Your Cryptocurrency Newsletter for 21 SEPTEMBER, 2020

If you are interested in cryptocurrencies, this newsletter is for you. [img]  [Learn more about RevenueStripe...](   [Learn more about RevenueStripe...]( [img]( [FeedBinary Newsletter]( [The Emergence of Cryptocurrency Hedge Funds]( Although the nascent crypto hedge fund industry still has lots of developing to do, it will undoubtedly be the future of finance. I started exploring Bitcoin first in 2012 and, still today, I am fascinated by the opportunities and future potential digital assets pose as an emerging alternative asset class. One of the most relevant recent developments, which is often not covered, is the emergence of crypto hedge funds. Compared to the early days of crypto assets, when there were mainly private investors or traders in the space, a massive inflow of professionals entering the market has begun with the emergence of crypto hedge funds. [crypto hedge funds] In fact, looking at data from 150 of the largest global crypto hedge funds, 63% were launched in 2018 and 2019, according to a survey by Big Four audit firm PricewaterhouseCoopers and Elwood Asset Management Services earlier this year. It is all about the performance Based on the annual PwC–Elwood Crypto Hedge Fund Report, the most common crypto hedge fund strategy is quantitative (48% of funds), followed by discretionary long-only (19%), discretionary long/short (17%), and multi-strategy (17%). When it comes to crypto fund performance, systematic crypto funds have been outperforming passive strategies (investing long-only), discretionary long/short, and multi-strategies quite significantly. In 2019, the average crypto hedge fund performance by strategy was as following: [crypto hedge fund performance 2019] These numbers suggest that systematic hedge funds are the best performing strategy for digital assets, but, in general, all crypto hedge fund strategies are able to generate sustainable alpha. The ecosystem for crypto assets and crypto hedge funds is growing The vast majority of investors in crypto hedge funds are either family offices or high-net-worth individuals. A growing number of funds of funds have been investing in crypto hedge funds, causing the whole ecosystem to evolve quite quickly. The fact that the percentage of crypto hedge funds with assets under management of over $20 million nearly doubled to $44 million last year indicates that more funds are reaching a critical size, which enables them to sustain their strategy. More and more talent from the traditional hedge fund world is moving into digital assets, including established hedge fund titans like Paul Tudor Jones. Wall Street is also becoming more open to Bitcoin (BTC) as a new asset class, and well-known Wall Street names including George Ball, the former CEO of Prudential Securities, suggested Bitcoin or other cryptocurrencies could be “a safe haven” for investors and traders as an alternative investment. The news of MicroStrategy buying $250 million in Bitcoin (60% of their treasury) in August 2020 and stating: “Bitcoin is digital gold — harder, stronger, faster, and smarter than any money that has preceded it” have been a big boost for established investors looking into the crypto markets. Back in May 2020, I explained why Bitcoin is an ideal inflationary hedge, and institutional investors are increasingly looking at this emerging asset class from a hedging perspective. It is obvious that investments in crypto hedge funds will be a big part of these additional inflows of capital. A massive increase in investor demand Given the transparency among most regulated crypto hedge funds with external investors regarding the fund’s performance and assets under management, the growth in investments is becoming apparent. Total assets under management of crypto funds worldwide doubled from 2018 to the end of 2019 (from $1 billion to $2 billion); and there are clear indications that this number will have roughly tripled by the end of 2020. Compared to other alternative asset classes, these are still rather small sums, but the growth rate indicates the direction the industry is moving in. Increases in assets allocated to crypto hedge funds and further indications that Bitcoin is a digital store of value and a new hedge against inflation show why and how demand from investors has been accelerating. Interesting times ahead for crypto hedge funds Looking at the talent moving into the space and the increasing demand from institutional investors makes me quite confident about the near future. It will be crucial for the industry to generate sustainable alpha in the future and prove that active investment strategies among crypto hedge funds are superior to a passive long-only approach, such as “holding.” This performance was demonstrated to date by the outperforming of successful crypto fund managers. [Read More]( The post [The Emergence of Cryptocurrency Hedge Funds]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ [Decentralized Exchanges UniSwap vs SushiSwap Explained]( Decentralized Exchanges in a nutshell A decentralized exchange (DEX) is a way of exchanging cryptocurrencies or other blockchain-based assets without a centralized agency or intermediary. These new exchanges for decentralized finance (DeFi) have inherited the advantages of blockchain: decentralization, censorship resistance (such as no KYC), extremely high security, and untamperable data. Anybody who has an Ethereum address can join the DeFi ecosystem where you can enjoy almost all of the financial services of traditional financial institutions. This means that DeFI can facilitate access to banking and financial services for anyone with an internet connection and could increase financial inclusion for billions of unbanked people and remote communities. [decentralized exchanges] The most popular decentralized exchanges or protocols are UniSwap, Aave, SushiSwap, Compound.Finance, Balancer, 0x, Bancor, DDEX, Curve, IDEX, JustSwap, etc. They primarily are based on the Ethereum blockchain. Some are based on other public blockchains like EOS and Tron. Many decentralized exchanges use the traditional order book model while others have adopted a more popular automated market maker model (AMM) that provides automated liquidity. A DEX that provides liquidity is called ‘liquidity provider’ or ‘yield farmer’ (the process of providing crypto liquidity and earn crypto is called yield farming). Liquidity provider or yield farming farmer are DEXs who earn cryptocurrencies by offering cryptocurrencies ownership at a certain time period. The concept of a liquidity provider is nothing new and is used in Forex (FX) trading which is an intermediary can buy and sell money, thus to earn money by money. Bancor was the first project that implemented an AMM. Decentralized exchange marks the third generation of decentralized movement Bitcoin and its underlying technology blockchain hold the promise of removing “trusted third parties” as much as possible. Ethereum introduced smart contracts while adopting the technologies behind Bitcoin, which made decentralized application (Dapps) a reality. Now UniSwap and SushiSwap have further expanded decentralization into exchange and trade, removing trusted intermediaries, and having the potential to replace traditional trade and exchange concepts and utilities. It is unfortunately no surprise that there has been a lot of news about manipulation in centralized crypto exchanges. Earlier in September, Korean’s largest and third-largest crypto exchanges were raided by police for in a fraud investigation. This is why in the traditional financial industry regulatory bodies like the United States Securities and Exchange Commission (SEC) and UK’s Financial Conduct Authority (FCA) are very important for normal financial activities. But even under such regulations, we are still suffering scams and a high threshold of entrances. After Bitcoin and Ethereum, UniSwap is the third-generation movement of decentralization. It is expected that decentralized exchanges will eventually completely remove centralized exchanges and their Apps,as it expands to the traditional financial industry—ecosystems around trade, payment and settlement systems would be reshaped. UniSwap VS SushiSwap, An Ongoing DEX War While decentralized exchanges hold much promise for the future, their evolution so far has been interesting to observe. An important event is the war between UniSwap and SushiSwap, which has had a profound impact on the development of DEXs. UniSwap is a leading decentralized exchange—a set of smart contracts on the Ethereum network that implements a protocol of automated liquidity provision. SushiSwap is a fork of UniSwap which added its own native token as an incentive, especially for liquidity provider (LP) and became an overnight success. Although SushiSwap is one of many UniSwap’ forks, we can not mention decentralized exchanges without mentioning SushiSwap. SushiSwap changed the logic in the competition of decentralized exchanges. The importance of being a big gamer with huge funds and incentive rules for the communities is highlighted and has received a lot of criticism for this as well. Recently regulated exchange Coinbase listed Uniswap Token UNI Instead of Sushi Token. SushiSwap’s migration drained many funds from UniSwap to SushiSwap. Facing pressures of SushiSwap and many other forks, UniSwap introduced its own token UNI urgently. The governance token as an incentive to liquidity providers or even lenders is not novel at all. Actually most decentralized exchanges have native tokens. The founders and liquidity providers can all benefit from the rise of the token. This token can be monetized and this wealth is created through buyers’ trust in the project’s future or simply the token would rise. Rule vs human nature, SushiSwap reflects the weakness of current DEXs design Behind SushiSwap hype are the design deficits in UniSwap. After all, we can not rely on morals exclusively and trust that all people will do the right thing. SushiSwap is a hard lesson learned for UniSwap’s Hayden Adams who watched as SushiSwap forked off his own DEX and attracted over $1.3 billion in total value locked its first week. In SushiSwap participants can stake their assets to earn SUSHI tokens, which is nothing new for a liquidity mine, in this case however the assets are actually Uniswaps tokens, which allows yield famers to obtain SUSHI tokens without having to forgo their liquidity provider rewards. SushiSwap has shown us the current decentralized exchange model is not perfect and we need better design rules. Besides SushiSwap, there are lots of other decentralized exchanges as forks of UniSwap or SushiSwap. For almost all forking decentralized exchanges, their primary focus is on how to sell the native token for more recognized tokens or stablecoins. The creation of a forked decentralized exchange and its token is a piece of cake for most capable developers but the value of these DeFi tokens often relies on market sentiment, marketing that verges on propaganda, and even cheating. This is much like ICO projects of 2017 that most major countries have now banned or made illegal like America and China. The fork problem has already existed in Bitcoin. Some popular projects like Litecoin, Bitcoin Cash (BCH), Bitcoin Version (BSV) are Bitcoin hard forks or codebase reuse. But there are no real substantial innovations in some wildly recognized Bitcoin forks like Litecoin. Unlike decentralized exchange forks, bitcoin forks at least need to maintain the network by computing power. The DEX ecosystem is very young and it will be very important in these early stages to weed out design flaws and beware of inevitable scam projects that will try to take advantage of the emerging world of decentralized finance. [Read Full News]( The post [Decentralized Exchanges UniSwap vs SushiSwap Explained]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ [Ethereum Price Prediction: ETH on the Cusp of a Rally For $420]( Ethereum traded within a whisker of $490 at the beginning of September. However, the trading in the last couple of weeks has mainly been lethargic, chiefly regarding recovery. Ether refreshed lows of $310 on September 5 before embarking on a recovery mission. On the upside, gains have hit highs above $390 on several occasions, but the resistance at $400 has not wavered, not even slightly. Support at $360 has also been confirmed in multiple instances. In the meantime, Ethereum is trading at $374 amid the pivotal price action at $380. [ethereum price prediction] Will Ethereum 2.0 fix the existing scalability challenge? Ethereum 2.0 release seems imminent by the end of the year, as recently discussed. Its launch is expected to be a significant boost for the smart contracts network as well as the value of Ether. On the contrary, some analysts argue that the impending protocol may not fix the high transaction fee problem. The Ethereum network is congested now more than ever. The decentralized finance (DeFi) ecosystem continues to expand daily. High gas fees have, however, been constant on the network. The users in the DeFi ecosystem eagerly wait for the launch of Ethereum 2.0. They hope that the new network will bring down the exorbitant fees, ensuring sustainability. According to Alex Kruger, an economist and a trader, the growth in DeFi is likely to overshadow the impact of ETH 2.0 as far as scalability is concerned. [ethereum 1 month chart] Ethereum breakout to $420 impends Ethereum is trading within the confines of an ascending triangle. The price action comes after last week’s rejection from levels above $390. On the downside, support at $360 has been keen on keeping bears in check. Consolidation seems to be taking precedence, especially with the Relative Strength Index (RSI) holding at the midline. A triangle breakout aiming for highs above $450 awaits Ether. However, the 50 Simple Moving Average (SMA) must first be flipped into support. The move will allow bulls to shift their focus to $400 immediately. On breaking the stubborn resistance at $400, more buyers could be encouraged to join the market, thereby creating more volume for gains above $420 and $450. Ethereum Litmus Test: On-chain analysis Ethereum is facing the most challenging resistance between $376 and $386, according to the on-chain data provided by IntoTheBlock. The range is the largest supply zone, mainly because of the 1.35 million addresses that previously purchased 13.38 million ETH in the area. In the event buyers flip this zone into support, a breakout above $400 would be unstoppable with Ether aiming for $420. Ethereum IOMAP chart It is also important to realize that Ethereum is not strongly supported. However, the most significant support lies between $363 and $374, an area where 694,330 addresses bought 2.6 million ETH. In case the support is shattered, ETH/USD could explore the rabbit hole to the next critical support zone between $318 and $330. Besides, the number of new addresses created on the Ethereum network keeps rising as observed from data provided by IntoTheBlock. An increase in the number of new addresses within a network suggests an upward trend is soon starting or resuming. [ethereum IOMAP chart] Ethereum new addresses chart Subsequently, Ethereum whales seem to be increasing their holdings as per on-chain metrics by Santiment, a leading blockchain data analytic platform. Wallets holding between 100,000 and 1,000,000 coins increased from 157 million on September 11 to 160 on September 18. In other words, large volume holders within the Ethereum network believe that ETH is bound to recover to highs above $400 in the near term. [ethereum new addresses chart] Looking at the other side of the fence Ethereum seems to be poised for a breakout that could easily take down the resistance at $400 and start the journey towards $500 afresh. However, it is vital to note that if the resistance at $376 – $386 remains intact, sellers could regain control over the price because buyers will be quite exhausted. A reversal from the resistance level might extend past the support discussed between $363 and $364, hence completing the bearish case eying a freefall to the next critical support at $318 – $330. [Read Full News]( The post [Ethereum Price Prediction: ETH on the Cusp of a Rally For 0]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ ------------------ Connect with TheFeedBinary on Facebook and Twitter [fb](  [tw]( ------------------ You received this email because you operate or create content for a website/service and based on your website it seemed like this could be important information to you and your users. FeedBinary daily newsletter is managed by [Postbox Consultancy Services Pvt. Ltd.]( C-4/5, IBD Emporia, Kolar Road, Bhopal, Madhya Pradesh, INDIA, 462042 Want to change how you receive these emails? [Update your preferences]( or [Unsubscribe](