Picture this: you’ve got millions of pounds worth of Bitcoin on a hard drive, but you’ve forgotten the password – and only two attempts before the money’s lost forever.

This is the situation German programmer Stefan Thomas found himself in, after being given 7,000 Bitcoin as payment for a video ten years ago.

At the time, the digital currency was worth a few dollars each, but that price has now soared to more than £25,000 pounds – which would make Thomas’s fortune worth £175 million pounds.

After receiving the Bitcoin, he stored them on an IronKey – a digital wallet which requires a password to access.

But he’s since lost the password after writing it down on a piece of paper – and he doesn’t have a clue what it might have been.

If he fails to enter the password correctly 10 times, the hard drive will encrypt itself – leaving the money lost forever.

‘The whole idea of being your own bank – let me put it this way, do you make your own shoes?’ Thomas told the New York Times.

‘The reason we have banks is that we don’t want to deal with all those things that banks do.’

Many in the cryptocurrency community are looking to create digital, decentralised version of banks, too – but they’re nowhere near as popular as Bitcoin is.

Since his costly mistake went viral after being reported in the New York Times, offers from across the world have come in to help him retrieve the money, like Facebook’s ex-head of security Alex Stamos.

There are many more Bitcoin millionaires locked out of their fortune, too.

It’s estimated that more than £100 billion pounds worth of the Bitcoin has been lost to wallets that can’t be accessed, according to cryptocurrency-data company Chainanalysis.

Businesses decicated to retrieving the lost cash can receive multiple requests each day.

Bitcoin has surged in value in recent months, as investors and institutional money has flocked to the cryptocurrency.

Many investors have began storing their money in cryptocurrencies as an alternative to the wild swings of the stock markets.

But Bitcoin has had its own rocky patches, with many experts warning against it as a ‘safe haven’ investment.

Many questions still remain about Bitcoin, from fraudulent trading using high-profile hacks to illegal activity (some estimates put the level of criminal activity at a quarter of all Bitcoin transactions).

Some economists have also noted that the Covid-19 pandemic has made investors think about their long-term storage options, as the world is re-shaped for a post-Covid future.

MORE : Bitcoin tops $30,000 for the first time

MORE : PayPal will start letting users buy and sell bitcoin

Not convinced? Find out more »

The crypto industry has produced countless of cryptocurrency that have been proven effective and profitable in 2020. As a result, interested investors around the world increase rapidly. One of these is the Cardano cryptocurrency, a blockchain network designed for innovator, and changemakers.

Cardano has over $8 billion in terms of market capitalization with a daily trading volume of almost $3.5 billion. Consequently, the crypto ranks along with the top 10 cryptocurrencies in CoinGecko.

Want to know more about Cardano? Come and join me in understanding thoroughly, “what is Cardano?”

Cardano is a blockchain-based network that has its own mainnet. Hence, the crypto can do all the things it deems necessary for the network without restrictions. When it comes to the creation of the platform, Cardano is developed by the Input-Output Hong Kong company (IOHK). Charles Hoskinson, BitShares creator and Ethereum Co-Founder, leads the said company.

The Cardano network focuses on providing a platform for developers where they can create smart contracts and decentralized apps. Recently, Cardano upgraded to Goguen mainnet, a blockchain technology that enables token lock features in the network.

About its token technology, ADA is the native digital currency in the platform. It functions as a means to pay for premium services on the platform. Users in the network can transfer and trade their funds using different crypto exchanges such as Binance, Digifinex and Upbit to name a few. These coins can be safely stored in Daedalus, Cardano’s own crypto wallet.

Now that we already have an idea about what Cardano is, let’s get familiar with the network’s use cases.

Use Cases

Undoubtedly, Cardano is one of the most active cryptocurrencies in the crypto world. The platform creates many kinds of use cases that are used in our daily lives.

In this time of the pandemic,  it is very important to identify substandard medicines over the real ones. Cardano solves this problem with its Atala SCAN, a feature that authenticates the pharmaceutical products’ origin and supply.

Concerning education, Cardano has built the Atala PRISM. This solution secures the academic certification of the user in its tamper-proof ecosystem. It also enables the user to share its academic credentials easily. Therefore, users can send all their documents anywhere in a secure and verifiable manner.

On the other hand, the users of the network can benefit from the Atala PRISM streamline and accelerating services. This feature of the network eliminates the long process of opening various accounts. Cardano members can also reuse the verified credentials stored in the immutable system of Cardano.

Surely right now, you already know a lot of things about Cardano. Do you think Cardano is a profitable cryptocurrency this year? Together, lets us find out in this  CoinQuora Cardano (ADA) price prediction.

Indeed, Cardano has accomplished many achievements in the past year. For this reason, the crypto gains the trust and respect of many traders in the crypto world.

Would this be enough for the crypto to maintain its bullish position in the coming months? Let’s head to the chart and find out in this Cardano price prediction 2021.

Based on the graph above, Cardano successfully defended its position against the wild swings of the crypto market. It also displays a strong price consolidation at $0.19 which triggers the bullish trend of the crypto.

Today, ADA trades a bullish price of  $0.296 with a growth rate of almost +700% in the 12 months. If this goes on, the bulls might be able to break the resistance level of $0.29. It could even go higher to over $0.32 if the market continues to side with the bulls.

However, traders must not overlook the relative strength index (RSI) of the crypto which is now at level 82. This means that Cardano could perform a price pull back anytime soon. In this case, traders must decide quickly whether they will hold or sell the crypto.

Meanwhile, the moving average convergence/divergence (MACD) of the crypto still resides on top of the signal indicator. In other words, traders can still look forward to more bullish days as long as the MACD moves above the signal indicator.

Binance CEO Changpeng Zhao — also known as “CZ” —  praised bitcoin as a “better form of value” over fiat currencies, explaining that its advantages became apparent during the 2020 economic turmoil. 

Zhao’s comments followed a 20% plunge in bitcoin prices from its all-time high of over US$40,000 on Jan. 8 and then tumbled 20% for four days before recovering. Bitcoin is currently trading at around US$35,000 at the time of publication.

“Covid paused all economic activity globally, and then this quantitative easing by every country — I think 20% to 30% of the U.S. dollars were printed last year, and other countries are probably printing more than that,” Zhao told Forkast.News. “If you’re holding fiat currencies, your purchasing power was probably devalued by 20% to 30% percent if you keep holding onto it.”

As pandemic-related stimulus checks flooded the global economy, rising fears of inflation have led to an influx of institutional investment into bitcoin. 

“If you were going to press me for a prediction, I would say bitcoin is probably going to do another 5 to 10x this year alone,” Zhao said, adding that even Binance — the world’s largest cryptocurrency exchange — has been struggling with the massive trading volumes. “There’s no 100% guarantee, but I think currently, we do have less outages compared to other players in the industry.”

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

Though Zhao and many in the cryptocurrency industry remain bullish toward bitcoin, others are warning about bitcoin’s volatility. Notably, Bank of America’s chief investment strategist Michael Hartnett and other bitcoin bears are calling bitcoin “the mother of all bubbles.”

But according to Zhao, bitcoin’s volatility is not actually all that high compared to other assets and companies of similar size in market capitalization. “Bitcoin’s volatility is actually lower than, for example, even Tesla’s,” Zhao said. 

Despite Zhao’s optimism toward bitcoin, he predicts that most DeFi projects “probably will fail” as the industry is still in its infancy. 

“I think we’re seeing the first iteration of DeFi right now,” Zhao said, explaining his belief that second-generation DeFi projects are more likely to achieve long-term success than current first-generation projects. “Google is not the first search engine. Facebook is not the first social media.” 

But the CEO’s misgivings toward first-generation DeFi projects have not stopped Binance from entering the DeFi space. The Binance Smart Chain offers both decentralized exchange (DEX) and centralized exchange (CEX) services. 

Zhao said that Binance would also continue to invest in projects like CoinMarketCap, which was acquired by Binance in March 2020. Watch CZ’s full conversation with Forkast.News Editor-in-Chief Angie Lau on bitcoin’s rally, the future of stablecoins, his outlook for DeFi and the plans in store for Binance. 

Angie Lau: Is bitcoin the mother of all bubbles? What’s behind DeFi’s extraordinary growth? And how is Binance, one of the world’s largest cryptocurrency exchanges, reshaping the future of finance?

Welcome to The 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. 

We saw massive sell off of bitcoin after it reached a new all-time high of US$41,900, and then Bank of America’s chief investment strategist called it the “mother of all bubbles,” while JP Morgan predicts bitcoin will go over US$146,000 as it competes with gold as an alternative currency. 

Who’s right? Well, how about if we ask the man who made the bet before the institutional pundits all weighed in and created a marketplace for crypto. Let’s welcome co-founder and CEO of Binance Changpeng Zhao — or better known as ‘CZ.’

CZ, Welcome to the show.

Changpeng Zhao: Hi Angie, thanks for having me on the show.

Lau: It’s great to have you. It’s your first interview of the year, so thanks for welcoming 2021 with us, right here at Forkast. How did things kick off for you? There’s no doubt, a lot of volume — a lot of trading volume — and a lot of activity on Binance since the start of the year.

CZ: I think things are really, really busy. I think 2021 kicked-off in high gear. So I think in the end of 2020, we saw the bitcoin price going up and institutions coming in and that just continues now. The first two weeks of 2021, I think we’ve seen five or six all-time highs both in terms of price and also system volume. So we’re seeing a massive number of users coming in now. So everything sort of busy, everything’s really cranked up. Everything is in high gear. So things are going pretty well from that perspective.

Lau: Are these new accounts and what are the volumes that they’re trading? Do they suggest that they are retail investors or are they bigger, more sophisticated investors making a bigger bet? What is the make up in your view?

CZ: We actually have seen an increase in both institutional and retail. So we’ve also seen some older accounts waking up, like people contacting our customer support, saying they forgot their passwords from two years ago. Now, they’re finally back. I even have friends calling me saying that they have an account that’s locked, they lost 2FA (two-factor authentication) because they changed phones. We’re seeing some of that, but we’re seeing also a massive number of new users come in. From a peak user trader volume perspective is much, much higher than the peak of 2018, or end of 2017-ish. So, we’re also seeing a lot of new institutions coming in this round. 

I think now, especially given the high profile institutions coming in the U.S. — worldwide, there are many institutions coming in now. So we’re seeing a mix of them. The proportions are actually pretty much the same as before, so we haven’t seen one rising above the other but it’s just massive volumes increasing all around — which is pretty interesting to see.

Lau: Yeah, as you note, institutional investors like Guggenheim and MassMutual, and others, really bringing in those dollars as you track trading volumes and flows. What do you think is behind the demand for bitcoin? What is creating that floor for the value?

CZ: If you look at the really fundamental parts, bitcoin is just a better form of value. So it is a better form of money, in a sense. So it has a lot of advantages over traditional fiat currencies, especially. But I think there’s a number of contributing factors for people realizing that, and for corporates, institutions realizing that and then rushing into this industry now. 

I think 2020, that was a pretty crazy year. Covid paused all economic activity globally, and then this quantitative easing by every country. I think like 20% to 30% of the U.S. dollars were printed last year, and other countries are probably printing more than that. So basically, which means that if you’re holding fiat currencies, your purchasing power probably devalued by 20% to 30% if you keep holding onto it. And then we’ve seen that the corporate treasurers of course — these are the professional users, these are the experts that understand economy and understand money — they now have to manage their corporate treasuries. They’re now allocating into bitcoin or other cryptocurrencies. And then this kicks off a race — that’s the institutional race right now that we’re seeing in North America and also in the rest of the world. 

Once the price starts to go up, all the retail guys flood in as well because everyone wants a piece of the rising value. So I think there are multiple factors contributing to it, but the overall economic situation last year definitely contributed to that.

Then DeFi’s pretty hot. The ‘OGs’ (or industry veterans) in the industry are all rushing to DeFi, including ourselves. I think there’s a number of contributing factors, but there’s nothing really negative about cryptocurrency. The regulations are getting clearer around cryptocurrencies and cryptocurrency businesses. Bitcoin and Ethereum, the top cryptocurrencies are generally viewed to be accepted as non-securities, etc., in most countries, and they’re also seen as valid assets — there are court cases protecting users assets, etc. So I think a number of those things have all come together. So there are multiple factors contributing to the ride and they all feed on each other. So now we’re seeing, I would say, a bull market.

Lau: Why do we see such volatility? It’s par for the course for those of us who’ve been tracking it. But for these huge price swings, for more conservative investors who are observing this space, why is there such massive volatility?

CZ: Well, I think in every market there’s volatility. If you base yourself in any asset, every other asset is going to be volatile. In every other asset is a mass psychology play. And also, bitcoin’s volatility is actually lower than, for example, even Tesla’s. Tesla is going up, really, a lot. And then they have corrections, of course, then there’s volatility.

So it’s actually less than Apple’s [and] Tesla’s stock volatility. So it’s nothing. And it’s also about the same market cap around those areas. So it’s actually not out of the ordinary. Volatility is still happening in trading markets where the asset is actively traded. And this natural price discovery and this mass psychology going on. Everyone wants to rush in, and then the price goes up, and then somebody says, “Okay, now the price is high enough,” they want to cash out a bit and they start selling. Sometimes that triggers a cycle and then everyone wants to sell. 

And especially when prices go up really heavily. I think we’ve probably seen bitcoin go from like US$10,000 to US$41,000 in the span of like a month or two. When that kind of price rises, a 20% correction is very, very normal, especially considering a lot of new guys coming in, buying at the new higher prices, they are not the sort of what we call strong hands holders that are in this for the long term. Many of them are for short term gains, and then as soon as they see any price drop, they rush to sell. So they’re not yet the core believers. They had not converted 100% of their wealth into crypto. So there are different stages of people. So the corrections are very, very normal. So I don’t think anything out of the ordinary and I think we’ll continue to see corrections and volatility going forward. But compared to other similar market cap assets, bitcoin is actually not that volatile now.

Lau: And you do note the speculative nature and the volatile nature, but hey, when you’re an exchange, any time somebody does a trade on Binance, that’s dollars for your bottom line. That really is what differentiates Binance from the very early days — getting into crypto, seeing a marketplace, creating a marketplace for exchange. And here you are, fast forward, there’s no doubt of the success. How has Binance handled the expansion and handled all of the machinations, if you will, from 2019, 2020 and into 2021?

CZ: I think for us, it’s really, really just a focus on how to handle growth. So even in mid to late-2018, when bitcoin prices [were] at rock bottom, say, around US$3,000, I was telling our team, “Look, we’ve got to scale up. We’ve got to be ready for the next wave.” So we have been spending the good part of the last two and half years expanding our systems, expanding our team, etc. To be very honest, even today, we have expanded so much capacity, [but] we’re still struggling a little bit. 

On peak days, there’s a few different parts. There’s a system which got to stay up when there’s peak volume, and we’re seeing 20 to 30X volumes on a 5% rise of bitcoin. So the volumes on the systems are growing much more exponentially than bitcoin prices. Luckily, we’ve done a lot of work in the last two years, but the system’s not production tested at those volumes and the system’s like a really complex organism right now. There’re so many different moving parts. It’s like a small city grid. If you imagine — there’s traffic going on different roads, and we never really know which road is going to be more congested beforehand. So we actually had to see the new volume coming in and then adjust as we grow.

Even though the core infrastructure is quite scalable, we are still seeing some issues here and there as the system grows to newer levels that we have not seen before. But so far, the system has been holding up. 

The other aspects, the second aspect, which is really hard to scale, is customer support. So there’s still a very large portion of customer support which is handled by humans. And you can’t just hire a 10x team before the volume gets there and everybody will be bored, and that’s demoralizing. But when the volume hits, you want to hire 10x people, it doesn’t happen that quickly. So we’re struggling a little bit on that front. We’re making a lot more automated tools to help users, etc., but it’s going to take some time. To be very honest, I think we were always anticipating this type of wave of growth for the last three years. It’s finally happening — which is great — but we are still struggling a little bit to keep up, to be honest.

Lau: There’s no doubt it, and Binance is not the only exchange that is experiencing server outages and pauses — Bithumb, Coinbase and others. It just seems to be increasingly frustrating for the trader. And then your trading position is suddenly lost or it’s paused. People are losing some money here. How are you planning to make it right or mitigate these system failures? How can users be sure that when they want to make a trade in their position that it’s going to go through?

CZ: So to be honest, there’s no 100% guarantee, but I think currently, we do have less outages compared to other players in the industry. But that’s not a valid reason or to say that we’re okay on any outage. So we do try to minimize it. We can’t guarantee that we will avoid all of them. There’re so many different parts: internet messed up, Google goes down sometimes as well. So we do try to minimize those. 

One of the advantages we actually have is when Binance goes into the system maintenance, for example, we’ve had to do an upgrade for like eight hours. Because we have so much volume on our order book, the price doesn’t move in that eight hours because everybody knows, given the thick order book on our exchange, when we turn it back on, the price is going to be dragged right back into our spread. So the price will naturally come back to where we paused it, if we’re doing system upgrades. So that’s one of the huge advantages for having a big exchange. 

But we do suffer here and there and we try our best to make it right for users if it’s our fault. But sometimes it’s very difficult to figure out whose fault it really is. So when there’s a massive outage, we do try to make up for it. We have a SAFU (Secure Asset Fund for Users) fund, which is an insurance fund that’s used for these types of situations, including security issues [and] system outages. Even when third-party projects get hacked, that coin price goes to zero, we have actually used [the] SAFU fund to cover some of these positions, including the cover incident recently. So there’s no perfect solution, but we do put protecting users as our top priority and top principle in the team. 

Everybody on the team knows [that] this is our model and they make decisions that way. But nobody can guarantee 100% no issues. This is a new industry. We’re seeing five to 10x volumes every month or so. It just keeps going up, and we just have to expand systems and also customer support to support that kind of volume. It’s a challenge, but so far we’re dealing okay. I wouldn’t say super great, but I think we’re faring better than most other exchanges in the industry. Hopefully we can continue to grow it and cope with demand.

Lau: Well, you seem to be providing some customer service to potentially a VIP client that you’re trying to woo over to bitcoin — this is Elon Musk. We’ve been enjoying your Twitter exchange. You said you’re going to buy a Tesla if he buys crypto. He inferenced that he was curious if you could buy a billion in bitcoin. And apparently that is possible. A lot of people are paying attention to this because, once upon a time, we didn’t think corporate treasuries were getting into the game and here they are.

CZ: So basically, number one, I enjoy trolling Elon Musk. That’s always good fun. He’s openly talking about cryptocurrencies, bitcoin, memes, Ethereum, etc., but I don’t think we can get him on Binance.com as a customer just yet because I think most of his assets are probably in the U.S. and he’s probably a U.S. citizen. So I think Binance U.S., our partner in the U.S., is going to probably try to win over his business if he wants to buy bitcoin. I don’t have any private information, I don’t have a private conversation with him, etc., but I would imagine that he’s probably buying loads of bitcoin right now and trying to figure out ways to buy.

Because for corporates in America, I would imagine there’s probably a lot of compliance procedures to go through, especially giving a public company, etc. And also being the world’s richest man, there’s probably a lot of additional hoops that he has to go through to acquire bitcoin at a billion dollars of scale. But he obviously talks about it, he understands it, he knows how good it is. So I wouldn’t be surprised if in a few months he announces that, finally, Tesla owns, I don’t know, how many bitcoins. That’ll be really good for the industry. I think it’s going to happen sooner or later — maybe this year, maybe next year. Who knows?

Lau: I think on the record, he said that he only has 0.25 BTC.

CZ: That was a couple of years ago, so we don’t know.

Lau: We don’t know if he added to the position.

CZ: And that’s also him personally. So more likely, he will have to use Tesla’s corporate treasury to buy first before he buys personally. That would be the right thing to do, because otherwise, they may be seen as conflict of interest, etc. He hasn’t said anything about Tesla or other corporate treasuries. I’m sure he couldn’t right now. So someday we may see an announcement. I’m pretty sure the day will come.

Lau: The funny thing about bitcoin is that a lot of people are paying attention to bitcoin right now, and yet, the biggest story of last year and going into this year has been DeFi. And I remember sitting down with you a few years back before all of the buzz, we were talking about DeFi, we were talking about decentralized exchanges when really few people were in here.

And here we are in 2021, total value locked is, I think north of US$22 billion right now. Where do you think DeFi is going? Is this the real story we should be paying attention to? And what is Binance’s strategy when it comes to DeFi and decentralized exchanges?

CZ: I think there’s definitely some core value in DeFi. DeFi is not a fad that will just go away. I think there’s some core principle or core concepts and core use cases and core applications that will stay. 

There’s the concept of automated automated market makers (AMM) which provides liquidity in a very transparent way. On the user side, there’s liquidity farming — you stake your coins and you know how those coins are used and you can calculate whether you’re making money or not, you can check. So it’s a very transparent, white box, a see through type of mechanism for users to lock their cryptocurrencies and make the cryptocurrency earn interest for you. 

Whereas now, in the fiat world, most of the banks are now starting to charge negative interest rates and they’re pretty heavy. So I think there’s definitely a core use case for that. That’s a very valid use case. Having said that, I think we’re seeing the first iteration of DeFi right now. And as in any industry, there’s a very high chance of failure. Most DeFi projects probably will fail. There will be a few that will be successful and a very high likelihood those are going to be second generation DeFi projects. Google is not the first search engine. Facebook is not the first social media. There’s a learning curve for any new industry. 

Right now, I think for the projects that’s already in the industry, I hope they become successful, but the chances are there’s going to be a very large number of failures. But I think the industry will definitely stay. The concept works. The concept is good. There will be more iterations based on those concepts. Basically, it is a very compelling use case. So I think DeFi’s going to grow. 

At the same time, if you look at the population mass adoption as a whole, 99.8% of the population still don’t have crypto of any kind. When we speak about DeFi, we’re talking about the marketplace in that 0.2% market share. The rest of the world are still figuring out how to buy bitcoin, and those guys are going to go on a fiat to crypto exchange to buy bitcoin. 

DeFi cannot interface with banks or traditional payment channels, so they use stablecoin and other mechanisms. I think there’s still a very large place for centralized exchanges, CEX, to sort of facilitate the next mass adoption that’s going to come in. 

I think there are demands for all business types, and for Binance, we actually offer products in both places, we give users multiple options. We offer Binance Smart Chain. On top of that, there’s a number of DeFi solutions growing on that. That’s an entire ecosystem on its own. And we’re trying to add similar kinds of services on the CEX, on the centralized exchange. We’re providing liquidity mining, staking, super savings, super earnings, type of products on the CEX as well, for the kind of novice users. We try to give users options and then we’ll see how the industry grows.

Lau: I mean, with the current state of Binance Smartchain as it relates to DeFi, you’re also planning to work on a stablecoin, I understand.

CZ: Yes, so we actually have been working on multiple stablecoin projects. We have a sort of a basket project that’s called Venus. That’s not a specific coin — well, now there is a specific coin called Venus.

But originally, it was a basket project that’s targeting multiple stablecoins. We have fiat-backed stablecoins like BUSD, which is actually not issued and minted by us, it’s actually minted by our partner in the U.S., Paxos, which is a NYDFS-regulated entity. So they hold all the money. They are constantly being audited. It is a very transparent and fairly safe stablecoin. We launched a BGBP which is the British pound stablecoin. We did Korean Won stablecoin, but we are going to wind that down. That’s kind of like a small failed project. That’s fine.

Lau: Why did it fail?

CZ

Bitcoin price is hovering below $11,500 following another failed attempt at sustaining gains above $11,500. However, it is impressive that the largest cryptocurrency is holding above $11,400 following the recent slump that tested $11,100.

BTC/USD immediate upside is limited by the 50 Fibonacci retracement level taken between the last swing high of $12,488 to a swing low of $10,542. Also standing in the way of movement is a descending trendline resistance.

The trendline has continued to control the narrowing of Bitcoin’s value since the high formed at $12,488 (2020 high). The lock-step trading has forced in a lower high and lower low pattern, suggesting that Bitcoin may have broken its upward momentum for a consistent downward trend.

From the technical levels observed in the 4-hour range, the prevailing sideways trading is likely to last longer. The Relative Strength Index confirms the consolidation narrative with its leveling motion at 44.56. This follows a recovery from levels around 30 (reminiscent of the drop to $11,100).

Related reading: Bitcoin Technical Analysis: BTC/USD Plummets To $11,100, Is This The End Of The Rally?

As long as the RSI hovers at this current level, BTC consolidation will take precedence. However, it is important to watch the direction of the indicator as a break above 50 would signal increasing bullish grip and growing potential for gains towards $12,000.

The Moving Average Convergence Divergence (MACD) is stuck in the negative region, confirming that sideways trading would last longer. The same indicator can help highlight the direction Bitcoin would take after the sideways trading. For now, holding above $11,400 support, remains key to Bitcoin bulls because it allows them to gather strength before they stage another attempt at breaking the $12,000 resistance.

Spot rate: $11,440

Relative change: -31

Percentage change: -0.27%

Trend: Consolidation bias

Volatility: Low

Read more: Big Win for Bitcoin and Crypto as SEC Amends Definition of Accredited Investors

To keep track of DeFi updates in real time, check out our DeFi news feed Here.

The growing decentralized finance (DeFi) space has been one of the best things to happen to Ethereum this year, as it has propped both the network and its currency, Ether. However, several other Ethereum-affiliated products are now getting a boost from this surge. Metamask, the top wallet provider, has crossed a significant milestone. 

Earlier this week, Metamask, an Ethereum-based browser wallet application, announced that it had recorded a million monthly users for the first time. In its announcement, the wallet application name-dropped several DeFi protocols, including Curve, Aave, Yearn Finance, and Uniswap, as some of the primary drivers of its growth. 

The wallet application’s developers reaffirmed their commitment to ensuring that they support DeFi projects as much as they can. It has been a good few months for both Metamask and DeFi, with the wallet’s user base tripling since February and the total value locked in DeFi increasing by 1,000 percent in that time. 

Currently, DeFi and Ethereum are enjoying a blissful relationship. Ether as a currency thrives on adoption from developers, and a surge in DeFi adoption has only served to stabilize the asset’s price over time. Save for the usual swings and market reactions, Ether has been a viable crypto investment for any prospective investor in 2020. 

However, this relationship has also come at a pretty steep cost. Particularly, the boom in the DeFi sector has made Ethereum less scalable. 

Early last month, data from Glassnode confirmed that gas fees on the Ethereum network reached $500,000 in an hour – a new all-time high. At the same time, Ether had consolidated 10 percent in 24 hours, sitting at a price of $486. 

Many believed that this increase in network activity came from Sushiswap, a fork of top decentralized exchange Uniswap, which crossed the billion-dollar mark in total assets locked in less than a day. 

Although the increased network activity meant good news for miners, it also pointed to the ever-present issue of scalability and sustainability on the network. DeFi has been the driving force behind an Ether bull run, but it has brought technical difficulties.  

As activity in the decentralized sector continues to surge, the Ethereum network is moving close to capacity. Congestion on the network could increase transactions going unconfirmed, causing longer wait times, and raising transaction fees. 

Left unchecked, this problem could affect the usability of smart contracts. Such an outcome will be a significant problem, as Ethereum’s entire operation rests on smart contracts’ ability to operate.

Speaking on the implications, Kosala Hemachandra, founder and chief executive of wallet provider MyEtherWallet, explained to Cointelegraph that it would be impossible for a single blockchain to hold so many transactions. 

Hemachandra highlighted that Ethereum’s popularity among DeFi projects is the reason for such high gas fees. However, it won’t be possible for DeFi to ditch Ethereum and go elsewhere. His posited solution is for them to migrate to some other high transaction-per-network solution, such as delegated proof-of-stake. However, he also noted that such a move could jeopardize DeFi projects’ decentralization.

More younger investors are looking to diversify their retirement accounts by adding bitcoin and/or other cryptocurrencies.

There has been a rise in individual retirement accounts that are focused on cryptocurrencies, and some crypto investors believe crypto IRAs will eventually be the industry standard.

What Is A Crypto IRA? An IRA is a tax-advantaged retirement investment account that operates under a specific set of rules. In exchange for the tax advantages associated with IRAs, investors have restrictions on how much they can add to their IRA accounts, and there are penalties associated with early withdrawal.

Cryptocurrency IRAs allow investors to add various types of cryptocurrencies to their retirement accounts.

Related Link: Millennials Are Twice As Likely To Buy Bitcoin Than Gold As Safe-Haven Investment

Pros Of A Crypto IRA: The biggest potential advantage of a crypto IRA is diversification. Love them or hate them, it’s becoming clear that cryptocurrencies are a unique asset class, and some even see bitcoin replacing gold as the preferred hedge against inflation for the next generation of tech-savvy investors.

Cryptocurrencies could theoretically help protect retirement investments in the event of a major stock market collapse or other economic catastrophes.

At the same time, many cryptocurrency investors simply believe that a rise in cryptocurrency popularity will make it a solid investment on its own.

Cons Of A Crypto IRA: The biggest potential disadvantage of crypto IRAs is their heavy fees. The typical crypto IRA will come with a holding fee, establishment fee, fees for asset purchases, fees for fund transfers and a minimum monthly account fee.

In addition, IRA cryptocurrency purchases must be made via a designated firm that will also charge its own fees.

In addition to the fees, IRA accounts can only be traded during regular market hours. Since stocks and bonds only trade during regular market hours, investors aren’t locked out of the market on weekends and holidays.

Yet bitcoin and other cryptocurrencies trade 24 hours a day, 365 days a week. They also have a long track record of huge upswings and downswings on weekends and holidays. Crypto IRA holders would be helpless to buy or sell during these huge off-hour swings.

Those swings are another potential con of a crypto IRA. One of the reasons why investors have favored gold as a store of value for thousands of years is because of its price stability.

Bitcoin has far outperformed gold overall in recent years, but it’s not unusual for bitcoin to lose 10% or 15% of its value in a matter of hours. In 2018, bitcoin finished the year down more than 72% on the year, while the price of gold declined just 0.9% that year.

Benzinga’s Take: Stocks, bonds, real estate and even gold have long, well-established track records of investment performance, but bitcoin and other cryptocurrencies have only been around for a little over a decade.

Given that a cryptocurrency’s supply is fixed, it doesn’t have the intrinsic value of a share of stock or a plot of real estate, and it doesn’t have the yield of a bond or certificate of deposit.

The prices of cryptocurrencies in the long term will be determined only by changes in long-term demand from investors and users.

New York: Bitcoin and other digital coins steadied Friday after posting some of the biggest declines since the onset of the pandemic, a selloff that stoked fresh questions about this year's boom in cryptocurrencies.

Bitcoin climbed above $17,400, following a slide of as much as 14 per cent to $16,227 on Thursday. Fears over tighter crypto regulations and profit-taking after a frenetic rally were among the reasons cited for the tumble.

"After big rallies in shares and various other assets, they are all vulnerable to a bit of a pause," said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd.. "But Bitcoin more than most, as it surged higher far more and had become far more frothy with speculative interest."

The slump pared Bitcoin's rally this year to about 140 per cent, a climb that's split opinion. Crypto believers tout a broadening investor base and the search for a hedge against dollar weakness amid loose monetary policy as reasons for a durable boom. Set against that is a history of big swings, including the run up to a record three years ago that was followed by a spectacular bust.

Proponents of digital assets say the current focus on cryptocurrencies compared with 2017 is different because of growing institutional interest, for instance from the likes of Fidelity Investments and JPMorgan Chase & Co.. Just this week, Van Eck Associates Corp. launched a Bitcoin exchange-traded note on the Deutsche Boerse Xetra exchange. In October, PayPal Holdings Inc. said it would allow customers access to cryptocurrencies.

Others see signs of retail investors piling in to chase momentum for fast gains, storing up an inevitable reckoning. The rout in Bitcoin began just hours after it rose to within $7 of its record high of $19,511 set in December 2017.

Concern about potential US crypto rules help explain Thursday's price drop across most major digital assets, said Ryan Rabaglia, global head of trading at OSL brokerage in Hong Kong.

"It's also not unusual to see a short-term pullback following periods of significant, accelerated gains as traders look to take profits before resetting once volatility subsides," he said. "Once the dust settles, we're back to business as usual with all medium to long-term bullish indicators still in play."

Profit-taking was inevitable and there are still factors in favor of Bitcoin as an asset class, according to Byron Goldberg in Sydney, who runs the Australian operations for Luno, the cryptocurrency exchange and trading platform.

"It continues to attract both institutional and retail attention as a 21st-century substitute to the gold play," he said.

A few large holders often referred to as whales own most Bitcoin. About 2 per cent of the anonymous ownership accounts that can be tracked on the cryptocurrency's blockchain control 95 per cent of the digital asset, according to researcher Flipside Crypto. That structure points to the risk of big price swings if major investors offload some of their stakes.

"Bitcoin may be a victim of its own success," said Michael McCarthy, chief market strategist at CMC Markets plc in Sydney. "Traders suggested several large holders moved to lock in gains as the cryptocurrency reached for all-time highs."

AMP Capital's Oliver said the depth of the recent plunge shows Bitcoin is "hardly a secure store of value", adding it may be vulnerable if COVID-19 vaccines lead to a sharp global recovery next year. "Money printing and the debasement of paper currencies that Bitcoin enthusiasts are seeking to protect against may start to fade as an issue," Oliver said.

  The debate between gold and being the superior investment has prevailed for over a decade now. We have seen gold proponent Peter Schiff abominate the and cryptocurrencies. For him the predominant investment has always been Gold. On the other hand major crypto personalities like the Winklevoss twins on several instances have elaborated how cryptocurrencies outshine traditional investments. Moreover, the much talked or DeFi protocols have given an entirely new meaning to the world of cryptocurrency. And it is safe to say that in particular DeFi protocols have propelled the adoption of cryptos and helped the sector reach new heights.  A recent by the Economic Times revealed that cryptocurrencies have outperformed gold this year. The total value locked under the DeFi protocols now amounts to an enormous $9 billion. At the start of the year the DeFi collateral was only $700 million. The Bloomberg Galaxy Crypto Index has appreciated by more than 65% in 2020 and has outshined gold’s jump by 20% this year. As per the report the Ethereum was one of the main reasons why cryptocurrencies have been titled the best performing asset this year. Ethereum is responsible for more than one third of the entire crypto ecosystem.  Strategist at Bloomberg International, Mike McGlone has said that global drive in DeFi adoption has facilitated the growth of Ethereum as it continues to maintain its leadership status. Ethereum is the primary platform for the growth of DeFi applications. A huge number of DApps rely on the Ethereum platform for operating. On the other hand, Bitcoin’s recent rally for the last two months has proved as to why the cryptocurrency is considered the biggest store of value. As the economic stability of nations continue to cripple, cryptocurrencies are providing major investors to protect their funds from inflation.  However, some critics are still not convinced that cryptocurrencies are the future of investments. This is because they are generally associated with heavy price swings and volatility, which is sometimes risky. In addition, they claim that the decentralised finance sector is not as decentralised as it claims to be. But the overall cryptocurrency usage as well as adoption seems to be in a good place as crypto derivatives expand. for getting faster updates at your fingertips. Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

Bitcoin is sideways Tuesday, with little price action. However, traders seem to be jumping into decentralized finance to maximize their crypto yield. Bitcoin’s price was flat Tuesday, sticking to a $15,000-$15,400 range and at $15,345 as of press time. It was a bit of a respite after Monday’s $1,000 price move in a span of hours.  Read More: 3 Reasons Bitcoin Has Rallied Over 60% in Just Two Months By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.Funding rates have ticked up on major derivatives venues, a sign more traders are looking for long leverage. “It is likely that the sharp bounces in BTC price yesterday and on Saturday were retail led – with the perpetual swap funding spiking for the first time since September,” quantitative trading firm QCP Capital wrote in its Tuesday investor note. “One reason for the overall strength and stickiness of the rally in the last two months has been the absence of retail over-leverage, as evidenced by the flat funding up till now.” Mostafa Al-Mashita, executive vice president of trading for Global Digital Assets, is keeping an eye on bitcoin’s correlation with the S&P 500 index as a way to gauge fundamental market news affecting the crypto market.  “We saw positive momentum from the Pfizer announcement, with a loss of S&P 500 correlation to bitcoin price action,” Al-Mashita said. “Support will be established over the next couple of days before rebounding to continue the bullish trend.”  After a slight dip last week, bitcoin’s correlation to the key U.S. index cropped back up on Monday. “The last month has been extremely bullish for digital assets,” said Brian Mosoff, chief executive officer of investment firm Ether Capital. “Various institutions are committing to new products and R&D and giving a new set of investors more comfort that the space is maturing.”  Read More: Billionaire Investor Druckenmiller Says He Owns Bitcoin in CNBC Interview Year to date, bitcoin has more than doubled and over the past month, the world’s oldest cryptocurrency is up over 35%. With the sideways price performance Tuesday, a number of traders appear to be moving crypto into decentralized finance, or DeFi, for yield-generating opportunities. According to DeFi Pulse, 168,111 BTC, worth $2.5 billion as of press time, is generating yield in various Ethereum-based protocols. “BTC is digesting the recent confusing macro and political events and consolidating before its next move,” said Jean-Marc Bonnefous, managing partner of investment firm Tellurian Capital. “We are seeing the rotation from BTC to DeFi in full swing now, which is typical of traders redeploying capital to higher yielding assets.” Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Tuesday trading around $450 and climbing 0.70% in 24 hours as of 21:00 UTC (4:00 p.m. ET). The amount of cryptocurrency “locked” or held in Ethereum-based DeFi protocols is at a record Tuesday. Over $12.8 billion is currently being held in DeFi, the highest it has ever been according to data aggregator DeFi Pulse. Ether Capital’s Mosoff says many investors have profited from rising crypto prices and are looking to find additional gains in the DeFi market.  “Total value locked in DeFi is hitting all-time highs likely due to the price increase across all crypto assets and the continued positive sentiment in the space alongside more certainty in the political arena,” Mosoff told CoinDesk. Digital assets on the CoinDesk 20 are mixed Tuesday. Notable losers as of 21:00 UTC (4:00 p.m. ET): Notable losers: Read More: Volume Surge Brings 25% Turnover to ‘CoinDesk 20’ Equities: Commodities: Treasurys: LitecoinCommoditiesBitcoinEtherAlgorand0xBitcoin CashCosmosDeFiChainlinkEquitiesMarket WrapDisclosureThe leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.What is undefined?

Today’s rise is accompanied by constantly growing volumes. Yesterday the cryptocurrency market saw a trading volume of over $465 billion, the highest since the end of February 2018. 

After initial uncertainty yesterday, the second half of the day saw purchases return to the highest levels in recent years. 

Analyzing the first three capitalized, Bitcoin, Ethereum and Ripple XRP, the current bullish trend that started in the first days of October is characterizing itself in a different way highlighting a general movement that remains guided by Bitcoin but, unlike the past weeks, is transferring fruitful movements also to Altcoins. 

Looking at the trading volumes over the last three days, there is an unprecedented amount of continuous trading. 

Yesterday was the third consecutive day for Ethereum trading above $3 billion, recording more than $3.9 billion. This has never happened before. 

With almost $6 billion traded in 24 hours, it is also a record for Ripple XRP. Never before in the history of Ripple XRP have there been three consecutive days of daily trading on major platforms above $2.8 billion.

Today continues to be dominated by the green sign with more than 75% above parity. Among the big names, only Ethereum (ETH) and Polkadot (DOT) move in negative with decreases between 1% and 3%. 

Both take a breath after the strong rises of the past few days with gains of over 30% in just five days. 

Bitcoin (BTC) continues to do well, climbing 2% on a daily basis over $19,300, now a step away from the historical records of 2017. From current levels, just over 2% is missing to enter unexplored territory. 

Stellar (XLM) with an increase of over 40% returns above 0.21 cents on a daily basis for the second consecutive day. 

A positive day with a double-digit rise also for Ripple (XRP), up 10%, although subject to short-term speculation causing rapid upward and downward swings during the same day.

Bitcoin’s market share rose above 61% with Ethereum slipping below 11.8% and Ripple trying to consolidate its dominance above 5%, the highest level in the last 13 months.

Although Ethereum continues to bleed, falling below 6.7 million ETH locked on the various decentralized protocols, with over $14.3 billion the total value locked (TVL) on DeFi remains close to record levels. 

Maker confirmed its leadership in the sector with $2.7 billion, followed by WBTC with $2.4 billion, recording a new record (124,480) of BTC transformed into ERC20 tokens, equal to 74% of the tokenized Bitcoin.

The exponential rise of Bitcoin has brought the quotations back to one step from the absolute historical record set on December 17th, 2017 at $19,891 recorded on the Bitfinex platform. 

Since the beginning of the current trend – mid-October – the rise has so far recorded only two days of weakness: November 7th and 22nd. On both days, intraday speculation has caused prices to drop by just under 10%. This is the data to take as reference in a similar context that from these levels does not find better references to consider in case of reversal of the trend. 

Translated in operative terms it means that for Bitcoin there is room for downward movement that until $17,400 would not compromise the current upward trend. On the other hand, if the historical highs are exceeded by more than $19,900, this could trigger a rise sustained by euphoria.

The rise of the last five days has brought prices back above $600, the highest level since the beginning of June 2018. A gain of more than 30% in value in less than a week, partly unexpected after the uncertainty that has been characterizing the fluctuations below $500 since last summer. 

The upward climb lacks valid short-term support, which is why it is necessary to wait for price consolidation in the coming days to define a level where to attract new purchases to support a climb to new records. Any downward speculative movement should not return below $480.          

The fast-growing realm of decentralized finance – semi-autonomous exchanges and lenders erected from interconnected systems of digital tokens and coding atop the Ethereum blockchain – is one of the hottest corners of the crypto industry this year, with $7 billion of value locked, a 10-fold increase over the start of 2020.   Now, the big centralized crypto exchanges are finding a way to cash in on the mania, introducing indexes tied to the fate of “DeFi” tokens and new futures contracts and other types of derivatives. For traders, these indexes provide a way to speculate on decentralized finance without going all in on any single project. You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here. By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.The latest announcement comes from Binance, the world’s largest cryptocurrency exchange.  The company plans to offer “DeFi Index Perpetual Contracts,” listed on Binance Futures, according to a press release Wednesday. The contracts will be denominated in the dollar-linked stablecoin tether and offer traders leverage up to 50 times their money down.     The “fully synthetic derivative product enables greater access to decentralized finance,” Binance said in the release.  Ahem. Never underestimate crypto exchanges’ creativity when it comes to adapting Wall Street-style financial engineering for use on the so-called digital rails.  Binance’s new contracts might be an early entrant in what could potentially become a crowded field. Earlier this week, the exchange FTX announced a futures index tracking the top 100 liquidity pools on the decentralized exchange Uniswap. FTX had already launched its own DeFi Index in June.  “We’ve seen large demand from customers to get exposure to a broad base of DeFi products,” CEO Sam Bankman-Fried told CoinDesk’s Zack Voell in a private message. Binance’s DeFi index consists of 10 tokens associated with DeFi, several of which rank among the year’s best performers. They include Chainlink’s LINK, Compound’s COMP, Kyber’s KNC, Aave’s LEND, ZRX’s 0x and MakerDAO’s MKR.  In an example of the speculative fervor, tokens associated with the phenomenon now have a combined market value of $12.7 billion, more than the amount of money locked into the underlying platforms, according to the website DeFi Market Cap. “DeFi is still the big hype, with many coins still flying high,” the Norwegian cryptocurrency analysis firm Arcane Research wrote Tuesday in a weekly report. Messari, a crypto-markets research firm, has compiled its own list of 30 tokens associated with DeFi. On average, they’re up 13-fold in 2020. It almost makes bitcoin’s 56% year-to-date gain look like dead money.   Bitcoin’s latest price drop has a silver lining: It has forced out weak hands in the derivatives market and potentially opened the doors for a more sustainable rally to recent highs.  Read more: Bitcoin Drop Squeezes Out Weak Derivatives Positions – And That May Be a Good Thing – Omkar Godbole Aave (LEND): Decentralized lender passes MakerDAO to become No. 1 in DeFi rankings (CoinDesk) Wrapped bitcoin (WBTC): Fees on Ethereum blockchain are so elevated that BitGo is scouting for partners for new sidechain. (CoinDesk)  Ether (ETH): More than $1 billion of ERC-20 tokens vulnerable to “fake deposit exploit.” (CoinDesk)   PAX Gold (PAXG): Crypto exchange Binance lists the gold-linked digital token as precious metal trades around $1,900 an ounce. (Paxos) Big companies load up on debt as borrowing costs fall, even amid recession (Bloomberg) U.S. consumer confidence unexpectedly falls to 6-year low as stimulus checks expire (Reuters) Stimulus-induced inflation puts $40 trillion of retirement savings at risk (Bloomberg) FTX Exchange Trying to One-Up Binance’s CoinMarketCap Acquisition (CoinDesk)FTX has acquired Blockfolio, the mobile news and portfolio tracking app, for $150 million. BitGo Might Do a Sidechain for WBTC as Fees on Ethereum Mount (CoinDesk)Pressure plaguing the Ethereum blockchain might prompt BitGo to build a sidechain to sidestep exorbitant fees. Bitcoin Lightning Startup LastBit Working With Visa to ‘Fast Track’ Card Payments (CoinDesk)LastBit’s hope is to allow users to harness the Lightning network to pay for just about anything. Japan’s First IEO to Launch via Crypto Exchange Coincheck (CoinDesk)One of the largest crypto exchanges in Japan is supporting the launch of the country’s first initial exchange offering. – Sebastian Sinclair MarketsBinanceNewslettersFirst MoverDisclosureThe leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.What is undefined?

With all the buzz around Chainlink’s and Bitcoin’s rapid rise and consolidation, respectively, other resurgent and dampened altcoins have been left out of the limelight. Bitcoin Cash, the hardfork of Bitcoin, for instance, has been replaced on the 5th spot of the coin market by the aforementioned Chainlink. Tezos despite a bullish rise has been outdone by EOS and Ethereum Classic, is down to the 26th spot on the coin ladder.

Bitcoin Cash  

 Despite a 3.85 percent daily price gain, the BTC hardfork has been ousted by the double-digit gains of LINK. However, BCH, on the 4-hour chart has been doing well over the past 4 days trading in a strong rising wedge marking a 10 percent gain.

Support for the altcoin lies fairly low at $265, while resistance is immediate at $310. Only for a brief few hours was BCH’s price over this resistance level and was pushed below on August 7, since which it hasn’t moved above.

Bollinger Bands indicated rising volatility as the price begins to pick up with the simple moving average below the coin’s price, hinting at a mild bullish swing.

Tezos

Pushed out from the periphery of the top-10, Tezos has been wayward over the past few days. Since its massive pump between August 7 to August 10, rising by 39 percent, the price has dropped by under 3 percent in the past few hours.

Trading in a fairly broad upward channel the price has mounted two higher highs in the past two weeks indicating strong movement. If this continues the current price of $4.17 could rise over the previous high at $4.45.

Chaikin Money Flow indicator suggested a net outflow out of XTZ as the indicator has moved below 0 for the first time since August 7, as traders lock their profits since the altcoin jumped.

Teozs and Chainlink were the few prominent altcoins that surged above their respective ATHs [post launch] during the bull-run which began at the end of July.

Ethereum Classic   

The hardfork of the top-altcoin Ethereum, Ethereum Classic has been muddled in sideways trading since the collective market’s drop on August 2. With the alt suffering a 51 percent attack earlier in the month, the network’s woes are spilling onto the price charts.

Strong sideways channel ranges between the support of $6.71 to the resistance at $7.36. However, since August 13, the price has turned up, rising by 8 percent but finding yet another resistance at $7.25.

Relative Strength Index for the altcoin is closing in on the overbought range of 70 despite its price not rising significantly indicating the low confidence investors have in the coin at the moment.

Prominent exchange OKEx stated in a report that if Ethereum Classic does not upgrade its network security the exchange would “consider delisting ETC.” 

DigiByte, STEEM, XRP Price Analysis: 17 August

Bitcoin: 4 reasons why we are in the early bull-run stage

Aakash is a full-time cryptocurrency journalist at AMBCrypto covering primarily the US market. A graduate in Finance and Economics, his writing is centered around regulation and institutional investment within the cryptocurrency space. He is also an aspiring triathlete.

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Bitcoin Cash short-term Price analysis: 18 November

Tezos long-term Price Analysis: 13 November

Crypto.com, Tezos, Algorand Price Analysis: 04 November

Decentralized finance yields are incredibly attractive, but options markets can also provide similar sized returns for those willing to take risks. 18973 Total views 53 Total shares Listen to article 0:00 Market Analysis The number of investors interested in yield farming has grown immensely over the past 6-months as decentralized finance (DeFi) applications became better known and easier to use.  This has led to an uncountable number of liquidity pools offering annual percentage yields (APY) surpassing 1,000% and the total value locked in DeFi contracts has risen to billions of dollars. Bitcoin investors who wanted a piece of the action managed to participate in DeFi yield farming by converting their BTC into tokenized formats like Wrapped BTC (WBTC) and renBTC (RENBTC).  This allows BTC holders to interact with all of the ERC-20-based tokens, but some analysts question how decentralized the Bitcoin custody is behind those offerings; therefore, it makes sense to explore more centralized solutions. Although it is impossible to directly extract yield on Bitcoin (BTC) deposits at these DeFi platforms, investors can still benefit from centralized services. While it is improbable to find APYs above 12% there are at least safer ways to earn yield on ‘uninvested’ Bitcoin. Centralized services such as Bitfinex, Poloniex, BlockFi, and Nexo will typically yield 5% to 10% per year for BTC and stablecoin deposits. To increase payout, one needs to seek higher risk, which does not necessarily mean a less known exchange or intermediary.  By trading BTC options at Chicago Mercantile Exchange (CME), Deribit, or OKEx, an investor can comfortably achieve 40% or higher yields. The buyer of a call option can acquire Bitcoin for a fixed price on a set future date. For that privilege, this buyer pays an upfront for the call option seller. Although the buyer might typically use this instrument as an insurance, sellers are mostly obtaining fixed income trades. Each contract has a predetermined maturity date and strike price, so potential gains and losses can be calculated beforehand. This covered call strategy consists of simultaneously holding BTC and selling the equivalent size in call options. It would be unfair to name it a fixed income trade, as potential losses loom whenever there is a more considerable price drop at options expiry. However, one can adjust such risk while setting up the trade. It is worth noting that limiting exposure will result in lower yields. Expected returns for a November $9.5K covered call. Source: Deribit The above chart represents a covered call strategy for the November expiry, yielding a 6% return in two months, equivalent to 41% APY. As previously mentioned, the covered call might present losses if the BTC price at expiry is lower than the strategy threshold level. Although the 6% yield achieved by selling 0.5 BTC at $9K and 0.5 BTC $10K call options, the strategy needs BTC to sustain above $10K at the November 27 expiry to achieve its full return. Any level below $8,960 will result in a loss, but that is 16.6% below the current $10,750 Bitcoin price. By selling these call options, the investors will make 0.1665 BTC ($1,957 at current price); therefore, the covered call investor should acquire the remaining 0.8335 BTC ($9,793) either via futures regular spot markets. However, if the buyer is unwilling to take this risk, it is possible to reduce the loss threshold. It is worth noting that most derivative exchanges allow option trades starting from BTC 0.10, with CME being the only exception. Expected returns for a November $8.5K covered call. Source: Deribit A 25% APY return can be achieved by selling 0.5 BTC $8K and 0.5 BTC $9K November call options. By reducing expected returns, one will only face negative outcomes below $8,370 at the November 27 expiry, 22% below the current spot price.  Take notice of how the $313 net profit stabilizes above $9K outcomes. To achieve this equilibrium, one needs to buy $8,187 worth of BTC, either via futures or regular spot markets. The call options premium will raise the remaining BTC 0.303 ($3,257), but only the option seller gets paid beforehand. Implied volatility is options markets main risk gauge, and it increases as traders perceive a higher risk of sudden price moves. This indicator will increase regardless of investors’ optimism, as volatility relies exclusively on absolute price changes.  A constant daily 4% loss across a few weeks results in extremely low volatility, which would be the same as a fixed daily 4% gain. The volatility will increase in periods of extreme uncertainty; therefore, option sellers will demand a larger premium. Bitcoin 3-month options implied volatility. Source: Skew As Skew data shows, the BTC 3-month options implied volatility currently stands at a 59% annualized basis. Despite being relatively low, the figure is still enough to provide a 41% APY using covered call strategies. Investors can benefit from a higher reading, but the risk of suffering losses using covered calls also increases. This reflects traders’ fear of unexpected price swings; therefore, an increased implied volatility indicates higher odds of an expiry price below the options strategies’ profit threshold. All passive yield strategies have embedded risks. While it is possible to use a stop loss on covered calls, it should be noted that options markets can be reasonably illiquid during intense BTC price swings. This means it’s important here to never close futures or spot positions independently from the options. DeFi might have its appeal, and even if one is willing to accept the risks associated with wrapped BTC, there are unknowns from faulty smart contracts, potential DeFi protocol breaches, clogs in the Ethereum network during peak traffic and the increased fees which can reduce profits and amplify losses. Outside individual pools and DeFi apps, there’s also room for oracle price sourcing manipulation which can cause cascading liquidations. The main advantage of the covered call is it enables investors to set their own appetite for risk and have a clearer picture of their potential profits.  By opting for centralized solutions, investors can avoid high gas fees and the risk of being front run by wealthier or more savvy DeFi farmers. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Bitcoin is looking bearish while Ethereum miners are reaping more fee revenue than ever before.

Read More: ‘Bitcoin Rich List’ Reaches All-Time High

Bitcoin’s price declined to as low as $11,102 on spot exchanges such as Coinbase Tuesday, wiping out long derivatives traders on BitMEX. In just one hour, up to $5.6 million in leveraged positions were automatically liquidated, the crypto analog to a margin call. 

Daniel Ladinsky, trader at quantitative trading firm Efficient Frontier, worries that if price stays beneath $12,000 per one BTC for too long it may signal a larger downward trend. “BTC has been hovering below $12,000 for quite some time, which is a crucial zone,” Ladinsky told CoinDesk.

Read More: Istanbul or ‘Coinstantinople’? Inside Turkey’s Bitcoin Bull Market

Michael Gord, CEO of cryptocurrency brokerage firm Global Digital Assets, sees Tuesday’s price dip as temporary profit-taking by some investors. ”Institutional traders take profits the whole way up to hedge their risk,” he said. ”We are now seeing more institutional traders take some of that profit and reallocate it into ‘riskier’ low- to medium-cap altcoins.” 

One interesting development: Bitcoin locked in decentralized finance, or DeFi, is down a little bit after it had previously doubled in August, according to data aggregator DeFi Pulse. 

Efficient Frontier’s Ladinsky says traders continue to see more alluring profit opportunities in DeFi, which might help explain the decline. “Recently, the market has been quiet for BTC and most of the attention and hype is on the DeFi front, where coins are surging very hard,“ he said.

Read More: Aave Second DeFi Project to Overtake MakerDAO for Most Crypto Deposited

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Tuesday, trading around $379 and slipping 5.9% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Ether Price Swings Make Bitcoin Look Tame as DeFi Speculation Spreads

Ethereum’s mining difficulty has hit a 2020 high, at 2,820 terahashes, its highest level since Dec. 13, 2019. 

The amount of gas, or the fee required to successfully conduct a transaction or execute a contract on the Ethereum blockchain, is at an all-time high, meaning the resources used per block are increasing. This means more miner revenue coming from fees and, as a result, more machines being turned on, causing mining difficulty to increase. 

Smart contract developers in the ecosystem like Jun Dam, who is working on a DeFi project based on the competing EOS platform, tell CoinDesk the Ethereum fee situation may be helping miners, but it isn’t benefiting anyone else. “ETH gas fees are not user- or developer-friendly,” Dam said. 

Read More: Ethereum Tokens Worth $1B Vulnerable to ‘Fake Deposit Attack’

Digital assets on the CoinDesk 20 are mostly in the red Tuesday. One notable winner as of 20:00 UTC (4:00 p.m. ET): 

Read More: Bitcoin Miner Overstated Industry Vet’s Involvement in $50M Series A Pitch

Notable losers as of 20:00 UTC (4:00 p.m. ET): 

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Bitcoin was slightly lower early Friday, leaving the cryptocurrency on track for its first weekly price decline since mid-July. 

The largest cryptocurrency broke above $12,000 earlier in the week and failed to hold the gains, though John Willock, CEO of crypto asset manager Tritum, told CoinDesk Thursday that “maybe we’ve got $13,500 in the next phase up in the coming days.” 

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European stocks were up and the euro was down early Friday as investors continued to bet on technology shares and a vaccine breakthrough while shrugging off fresh signs that the economic recovery is faltering. The dollar was headed for its first weekly gain since mid-June. 

“It does almost seem as if the entire crypto market is taking its cues from the U.S. dollar,” Mati Greenspan, founder of the foreign-exchange and cryptocurrency analysis firm Quantum Economics, told subscribers in an email. 

What’s surprising is that still-fledgling digital-asset markets might be more rational and functional these days than Wall Street: The various ups and downs of token prices are sending out bona fide market signals that point to projects and opportunities where capital is warranted, and investors are responding. 

Sure, bitcoin has benefited from the perception that the largest cryptocurrency might benefit from inflation, since many investors see it as a hedge against currency debasement, similar to gold. 

Far more fascinating are the capital flows into the semi-autonomous lending and trading systems being built atop the Ethereum and other blockchains under the rubric of “decentralized finance,” or DeFi.

It might all just be speculative hype, but that might actually be preferable to global foreign exchange markets that are heavily influenced if not controlled by central bank officials. 

Within the digital-asset ecosystem, investors have figured out how to quickly allocate and reallocate capital whenever new opportunities arise.   

CoinDesk’s Daniel Cawrey reported on Thursday that juicy returns in the DeFi market are making some investors shift away, at least temporarily, from putting their money into options contracts on bitcoin.

“Every derivatives trader that was looking for incremental yield and levered returns has been besotted by the magnitude of moves in DeFi,” Viashl Shah, founder of derivatives exchange Alpha5, told Cawrey. “So, naturally, cost of capital dictates at least some attention that way.”

Traders are even are putting their bitcoins into DeFi platforms to take advantage of the higher yields in the fast-growing arena. 

Since the start of the year, the number of bitcoin locked in DeFi has grown 34-fold to about 49,000. 

It might be a bubble, but at least it’s not a game of trying to anticipate the Fed’s next move. In fact there’s even room for investors to take bets on which projects might become dominant players in the future, without struggling so much to understand what exactly is happening, as often seems to be the case these days in so many traditional markets. 

“DeFi long term will revolutionize finance, but this short-term bubble is bound to pop eventually, in my opinion,” Michael Gord, co-founder of trading firm Global Digital Assets, told Cawrey. At that point, the locked-up bitcoins might flow back out of DeFi, and more money might flow back into bitcoin options. 

Almost like a real market. 

Bitcoin has pulled back more than 5% from the 13-month high above $12,400 reached on Monday. 

Read more: Bitcoin Options Open Interest Nears All Time High – But Rise in Puts Could Presage Drop

– Omkar Godbole

European economic activity unexpectedly slowed in August (Bloomberg)

U.S. cutback of $500B in emergency aid could shave $940B off economy. (Peterson Institute)

Costa Rica, Greece, Morocco, Portugal, Thailand hit by “precipitous drop” in tourism. (IMF)

JPMorgan reportedly pushing to provide banking services in U.S. post offices. (The Capitol Forum) 

Federal Reserve has been putting a floor under the Treasury market for 84 years. (New York Fed)

Asian Banks face “challenging” revenue environment from near-zero interest rates (Fitch) 

U.S. Jobless claims jump back above 1M as labor-market recovery stalls (Labor Department)

Chinese nationals might be using tether to spirit capital out of China (Bloomberg)

Grayscale trusts “sold in secondary market to the public at large premiums” (Arcane Research)

Mining industry increasingly “financialized” and hashrate “capitalized” (TokenInsight)

Crypto-Friendly U.S. congressman turns to crypto-friendly fund-raising via BitPay (CoinDesk)

FTX hires former Robinhood crypto exec as COO of U.S. crypto exchange (The Block)

Newest-generation Bitmain, MicroBT rigs portend “neck and neck competition” (BitMEX Research)