Bitcoin (BTC) is on the verge of closing another week that saw the price dip closer to $30,000 but the same bearish observation cannot be made for all altcoins. On Friday, several smaller-cap altcoins managed to shake off the bearish assault and post-double-digit gains before traditional markets closed for the weekend.
Data from Cointelegraph Markets Pro and TradingView shows that the top movers over the past 24 hours were NEM (XEM), Augur (REP) and district0x (DNT).
Top 7 coins with the highest 24-hour price change. Source:Cointelegraph Markets Pro
It’s worth noting that four of the top seven gainers are layer-one protocols, an interesting development that comes at a time when Ether’s (ETH) price is struggling below the $2,000 level and the community anxiously waits to see if the upcoming London hard fork improves Ether price and the process of transacting on the network.
NEM/USDT
Data from Cointelegraph Markets Pro and TradingView shows that after a month where the average 24-hour trading volume for NEM was $50 million, demand for the token surged on July 16 as the volume increased to $532 million and the price rallied 35% to $0.151.
XEM/USDT 4-hour chart. Source:TradingView
The uptick in price follows the July 13 announcement that Symbol (XYM), an enterprise blockchain protocol developed by the NEM group, had agreed to a collaborative project with the government of Colombia.
REP/USDT
According to data from TradingView, REP price began to surge on July 13 after the 24-hour trading volume spiked from a daily average of $17 million to more than $521 million on July 14.
REP/USDT 4-hour chart. Source:TradingView
As a result of the sudden increase in trading volume, the price of REP rallied 57% from a low of $14.60 on July 13 to an intraday high at $22.97 on July 16.
While there is no readily identifiable cause for the sudden increase in interest, a scroll through the Augur’s Twitter feed shows that forecasting on the network remains active with the most recent polls asking “Who would win the 2021 Major League Baseball Home-run derby?” and “Who will win the Ultimate Fighting Championship fight between Connor McGregor and Dustin Poirier?”
Related:Cardano grows closer to launching smart contracts with new testnet
DNT/USDT
The third-largest gainer on July 16 was Distric0x, a protocol that bills itself as a “network of decentralized markets and communities” and specializes in helping users launch their own decentralized autonomous organizations (DAO).
DNT/USDT 4-hour chart. Source:TradingView
Data from Cointelegraph Markets Pro and TradingView shows that DNT’s trading volume spiked from $3 million to more than $60 million on Friday, which led to a 73% rally from $0.112 to an intraday high at $0.193.
At the time of writing the price of DNT had since retraced to $0.133 which represents a 17.35% gain on the day.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
According to this pseudonymous analyst, the second leg of the bull market is still far ahead. And we’ll all need patience to get there. Using the Sentient Trader technical analysis software, Charting Cycles predicts that we’re still at least a couple of months away from the end of the… cycle. We haven’t put the 18 months since Black Thursday. The flat-horizontal period that seems to last forever still has a long way to go.
Here’s the chart:
$BTC – If you are a crypto bull, time to practice your patience. We are likely still ways away from putting in the 18m trough. pic.twitter.com/35EBLLc2m6
— Charting Cycles (@ChartingCycles) July 15, 2021
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And that leads us to the reason to be for this article, patience. It’s as Warren Buffett said, “The stock market is a device for transferring money from the impatient to the patient.” And, in this case, the same rules apply to the cryptocurrency market.
Related Reading | Charlie Lee Confirm Litecoin is Boring but People Should Have Patience
All We Need Is Just A Little Patience
The cryptomarket is wild. The ups and downs are not for the faint of heart. If you’re not a day trader and aren’t using leverage, however, are they really that relevant? Hopefully, you did your homework. You did your own research. You know the fundamentals and invested wisely. If you made an informed decision and identified a buying opportunity, well, all you need is just a little patience.
Get 110 USDT Futures Bonus for FREE!
If you’re playing the long game, get your emotions in check. It’s a scary ride, but nothing will come from rushed decisions and fearful trades. Remember, you did the research. You made your bet. If you’re wrong, you’re wrong, but respect the parameters you set yourself. If you identified an entry point, stick to it. If you have a target price, wait for it. You made the plan. As long as it’s moving between your parameters, let the chips fall where they may.
You can’t beat the market all day/ every day. It’s the nature of the game, you will be up and you will be down. Be patient and stick to the plan. However, don’t hesitate to pull the trigger if things turn ugly and the plan breaks.
BTC price chart on Bitbay | Source: BTC/USD on TradingView.com
Other Sources Tell Us About Patience In Trading
Investopediasummarizes everything and elaborates on the previous idea:
… so much of trading is psychological, making patience a great virtue for investors. Exhibiting patience when entering a trade and having patience while a trade develops are integral parts to successful trading and investing. However, allowing patience to turn into stubbornness is something you must always guard against; consistently exiting a trade according to predefined criteria is one of the best methods of improving your success as a trader.
TradeYourEdgeintroduces a new idea:
The market knows better than you, so never rush for a trade. Have patience and wait for the right signal. There’s a golden rule of trading – no signal, no trade.
In their MrIndice profile,eToroalso summed up the idea:
MrIndice is a trader who understands the value of patience and self-discipline when he is investing. It’s a philosophy that many successful investors share and is worth exploring in more detail. There are plenty of anecdotes about traders who followed hunches, or responded to their intuition to make quick profits. But long term success is built on effective fundamental and technical analysis, combined with reasoned strategies and logical thinking.
Cryptominiumgives us a tip for exercising patience:
Another thing that you can do to prepare is create a trading philosophy. Make sure that you know what type of trader you are, how aggressive you want to be, and other philosophical rules that you may want to adhere to.
One Last Thing Before Concluding The Ceremony
Related Reading | Patience Pays: Get to Know Popular Investor Reinhardt Coetzee
To close this,Coinsbankputs things into perspective:
Patience is the key to trading in cryptocurrency. Do not be afraid to miss any deal – the market is so big and developing that there will be enough money for everyone. However, remember that it is easy to make money on the market, but it’s hard to keep what you have earned.
Featured Image by anncapictures from Pixabay - Charts by TradingView
Bitcoin has recently fallen below a $32,000 critical hold point and in response, retail investors have taken this as an opportunity to make money from the falling bitcoin price. So far, retail investors have started loading up on shorts, an incredibly bearish metric for the market.
Retail investors load up on shorts | Source: Twitter
So many shorts placed in such a short period of time might show other investors that the price of the digital asset will fall eventually and thus, lead to panic selling. Although this is never always the case. The fact remains that no one exactly can pinpoint what will happen with the digital asset and as such, every short or long being placed now are mere bets. More akin to guesses than actual predictions.
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Related Reading | I Stand By My $100,000 Bitcoin Price Target, Anthony Scaramucci
According to this Twitter post, retail investors have been consistently short squeezing the digital asset as the market struggles to rebound. This might show that the digital asset now more than ever might be close to the famed bitcoin bottom.
Cascading Lows
Investors poured in their opinions on the longs being placed by retail investors. A user posted that this might lead to more of a cascading bottom that will be much greater than anything reversal.
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Chances of cascading bottom much greater than any reversal here. Money on retail for once.
— Crazy Tuliped (@TonyD0214) July 16, 2021
Forecasts remain that the digital asset might break the $30,000 stronghold that it has held for weeks now. Speculations abound that this is the point institutional investors would up their investments and the bulls would come storming back in.
BTC price amid bearish sentiment | Source: BTCUSD on TradingView.com
Bitcoin has dipped in the past 24 hours, down to almost $31,000, and made a small recovery back from this dip. But this is not enough to renew faith that a rebound would be more likely than a bottom.
If the digital asset breaks $30,000 before the week is over, then it might as well be very well in bear territory for bitcoin. Regardless, other investors believe this will spark a weekend relief rally.
The shorters hope to break the current bitcoin support but so far, bitcoin has held out. But there’s no telling how the rest of the weekend will play out.
Bullish Sentiment For Bitcoin?
Despite the continued fall of the price of the digital asset, bitcoin maximalists continue to remain steadfast in their resolve for bitcoin’s future. Exchanges have reported plummeting crypto reserves on their balance as investors take out coins from exchanges into hold wallets. Holders continue to stand by the coin.
There are likely to be large accumulation events taking place if bitcoin does break the $30,000 support. Whales will use this opportunity to buy back the assets they had sold during the height of the market and retail investors alike will want a piece of that action.
Related Reading | Make It Rain Satoshis: Las Vegas Strip Club Starts Accepting Bitcoin Payments
Calling the bottom for the digital asset has been a debated topic for a while now. Forecasts hound the market of when the bitcoin bottom will be reached. But so far, bears seem to have a chokehold on the price as the asset has not been able to post any meaningful recovery in the past weeks. Just barely holding on to its current position on the charts.
At this time, BTC continues to aim for the $32,000 price point while bears drag the price down. The digital asset has shown strong rebound patterns so far as it now trades at a little over $31,900.
Featured image from The Balance, chart from TradingView.com
According to this pseudonymous analyst, the second leg of the bull market is still far ahead. And we’ll all need patience to get there. Using the Sentient Trader technical analysis software, Charting Cycles predicts that we’re still at least a couple of months away from the end of the… cycle. We haven’t put the 18 months since Black Thursday. The flat-horizontal period that seems to last forever still has a long way to go.
Here’s the chart:
$BTC – If you are a crypto bull, time to practice your patience. We are likely still ways away from putting in the 18m trough. pic.twitter.com/35EBLLc2m6
— Charting Cycles (@ChartingCycles) July 15, 2021
5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!
And that leads us to the reason to be for this article, patience. It’s as Warren Buffett said, “The stock market is a device for transferring money from the impatient to the patient.” And, in this case, the same rules apply to the cryptocurrency market.
Related Reading | Charlie Lee Confirm Litecoin is Boring but People Should Have Patience
All We Need Is Just A Little Patience
The cryptomarket is wild. The ups and downs are not for the faint of heart. If you’re not a day trader and aren’t using leverage, however, are they really that relevant? Hopefully, you did your homework. You did your own research. You know the fundamentals and invested wisely. If you made an informed decision and identified a buying opportunity, well, all you need is just a little patience.
Get 110 USDT Futures Bonus for FREE!
If you’re playing the long game, get your emotions in check. It’s a scary ride, but nothing will come from rushed decisions and fearful trades. Remember, you did the research. You made your bet. If you’re wrong, you’re wrong, but respect the parameters you set yourself. If you identified an entry point, stick to it. If you have a target price, wait for it. You made the plan. As long as it’s moving between your parameters, let the chips fall where they may.
You can’t beat the market all day/ every day. It’s the nature of the game, you will be up and you will be down. Be patient and stick to the plan. However, don’t hesitate to pull the trigger if things turn ugly and the plan breaks.
BTC price chart on Bitbay | Source: BTC/USD on TradingView.com
Other Sources Tell Us About Patience In Trading
Investopediasummarizes everything and elaborates on the previous idea:
… so much of trading is psychological, making patience a great virtue for investors. Exhibiting patience when entering a trade and having patience while a trade develops are integral parts to successful trading and investing. However, allowing patience to turn into stubbornness is something you must always guard against; consistently exiting a trade according to predefined criteria is one of the best methods of improving your success as a trader.
TradeYourEdgeintroduces a new idea:
The market knows better than you, so never rush for a trade. Have patience and wait for the right signal. There’s a golden rule of trading – no signal, no trade.
In their MrIndice profile,eToroalso summed up the idea:
MrIndice is a trader who understands the value of patience and self-discipline when he is investing. It’s a philosophy that many successful investors share and is worth exploring in more detail. There are plenty of anecdotes about traders who followed hunches, or responded to their intuition to make quick profits. But long term success is built on effective fundamental and technical analysis, combined with reasoned strategies and logical thinking.
Cryptominiumgives us a tip for exercising patience:
Another thing that you can do to prepare is create a trading philosophy. Make sure that you know what type of trader you are, how aggressive you want to be, and other philosophical rules that you may want to adhere to.
One Last Thing Before Concluding The Ceremony
Related Reading | Patience Pays: Get to Know Popular Investor Reinhardt Coetzee
To close this,Coinsbankputs things into perspective:
Patience is the key to trading in cryptocurrency. Do not be afraid to miss any deal – the market is so big and developing that there will be enough money for everyone. However, remember that it is easy to make money on the market, but it’s hard to keep what you have earned.
Featured Image by anncapictures from Pixabay - Charts by TradingView
A common saying in the investing world is “The trend is your friend,” a phrase that points to the idea that the majority of the time, sticking with the prevailing market trend will produce positive results.
Some of the common metrics used to identify market trends include: technical analysis, which involves studying price charts to spot opportunities; fundamental analysis, which involves looking at a project’s underlying economic and technological factors; and social media metrics, which help an investor listen to the pulse of what the wider public is focused on.
One of the more popular metrics that crypto traders use to identify emerging patterns is Google Trends, a product that analyzes the popularity of search queries performed via Google’s search engine. Using Google Trends, users can view the data in simple line graphs that also provide a breakdown by geographical region.
The Google Trends chart for “Bitcoin” shows several sharp spikes in searches over the past year, most notably in early January, late February, mid-April and again in mid-May.
Bitcoin interest over time. Source:Google Trends
A look at the BTC price chart shows that each of the spikes in Google searches coincided with run-ups in the price of Bitcoin (BTC) and indicates that search queries do indeed offer some insight into identifying trends that could impact prices.
BTC/USDT 1-day chart. Source:TradingView
The same approach can also be applied to altcoins and decentralized finance (DeFi) tokens. Let’s take a look at how social analysis preceded the rise of popular NFT-related tokens and DeFi blue chips like Polygon’s MATIC.
Interest in DeFi came in two waves
DeFi was the hottest sector in the cryptocurrency market at the beginning of 2021, and it seemed like not a day passed without some newly emerged lending or farming protocol reaching $1 billion in total value locked.
Total market capitalization of the top 100 DeFi tokens. Source:CoinGecko
Data from CoinGecko shows that the total market capitalization of the top 100 DeFi tokens began to rapidly increase in mid-January, and eventually, the figure peaked in mid-May after the entire cryptocurrency market proceeded to sell off.
Searching “DeFi” in Google Trends produces the following chart, which actually shows a spike in the number of queries around the same time as the market cap of DeFi tokens began to increase.
DeFi search interest over time. Source:Google Trends
This figure continued to increase even after the number of queries declined during the month of March.
Spikes seen in the number of searches in April and again in May also occurred around the same time as spikes in the DeFi market cap.
Searches for “NFT” went parabolic at the end of February
The rise of nonfungible tokens, or NFTs, in February and March caught the world’s attention as big-name celebrities like NFL veteran Rob Gronkowski and Twitter CEO Jack Dorsey got in on the action and established auction houses like Sotheby’s helped facilitate NFT auctions, including the recent sale of CryptoPunk #7523, which was sold for a record $11.8 million.
THETA/USDT vs. AXS/USDT vs. EJN/USDT vs. CHZ/USDT vs. MANA/USDT 1-day chart. Source:TradingView
Some of the biggest monthly gains from NFT projects include a 443% gain in the price of THETA between March 1 and 21, and a 530% gain in the price of Axie Infinity Shards (AXS) from Feb. 23 to March 15. Chiliz (CHZ) saw a 3,690% surge in price between Feb. 13 and March 13.
The increase in prices coincided with a surge in NFT-related searches registered by Google Trends.
NFT search interest over time. Source:Google Trends
While it was widely reported that NFTs stole DeFi’s thunder, evidence of the rotation can be seen when the DeFi and NFT search interest charts are combined. As shown below, there is a sudden and massive rise in NFT queries as searches for DeFi fall.
Search interest in DeFi (blue) vs. search interest in NFT (red). Source:Google Trends
The magnitude of NFT search queries was also significantly higher than that of DeFi, hinting that nonfungible tokens may be an optimal route to encouraging the widespread adoption of cryptocurrencies.
Looking at the late February to early March timeframe on the price charts, a dip in the price of DeFi tokens is seen at roughly the same time as the prices of NFT tokens start to rise, indicating some level of rotation out of DeFi and into NFTs.
Both charts show spikes in search interest that line up with price increases in related DeFi and NFT tokens, and they also manage to capture the diminishing interest seen as prices fell in June and July.
Related:Striking a chord: DeFi’s domino effect on NFTs and Web 3.0 adoption
Twitter mentions can also hint at growing adoption
Twitter is also a good source to obtain insight into what coins retail investors might be interested in, and analyzing the number of Twitter mentions can help hone in on which projects have the potential to see future price movements.
In 2021, Polygon emerged as one of the most promising layer-two solutions for the Ethereum network, and social media mentions increased significantly as the price of its native MATIC token surged 700% from $0.33 on April 26 to its all-time high of $2.68 on May 18.
MATIC price vs. tweet volume. Source:TheTIE
As seen in the chart above, data from TheTIE shows that most of the large jumps in the price of MATIC coincided with spikes in tweet volume where the keyword “MATIC” was mentioned.
Google Trends also shows an increase in searches for “Polygon” during this time period, with the initial spike in interest coming during the week of April 25 to May 1.
Polygon search interest over time. Source:Google Trends
While many analysts and trend watchers prefer to utilize technical and fundamental analyses to keep a pulse on developing trends, it’s important to remember that no cryptocurrency project has any value without the people involved in the network.
This means that valuable insights can always be found in analyzing information and announcements that catch people’s attention and initiate public engagement.
Want more information about trading and investing in crypto markets?
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Digital currencies are quickly gaining traction in the world; but Bitcoin is poised to maintain superior incentives.
Bitcoin’s popularity has unleashed a race for digital money dominance, which is likely to intensify with the emergence of Central Bank Digital Currencies (CBDCs). In a 2021 survey of central banks, 86% of respondents indicated they are actively researching the potential for CBDCs. The question that emerges is how will CBDCs live alongside borderless cryptocurrencies like bitcoin?
This paper is a three-part study on CBDCs within the context of the evolution of money. Readers will find that CBDCs will play an important role in the normalization of money as a digital concept. The paper outlines several factors that will contribute to the rise of CBDCs in the coming years, as well as the design limitations of CBDCs that will drive demand back to bitcoin.
Part 1: Humans and Change — We recreate old things before we reimagine new things.
Part 2: How CBDCs Fit In The Evolution Of Different Types Of Money — How CBDCs compare to bitcoin, in the context of fiat money, representative money, and commodity money.
Part 3: The Challenges Of CBDCs: Digitization Instead Of Innovation — How CBDCs are likely to be rolled out, and the four design limitations that will drive demand back to bitcoin.
Part 1: Humans And Change
History shows that humans rarely make the direct leap to new breakthrough technologies.
The human change cycle often starts by adopting a semi-improved version of the old thing before reimagining a new frontier. The pattern of old ⇒ semi-new ⇒ new is evident across numerous industries:
Transportation: Horses ⇒ Horses on wheels ⇒ Automobiles
Money: Fiat money ⇒ Digital fiat money ⇒ Bitcoin and cryptocurrencies
Fiat money by any other name is still fiat money, dictated by land borders. Digital money, on the other hand, is transnational by nature. CBDCs and stablecoins operate in a hybrid state, where they are an online version of offline currencies.
Going from physical cash to CBDCs and stablecoins is equivalent to going from photographs to moving pictures — a novel innovation but a semi-improved version of the old product. History shows us that semi-improvements are usually a transient innovation. Typically, these versions are replaced by innovations that can reimagine the future rather than recreate the past.
Part 2: How CBDCs Fit In The Evolution Of Different Types Of Money
To better understand the evolution of money, it is important to understand the three different types of money: commodity money, representative money and fiat money.
Commodity money: An asset that has intrinsic value based on market demand (e.g., gold and silver).
Representative money: An asset that has no intrinsic value but provides a claim over another asset (e.g., cheques and gold certificates).
Fiat money: A money which has intrinsic value because the government says so (e.g., Today, national currencies are examples of fiat money).
The two main types of money are commodity money and fiat money, while representative money is more of a hybrid state. Prior to the 20th century, gold and silver were the dominant forms of global money: This was the era of commodity money. During the early 20th century (gold standard), banknotes became popular, although they were still pegged to gold. Since 1971, our banknotes no longer have to be pegged to anything else. This completed an evolution from commodity money to representative money to fiat money.
We are now experiencing a trend in the opposite direction, by migrating from fiat money to digital representative money. The representative money of the 20th century were banknotes pegged to gold, and the representative money of the 21st century are digital currencies pegged to fiat money. A century ago, banknotes solved a divisibility and portability problem for gold. Today, digital fiat money is similarly solving a divisibility and portability problem for banknotes. The next step in this cycle is digital money with intrinsic value on its own — a commodity money.
CBDCs are likely to be designed with features which digitize the existing monetary architecture with central banks at the center. On the other hand, a digital commodity money like bitcoin offers an entirely different monetary design, which foregoes middlemen altogether.
Part 3: The Challenges Of CBDCs – Digitization Instead Of Innovation
The first challenge with CBDCs is articulating why we need a Central Bank Digital Currency in the first place. Why digitize to a newer system which keeps all the old middlemen in place? There are short-term reasons, like efficiencies in payments and settlements, however, innovations in the private sector (such as the Lightning network) have already been making it easy to transfer money — without needing CBDCs.
As a digital representation of a landlocked currency, CBDCs will still be subject to offline nation-state governance. While CBDCs will provide greater divisibility and programmability than paper money, their economic and social designs are likely to be contrasted by the elephant in the room: How do they compare to bitcoin?
Four key themes are likely to emerge as limitations of CBDCs in the coming years:
Store of value concerns: Fiat by any other name is still fiat. When central banks in countries like Argentina roll out a digital peso, it will still be subject to inflation and debasement. CBDCs will normalize the concept of a digital medium of exchange, but the uncertainty of central bank monetary policies will leave open the space for a digital store of value with high certainty. Every time a CBDC incurs a major monetary policy debate, it is likely to become a sharp contrast against the predetermined monetary policy and scarce supply of bitcoin.
Privacy and surveillance concerns: While cash has no memory, CBDC transactions will invariably leave a financial footprint that can be tracked by state governments. The need for privacy-preserving digital money will gain popularity, especially in countries where minorities may be punished for their ideological beliefs or sexual preferences. We are likely to see a black market for cash, along with a demand for digital currencies like Monero and Decred capable of providing privacy without central party surveillance.
Sanctions and censorship concerns: When authoritarian regimes can monitor dissenting individuals, they will also be able to censor their financial activity. CBDCs will supercharge the powers to sanction people, which, in turn, will create a demand for an uncensorable financial network. Much like SWIFT operates as a messaging network today, demand for a neutral and tamper-proof financial network will draw people to the censorship resistance of the Bitcoin settlement network.
Lack of switching costs for currencies: In a physical money world, countries are able to enforce their borders for currencies. But once all money is digitized, switching costs of currencies are likely to be eroded. Businesses will no longer have to worry about carrying the day’s cash to their local bank, and merchants will be freed to accept the best form of electronic money, not just the local currency. Online money won’t care about offline borders, freeing consumers to choose the best forms of money, which will go beyond their local currencies.
Once most governments have rolled out digital currencies, currency competition is likely to become fierce. Some nation-states may try banning the use of bitcoin and alternative currencies, while others will tie their national currency to patriotic appeals.
Today’s patriotic slogan: “Buy local.”
Tomorrow’s patriotic slogan: “Buy with local currency.”
CBDCs will almost certainly be promoted via “helicopter money,” where governments can airdrop social assistance exclusively in local currencies. Legal tender laws will enforce CBDCs as mediums of exchange, although people may choose to keep their savings in a more superior store of value.
The lasting impact of CBDCs will be to normalize the concept of money as a digital native product, and their design limitations will create the demand for a permissionless, inflation-proof digital store of value. The leading contender to meet this demand is bitcoin.
This is a guest post by Ammar Naseer. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
Janet Yellen will meet with the Working Group on Financial Markets to discuss stablecoin regulations in the U.S. next week.
Yellen has historically been critical of cryptocurrency; however, she has also acknowledged its potential to improve finance.
It appears that the upcoming discussion will concern commercial stablecoins, not government-backed CBDCs.
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U.S. Treasury Secretary Janet Yellen will meet with regulators to discuss stablecoins, according to an announcement today.
Workgroup Will Take Place Monday
According to the U.S. Treasury, Yellen will meet with the President’s Working Group on Financial Markets on Monday, July 19.
That group includes members of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks,” Yellen stated. She added that government agencies should work together on regulation and create reccomendations for authorities.
The discussion will build on a 2020 statement from the workgroup that discussed similar regulatory matters around stablecoins.
The workgroup does not seem to be concerned with a central bank digital currency (CBDC) or government-issued stablecoins. Rather, it seems to concern regulations around commercial stablecoins.
Is Yellen For or Against Crypto?
Yellen became Secretary of the U.S. Treasury as President Joe Biden took office earlier this year. She was confirmed on Jan. 25, 2021.
Yellen has historically held an anti-cryptocurrency stance, highlighting its use in criminal activity. However, she has also acknowledged that digital currency has the potential to improve the financial system.
Today’s news means that Yellen is slightly more open to digital currency than her past statements may suggest.
However, this news does not necessarily indicate that regulations will change significantly. Currently, entities that simply wish to work with stablecoins are seemingly free to do so. For the most part, cryptocurrency exchanges can legally circulate stablecoins, and the OCC has even granted banks the right to work with stablecoins. Visa has also expressed its intent to offer stablecoin transactions.
One possible regulatory restriction concerns recent guidance from FinCEN that may require stablecoin creators and issuers to operate as Money Service Businesses (MSBs). However, this has not hindered any major stablecoin issuers to date.
Disclaimer: At the time of writing this author held less than $75 of Bitcoin, Ethereum, and altcoins.
This news was brought to you by Phemex, our preferred Derivatives Partner.
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The largest Ethereum whales in existence are accumulating ETH as the asset’s price continues to tick downwards.
Crypto analytics firm Santiment says Ethereum’s top 10 largest addresses went from owning as low as 18.46% of the total Ethereum supply after mid-May – when ETH achieved its all-time high – to 20.58% by July 13th.
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For those top 10 addresses, that’s the highest ETH ownership percentage since May of 2017, according to Santiment.
The analytics firm says that the accumulation of stakeholders is a good sign for Ethereum’s potential price recovery.
“This chart is indicative of the largest stakeholders continuing to accumulate while prices have fallen more than 50% from their AllTimeHigh levels. It is a bode of confidence that prices can and will recover at some point.”
Santiment also notes that miner balances have been rising steadily for the past month, a sign that people who power the network are not inclined to sell.
Ethereum is trading at $1,954.02 at time of writing and is down more than 8% in the past week, according to CoinGecko.
Santiment says if ETH can hold above $1,800, it will have a chance to test the “resistance trend line” at $2,200.
“ETH’s price action continues to linger around a bearish bias, with it hanging on to a very important support now. Bulls really need to step in soon (for a bounce at the very least), else bears shall continue their downward trend.
On-chain metrics are showing some positive signs but it’s still too early to say whether we bottomed out.”
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The Harmony blockchain has opened registration for a hackathon starting next month with more than $1 million in seed funding and prizes for participants.
In a Thursday announcement on Twitter, Harmony said the hackathon would be focused on bringing in more people from traditional finance for challenges bridging their fields and decentralized finance. The protocol said there would be four challenges in each category of social wallets and keyless security, cross-chain and trustless bridges, and cross-border with fintech integration.
“In blockchain, finance is where we are seeing product market fit,” said Harmony. “But most of DeFi was created by people who didn’t come from traditional finance. We want to bring more TradFi in to contribute to DeFi. We know they have much to teach us and we can help them understand and harness the power of DeFi and teach them a lot as well.”
SushiSwap core developer Omakase is listed as one of the featured speakers or judges for the event, alongside Earn.com co-founder Lily Liu, DeFi Alliance lead Imran Khan, and others. Sponsors include CoinGecko, Messari, Unstoppable Domains, DappRadar, SushiSwap, DoraHacks, news platform The Defiant, and Hummingbot.
Related:Hackathon challenges developers to build killer blockchain apps using JavaScript
A sharding protocol with a trustless Ethereum bridge that separates its chain into segments that process transactions and store data in parallel, Harmony’s mainnet first went live in 2019. The project has since announced multiple partnerships and integrations, including with stablecoin platform Terra for its token to migrate to Harmony and be used on applications in the ecosystem.
Harmony said last month it would be sponsoring the hackathon in its aim to reach 10 billion people. Teams for the event will be limited to 5 people, with registration closing Aug. 15. It will conduct the event over roughly six weeks from the submission deadline until Sept. 30.
Authorities in Japan are contemplating tighter cryptocurrency regulations, according to the latest reports.
Japan Stepping up Crypto Regulatory Activities
US media outlet Reuters revealed that Japanese finance regulators had expressed their intentions to step up regulatory efforts on cryptocurrencies. Officials told the news agency that the rise of cryptocurrencies poses a threat to the financial structure in the country.
Japan is one of the countries that are relatively crypto-friendly and has relaxed rules on cryptocurrencies. However, pressure from other regulators in the G7 could lead to a rethink of existing policies.
Last week, Japan’s Financial Services Agency (FSA) launched a new section to oversee digital currency regulations as part of increased surveillance on crypto transactions. The unit will also oversee decentralized finance, a new form of finance that does not rely on third-party financial intermediaries.
The Ministry of Finance is also contemplating increasing its staff to increase its digital currency oversight and is expected to submit a budget request in August. In addition, the Bank of Japan (BoJ) has also stepped up efforts towards the development of a digital yen that is seen as an alternative to cryptocurrencies.
The apex bank had created a committee in March that brought together financial agencies and key stakeholders in the banking and finance sector to add their input on the digital yen. All these activities aim to ensure that the Asian nation can keep up with the growing world of crypto regulations.
Global Regulators Wary of Stablecoins
Although cryptocurrencies like Bitcoin and Ethereum are a source of problems to regulators, globally stablecoins pose the most threats to the banking system. Stablecoins are cryptocurrencies pegged to real-life assets and have increased in popularity in recent years.
Unlike traditional currencies like Bitcoin that are volatile, stablecoins represent an ideal coin for transactions due to their stable nature. However, global regulators quickly shut down the proposals by Facebook in 2019 for use on its platforms due to its potential to bypass existing financial systems.
Cryptocurrency has also received scrutiny as a useful tool for money laundering and tax evasion. As a result, it is understood that many regulators want to place a crypto framework that would prevent any cryptocurrency from disrupting existing financial systems.
