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Ethereum fees are skyrocketing — But traders have alternatives

March 6, 2021 by Blockchain Consultants Leave a Comment

With the rapid growth of decentralized finance, upcoming scaling developments on Ethereum 2.0, and increased crypto allocation in the portfolios of institutions, the price of Ether (ETH) is rapidly ascending. In fact, we’ve already seen ETH break the $2,000 barrier for the first time, marking a brand-new all-time high. All this action may be bullish for ETH holders and DeFi investors, but for smaller DApp developers and other users on the network — such as traders using ERC-20-based stablecoins — it’s quickly pricing them out.

That’s because the cost of using any stablecoin depends on the blockchain network on which it functions. And, once again, the Ethereum blockchain is finding itself plagued with network congestion and rising fees. On Feb. 23, the average transaction fee on Ethereum soared past $39 for the first time, making transacting with ERC-20 tokens like the Ethereum-based versions of Tether (USDT) and USD Coin (USDC) expensive and even prohibitive.

While Eth2 with its transition to proof-of-stake may hold the answers in the long term, traders are currently left frustrated. The good news is that there are alternatives to allow them to avoid price volatility by holding their value in stablecoins — without paying hefty network fees.

Related: DeFi users shouldn’t wait idly for Eth2 to hit its stride

USDT and USDC on the Algorand blockchain

As a public and open-source smart contract blockchain using a PoS consensus algorithm, Algorand provides the scalability and speed that Ethereum is currently lacking. By running USDT and USDC on Algorand, users can transact in their preferred U.S. dollar-backed stablecoin at a fraction of the cost and time.

The technology behind the Algorand blockchain allows for high throughput, meaning more transactions can be processed per second than on other comparable blockchains, such as Ethereum. In fact, Algorand can process more than 1,000 transactions per second, compared to Ethereum’s TPS of fewer than 15.

This means that transactions on Algorand are settled almost instantly — in less than five seconds. And, rather than having to endure a hefty $39 average, fees can be as low as $0.001 per transaction — regardless of the transaction size.

Using the Algorand Standard Asset protocol for creating new tokens, developers can launch new ASA tokens to be used in a decentralized application — or use it as a way of transferring existing assets to a faster alternative blockchain.

With a market cap now comfortably above $35 billion, Tether’s USDT is the most popular stablecoin in existence and the third-largest cryptocurrency by market cap. USDT is currently issued on a number of blockchains, including Bitcoin (Omni protocol), Ethereum (ERC-20 protocol), Tron (TRC-20 protocol) and Algorand (ASA protocol).

Currently, if a trader wants to transfer 100 USDT (ERC-20), it would cost them approximately $3.43 in Ethereum network gas fees. The same transaction using ASA would be 100 times cheaper, making it extremely appealing, especially to high-frequency, high-volume traders.

The continued development of the crypto space

Ethereum, with the largest developer community in the crypto space and by far the highest number of DApps running on it, understands this better than anyone. However, the arrival of Ethereum 2.0 could still be some time away. However, the arrival of Ethereum 2.0 could still be some time away, and we need alternatives to Ethereum and its rising gas fees and network congestion.

Algorand is a technically sound protocol that provides the scalability essential for further crypto adoption and the continued growth of the space. And it’s a major step in the right direction as cryptocurrency gets closer to mainstream adoption.

Healthy competition such as this incentivizes layer-one protocols like Ethereum to intensify the moats around their products and to solve issues related to their scalability, transaction costs and interoperability. And this can only be a good thing for all participants in the network.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jay Hao is a tech veteran and seasoned industry leader. Prior to OKEx, he focused on blockchain-driven applications for live video streaming and mobile gaming. Before tapping into the blockchain industry, he had already had 21 years of solid experience in the semiconductor industry. He is also a recognized leader with successful experience in product management. As the CEO of OKEx and a firm believer in blockchain technology, Jay foresees that the technology will eliminate transaction barriers, elevate efficiency and eventually make a substantial impact on the global economy.

Ethereum fees are skyrocketing — But traders have alternatives

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Bitcoin Cash is on the brink of falling below 1% of Bitcoin’s price

February 25, 2021 by Blockchain Consultants

Bitcoin Cash (BCH) holders have no reason to celebrate, despite the 46% year-to-date gains in U.S. dollar terms. One year ago, the altcoin was the third-largest by market capitalization. It now risks dropping out of the top 10, having been surpassed by other cryptocurrencies including Litecoin (LTC) and Chainlink’s LINK.

BCH/BTC. Source: TradingView

After three years of continuous devaluation, BCH finally traded below 0.01 Bitcoin (BTC) on Feb. 22. Besides being psychological support, it marks a 96.5% devaluation from its highest close of 0.285 BTC on Aug. 2, 2017.

Even though both cryptocurrencies’ combined hash rate was somewhat comparable at the time, it has since become a one-sided battle, with BTC’s hash rate dominance now over 98% versus BCH and Bitcoin SV (BSV) combined.

Bitcoin Cash and Bitcoin hash rate. Source: Coin Metrics

As depicted above, the BCH hash rate currently stands at 1% of BTC’s 150 exahashes per second. However, BCH proponents argue that Bitcoin Cash’s 10-block checkpoint system defends the blockchain against hostile reorgs, so less hash rate is needed.

Nevertheless, while the risk of a “deep reorg” is reduced, checkpoints come with tradeoffs, particularly the increased risk of a consensus chain split, according to BitMex. 

The addition of checkpoints has also led to criticism from Bitcoin proponents, who argue that this solution compromises the decentralization of the Bitcoin Cash network. 

Just woke up:
So apparently Jihan took a lot of hashpower from Bitcoin to mine on $BCH. He got really scared and is burning a lot of money. https://t.co/RbObgu5fiS
They added a checkpoint to prevent attacks. It means that 1 person is saying what is the valid chain = centralized.

— WhalePanda (@WhalePanda) November 16, 2018

Litecoin’s active addresses outshine Bitcoin Cash

Daily active addresses are a vital on-chain metric, albeit they are often inflated when the lower transaction costs are considered alongside network security tradeoffs. Nevertheless, comparing BCH with Litecoin and Dash seems reasonable, as the three networks have average fees below $0.05.

BCH, LTC and Dash daily active addresses. Source: Coin Metrics

As the data indicates, Litecoin currently has double the number of Bitcoin Cash daily active addresses. Therefore, the activity on the Bitcoin Cash network is more similar to that of Dash, an altcoin with a $2.2 billion market capitalization

 VORTECS™ Score (yellow) vs. BCH price. Source: Cointelegraph Markets Pro

Additionally, the VORTECS™ metric from Cointelegraph Markets Pro began dropping on Feb. 18, just days before the price peaked.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from multiple data points including market sentiment, trading volume, recent price movements and Twitter activity.

The score fell to sub-50 levels, and the drop in BCH price came four days later, losing the important $670 support level.

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 Cash is on the brink of falling below 1% of Bitcoin’s price

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Filed Under: blockchain technology Tagged With: altcoin, BCH, BCH hashrate, Bitcoin, bitcoin cash, Bitcoin SV, BITMEX, blockchain, btc, Cash, Cryptocurrencies, data, decentralization, investment, Litecoin, LTC, Market, Market Analysis, market capitalization, Market Sentiment, Markets, money, On-Chain Metrics, opinions, other, security, Trading, twitter, u.s.

Swiss Canton of Zug Now Offers Crypto Payment Options For Taxes

February 18, 2021 by Blockchain Consultants

Bitcoin and cryptocurrency’s use as a payment method is gradually gaining the popularity the crypto community craves.

A Swiss Confederation member state, Canton of Zug, announced it has started accepting crypto assets for tax payments from residents.

According to the announcement, the development is geared towards encouraging people to start using cryptocurrencies for payment of goods and services.

PAY TAXES IN BITCOIN – As of this week – for the first time – the Canton of Zug is accepting cryptocurrencies (#Bitcoin and #Ether) for cantonal tax payments. 💪 $BTC $ETH pic.twitter.com/8HGnge4xD5

— Bitcoin Suisse (@BitcoinSuisseAG) February 17, 2021

This is coming barely 24 hours after a government entity in Dubai KIKLABB started accepting Bitcoin payment options for licensing fees.

In a related development, the city of Miami in the U.S. is considering the option of tax payments using digital currencies.

Canton of Zug is collaborating with Bitcoin Suisse to make the initiative happen. It means that residents can now convert their Bitcoin and Ethereum tax payments into Swiss Francs for the tax authority.

The crypto-paying process has also been made easy for the residents. They simply have to pay from their proffered crypto wallet after scanning from a PR code. However, to hedge against extreme volatility, the authority has placed a limit on the tax crypto payments. According to the announcement, residents can pay their tax for up to CHF 100,000, or about $110,000.

Only Bitcoin (BTC) and Ethereum (ETH) supported

The announcement mentioned only the two largest cryptocurrencies – Bitcoin and Ether –  as the base crypto assets they can transfer their funds from. However, there are plans to add other currencies as the project progresses in the future.

More crypto adoption in Switzerland

The Canton of Zug is not the only Swiss city accepting crypto assets for tax payments. Two Swiss municipalities of Chiasso and Zermatt have been supporting crypto tax payments, although on a much smaller limit.

But the Swiss city of Zug has been accepting Bitcoin for tax payments since 2016.

It’s not clear how many people prefer paying taxes using crypto assets since their prices are rising massively. Presently, Ethereum has hit a new all-time high of $2,000 while Bitcoin has broken the $50,000 resistance.

The Canton of Zug has included detailed information on the new tax payment option on its official website.

Swiss Canton of Zug Now Offers Crypto Payment Options For Taxes

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Filed Under: blockchain, cryptocurrency Tagged With: Adoption, Bitcoin, btc, crypto, Crypto Tax, Cryptocurrencies, cryptocurrency, Currencies, Digital, digital currencies, Dubai, ETH, ether, ethereum, government, information, Market, Miami, other, payments, PR, tax, Taxes, Trading, twitter, u.s.

Tesla buys BTC, Mastercard supports crypto, DOGE founder speaks out: Hodler’s Digest, Feb. 7–13

February 13, 2021 by Blockchain Consultants

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

Top Stories This Week

Bitcoin hits all-time highs as Tesla invests $1.5 billion

The past week is going to go down as one of the best in Bitcoin’s history. It all began when an SEC filing revealed Tesla has invested $1.5 billion in BTC and planned to start accepting crypto as a payment method.

BTC’s price immediately leaped to record highs on the news, surging by 20% in 24 hours. The announcement came weeks after Elon Musk added #bitcoin to his bio and revealed he supported the cryptocurrency.

Tesla’s Bitcoin exposure represents about 7.7% of its gross cash position, and the news has sparked hopes that other major corporations will follow suit. Galaxy Digital’s Michael Novogratz predicted that “every company in America” will emulate the electric vehicle maker by allocating part of its balance sheets to BTC.

But some treasury experts have been left scratching their heads over the change in Tesla’s investment strategy, with critics describing the move as “unusual” and “risky.” JPMorgan also piled in and said the purchase might not trigger a ton of similar investments.

Mastercard announces support for crypto on its network in big week for adoption

Tesla was just the tip of the iceberg, with a flurry of announcements proving that Bitcoin is now firmly in the mainstream.

Mastercard unveiled plans to start supporting crypto this year, paving the way for almost 1 billion people to spend digital assets at more than 30 million merchants. The company said the move was about giving its customers choice.

Elsewhere, PayPal revealed that its crypto service is going to be rolled out in the U.K., making it the first international market since a successful launch in the U.S. last fall.

Twitter, home to crypto-friendly CEO Jack Dorsey, confirmed it is looking into how it might pay employees who wish to be compensated in Bitcoin. Chief financial officer Ned Segal added that the social network is exploring whether it needs to have BTC on its balance sheet.

There was more to come. BNY Mellon, America’s oldest bank, announced that it will offer crypto custody services for institutional clients. Its chief executive, Roman Regelman, told the WSJ: “Digital assets are becoming part of the mainstream.” Other major banks, such as JPMorgan, now believe they’ll eventually have to get involved in BTC.

Speculation is now growing that Apple will be one of the next companies to embrace Bitcoin. The cherry on top of the cake came when the crypto-focused fintech platform BitPay revealed that card owners can now pay for goods and services using Apple Pay.

Key Bitcoin price metric signals traders are positioned for $50,000 

BTC surged beyond $43,000 without breaking a sweat on Monday, besting last month’s all-time high of $42,000. As the week progressed, Bitcoin managed to hit $48,900.

Many high-profile analysts openly predicted last year that $50,000 was a realistic price target for 2021. Just six weeks into the year, BTC has come tantalizingly close to this level.

Despite Bitcoin’s value trebling in the space of just three months, several crypto traders believe that the scene remains exceedingly bullish… and those looking for a local top might end up being disappointed.

One analyst, Cheds, told Cointelegraph: “In my view, bulls are still in complete control, and every day, we get more news of institutional adoption and demand and that, more than anything, will be the driving force.”

Another, CryptoWendyO, described $50,000 as “inevitable,” adding that a Bitcoin tweet from Musk could send BTC to $54,000.

Ethereum hits a new all-time high as CME futures go live

ETH broke $1,800 this week, setting new records several times along the way. All of this came as Ether futures made their long-awaited debut on CME.

It’s also been a very lucrative few days in the altcoin markets. Cardano has surged 71% over the past seven days, and Polkadot is up 49%, with Binance Coin crushing the competition after clocking gains of 103% in the space of a week. Even XRP managed to break $0.60 once again, which has the Sword of Damocles hanging over its head.

BNB’s gains are undoubtedly linked to the record levels of traffic coming to the Binance exchange, with the platform suffering an outage on Thursday as it went down for maintenance.

The total value locked in decentralized finance also managed to crack $40 billion this week. However, much of this surge is likely down to the soaring value of Ether rather than a dramatic explosion in activity.

Founder of Dogecoin sold everything in 2015 for “a used Honda Civic”

Not everyone is rolling around in $100 bills as a result of the crypto bull run. Dogecoin founder Billy Markus has revealed that he sold off his DOGE stash in 2015 for an amount equivalent to a used Honda Civic.

All of that means that he missed out on the Dogecoin mania that has helped the joke cryptocurrency gain 900% since late January, fueled by tweets from Elon Musk.

Writing on Reddit, Markus said that he can’t comprehend the prospect of DOGE ever reaching $1, writing: “That would make the ‘market cap’ larger than actual companies that provide services to millions, such as Boeing, Starbucks, American Express, IBM.”

Musk recently revealed that he had bought some DOGE for his nine-month-old son so he can be a “toddler hodler,” but there are fears that his days of tweeting about crypto could be numbered. Legal advisors have warned the billionaire that his social media activity and public statements could come under scrutiny from the SEC.

Winners and Losers

At the end of the week, Bitcoin is at $47,592.20, Ether at $1,836.68 and XRP at $0.60. The total market cap is at $1,477,578,548,979.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Avalanche, BitTorrent and The Graph. There’s just one altcoin loser in the top 100 this week: Ampleforth.

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

Most Memorable Quotations

“Cryptocurrency has become a worldwide transaction of which you cannot even identify who owns what. The technology is so strong that I don’t see the kind of regulation that we can do. Bitcoin has made our currency almost useless or valueless.”

Sani Musa, Nigerian senator

“Elon Musk has exposed Tesla to immense mark-to-market risk.”

Peter Garnry, Saxo Bank head of equity strategy

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

Janet Yellen, U.S. Treasury Secretary

“New account registrations are still open, not sure for how long. Also seeing ATH on this. Better get an account soon.”

Changpeng Zhao, Binance CEO

“It would not be surprising — given the focus on the chief executive’s tweets, Bitcoin pricing and recent dramatic market moves — for the SEC to ask questions about the facts and circumstances here.”

Doug Davison, former SEC enforcement official

“Digital assets are becoming a more important part of the payments world. We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money.”

Mastercard

“Bought some Dogecoin for lil X, so he can be a toddler hodler.”

Elon Musk, Tesla CEO

“The main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin.”

JPMorgan

“We’ve done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in Bitcoin, how we might pay a vendor should they ask to be paid in Bitcoin, and whether we need to have Bitcoin on our balance sheet.”

Ned Segal, Twitter chief financial officer

“Markets are going up heavily, but we’ll be seeing some downwards momentum as well. Nothing goes up in a straight line.”

Michaël van de Poppe, Cointelegraph Markets analyst

“I wouldn’t be surprised to see there being almost some sort of a race now — you have Elon Musk, you have Michael Saylor, Jack Dorsey. You’re gonna see a lot of other visionary leaders in disruptive companies actually realizing that it’s really moved from ‘why’ to ‘why not.’”

Michael Sonnenshein, Grayscale CEO

“The target for consolidation is near $52k, where I’m expecting a bit of a correction but the measured move overall should take us towards $63,000.”

filbfilb, Cointelegraph Markets analyst

“Any wallet that won’t give you your private keys should be avoided at all costs.”

Elon Musk, Tesla CEO

“Central banks should ban the trading of it, and force anyone who holds Bitcoin and wants to use it in any transaction, to exchange it for another currency that does not have such a damaging side effect.”

Nick Boles, former British MP

“ETH futures go live on the CME today. This is huge. This is a bridge to institutions. This is a green light from U.S. regulators. ETH is becoming globally accepted commodity money.”

Ryan Sean Adams, Ethereum researcher

“If [Apple] decides to enter into the crypto exchange business, we think the firm could immediately gain market share and disrupt the industry.”

Paul Steves, Royal Bank of Canada Dominion Securities

“We expect to begin accepting bitcoin as a form of payment for our products in the near future.”

Tesla

Prediction of the Week

Bitcoin price poised to hit $63,000, says trader filbfilb

The popular analyst filbfilb has declared that “the game has changed” for Bitcoin — and has revealed what he thinks will come next for the world’s biggest cryptocurrency.

The Cointelegraph Markets contributor has said that he’s anticipating “a bit of a correction” once BTC hits $52,000 but believes “the measured move overall should take us towards $63,000.”

And on the matter of corporate adoption, he wrote: “I really don’t think people understand that S&P 500 companies owning Bitcoin means that by default people’s pensions are exposed to Bitcoin. The % of people invested in Bitcoin has already reached the masses, they just don’t even know it.”

FUD of the Week 

Ethereum-based social media project shuts down as ETH fees approach new highs

An Ethereum-based project has ceased development due to rising gas prices, as the cost of transacting on the blockchain continues to push new highs.

Unite, which aimed to offer social media tokens, said the original idea for the project has been rendered unfeasible by the recent spike in fees, with the average cost of using Ethereum rising by a staggering 35,600% since last January.

The startup intended to allow social media users on sites such as Twitter and Discord to distribute Ethereum ERC-20 tokens to their audience and community. Developers also confirmed that they have decided against building the platform on a layer-two solution.

FTX CEO claims competitor responsible for racist messages delivered to Blockfolio users

Blockfolio’s Signal feed was briefly compromised this week, with some users receiving racist messages within the company’s app.

Now, FTX CEO Sam Bankman-Fried, who acquired Blockfolio for $150 million last August, has shed light on what happened following a security review.

He claimed that the offensive content was produced and published by a competitor exchange that maliciously gained access to someone’s account.

Bankman-Fried didn’t name the culprit but stressed that funds were not jeopardized at any time. He also confirmed that Blockfolio has now fixed the vulnerability that led to this situation.

The executive has been praised for his handling of the situation, and he has apparently added $10 to the trading accounts of affected users, as well as donating to organizations dedicated to fighting racial and societal injustice.

India’s crypto ban is coming, hodlers to be given transition period: Bloomberg

An unnamed senior finance ministry official has claimed that India will soon completely ban crypto assets.

It’s reported that the use of cryptocurrency in all forms will be prohibited under the new law — meaning transacting through foreign exchanges won’t be allowed either.

Crypto exchanges have reacted with dismay to the news. Unocoin co-founder Sathvik Vishwanath said: “If government goes ahead with banning all cryptocurrencies, except the one backed by the state, it will not make sense to continue our business in India. But we’ll have to wait and watch.”

The Indian government has been determined to clamp down on crypto use after the supreme court overturned the RBI’s blanket ban on local banks providing services to businesses dealing with crypto.

Best Cointelegraph Features

Moment of truth? Tesla purchase is the moment Bitcoin has been waiting for

Despite some expected near-term volatility, Tesla’s exploration of the crypto realm will likely help the industry scale up to new heights.

Coincidence? Company stocks rise after they buy Bitcoin as a reserve

The market caps of most companies that bought Bitcoin have increased recently, but is that solely thanks to BTC?

A new trend? Non-crypto CEOs and celebrities embrace Bitcoin on Twitter

Are business leaders signaling the technological future they believe is coming to pass — an international and decentralized one?

Tesla buys BTC, Mastercard supports crypto, DOGE founder speaks out: Hodler’s Digest, Feb. 7–13

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Bitcoin price enters consolidation, but is a rally past $50K now inevitable?

February 12, 2021 by Blockchain Consultants

The price of Bitcoin (BTC) achieved a new all-time high on Feb. 11 as it surpassed $48,500 across major exchanges. Since then, the dominant cryptocurrency has been consolidating, showing no real momentum to break out of the record-high in the near future. But analysts are not fazed by the consolidation after breaking past a new peak.

Generally, market commentators say that when an asset moves slowly or consolidates after an explosive move upward, it is a sign of a healthy market. For Bitcoin, stabilizing following a strong impulse rally to a record-high is critical at this current juncture due to the overcrowded futures market. If the price of Bitcoin continues to increase without a proper reset pullback, it would increase the probability of a major long squeeze in the short term.

A long squeeze happens in the futures market when the market is overwhelmed with buyers or long contracts, and as a result, the funding rate turns highly positive. When the funding rate is above 0%, buyers have to pay a portion of their position as a fee to their short-seller counterpart every eight hours. This mechanism is used by futures exchanges to achieve balance in the market so that the market is not swayed to one side for a prolonged period.

Considering the negative effect of an imbalance in the futures market and the fact that the Bitcoin futures funding rate is consistently hovering above 0.1%, which is 10 times higher than the normal 0.01%, longer consolidation is optimistic for Bitcoin. But this is given that BTC remains above crucial support areas, which has seemingly been established at $44,214, acting as a crucial whale cluster support level in the near term.

Where is Bitcoin heading next?

In an interview with Cointelegraph, Guy Hirsch, U.S. managing director at eToro, emphasized that Tesla’s $1.5-billion BTC purchase took the market by storm. The news caused a significant sentiment shift, leading many investors to perceive this as a turning point in the history of the crypto market and how public companies would perceive crypto assets. The news also broke as MicroStrategy conducted a seminar with over 1,400 corporations to discuss Bitcoin.

Hirsch explained that the synergy between Tesla buying Bitcoin and MicroStrategy continuing to spread awareness about the merit of BTC as a store of value and a corporate investment would propel more public companies to follow up with similar announcements. If this trend occurs, Hirsch emphasized that a push toward $50,000 is plausible before the end of the second quarter, adding:

“We are likely to look back on MicroStrategy and Tesla as being at the forefront of this new way of using corporate treasury assets to appreciate cash holdings, rather than just sit on them, and see this as a turning point not only in the history of Bitcoin but also of how publicly traded companies act and serve in the best interests of their shareholders.”

Traders are also generally expressing optimism toward both the short-term and medium-term trajectory of Bitcoin’s price. A pseudonymous trader known as Loma said that the “relative downside on BTC is so slim” at the moment, considering the strong market sentiment around it. The trader noted that “$50k is inevitable,” and whether BTC drops “a bit beforehand” is not a major issue.

A “black swan” event could in theory cause a 30%–40% correction in the price of Bitcoin, as seen throughout its past bull cycles. However, Bitcoin is seeing an unprecedented level of buyer demand from high-net-worth investors and institutions who were not as active in the past few years.

The inflow of new institutional investors presents a major variable that could buoy BTC’s momentum toward the $50,000–$70,000 range. The continuous increase in liquidity in the traditional financial market is further catalyzing the appetite for inflation hedge assets, which include the likes of Bitcoin and gold.

A potentially bearish case for BTC

A crypto whale known as Waro said that there is one scenario where Bitcoin could see a potential pullback in the short term. The trader explained that if BTC struggles to break out of $48,000, it could see its momentum dwindle and see a 5%–15% drop in the foreseeable future.

According to him, this would be a positive trend for BTC, as it would allow it to access some of the liquidity and large buy orders in the low $40,000 range: “I was one of the first to call for 52k about a week ago and now everyone is euphoric and screaming for 50+ while bitcoin is having trouble with this resistance. Not a bear, it just needs more fuel, that’s all.”

One fundamental factor that could counter a potentially bearish market sentiment around Bitcoin is the declining selling pressure from miners. In the past two weeks, miners sold large amounts of BTC, placing pressure on the short-term price trend of Bitcoin. Since miners are one of the few external sources of selling pressure in the cryptocurrency market, heightened levels of selling activity can suppress the uptrend of Bitcoin.

Lex Moskovski, a cryptocurrency investor and a quant trader, found that miners “are not so eager to sell their #Bitcoin the last two weeks.” He said that either miners are anticipating the price of Bitcoin to increase substantially in the foreseeable future or have run out of BTC to sell in the near term. 

Either way, this trend is a positive catalyst for Bitcoin that could counter the bearishness around the crypto market and push BTC toward a new all-time high above $50,000.

Bitcoin price enters consolidation, but is a rally past $50K now inevitable?

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Filed Under: blockchain technology Tagged With: Bitcoin, Bitcoin Futures, Bitcoin Price, btc, Cash, Companies, correction, crypto, cryptocurrency, derivatives, Director, etoro, Exchanges, funding, Futures, gold, interview, investment, Market, Market Sentiment, news, tesla, u.s.

Ethereum is struggling again vs. Bitcoin: Why is ETH/BTC showing weakness?

February 11, 2021 by Blockchain Consultants

The price of Ether (ETH), the native cryptocurrency of Ethereum, has been stagnating against Bitcoin in recent days after a strong few weeks against BTC.

In the past few weeks, ETH and BTC have shown some inverse correlation as ETH rallied strongly when BTC consolidated, and vice versa.

ETH/BTC 15-minute price chart (Binance). Source: TradingView.com

So why is ETH struggling at the moment?

In the last several hours, Bitcoin has seen a decent rally after BNY Mellon said it would begin offering Bitcoin services later this year.

Roman Regelman, the CEO of BNY Mellon’s asset servicing and digital, said:

“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets. Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field.”

The announcement almost immediately uplifted the momentum of Bitcoin, causing it to rally from around $45,500 to around $47,400. It eventually reached an all-time high hours after, rising to above $48,500.

During the same period, the ETH/BTC pair pulled back despite their respective USD remaining in relative lockstep. But in recent weeks, ETH typically rallied harder than Bitcoin during uptrends, alongside both large-cap altcoins and DeFi tokens.

BTC/USD vs. ETH/USD (orange) 1-hour candle chart (Bitstamp). Source: Tradingview

But, in the last 24 hours as Bitcoin gained significant short-term momentum, ETH has been lagging behind BTC.

Willy Woo, a popular on-chain analyst, said that historically, Bitcoin is a better “multi-cycle HODL” while ETH is a “better mid-macro” swing trade.

This trend is shown during short-term cycles as well, as Bitcoin tends to increase steadily most of the time while ETH either accelerates against BTC or stagnates. He said:

“Risk Adjusted Returns over a 4 year hold period. -> Winner: Tied. See how short ETH’s backtrace is? That shows just how new and untested it is, only 1 macro cycle of data so far. Gold also shown (6000 yrs of backtrace, a supply inflation of 100% per 40 yrs, not digital). Personal opinion from this data: – BTC is a better multi-cycle HODL. – ETH is a better mid-macro swing trade.”

What’s next for Ethereum?

In the near term, traders and analysts generally remain optimistic around the short-term cycle of ETH.

ETH, BTC year-to-date performance. Source: Digital Assets Data

For instance, there has been no sell-the-news reaction to the CME ETH futures listing, which is a positive factor that may boost the chances of ETH’s rally continuing.

Additionally, on the first day of trading, the CME ETH futures market traded over $30 million in volume, which is relatively high for the first day of trading. Thus, if the institutional demand for ETH rises similar to Bitcoin in late 2020, ETH could see a broader rally in the weeks to come.

A trader known as “Pentoshi” said that altcoins and ETH should have much stronger momentum, suggesting that they are currently stagnating. He said:

“Alt market has me feeling a little uncertain atm $ETH and $LINK should have way more momentum, DeFi perp showing indecision Total potentially finding some resistance here at 500B Something to watch, and plan for. NOT FEAR. Any correction is opportunity. View it that way.”

For now, $1,800 remains the key level to break for ETH to regain momentum against both Bitcoin and the U.S. dollar in the foreseeable future.

Ethereum is struggling again vs. Bitcoin: Why is ETH/BTC showing weakness?

Source

Filed Under: blockchain technology Tagged With: altcoins, analyst, Bank, Better, Binance, Bitcoin, bitstamp, btc, ceo, correction, cryptocurrency, data, DeFi, Digital, ETH, ether, Ether Price, ethereum, Futures, gold, HODL, Market, opinion, Orange, Tokens, Trading, tradingview, u.s., us, view

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