This quarter has been rewarding to Ethereum (ETH) because it is now an asset with a market capitalization of more than $500 billion. Continued adoption has played an instrumental role in enabling Ethereum’s value to rise because it is one of the sought-after networks in the non-fungible token (NFT) and decentralized finance (DeFi) sectors.
Furthermore, ETH supply on exchanges has been shrinking, which has been pivotal in Ethereum’s price rally. Crypto analytic firm Santiment acknowledged:
“Ethereum’s supply on exchanges sits at 15.66%. One year ago, this number sat at 23.29%. It’s clear that more and more ETH is moving safely to cold wallets for DeFi-related activity and hodling, an encouraging sign for long-term price prospects.”
Market insight provider Glassnode echoed these sentiments and noted that ETH balance on exchanges dropped to a 3-year low.
Investments in Ethereum 2.0 continue going parabolic
“Total value in the ETH 2.0 deposit contract just reached an ATH of 8,240,450 ETH.”
Ethereum 2.0, also known as the Beacon Chain, was launched in December 2020 and was regarded as a game-changer that sought to transit the current proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) framework.
The proof-of-stake algorithm allows the confirmation of blocks to be more energy-efficient and requires validators to stake Ether instead of solving a cryptographic puzzle. As a result, it is touted to be more environmentally friendly and cost-effective. ETH 2.0 is also expected to improve scalability through sharding.
Meanwhile, ETH mining difficulty recently reached record highs.
The Ethereum mining difficulty measures how many hashes in statistical terms must be generated to find an effective solution to solve the next ETH block and earn the mining reward.
With this metric reaching record highs, the Ethereum supply is expected to continue being depleted because it is becoming harder to generate more coins.
Bitcoin (BTC) was up by 2.05% in the last 24 hours to hit $44,907 during intraday trading after briefly nosediving below $40K on September 22, a fate not seen since August 5.
Glassnode acknowledged that a large portion of Bitcoin supply was stored in cold storage. The on-chain metrics provider explained:
“The Bitcoin supply that has been dormant for at least 1yr is starting to bottom out at 54.2%. Compared to the 2017 top, this indicates that a larger relative proportion of BTC remains in cold storage.”
Therefore, more Bitcoin supply being kept in cold storage signifies a holding culture. This is bullish because investments are held for future purposes other than speculation.
Holding is a favoured strategy in the Bitcoin market, with long-term holders and crypto whales leading the race.
For instance, Bitcoin supply has been steadily maturing to old hands, given that nearly 2 million BTC have transitioned from short-term to long-term holders from the time an ATH price of $64.8K was attained in mid-April.
Meanwhile, the Bitcoin Lightning Network has been gaining steam because it recently hit an all-time high (ATH) capacity of 2,738 BTC. This is a second layer incorporated into the Bitcoin blockchain to undertake off-chain transactions. As a result, micropayment channels are utilized to scale the blockchain’s capacity to carry out transactions more efficiently.
On-chain analyst Will Clemente acknowledged the Lightning Network growth was crucial for Bitcoin to eventually transit from primarily being used as a store of value to a medium of exchange.
“Bitcoin is looking at resistance, but showing a great daily candle. A breakout above $44.6K and a path to $50K is open. If we correct, then I’m looking around the $42K region for support.”
Earlier this month, BTC breached the psychological price of $50K and scaled to the $52,000 level. Nevertheless, the leading cryptocurrency experienced a significant pullback that prompted a $10K loss as over-leverage factors dominated.
Furthermore, Bitcoin’s quest to retest the $50K zone was recently dented by a significant liquidity challenge experienced by China Evergrande, a leading Asian property developer. This development is one of the factors that made Bitcoin briefly drop below the psychological price of $40K.
Samsung Electronics has added new support assets for blockchain users with hardware wallets this week. The move will impact mobile Galaxy owners, allowing them to use third-party hardware wallets with the Samsung Blockchain Wallet app. In their press release, Samsung has sought out to explicitly provide hardware support for Ledger Nano S and Nano X. The company stated, however, that they plan to support more cold-storage wallets moving forward.
The journey to initiate hardware support, of course, started with straightforward blockchain integration. In 2019, Samsung released Samsung Blockchain and dedicated crypto wallet support, without extensive fanfare. The company rolled out the blockchain software in tandem with the Galaxy S10 release. A major focal point for the blockchain offering is the included software development kit. The kit opened the door for Samsung to support developers in creating decentralized apps. Dapp support is driven through the Blockchain Keystore SDK.
Of course, the other major emphasis of the Samsung Blockchain is security. This comes by way of the company’s self-described ‘Samsung Knox’ and ‘Trusted Execution Environment (TEE)’. Knox is a secure holding space for crypto users that is separate from the main operating system, accessible only via PIN or biometric authentication. Knox is essentially a “secure processor dedicated to protecting your PIN, password, pattern, and Blockchain Private Key”, as the company describes it.
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The update to begin supporting cold-storage wallets will be applicable for Galaxy users running Android 9.0 and above. The company also cautioned that in the initial roll-out, Nano X bluetooth features may be limited.
The Korean-based firm continues to keep promotional activity around new blockchain-related features somewhat under the radar, despite continuous and evolving support.
BTC's consistency has given more companies good reason to integrate | Source: BTC-USD on TradingView.com
Continued Crypto Support
Samsung has continued to release crypto-related support with a relatively quiet approach. In 2020, the firm partnered with crypto exchange Gemini to streamline Galaxy users consumer experience. The company continues to offer consumer and developer assets, such as a dedicated crypto newsfeed available in the Blockchain Wallet app. For developers in particular, offerings include extensive resources, such as APIs that allow dapps to securely sign for transfers of virtual assets.
After initially support ethereum in 2019, and adding bitcoin shortly thereafter, the company now offers over thirty coins, including stablecoins. Samsung continues to stay relatively quiet despite what seems to be continued investment. In a public statement, head of blockchain and company VP Woong Ah Yoon stated that monthly active users of the blockchain app have doubled over the past seven months. Without sharing hard figures, Yoon added the smartphone wallet is currently used to hold hundreds of millions of USD in AUM (assets under management).
Related Reading | Go Phish: How This Bitcoin Investor Lost 17 BTC To An iPhone App
Featured image from Pixabay, Charts from TradingView.com
Digital asset security infrastructure outfit Metaco has partnered with tech conglomerate IBM to utilize the latter’s cloud platform for enterprise-grade digital asset custody solutions.
According to a press statement issued on Thursday, Metaco will leverage IBM Cloud and IBM Cloud Hyper Protect Services for its digital asset orchestration system.
The goal of the partnership is to provide adequate digital asset custodial services for banks and other highly regulated financial services firms looking to participate in the digital asset ecosystem across use cases like tokenization, custody, and transaction management among others.
As part of the announcement, Metaco will reportedly utilize IBM’s confidential computing and “Keep Your Own Key”, or KYOK, encryption to ensure that the firm’s clients retain sole access to their private keys. The press statement also revealed that clients will be able to run the asset orchestration system on-site or on the cloud or via a hybrid cloud environment.
For Metaco, robust security-critical protocols like KYOK are necessary to protect client information while mitigating the risks posed by hackers.
Commenting on the IBM collaboration, Metaco CEO Adrien Treccani remarked that the collaboration will enable the company deliver greater levels of security for their clients as they create products and services in the digital asset space.
In a conversation with Cointelegraph, Seamus Donaghue, vice president of strategic alliances at Metaco highlighted the ways in which the digital asset orchestration system will help banks and other financial services firms comply with regulatory requirements, stating:
“The fiduciary obligations of asset managers require them to externalise custody to regulated custodians. Our multi-custodian solution enables them – with a single integration into their core infrastructure – to seamlessly manage and diversify risk across multiple custodians all under a holistic risk and control framework.”
According to Donaghue, the company’s offering also provides the added advantage of efficient transfers of digital assets from secure lockups. “The orchestration can be parameterized to leverage trusted address books and the secure workflow automation to facilitate instant but secure movements as required. In this manner, a firm can be confident that its assets are always safe but can respond to rapidly moving markets,” the Metaco executive added to Cointelegraph.
Back in December 2020, Donaghue remarked that regulatory clarity for cryptocurrencies was enabling greater institutional involvement in the asset space.
Indeed, 2020 saw significant inroads being made by banks and other financial services firms into cryptocurrencies especially in the area of custody.
Bitcoin (BTC) was able to breach the $50,000 mark it has been trying to breach a few days ago after a price correction drove it to lows of $42,000.
Its upward momentum pushed its price to a 17-day high of $57,350 earlier today even though it has retracted to $57.107 at the time of writing, according to CoinMarketCap.
New data by Glassnode reveals that crypto addresses sending BTC to exchanges have recorded a monthly low. The on-chain data provider explained:
“Number of Bitcoin addresses sending to exchanges (7d MA) just reached a 1-month low of 5,930.185.”
Bitcoin is usually sent to crypto exchanges from cold storages for the purpose of liquidating the funds or trading it.This data, therefore, shows a holding culture as more participants are storing their BTC for speculative or future objectives.
These statistics are echoed by the fact that investors are doubling down on the derivatives market as BTC futures contracts are on a record-breaking trend.
Furthermore, open interest across major exchanges is currently sitting on the verge of the $20 billion mark, the highest it has ever reached. It, therefore, illustrates that more participants are leveraging so that they can join the Bitcoin network.
Stablecoin inflows needed to sustain strong upward momentum
Crypto analyst Joseph Young believes that Bitcoin needs stablecoin inflows for it to surge past the $56,000 resistance level. He acknowledged:
“There’s not a lot of sidelined capital entering into Bitcoin at the moment. Below is stablecoin inflow into exchanges. When $56k cleanly breaks, I imagine more capital would enter into BTC, accelerating the rally. Hence, I think consolidation, and then an explosive move upwards.”
As corporate giants Square, Tesla, and MicroStrategy ramp up crypto interest, Bitcoin will continue enjoying remarkable institutional investments. Recently, leading American business intelligence firm MicroStrategy added 205 Bitcoins worth $10 million to its 91,064 BTC portfolio.
One of the biggest trends in recent months has seen Bitcoin flow out of exchanges into wallets. Generally, this is interpreted as a bullish sign — indicating that investors are optimistic about further growth in cryptocurrency prices.
But delve deeper, and there’s more to this than meets the eye. The crypto industry has grown immeasurably over recent years — making stars out of a number of exchanges. Platforms such as Binance and Coinbase now handle billions of dollars in trading volumes every day. With this come concerns that centralization is creeping in — and fears that major exchanges are becoming the titans of the industry, just like big banks dominate the world of traditional finance.
Exchanges do have downsides. Binance and Coinbase have both suffered outages when Bitcoin surges — and in some cases, this has left traders unable to execute transactions in a timely fashion. Such breaks can prove to be extremely expensive, as a lack of immediate access can mean users are unable to buy and sell at optimal prices.
Another big platform, OKEx, recently hit the headlines when it abruptly suspended withdrawals for six weeks — leaving panicked customers unsure whether or not their funds were safe. Although this exchange attempted to make things right through a generous compensation program, users appeared to be pulling their funds out fast when services returned to normal.
As retail and institutional interest in digital assets shows no sign of abating, wallets are starting to serve as a viable alternative for those who are unsure about entrusting their funds in an exchange. Several platforms also claim that they offer low trading fees from the very beginning — a contrast to exchanges, which may only unlock their most preferential rates to those who hold its native cryptocurrency and lock it away for long periods of time.
What’s in your wallet?
In an attempt to entice crypto enthusiasts, wallet providers are making a concerted effort to show what makes them different from exchanges. And although consumers may be drawn to bigger platforms because of their credibility, there comes a warning: The power of exchanges gives them a greater ability to dictate the rules of doing business.
For adventurous investors who may have a diverse portfolio consisting of dozens of altcoins, one of the biggest frustrations centers on how many cryptocurrencies aren’t universally supported by exchanges. As a result, this means that their holdings can be scattered across countless platforms — each with their own username and password — that makes life a lot more complicated, especially when transactions need to be completed with urgency.
One of the biggest hurdles faced by the whole crypto sector involves making things as simple as possible, and making buying, selling and transferring cryptocurrencies free from any kind of confusion. Creating a user experience that’s akin to mainstream banks, with cleverly designed apps that allow tasks to be completed at the touch of a button, could prove crucial to ensuring that recent user growth remains sustainable.
And then there’s the perennial issue of security. High-profile hacks remain common, with $280 million taken from KuCoin’s hot wallets during one incident in September. Although most of these funds were eventually recovered, it still undermines confidence.
Streamlining the experience
Freewallet is one wallet provider that says its ecosystem offers a compelling alternative to crypto exchanges.
The company says it is aiming to create a one stop shop for digital assets, meaning that its users only need a single account to complete all of their transactions. This eliminates the need for logins with multiple sites, most of whom will take fees along the way. A recent revamp saw the platform expand its exchange capabilities — decreasing transaction processing times substantially, with an average completion time of under a minute.
Although the platform says convenience is something that weighs heavily on the minds of crypto owners, it stresses that there are other important things to consider too. According to Freewallet, its security is unparalleled — with cold storage employed to ensure that crypto assets are kept safe at all times. Additional security measures are also in force to ensure that the integrity of user accounts isn’t compromised.
Freewallet also says it has sought to offer some of the most competitive fees in the industry — making it easy to buy, sell and convert between more than 100 cryptocurrencies inexpensively. This is coupled by real-time pricing data that accurately reflects what’s going on in the markets, at a time when Bitcoin can fluctuate by hundreds of dollars in a single hour.
Fee-free transactions are also offered when Freewallet users are sending funds to another account that’s on the platform, with payments arriving instantly. Meanwhile, a new feature means that users can buy gift cards for online and brick-and-mortar businesses with any cryptocurrency supported by the platform — including Amazon, eBay and iTunes. An integration with MoonPay also means more than 40 major fiat currencies can be used to purchase a plethora of digital assets.
Freewallet will be hoping that its mobile-first secure storage, complete with an integrated trading platform, delivers a more satisfying user experience than what mainstream exchanges currently provide. First impressions matter, and simplicity will be key if the public is going to be persuaded that digital assets are right for them.
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A student has claimed to have found private keys accidentally HODLed starting as early as 2011 which will unlock more than $4 million in Bitcoin.
According to a throwaway account from BitcoinHolderThankU, the Reddit user was able to cash out roughly $4.2 million in Bitcoin (BTC) after finding the lost keys to 127 BTC on Dec. 22, when the price of the crypto asset was in the $23,000s. They later liquidated the coins in the middle of the bull run.
“I spent the next week figuring out how to safely and securely liquidate such a large amount of Bitcoin for the cheapest price possible,” said the Redditor. “I went back and forth between different [over-the-counter principal desks] and ultimately ended up selling all 127 Bitcoins for a price of $33,439.02 per coin minus a 0.15% fee. The net was roughly $4.24 million.”
They claim to have earned Bitcoin in 2011 or 2012 through “surveys, watching videos, and completing random tasks” to ultimately use the coins for purchasing in-game currency for the online game DarkOrbit. The private keys were reportedly never really missing, just forgotten on an older model Dell computer as BitcoinHolderThankU ended up not purchasing the currency.
Unfortunately, if the Redditor’s account is to be believed, they missed out on $1 million in additional profit by not holding for just a few more weeks. Since December, the price of Bitcoin has passed $41,000 to reach new all-time highs. BitcoinHolderThankU admitted they “would not have sold all 127 Bitcoin” if the same situation had played out again.
“To give myself credit, I did HODL for 8-9 years which is more than the vast majority of crypto users,” they said. “I definitely would’ve done things differently if I were given a second chance.”
Despite their sudden fortune, the Redditor says they will avoid “expensive luxuries” and intends to put the bulk of the funds into the S&P 500, adding:
“I don’t want to end up like one of those people who win the lottery and blow it all in a matter of months/years […] I’m going to continue living my life normally as I was on December 21st and every day before that.”
Unfortunately, not all stories involving misplaced or forgotten keys have such a happy ending. There may still be more than $285 million in Bitcoin lost somewhere in a U.K. garbage dump after an IT worker accidentally threw out his personal laptop with his keys in 2013.