Day: May 7, 2021

Ether Classic Has Climbed More Than 300% In The Last Week—Here’s Why

by Forbes

Ether classic has had a great week, quadrupling in value in a matter of days as investors flock to altcoins, or digital currencies other than bitcoin.

The price of ether classic, a digital sibling of the more prominent cryptocurrency ether, reached an all-time high of $177.26 yesterday, according to CoinDesk data.

At this point, it had rallied more than 350% from its opening price of $38.67 on Saturday, May 1, additional CoinDesk figures show.

Since then, it has pulled back somewhat, but was still up more than 200% from the start of Saturday at the time of this writing.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Network Challenges

Traders have apparently taken an interest in ether classic, pushing it sharply higher, even though the digital asset’s network, Ethereum Classic, has encountered some challenges over the last few years.

“The ETC ecosystem is not very active, as demonstrated by on-chain data,” said Martin Gaspar, research analyst at CrossTower.

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“The number of daily unique addresses on ETC steadily declined between 2018 and 2020, and has just recently picked up in 2021 amid the broader crypto market rally, according to data from BitInfoCharts,” he clarified.

“For comparison, daily active users on ETC stands in the tens of thousands in recent weeks, while ETH daily active users have been above 900,000 for the same period.”

“ETC has also endured several 51% attacks in 2020, which suggest the network is not very secure, as attackers were able to double spend significant amounts of ETC,” the analyst added.

Bullish Factors

On the other hand, ether classic’s price is being driven higher by a handful of bullish factors, according to Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital.

The altcoin has been climbing as it rides on the coattails of its digital sibling ether, he stated.

“The price has risen partly due to speculation following the massive ETH rally and partly because market participants are speculating on ETC having more relevance post the ETH 2.0 upgrade,” said DiPasquale.

“Since ETH will move to proof of stake, leaving ETC with proof of work, traders are speculating on whether that shift will give ETC a chance to operate independently and offer an alternative to the proof of stake chain,” he clarified.

Alt Season

Several analysts cited the so-called “alt season,” which Gaspar defined as a period when traders look to altcoins amid lagging growth in bitcoin prices, as potentially contributing to ether classic’s recent strength.

“We are seeing this now as Bitcoin has largely remained in the $50,000 to $60,000 range for a couple months,” he noted.

“Recent price appreciation in ‘old’ and less fundamentally sound cryptocurrencies may have led investors to pile on to ETC.”

“Essentially, investors are starting to look beyond the crypto giants to see what else is out there – what else can they buy low and HODL until they become millionaires,” said Collin Plume, president & CEO of Noble Gold Investments.

Sentimental Value

In addition to noting the aforementioned factors, some market observers claimed that ether classic benefits from having a sentimental value of sorts.

John Iadeluca, founder & CEO of multi-strategy fund Banz Capital, helped shed some light on this situation.

“While Ethereum Classic lacks the technological caliber of most modern cryptocurrencies, there is a sentimental value feeding the speculation creating the current price increase,” he stated.

“Ethereum Classic maintains the original, unchanged Ethereum blockchain. While obsolete relative to Ethereum as far as utility, Ethereum Classic stands as a piece of history that’s shaped the current cryptocurrency markets and has served as a milestone within the community.”

As a result, it holds appeal for some of the more tenured participants in the crypto space, he stated.

Plume offered a similar perspective, describing it as a “sentimental buy” “to a certain extent,” seeing as how “Ethereum is what’s being used by companies including JP Morgan and Fortune 500 companies.”

However, he offered a bullish outlook for the altcoin.

“Ethereum Classic did cap its supply of coins to 210 million, following the footsteps of its big brother, Bitcoin,” said Plume.

“Ethereum is also going to move to PoS from PoW. That will further push ETC to an ‘elite’ club,” he added.

“ETC will continue to rise and I think $1,000 is viable but its value will come from its exclusivity, not necessarily utility. Whether that’s good or bad depends on the perspective of the investor,” concluded Plume.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.

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12K BTC Removed From Coinbase, Are Whales Relenting?

by NEWSBTC

Coinbase, the largest exchange in the United States, has been the site of several big Bitcoin buy-ins this year.

Recent reports show sudden transfers of more than 10,000 BTC to private wallets are not uncommon, but they do show a preference to store Bitcoin for the long term rather than hold it close to a point of sale.

As retail investors face liquidity shortages due to high institutional participation, Bitcoin has been flowing out of Coinbase on a regular basis over the last few months. This is clear, as Bitcoin has outperformed any other institutional asset class in recent years, with returns of over 100% in Q1 2021.

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During the first quarter, however, the percentage of Bitcoin supply owned by whale addresses with over 100K Bitcoin increased by 200 percent (or 3x). According to Santiment, an on-chain data provider:

“The percentage of #Bitcoin‘s supply held by whale addresses with 100k or more $BTC has risen from 0.76% 11 weeks ago, to 2.20% today, an 11-month high. Meanwhile, the smaller 1k-100k $BTC addresses have dropped from 42.4% to 39.5% in the same 11 weeks”.


For analyst Lex Moskovski, the type of investor behind such transactions remains uncertain — it could be a private individual or small group, as well as an institutional investor or corporate client.

Related article | Bitcoin whales on the defense, this is how BTC could climb to new highs

“Institutions or not, that’s still a significant outflow,” he commented on the Glassnode data.

The data is consistent with on-chain indicators remaining bullish. This week, Glassnode co-founder Rafael Schultze-Kraft pointed to an increase in Bitcoin’s so-called realized limit (Rcap), which backed up the general purchasing thesis.

The realized limit is a calculation of Bitcoin’s market capitalization based on the most recent price of each coin. It offers valuable information about market composition and trader sentiment, as well as a total that differs greatly from the conventional market capitalization.

Schultze-Kraft tweeted on Friday:

“Unprecedented capital inflows into Bitcoin as measured by realized capitalization. Over the past 6 months, realized cap has surged a whopping $250 billion – an increase of ~200%. Healthy bull market.”

He went on to say that the realized limit has risen by the same amount as Bitcoin’s entire conventional market cap as of December 2020.

Rcap, in comparison to conventional cap, can still rise dramatically until signaling the end of the bull market. MVRV, which calculates the ratio of the two metrics, was 4.4 this week, down from 7.6 in February and more than 10 at previous market cycle peaks.

“We have yet to experience true fomo yet from institutions. It’s coming,” Timothy Kim said in response to the Glassnode numbers.

Grayscale, the world’s largest Bitcoin fund manager, has also expressed interest in converting the Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF. Following the hype around the first U.S. Bitcoin ETF, shares of the Grayscale Bitcoin Trust (GBTC) have been trading at a discount over the last month.

Related article | How Grayscale Bitcoin Trust at a discount could change everything for BTC

Featured image from Pixabay, Charts from TradingView.com, Bybit.com, and Glassnode.

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Reeling from post-hack price slump, Easyfi reveals community compensation plan

by Cointelegraph

After a devastating hack, a cross-chain decentralized finance (DeFi) protocol has revealed today a temporary compensation plan for token holders and investors impacted by one of the largest exploits in DeFi history. 

In a Tweet today, EasyFi announced their “Interim Compensation Plan,” a multi-stage process that includes immediate payments, IOU tokens, and incentive programs aimed at victims of the attack.

The hack, which took place 19 April, is considered to be among the largest in DeFi history, with $6 million in stablecoins and 2.98 million EZ tokens worth upwards of $120 million lost at the time of the attack. The hacker was in a complicated position, however, as after exploiting the protocol they owned upwards of 30% of the supply of EZ tokens and there was limited liquidity with which to unload them. The token “hardforked” to EZ 2.0 a week later, rendering the attacker’s remaining tokens effectively worthless. 

In a Tweet from his personal account, EasyFi founder Ankitt Gaur confirmed that the hack was the result of a “targeted attack on the founder’s machine/metamask to access admin keys and execute the well-planned hack.” This attack vector bears similarities to a 2020 hack on the personal computer of Hugh Karp, the founder of Nexus Mutual, who lost $8 million.

An expert from hack and exploit publication Rekt noted that the theft may have been the result of lax security practices, in that a single individual was in possession of the keys to the treasury, as opposed to being secured in a wallet with precautions against this type of hack such as a multisignature scheme or timelocked transactions.

In their compensation plan blog post, EasyFi characterizes the attack as “well-planned” and “sophisticated.”

Regardless of the cause, the efforts to compensate victims is multifaceted. Per their post, 25% of lost funds will be distributed to users “immediately” in the form of stablecoins, while the remaining 75% will be distributed as “IOU” tokens. The IOU tokens will have “25% discount on spot price of EZ at the time of distribution,” and be redeemable for EZ v2 tokens on a 1-to-1 basis. Hack victims will also reportedly be the recipients of future airdrops from unspecified partners and have access to other incentivized programs still in development. 

The post also noted that the protocol has worked to attract new venture capital via an “accelerated” fundraising round following the hack — a round that is still ongoing.

The token is down 4.7% today to $11.30, and down 33.8% on the week — still reeling from both the hack, as well as from compensated investors possibly cashing in their IOUs.

Compensation methods are an increasingly hot topic as hacks and exploits continue to plague DeFi. EasyFi’s multifaceted approach mirrors that of Origin Dollar’s, while other protocols have opted for creative cross-platform treasury magic to mitigate attacks in recent months.