Bitcoin bubble will pop sooner or later, says famous Russian BTC critic

Bitcoin bubble will pop sooner or later, says famous Russian BTC critic

Anatoly Aksakov of the Russian State Duma suggested that global jurisdictions should ban Bitcoin as a payment method.

Anatoly Aksakov, a member of the Russian State Duma, has reiterated his negative stance on Bitcoin (BTC) shortly after the cryptocurrency briefly retouched $40,000 on Jan. 14.

In an interview with local news agency TASS, Aksakov argued that Bitcoin is not backed by anything and thus the Bitcoin bubble is poised to burst sooner or later:

“Bitcoin is not backed by anything as a cryptocurrency. This is a private currency, and its value is based on trust of the related data system. In this context Bitcoin provides a basis for a bubble on the crypto market, and I think this bubble should burst sooner or later.”

Aksakov also urged for strict regulations on Bitcoin, hinting that global jurisdictions should probably ban it as a payment method. Russia has already banned crypto-powered payments effective from Jan. 1, 2021. 

Aksakov stated, “It is necessary to cut off all channels for using Bitcoin to finance drug trafficking, terrorist operations, money laundering, corruption schemes, and so on.” 

Aksakov also noted that Bitcoin is “the mother of blockchain.” “Blockchain technology has existed for a long time, but thanks to Bitcoin it became popular and is now widely used,” he said. 

Aksakov is not alone in maintaining that Bitcoin is a bubble. Michael Hartnett, chief investment strategist at Bank of America Securities, argued that Bitcoin looks like “the mother of all bubbles” in early January 2021.

As previously reported by Cointelegraph, Aksakov emerged as one of the biggest Bitcoin critics in 2020. He is confident that Bitcoin “has no future” and that crypto payments would destroy the global financial system.

Following Bitcoin’s massive rally driving its price to as high as $42,000 in January, a number of global authorities have expressed criticism of the world’s largest cryptocurrency. European Central Bank President Christine Lagarde argued on Jan. 13 that Bitcoin is a “highly speculative asset” and a “funny business” contributing to money laundering.

DOT flip: Polkadot overtakes XRP to become the fourth largest cryptocurrency

DOT flip: Polkadot overtakes XRP to become the fourth largest cryptocurrency

DOT is on fire today as it surges up the market cap charts to fourth spot.

There have been some big movers as the crypto market rally resumes and Polkadot’s DOT token is among them.

According to figures from leading analytics portal Coingecko, DOT has flipped Ripple’s XRP in terms of market capitalization following a massive gain of 26% over the past 24 hours. This makes it the new fourth largest cryptocurrency by market cap.

The Polkadot token has surged from an intraday low of just below $11 to top out at an all-time high of $14.80 before retreating slightly to $14.45 at the time of writing. The big price move has pushed its market cap to $13.7 billion as reported by Coingecko.

XRP, conversely, has only managed a gain of 3.7% over the past 24 hours which has not been enough to take the cross-border transfer token above $0.30. Its market cap is currently just below DOT’s at $13.5 billion.

Stats from Polkadot’s own platform estimate it has an even higher market cap of $14.8 billion using a circulation figure of just over one billion tokens. Messari crypto stats are very similar to this and they also show DOT having flipped XRP with a $3 billion difference in market cap.

The Binance owned Coinmarketcap is the only site in disagreement as it reports the DOT supply as ten percent lower. CMC was late to list Polkadot, which is an Ethereum and Binance Smart Chain competitor.

Polkadot is essentially a multi-chain protocol which has a number of ‘parachains’ (called shards in Ethereum) and works on its own technology called ‘Substrate’, which is a blockchain framework. The platform is fully interoperable, allowing other blockchains to connect to the network as a sidechain and the blockchain protocol has the ability to process thousands of transactions per second, leading it to be dubbed the latest ‘Ethereum killer’.

The most recent update, which may be driving momentum, was the launch of its Rococo parachain testnet which went live in late December. It is now gaining more partners according to the Polkadot community;

Other factors driving momentum include the issues with DeFi on Ethereum as demand for scaling intensifies, along with a strong technical market structure.

Block.one’s Bitcoin reserves are now worth double the entire EOS market cap

Block.one’s Bitcoin reserves are now worth double the entire EOS market cap

Block.one holds a reported 140,000 BTC which is worth around double the EOS market cap. Does that make EOS a buy?

EOS has largely under performed during this crypto rally and has dropped out of the top ten by market cap, but one industry executive believes it could be one of the best risk/reward digital assets right now.

Chartered Financial Analyst and Arca CIO Jeff Dorman made the assertion based upon Block.one’s extensive Bitcoin holdings.

Before delving into that, Dorman observed that EOS is the only major crypto asset apart from XRP that has not made significant gains during this rally. Over the past twelve months, EOS prices have declined by 26%, with losses recently accelerating due to the resignation of CTO Dan Larimer.

But with plenty of “zombie projects” up 300% to 1,000%, he believes EOS provides a good risk/reward opportunity.

Block.one owns 140,000 BTC worthh an estimated $5.5 billion at current prices according to data compiled by a financial comparison platform Bankr.nl. The CFA compared the market capitalization of EOS with that of its Bitcoin holdings;

“At $2.77, the market cap of $EOS is $2.6 bn, which is only 47% of the value of their BTC holdings. That means by buying $EOS, you are actually buying $BTC at $18,771. Huge discount.”

Dorman stated that generating a Return On Investment, or ROI, from Book Value is essentially taking a gamble on what management will do with that capital. Block.one and the EOS teams have done very little to instill confidence, he added.

But Dorman suggested that at this point, EOS and Block.one CEO Brendan Blumer need to create value for token holders as soon as possible, or return the capital, or expect huge lawsuits.

He concluded that any one of these three options will unlock this value and close the gap between EOS’ market cap and the value of the Bitcoin on Block.one’s balance sheet, which currently stands at $1.5 billion more than the company raised in its May 2018 ICO.

Not all were in agreement with the CFA with one respondent pointing out that buying EOS is not the same as buying BTC;

“To be clear, you are NOT buying Bitcoin by buying EOS. Block One does own 10% of the EOS token supply. They update the eosio code. But EOS is a public blockchain. And B1 does not reward EOS token holders with their Bitcoin holdings.”

The enormous amount of Bitcoin on the Block.one books may lend weight to outspoken crypto podcaster Peter McCormack’s comment:

“EOS was nothing more than a Bitcoin heist.”

At the time of writing, EOS was trading at $2.80, flat on the day and down almost 13% over the past week.

Grayscale Investments liquidates all of its XRP… while it still can

Grayscale Investments liquidates all of its XRP... while it still can

Grayscale is dissolving its XRP Trust and will distribute cash to investors after liquidating all XRP held by the trust.

Institutional crypto-fund manager Grayscale Investments has begun the dissolution of its XRP Trust in response to the Security and Exchange Commission’s December 2020 lawsuit alleging the XRP token is a security under U.S. law.

According to an announcement published Wednesday, Grayscale decided to dissolve the trust in response to the spate of XRP delistings from major crypto-asset exchanges after the SEC’s complaint was filed. Grayscale concluded:

“It is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP to U.S. dollars, and therefore continue the Trust’s operations.”

All XRP held by the trust has already been liquidated, with Grayscale intending to distribute the net cash proceeds to XRP Trust shareholders after deducting expenses. The trust will be terminated following the distribution of said cash.

Despite the SEC’s hardline position on XRP, regulators in other countries are not convinced the token comprises a security.

A January report on cryptocurrency regulation published by the U.K. Treasury classified XRP as an “unregulated token” alongside leading digital assets Bitcoin (BTC) and Ether (ETH), with the Treasury describing unregulated tokens as “neither e-money tokens nor security tokens.”

The report describes XRP primarily as an “exchange token” — a token that is “primarily used as a means of exchange.”

On Wednesday, Japan’s Financial Services Agency told The Block it classifies XRP as a cryptocurrency, not a security.

XRP is currently trading for $0.31 and is down 40% in the past 30 days.

Rick and Morty creator auctioning NFT artwork collection

Rick and Morty creator auctioning NFT artwork collection

The platform stated it would offer “several original artworks” from Justin Roiland as part of his NFT collection.

The Winklevoss-owned Nifty Gateway has announced the auction of a crypto art collection from the voice actor and co-creator behind Adult Swim’s cult animation series Rick and Morty.

According to a tweet from Nifty Gateway today, the non-fungible token, or NFT, marketplace will be auctioning artwork from Rick and Morty co-creator Justin Roiland on Jan. 19. The platform stated “several original artworks” from Roiland would be offered as part of the collection.

The Rick and Morty co-creator first tweeted about Bitcoin (BTC) in 2015 and he mentioned the crypto asset during a GQ video last June, saying viewers should “watch out for the economy collapse that’s coming up — buy Bitcoin and crypto”. However he then added: “Maybe don’t do that.”

Nifty Gateway has acheived some noteworthy sales auctioning NFT crypto art. In December, the marketplace hosted an auction featuring a collection of artwork inspired by technology, nature, and Star Wars that ultimately sold for $3.5 million, with one piece selling for $777,777. The previous record set for the most-valuable artwork auctioned on the marketplace was held by Trevor Jones’ NFT “Picasso’s Bull,” which sold for $55,555.55 in August.

The Rick and Morty animated series has a well-established fan base, some of whom are crypto fans as well. José Delbo, a comic book artist who has also auctioned his NFTs on Nifty and had his art featured in the Ethereum-based virtual reality world Decentraland, called the entry of Roiland into the digital art world “very exciting.”

“With Jose blazing the trail it’s great to see other amazing comic and cartoonists enter the space with their fans,” said Twitter user CryptoRich0x69.

“What a great time in the history of art.”

Bitcoin briefly loses its spot as top cryptocurrency — Wait, what?

Bitcoin briefly loses its spot as top cryptocurrency — Wait, what?

Bitcoin’s twin took over the number-one spot on CoinMarketCap.

Bitcoin’s market capitalization was briefly flippened today as Wrapped Bitcoin suddenly gained quadrillions of dollars in value.

WBTC showed a behemoth market cap of about $432 quadrillion for a brief period (the total world money supply is estimated at $1.2 quadrillion, including derivatives, according to Rankred.com.) It sat listed atop all the other assets, even Bitcoin (BTC), which had a valuation of roughly $733 billion at the time. 

But crypto aficionados and maximalists need not worry about the usurpation of the Bitcoin crown: The move was a glitch on CoinMarketCap, which briefly displayed Wrapped Bitcoin (WBTC) as worth more than all other assets in the world combined. 

Source: CoinMarketCap.com

A spokesperson for CoinMarketCap told Cointelegraph:

“The bug was caused by an errant supply module, which was reporting erroneous values for WBTC’s circulating supply, one of the inputs that goes into rankings. The problem was quickly rectified. Alas, even we couldn’t keep this under ‘wraps.'”

Even a Google search for four hundred and thirty-two quadrillion, nine hundred and forty-nine trillion, two hundred and forty-seven billion, four hundred and thirty-two million, eight hundred and sixty-five thousand, six hundred and sixty-four displayed Wrapped Bitcoin’s supposed market value. And if it’s on the internet, it must be true…

Source: Google.com

CoinMarketCap quickly fixed the glitch, subsequently putting WBTC back in its rightful place: 13th in the rankings, with a market cap of about $4 billion at the time of publication. Before fixing the glitch fully, however, WBTC remained in the top position for a few moments, even after its market cap was corrected.

Source: CoinMarketCap.com

But what is WBTC anyway? It’s Bitcoin in an Ethereum wrapper. This allows participants to use WBTC within the Ethereum ecosystem, as the network runs on a different blockchain. This way, participants can use Bitcoin for Ethereum-based activities, such as decentralized finance. Each WBTC has the same value as 1 BTC, backed one-to-one by actual Bitcoin, which is managed by a custodian, as detailed by BitGO in a blog post. 

Another asset flipped Bitcoin once before on CoinMarketCap, during the height of pandemic lockdowns when toilet paper became one of the world’s most desired commodities. Toilet Paper Token rose above Bitcoin on March 31, 2020 — as an April Fools joke. So, this isn’t the first time Bitcoin has been Number Two.

Cointelegraph will be sure to report on the next time CoinMarketCap’s data “cwraps” out.

Grammy winner Portugal. The Man launches fan token on Ethereum blockchain

Grammy winner Portugal. The Man launches fan token on Ethereum blockchain

In a first for the blockchain world, the Grammy Award-winning band will use cryptocurrency tokens to distribute previously unreleased material.

Grammy Award-winning American pop-rock band “Portugal. The Man” has launched a fan-focused cryptocurrency on the Ethereum-based Rally Network. Known as PTM Coin, the new token will reportedly grant fans exclusive access to various events and perks, including a livestream party, previously unreleased songs and more.

Fan tokens emerged as a growing trend in 2020, allowing artists and content creators (and even soccer players) to build virtual communities through token economies on the blockchain.

When Portugal. The Man releases an archive of unreleased performances to tokenholders on Friday, it will mark the first time Grammy Award-winning artists have used cryptocurrency to distribute new material.

Portugal. The Man is best known for the 2017 hit single “Feel It Still,” which sold an estimated 5 million copies in the United States and millions more worldwide. The band was formed by native Alaskans John Gourley, Zach Carothers, Kyle O’Quin, Zoe Manville, Jason Sechrist and Eric Howk, now residents of Portland, Oregon.

PTM Coin is hosted on Rally Network, a digital-asset platform built on an Ethereum sidechain that allows artists and content creators to build personalized “Creator Coins.”

John Gourlay, lead singer of Portugal. The Man, said the decision to launch a cryptocurrency for fans was motivated by a desire to encourage community growth while conferring ownership to the fans themselves:

“PTM has always been about having a direct connection with our audiences. We never felt good charging for Meet & Greets or for autographs and things like that. We looked long and hard for a solution that would allow us to embrace our community but also give them the opportunity to experience real ownership in what we are doing.”

Kevin Chou, co-founder of Rally, said the release of PTM Coin was “the most substantial artist social token launch” held in the cryptocurrency space to date and “the first time a global artist has partnered with their community to offer unreleased and live recordings.”

The concept of blockchain-based fan tokens took hold globally in 2020. Most notably, European soccer giant Barcelona began experimenting with the social token model in June, leading to a $1.3 million token sale tha sold out in two hours.

Coinbase invests in US-based mining firm amid industry diversification efforts

Coinbase invests in US-based mining firm amid industry diversification efforts

Titan secured funding from Coinbase to offer a U.S.-developed software suite for miners.

Coinbase Ventures, the investment arm of the major crypto exchange, has invested an undisclosed amount into Titan, a developer of software and services targeted at industrial Bitcoin (BTC) mining.

According to Titan’s announcement, the investment will help continue development of the company’s products and improve efficiency and profitability of Bitcoin mining companies.

Ryan Condron, co-founder and CEO of Titan, said that “mining has advanced from hobby, to industry, to critical global computing infrastructure, and Titan is prepared to help world-class miners meet these challenges.”

Titan offers advanced pool and mining software targeted specifically for professional U.S.-based miners. Its network of nodes and mining dashboards allows miners to better compete on a global scale, according to the company.

Previously, Titan launched the Titan Pool in collaboration with CoinMint and CoreScientific, two major mining infrastructure providers in the U.S. Among the benefits offered by the pool, Titan cites better transparency and, crucially, solving some jurisdictional issues for U.S. miners.

China currently accounts for the vast majority of the Bitcoin hashrate. The relative dominance can be attributed to a combination of attractive electricity costs and a localized supply chain.

The Sichuan region is particularly attractive for miners due to its cheap hydroelectric power. Its importance is so pronounced that local seasons have a strong effect on Bitcoin’s hash rate. But cheap electricity is not unique to China, with some regions in the U.S., Canada and Europe being just as competitive.

The mining supply chain, on the other hand, sees a much stronger dominance of Chinese companies. Mining hardware manufacturers are almost exclusively based in China. This gives local miners a powerful home field advantage, as there may be difficulties in exporting and importing certain chips and devices. Though the U.S. is catching up in terms of mining hash rate, accounting for 14% of the total, local firms are still using Chinese-made devices.

This may be particularly problematic in today’s geopolitical environment, where the U.S. is actively banning Chinese-made products and services, and going as far as prohibiting investment in Chinese companies. The mining industry has already begun responding, with some operators repatriating hash rate. Though the departure of President Trump may help ease tensions somewhat, some analysts believe that there may be no reset in sight for the U.S.-China relations.

Titan is primarily focusing on the software side of the mining supply chain, offering a national pool for miners to join. There have also been some developments in local maintenance infrastructure, with Bitmain offering technician certification courses in the U.S. in May 2020.

Interest in diversifying the mining industry away from China’s dominance appears to be high, but full independence is unlikely to be achieved until ASIC manufacturers from other countries step in.

0x (ZRX) price rallies 35% ahead of v4 mainnet update

0x (ZRX) price rallies 35% ahead of v4 mainnet update

An upcoming mainnet upgrade and increasing DEX market share back 0x’s (ZRX) recent double-digit rally.

Decentralized exchanges (DEX) are a giant leap in permissionless and transparent trading, and they exist as fantastic alternatives to centralized exchanges. 

While DEXs ease the process of listing new ERC-20 tokens and remove the need to pay a central authority high listing fees, they stil have the issue of high gas fees. This is precisely the issue 0x Protocol (ZRX) aims to solve.

The 0x Protocol (ZRX) ICO raised $24 million in August 2017 for 50% of its supply, with no pre-sale. As an ERC-20 token, the permissionless Protocol connects liquidity providers through smart contracts, therefore aggregating liquidity.

The protocol allows interoperability between different decentralized applications and DEXs. Thus, ZRX should not be seen as a Uniswap competitor, as it benefits from the sectors’ increased liquidity.

0x Protocol (ZRX) token price in USD. Source: TradingView

Although the ZRX token has been quite volatile over the past weeks, there’s an uptrend happening as it tries to establish $0.50 as a support level after a 22% price increase past 24 hours.

From servers to service

Initially launched as a voting mechanism for governance proposals, ZRX tokens received staking capabilities after its v3 update in late-2019. Market makers were then able to earn ETH rewards for liquidity providing services. Meanwhile, holders could benefit by delegating their tokens using pools.

In June 2020, the project launched a DEX liquidity aggregator service, known as Matcha. After serving exclusively as a backbone for three years, 0x Protocol created a smart order routing service that encompasses DEX like Uniswp, Curve, and Kyber.

Community and DEX activity are probably the most vital metrics for measuring DeFi token growth. Data from Dune Analytics shows that Uniswap and SushiSwap both account for over 60% of the volume but it’s important to remember that liquidity aggregators are not direct competitors to 0x Protocol.

Weekly DEX volume in USD. Source: Dune Analytics

Therefore, the general DEX market growth of the past year is actually a positive driver for ZRX token. Looking at 0x Protocol usage, we can see that 0x weekly volume more than doubled from the October to November $350 million weekly average, reaching 10% market share.

0x Protocol top apps activity past 30 days. Source: 0xtracker.com

Taking a more detailed view of 0x network activity, the chart above shows that multiple platforms use 0x Protocol’s liquidity aggregation capabilities. These trades can take place at numerous DEXs, including Uniswap, Curve, and Balancer.

Market makers returns and v4 update

On Dec. 15, Theo Gonella, 0x Labs product manager, showed data from a market maker that made a 100% return in 2020 by providing liquidity on 284 ETH across 41,000 trades. More recently, 0xTracker stated that 1,782 ETH were distributed to 0x market markers as liquidity rewards in 2020.

The 0x Project v4 voting process will occur from Jan. 16 to Jan. 23 and aims to reduce requests for quotation gas costs by 70%. According to the 0x Labs blog, this version enables customizable modules to execute atomic operations, including token wrapping and unwrapping.

Front-running problem

For those unfamiliar with front-running, the problem lies in on-chain data. Savvy arbitrage desks monitor Ethereum’s main chain for transactions, to then add extra gas on a similar trade and buy (or sell) the asset ahead of the other party. Thus, the higher fee transaction will be able to front-run other users’ executions.

Albeit not exclusively an 0x problem, this certainly limits DeFi aggregators use.

ZRX Twitter user activity vs. price (USD). Source: TheTie

Data from TheTie shows that the recent price spike has been accompanied by increased social network activity. Nevertheless, the indicator remains 50% below the previous May and August peaks. Therefore, judging by social network metrics, there is possibly an enormous upside for ZRX price.

0x Protocol may find further success as the DeFi sector continues to grow and mature. As long as there is a need for lower gas costs and multiple price providers, liquidity aggregators will have a void to fill.

To conclude, for those who believe that the v4 update will be a game-changer, there’s room for plenty of growth in DEX market share, and therefore price potential.

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.

If Bitcoin doesn’t break record highs right away, it wouldn’t be the worst thing, trader posits

If Bitcoin doesn't break record highs right away, it wouldn't be the worst thing, trader posits

Trading sideways for a while could be healthy for Bitcoin.

After its rise past $40,000, and a correction back to nearly $30,000, Bitcoin (BTC) has rebounded once again. Stalling before jumping back up past highs near $42,000 could be good for the asset, however, according to Brian Krogsgard, a trader and podcaster going by the name LedgerStatus on Twitter. 

“Bitcoin’s correction was healthy in a strong bullish environment, mean reverting back to the 20 day moving average,” Krogsgard told Cointelegraph on Thursday. “With a strong bounce now, it is time to see if it will immediately continue upward, or spend longer in prolonged consolidation, which I believe would be healthy.”

Bitcoin barely surpassed $40,000 on Thursday morning before retracing slightly, falling back into the $39,000 range, according to TradingView.com data at time of publication.

Surpassing the $36,000 mark was an important move for the asset, according to comments from CryptoWendyO, a trader and analyst on Twitter. “Unless we reclaim $36,000 I am not ruling out a further drop,” she told Cointelegraph on Jan. 12, before Bitcoin’s recovery past the level. The asset recently pushed past $36,000 with conviction. Bitcoin’s four-hour price chart now shows a higher low.

Source: TradingView.com

Updated commentary from CryptoWendyO shows bullishness on price at present. She told Cointelegraph on Thursday:

“Bitcoin has experienced an amazing rebound at my ~$34,200 support box after that gnarly ~25% drop. I myself am in disbelief however the fundamental of 2020/2021 are different then prior Bitcoin history, currently I believe we will continue to rise and am expecting to flip $42,000 and go on a similar run after we experienced drop on 1/7/2021 from ~$34,200 to ~$28,000 to test ~$48,000.”

Regarding recent price action, Krogsgard sees a correlation with one of the mainstream market’s Bitcoin products. “It appears the GBTC’s closing and re-opening for deposits had a real impact on demand for coins, as the re-opening of their market marked the bottom,” Krogsgard posited. “I believe we’ll continue to see institutional demand on any dips.”

Run by Grayscale, GBTC is essentially the stock form of Bitcoin, with each share backed by a fraction of one Bitcoin. The company put BTC trust investments on hold back in December and reopened them this month.