Your Cryptocurrency Newsletter for February 08, 2021

If you are interested in cryptocurrencies, this newsletter is for you. [img]( [img]( [FeedBinary Newsletter]( Sponsored Content [Crypto Long & Short: Could Scalable Payments for Bitcoin Undermine Its Value?]( Credits: www.coindesk.com A stream of crypto payments services coming to market give new life to the debate around whether bitcoin can be both a store of value and a payments token. With the wild journey that is bitcoin price swings so far this year, you might have missed the accelerating rhythm of companies announcing services to support bitcoin for payments. We’re not talking about small idealistic startups, either. A week ago, on Visa’s Q1 earnings call, CEO Al Kelly said the company may add cryptocurrencies to its payments network. He acknowledged that bitcoin is “not used as a form of payment in a significant way at this point,” but went on to discuss a strategy to “enable users to purchase these currencies using their Visa credentials or to cash out onto our Visa credential to make a fiat purchase at any of the 70 million merchants where Visa is accepted globally.” You’re reading Crypto Long & Short, a newsletter that looks closely at the forces driving cryptocurrency markets. Authored by CoinDesk’s head of research, Noelle Acheson, it goes out every Sunday and offers a recap of the week – with insights and analysis – from a professional investor’s point of view. You can subscribe here. Visa also currently provides credit card infrastructure for 35 crypto companies, with the aim of making it easier for users to pay with bitcoin. In PayPal’s Q4 earnings call this week, the first since the company started allowing the purchase and sale of a handful of cryptocurrencies via their PayPal account, the company revealed that it was planning to start allowing customers to use their crypto balances to pay for goods and services at any of the approximately 29 million merchants on the network, and that it was “significantly investing” in the crypto business unit. Large crypto companies are also moving into payments. Last month, crypto exchange and custodian Gemini launched a credit card with a 3% reward on purchases. In December, crypto lender BlockFi announced that it would launch a similar product in early 2021. This is just scratching the surface. Binance, Coinbase, Paxful and BitPanda are just some of the crypto exchanges that over the past few months have introduced crypto debit cards for retail spending. This week, crypto platform Uphold announced the acquisition of card issuer Optimus Cards U.K. Also this week, Binance, the largest cryptocurrency exchange in the world in terms of volume, announced the launch of a payments system called Binance Pay, aimed at encouraging the use of crypto in cross-border payments. Binance CEO and founder Changpeng “CZ” Zhao said: “We think that payments is one of the most obvious use cases for crypto.” Not so fast Is he right? Obviously “crypto” encompasses a range of assets, but let’s focus on Bitcoin for a moment. The white paper that introduced Bitcoin to the world in 2008 opens with: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” Whether Satoshi Nakamoto, the pseudonymous writer of the paper, meant for payments to be the main use case or not (this is a point of contention, as he* also wrote elsewhere about its potential role as a store of value), over the years it became clear that scaling limitations inherent in the protocol design made the network impractical for high transaction volumes. (*I am not assuming Satoshi is a he, but I am using this pronoun to avoid linguistic clutter.) Another critique of Bitcoin-as-a-payments rail is its relative lack of speed, although this can be misleading. A bitcoin payment will take around 10 minutes on average, and up to an hour for assumed settlement finality. Credit card and contactless payments are faster, but they usually don’t have settlement finality until days later. And data gathered in electronic transactions removes any financial privacy. Cash, on the other hand, is instantaneous and private, but you need to be physically present. What’s more, bitcoin transactions are relatively expensive. This week the average fee reached its highest point since January 2018. [[png-to-jpg output image]] Solutions such as the Lightning Network aim to solve for these barriers by offering fast and cheap throughput on a transaction layer that anchors to the Bitcoin blockchain at certain intervals. Adoption of this technology is growing, but is still in its early stages. The existential question Then again, most of those that complain that Bitcoin doesn’t work for payments have access to other mechanisms that work well. That’s not the case for much of the world. Some jurisdictions have strict capital controls that block payments to other regions. Some countries don’t have sophisticated payment rails that make even simple internal transfers easy. Even some demographic groups in developed countries don’t have access to online payments and are still largely dependent on bank relationships. For many, bitcoin is a tool for freedom in that it facilitates online payments where previously they were inaccessible. For others, using bitcoin is a way to support the network by giving the asset a broader utility. This raises an important question: should bitcoin be encouraged to be both a store of value and a payments mechanism? Some reasons why it should: It can be argued that bitcoin’s worth as a store of value depends on its utility. The more there is residual demand for bitcoin as a payment token, regardless of its price, the more investors will believe that demand for it will rise in a sustainable way. It can also be argued that it is essential for the health of the network that bitcoin’s use as a medium of exchange be encouraged. As successive halvings reduce the block subsidy (in which miners get new bitcoin as compensation for the work expended in successfully processing blocks of transactions), miner incentives will increasingly rely on transaction fees. And current demand for this use case is not insignificant. Binance Research this week published the results of a survey of 16,000 crypto users across 178 regions, which found that 38% see bitcoin as a medium of exchange. In December, Susquehanna Financial Group revealed a survey of PayPal customers that showed 53% would use bitcoin to pay for goods, if they owned it. Some reasons why it shouldn’t: There is a not totally unfounded concern that, if bitcoin becomes seen by governments as a widely used payment token and a potential threat to fiat currencies, they may decide to act, and not in bitcoin’s favor. While it may seem that governments care more about markets and asset prices, it’s payments that matter for monetary policy, consumption and wages – all things that get you votes. Investments sit there (and hopefully grow) while payments move, and both animal and regulatory instinct is to focus more on things that move. In addition, you have the theory that if bitcoin is seen as a store of value, it will not be spent. Gresham’s Law dictates that bad money crowds out the good – if bitcoin is “good” money, people are more likely to hold onto it, and use other assets with less potential value. The endgame? This segues into what is perhaps the endgame of many of the crypto payments providers. It’s perhaps not about Bitcoin at all. Bitcoin is the crypto asset with the least regulatory uncertainty at the moment. Even stablecoins are not totally out of the regulatory woods yet. (The OCC’s letter that said banks could handle stablecoins could be walked back under a new chief.) So, maybe Bitcoin is the safe starting point for these new rails. Ethereum will probably come next, and where Ethereum goes, so do stablecoins. Maybe the banks and payment companies working on bringing crypto payments services mainstream have their eyes on a potentially bigger pie – that of tomorrow’s payments, the bulk of which could run on blockchains that handle a range of assets. Maybe the forward-thinking institutions are preparing for a day when we hold cryptocurrencies in our digital wallet right along with our private stablecoins and our digital dollars and our tokenized GameStop shares. Maybe they’re all looking at a financial landscape where the user has more choice. The crypto payment functions today serve their purpose. They offer a useful service to many, nudge along the sophistication of market infrastructure, and set the scene for mainstream adoption of a range of assets with a range of utilities. [Read more]( The post [Crypto Long & Short: Could Scalable Payments for Bitcoin Undermine Its Value?]( appeared first on [Feed Binary](. [Read Full Story]( ------------------ [Ether is flying to the moon? Here’s what’s fueling the ETH rocket]( Credits: www.cointelegraph.com DeFi, institutions and Eth2: What are all the factors fueling Ether’s current rally to its all-time highs? Ether hit its all-time high again on Feb. 2, reaching the psychological mark of $1,500. Since then, its price has remained above this level and is currently sitting at around the $1,700 mark. Along with Bitcoin (BTC) and other cryptocurrencies, Ether (ETH) has seen outstanding price action since the start of 2021, having surged by 10.46% in a month. While Bitcoin has also been seeing positive price action, it is shy of its previous all-time high of $41,941 reached on Jan. 8. Ether volumes have been on the rise. According to market data provider CryptoCompare, spot volumes reached their all-time high on Jan. 11, with volumes for the month being up by 320% from December 2020. Alongside increasing volumes, data from analytics firm CryptoQuant shows that the amount of Ether held on centralized exchanges has been declining to new lows, signaling increased buying pressure for ETH. [[png-to-jpg output image]] Exchange outflows have also been increasing, which shows that buyers are interested in holding the asset rather than selling. Ki Young Ju, CEO of crypto data analytics firm CryptoQuant, told Cointelegraph: “Since ETH reserves on all exchanges keep decreasing, I think the bull run will continue until it stops decreasing.” Derivatives data also shows a bullish outlook for Ether, as according to data analytics platform Laevitas, 80% of options volume on Deribit was dominated by calls (buy orders) on Feb. 2 when ETH reached its all-time high of around $1,500 — a bullish sign. According to Ben Zhou, CEO of Bybit exchange, Ether is catching up to Bitcoin in terms of demand and trading volume. He told Cointelegraph: “In the past couple of days the volumes of our ETH/USD and ETH/USDT pairs are not too far off from their BTC counterparts.” Institutional engagement Ether has been doing well both in the retail and institutional worlds, with demand for Ether increasing rapidly. While Grayscale, the world’s biggest cryptocurrency asset manager, previously closed off several altcoin trusts, including the Ethereum Trust, investments resumed in early January, and it currently has $4.25 billion worth of ETH under its management at the time of writing, an increase of over 240% in the last three months. Jonathan Hobbs, the author of The Crypto Portfolio and a former digital asset fund manager, told Cointelegraph: “We have seen a general rotation in the crypto market into altcoins, while Bitcoin has been in a range. Ethereum is a proxy for the altcoin market that institutions can access through Grayscale’s trust. With a market cap of nearly $200 billion, Ethereum is large enough for institutions to start taking seriously.” As interest for Ether continues to increase, so do the options for institutional engagement. On Feb. 8, Ether futures will be added to the Chicago Mercantile Exchange alongside Bitcoin. Hobbs added: “CME futures trading will provide a further stamp of approval for institutions. I would expect Ethereum to rally leading up to the event on the eighth of February. But I would be cautious of a pullback around or just after the launch.” Activity on Ethereum, DeFi and NFTs The growing demand from both the retail and institutional crowds can be attributed to the growing activity and hype surrounding the decentralized finance sector. The total value locked in DeFi has also been increasing and is currently sitting at almost $35 billion, according to DeFi Pulse, an all-time high. The trading volume on decentralized exchanges has also been increasing steadily. According to analytics tool DeFi prime, DEXs had over $55 billion worth of trading volume during January, a record-breaking month. Several DeFi tokens have also reached their all-time highs in recent times, including Aave, Uniswap and SushiSwap. While nonfungible tokens still lag behind in terms of activity and volumes, the sector has been heating up, especially in the gaming and art worlds. Just recently, Hashmasks, an NFT-based project, was able to sell over 7,600 ETH (roughly $10 million at the time) worth of NFT tokens representing collectible cards. Competition falling behind? As Ether continues to rally, other altcoins have also seen significant price action. However, many are still far from their old all-time highs, including Ether competitors, such as EOS. These layer-one blockchain projects have been losing ground to Ethereum, with a recent report by venture capital firm Outlier Ventures showing that many Ethereum competitors are seeing a decline in development activity. Ilya Abugov, advisor at DApp statistics aggregator DAppRadar, told Cointelegraph: “As the Ethereum ecosystem grows, it becomes more attractive to integrate with it. The composability factor increases with the growing number of DApps, and the amount of capital and the number of active developers make it very appealing to other teams. You can even see it in the number of different wrapped tokens coming to Ethereum.” Furthermore, as development on Ethereum 2.0 continues to bear fruit along with other layer-two solutions, which are currently available, Ethereum remains a viable candidate for a long-term investment. These solutions will allow it to scale as a network and blockchain, especially with the introduction of staking, which will replace the old proof-of-work model. Staking will allow Ether holders to earn interest on the ETH they stake. At the time of writing, more than 2.9 million ETH, worth over $.4.7 billion, have been staked on the Ethereum Beacon Chain, with APY staking rewards reaching double-digit percentages. While PoW miners have had a record-breaking month in terms of revenue, earning over $800 million in mined coins globally, it seems that staking is becoming increasingly popular. With more coins having being locked away for staking, the available supply of ETH is significantly reduced, which may have a positive impact on the price. According to Zhou, a combination of all these factors spell a bright future for Ethereum in the short and long term: “The growing value staked on Eth2 and locked in DeFi, the increasing user activity, and the resumption of Greyscale Ethereum Trust have compounded to lift Ether to ever new heights. And unlike the 2017–18 bull run, this time, Ether is a lot more sure-footed.” [Read more]( The post [Ether is flying to the moon? Here’s what’s fueling the ETH rocket]( appeared first on [Feed Binary](. [Read Full Story]( ------------------ [Growing list of billion-dollar crypto ‘unicorns’ suggest the best is yet to come]( Credits: www.cointelegraph.com More than 53 blockchain projects have emerged as multi-billion dollar market cap crypto unicorns, a signal that the 2021 bull market is just getting started. In the traditional investing world ‘unicorn’ is a term used by venture capitalists to describe a privately held startup valued at more than $1 billion. Typically these startups have strong fundamentals and oftentimes a first-mover advantage that helps them rapidly rise in value to become prized investment opportunities for yield-seeking funds. Some of the best-known unicorns include Elon Musk’s SpaceX, a private rocket and spacecraft manufacturer with a valuation of $46 billion, and Coinbase, the largest U.S.-based cryptocurrency exchange with a current valuation of $8 billion. While the world’s attention has been focused on the Coronavirus pandemic, the outcome of the 2020 U.S. presidential election, and the recent r/Wallstreetbets social investing phenomenon, the crypto sector has quietly ascended to a total valuation of over $1.2 trillion. Adding to this, currently there are more than 55 unicorn status projects that have a market cap over $1 billion. Recent Bitcoin (BTC) evangelism from the likes of Michael Saylor, Mark Cuban and Elon Musk are helping shine a spotlight on the nascent crypto industry, and with it comes the discerning eye of institutional investors who will quickly want to look beyond BTC to what other promising opportunities exist in the space. These projects are no longer just focused on making cryptocurrency a global means of exchange. Some of the top projects include smart contract platforms, decentralized finance (DeFi) protocols, privacy tokens, oracles providers and even humor-oriented meme coins. With that in mind, here are some of the top crypto unicorn projects to keep an eye on as institutions begin to make their presence felt in the cryptocurrency markets. Blue-chip projects Bitcoin is the ultimate first-mover in the crypto space as it paved the way for the rest to come into existence and holds more than 61% of the total market value with a current market cap of $843 billion. As the longest-running chain possessing the strongest mining network of all proof-of-work cryptocurrencies, BTC is likely to be the go-to choice for new money coming into the sector which will take a cautious approach to start out with. Similar to how many of the current crypto faithful got involved in the space, Bitcoin will be the “gateway coin” that introduces the concept and leads to further exploration. Ethereum (ETH), with a current market cap of $196 billion, is the obvious second choice as it is the most-utilized smart contract platform and home to a majority of the top DeFi protocols that have surged in popularity in recent months. Other legacy projects that have survived multiple bull-bear cycles and achieved unicorn status include Litecoin (LTC), which has emerged as a reliable value transfer alternative to the higher fees and longer block times of BTC, and the privacy-focused Monero (XMR) and Zcash (ZEC), which paved the way in bringing anonymity to blockchain transactions. These projects currently have market caps of $10.5 billion, $2.75 billion and $1.07 billion respectively. Decentralized finance takes center stage Since early 2020, one of the main driving forces in the growth of the cryptocurrency sector has been the emergence of decentralized finance. Decentralized exchanges (DEX) like Uniswap have steadily grown from being a simple exchange interface dApp to a sprawling trading platform that now averages a 7-day trading volume of $6.72 billion, a figure that rivals volume of the top centralized exchanges. Uniswap’s UNI governance token was initially airdropped to users of the interface who took a chance on the protocol while it was still in development, but now the token can be found on all major centralized and decentralized exchanges. The protocol also received venture capital backing to ensure further development. With a current market cap of $5.9 billion and a token price of $19.79, Uniswap is likely to be on the watchlist for the smart money eyeing the space. SushiSwap, the main competitor to Uniswap, has also achieved unicorn status with a current valuation of $1.8 billion. The platform offers a community-focused system that allows token holders to stake their SUSHI to participate in governance as well as earn passive income from trading fees generated by the protocol. While DEXs helped facilitate the growth of DeFi, lending protocols have emerged as the top draw for total value locked (TVL) and higher token values. Maker (MKR), AAVE and Compound (COMP) are the leading platforms when measured by the total value locked (TVL) in the protocol. Currently there is a combined $15.63 billion in value deposited in smart contracts that interact with the protocols and their market caps range from $2.1 billion to $5.98 billion. In addition to the high yield opportunities offered by staking protocols, retail investors are also attracted to the governance features that give token holders a say in the future development of the protocol. These DeFi darlings are likely to pique the interest of long term capital. [Read more]( The post [Growing list of billion-dollar crypto ‘unicorns’ suggest the best is yet to come]( appeared first on [Feed Binary](. [Read Full Story]( ------------------ Sponsored Content [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](