Cameron Winklevoss, the billionaire founder of cryptocurrency exchange … investment vehicles by institutions to gain exposure to cryptocurrencies.
Cameron Winklevoss, the billionaire founder of cryptocurrency exchange Gemini, believes the next Bitcoin (BTC) bull run will be much different. When compared to previous bull markets, Winklevoss noted that there is substantially more capital, infrastructure, and better projects.
“The next Bitcoin bull run will be dramatically different. Today, there’s exponentially more capital, human capital, infrastructure, and high-quality projects than in 2017. Not to mention the very real specter of inflation that all fiat regimes face going forward. Buckle up!”
Various data points hint at a significant increase in the amount of capital held by investors in the cryptocurrency market. Major cryptocurrency exchanges have also received more regulatory clarity, improving the infrastructure of the market.
Capital flows into the Bitcoin market
Two metrics primarily show that more money could be involved in the latest Bitcoin rally. First, the market capitalization of Tether (USDT) has surpassed $10 billion. Second, the assets under management (AUM) by Grayscale Investments recently achieved a new high.
To date, Tether is the biggest stablecoin in the cryptocurrency market. Investors, especially in countries with regulatory uncertainty, rely on the stablecoin to trade crypto assets. A rapid rise in the market cap of Tether could indicate more money is waiting to deploy on crypto exchanges.
Grayscale’s crypto-asset trusts are arguably the most widely-utilized investment vehicles by institutions to gain exposure to cryptocurrencies. Within the last quarter, the assets under management in Grayscale’s suite of products hit an all-time high at $5.1 billion.
Clarity around cryptocurrencies by major U.S. regulators and banks could improve the perception of the asset class by the mainstream. This means if Bitcoin approaches a new bull market, the improved sentiment around the entire industry could benefit BTC adoption and its value.
Crypto startups are finding relevant use cases
Overall, projects and companies in both the Bitcoin and crypto markets are seemingly increasing in quality. This is partially due to increased regulatory clarity and the fact that more traditional firms are willing to collaborate with crypto firms.
As an example, Bitcoin Lightning startup Zap is working with Visa and has participated in its Fintech Fast Track Program. This allows Zap to launch Visa cards as a part of the partnership.
“We’re contractually obligated to launch one in the next 12 months and we plan on launching one in the next few months.”
Better projects, increased capital, and improving infrastructure are resulting in boosted confidence levels among Bitcoin investors and this is raising sentiment across the entire sector. In the medium-term, high-profile investors are hopeful BTC would reflect these factors.
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US crypto exchange giant Coinbase is going deeper down the DeFi rabbit hole by listing more tokens and offering rewards through its Learn platform.
Yesterday, Coinbase announced that it was expanding its Learn platform with the addition of Kyber Network tokens. The incentive allows exchange customers to watch videos in exchange for a small handful of the KNC tokens worth a couple of dollars.
Starting today, Coinbase customers can start earning Kyber (KNC) by watching lessons and completing quizzes about the Kyber Network, a protocol that aims to make swapping digital assets and cryptocurrencies simple and efficient. https://t.co/2JQm5kDn3W
The Kyber Network has shot to DeFi fame recently following the launch of its long-awaited Katalyst protocol upgrade on July 7. The platform joined the liquidity farming race with a governance upgrade that yielded staking opportunities on the new KyberDAO for KNC holders. Earlier this month, KNC skyrocketed to a two year high of around $2. Not wanting to miss out on commissions or potential future staking fees, Coinbase listed KNC earlier this year.
Coinbase has also listed Compound Finance’s COMP token, admitting that it has a large stake in the DeFi platform. Learn opportunities are also available for COMP, but waiting lists appear to be a bigger issue than eligibility for many of the exchange’s customers.
Still Waiting …
The move was met with a lot of complaints however, as just a few hours after it was announced, many Coinbase customers had logged in to found that they were on a waiting list. Either the incentive is that popular that thousands had signed up to learn about KNC within a couple of hours, or Coinbase was playing tricks again to boost its user base.
These ‘waitlists’ are often just another way of saying ‘we’ve run out of free tokens to hand out’. Some users were still waiting for XLM earn opportunities, 16 months after they were announced on the exchange. One disgruntled customer posted:
“I’ve been on “WAITLIST” for your coins for >6 months. I’ve have emailed you guys multiple times, with no reply, no help, no acknowledgement.”
“You guys just made us join wait list……… but that wait never ends ….. very bad experience with coinbase for giveaways,”
Eligibility is also an issue as Coinbase prevents some geographical regions from taking part though being in one of its favored locations is still no guarantee of acceptance.
“Customers in all other supported countries may indicate their interest and join the waitlist. Due to popular demand in those markets, please note it may take some time to be able to start earning — even if you are an eligible customer.”
The incentive appears to be a good one, but judging by the responses, Coinbase doesn’t really want to give much away at all.
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Meanwhile, based on the Exchange Benchmark by crypto market data provider CryptoCompare (assigning grades between AA and E), only Gemini …
Just above half of the examined crypto exchanges passed the tests for ‘trusted’ spot volume, according to crypto market analysis firm Coin Metrics‘s latest metric. One failed all of them.
Coin Metrics has introduced a “trusted volume” metric, in an effort to help differentiate between legitimate and fake trading volumes. Each exchange is tested in three categories – volume correlation, web traffic analytics, and qualitative features – and they must pass all three to be included in the trusted volume set of metrics, wrote the firm.
However, major exchange OKEx is the only one among the 26 tested platforms that failed all three tests performed. It got 76% in volume correlation (cutoff is 80%); it got 50 in qualitative features (cutoff is 50); and it’s outside the threshold set in the traffic analytics category.
Four exchanges passed only one test, these being: Bibox (volume correlation), HitBTC (qualitative features), LBank (qualitative features), and ZB.COM (web traffic analytics).
The remaining seven exchanges on the list passed two tests each, as seen on the table.
The report said that the list will remain under periodical revision, while certain exchanges, such as derivatives platform FTX (which had failed the volume correlation test) have already “added a broader listing of spot assets since the end of June and subsequently improved performance on the volume correlation test.”
Meanwhile, based on the Exchange Benchmark by crypto market data provider CryptoCompare (assigning grades between AA and E), only Gemini and Coinbase got an AA grade, while nine others got an A grade.
Looking at the exchanges on Coin Metrics’ ‘winner’ list, the majority are graded AA or A by CryptoCompare. Meanwhile, Binance US and Gate.io are graded B, while Bitbank, Bittrex, and Poloniex got a BB each.
The failed OKEx has gotten a BB from CryptoCompare.
Per their July report, in June, volume from many of the largest Top Tier exchanges decreased 35% on average compared to May.
“Binance and OKEx remained the top players in terms of volume in June relative to other Top Tier exchanges,” said the report, while “among the top 15 Top Tier exchanges, they currently represent approximately three quarters of the volume.”
Furthermore, both Top Tier volumes and Lower Tier volumes decreased “drastically”: -36% to USD 177bn and -53% to USD 466bn, respectively.
Binance was the largest Top Tier exchange by volume in June, the report said, trading USD 41.8bn, followed by OKEx’s USD 40.6bn, and Coinbase’s USD 6.86bn.
IO, Coinbase, Gate.io, Gemini, itBit, Kraken, and Poloniex. All of these exchanges, sans CEX.IO and Gate,io, Bitbank, were also included in Messari’s …
The team at crypto analytics firm Coin Metrics has architected a new framework for evaluating how reliable exchange volume data really is. And based on the firm’s methodology, real crypto trading volumes are close to one tenth of those reported by most exchanges.
The Coin Metrics Trusted Volume Framework is a new way to more accurately measure trading volumes across crypto markets. Many exchanges, particularly those which list illiquid altcoins, have a reputation of falsifying volumes in a bid to attract traders.
“Exchanges are especially notorious for boosting volume numbers in order to game ranking sites or other nefarious reasons,” Jon Geenty, a data scientist at Coin Metrics, told Decrypt.
“The industry is full of technical information that can be difficult to understand and at times, misleading. We are working to create a more transparent environment for those within it and a safer, more trustworthy source for those hoping to learn more.”
Instead of aggregating volumes from the most popular exchanges in the industry, Coin Metric’s new framework funnels data from 13 trusted spot exchanges: Binance/Binance US, Bitbank, Bitfinex, bitFlyer, Bitstamp, Bittrex, CEX.IO, Coinbase, Gate.io, Gemini, itBit, Kraken, and Poloniex. All of these exchanges, sans CEX.IO and Gate,io, Bitbank, were also included in Messari’s “Real 10” exchange index that it unveiled in March 2019.
For its own framework, Coin Metrics subjected popular crypto exchanges to a three-pronged litmus test for volume correlation, web traffic analytics and qualitative features.
The first metric measures whether or not an exchange’s price feeds are closely correlated with the price feeds from well established, well-regulated exchanges, namely Bitstamp, Bittrex, Coinbase, Gemini, itBit and Kraken. Any exchange which had a correlation of 80% or higher passed this test.
The second test involves cross referencing an exchange’s reported volume with its daily web traffic. The rationale here is that “[a]n exchange inflating volume numbers should tend to have a higher ratio of volume to traders relative to the other exchanges,” according to Coin Metrics.
For the final test, Coin Metrics gauged a number of qualitative measures regarding an exchange’s features, including historical data availability, regulation status, KYC requirements, and fiat deposits enabled. Any exchange which did not score at least a 50 out of 89 for this test failed it.
So which exchanges are the least trustworthy? Only one, the Malta-based OKEx, failed all three categories, while BiBox, ZB.com, LBank and HitBTC failed two. The full list is current as of July 1, but Coin Metrics will update it periodically if needed.
Based on this framework, the real 24-hour volume of the crypto market is roughly $13.25 billion, as opposed to the nearly $113 billion in volume reported by exchanges.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
Trade Bitcoin Cash and other major cryptocurrencies, indices, forex, shares and commodities through CFDs with Capital.com’s award-winning …
Why is Bitcoin Cash important to traders?
Launched in 2017, Bitcoin Cash (BCH) has already established itself as a rather prominent player in the crypto market. Also known as Bcash within its community, it was quickly adopted by investors, and by the end of the first day of its existence, BCH became the third cryptocurrency behind BTC and ETH in terms of market capitalisation. Today, it keeps its strong position in the top five list.
Bitcoin Cash is arguably Bitcoin’s most successful offshoot, differing from the other versions of that time by enabling the increase of the block size from one MB to 32 MB. This feature was developed to make the technology more scalable, allowing to process more transactions per second and helping to support the use of the cryptocurrency not only as a store of value but also as a means of payment. Besides, Bitcoin Cash offers cheaper transfer fees per transaction than Bitcoin, which makes it more attractive to active investors and traders who transact crypto more often.
The project’s ambition is to make Bitcoin Cash a valid competitor of the industry’s behemoths such as Visa (V) and PayPal (PYPL) in terms of the volume of transactions processed.
Since its inception, the Bitcoin Cash network’s protocol and third-party infrastructure have grown rapidly, with many exciting projects and applications being built on and around the BCH chain.
Wondering how to invest in Bitcoin Cash? Typically, an individual has two options when trading in the crypto market. Firstly, they can buy actual cryptocurrencies, such as purchasing Bitcoin Cash on an exchange such as Binance, Bitstamp, BitMax, Kraken, Gemini, or Coinbase, so they own the BCH themselves. This is considered a long-term investment, as the individual is waiting for the price to rise significantly, so they can later sell their BCH coins on an exchange for a profit.
Alternatively, they can trade a contract for difference (CFD) on a particular cryptocurrency and speculate on the price difference. A CFD is a type of contract, typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade. This is considered a short-term investment as CFDs are used within shorter time frames.
Investing in Bitcoin Cash CFDs gives you the opportunity to trade BCH in both directions. You can either hold a long position, speculating that the BCH price will rise, or a short position, speculating that the price will fall. Therefore, regardless of having a positive or negative view of the future of the Bitcoin Cash price, you can try to profit from both upward and downward fluctuations.
For instance, to participate in the BCH trade through CFDs, you can speculate on the BCH/USD pairing.
There are pivotal differences between buying a cryptocurrency and trading a CFD in the crypto market. When buying a cryptocurrency, it is stored in a wallet. On the other hand, when trading CFDs, the product is stored in your account, which is regulated by a financial authority. You are more liquid when you purchase CFDs as you are not tied to the asset: you have merely purchased the underlying contract.
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What is Bitcoin Cash? What is cryptocurrency?
A cryptocurrency is a digital asset conceived for use as a medium of exchange, which uses cryptography to secure transactions, control the supply of additional units and corroborate transfers. In short, cryptocurrency is a decentralised electronic currency.
Bitcoin Cash cryptocurrency was launched in August 2017 as a result of a hard fork of the Bitcoin blockchain. It was created by a group within the Bitcoin community looking to re-establish Bitcoin’s initial promise of peer-to-peer electronic cash.
Bitcoin Cash underwent another fork in November 2018, splitting into Bitcoin SV (BSV) and Bitcoin Cash ABС, which is the Bitcoin Cash (BCH) that we know today.
Technically, Bitcoin Cash is quite similar to Bitcoin in many ways. They both employ Proof of Work (PoW) as a consensus mechanism with a focus on the SHA256 algorithm. Moreover, they both feature reward halving at predetermined times and have a total maximum supply of 21m coins.
However, unlike Bitcoin, Bitcoin Cash has a much bigger capacity of blocks, allowing more transactions to be carried on its blockchain. This difference makes them un-interchangeable and, therefore, discrete and independent cryptocurrencies.
Why trade Bitcoin Cash CFDs with Capital.com?
Advanced AI technology at its core: a Facebook-like News Feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative News Feed offers a range of materials to put them back on the right track. The neural network analyses in-app behaviour and recommends videos, articles and news to help polish your investment strategy. This will help you to refine your approach when trading Bitcoin Cash.
Trading on margin: providing trading on margin (up to 1:2 for cryptocurrencies) with the help of CFDs, Capital.com gives you access to the cryptocurrency market even with a limited amount of funds in your account.
Trading the difference: when trading BCH CFDs, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the Bitcoin Cash price. CFD trading is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop and limit losses and apply trading scenarios that align with their objectives.
All-round trading analysis: the browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.
Focus on safety: Captal.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows you to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.
Bitcoin Cash price history
Bitcoin Cash started trading on August 1, 2017, with the opening value of about $290 per coin. The new cryptocurrency immediately hit the top of the ratings in terms of market capitalisation, with its price more than doubling the next day to reach a $756.93 mark. The coin ended its second day of trading at $452.66, boasting of a market cap of 7,460,771,889. By August 19, its value soared to $1,091.97.
After peaking at this price, BCH started to depreciate gradually. By the middle of October 2017, it fell below the $315 mark as many people who had originally held BTC started to sell BCH coins they received at the hard fork.
Then, the great reversal of the entire crypto market happened. Bitcoin Cash was at its highest level at the end of 2017. On December 20, it skyrocketed to an intraday high of $4,355.62 and ended the day at $3,923.07. However, the upside momentum was short lived and, in less than a month, the BCH price fell to trade below $2,000.
After rising from $621 in April 2018 to $1,838 in May 2018, the coin started to drop in value yet again, eventually plunging 88 per cent to trade around the $540 level in August 2018.
The same year, on November 15, a hard fork chain split of Bitcoin Cash happened. On this day, BCH traded at about $430 and Bitcoin SV – at $96.50. Amid the ongoing crypto market sell-off, the BCH price fell below $80 per coin on December 15, 2018.
As the market started to recover slowly, Bitcoin Cash appreciated to $522.09 by the end of June 2019. However, another price decline was not long in coming, with BCH plummeting to $210 by the end of the year.
The market experienced a boost at the beginning of 2020, seeing Bitcoin Cash trade in the upward trajectory. On February 14, BCH was worth $493.03. However, once the Covid-19 pandemic hit the world, all the financial markets tumbled amid the increased economic uncertainty. Cryptocurrencies were not an exception. On March 13, the Bitcoin Cash price plunged to $139.22 per coin. In the following days, the cryptocurrency escalated to end the month at $220.
On April 8, the cryptocurrency underwent its first block reward halving, with its value seeing modest gains and closing the day at $266.24.
Before buying BCH, you will need a place to store it. This is what a wallet is for, and it consists of two elements: a private key and a public address. A wallet requires a private key, specific to the individual, that enables access to the BCH address stored in the wallet, which is also the public key. The wallet is what enables BCH, or any cryptocurrency, to be a secure medium of exchange. Essentially, people can send BCH to certain wallets using the public key, which only the individual can access with their private key. Some individuals choose to keep their coins in their wallet provided by their cryptocurrency exchange, due to the fact that a lot of exchanges have mobile apps that allow people to easily buy, sell and spend cryptocurrencies.
Cryptocurrency exchanges or online wallets are far from immune to the dangers of cybertheft. The infamous case of the Mt Gox Bitcoin exchange highlights this. Historically, Mt Gox was the largest global exchange for Bitcoin, until it declared bankruptcy in 2014 after its security had been compromised. Mt Gox had 850,000 Bitcoins, valued at $450m in February 2014, before its exchange was emptied by hackers. It is believed that the private keys of Mt Gox’s digital wallet were stolen from as early as 2011.
These risks are avoided when trading BCH CFDs because you do not need a wallet.
A “bubble”, in market terminology, is where the price of an asset far exceeds its intrinsic value. For instance, the dot-com bubble that occurred between 1995 and 2001, is a prime example, where information technology industry firms saw their stocks rise, merely because of the market sentiment around that particular industry, irrespective of their profits or chances of succeeding. This market then crashed in March 2000.
The problem here is that it is hard to determine the value of the cryptocurrency to begin with. Although a lot of investors are holding cryptocurrencies as if they were equities, they are not. Yet, they do not particularly act like currencies either, which makes comparisons to currency valuations difficult.
However, with any new technology, caution is advised. It could well be the case that the valuations of Bitcoin or Bitcoin Cash are not overvalued, and that the bubble, if there is one, is represented by the various new cryptocurrencies that are being driven by market sentiment. Arguably, this is comparable to the dot-com instance, where stocks such as Amazon were not overvalued, but others (such as Pets.com, which went from IPO to liquidation in 268 days) clearly were. So, it seems that only time will tell whether the market is overheating, but in either case, there are options to trade using CFDs to take both long and short positions.
From late 2017 to early 2018, there was a surge in the price of Bitcoin (reaching $20,000 per BTC), followed shortly behind by other cryptocurrencies. The market then crashed between January and February 2018, and Bitcoin fell free, dropping 65 per cent in value. Consequently, most other cryptocurrencies crashed as well.
So, there clearly was a bubble in the crypto market. The question that this implies is whether there is another one on the verge. The value of most cryptocurrencies is derived from their potential; how they could be used to advance society in the future. Without institutional acceptance however, the potential value will remain merely potential, but whether this implies that cryptocurrencies are overvalued is another question.
The 2018 crypto crash was the biggest sell-off of most cryptocurrencies in the history of the market. From January 6 to February 6, BTC shed about 65 per cent. Consequently, nearly all other cryptocurrencies crashed. The cryptocurrency market capitalisation lost at least $342bn in the first quarter of 2018.
Bitcoin peaked at the $20,000 mark in December 2017, with most other cryptocurrencies surging shortly after. There were several shocks that ultimately contributed to the cryptocrash. BTC price depreciated by about 12 per cent after the Attorney General for South Korea announced a move to ban crypto exchanges from issuing new trading accounts, and later that month Coincheck (a Japanese Bitcoin wallet and exchange service) was hacked and approximately 500 million NEM tokens (worth $530m) were stolen, making this the largest crypto hack to have occurred.