement action, we’re all sitting there together and we all vote for it. And so if there [are] five people on the commission and three of the five vote for something, it will move forward. In enforcement actions, it’s often a unanimous vote, but it’s sometimes not. And so, once that vote has been taken, the litigation moves forward. And often, you’ll see that the litigation ends in a settlement. Sometimes it goes through and the litigation actually plays out in court. You saw that in, for example, the Kik case and the Telegram case are a couple of examples of that. Unikrn was an example where a settlement was reached. So you have different ways for things to play out. And then once something is final, either final through a settlement or final through a court action, you can actually go to the SEC’s website and you can see how the different commissioners voted.

Lau: We’ll be keeping an eye. Thank you, Hester, for that clarity.

Well, let’s talk a bit more broadly then. In 2020, we really saw, especially in the last part of the year, this increase, as you said, of institutional dollars flooding into this space. We’re certainly seeing that as the underpinning of the current price of bitcoin and volatility. How have you been regarding this rise of interest — and how has that been regarded by the rest of your commissioners of the space?

Peirce: Well, again, I can only speak for myself. And I think the agency doesn’t take a position in terms of a price or enthusiasm in the space. The only thing that I would say is that people are looking for asset classes, new asset classes that perform differently than traditional asset classes. And so, I think it’s helpful to help focus our minds that more people are saying, ‘Hey, this is an asset class I’d like to take a look at. I’d like to be able to get some exposure in a way that’s more akin to how I get exposure to other asset classes. I’d like to get exposure through my traditional intermediaries.’

Obviously, there’s a big set of people in the crypto community who [don’t] want to access crypto through an intermediary. That’s the whole point of decentralization. And so, there are a lot of people who have no interest in that. But, some of the more traditional investors are going to need to access. If they’re going to be able to access at all, they’re going to need to access through these traditional avenues.

And so, you’ve seen in 2020, some people come out, some companies come out and say, ‘Hey, we’re putting some of our treasury funds in crypto.’ Or you’ve seen well-known investors come out and say, ‘Hey, this is an asset class I’m looking at.’ And so, that will necessarily put more attention on crypto at the SEC. Now, that said, crypto is still a relatively small asset class and the SEC has a lot of different things to work on. And so, it’s always going to compete with other issues for attention.

Lau: Absolutely. It is growing attention nonetheless. And you talk often of clarity. Certainly, that can be muddied by regulatory action, not only from the SEC, but other U.S., [European], and other regulatory agencies around the world. What’s your goal when it comes to clarity in 2021, from your position as commissioner?

Peirce: I mean, my goal is just that we would make some concrete steps toward providing clarity, and that doesn’t need to be the safe harbor that I proposed. But, it needs to be something to be able to tell people — one, this is what you need to look at to determine whether or not something fits within the security bucket, or two, this is what you need to think about when you’re trying to go from being a security to a non-security. Because there’s this notion that, maybe something starts out being sold as a security, but then, down the road, it turns into something else. So can we provide some markers about what it means for a network to be decentralized? I think that could be quite valuable to people.

And then, there really is a need for clarity in terms of: how to broker dealers, and investment advisors, and ATSs (alternative trading systems), which are sort of exchanges, ‘exchange-like’ in the United States. How are they allowed to interact with digital assets, whether they’re securities or not securities? So, I think there’s a lot of room for us to provide clarity. I think we’re getting a lot of good questions.

We’ve seen, as I mentioned, Wyoming has been quite forward-thinking in the approach that they’ve taken to crypto. And so, there are some areas where their laws intersect with their actions, intersect with what the SEC does — so we can provide clarity there. We can provide clarity with respect to DeFi, which is something that we haven’t talked about yet, but I think has had quite a year in 2020. And so, I think it’s important for us to provide some help there for people trying to understand, ‘How does DeFi interact with the securities laws?’

Lau: I want to absolutely jump on that. It is exactly top of mind for so many. We saw at the beginning of 2020, you know, the value of the activity was, I think — half a billion, five hundred million. And at the end of the year, it has absolutely — exponentially exploded to the billions.

How do you regard this space? When you talk about DeFi clarity, it really feels on one hand, great technology, and then on the other hand, really a lot of hype, a lot of ‘Wild West’ kind of behavior. How are you as commissioner, in your view, regarding DeFi?

Peirce: Well, I think it’s hard to provide a clear answer to that, because, again, DeFi encompasses a lot of different things. And some of them are probably well outside of the reach of the securities laws. So when I’m thinking about clarity, I’m thinking, ‘Let’s help people figure out when the securities laws might apply, so that we’re not faced with a situation a few years from now when we’re providing clarity through enforcement,’ which I think is never a good way to provide clarity. Enforcement actions can indeed provide clarity, but it’s not the right way to do it from my perspective. We want to provide people clear guidelines ahead of time and then they can figure out whether — how they can do something so that it is legal.

But on the DeFi side, I think it moves so fast, it can be difficult to keep up with. But we would do well to try to spend some time with people in that space and thinking about where clarity might be helpful. And thinking about where we can spot something and say, ‘Yes, we know that’s a security issue, so let’s let people know that it is.’ But again, a lot of people are very creative and building really interesting things.

And I think the concept of decentralized finance is a really fascinating one. It is one that’s going to be challenging to us because most of the way we regulate is through intermediaries — and when you really build something that’s decentralized, there’s no intermediary. And so, that’s great for some things like that. It’s great for resilience of a system. But it’s much harder for us when we’re trying to go in and regulate to figure out how to do that. And so that’ll be a new challenge.

Lau: The industry is going to be listening intently here and they’re probably wondering, ‘Well, what about all the crypto tokens that people are working on right now?’ How do they get that they go to market, and for those who want to abide by the regulatory lanes that have been set, how do they do this within the rules of the law so they don’t get in trouble?

Peirce: Well, I think that’s a big concern of mine. Now, you have seen some projects that have used some of our existing exemptions, or used Regulation A, which is one form of doing an offering that’s not subject to all the rules that you might have in an IPO, for example. But, there are then questions about how you transform from being a security to being a token that’s used widely.

So there, if people look at it and they say, ‘Well, we know that we could do an organic launch.’ Where it’s like a Bitcoin-like launch, but that’s not always very easy to figure out how to do that. And so, I think it is really quite challenging right now for projects, and I think people are thinking about different ways to do that in a way that’s compliant. But there are no easy answers because we haven’t provided that clarity on how to do it.

Lau: As a regulator, as a commissioner of the SEC, this is the gold standard. But as you take a look outside of the U.S., and observe other regulatory peers, how would you rate and compare the U.S. against regulatory guidelines that are being set around the world?

Peirce: Well, you know, again, I think the SEC hasn’t done a fantastic job in getting out in front and setting clear lines for crypto and other countries have been much faster to do that. I think one advantage for the United States is that it’s a place where a lot of people want to do their development work — and they certainly want to interact with Americans and they want Americans to be part of their network. But, as the lack of regulatory clarity persists, some people say, ‘You know what, it isn’t worth that much,’ and especially if they think of it in a few years, ‘I might face an enforcement action.’ I think the Telegram enforcement action was really quite telling for some, because even though a lot of the activity was outside the United States, its interaction with the United States ended up ultimately bringing that project to an end. And so, I don’t think that we’ve done a great job so far.

Now, as I said, some other regulators are quite forward thinking in the United States. And so it’s not one story. And I don’t think that it’s all a negative story at the SEC either. I’m hard on my own agency because I want us to do better. But we have people at the agency who care a lot about the space. We just made the head of our office that deals with crypto officially a self-standing office and has a more prominent role at the commission and a more direct reporting line to the chairman. And I think that is a positive move. And so, there’s a lot of collaboration between our staff at the SEC and other staff and other agencies working on these same issues. So it’s not all a negative story, but I think that the rate of activity on our part has been rather frustratingly slow, and that has real concrete effects on businesses that are trying to get into this space.

But they need that regulatory flag: ‘Yes, go ahead.’ They need to get that permission slip to move forward. And until they get it, they can’t do anything. And that means that some businesses can’t hang on long enough to get that permission slip. So we could certainly do a better job. And I hope that we will in 2021. 

Lau: You know, Covid has kept everybody in place. But that doesn’t mean that these projects are geographically tied to any one place. And so you make a great point — that as the regulatory landscape seems to be, slightly divisive because it’s not aligned. And so for the more innovative regulators outside of the U.S., it could be attracting that kind of talent. That’s the concern. That’s the concern for the growth of [the] U.S. and this space.

Peirce: Well, it certainly is. And I’m someone who loves to see the best and brightest minds wanting to come to the United States — wanting to work in the U.S. And build things in the U.S., whether it’s in crypto or in other things. And so, I think we send a message when we don’t handle something new, a new innovation while we send a broader message.

And I’m not happy about sending a message that’s not welcoming to innovators and innovation. But again, I’m optimistic that 2021 will be a time for us to kind of recalibrate. And so, we have a lot of really great people in the agency and outside the agency trying to help us think through how to approach these issues. And so, it’s a fresh start, a new year. And I’m hopeful that it will bring more clarity.

Lau: Well, that move, that trend line is underlined by a number of things that are happening at the SEC. [The] Strategic Hub for Innovation and Financial Technology (FinHub), recently labeled to formal office status. So that, to your point, we’ve got a new acting chairman of the SEC, Elad Roisman. We also have a new administration that’s going to be coming in — the Biden administration. How do you think this all shapes progress this coming year?

Peirce: Well, Chairman Roisman is fantastic. I’ve had the pleasure of working with him at the SEC for some time now. And he’s fantastic. He doesn’t have a lot of time to make a lot of headway on crypto, because soon, the Biden administration and a new chairman, presumably, will be coming in, but he’ll stay on at the agency and he has a real passion for innovation as well. So, I think that’s really promising. And then we’ll see what comes. But, I can assure you that I’ll be talking to the new chairman about this space. And I think it’s a wonderful opportunity for us to work together as a commission to provide clarity which we really need to do through regulation.

Lau: Well, as we wrap up this very candid conversation, Commissioner Peirce, I’m going to ask you to join our Forkast Forecast. This is our look at 2021. But, in retrospect, what do you think the top developments were in 2020, as we know that this is a foundation for what we’re going to be seeing this year? In your view, what were the top developments in 2020 that you paid attention to?

Peirce: Well, I think increased institutional interest in the space. I think developments in Wyoming were quite meaningful in the past year. And then I would say the DeFi summer was certainly a big part of 2020. And then, moving forward into 2021, I think we’ll continue to see institutional interest. It will be interesting to see — both what happens with bitcoin, the interest in bitcoin — and then also we’re seeing a lot of developments around ether. So that should be fun to watch as well. And then, I’m hopeful that we’ll see some changes at the SEC in terms of predictions on what will happen. I’ll just say, generally, that I think that we will make some strides. But again, that’s probably informed by my optimism. But I hope that we’ll make some progress there.

Lau: Well, there’s no doubt — leading that progress will be you, as you share your views from the industry and share your knowledge and education. There’s no doubt the interest is increasing and the focus is absolutely on the guidance that you and your commissioners will provide.

Last thoughts, on how you want to, where do you want to leave us with? As you head back to the office, what can the community expect? What can the industry expect?

Peirce: Well, I think the industry can expect the need for me to hear from them, the need for them to interact with regulators. At the same time, I don’t want them to spend all their time thinking about regulation. So, I’m going to leave with the note that you should continue to think about how the technology can be used in developing your projects. And remembering that what it is that makes this technology and the community that’s developing it a really interesting and exciting one to be a part of.

Lau: Well, thank you so much, Commissioner Hester Peirce, for joining us on this first of the year and really an exclusive interview that you shared with us — for the first time on your views — to kick-off 2021. We absolutely appreciate it. And there’s no doubt that we’ll talk again.

Peirce: It’s been a pleasure. Thank you, Angie. 

Lau: And thank you, everyone, for watching this latest episode of Word on the Block. I’m Angie Lau, Editor-in-Chief of Forkast.News. Until the next time.

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Report”, the transaction volume of the digital asset derivatives market in Q3 2020 will reach US$2.7 trillion.

2. In 2016, BitMEX launched a currency-based perpetual contract. The currency-based perpetual contract has no expiry date and is anchored in the spot market through a fee rate mechanism. At a time when digital asset trading risk events frequently occurred, currency-based perpetual contracts won the favor of many users.

3. Digital asset practitioners continue to optimize and improve the structural framework of currency-based perpetual contracts, and increase mechanisms such as stepped margins to ensure the security of contract transactions and enhance the user experience of currency-based perpetual contracts.

4. TokenInsight data shows that the daily trading volume of currency-based perpetual contracts reached 26.6 billion US dollars on November 27, a record high. Currency-based perpetual contracts accounted for 49.3% of the market share of perpetual contracts.

5. Since September 2020, the top three exchanges with cumulative trading volume of currency-based perpetual contracts are: Huobi, BitMEX, and Bybit. Binance launched the BTC currency-standard perpetual contract for less than 4 months, and its weekly trading volume ranked fifth in the market.

6. The bearish reverse contract has a price convexity. When investors buy a reverse perpetual contract to short, they will get a certain amount of income protection.

7. Comparing the transaction fees of the sample exchanges, BitMEX and Bybit have a negative commission rate for pending orders, which is extremely friendly. The trading platform is willing to give liquidity providers some compensation. Binance’s order-taking fee rate is the best, only 0.040%.

8. The currency-based perpetual contract still uses digital assets such as BTC and ETH as the main targets. The exchange still has a lot of room for improvement in user protection and product innovation.

9. The digital asset trading platform will continue to innovate products, and derivatives will become the main growth point of the trading platform.

1.1 Traditional contract market

In Europe, futures contracts appeared in the Netherlands in the 17th century. During the climax of the Dutch tulip mania in 1636, the famous tulip futures appeared in the Dutch trading market. In the East, the earliest futures market appeared in Japan during the Edo Shogunate period. Due to the rice prices at that time, it had a significant impact on economic and military activities. Rice merchants often decide on the sale of stocked rice based on the production of rice and the market’s expectations of rice. In 1697, Dojima, Osaka established the Dojima Yonesha Club. Traders everywhere use silver to trade forward contracts based on rice [1].

[1] Refer to Wikipedia for related information.

Modern futures trading evolved from forward trading. The first modern futures exchange was established in Chicago, USA in 1864. The firm established a commodity trading model based on standard futures contracts in 1865. Later, with the gradual enrichment of systems such as margin and contract mutual netting, futures contract trading has become the most common way of international commodity trading.

Traditional market contract operation mechanism

In the modern futures system, the exchange launched standardized futures contracts with commodities as the target. The exchange ensures the smooth progress of commodity trading through automated mechanisms such as continuous quotation and order-driven. Different types of market participants on the exchange offer prices for commodities. A steady stream of quotation orders maintains the liquidity of the commodity market. Large-scale commercial manufacturing companies and international financial institutions continue to intensively trade futures contracts in the secondary market, making each month’s futures contracts have a continuous quotation curve to ensure the market’s reasonable pricing of forward commodities.

CFTC main commodity open positions, source: CFTC; statistics date December 1, 2020

1.2 Digital asset contract market

Digital assets have experienced more than ten years of development, and digital assets represented by BTC have become the value consensus of investors around the world. The digital asset spot market has become more mature, and the contract market has emerged.

In 2013, OKCoin launched a BTC delivery contract. Users can conduct two-way trading of digital asset contracts before the contract expires. Then BitMEX launched a perpetual contract in 2016. Perpetual contracts have no expiration date, which saves users the need to move positions when they expire. In December 2017, the Chicago Mercantile Exchange launched BTC futures contracts for institutional investors. In September 2019, Bakket launched a physically deliverable BTC futures contract, which was cleared at the US Clearing House. This marks the recognition of digital assets by traditional financial institutions.

Digital asset contract launch time, source: tokeninsight.com

According to whether the contract has an expiry date, we can divide digital asset futures contracts into delivery contracts and perpetual contracts. With the gradual maturity of products, the scale of the digital asset contract market continues to expand. At present, the digital asset derivatives market has formed a market structure dominated by perpetual contracts. According to TokenInsight’s “2020Q3 Digital Asset Derivative Exchange Industry Research Report”, in 2020, the Q3 digital asset derivatives market will have a transaction volume of 2.7 trillion US dollars, of which perpetual contracts account for 80.01%.

20Q3 Perpetual Contract and Delivery Contract Volume Comparison, Source: tokeninsight.com

Changes in trading volume of digital asset derivatives market in 19Q2-20Q3, source: tokeninsight.com

2.1 Currency-based perpetual contract

Perpetual contracts can be divided into currency-based perpetual contracts and U-based perpetual contracts based on the reference targets for pricing settlement. This article mainly studies and analyzes currency-based perpetual contracts.

Currency-based contracts: Currency-based perpetual contracts are divided into inverse contracts (Inverse Futures) and dual currency contracts (Quanto Futures).

Inverse Futures: The margin and profit and loss of inverse contracts are calculated in the base currency. For example, the BTCUSD perpetual contract launched by Binance, the margin and profit and loss of the contract are calculated using BTC. In the ETHUSD perpetual contract launched by Huobi, the margin and profit and loss of the contract are calculated using ETH. For reverse contracts, the user’s profit or loss is determined by the change in the number of digital assets corresponding to the contract.

Quanto Futures: The margin and profit and loss of a dual-currency contract are calculated in a currency other than the base currency and the quote currency. The dual currency contract anchors the contract with a fixed multiplier. For example, ETHUSDT, assuming the fixed multiplier is 0.0001/USDT, when the ETHUSD price exchange rate rises by 1USDT, the user will earn or lose 0.0001 BTC.

U-standard contract (Linear Futures): U-standard perpetual contract margin and profit and loss are calculated by the quote currency. For example, the BTCUSDT perpetual contract launched by Binance, the contract uses USDT to quote BTC, and the calculation of margin and profit and loss uses USDT. The user’s profit and loss is determined by the price of the digital asset corresponding to the contract.

Comparison of currency-based and U-based BTC perpetual contracts, source: tokeninsight.com

[2] Dual currency contract: select BTC as the settlement asset of ETHUSD as an example.

2.2 The design mechanism of currency-based perpetual contracts

In the traditional commodity market, spot and futures prices can be anchored through the mode of spread delivery or physical delivery. Currency-based perpetual contracts do not have an expiration date, so currency-based perpetual contracts will not be delivered on the expiry date like delivery contracts. The currency-based perpetual contract uses the funding rate mechanism to anchor the contract price and the spot price index to ensure the fair response of the currency-based perpetual contract to the market price of digital assets. The currency-based perpetual contract calculates unrealized profit and loss and liquidation price by marking the price to avoid unnecessary losses to users due to temporary market shocks.

Spot price index: Perpetual contracts are derivative products based on digital assets, and their pricing needs to refer to the spot market of the corresponding digital assets. In product design, the exchange introduced a spot price index to fairly reflect the spot market. Take the currency-based perpetual contract launched by Binance as an example. The trading markets referenced by Binance’s spot price index include: Huobi, Bitterex, HitBTC, Gate.io, Bitmax, Poloniex, FTX, MXC.

Funding rate: The currency-based perpetual contract adopts a capital cost mechanism to anchor the market price of the perpetual contract to the spot price. Taking OKEx as an example, the funding rate of a perpetual contract consists of two parts: interest rate level and premium level. For example, when the contract is excessively premium, the funding rate is positive, and the multiple parties need to pay the funding rate to the short party. This mechanism will prompt the multiple parties to close their positions, thereby prompting the price to return to a reasonable level.

Marked price: In order to improve the stability of users’ transactions in the contract market and reduce the impact of abnormal fluctuations in individual markets on the perpetual contract positions. Use the marked price to calculate the user’s profit and loss to avoid unnecessary losses to the customer.

Margin: In contract transactions, traders need to deposit certain assets on the platform account in a certain proportion according to the contract price as a guarantee for the performance of the contract in order to participate in the contract transaction. Margin is divided into initial margin and maintenance margin.

Initial margin: The initial margin depends on the user’s choice of leverage. Without considering the transaction costs, the initial margin rate is determined by the user’s adjusted leverage. That is: initial margin ratio = 1/leverage multiple.

Maintenance margin: The minimum margin rate required for users to maintain the current position, so the initial margin will be higher than the maintenance margin. Taking Binance as an example, when the margin rate is less than or equal to the user’s current required maintenance margin rate + liquidation fee rate, liquidation is triggered.

2.3 The price convexity of the currency-based reverse perpetual contract

For currency-based reverse perpetual contracts, the margin and profit and loss of the contract are settled in the base currency instead of the quote currency. Compared with the U-standard perpetual contract with linear return, the investor’s return curve of the currency-standard reverse perpetual contract has certain non-linear characteristics. For this nonlinear feature, we can derive it through a certain mathematical relationship.

The calculation method of the income of the reverse contract:

U-standard perpetual contract revenue calculation method:

When users use currency-based reverse perpetual contracts to trade, because the face value of the contract is marked in U.S. dollars, the contract profit and loss are settled by digital assets. So the rate of return needs to be calculated by the inverse of the buying and selling price. Therefore, the yield curve of the currency-standard reverse perpetual contract has nonlinear characteristics.

Reverse perpetual contract yield curve [3], source: tokeninsight.com; BTC income

[3] The yield curve chart shows the profit and loss of the reverse contract at different market prices after opening a position of $9,200.

When calculating income through BTC, the bearish coin-standard reverse contract has positive convexity. Therefore, when investors are short on digital assets, if they choose to use reverse contracts to operate, then as the price of digital assets drops, because the convexity is positive, when the price drops, investors’ income will accelerate and enlarge. If the price of digital assets rises and benefits from a positively convex yield curve, investors’ loss speed will slow down.

What is convexity?

Convexity, also known as Gamma in financial derivatives, is an important measure of the value of the underlying assets of derivatives. Convexity is the degree of change in the price range of derivatives caused by changes in the asset price of the indicator.

Explanation of perpetual contract formula parameters:

PNL: Profit and loss; Contracts: number of contracts; Multiplier: contract multiplier; EntryPrice: opening price; ExitPrice: closing price

3.1 Coin-based perpetual contract trading platform

In May 2016, BitMEX launched the XBT/USD currency-standard perpetual contract, each contract worth 1USD of BTC. Currency-based perpetual contracts use digital assets as the settlement currency. The contract is linked to the spot market through the funding rate mechanism. Perpetual contracts use a reasonable marked price as the liquidation price to avoid asset losses to users caused by market fluctuations. At a time when digital asset trading risk events frequently occurred, currency-based perpetual contracts won the favor of many users.

“Coin-based perpetual contracts are favored by users, and exchanges have deployed

Since 2016, the currency-based perpetual contract trading market has continued to experience rapid growth. Exchanges such as OKEx, Bybit and Binance have launched currency-based perpetual contract products. With the continuous improvement of product mechanisms, currency-based perpetual contracts have become an important part of the digital asset derivatives market.

Starting from Q3 of 2020, the digital asset market will start. TokenInsight data shows that the daily trading volume of currency-based perpetual contracts reached 26.6 billion U.S. dollars on November 27, a record high, accounting for 49.3% of the contract market share. In the rapid changes in the market, currency-based perpetual contracts rely on mature product design and become a reliable investment choice for investors.

The exchange launches the timetable for currency-based perpetual contracts, source: tokeninsight.com

Contract volume comparison, source: tokeninsight.com; statistics date: November 27, 2020

“The trading volume of currency-based contracts is growing rapidly, and the exchange head effect appears

Starting from September 2020, in less than 3 months, the price of BTC has risen by 90%, and digital assets ushered in an explosion. While the trading volume of currency-based perpetual contracts surged, the exchange head effect began to appear. TokenInsight’s data shows that the cumulative trading volume of BTC currency-standard perpetual contracts are concentrated in: Huobi, Bybit, BitMEX, BitForex [4], Binance.

[4] BitForex does not open API trading, and the trading volume of perpetual contracts is the data returned by the exchange.

BTC currency-standard perpetual contract trading volume, source: tokeninsight.com; statistics date: December 15, 2020

Trading volume of currency-based contracts, source: tokeninsight.com; date of statistics: December 14, 2020

On August 10, 2020, Binance launched the BTC currency-standard perpetual contract. The trading volume has increased by 20 times in 4 months, from a weekly turnover of US$400 million to US$8 billion. Currently, Binance’s BTC currency-standard perpetual contract trading volume ranks fifth in the market.

Binance BTC currency standard perpetual contract weekly trading volume, source: tokeninsight.com

As the trading volume increased, the open interest of the BTC currency-standard perpetual contract increased accordingly. TokenInsight’s data shows that the open interest of BTC-based perpetual contracts rose from USD 1.2 billion in September to USD 2.4 billion in December, a growth rate of 100%. The top exchanges by volume are: Bybit, BitMEX, Huobi, OKEx, Deribit. The open interest market share of the BTC currency-standard contract of the top 5 exchanges is more than 70%.

Open interest in currency-based perpetual contracts, source: tokeninsight.com; date of statistics: December 14, 2020

Open interest in currency-based contracts, source: tokeninsight.com; date of statistics: December 14, 2020

Against the backdrop of the hot derivatives market, Binance’s BTC currency-standard perpetual contract open interest has risen rapidly. In November 2020, the open interest exceeded US$1 billion. Currently, Binance’s BTC currency-standard perpetual contract open interest remains in the US$1.5 billion range, ranking seventh in the market.

Open interest of Binance BTC currency-standard perpetual contract, source: tokeninsight.com

3.2 Coin-based perpetual contract products

After five years of market testing, currency-based perpetual contracts have become mature digital asset derivatives. The currency-standard perpetual contract has formed an infrastructure that uses the spot index price as a reference benchmark and anchors the contract price to the spot price through the funding rate mechanism. In order to improve user experience and ensure transaction security, various trading platforms on the market have carried out various innovations in perpetual contract products. The currency-based perpetual contract product designs of various exchanges are different, and the main differences are concentrated in the price index composition, leverage multiples, and margin mechanism.

Comparison of exchange currency-based perpetual contract product elements, source: tokeninsight.com

The currency-based perpetual contract products launched by the trading platform continue the design framework of BitMEX’s funding rate mechanism and spot price index. Most of the exchanges use the basic interest rate and premium index to determine the funding rate. In terms of price indices, Binance, Bybit, and BitMEX use a volume-weighted method to calculate spot price indices.

What are full positions and partial positions?

Whole position margin: all the balance transferred by the investor into the contract account can be used as collateral assets. Margin by position: The margin required by the investor when opening a position is used as the fixed margin for the contract.

The currency-based perpetual contract market has gradually taken shape, and the product design framework is basically determined. Digital asset exchanges provide effective and safe trading services, which are essential for investors. We selected trading activity, risk control mechanism, and user trading experience to compare and analyze the current trading volume of the exchanges in the market in three dimensions. The analysis results are as follows.

3.3 Activity of currency-based perpetual contract transactions

Trading depth is also called handicap depth, which reflects the intensity of the exchange’s pending orders and is a commonly used indicator to consider the activity of exchange transactions. The exchange’s good market depth can free investors from trading slippage problems and facilitate traders to execute transactions at reasonable prices. For institutional traders and quantitative trading teams, good market depth is the key to ensuring profitability. In extreme market conditions, the better trading depth of the trading platform is a necessary condition to ensure that orders are matched and traded in a timely and effective manner. Refer to TokenIsight data and sort by 2‰ market depth. The top 5 exchanges for BTC currency-standard perpetual contract market depth are: Bybit, BTCMEX, BitMEX, Binance, Huobi. Sorted by 1‰ handicap depth, the top 5 exchanges with BTC currency-standard perpetual contract handicap depth are: Bybit, BTCMEX, Phemex, Binance, Huobi. For quantitative traders, intensive handicap depth is the key to ensuring the profit of the strategy. In the more detailed 5‱ handicap volume statistics, the top five exchanges with BTC currency-standard perpetual contract handicap depth are: Bybit, BTCMEX, Phemex, Binance, Huobi. Under different market statistics, Bybit’s trading depth ranks first.

What is handicap depth?

Handicap depth refers to the intensity of pending orders on the trading platform. Handicap depth can represent, to a certain extent, the ability of the trading platform to withstand large transactions without significant price fluctuations. It is usually expressed by the amount of pending orders within a certain range of transaction prices.

BTC currency standard perpetual contract liquidity comparison, source: various exchanges; tokeninsight.com; statistical date at 17:00, December 22, 2020

The degree of trading activity is also related to the trading volume, slippage, and open interest of the trading pair. In order to compare the trading activity of different trading platforms more comprehensively, we select the liquidity score index of TokenInsight to compare the trading activity of BTC currency-standard perpetual contracts of different trading platforms. TokenInsight’s exchange liquidity score index is obtained by calculating the depth and slippage data of the designated trading pairs of the exchange, and combining the trading volume and open interest of the trading pairs. The liquidity score can more comprehensively show the trading activity of the main trading pairs on different exchanges. According to TokenInsight’s liquidity calculation rules, the top five exchanges with BTC-based perpetual contract liquidity scores are: Bybit, BitMEX, Huobi, Phemex, Binance.

BTC currency standard perpetual contract liquidity score, source: various exchanges; tokeninsight.com; statistics date December 14, 2020

By comparing the exchange’s TokenInsight liquidity score and market depth, we found that Bybit has the best trading activity, with a liquidity score close to 100, and the market depth is the best. Under the 2‰ market depth, Bybit’s BTC currency-standard perpetual contract can reach a market order volume of 11.36 million US dollars. With a market depth of 5‱, Bybit’s market order volume can still reach $3.95 million. Bybit can better meet the trading needs of quantitative investment teams. BitMEX, Binance, Huobi, and OKEx exchanges have 2‰ market orders around 5 million U.S. dollars, and 5‱ market depths have orders above 1 million U.S. dollars. The trading activity of BitMEX, Binance, Huobi, and OKEx is sufficient to meet the investment needs of ordinary users.

3.4 Risk control mechanism of currency-based perpetual contract

The high leverage mechanism of currency-based perpetual contracts will bring high volatility risks to users’ investments. All exchanges have introduced corresponding risk control mechanisms to protect user safety. The current risk mechanism generally adopted in the market: use the marked price to calculate the user’s closing line to avoid unnecessary market fluctuations on the user, and include the capital cost in the risk protection fund to compensate traders for unnecessary future encounters loss. At the same time, major exchanges are constantly improving their risk control mechanisms. The specific mechanisms are shown in the table below.

Comparison of risk control mechanisms of BTC currency-standard perpetual contracts, source: tokeninsight.com; statistics date: December 5, 2020

[5] BitMEX disclosed that the risk protection fund is the overall reserve of the trading platform, so the amount is relatively large. USDBTC perpetual contract risk protection fund did not disclose separately

Taking Binance as an example, Binance uses FAK (Fill and Kill) for liquidation. In the event of forced liquidation, the orders will be filled as much as possible, and orders that are not filled will be automatically cancelled. In the design of the margin system, Binance adopts a step-by-step margin model for risk control, and sets a higher margin ratio for large positions to avoid impact on market prices when large positions are liquidated.

Use FAK (Fill and Kill) method for liquidation. Orders will be filled as much as possible, and orders that are not filled will be automatically cancelled. Under the Fill or Kill method, all orders are either filled or cancelled.

3.5 User experience of coin-based perpetual contract

TokenInsight analysts compare the user experience of currency-based perpetual contracts on different trading platforms from the three dimensions of rate, data market feedback, and trading experience.

Transaction fees and funding rates

Transaction fee rate: Transaction fee is divided into Maker (pending order) fee and Taker (take order) fee. Maker is an order placed by a trader, waiting for the transaction. Taker refers to an order that is actively traded with a pending order.

Funding rate: Perpetual contracts use the “funding cost mechanism” to anchor the contract price to the spot price. When the funding rate is positive, long positions pay short positions. When the funding rate is negative, shorts pay longs.

Comparison of BTC-based perpetual contract rates on major exchanges, source: various exchanges; tokeninsight.com

Comparison of transaction fees : By comparing the transaction fees of exchanges, we found that BitMEX and Bybit’s pending order fee rates are negative and extremely friendly, and the trading platform is willing to give liquidity providers a certain amount of compensation. Binance’s order-taking fee rate is the best, only 0.040%.

Funding rate comparison: Funding rate refers to the ratio of fees paid by the trading platform to long or short traders based on the price difference between the perpetual contract price and the spot price. Therefore, the fluctuation of the funding rate can reflect the deviation of the platform contract price from the spot price.

Change range of fund rate: According to TokenInsight data, the change range of fund rate of BTC currency-standard contracts of major exchanges in the past 90 days can be observed. Through comparative analysis, we can see that the funding rate of Deribit and Bybit is in the range of -0.068% to 0.300%, and the funding rate has changed significantly. This can reflect that the currency-standard perpetual contract price of the trading platform has experienced large fluctuations from the spot price. The funding rate of Binance, Huobi, BitMEX, and OKEx has been stable in the range of -0.068% to 0.100%, and the price performance of the currency-based perpetual contract is relatively stable, and there is no significant deviation.

Funding fee rate collection time: The frequency of fund fee collection by major exchanges is basically the same, three times a day and once every 8 hours. Only when the trader is holding a long or short position at the time of receipt, will he be charged or paid the corresponding fund fee.

Comparison of BTC currency standard perpetual contract funding rate, source; tokeninsight.com; statistical date December 8, 2020

Currency-based perpetual contract data market

The price volatility of digital assets is much higher than that of traditional financial investment tools, considering that users often use leverage to invest in currency-based perpetual contracts. Therefore, price fluctuations in the perpetual contract market will cause investors’ income to change rapidly. If investors cannot obtain comprehensive market information in a timely and effective manner, and make timely response to directions and positions, it may have an impact on investment income. Therefore, an accurate grasp of market conditions is very important for traders of currency-based perpetual contracts. We compare different trading platforms, and the comparison of the elements of the data market is shown below.

Comparison of currency-based perpetual contract data, source: tokeninsight.com

Through comparative analysis, we can see that each exchange has a relatively complete presentation of the basic market information of digital currencies, and the advanced version of the trading interface has a richer display of high-level market data of digital assets. In the future stage, user experience competition may focus on in-depth market display; specifically, information on the latest blockchain technology research and digital asset industry dynamics may attract users more.

Currency-based perpetual contract trading experience

The mainstream trading methods of currency-based perpetual contracts evolved from delivery contracts and spot trading methods. With the continuous expansion of perpetual contract users, digital asset exchanges continue to innovate products. In order to facilitate investor transactions and improve user experience, the exchange has made many optimizations in the order mechanism, position holding method, and margin mechanism.

Comparison of currency-based perpetual contract trading methods, source: tokeninsight.com

By comparing the trading commission methods of currency-based perpetual contracts on different exchanges, we can see that Binance, OKEx, Huobi and other exchanges are constantly improving related mechanisms and optimizing trading services. Taking Binance as an example, Binance provides users with multiple order options such as limit-price stop-profit and stop-loss, market price stop-profit and stop-loss, and follow-up orders. A variety of order orders can simplify investors’ transaction process and enhance users’ investment experience. In terms of position holding methods, Binance has innovatively introduced a two-way position holding system. One contract can allow holding positions in both long and short directions at the same time, and the position multiples and number of positions in the two directions do not affect each other. The two-way position holding mechanism can provide investors with more hedging options. In addition, in terms of wallet settings, BInance supports users to implement delivery contracts and perpetual contract transactions in one wallet, eliminating the need for users to transfer assets in different wallets when investing in different derivatives.

What is an iceberg commission?

Iceberg entrustment refers to the automatic splitting of large orders into multiple entrustments in order to avoid excessive impact on the market when investors conduct large-scale transactions

What is tracking commission?

Tracking orders allow users to preset orders within a certain percentage of the market price when the market fluctuates. When the market develops in a direction that traders think is advantageous, it can help traders limit losses and protect profits.

4.1 The currency-based perpetual contract needs to be optimized

Most of the product targets are mainstream digital assets: The current currency-based perpetual contract products launched by digital asset exchanges still mainly target mainstream digital assets such as BTC and ETH. As the currency-based perpetual contract market becomes more mature, we look forward to further enriching the product categories of currency-based perpetual contracts to meet users’ investment needs for different digital assets.

Product design mechanism: The currency-based perpetual contract adopts the fund rate mechanism to anchor the contract price and the spot price. If the contract price is higher or lower than the spot price, the long or short side will be punished by interest rate. Compared with the tight price relationship established by spot and delivery contracts through maturity delivery and capital interest rate. The funding rate mechanism of currency-based perpetual contracts may not be able to avoid a significant deviation between the contract price and the spot price in the short term. We expect that digital asset practitioners can further enrich the pricing mechanism of currency-based perpetual contracts and strengthen the essential attributes of perpetual contracts for forward pricing of digital assets.

User protection measures: Currency-based perpetual contract products are similar to highly leveraged digital asset derivatives bound to spot indexes, and are high-risk investment tools. With reference to the traditional financial market, investors must meet the corresponding asset requirements and professional knowledge level before conducting two-way transactions and high-leverage investment activities. At present, the protection mechanism for primary users of digital asset trading platforms is not sufficient, and there is still much room for improvement. For example, the exchange can try to determine the leverage multiples that users can use for investment based on the assessed user’s capital scale and trading years, so as to protect the inexperienced junior users.

Comparison of open interest in currency-based perpetual contracts, source: tokeninsight.com; date of statistics: December 7, 2020

4.2 Future prospects of digital asset derivatives

TokenInsight data shows that since the beginning of the year, the trading volume of currency-based perpetual contracts with BTC and ETH as the target has repeatedly hit new highs. In recent years, digital asset derivatives have gradually enriched. From delivery contracts to perpetual contracts, every industry innovation will bring room for growth. BitMEX has become the leading digital asset contract exchange with currency-based perpetual contract products. Deribit has won the favor of professional investors by relying on professional quotation mechanism and rich option products, and has become the most successful digital asset options trading platform. The product innovation of digital assets will not stop. Multi-variety index derivatives, ETFs, and tiered funds based on digital assets may appear. We are optimistic that the derivatives market will become the main growth point of the digital asset market.

Changes in quarterly transaction scale of digital asset derivatives and spot transactions, source: tokeninsight.com

risk warning

To prevent illegal fund-raising activities under the banner of “blockchain” and “virtual currency” on various financial platforms, TokenInsight will strictly abide by national laws and regulatory Variations, dissemination of bad information and other illegal activities.

scalability, interoperability, and sustainability at its ideological core, Cardano has cemented itself among the leading distributed ledger technology (DLT) projects today. Now, having successfully launched the highly-anticipated Shelley phase, things are only looking more promising than ever for Cardano.

In this Altcoin Explorer, we deep dive into this fascinating smart contract protocol which happens to be the world’s first peer-reviewed blockchain project driven by academic research and scientific philosophy. A multi-layered smart contract protocol, Cardano is committed to laying the building blocks for tomorrow’s decentralized economy.

In 2015, former Ethereum co-founder Charles Hoskinson along with Jeremy Wood – his co-worker during his time at Ethereum – co-founded Input Output Hong Kong (IOHK), one of the three entities (others being Cardano Foundation and EMURGO) behind the development of the Cardano blockchain.

For the uninitiated, IOHK describes itself as a “research and development company committed to using the peer-to-peer innovations of blockchain to build accessible financial services for all.” Officially, IOHK has been contracted to build, design, and maintain Cardano until 2020.

Coming back to Cardano, the project was found on the idea of creating a scalable, decentralized, and stable blockchain protocol that fosters a society without power intermediaries.

Fast-forward to 2017, the project carried out its initial coin offering (ICO) raising a healthy $63 million through the sale of its native digital coin, ADA.

In September 2017, IOHK officially launched the Cardano blockchain which to rise through the ranks to establish itself as a force to reckon with in the rapidly growing blockchain and crypto space.

At the height of the 2017-18 ICO frenzy, Cardano’s ADA hit its ATH value of $1.18. Since then, despite the wider crypto market simmering down, ADA remains as one of the top-performing digital assets in the space consistently ranking among the top 10 coins by total market cap.

Today, ADA is one of the most recognizable cryptocurrencies in the industry with several major crypto exchanges supporting it. Individuals can trade ADA on exchanges such as Binance, Kraken, Binance.US, Huobi, and KuCoin, among many others.

While many like to dub promising smart contract protocols as potential “Ethereum killer,” Cardano is anything but that. Rather, Cardano is the first of its kind project which is laying grounds for the inevitable future “Cardano killer” blockchain projects.

Fundamentally, Cardano is a proof-of-stake (PoS) blockchain platform developed through evidence-based methods. According to its official website, Cardano combines pioneering technologies to offer unparalleled security and sustainability to decentralized applications (dApps), systems, and societies.

Cardano differs from the vast majority of other smart contract platforms in that its architecture is based on sound mathematical and scientific research. The project firmly believes that its academic-driven approach to blockchain will help it promote the wider adoption of the emerging technology.

The academic rigor of the project can be estimated from the fact that, to date, IOHK has published more than 60 academic papers that outline the technological infrastructure underpinning Cardano. Further, the firm has also inked academic partnerships with numerous prestigious universities across the world.

IOHK chose Haskell as the coding language for Cardano as it offers unparalleled security. For those not in the know, the Haskell programming language is used widely in information sensitive industries such as banking, finance, and defense.

The propulsion of Cardano among the heavyweight blockchain projects is the result of continual efforts by the three major entities working in the background. These are, namely, the Cardano Foundation, IOHK, and EMURGO.

The Cardano Foundation is the project’s independent standards body that oversees and supervises the advancement of the Cardano ecosystem. The Cardano Foundation, being the legal custodian of the protocol and the owner of the Cardano brand, performs various functions including driving protocol adoption, growing the global Cardano community, and shaping legislation and commercial standards.

The Cardano Foundation discharges the aforementioned duties through its governing council, a professional executive team, and community managers, who collectively burn the midnight oil to ensure the Cardano ecosystem continues to grow bigger.

The Cardano Foundation is just as much outward-looking as it is inward. To date, it has inked several partnerships with entities across different industries contributing to the expansion and wider adoption of Cardano. Further, the Cardano Foundation has also played an instrumental role in raising awareness about Cardano by launching myriad educational programs and courses.

As mentioned earlier, IOHK was founded by Hoskinson and Wood to oversee the design, development, and maintenance of the Cardano platform.

A leader in building distributed computing systems and decentralized technology solutions, IOHK is committed to formulating open-source principles in the field of cryptographic research and the architecture of cryptocurrencies.

Similar to the Cardano Foundation, IOHK is working toward promoting the academic study of distributed ledger technology (DLT) via educators, academic partners, and tailor-made courses.

Last but not the least, EMURGO is the commercial arm of Cardano that “develops, supports, and incubates commercial opportunities” and helps integrate them into the Cardano ecosystem. In essence, EMURGO can be considered the for-profit arm of Cardano that seeks to promote its adoption through successful commercial ventures.

EMURGO has offices in leading tech countries such as Singapore, Japan, USA, India, and Indonesia, and strives to ink partnerships with local blockchain players and national governments to give them a taste of the Cardano advantage.

As reported by BTCManager in February 2019, EMURGO had launched a blockchain academy in India to train close to 2,500 blockchain developers by the end of the year.

Being a research-driven project, Cardano has a long roadmap which eventually strives to create a self-sustaining, scalable blockchain ecosystem that is governed by its community. Cardano’s roadmap is divided into five phases with each of them taking the project one step closer to its self-sustaining form.

The first phase of the project, Byron laid the foundation for Cardano in September 2017 after spending close to two years in development.

This phase enabled users to buy and sell Cardano’s native digital currency, ADA, named after revolutionary programmer Ada Lovelace. At the same time, Byron also introduced the cutting-edge Ouroboros protocol which is the first PoS protocol based on extensive academic research with a mathematically-proven level of security. You can learn more about this protocol here.

Further, the Byron phase also witnessed the release of Cardano’s official desktop wallet named Daedelus and Yoroi, a light-weight wallet from EMURGO to promote routine use of the ADA digital currency.

The highly-anticipated Shelley upgrade marks the era of network decentralization for Cardano.

Officially launched on July 29, 2020, the Shelley upgrade is a watershed moment for the entire Cardano community as it entails the shift in the network’s structure from a federated one under Byron to a community-driven one. This means that under the Shelley phase, an increasing number of nodes will be a shift toward being run by the Cardano community, thereby giving it greater security and robustness.

Shelley brings with itself a plethora of new features and incentive mechanisms to the Cardano network aimed toward encouraging ADA holders to stake their coins to maintain network decentralization.

These include the introduction of a delegation and incentive scheme and a reward system to drive stake pools and community adoption. Toward the end of the Shelley phase, Cardano is expected to become 50-100 times more decentralized than other major blockchain networks.

Once the network is sufficiently decentralized, smart contracts will be integrated into the Cardano network during the Goguen phase to make it ready for the development and deployment of enterprise-grade dApps.

Many might be unaware of the fact that the word for Goguen has been running simultaneously with Shelley, therefore, the Cardano community will not have to wait for a long period of time for the onset of this phase.

Unlike many other smart contract platforms that require advanced coding skills to develop blockchain-based dApps, Goguen will allow both users from technical and non-technical backgrounds – especially those with finance and business backgrounds – to develop dApps on the network without any hassle.

This will be achieved via Marlowe, a high-level domain-specific language for financial products built on Plutus which is a purpose-built smart contract development language and execution platform built on top of Haskell.

With a decentralized, smart contract-enabled network at hand, the next step for Cardano would be the optimization of the network to improve scalability and interoperability. This will be achieved during the Basho phase.

The Basho phase will introduce sidechains which are essentially new blockchains interoperable with the main Cardano chain. These sidechains can be leveraged as a sharding mechanism to reduce the load from the main chain to pave way for better network efficiency.

Additionally, the Basho phase will introduce parallel accounting styles. The introduction of account-based models into the Cardano network via sidechains will not only increase network interoperability but also serve the purpose of extending the scope of use-cases for Cardano.

The final phase of the Cardano blockchain, the Voltaire era will focus on the governance aspect of the network to complete its transformation into a self-sustaining system.

This era will introduce voting and treasury system that will allow network participants to use their stake and voting rights to chart the future course of Cardano.

Interestingly, the treasury system will be funded via a fraction of all transaction fees in the network to provide ready funds to finance the development activities to be performed as per the voting decision.

With a functional voting and treasury mechanism in place, the Cardano network will be decentralized in the true sense of the term and will no longer be under IOHK’s management. From there on, the network will run by the Cardano community itself.

In a fast-paced industry such as blockchain, a project following a methodological approach could easily stand out as an outlier. However, it is often the slow and steady that wins the race and the same can be expected of Cardano.

Cardano is a time-tested blockchain network that has not only successfully weathered all the ups and downs of the broader cryptocurrency industry but also continues to snowball into a larger protocol with each passing day.

Instead of taking the shorter route of borrowing the technical infrastructure from Bitcoin or other cryptocurrency systems, Cardano works with world-leading academics on fundamental research, most of which are subject to peer review, with papers presented at top-tier international conferences.

This longer and innovative approach to developing network infrastructure is a testimony to Cardano’s endeavor to become the leading smart contract platform to fuel an economy that is true to blockchain’s ethos of decentralization, transparency, and security.

Foundation in January 2018. VeResearch has been a major force behind VeChain’s progress on blockchain-based technology. As a global innovative research grant program, VeResearch has collaborated with world-class global research teams to co-develop blockchain solutions.

Solutions that have been developed through VeResearch have been geared towards the improvement of VeChainThor and the betterment of the blockchain industry at large. The goal of VeChain is also to integrate blockchain into different industries by creating bridges between the real world and blockchain technology. The grant program is designed to empower developers and academics to create high-level practical responses to the industrial challenges faced by businesses today.

In line with VeChain’s goals, VeResearch has joined forces with the RMIT Blockchain Innovation Hub. The initial goal of this partnership is to accelerate the standardization of blockchain governance consensus and enhance current studies on blockchain governance models.

Known as the first research center in the world based upon the social science of blockchain technology, the RMIT Blockchain Innovation Hub brings together a superb team of social science researchers and economists. The team includes Dr. Chris Berg, who is a TV media commentator and a scholarly contributor in the Australian Journal of Political Science. He is also a co-director of the RMIT Blockchain Innovation Hub.

Speaking about the partnership, Dr. Chris Berg said, “The RMIT Blockchain Innovation Hub is excited to be working with one of the world’s leading blockchain platforms to explore and research governance models for public blockchains. With this important research we are hoping to build towards a general theory of blockchain governance contributing to VeChain’s ecosystem and providing benefit to the broader blockchain community.”

The RMIT team will work closely with the VeResearch team. While focusing on blockchain-based governance models and improving the standard of blockchain governance consensus,  a framework for comparing and evaluating governance systems of public blockchains will be developed.

Due to its high-level research, VeResearch has worked closely with different high-profile academic institutions, including the University of Oxford, Michigan State University, Dartmouth College, South China Normal University, and Tsinghua University.

Previously, VeChain collaborated with I-Dante and developed E-HCert, a blockchain-based COVID-19 records app. The E-HCert app provides an archival solution for COVID-19 RT-PCR (real time-polymerase chain reaction) and antibodies tests (Rapid Test) records.

As of time of publication, VeChain (VET) price was $0.01924698 with a 24-hour trading volume of $500,819,245. VET price also went up by 15.5% in the last 24 hours. It has a circulating supply of 64.8 billion coins and a max supply of 86.7 billion. Binance is also the current most active market trading VET.

For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.

like the National University of Singapore’s (NUS) Graduate Research Innovation Programme (GRIP) in Singapore. These programs create an enabling environment for innovation to take place because they provide Ph.D. researchers and research scientists with the resources they need while still being able to complete their studies.

Notably, the term deep tech was formed by Swati Chaturvedi, CEO of investment firm Propel(x). A major example of one of Singapore’s deep tech startups is Zilliqa.

Popularly known as a public, permissionless blockchain, Zilliqa boasts of being able to offer high throughput and better scalability as compared to other blockchains available today. The platform also claims to be able to securely carry out thousands of transactions in just one second. Zilliqa is a deep tech platform because its technology was built from scratch. It is the first blockchain platform to incorporate sharding technology.

The platform, according to a recent tweet, was “born out of lecture halls and laboratories,” hence confirming its deep tech status.

Our Co-CEO & Chief Commercial Officer @ColinMiles discussed this with @e27co: https://t.co/LvX8ldSTP8 – AN

— Zilliqa (@zilliqa) December 30, 2020

Speaking on this in an interview with e27, Colin Miles, CCO of Zilliqa, pointed out that a lot of time and resources have gone into the academic aspect of many deep tech startups, Zilliqa inclusive. Another major deep tech startup birthed from the NUS incubation program is Breathonix. It was founded in 2019 and recently designed a breath test that could help detect the presence of COVID-19 in about 60 seconds.

There are a lot of important reasons why the Singapore government is looking to grow its deep tech space.

Another major innovation brought to life by SGInnovate is PowerX. SGInnovate is a Singapore government initiative focused on growing the deep tech ecosystem.

Seeing that a major issue in the Singaporean deep tech space is funds, the government put forward a special budget. In 2020, the government set aside S$300 million (US$224 million) to help fund deep tech startups.

Just last month, Seeds Capital made a call for about 10 to 15 private investors to help invest S$150 million (US$112 million) in deep tech startups.

Interestingly, popular crypto-friendly travel booking platform Travala.com recently added support for ZIL tokens. Now ZIL can be used in booking the platform’s over 2.2 million hotels globally.

At the time of publication, ZIL was trading at $0.077923 with a market cap of $862,392,240 and a 24-hour trading volume of $306,791,093.

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Find out more about the crypto and blockchain sphere on the Altcoin Buzz YouTube channel.

lawsuit against Ripple and its CEO and Chairman. The accusation against Ripple is that they illegally sold securities worth $1.3 billion to retail investors. 

The claim centers around the marketing of XRP (XRPLX), which was the world's third-largest cryptocurrency before last week’s tumble. According to the suit, Ripple raised capital for the platform through the coin sale in an unregistered securities offering. The issue is part of a long-standing argument about whether XRP is a security due to the centralized nature of the Ripple holding company.

The SEC also alleged that the company received services in exchange for XRP, while it is also alleged that the executives made unregistered sales worth $600 million.

The risk for XRP is that exchanges will stop dealing in the coin and this was underlined with news that Bitstamp would halt trading and deposits in XRP. 

Ripple’s CEO Brad Garlinghouse refuted the SEC claims, saying: 

One bright spot for XRP is that the coin still sees strong support in Japan due to differing regulations. Research from Nomura research, which is Japan’s biggest economics analyst, said that XRP is listed as a crypto asset under Japan’s Funds Settlement Act. This means that the coin will not be seen as a security and will still trade on exchanges. Despite this, selling in the rest of the world could weigh on the price going forward.

The price of XRP crashed from near $0.6000 to trade at $0.2200 and the coin now trades at $0.3000. XRP has lost its place as the third-largest cryptocurrency to Tether stablecoin, while Litecoin now closes in on the fourth spot, but is still $4 billion away.

Ethereum is seeing strong volumes from the ongoing Bitcoin rally and the coin now trades above $700 near $725. The 24-hour volume in Ethereum was at a 2020 high of $34 billion, which was only matched in September of this year.

ETH now has a market cap of $83 billion after gaining 14% on the week and the coin now trades at its highest level since May 2018. The coin is seeing strong support from institutional buyers and will also see futures listed on the CME exchange in January 2021. The new Ether futures contract will allow investors to hedge their exposure to the short-term swings in the cash market. 

It was noted in this blog recently that digital asset manager Grayscale had seen rising interest in Ethereum and we are likely to see that continue to grow as many institutions will be late to the Bitcoin party, while ETH also has the potential for the underlying Decentralized Finance (DeFi) growth. The majority of DeFi coins are created in Ethereum’s ERC-20 coin technology and as the world pivots to digital currencies, these finance projects could see continued demand for their finance offerings.

Resistance for Ethereum will be seen ahead at the $800 and $900 levels ahead of a potential $1,000 test but there is always a pullback risk in the cryptocurrency space after a very strong second half of the year. 

Bitcoin’s strong performance continued with a rally above the $28,000 level and the coin has now seen a move above the $500bn market cap level. The coin is now above payment rivals Mastercard and VISA, which have valuations of $328 and $478 at the time of writing.

The overall market cap of the cryptocurrency market is $730bn so Bitcoin and ETH hold $580bn of this. This would suggest that there are still potential gains ahead for the right altcoins to grow. 

The gains in BTC are filtering through to other coins in the cryptocurrency space but those gains are below that of the major coins such as Litecoin with a 30% gain on the week and BTC’s 23% rise. This is a sign that the flows coming in are going to the larger coins, which would suggest professional investors are moving in and seeking the security of the larger coins.

Bitcoin’s price has bounced off the $28,000 level and this hints at a potential correction coming soon. The coin may still see a blow-off move above $30k before any selling arrives.

The Ripple news is a worry for cryptocurrency investors as it highlights a looming regulatory threat. I have said for a long time that the government and the existing banking system won’t easily give up control over monetary supply and market share easily. Ripple’s cross-border payments technology is a threat to their fee structure and this may be the first shot in an SEC that becomes increasingly hostile towards cryptocurrencies. 

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.

group said that under Japanese law, XRP is dubbed as a “cryptocurrency asset.”

Last week, SEC accused Ripple and two of its executives in a lawsuit that reignited the debate whether XRP was security or not. The federal agency alleged that Ripple, its CEO Brad Garlinghouse and co-founder Chris Larsen raised over $1.3 billion through an unregistered, ongoing “securities” offering.

SBI mentioned a 24 December column by Sadakazu Osaki, a fellow of Nomura Research Institute, and implied that under Japanese law XRP is not a security and is a “cryptocurrency asset.” SBI further quoted the researcher and said that XRP will continue to trade on cryptocurrency exchanges as “cryptocurrency assets” rather than “securities” in Japan. 

SBI has always been associated with the crypto and blockchain sector. With the help of its long time business partner, Ripple, the financial giant added Money Tap, its cash transfer app, to its business, which was built on Ripple XRP ledger technology. 

The group also launched its S Coin platform which allows governments and corporations to issue digital tokens via the Corda blockchain network from R3. 

Santiment data also found that wallets having 10 million XRP and more – began to decline – ever since the SEC news broke.

Chainlink, Aave, FTX Token Price Analysis: 28 December

Marathon Patent to buy 70K ASIC miners from Bitmain

Alisha is a full-time journalist at AMBCrypto. Her interests lie in blockchain technology, crypto-crimes, and market developments in Africa and the United States

VanEck files SEC registration for Bitcoin ETF again

After Ripple is SEC set to target Tether?

Ripple and SEC Pretrial scheduled for 22 February

Ripple releases latest statement: we look forward to working with SEC’s new leadership

Why Coinbase, Ripple and other crypto whales moved 365.7 million XRP

Ripple to face an SEC lawsuit soon

Parliament that it had completed the primary theoretical research on central bank digital currency (CBDC). The live trial would begin in the second half of next year. The initiative is seen as an attempt to control double-digit inflation (14%) and soaring consumer prices.

As per Agbal, “There is an R&D project initiated on digital money. Currently, the conceptual phase of this project has been completed. We aim to start pilot tests in the second half of 2021.”

The country has been researching CBDC since mid-2019. Agbal, who took over as the chief of the central bank a month before, has stated that the bank would take necessary measures to bring down inflation and achieve the objective of 9.4% by the year-end.

Velo Labs revealed that two associates have completed the first-ever FCX live trade

Velo Labs’ core team has revealed that two of its associates, SEBA Bank and Lightnet Group, have completed the first-ever live trade using its FCX (Federated Credit Exchange Network).  Stellar network backs Velo Labs in terms of financial assistance (via Stellar Development Foundation) and technology.  The Velo token – issued on Stellar Blockchain – serves the purpose of collateral to guarantee digital loans. Interestingly, Velo Token can also act as collateral for other financial services.

FCX can be defined as a distributed network of organized access nodes linking a broad array of centralized and decentralized financial associates. The platform has been structured to achieve both efficiency and liberty of DeFi with time-tested, evolved ways and criteria of CeFi  (centralized finance) and conventional media.

FCX enables the liquid exchange of digital credits pegged to any fiat currency while settling the transaction using the VELO token as collateral within the ecosystem.

FCX facilitates the liquid exchange of crypto credits linked to any fiat. The transaction is completed through the utilization of the VELO token in the form of collateral. In the trade mentioned above, SEBA Bank selected a digital loan linked to the franc (CHF).  At the same time, Lightnet Group chose a loan related to the greenback. Subsequently, a USD/CHF pair was used to complete the transaction.

IGT receives patent for gamblers to move their crypto holdings to a gaming account

International Game Technology (IGT), the world’s largest manufacturer of slot machines, has received a patent from the United States Patent and Trademark Office for a system that would facilitate gamblers to move their crypto holdings to a “gaming establishment account.” The patent filing illustrates the process of transferring cryptos such as Bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH) from third-party wallets to wallets linked to accounts with casinos.

Regarding the patent, Phil O’Shaughnessy, spokesperson of IGT, said: “IGT secured this patent to bolster its industry-leading patent portfolio in anticipation of any possible future direction in regulated gaming involving cryptocurrency.”

Notably, IGT has also received regulatory endorsement in Nevada for providing Resort Wallet to players. The wallet enables players to conduct cashless deposits. Referring to the pandemic, the company asserted that the system offers a “reduced-contact” and secure gaming experience.

CEO reveals that Binance records a volume of $80 billion

CEO of arguably the world’s largest cryptocurrency exchange by volume, Changpeng Zhao (CZ), revealed that his company’s trading platform recorded a volume of $80 billion on January 4. He further stated that the trading volume on January 4 is four-times the volume handled by the platform between November 15, 2017, and December 15, 2017.

A day before CZ revealed the volume, the spot trading volume of Binance surpassed $23.60 billion, while derivatives volume shot to $57 billion. The platform did face issues in tackling colossal volume. Changpeng Zhao stated: “We saw some scaling issues today. We probably will see more issues as we continue to grow. We aren’t perfect, but we will fix them as quickly as we can.”

Nevertheless, along with unexpectedly high trading volume, Binance also witnessed the liquidation of short positions worth $190 million in a matter of 10 minutes as Bitcoin plunged below $30,000.

Notably, on January 4, Sam Bankman-Fried, CEO and founder of crypto derivatives exchange FTX, revealed that the trading platform had executed trades worth over $10 billion.

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

be a challenging task.

Many cryptocurrencies offer attractive investment opportunities. Deciding on your investment goals, doing your research, and choosing which one works best for you can be overwhelming and time-consuming. There is also your level of experience to consider when making your choice since some cryptocurrencies might be a good investment for beginners, while others have shown to be for more advanced crypto traders. Being that our team has been in the game for a very long time, our experience can shed some light on the matter.

However, you should always be on the side of caution, as investing in cryptocurrencies doesn’t necessarily make you profitable in the short term. Many traders have witnessed their investments crumble because they did not pay enough attention to security and invested in centralized exchanges that got hacked.

Some of the most common issues are forgetting to enable two-factor authentication, leaving your coins in an exchange, and not owning a hardware wallet or dedicated crypto transaction laptop. With all this in mind, whether you are just starting your crypto journey, or already have experience but in need of answers or guidance, don’t feel hesitant to contact us for additional advice.

For all of you looking for a cryptocurrency to invest in 2020 and 2021, we have composed a list of those that experts predict are in a range this year that could be a favorable position to be in.

“There is no doubt that cryptocurrency empowers anyone who uses the internet in their day to day life. Blockchain technology has enabled us to now engage so easily in economic activity among all people especially the fact that it has opened new frontiers on the internet for commerce. Investing in knowledge, and doing so having a stake in the game no matter the size is the best way to gain that knowledge. In this year, the markets are in my personal opinion priced low enough to enjoy the many facets cryptocurrency has to offer.” Daniel Dabek, Founder xcalibra.com

No talk about cryptocurrencies can go without mentioning Bitcoin. It is the most used cryptocurrency with the goal to become global, peer-to-peer, digital money detached from any form of central government backing, and as such becoming fully decentralized.

One of the main reasons to invest in Bitcoin is that it has the highest liquidity in the crypto spaces, which makes it the best cryptocurrency for beginners. You should have no trouble buying or selling Bitcoin, and you can always expect to have someone match your offer. The demand for Bitcoin is expected to increase in the years to come, and the price will follow since there will only be 21 million coins. Nexo co-founder Antony Trenchev said he thinks the price of Bitcoin could go up to $50,000 by the end of this year.

Ethereum consistently tops the list of top five digital assets by market cap and value and is without a doubt the cryptocurrency to invest in 2020. Unlike Bitcoin’s hashing algorithm, Ethereum’s algorithm Ethash was designed to be an ASIC resistant coin, which has enabled CPU/GPU miners to contribute to securing their network. As a result, it can be profitable for at-home miners, providing they can deploy enough computing power using their GPUs to compete.

It is the second most liquid cryptocurrency behind Bitcoin, which means you should have no trouble with buying or selling. Ethereum has a loyal team and community, and that gives this cryptocurrency a better chance of staying stable and increasing in value in the long run.

Ethereum tokens are called Ether, and they fuel the dApp ecosystem, which means that millions of developers and companies need it to support their smart contracts and launch applications.

Safex is tackling eCommerce and using an open-source blockchain that delivers a marketplace application. Since the network is decentralized the Safex Token serves to allow users to create accounts, essentially creating decentralized marketplace stores, and participate in revenue sharing.

Decentralized finance (DeFi) took the crypto world by storm providing open and inclusive financial opportunities. This made the value of tokens locked in DeFi protocols skyrocket. Safex Token is a utility token that was originally released in 2015 to provide an incentive to the community to support the creation of Safex Marketplace. Every SFT holder who locks their coin participates in the revenue sharing of the Safex platform. The proportional reward is determined depending on the amount of Safex Token one locks.

Users can regain control of their purchasing power by utilizing the Safex marketplace platform which enables eCommerce directly with cryptocurrency shortening the settlement time, as well as reconnect directly with their customer. Data is no longer shared with a centralized party because it is on a peer to peer network from now on.

Safex Cash is a mineable proof-of-work coin that is used as a medium of exchange in the marketplace. It has an emission curve that follows the rate of adoption of new technologies and uses stealth address and ring signatures, which makes it a privacy coin.

Their team dedicated extra attention to developing an economic model by creating a special emission curve for Safex Cash increasing its distribution and making it attractive to both current and future miners.

Transaction fees on the Safex Blockchain are paid in Safex Cash for listing products to the marketplace, and when editing accounts among the many other functions of the marketplace platform.

Uniswap is a Decentralized Exchange built on Ethereum that utilizes an automated market system instead of a traditional order-book. On September 16th, 2020 Uniswap released its platform’s governance token, allowing its users to claim an airdrop of 400 UNI.

After distributing 150,000,000 UNI to their historical liquidity providers, users, and SOCK redeemers/holders, the governance treasury retains 430,000,000 UNI to distribute throughout contributor grants, community initiatives, liquidity mining, and other programs. UNI will vest in the governance treasury on a continuous basis for the following four years.

The BAT has been and remained one of the best cryptocurrencies for the last two years. This is a utility token utilized by the Brave Browser. It is used to tip content creators, as well as anyone you find helpful on the Internet. With the web browser industry being so enormous, it is clear that this cryptocurrency has a lot of potentials.

BAT has a lot of credentials with Brendan Eich, the co-founder of Mozilla Firefox, and the person who helped create JavaScript, standing behind it. While so many coins are prone to collapsing, BAT remains consistent, which is a sign of healthy accumulation.

Binance is a company with a solid business history and an experienced team. Its main concept is for its Binance Coin to be a utility token. The value of a Binance coin comes from how useful it is, along with the level of demand for its utility. Their success is proof to investors that they have the skills and resources to make this coin a success.

Binance Coin is ranked within the top 10 on CoinMarketCap and is one of the most liquid cryptocurrencies today. Their exchange is also one of the world’s fastest-growing cryptocurrency exchanges.

Earlier this year, the price of a Binance Coin has multiplied 3 times.

Cryptocurrency has been the talk of the town for the last couple of years. However, the majority of people still look at the topic with caution and feel somewhat reluctant to invest or trade.

Of course, cryptocurrency can be considered a bit risky, but so can any other investment with a potentially high return, and recent history shows that it can often be a very good idea to invest in this rapidly growing industry. Although cryptocurrencies have been around for a relatively short time, so far they have shown the potential to be more profitable than most other asset classes.

privacy and speed of exchange very seriously.

Today the cryptocurrencies exchange segment is saturated by well-designed and powerful products. Even amidst this landscape, Godex surpasses most of its competitors by a wide margin in terms of the variety of blockchains and assets available for swaps.

It supports operations with crypto behemoths like Bitcoin (BTC) and Ethereum (ETH), privacy coins like Monero (XMR) and ZCash (ZEC), stablecoins like USDT and BUSD and the native assets of competitors like Binance Coin (BNB) and Crypto.com (MCO). The total number of coins supported by Godex surpasses 200 positions.

Most importantly, Godex has added numerous assets from the red-hot sector of decentralized finances, or DeFis. Balancer (BAL), Ampleforth (AMPL), Chainlink (LINK), Compound (COMP) and all those coins with triple-digit daily gains are available with one click.

But the most interesting aspect of Godex's approach to crypto trading is its KYC agnosticism. Godex does not even require registration to initiate trades on the platform. Its users need nothing but to obtain a valid blockchain address and matching private key to authorize the transaction and receive coins.

Godex does not employ an orderbook: all trades are executed with fixed cryptocurrency rates. This feature is particularly useful for crypto newbies who may find the regular system of bids and asks at the majority of exchanges confusing.

From day one, the Godex team proudly announced that it has no limits in terms of trading amount. Once registered, the user is allowed to exchange any amount of cryptocurrency he/she desires.

Should crypto enthusiasts need seamless instant crypto exchange for their eCommerce projects, swapping widgets by Godex will solve their problems in an out-of-the-box manner. Clients can customize the size and color of the Godex widget interface.

Developers can integrate Godex instruments in third-party business operations via powerful API.

Retail traders will enjoy a one-click exchange in a couple of seconds. Traders on Godex do not need to wait for the confirmation of transactions by blockchain validators. With a "Dictionary" section, trading newbies can upgrade their understanding of crypto market processes.

Furthermore, the development team tasked with the progress of the Godex wallet has announced that applications for iOS- and Android-based devices will be released soon.

The users of the Godex wallet are invited to monetize their exposure to social media by participating in its lucrative affiliate program. The affiliate program has two categories: for individuals and organizations.

Within the frameworks of individual affiliate programs, traders can obtain 0.005 Bitcoin (BTC) as a welcome bonus and earn up to 0.6 percent off every transaction as a reward for his/her referrals.

Entrepreneurs who decide to join the Godex affiliate program can install Godex widgets, become "white label" partners and interact with the platform through its API. The Godex team guarantees 24/7 support for every participant in its affiliate program.

All in all, Godex represents a new generation of exchange platforms for users with a high trading volume, zero tolerance for KYC and well-diversified portfolios of digital assets.

classified 14.5 million bitcoin as illiquid and only 4.2 million bitcoin in constant circulation.

One of the most treasured parts of the Bitcoin (BTC) protocol is the fact that the system is mathematically provable, and bitcoins are scarce. When Satoshi Nakamoto created the crypto asset, the inventor set the supply cap to end at 21 million coins issued and today, there’s approximately 18.58 million BTC in circulation.

This week, researchers from the onchain analysis firm Glassnode reported on the number of liquid and illiquid coins in existence these days.

Despite the fact that exchanges have a massive quantity of bitcoin (BTC) on hand to sell and trade, Glassnode researchers say that 78% of the current supply is illiquid.

On Twitter, Glassnode wrote: “78% of the circulating bitcoin supply is illiquid and therefore hardly accessible for buying. This points to a bullish investor sentiment as large amounts of BTC are being hoarded – which reduces sell pressure,” the researchers stressed.

The analysts added:

The onchain data suggests that the current uptrend in crypto asset value has been fueled by liquidity issues. For instance, during the course of the year, large financial institutions and well known hedge fund managers have been purchasing bitcoin in massive quantities.

The bitcoin treasuries list has grown rapidly this year with 29 well known companies capturing 1.1 million BTC to be held for treasury reserves.

“Over the course of 2020, a total of 1 million additional BTC have become illiquid— investors are increasingly hodling,” the Glassnode analysts further noted. The rising illiquidity suggests “the current bull run has been (partly) driven by this emerging bitcoin liquidity crisis,” the researchers added.

Glassnode concluded that the amount of liquid and illiquid bitcoin in circulation has a “clear relationship with the BTC market.” Data shows that since 2017, the illiquid supply of bitcoin has swelled more so than the issued bitcoin stemming from bitcoin miners.

This pattern was observed during the crypto asset runup in 2017 as well, the onchain researchers detailed.

According to the Bituniverse “Exchange Transparent Balance Rank” data stemming from Peckshield, Etherscan, and Chain.info, exchanges hold fewer bitcoins than they did last year.

What do you think about the number of liquid and illiquid bitcoins in existence? Let us know what you think about this subject in the comments section below.

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