Coinbase has had a spectacular 2021. The company announced $1.80 billion of revenue, $585 million more than the fourth quarter of 2020, and $191 million more than its results from a year ago.
Much of these numbers are driven by the growing interest in cryptocurrencies. 56 million users and 6.1 million monthly transactions put the company right on the money radar, primarily since Coinbase benefits from the fees generated by every trade made on its platform.
The IPO was also good news for Coinbase, which has benefited from increased confidence in its brand. Being fully regulated, Coinbase has become a benchmark for U.S. institutions and investors looking to increase their exposure to cryptocurrencies.
Coinbase Global, Inc. announced today the release of its first quarter 2021 shareholder letter. The letter, including the company’s financial results, can be found on the Investor Relations website at https://t.co/h2LGcznWvK
— Coinbase News (@CoinbaseNews) May 13, 2021
Coinbase shares rose 3% in after-hours trading session following the positive results. However, alarm over a possible investigation by the IRS and DOJ into Binance raised nervousness among traders, and the stock fell 6.5%.
Coinbase is the leading cryptocurrency exchange in the United States. It offers a trading platform, a wallet, a custody service, and blockchain analytics services.
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Coinbase Sends Dogecoin To The Moon… With The Help of Elon Musk
In the same report, Coinbase announced its decision to list Dogecoin (DOGE) in a period of about 6 to 8 weeks.
The decision was in stark contrast to its previous image as a company that only listed serious projects with solid fundamentals; Dogecoin is definitely the absolute opposite of this philosophy. But the laws of competition in the markets can outweigh personal philosophies, and the CEO of Coinbase made it clear:
“Our competitors are supporting certain crypto assets that are experiencing large trading volume and growth in market capitalization that we do not currently support, as well as offering new products and services that we do not offer,”
The news was a breath of fresh air for traders of the meme cryptocurrency that had only been falling for the previous 5 days. Amid today’s bloodbath, Doge hodlers can boast a 20% return in the last 24 hours.
DOGEUSD. Image: Tradingview
In fact, Coinbase is not the only pro-Dogecoin company out there. Dogecoin is once again benefiting from the actions of the one and only Dogefather, Elon Musk.
A few minutes ago, the Tesla CEO announced that his company would stop accepting Bitcoin as payment for its new electric cars. The news caused a general crash in the crypto markets. Still, Dogecoin has managed to emerge unscathed after a tweet in which Elon announced that he was working with Dogecoin developers to increase the efficiency of the network.
Working with Doge devs to improve system transaction efficiency. Potentially promising.
— Elon Musk (@elonmusk) May 13, 2021
Previously, Elon ran a poll asking if Tesla should accept Dogecoin as payment, and Dogecoin uses a more environmentally friendly consensus algorithm.
Will Dogecoin be Tesla’s new favorite currency?
Only God knows what is crossing Elon’s mind.
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Elon Musk tweeted that he has engaged with “Doge devs to improve system transaction efficiency.”
This comes after he tweeted about Tesla ceasing to accept Bitcoin over energy consumption concerns, which sent the entire crypto market downwards.
Dogecoin, which has received an incredible amount of attention due to Musk, was also recently announced to be launched to the “literal moon” on a SpaceX rocket in 2022.
Musk hinted that he was looking into alternative cryptocurrencies for Tesla to accept payments in, and previously polled twitter if they wanted him to accept Dogecoin.
For a project with very little development activity, Dogecoin may be getting much needed renewed attention in terms of development. Critics, however, are noting that Dogecoin is merge mined with Litecoin—another proof of work (PoW) cryptocurrency (like Bitcoin) and thus has similar energy consumption properties.
MORE FOR YOU
Aug 2009 – May 2021 Dogecoin Github
screenshot – dogecoin github commits
Nicholas is the Director of Research and Development at Inca Digital. Nicholas holds some Digital Assets. Nothing here is financial advice.
Cryptocurrency price corrected sharply today, including Ether (ETH), but this is a short-term move which is not reflective of the more macro-level events which still paint a bullish picture for assets like Ether and Bitcoin.
In the last 30 days, Ether price gained 96%, moving from $2,138 to $4,200 on May 11. Normally the assumption would be that every trader is consumed with euphoria and this would be seen in the funding rate reaching record highs on Ether futures contracts but at the moment this is not the case.
The funding rate appears to have flatlined on April 18 and at the moment it seems that there’s nothing that can be done to re-ignite buyers’ leverage.
Take notice of how the cost for longs (buyers) to carry open positions on Feb. 20 reached 0.20% per 8-hour, equivalent to 4.3% per week. A 74% price hike in 30 days fueled that situation as Ether tried to break the $2,000 resistance.
More recently, a similar situation took place on April 3 after Ether rallied 43% to a $2,150 all-time high. Movements like these typically mark retail traders’ excessive use of leverage. Meanwhile, whales and arbitrage desks open longs using the fixed-month future contracts to avoid the funding rate oscillations.
The 19% negative price swing on April 17 caused $1 billion long futures contracts liquidations. That event crushed bulls’ morale also impacted their confidence in building leveraged-long positions.
Top traders also lack confidence
Typically retail traders are more inclined to take a longer time to recover from unexpected losses, but this time around, pro traders also lack conviction despite the rally.
The top traders’ long-to-short net positioning is calculated by analyzing the consolidated positions on the spot, perpetual and futures contracts, providing a clearer view of whether professional traders are leaning bullish or bearish.
With this in mind, there are occasional discrepancies in the methodologies between different exchanges, so viewers should monitor changes instead of absolute figures.
Exchange’s top traders ETH long-to-short ratio. Source: Bybt
Despite the $4,380 all-time high on May 12, these top traders are nowhere near the highest long-to-short ratio. OKEx presents the most drastic change as the indicator reached 0.97 on April 18 and has since declined to 0.50, meaning top traders are 2:1 net short.
Binance top traders long-to-short oscillated between 0.86 and 0.95 over the past thirty days, and the indicator currently stands at 0.89. That should be interpreted as a ‘neutral’ position, which seems odd considering the 96% rally during this period.
Lastly, Huobi’s top traders’ leverage indicator peaked on May 4 at 1.00, indicating a balanced situation between longs and shorts. However, it currently stands at 0.95, therefore signaling a lack of excitement.
Bitcoin’s price action could be the reason
It’s no secret that Bitcoin (BTC) movements dictate traders’ general feelings, even if it means cheering for its price to stabilize near $55,000.
#BTC
The real G’s called altseasons months ago but it’s no shame to tweet “altseason” now because it’s still going
Ideally Bitcoin goes sideways until it breaks out here. When Bitcoin drops and drags altcoins down, that’s where you buy dips for maximum gains.
You are welcome pic.twitter.com/5f8SyCuUxf
— muro – won’t DM you (@MuroCrypto) May 5, 2021
This #BTC Flag is sandwiched by two major resistance (red) and support (green) areas
It’s a great market structure to promote further BTC consolidation in the short-term
Meanwhile, Altcoins will continue to make impressive gains until $BTC finally breaks out#Bitcoin pic.twitter.com/L0peyMgt6o
— Rekt Capital (@rektcapital) May 5, 2021
Posts like these can be found all over Twitter and in a way, they confirm that investors expect altcoins to crash if Bitcoin moves below $50,000. This may be the primary reason for the lack of confidence in Ether longs.
The views and opinions expressed here are solely those of theauthorand 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.
Leading DeFi DEX aggregator 1inch Network (1INCH) has expanded to Ethereum layer-2 scaling solution Polygon (MATIC).
1inch Protocol Expands to Polygon
In an announcement made today, DeFi DEX aggregator 1inch Aggregation Protocol announced its expansion to the Polygon network. Specifically, the expansion provides 1inch users with several liquidity sources on Polygon such as Curve, Sushiswap, Quickswap, Aave V2, and Cometh. There are plans to add more protocols to source liquidity from, the announcement reads.
For the uninitiated, Polygon – formerly known as Matic Network – is a leading Ethereum scaling and infrastructure development platform that has played a significant role in aiding the Ethereum network keep up with the competition while it continues to switch to the Proof-of-Stake (PoS) consensus algorithm.
Polygon is committed to realize Ethereum’s full potential by being a powerful multi-chain system. Currently, Polygon offers a transaction speed of over 7,000tps which eclipses that of the Ethereum network by orders of magnitude. Further, Polygon also does this at a fraction of cost of Ethereum.
Commenting on the development, Sergej Kunz, co-founder of 1inch Network, noted:
“After the 1inch Network has expanded to Binance Smart Chain, there was a massive request from the community to make Polygon also available for swapping via 1inch. Currently, the 1inch Aggregation Protocol is already deployed on Polygon, while the 1inch Liquidity Protocol and the 1inch Governance Protocol are expected to expand over to Polygon in the upcoming few weeks.”
Users interested in using the 1inch Network on Polygon can transfer their digital assets between Ethereum and Polygon blockchains via the special cross-chain bridge run by the Polygon network. In addition, the network also has a dedicated wallet where users can securely store their crypto assets on the layer-2 scaling solution.
Polygon Adoption Continues to Grow
Since their rebranding earlier this year from Matic Network to Polygon, the layer-2 Ethereum scaling solution has been on a spree of integrations and partnerships.
As reported by BTCManager on April 1, major DeFi lending and borrowing protocol Aave (AAVE) had integrated Polygon to enable fast, secure, and economically feasible transactions for its users.
On a recent note, BTCManager reported how mStable DeFi protocol went live on Polygon.
If you were to ask a stranger, “What are the properties of a physical object?” They would likely say it can be touched, it has volume and mass, and is made up of atoms. If you were to ask about its limitations, they might say it must travel a physical path to move from point A to point B (no teleportation); it cannot be given to a person without being relinquished by the giver (discrete ownership); or it degrades over time (increasing entropy).
If you asked the same person how to describe “information,” they might say essentially the opposite; it’s intangible, it can be given to someone while the giver retains it, and it can survive in perpetuity without changing. In summary, the physical is finite and limited, while the metaphysical is infinite. Many of us (myself included until recently) believe that no single entity can be both finite and infinite. Enter Bitcoin.
Several of the following topics are touched upon by Alex Waltz in “Bitcoin: Or How We Became Gods.” He concluded, “Bitcoin is the link between the two worlds: chaos and order, real and digital, uncertain and certain, unconfirmed and confirmed.” I hope to build upon this idea and explore its implications.
I will generally refer to the network and the token as bitcoin. Bitcoin (the token) has advantages of both the physical and the metaphysical: it is intangible, teleportable, infinitely divisible and is created from nothing while it’s paradoxically impossible to destroy and finite in final quantity. Though you and I both know it’s not truly physical, it seems so by application (e.g. futures markets are ironically calling derivatives settled in Bitcoin “physically settled”). The significance of this relationship cannot be understated. We now have an example of how an infinite resource can be bound in a semi-physical form to leverage the benefits of both worlds. This author has lost his grasp of the metaphorical versus literal implications of this technological breakthrough.
At first glance, this may seem to be a clever trick of computer science which, with its advances, continually improves and outdoes itself in its order-of-magnitude improvements on our world. One could be forgiven to think that this imitation of scarcity could just as easily be undone with more information or changes to its code. Yet there are multiple metaphysical layers of defense that prevent this from occurring: robust network effects, a firewall of mining hashpower, a hornet’s nest of social consensus, and so on (these are well documented elsewhere). If the laws of thermodynamics set the bounds of the physical world, these characteristics could be thought of as the incentive-bounds of Bitcoin dynamics.
I no longer believe that Bitcoin is simply a network, digital gold or the future of our financial system. I believe Bitcoin is proof that we have taken the limits of the physical world for granted, which opens the doors to question, reverse or obliterate these limitations as long as we can apply a limitless concept (such as information) in an opposing fashion on a related plane.
The Second Law of Thermodynamics
Entropy is the measure of stability or disorder of a system. We accept that in any contained system, entropy increases over time and cannot decrease. In some cases, such as chemical reactions, this can be directly measured. Entropy is an important driving force of the physical world; everything trends toward chaos (eventually the heat death of the universe). But like the saying goes, “Bitcoin’s value doesn’t go up a straight line.” Similarly, the universe has systems of order along the path towards disorder.
Life itself is an affront to the compulsion of increasing entropy. Living beings strive to maintain a level of order throughout their existence. This inevitably ends in failure for the individual lifeform, yet this failure has yet to be seen for life as a whole. Life could be described as the capacity for growth, reproduction, functional activity and continual change preceding death. It’s also defined as a system capable of performing functions such as eating, metabolizing, excreting, breathing, moving, growing, reproducing and responding to external stimuli. In the context of this monologue, I define life as a system working as one to leverage the potential energy of its environment to stabilize its own entropy. Individual lifeforms die, but life goes on. If entropy is a river, life is a fish swimming upstream against the nearly insurmountable force of the water.
Unstoppable Force, Immovable Object
We learn in physics class that a larger force trumps a smaller one; it will either move it, incorporate it or destroy it. Yet there are types of measurements, or planes of existence, that don’t allow for direct comparisons, at least not intuitively. For example, what would win out, the sheer volume of my shrill singing voice or the strength of a wine glass? Intuitively, the primary characteristics of each have nothing to do with each other, this is demonstrable with the units by which they are measured. Audible volume is measured in decibels and my cheap wine glasses are made of strong bonds between silicon dioxide molecules.
Image source
High school math taught me that measurements of different units weren’t directly comparable and thus had no effect on each other. However, there is a term that can be applied to both: resonance. With research, practice and lots of vocal lessons, I can learn the resonance with which the chemical bonds in my wine glass vibrate and sing at that exact pitch. From there, it’s a simple case of “which force is stronger?”
It wasn’t what I took for granted as the primary characteristics of my voice (the decibels of volume) and the glass (the chemical composition) that mattered, these concepts are unrelated to each other. What mattered was being able to apply my voice in a way that could forcefully act within the same domain as the glass.
Most of us understand the world around us by perceiving, measuring and subconsciously categorizing things into a basis of comparison. For example, yesterday, I took a cold refreshing beer out of the fridge and enjoyed it. I believe that today, the remaining beer will be equally cold and refreshing. I might take for granted the fact that the next beer could serve the same purpose, or it could be a gift for a new neighbor that might foster a strong community or a long and memorable friendship. Same tool, new application. These two concepts, refreshment and friendship, are two concepts that can’t be compared apples to apples.
I didn’t reinvent the idea of vocal resonance, I had to discover it. I didn’t change the beer, I merely learned how to use it differently. What other concepts do we take for granted that may be holding us back as individuals or as living beings?
Orthogonality
When I was a kid and wanted my dad’s attention, sometimes I’d stand between him and the TV. When he told me to move, I would step backward, technically obeying his request (see image below) while still blocking his view. I would keep this position only briefly, lest I cease to be charming and start to annoy. My path was a movement we could both understand, but it could be best described as orthogonal to his line of sight.
(My father circa 1992, colorized)
Futurama
I like the term “orthogonal” to describe two seemingly unrelated concepts. On a classic two-dimensional graph, the x-axis and y-axis are orthogonal, as they can be described in independent ways but, rather importantly, they are not completely independent. In fact, they coexist at a very important point, [0,0]. The importance of zero is brilliantly described by Robert Breedlove in “The Number Zero and Bitcoin.”
Most of us assume that this point is meaningless, but Breedlove adds onto the work of Brahmagupta to say that not only is zero a sort of final frontier of numbers, but it is a gateway to negative and imaginary numbers. He says that zero “punched a hole and created a vacuum in the framework of mathematics” and that Bitcoin “is the catalyst of a worldwide paradigmatic phase change.” I’ll combine these concepts and say that Bitcoin is the gateway between the infinity of information and the finiteness of matter.
How difficult would it be to block the thrust of an enemy’s sword with the point of your own? Not as hard as finding a single point between dimensions where seemingly unrelated systems can interact and influence each other. Bitcoin sticks ‘em with the pointy end.
“Let’s get cosmic.” — Marty Bent
Stated another way, Bitcoin is the [0,0] coordinate between (yet within) the orthogonal dimensions of the physical and the metaphysical. The fact that this relationship was forged is an quantally unique occurrence. It can be hard to analogize what I’m proposing here, so let’s start with foundational concepts. An electron is effectively a zero-dimensional object as it has nearly immeasurable mass and volume. Its path through a wire is analogous to a zero-dimensional object bound by and traveling through a one-dimensional plane. If it were to come upon a slow, stopped or reverse-moving electron in the same wire, they would have no choice but to pass through each other or collide.
In our world, that is to say an electrical force applied on one end of the wire will travel to the other end, affecting the wire wholly; there is no section of wire not affected by the electron. However, if you placed the same electron at the edge of a thin metal plate (two-dimensional wire), the number of paths to a different edge are numerous. The dimensional degree of freedom is one level higher than in the one-dimensional wire. The chances of two electrons placed on different edges ever meeting are improbable. The possible pathways are orthogonal and increase exponentially with each higher dimension of freedom. In this example, a zero-dimensional object on a two-dimensional plane allows for two dimensions of freedom.
Now consider two electrons placed at different locations on a metal sphere at different times throughout history since the big bang. This sphere is a four-dimensional version of our wire, allowing for four dimensions of freedom. These two electrons have an infinitesimally low chance of ever meeting. To summarize, the dimensional difference between two systems has an exponential effect on the inability for them to have influence upon each other.
Another interesting example of domain boundaries is found in chemical phase change. We all know of H2O as solid ice, liquid water, and gaseous vapor. These are all domains of H2O’s existence that are bounded on the pressure vs temperature graph by physical changes. We regularly observe the transformation of water via boiling, melting, condensation, and freezing. Most of us only observe these changes as manipulated by temperature changes. In a sufficiently cold environment (to the left of the triple point in the image below), decreasing the pressure causes solid ice to phase change into gas, omitting the liquid state completely. This is called sublimation and is the process by which freeze-dried food is produced, an important tool in increasing its shelf life.
Image source
I can’t describe how difficult it is to discover the inflection between the domain of imagination and the domain of the physical world, as I can’t perceive all of the dimensions of freedom between them.
“It’s like launching a pencil over the empire state building, having it reverse, come back down and land on a shoebox on the ground in a windstorm.” — Tim Urban on SpaceX landing a rocket upright for the first time.
I’d happily bet that the electrons in the four-dimensional example above will never meet. Yet two entities having common existence on multiple dimensions have a much higher probability of meeting. Consider two lines on a graph, these are two one-dimensional objects bound by the same two-dimensional plane.
The graph below depicts how two lines representing supply and demand can intersect, setting an optimal price (all of trade is dependent upon supply and demand being bound by the same domains so they can meet, satisfying the double coincidence of wants).
Let’s come back to Earth. If supply is the primary driver of value (demonstrated by the supply vs. demand graph), one might say that anything physical is totally scarce. They’d be wrong, of course, but only for taking supply and demand as too literal of a concept. The hidden complexity to supply is the amount of work to bring goods and services to market. Gold coins are much more useful than gold ore. Frédéric Bastiat describes the relationship between work, property and value in “The Law.” In short, the physical is finite but not necessarily scarce. This is another perspective on the laws of thermodynamics, in that unlimited resources are pointless if they cannot be properly utilized (just ask Venezuela’s oil producers). Scarcity and value are always measurable in energy and work, including Bitcoin’s proof of work. It is ironic then, that Bitcoin is the only purely scarce thing in the universe, and it’s not even purely physical.
Seeking Zero
Bitcoin is a practical application that straddles the intersection of the real and the imaginary. In Bitcoin’s eternal struggle, Gigi demonstrates the incentive-bounds of Bitcoin and summarizes it by saying, “Bitcoin grows on the edge of order and chaos.” He is describing how Bitcoin takes the “chaos” of randomness and leverages it into the “order” of blocks. Bitcoin is the [0,0] that allows us to convert chaos into order.
Information can be shared without diminishing. Information is fire, Satoshi is Zippo, and Bitcoin is the lighter. Being able to harness something intangible and bound it in a physical form breaks us free of our physical limits. All it requires is admitting what many of us are in denial about: the physical state isn’t our final form. The first epoch of man has been spent striving for understanding and earning rewards of the spiritual realm. A short span of man’s existence has been dedicated to developing one implementation of life after death: the computer.
We’ve been getting closer to building the digital ship of Theseus by reducing ourselves to bits. This may lead to a completely digital existence, or the ability to regenerate ourselves in meatspace elsewhere in the universe. Maybe we can have our cake and eat it too. There will be some uncomfortable truths to face along the way. Such as
Is a digital self truly the same as the original or merely a projection of what we can currently perceive?
Will our vanity drive us to chase perfection by altering either our DNA or our source code?
Is this the correct path of life?
Conclusion
A single living being cannot overcome the force of entropy. Everything that has ever lived, has died and decayed. Yet life itself continues to grow and improve. I mentioned above that I believe life is a “system working as one to leverage the potential energy of its environment to stabilize its own entropy.” Generally speaking, individual life forms are in competition with each other for resources. But on the grand scale, life itself is making progress in the fight against chaos. There are many examples of living beings working in tandem. A pride of lions works together to hunt, to grow and to survive. Man, as a being of higher intelligence, is able to work together in much more complex ways. Our intelligence continues to survive and grow with each generation.
The difference between an inanimate object and living being is intelligence. If knowledge is a force of infinite magnitude, then it will win out versus anything bound by the limits of the physical world, but it requires the right application. A virus has intelligence that has singular application: reproduction. Lions have a higher but still limited level of intelligence whose application is limited to the survival of a pride until a new alpha takes over. Humans have taken the application of knowledge a step further in that we can communicate our knowledge directly, allowing our collective intelligence to grow with each generation. The more effectively we apply our intelligence, the closer we can get to finding the gateway that unlocks the power of infinity, the next [0,0].
Applying infinite metaphysical concepts to the physical world allows us to achieve the improbable. Not because our knowledge is complete, but because our imagination is boundless. Bitcoin is an order-of-magnitude improvement for mankind. How many improvements would it take to counter or slow the forces of chaos? Possibly many but maybe not infinite. What do we currently accept as truth which may be fallible if we grow to a higher level of intelligence: The eventual end of our species? The heat death of the universe? The expected death of an individual life form? I hope I live long enough to see another shattered assumption.
[0,0] is the ultimate goal of mining life’s intelligence, not only as the common path of the physical and metaphysical, but also the goal of life as it applies to its change in entropy. If entropy is a stream and life is a fish swimming against the current, life’s ultimate goal is to build a watermill and leverage the force of the stream or dam it up entirely. Bitcoin has shown us not to take for granted the impossible of today which might be an afterthought of tomorrow.
This is a guest post by Corey Edwards. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
The amount of Bitcoin whales is the lowest it’s been in 10 months.
Experts tell Decrypt that investors shouldn’t worry. It’s possible that Bitcoin is becoming “more evenly distributed.”
The number of Bitcoin whales is dwindling, according to figures released this week from blockchain data provider Glassnode. That fact might seem counterintuitive. Aren’t more big players in the finance and tech worlds buying up Bitcoin than ever before?
Well, yes and no.
It’s true that large companies, such as Square and Tesla, have bought up large hoards of Bitcoin within the last few months. Payments company Square, for example, now holds $394 million in Bitcoin as part of its treasury. And Elon Musk’s car company famously purchased a whopping $1.5 billion in Bitcoin last February (though Musk isnow suddenly concernedabout Bitcoin’s “environmental impact” and tweeted yesterday that Tesla will no longer accept the cryptocurrency as payment.)
But despite the seemingly growing trendstartedby MicroStrategy last summer of big firms holding BTC on their balance sheets, the number of whale addresses (digital wallets holding 1,000 or more Bitcoin—over $48 million-worth of the currency) has been steadily decreasing over the last year.
In the past month, the number of Bitcoin whales has dropped considerably: this time in April the figure was 2,231 such addresses,accordingto blockchain data provider, Glassnode.
Yesterday, it was 2,167—the lowest it’s been in 10 months. That looks like quite a turnaround from just January, when the number of whaleshitan all-time high.
So, is this something investors should worry about? If big investors buying up Bitcoin signals that demand for the coin is going up, then could large accounts dropping off be a sign of that demand going down?
Not necessarily, market analysts toldDecrypt.
Pedro Febrero, head of blockchain at crypto fantasy marketplace RealFevr and analyst at Quantum Economics, said that it is not a bearish indicator butcouldrather be the opposite—that more people are getting involved in the Bitcoin world and the currency is being widely distributed.
“In order for Bitcoin to get further distributed, the number of whales needs to considerably drop,” he said.
“We think that the number of whales should drop as Bitcoin’s price grows. Essentially once whales sell, it’s hard for them to get back into the market at the same price, or below,” he added.
Ex-banker and analyst Alex Kruger also toldDecryptthat the decrease in whales was not enough to signal a bear market. “It’s just noise,” he said.
And it would seem both analysts are right. Areportreleased today by Coin Metrics shows that Bitcoinisgetting more widely distributed: addresses holding between 0.01 ($477) and 1 Bitcoin ($47,773) has shot up this year.
“The number of addresses holding relatively small amounts, between 0.01 and 1 BTC, has grown by 710K since the start of the year with a big surge in April,” the report says.
“For context, in 2020 the number of addresses holding between 0.01 and 1 BTC increased by a total of 610K.”
Febrero added that Coin Metrics’ data shows that Bitcoin could be getting further redistribution—but he did add that more addresses doesn’tnecessarilymean more people. The same number of big holders may be creating new addresses to diversify risk, he said.
Analysts have previouslysaidthat Bitcoin whales control the market. Some dispute this, but even if it is true, experts havetoldDecryptthat it’s likely as the industry matures, whales will gradually drop off and the distribution of Bitcoin will even out.
We could be witnessing that now.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
Popular crypto trader and analyst Nicholas Merten is listing a handful of altcoins that could skyrocket on the heels of Ethereum’s astounding rally to over $4,000.
In a new video, Merten first names Uniswap (UNI) as an asset that could benefit from Ethereum’s rapid ascent.
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The trader tells his 449,000 YouTube subscribers that he has a large position in UNI, which is trading at $38.89 at time of writing, down about 9% in the past two weeks, according to CoinGecko.
“The reason why I think UNI is in a good spot right now is because it’s about half of where it was against Ethereum back here in March… It started to lose out against Ethereum as Ethereum started to build into its super cycle.”
Merten’s next pick is the enterprise blockchain project Unibright (UBT). The analyst notes UBT has held its line of resistance against Bitcoin multiple times and is “starting to look like it might tick up” in the near future. Merten adds that Unibright has moved against Ethereum fairly well, maintaining a solid support level in the UBT/ETH pair.
Unibright is trading at $1.50 at time of writing and is down more than 30% in the past seven days, according to CoinGecko.
Next up on the analyst’s list is decentralized exchange aggregator 1inch (1INCH). Merten says he doesn’t currently have a position in 1inch, but is “definitely looking to build one” if it can hold onto its current range against Bitcoin. 1inch is trading at $5.90 at time of writing, according to CoinGecko.
And Merten’s final crypto pick is Litecoin (LTC), which he notes has seen more than 46% gains against Bitcoin in just the first 10 days of May alone. The trader believes Litecoin is still in the “early innings” of its climb, and that he currently holds the asset.
“This is going to be one of those plays – it’s not in the Ethereum ecosystem, but it’s going to be one you’re going to want to watch for that liquidity to cycle out [and] for Litecoin to gain some ground against not only Bitcoin but Ethereum.”
LTC is trading at $331.26 at time of writing and is up 27.7% in the past two weeks, according to CoinGecko.
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After a rocky first quarter, decentralized finance (DeFi) platform Alpha Homora announced the relaunch of its v2 leveraged yield farming program today — and so far both traders and users are celebrating as both total value locked (TVL) and ALPHA token prices soar.
The version 2 of the platform, which allows for leverage up to 7x on popular yield farming positions on protocols such as Sushi, Curve, and Balancer, notably had to shut down to new positions after a devastating hack in February. The protocol suffered $37 million in losses, which counts among the most devastating exploits in DeFi history.
However, the relaunch so far has gone swimmingly by multiple metrics. The ALPHA token — which underwent a revamped tokeneconomic design during the downtime — is up 11.1% to $2.28 on the day, and TVL has increased by nearly $100 million since the relaunch to a total of $675 million.
#AlphaHomoraV2 now has…
$675M TVL
$500M lent
$170M collateral
$99M borrowed
Though the demand to use the product is high, we’ll maintain security measure that we set out to do by keeping $100M credit limit for now.
Will actively monitor & increase accordingly
— Alpha Finance Lab (@AlphaFinanceLab) May 13, 2021
It now remains to be seen how long the protocol will remain stable. In addition to the February exploit, the platform was tied to Rari Capital’s $11 million loss earlier this week, though that particular exploit was due to no fault on Alpha Finance Lab’s part.
The relaunched v2 also came with a new set of audits, but ultimately the greatest test of a DeFi protocol is time — the longer it’s survived scrutiny from would-be exploiters, the more users can trust its longevity.
Some observers are additionally off-put by Alpha’s unusual model, which has little precedent in Tradfi. However Leo Cheng of C.R.E.A.M. Finance, whose Iron Bank protocol-to-protocol lending platform enables v2’s leveraged yield farming, argued in an interview with Cointelegraph that if flash loans can be a key cog in DeFi’s capital efficiency, leveraged lending is a logical next step.
By nature, says Cheng, a smart contract “doesn’t quite care, and it doesn’t quite see the borders with the smart contract projects” with regards to where funds are coming from. As long as a transaction will end with the various protocols involved in the green, the transaction will go through.
Alpha Finance Labs did not respond to multiple requests for comment.
What are the basics that everyone should know about how their bitcoin is taxed in the United States?
Is the purchase of bitcoin taxable?
Do you pay taxes on the sale of bitcoin?
What transactions require me to report my Bitcoin?
These are questions nearly every Bitcoiner has asked themselves at some point in their Bitcoin journey. The topic of taxes and bitcoin can seem daunting at first but, once you have a solid understanding of the tax implications you may have around your bitcoin, you can make better decisions to lessen the burden of the good ol’ government. I have been working under one of the top Bitcoin tax experts in the country over the past year and have learned everything there is to know about Bitcoin and taxes. I can attest, knowing the regulations and laws around taxes on your Bitcoin can help make a big difference in how you utilize it.
Is There A Bitcoin Tax?
There is not actually anything called a “bitcoin tax” per se. When people refer to taxes and bitcoin they are referring to the capital gains taxes one must pay on profits made from selling or trading bitcoin. This is because, under the current view of the IRS (seen in IRS notice 2014-21), bitcoin is considered property. Per notice 2014-21 the IRS states “for federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.” This really means the capital gains tax on Bitcoin is no different than the one referred to from profiting off a stock.
Capital gains have different rates you pay based on your income level as well as the holding period for the bitcoin.
Capital Gains Taxes: Short Term vs. Long Term
Capital gains taxes are split up into two groups, short term and long term, depending on how long you’ve held the asset.
Short-term capital gains tax is applied to profits from selling an asset you’ve held for less than a year. Short-term capital gains taxes are pegged to where your income places you in federal tax brackets, so you’ll pay them at the same rate you’d pay your ordinary income taxes.
Long-term capital gains tax is applied to assets held for more than a year. The long-term capital gains tax rates are 0%, 15% and 20%, depending on your income. These rates are typically much lower than the ordinary income tax rate, which is why HODLing is always going to be the most tax efficient strategy.
The pictures below represent the current long- and short-term capital gains tax rates in the United States.
Internal Revenue Service
Internal Revenue Service
Keep in mind, there are also varying state tax rates that get applied to capital gains. These can range anywhere from 3%–10%.
Capital Losses
If you sell bitcoin at a loss, meaning if the price you sold at is lower than your purchase price, you are entitled to a tax loss deduction, lowering your overall tax bill. You can deduct up to $3,000 per year from capital losses or use it to offset a portion of your capital gains. Any capital loss that exceeds $3,000 will roll forward to following years and can help offset future gains.
For example, If you lost $6,000 in 2020, you would deduct $3,000 from your 2020 income, reducing your tax bill and be able to deduct another $3,000 in 2021, or if you had gains in 2021 you could reduce your gains by that $3,000.
What transactions are taxable?
Understanding what transactions are taxable is very important for planning ahead and making smart decisions about how to best utilize your bitcoin. Let’s break down what is and is not a taxable event.
Taxable: Anytime you trade, spend or sell your bitcoin, you are triggering a taxable event which must be reported to the IRS. You are also required to report any bitcoin mining as taxable income.
Non-Taxable: HODLing, purchases of bitcoin with fiat, sending bitcoin from one wallet or exchange to another, using bitcoin as collateral are all non-taxable events.
What is the best tax method?
I recommend using FIFO (first-in first-out) to most of if not all the clients I work with. This essentially means that the first coins you purchased will be the cost basis and holding period for the coins you decide to sell, spend or trade. FIFO is always favorable for Bitcoiners because it allows you to qualify for long-term capital gains rates easier.
How are capital gains tracked for bitcoin?
Tracking capital gains and losses can be quite tricky depending on how much activity you have had with your bitcoin. Moving and storing bitcoin on different wallets and exchanges can lead to quite the headache when trying to figure out the cost basis and holding period for the coins you decide to trade, spend or sell. Luckily, there is software out there like Cointracking.info (my personal favorite) that allows you to easily import your data and does the calculations for you. Once you have calculated your gains/losses either via a software or by doing it yourself, you then report the numbers on form 8949. These figures flow through to schedule D on form 1040.
My suggestions:
My biggest suggestion to any client is to keep track of everything in a notebook and try to use only a few fiat on-ramps and a few secure hardware or multisig wallets. This will make the whole process of calculating your gains/losses much easier. I also recommend not selling your bitcoin until it becomes the unit of account, however, I understand everyone has expenses and reasons to sell along the way. A good way to work around this is by putting your bitcoin up as collateral with a company like Unchained Capital. Just as long as you aren’t selling your bitcoin to buy an Aston Martin.
Hopefully, this article has given you a better idea of how taxes might affect you, so you can make better decisions and minimize your payments to the greedy government. If you need help navigating your bitcoin taxes or just want to ask questions, feel free to shoot me a Twitter DM (located on author profile page) anytime.
This is a guest post by Joe Howe. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
The Hong Kong Monetary Authority (HKMA) and the Digital Currency Institute of the People’s Bank of China (PBOC), are looking to expand the testing of China’s central bank digital currency (CBDC) for cross-border payments.
Hong Kong and China Preparing for More Digital Yuan Trials
According to Bloomberg on Thursday (May 13, 2021), the HKMA decided to moe forward with the digital yuan test, after the initial pilot phase was successful. The first phase of the eCNY trial involved selected merchants and a bank chosen by mainland Chinese authorities.
Back in December 2020, the HKMA and the PBOC announced that they were planning to test the digital yuan for cross-border settlements. With the success of the first cross-border trial, the HKMA is ready to enter the next phase of pilots, stating:
“We have tested the use of the related app, system connectivity and certain use cases such as cross-boundary purchases. We are discussing and collaborating with the PBOC on the next phase of technical testing, including the feasibility of broadening and deepening the use of e-CNY for cross-boundary payments.”
A recent report by leading consulting firm Oliver Wyman, stated that the use of China’s digital yuan could make cross-border settlements faster and cheaper. According to the report, cross-border payments in Hong Kong cost between $20 billion – $40 billion annually, which is equal to almost 11 percent of the city’s 2020 gross domestic product (GDP).
An excerpt from the report reads:
“The introduction of eCNY has the potential to elevate RMB to a new height. And with a nationwide roll-out now under a year away, financial players need to consider the impact now. With the potential for the new currency to move into cross-border transaction, supported by liberalization policy, RMB could become a true global trade that will bring savings and efficiency.”
China’s CBDC project continues to move at an accelerated pace, with different cities conducting multiple digital yuan trials via red packet airdrop events. Chinese financial institutions have also contributed to eCNY trials, by developing hardware wallets and mobile applications.
Meanwhile, China is aiming to expand the scope of its CBDC testing to foreigners. As reported by BTCManager back in April, the PBOC said that it was working towards testing its digital yuan with international visitors at the upcoming 2022 Beijing Olympics.
