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Coinbase Global Inc (NASDAQ: COIN) stock opened 30% up on Thursday after BlackRock announced a partnership with the crypto exchange that will offer its institutional investors access to Bitcoin. Brief overview of the announced partnership The asset manager was “studying” crypto and related technologies in recent months to better serve its customers that have been […]
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With Bitcoin rallying from $30,000 to $42,000 and back again during January, BTC’s annualized volatility rose to levels last seen in April 2020, according to a new report from U.S. crypto exchange Kraken.
January was a roller-coaster ride for Bitcoin, with BTC rallying 46% to a new high of $41,989 before retracing 32% to below $29,000. This resulted in the annualized volatility spiking to over 100% — which was last seen 10 months ago during the infamous ‘Black Thursday’ price plummet.
In early-March 2020, Bitcoin’s price dove more than 40% in a matter of days from $9,000 to $5,200 — resulting in volatility spiking from 60% to more than 150%.
Despite its surging volatility, Bitcoin registered the smallest volatility spike of the top five crypto assets by market cap (excluding Tether).
Polkadot (DOT) finished the month with the largest volatility of 228%, followed by Cardano (ADA) with 183%, and Ethereum (ETH) with 160%. Unlike Bitcoin, ETH, DOT, and ADA evaded heavy corrections during January, closing out the month near their respective local highs.
Looking forward, Kraken anticipates that Bitcoin’s price will trend upwards with reduced volatility during February:
“Given that Feb., on average, returns six percentage points more than Kan. and is 15 percentage points less volatile, one might expect Feb. to outperform Jan. and volatility to dwindle as BTC melts up.”
However, not everyone is convinced Bitcoin will continue its road to higher peaks. Famed gold-bug and notorious Bitcoin-skeptic, Peter Schiff, speculated BTC’s bullish momentum is unlikely to last, predicting it will be superseded by the surging meme-coin DOGE:
Being the first mover gave Bitcoin a head start, but it doesn’t guarantee that it wins the race. #Bitcoin = Myspace, #Dogecoin = Facebook, _______ = Instagram, ______ = ______. Nothing will ever equal #gold!
— Peter Schiff (@PeterSchiff) February 7, 2021
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Author: Refer to Source Cointelegraph By Joshua Mapperson
The court has reached an agreement with the Maker Ecosystem Growth Foundation that a class action lawsuit concerning the collapse of “Black Thursday” should enter the arbitration process.
After MakerDAO user Peter Johnson suffered a six-figure loss in April due to insufficient collateral in the agreement, the Maker Foundation filed this motion for arbitration.
In an order on September 25, Judge Maxine Chesney held that the American Arbitration Association must determine whether Johnson’s claim falls within the scope of the arbitration clause contained in the DAI service clause agreed to by investors in 2018.
Maker argued that Johnson’s actions violated the terms he agreed to, noting that:
“In the filing of this hypothetical class action, the plaintiff ignored his promise to recourse through arbitration, and did not mention the arbitration agreement he explicitly agreed to.”
The court rejected Johson’s rebuttal. He believed that Maker “cited an outdated and now obsolete product agreement in 2018” as an opportunistic means to circumvent the lawsuit.
The case was put on hold until the arbitration process was over, and the hearing originally scheduled for October 2 was cancelled.
The MakerDAO agreement allows users to use Ethereum (ETH) deposits to mint stablecoin DAi with a margin rate of up to 75%, and set a liquidation price to ensure that the collateral held by the agreement exceeds the outstanding supply of DAI.
In mid-March, when the price of ETH fell by more than 50% in less than two days, hundreds of MakerDAO users faced full liquidation due to insufficient collateral for the agreement.
Johnson filed a lawsuit on April 14, 2020, claiming that DAI’s terms of service deliberately misrepresented the structure of the MakerDAO agreement in order to downplay the risks associated with using the agreement. The lawsuit seeks damages of nearly US$30 million.
Johnson claimed to have lost more than $200,000 of Ethereum during the plunge in mid-March. At that time, his 1713.7 Ethereum collateral was liquidated for $121. He stated that according to Maker’s terms, the liquidation would only cause a loss of 13%. :
“The Maker Foundation and other third-party user interfaces inform users that because their CDP is seriously over-collateralized, the liquidation will only impose a 13% liquidation penalty on the remaining collateral, and then return the remaining collateral to the user.”
On September 22, MakerDAO’s decentralized governance voted against the proposal to compensate users of the agreement who suffered losses during Black Thursday.
Is the crypto market structure creaking with tension, or stronger than ever? Has the jump in market volatility laid bare the weakness in crypto market structure, or has it highlighted the sector’s resilience?
Crypto market structure leaders Max Boonen, founder and director of B2C2, Catherine Coley, CEO of Binance USA, and Miha Grcar, head of business development at Bitstamp, share their experiences over the past few months and the changes they expect to see in their sector in the coming years.
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As Bitcoin (BTC) price pulled back below $12,000, some investors began to worry that another crypto market crash like one that occurred on March 11 would occur.
However, data from CryptoQuant, an on-chain analysis firm, suggests otherwise, as Bitcoin exchange reserves hit a 2020 low. CryptoQuant CEO Ki Young Ju said:
“People keep worrying about the great sell-off like March, but exchanges don’t have as many idle Bitcoins (waiting to be sold) as that day.”
All Exchanges Reserve and MPI charts. Source: CryptoQuant
The Bitcoin exchange reserve metric shows how much BTC is being held at exchanges. When the figure reaches a low it suggests that investors have withdrawn their holdings from the exchange into a more secure and permanent storage.
Data from Chainalysis, also shows that the amount of BTC held for to 52 weeks is on the rise. Furthermore, Glassnode, an on-chain analytics provider, recently observed similar behavior and said that “the decline of Bitcoin exchange balances signals reduced selling pressure.”
At the time of writing, 2.6 million BTC are being held at exchanges, which is lower than the amount held before the March sell-off when the figure sat at 2.9 million BTC.
Data from CryptoQuant also revealed that miners are choosing to hold on to their current BTC supply.
This suggests that miners expect higher prices and is a good indication of positive sentiment as miners constitute a significant portion of the Bitcoin selling pressure, they hold some influence over the Bitcoin price.
The Bitcoin hash rate has also been increasing, another bullish sign as more people see the BTC price as being reliable above their price of production, a factor that gives the hash rate and price a strong correlation.
All Bitcoin Exchange Inflows. Source: CryptoQuant
While the number of BTC held by exchanges is at a 2020 low, data from CryptoQuant also shows that this figure may change soon as Bitcoin inflows to exchanges are on the rise.
According to Ki Young Ju increasing amounts of BTC being sent to exchanges is typically a bearish sign.
“BTC Inflows (netflows) into spot exchanges could indicate a potential sell pressure, stablecoin inflows indicate a potential buy pressure.”
While increased exchange inflows for Bitcoin are typically bad news, USDT transfers are also on the rise, according to data from Glassnode, having reached their 2020 high on Aug. 17.
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Author: Refer to Source Cointelegraph By António Madeira
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