In a recent press release, Grayscale Investments, the world’s largest digital currency asset manager, announced it has received a comment letter from the U.S. Securities and Exchange Commission (SEC). According to the SEC, Grayscale’s Filecoin Trust’s underlying asset, Filecoin (FIL), should be classified as a security under federal securities laws. The regulatory body’s viewpoint has sparked a dispute, as Grayscale holds a differing opinion on the matter.
The SEC’s contention is that if Filecoin is considered a security, Grayscale’s Filecoin Trust would correspondingly qualify as an investment company under the Investment Company Act of 1940. Consequently, the SEC has requested that Grayscale promptly withdraws the registration statement it filed on April 14, 2023, for the Grayscale Filecoin Trust under Section 12(g) of the Securities Exchange Act of 1934.
Contrarily, Grayscale Investments believes that Filecoin does not meet the definition of security under federal securities laws. The company plans to respond expeditiously to the SEC, defending its position with a detailed legal explanation.
The outcome of this disagreement is uncertain, and much depends on whether Grayscale’s arguments can persuade the SEC. If the SEC stands firm in its belief that Filecoin is a security, Grayscale may be forced to seek alternative accommodations allowing the Trust to register under the Investment Company Act of 1940. Another potential, albeit drastic, alternative could involve dissolving the Trust altogether.
The stakes are high for both Grayscale and the broader cryptocurrency market. The SEC’s final decision may significantly impact the regulatory framework governing digital assets.
This week, many cryptocurrency companies have eliminated jobs in response to the current crypto winter. However, these companies have chosen to keep “impactful” people on staff as they prepare for a “longer slump.”
At least 216 jobs were cut across three different cryptocurrency companies. These companies are open-source software laboratory Protocol Labs, blockchain data firm Chainalysis, and cryptocurrency exchange Bittrex. Each of these companies reduced their workforce by 89, 83, and 44 employees, respectively.
In a blog post dated February 3, Juan Benet, CEO of Protocol Labs, the firm that introduced Filecoin (FIL), said that the company will be cutting jobs because it needed to concentrate its workforce “against the most impactful and business-critical projects.”
He claimed that the firm had come to the conclusion that it was in the best position to “weather this protracted winter” by eliminating “89 jobs,” which is equivalent to around 21% of its staff.
Given that the cryptocurrency business is now experiencing “very tough” conditions, Benet said that the firm should “plan for a lengthier slump.”
Meanwhile, on February 1, Bittrex CEO Richie Lai emailed the firm’s workers to notify them that the company would be reducing its employment in order to “maintain the long-term health” of the business.
On February 2, the email was shared inappropriately on Twitter. Lai claimed that despite the fact that the leadership team has been “working vigorously” over the last several months to decrease expenditures and boost efficiency, the efforts have not achieved the “results required.” Lai added that the efforts have not delivered the “results necessary.”
Lai went on to say that the current state of the market necessitated a reevaluation of the company’s approach and a readjustment of its “investments with the new economic climate.”
On February 2, 2018, records pertaining to employment in the state of Washington indicated that Bittrex had eliminated 83 positions.
According to statements made by Maddie Kennedy, director of communications at Chainalysis, to Forbes on February 1, the firm let off 44 of its 900 workers, which represents around 4.8% of the workforce. Kennedy said that those who were let go were “mainly in sales” at the company.
The announcement of these layoffs follows reports that in January, at least 2,900 employees were let go across 14 different cryptocurrency organisations.
Among those companies, Coinbase saw the most personnel reductions, with 950 employees losing their jobs on January 10th.
During this time, rival cryptocurrency exchanges Crypto.com, Luno, and Huobi each laid off about 500 employees, 330 employees, and 320 employees, respectively.
The Australian Securities and Investment Commission (ASIC) has issued a stop order on three crypto funds belonging to Sydney-based Holon Investments Australia Limited.
According to a Press Release shared by the regulator on Monday, the three Holon crypto funds include those linked to Bitcoin (BTC), Ethereum (ETH), and Filecoin (FIL) respectively.
According to the regulator, the reason for the halt in the offering of these crypto funds is that the firm did not meet the non-compliant target market determinations. ASIC fears that Holon is offering the product to retail investors whose investment goals and capabilities may not necessarily fit into the risks associated with the three products.
The regulator reiterated that the embargo is temporary and will remain so for the next 21 days. The selection of Bitcoin, Ethereum, and Filing is essentially based on their extreme volatility and by a subtle extension, their popularity among retail investors.
“The interim orders stop Holon from issuing interests in, giving a product disclosure statement for or providing general advice to retail clients recommending investments in the Funds. The order is valid for 21 days unless revoked earlier,” the announcement reads, adding that “ASIC made the interim orders to protect retail investors from potentially investing in funds that may not be suitable for their financial objectives, situation or needs.”
The regulator noted that Holon Investments has the right to meet its requirements to offer the products, otherwise, it will place a final stop order on the products.
The Australian ecosystem is one that is very vibrant, however, with a lot of fraudulent practices hitting users in the country, regulators are very cautious in their attempts to protect the average consumer. The same sentiment is shared by regulators in other top economies like the United States and the United Kingdom.
In all, this offering of protection accounts for why many nations are still relatively slow with their embrace of regulation when compared to major crypto hubs like the UAE and Singapore.
Decentralized storage network Filecoin miner RRMine Global announced that it will withdraw from the Chinese mainland market and close its business in mainland China, moving its headquarters to Singapore.
In the press release, the company said that due to the policy of strict restrictions on cryptocurrencies in mainland China and the divergence of its Web3.0 strategy, it decided to completely shut down mining operations in mainland China and move its headquarters to the world’s most cryptocurrency-friendly place, Singapore which is one of the open economies.
Reportedly, several executives of Renren Mine were taken away by the police from their offices in Chengdu, China for investigation last December.
Steve Tsou, Global CEO, RRMine Global
“Very much like other entrepreneurs, we want the best for our company, employees and community. The decision has been made after a profound examination and multiple discussions, and it has not been easy to come back from a downfall, especially when RRMine Global has Continuously provided services to all its users globally without fail despite all the events that happened. From today onwards, we would like to move forward and recreate the prosperous scene from China in Singapore.”
RRMine Global has been committed to solving the problem of lack of liquidity in Web3.0 and has become the world’s leading one-stop service platform for providing Filecoin.
Decentralized storage network Filecoin aims to provide users with decentralized data storage and transmission services through its miners, using its commodity hardware. Miners are also required to stake large amounts of FIL tokens to start their mining operations as part of their “initial staking collateral.”
Filecoin had an initial coin offering (ICO) in 2017 and was listed on major exchanges, including Coinbase. Shortly after FTX went public, the FIL futures contract quickly processed a volume of $150 million.
RRMine Global also announced the launch of “R-Datacap Storage” this time, which will significantly reduce operating costs, improve revenue efficiency, and promote the Filecoin incentive plan.
Crypto trader Aaron Arnold is naming his top altcoin picks for the month of November.
In a new YouTube video, the Altcoin Daily host says he anticipates Polygon (MATIC) to surge as companies like Twitter work on projects that require Ethereum layer-2 scaling solutions.
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“Polygon is breaking out, targeting new record highs. MATIC looks ready to set new all-time highs, and this matches what we see going on on-chain.
Polygon just crossed one billion transactions that have all been processed on the Polygon proof-of-stake chain. An amazing milestone, an amazing achievement.
Ethereum layer-2 scaling solutions could not have come at a better time. There’s demand for this, especially with all the adoption that we see.”
The trader is also optimistic about the smart contract platform Avalanche (AVAX) after one of the original rebasing tokens, Ampleforth (AMPL), launched on the network.
“Avalanche is providing a lot of incentives for different DeFi [decentralized finance] protocols to come on the Avalanche blockchain and it’s working.”
He points to Avalanche’s growing numbers in terms of addresses and transactions, adding that the network’s daily active addresses just hit a new high of nearly 70,000, representing a weekly increase of over 100%.
Arnold says that he is also bullish on the decentralized oracle network Chainlink (LINK) and decentralized peer-to-peer file storage protocol Filecoin (FIL).
“I’m adding them just because they are interoperating with a lot of the leaders in this space. I think the future is multi-chain, the future is interoperable.”
Arnold says that the decentralized cross-chain liquidity protocol THORchain (RUNE), which recently broke volume and liquidity all-time highs, is also on his list.
He says the platform is now being viewed as a favored venue for KYC-less (know your customer) and borderless trading of Bitcoin (BTC) for Ethereum (ETH) and ERC-20 tokens. Arnold cites a forecast that the network will have more real Bitcoin than Wrapped Bitcoin (WBTC) on the Uniswap exchange by the end of next January.
“THORchain is doing some impressive metrics.”
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Some traders have said that Filecoin (FIL) has lost its momentum because its current price at $64 is more than 70% below its all-time high at $238. However, this decentralized data-sharing platform is showing signs of increasing adoption and this could cause the FIL token price to accelerate its current uptrend.
The FIL token is used to purchase storage space and retrieve data from the Filecoin Network. At the same time, its users gain rewards for selling their excess storage using this open-source platform. To compete with existing centralized cloud storage services, Filecoin has economic incentives to ensure files are reliably stored over time.
Filecoin (FIL) price at Coinbase in USD. Source: TradingView
Notice how the past three weeks showed a potential reversion to the previous downtrend movement. That upward channel points to a $90 support by mid-November and resistance near $107, which would be a 55% gain from the current pricing.
Related:Bitcoin-related altcoins surge as BTC ETF rumors spread across the sector
Partnerships and adoption could pave the way to $100
On Sept. 14, Filecoin announced a referral program for users who bring members carrying datasets larger than 90 Terabytes. The network reached 9,000,000 Terabytes in August, and according to their website, there are over 3,000 systems and storage providers serving capacity to 400+ applications.
On Oct. 13, Filecoin announced a storage collaboration with Flow Blockchain, which is backed by Dapper Labs. The service will establish decentralized data storage for nonfungible tokens (NFTs), along with the media assets associated with them. Flow’s platforms include Eternal, Starly, Versus and the upcoming multiplayer online game Chainmonsters.
More importantly, on Oct. 15, the daily release of Filecoin tokens will decrease by 23.8% to mark a year since the mainnet launched. Specifically, that affects the 7.5% stake held by early investors, equivalent to 150 million FIL tokens after the three-year issuing period.
Filecoin future gregate open interest. Source: Bybt
Since Sep. 30, Filecoin futures open interest has increased by 45%, signaling that investors’ interest is finally starting to pick up. This metric represents the total number of contracts in play, regardless of whether they have actually been traded on a specific date.
Glass half full: The funding rate has room for buyers’ leverage
To assess whether the market is leaning bullish, one should analyze the perpetual contracts funding rate. Even though buyers and sellers’ open interest is matched at all times, leverage can vary. When buyers (longs) are demanding more leverage, the funding rate turns positive. Thus, they are the ones paying the fees to the sellers (shorts).
However, the opposite situation occurs when shorts require additional leverage, and this causes the funding rate to turn negative.
The above chart shows a brief period of excessive buyers (longs) leverage building in early September as the funding rate reached 0.10% or 2.1% per week. More recently, Filecoin’s funding rate surpassed 0.06% per 8-hour as FIL token struggled with the $80 resistance on Oct. 8 but failed to break through.
Currently, derivatives metrics show few signs that investors have abandoned Filecoin despite its price hanging 70% below the $238 all-time high. The recent partnership with Flow Blockchain, increasing network use and capacity, and the reduced token emission point to a possible continuation of the previous three-week uptrend. Nothing seems to be holding back FIL from reaching the $90 to $107 range in November.
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.
Filecoin has officially become the storage collaborator for the Flow Blockchain.
Filecoin said in an Oct. 13 announcement that the move was a part of a push to ensure holders’ and issuers’ NFTs are “securely available everywhere.”
The announcement follows from a previous move in August in Which Dapper Labs was working to integrate Filecoin’s storage services with the Flow Blockchain.
The collaboration enables Flow users to mint NFTs, leverage InterPlanetary File System (IPFS) content addressing, and store the tokens in decentralized storage hosted by Filecoin.
According to Filecoin, IPFS content addressing is a solution to location addressing which retrieves online information from specific locations on the web, such as from behind URLs. Filecoin asserts that this method has “obvious downsides” as the data relies on centralized entities who own the locations, and therefore can “control the content.”
“In content-based addressing, content is no longer retrieved from single locations on the web. Rather, content is retrieved from any participating nodes on the IPFS network that have the content you’re requesting,” Filecoin outlined.
As part of the collaboration, Filecoin has also opened “Next Step Grants” worth $5,000 for each eligible NFT project on Flow that integrates with IPFS or Filecoin’s network.
“As the Flow ecosystem grows, Filecoin’s decentralized storage solution will allow future applications that are built on Flow to have an easy way to protect NFT media assets and metadata,” the announcement read.
It’s happening! @Filecoin is the official storage collaborator #onFlow
⛓️ Immutable NFT metadata, including media assets, via @IPFS content addressing
Filecoin’s provable and decentralized storage
Full announcement https://t.co/iwEd1JpEVk
— Flow Blockchain (@flow_blockchain) October 14, 2021
Dapper launched the Flow Blockchain in late 2020, and the network is home to top NFT projects, including NBA Top Shot and CryptoKitties. September was a big month for Dapper, with the firm signing multiple partnerships with top firms, along with raising $250 million in funding.
Cointelegraph reported on Sept. 14 that Google had partnered with Dapper to serve as a network operator for Flow. Google signed on to support the development of Web 3.0 products and services such as NFT projects with “scalable” and “secure infrastructure.”
Related:Blockchains vie for NFT market, but Ethereum still dominates — Report
On Sept. 30, the NFL partnered with Dapper to launch an American football equivalent of NBA Top Shot on Flow, which is slated to drop later this year.
During the announcement of the $250 million funding round, Dapper outlined that the fresh capital will be used to fund further licensed NFT projects across sports, music and entertainment, along with scaling up its NBA Top Shot platform.
Bitcoin (BTC) is struggling to sustain above $50,500 but that has not stopped the altcoins from following in Ether’s (ETH) footsteps after the top-ranked altcoin hit $4,000 on Sept. 3. This has pushed Ether’s market dominance above 20% while Bitcoin’s dominance has shrunk to 41.1%.
However, Bitcoin’s hesitation in the past few days has not altered the outlook of Bloomberg senior commodity strategist Mike McGlone who has retained a $100,000 target on Bitcoin and $5,000 on Ether.
Crypto market data daily view. Source:Coin360
Apart from the top two cryptocurrencies, the nonfungible token (NFT) sector had been attracting investor’s attention since July. Cointelegraph contributor Jordan Finneseth recently suggested that the recent drop in transaction volumes and a few other reasons could be signaling a rotation of capital from NFTs to the decentralized finance sector.
Let’s study the charts of the top-5 cryptocurrencies that may outperform in the short term.
BTC/USDT
Bitcoin broke above the $50,500 resistance on Sep. 3 to hit $51,000 but the long wick on the day’s candlestick suggests a lack of buying at higher levels. That was followed by a Doji candlestick pattern on Sep. 4, indicating indecision among the bulls and the bears.
BTC/USDT daily chart. Source:TradingView
The negative divergence on the relative strength index (RSI) suggests that the bullish momentum may be weakening but the upsloping moving averages indicate that the path of least resistance is to the upside.
If buyers drive the price above $51,000, the BTC/USDT pair could resume its uptrend. The first stop could be $55,000 but if this resistance is crossed, the up-move could reach $60,000.
Conversely, if the price turns down from the $50,500 to $51,000 resistance zone, the pair may drop to the 20-day exponential moving average ($47,998).
This is an important support for the bulls because if it cracks, the pair may remain range-bound between $46,200 and $50,500 for a few days. A break and close below $46,200 could sink the pair to the 50-day simple moving average ($43,291).
BTC/USDT 4-hour chart. Source:TradingView
The price has been trading between the 20-EMA and the overhead zone. This tightening of the range is likely to result in a strong breakout soon. If buyers push the price above $51,000, the bullish momentum could pick, signaling the resumption of the uptrend.
Alternatively, if the price slides below the moving averages, it will suggest that bears are aggressively defending the overhead resistance zone. That could pull the price down to $46,200. A bounce off this support could keep the pair range-bound for some more time but a break below it will indicate that bulls may be losing their grip.
LTC/USDT
The bulls are attempting to push and sustain Litecoin (LTC) above the overhead resistance at $225.30. If they succeed, it will complete a rounding bottom pattern that may start a new uptrend.
LTC/USDT daily chart. Source:TradingView
The long wick on the Sep. 4 candlestick showed selling near the overhead resistance but the positive sign is that bulls did not cede much ground. They are again attempting to overcome the overhead hurdle.
If they can sustain the price above $225.30, the LTC/USDT pair could start an up-move to $300 and later to the pattern target at $347.30. The rising 20-day EMA ($184) and the RSI in the overbought zone indicate the path of least resistance is to the upside.
This bullish view will invalidate if the price turns down from the current level and breaks below the 20-day EMA.
LTC/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows the bears tried to stall the up-move at the overhead resistance at $225.30 but the bulls did not give up much ground. This suggests that buyers continue to accumulate on any minor dip.
Both moving averages are sloping up and the RSI is in the overbought zone, indicating that bulls are in command. A break and close above $225.30 could open the doors for a rally to $250.40. Conversely, a break and close below the 20-EMA will be the first sign of weakness.
FIL/USDT
Filecoin’s FIL token has broken above the overhead resistance at $98 today. This completes a rounding bottom pattern, suggesting the start of a new uptrend. The bottoming formation has a pattern target at $156.
FIL/USDT daily chart. Source:TradingView
The 20-day EMA ($79) has turned up and the RSI has soared above 81, indicating a possible trend change. Usually, the breakout from a major pattern retests the breakout level. In this case, the price may drop to $98.
If bulls flip the $98 level into support, the FIL/USDT pair could resume its uptrend. On the contrary, if bears pull and sustain the price below $98, it will suggest that the recent breakout was a bull trap. The pair may then drop to the 20-day EMA.
If the price rebounds off this support, the bulls may once again try to propel the price above the overhead resistance and resume the uptrend. The bears will have to sink the price below the 20-day EMA to gain the upper hand.
FIL/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows a strong momentum in favor of buyers. That has pushed the RSI deep into the overbought territory, indicating the possibility of a minor correction or consolidation in the short term.
If bulls do not give up much ground, it will suggest that traders are not booking profits as they anticipate another leg higher. That will increase the likelihood of the resumption of the uptrend.
However, the bears are likely to have other plans. They will try to pull the price back below $98 and trap the aggressive bulls.
FTT/USDT
FTX Token (FTT) broke above the previous all-time high at $63.13 on Sep. 1 and followed it up with a new all-time high at $70.72 on Sep. 2. A new all-time high is a sign of strength but the bulls have not been able to sustain the price above the breakout level at $63.13.
FTT/USDT daily chart. Source:TradingView
This suggests that bears have not yet given up and are attempting to stall the up-move. The negative divergence on the RSI suggests that the bullish momentum may be slowing down.
If bears pull the price below $57.93, the FTT/USDT pair could drop to the 20-day EMA ($53). A strong bounce off this level will suggest that bulls are accumulating on dips. The buyers will then again attempt to push the price above the $63.13 to $70.72 resistance zone. If they manage to do that, the pair could rally to $84.
This positive view will invalidate if the price breaks below the 20-day EMA. Such a move will suggest that the recent breakout above $63.13 was a bull trap.
FTT/USDT 4-hour chart. Source:TradingView
The 4-hour chart shows the formation of a descending triangle pattern, which will complete on a break and close below $59. This bearish setup has a pattern target at $47.50. The flat 20-EMA and the RSI just above the midpoint do not give a clear advantage either to the bulls or the bears.
If buyers drive and sustain the price above the downtrend line, it will invalidate the bearish pattern. The price may then rally to $65 and later to $70.72. A breakout and close above this level could start the next leg of the uptrend.
Related:Nigeria plans CBDC rollout, Salvadoran retirees protest Bitcoin Law, Twitter to add BTC and ETH tipping feature: Hodler’s Digest, Aug. 29-Sept. 4
IOTA/USD
IOTA (MIOTA) rallied sharply from $0.96 on Sep. 1 to $2.08 on Sep. 4. This up-move pushed the RSI above 82, suggesting that the rally was overextended in the short term.
MIOTA/USDT daily chart. Source:TradingView
The MIOTA/USDT pair is currently witnessing profit-booking and it may drop to the first support at the 38.2% Fibonacci retracement level at $1.64. A strong rebound off this level will suggest that traders are buying on minor dips.
The bulls will then make one more attempt to push the price above $2.08. If they succeed, the pair could pick up momentum and rally toward $2.40 and then $2.67.
Alternatively, if bears pull and sustain the price below $1.64, the next stop could be in the zone between the 50% retracement level at $1.51 and the 61.8% retracement level at $1.38. A deeper correction could delay the start of the next leg of the uptrend.
MIOTA/USDT 4-hour chart. Source:TradingView
The long wick on the 4-hour chart above the psychological barrier at $2 shows that bears are attempting to defend this level. Profit-booking may pull the price down to the 20-EMA, which is likely to act as a strong support.
If the price rebounds off the 20-EMA with strength, it will suggest that the sentiment remains positive and bulls are accumulating on dips. The buyers will then try to resume the uptrend by thrusting the price above $2.08.
A break and close below the 20-EMA will be the first sign of weakness. That may open the doors for a further decline to $1.50.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Ethereum has been on an impressive growth path recently. The digital asset recently broke a three-month high after it broke through $3,400 in the early hours of Tuesday. Usage on the Ethereum network has increased drastically in the recent weeks, causing fee rates to surge 200% in the space of a week. As more users adopt the leading smart contracts platform, predictions for the asset’s value have risen accordingly.
Raoul Pal is an ex-Goldman hedge fund exec who is bullish on cryptocurrencies. The ex-hedge fund exec had then gone on to co-found Real Vision, a platform that provides insights and analysis for investors. Pal was on a podcast to talk about his cryptocurrency investment strategies for the top 2 largest projects in the market, Bitcoin and Ethereum, and he had some interesting predictions for both cryptocurrencies.
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Ethereum To $20,000, Bitcoin To $250,000
Real Vision CEO Raoul Pal gave some very optimistic predictions for the top 2 digital currencies during his interview. Pal said he believed that Ethereum was going to be at $20,000 by the end of March 2022, while putting Bitcoin price between $250,000 to $400,000 in the same time frame. For Ethereum, Pal said that the growing popularity of decentralized finance (DeFi) and non-fungible tokens (NFTs) factors into his prediction. Disclosing that both DeFi and NFTs have already been twice as widely accepted as Bitcoin.
Related Reading | Billionaire Who Predicted 2008 Housing Crash Says Bitcoin Is “Worthless”
Ethereum adoption has far dwarfed the rest of the crypto space, Pal said. Adding that the recent London Hard Fork and EIP-1559 work to reduce ETH supply, and with ETH 2.0 staking, further propels the bullish setup for the price blowout.
Get 110 USDT Futures Bonus for FREE!
Raoul Pal expects ETH to 6X by next year | Source: ETHUSD on TradingView.com
“There’s tons that have gone into just holding, tones that are locked up in DeFi, tons that are locked up in NFTs, and you’re left with, as of today, 11% of the entire supply of Ethereal available and it’s going down every day, and the demand is going exponential. The only outcome is an exponential rise in price. There’s no other outcome.” – Raoul Pal, Co-Founder, and CEO, Real Vision
Put Your Money Where Your Mouth Is
Raoul Pal is not one to give predictions for others to follow without having a stake in it himself. In fact, the CEO had revealed last year that he had moved his entire investment portfolio to cryptocurrencies. That’s how bullish Pal is on cryptocurrencies. The CEO had completely exited his gold holdings, which, at the time, had made up 25% of his investment portfolio, and the funds were moved to crypto. Even at that point, Pal’s portfolio was made out of 75% crypto before he exited his gold positions.
Related Reading | Deloitte Survey Shows 76% Of Finance Execs Think Physical Money Is Nearing Its End
Now, Pal’s holdings consist of cryptos at various degrees of concentration, down to crypto-related products. The CEO revealed that his holdings consisted of 55% Bitcoin, which made up the majority of his investments. Ethereum (ETH) is the second-largest position, making up 25%. The remaining 20% consists of an equally weighted basket of tokens. These range from tokens of decentralized finance (DeFi) protocols, Layer 1 blockchains, and interoperability solutions.
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Pal also added that he had “some specific bets in social tokens, metaverse, and other longer-term macro bets.” The Real Vision co-founder referred to Ethereum as “the greatest trade” from a macro perspective point of view. And he expects the cryptos to go up in Q4 of 2021. “Don’t forget that they usually go up 5X to 10X in the last three months of the year, and we haven’t even got to the all-time high,” Pal said.
Featured image from Toshi Times, chart from TradingView.com
Filecoin (FIL) accumulated 65% gains over the past 30 days to reach its highest price since June 8. The recent strength was accelerated after an Aug.6 partnership with Chainlink’s oracle protocol on Aug. 6 allowed the projects to join their grant initiatives to speed up the development of hybrid smart contracts to leverage code running on the blockchain while the managing data computation process off-chain.
Filecoin (FIL) price in USD at Coinbase. Source:TradingView
Numerous events triggered the $235 all-time-high on April 1, but that movement is clearly long gone because the cryptocurrency is 67% below that level. Let’s take a moment to understand what triggered the rally and whether these drivers still exist.
Filecoin is a decentralized cloud-based data storage network that allows its users to gain rewards for selling their excess storage on an open-source platform. The built-in economic incentives ensure files are reliably stored over time.
The network’s storage capacity surpassed 2.5 exabytes in February, which lead to positive remarks from influencers like Cameron Winklevoss, the billionaire investor and co-founder of the Gemini exchange.
The amount of network storage power, active miners, and Github contributors continues to grow on the @Filecoin $FIL network. Not surprised to see price rocketing. pic.twitter.com/0Ua77UJlgl
— Cameron Winklevoss (@cameron) March 17, 2021
On March 17, Grayscale Investments, the digital currency asset manager behind the GBTC Trust, announced the launch of its Filecoin investment vehicle.
On March 25, a $23 million Filecoin Ecosystem Fund was announced, backed by large Chinese investment groups like Fenbushi Capital, SNZ Capital, and Neo’s EcoFund.
New smart contract capabilities are expected and FIL’s daily issuance was cut
On March 31, Qtum founder Patrick Dai said that the protocol was working to enable smart contracts for Filecoin through the Qtum network.
On April 10, Martin Gaspar, a research analyst at CrossTower exchange, told Cointelegraph that solid demand from Chinese miners emerged due to a shortage of proof-of-work rigs. Gaspar added that these miners “are required to pledge the FIL token as collateral, resulting in demand for the token.”
Lastly, on April 15, Filecoin changed its supply economics, reducing its daily issuing from 648,000 FIL per day to 365,000. The drastic cut likely led to a perception of scarcity for the token. In turn, it may have caused retail investors and miners to accelerate their investments ahead of the event.
Data shows retail activity has been picking up
Perpetual futures contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours to ensure no exchange risk imbalances.
Whales, arbitrage desks, and market makers avoid exposure to these instruments due to their variable funding rates. When longs (buyers) demand more leverage, they are the ones paying the fee. The opposite holds when shorts (sellers) use more leverage, thus causing a negative funding rate.
The above data clearly shows the funding rate surging between Aug. 10 and Aug. 17, and it reached a positive 0.08% average. This number translates to 1.7% per week, indicating increased leverage longs activity. After receding for a couple of days, the indicator initiated another hike to a 0.10% fee charged every 8-hour from longs.
The current 2.1% weekly equivalent fee indicates even stronger leverage from retail traders, which means optimism. Of course, there’s no way to know if the recent move will be enough to spark a continuous price improvement, but traders seem to believe $100 is closer than ever.
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.
