Institutions Are Not Buying During the Drop in the Price of Bitcoin, According to JP Morgan

Alexander Salazar
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Institutions Are Not Buying During the Drop in the Price of Bitcoin, According to JP Morgan

Tanzania could remove its ban on cryptocurrencies after El Salvador announced its Bitcoin Law. The financial regulator of Japan warned Binance that it needs a license, but Changpeng said that his team is working on it.

In recent days, JPMorgan spoke about the fair value between USD 23,000 and USD 35,000 that Bitcoin could achieve in the medium term. The institution explained that the cryptocurrency could take time to recover from the recent fall that its price suffered. The banking giant said that institutions are not buying Bitcoin on the cheap.

JPMorgan previously envisioned a USD 140,000 road map if Bitcoin matched the gold allocation and the volatility profile. However, the institution predicted that full convergence or volatility equalization is unlikely in the foreseeable future.

They also said that the repression by China against Bitcoin mining on the territory would have a positive impact in the medium term. That would help accelerate the reduction of China’s high share of the Bitcoin hash rate.

According to the bank, the recent drop in the price is just a continuation of weak flows and price dynamics. The weak flows suggest that institutions are not buying during the slump of Bitcoin to current levels.

The financial institution considers that another factor preventing a possible bullish run is the end of the six-month lockdown of the Grayscale Bitcoin Trust fund. In December and January, that company posted a revenue sum of nearly USD 4 billion.

Central Bank of Tanzania May Remove the Ban on Bitcoin

The Bank of Tanzania is reportedly working to remove its November 2019 cryptocurrency ban. That comes amid favorable comments on Bitcoin and other cryptocurrencies from the president of the African country.

According to Reuters, the federal government has given the Tanzanian central bank guidelines to lift the ban. Hassan instructed them to stay current as cryptocurrencies have grown in popularity.

The announcement of the approval of the Bitcoin Law in El Salvador gave rise to those favorable comments on cryptocurrencies in Tanzania. Additionally, there was a wave of positive sentiment about BTC in other Latin American countries such as Paraguay, Panama, Honduras, Guatemala, and Costa Rica.

Twitter user @CRIPTOBOI said that Paraguayan banks are mounting a powerful anti-cryptocurrency lobby. However, he reported that the community wants to receive crypto cards to buy with cryptocurrencies.

Japanese Financial Regulator Warns Binance about Its License

Japan’s Financial Services Agency recently confirmed that it was about to warn the Binance exchange about a problem. That financial control body explained that the company did not have any record with them.

The regulator’s statement does not imply weighing criminal charges against the exchange, as Nikkei indicated in its previous report. According to Bloomberg, earlier this year, the firm said it worked alongside Japanese regulators to obtain a license.

Regarding the statement of the Financial Services Agency, Zhao Changpeng confirmed that he had received the warning. He said that the legal team of his company is in talks with the regulatory agency.

Exchanges Do This in the Face of Excessive Fees for Bitcoin Transactions

Alexander Salazar
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Exchanges Do This in the Face of Excessive Fees for Bitcoin Transactions

Binance, Bitfinex, and Poloniex have come to pay between 3 and 10 times more than necessary. Fee rates rise above averages with exchange overpayments.

A sudden drop in miners’ hash rate may be contributing to the increase in fees for processing Bitcoin transactions. Other factors include transaction congestion and overpayment from users of the Bitcoin network, according to exchanges.

Cryptocurrency exchanges charge very high figures for withdrawing Bitcoin (BTC) from the platform. Although they do it to pay miners, those amounts are not necessary to confirm the sending of BTC.

Since miners include the transactions in each block, they receive the fees for processing the sending of Bitcoin. The higher the payment, the greater the incentive for miners to include the transactions.

The minimum unit to measure fees in Bitcoin is the satoshi (or sat), which is equivalent to 0.00000001 BTC. For this value, it is necessary to cross the total weight of the information and a rate in sats per vByte of data.

Paying 10 Times More Than Necessary for Sending Bitcoin

Binance and other exchanges pay fees above what the network needs to process their customers’ withdrawals. For example, Binance paid a rate of 100 sats/vByte, when the block average was 20 sats/vByte.

For its part, Bitfinex paid a rate of 143 sats/vByte when the general average was 54 sats/vByte per block.

The exchanges paid three times the average and almost ten times the minimum rate needed to enter the block.

Poloniex paid a rate of almost 350 sats/vByte, meaning that the overpayment was six times the average and more than 20 times the minimum rate.

A single transaction per block should not seriously affect the fee average. However, exchanges move high volumes of money daily through thousands of transactions.

How the Excessive Payment of Fees for Sending Bitcoin Affects Users

Many users fall victim to excessive fees for sending a few US dollars in BTC from a wallet.

Wallets usually set the average rate to enter the first block to mine as a priority rate. If users cannot define the fees to pay, they could be spending much more than necessary.

Every transaction by exchanges, some individuals and other services using Bitcoin causes that average to go up. As minutes pass without any blocks mined, the number of high-fee transactions grows.

The average of block 688,887 was 42 sats/vByte but confirmed transactions of 3 sats/vByte entered. By sending at the average rate, users pay 14 times more than necessary.

According to mempool.space, an average transaction could include around 140 vBytes of information for native SegWit addresses. At a rate of 42 sats/vByte, that would be a total of 5,880 satoshis or a total fee of around USD 1.86. With the rate of 3 sats/vByte (a total of 420 satoshis), the payment would be just USD 0.13.

In times of high congestion, that difference increases and could reach tens of US dollars. According to data from Blockchair, in April, there were fees above USD 60.

This situation becomes worse when customers withdraw their funds since exchanges often charge fees well above necessary. Besides, they pay miners less than they charge customers, so overpaying does not affect them. While customers lose due to their withdrawal, Bitcoin users do due to the increase in fees on the network.

By Alexander Salazar

While the Price of Bitcoin and Other Cryptocurrencies Pulls Back, that of Dogecoin and Shiba Inu Rises

Alexander Salazar
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While the Price of Bitcoin and Other Cryptocurrencies Pulls Back, that of Dogecoin and Shiba Inu Rises

A new tweet from Elon Musk seems to have contributed to the increase in the prices of Dogecoin and Shiba Inu. Recent falls in the price of Bitcoin have weighed on that of altcoins such as Ether and Cardano.

The price of the pioneering cryptocurrency recently dropped by 8.8% to around USD 31,800 per unit. However, it has seen a 13.7% rebound in sales volume, reaching USD 39 million.

Enthusiasts and supporters of the cryptocurrency express their support for the recent announcements by the Salvadoran government. President Nayib Bukele informed citizens that the adoption of the cryptocurrency would go into effect on September 7th. To do this, they are preparing a new electronic wallet that will work on mobile devices.

A bonus of USD 30 for users of the digital wallet will accompany the measure. That will allow all those with less experience in using the cryptocurrency to become familiar with it.

Bitcoin Falls in Price and Major Altcoins Accompany It

Major altcoins on the market have also felt the effect of the falling price of Bitcoin. For that reason, some of them have recently suffered quite steep declines.

The most relevant cases are Ether (ETH), Binance Coin (BNB), Cardano (ADA), XRP, Polkadot (DOT), Solana (SOL), THETA, and VeChain (VET). The prices of these altcoins have fallen by between 4% and 10% in 24 hours.

Dogecoin and Shiba Inu Survive the Storm

However, the cases of Dogecoin (DOGE) and Shiba Inu (SHIB) are the most prominent amid the decline of crypto assets. These meme cryptocurrencies are among the few crypto assets that have made small profits.

Both cryptocurrencies have been experiencing increases close to 5% in the last 24 hours. Many blame this increase on the “Elon Musk effect,” the eccentric CEO of Tesla and SpaceX. He posted a new tweet where he said that everyone would know the Shiba Inu dog as Floki.

Although the message does not directly mention either of the two cryptocurrencies, the reaction of users and enthusiasts was evident in the markets. Trading volumes for both tokens rebounded following an increase in purchase orders.

Influence of Bitcoin in the Cryptocurrency Market

The price of Bitcoin plummeted when Elon Musk announced that Tesla would no longer accept Bitcoin as payment for its electric cars. He argued that cryptocurrency mining is harming the environment due to CO2 emissions. Altcoins accompanied the pioneering cryptocurrency during the collapse of this market.

Comments from influential figures can affect the price of Bitcoin both positively and negatively. On one occasion, the CEO of Tesla spoke positively about the cryptocurrency, which drove its price up.

Bitcoin has proven that it can bounce back from its worst all-time lows, which is why many continue to rely on it. For example, the president of El Salvador supports its use as a method of exchange in the economy through a new law. Other Latin American countries, such as Paraguay, Panama, Honduras, Guatemala, and Costa Rica, endorse the Bitcoin Law.

By Alexander Salazar

The Pressure from the Chinese Government on Cryptocurrency Mining Forced Bitmain to Stop Selling ASICs

Alexander Salazar
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The Pressure from the Chinese Government on Cryptocurrency Mining Forced Bitmain to Stop Selling ASICs

The largest manufacturer of Bitcoin mining equipment, Bitmain, suspends the sale of its products due to pressure from Beijing.

In recent days, the Bitmain company suspended the sale of the ASIC devices that it manufactures. The pressure from the Chinese authorities on cryptocurrencies led them to make such a drastic decision. In Beijing, the measures against the trading and mining of cryptocurrencies within the territory intensified.

For that reason, the company specializing in equipment to generate cryptocurrencies stopped its commercial activities. They argued that they wanted to reduce selling pressure in the secondary market due to too low prices. Since everyone wants to get rid of used equipment, prices have reached the bottom.

Bitmain is not the only manufacturer of that type of equipment that the selling pressure in the secondary market is affecting. Other major Chinese manufacturers that are suffering from this situation are MicroBT, Canaan Creative, and Ebang.

Reasons why Bitmain Suspends the Sale of Mining Equipment

The suspension of the sale of mining equipment by Bitmain could lead to three conclusions. First, the company fears retaliation from the Chinese authorities for selling products related to cryptocurrencies. Second, the fall in the prices of ASICs in the secondary market has caused their sales not to generate profits.

Another conclusion is that both reasons forced the manufacturer to make that decision. What is true is that the company will not offer new products indefinitely. Therefore, miners in other countries will have to settle for used equipment.

The reality before Bitmain’s decision was not much different from that of today. Stocks remained empty due to orders from large mining companies and a shortage of semiconductor chips.

What has caused great commotion is the fall in the prices of mining devices in the secondary market. The authorities will apply exemplary punishment to those mining cryptocurrencies, which has forced the owners to sell them cheaply. Suspending the sale of products is only part of a bigger problem.

China Takes Strong Measures Against Bitcoin Mining

In May, the Chinese government decided that Bitcoin mining was against the country’s environmental plans. They argued that the business was damaging the environment with CO2 emissions, so they decided to ban it.

In June, the central government began the offensive, ordering the provinces to close all companies related to mining farms.

At the same time, the authorities summoned financial institutions to monitor their users. They sought to prevent any account from becoming involved in the purchase and sale of cryptocurrencies.

All of that forced Bitmain to suspend the sale of cryptocurrency mining machines. Representatives of the company said that the decision aimed to help avoid any problem.

The tightening of anti-cryptocurrency measures in China has also affected other businesses. For their part, cryptocurrency exchanges and pools have also closed their operations or have reduced them to a minimum.

The Chinese government does not accept the decentralized and anonymous nature of Bitcoin, which led it to create its CBDC. Besides, they argue that mining this cryptocurrency contributes to harming the environment as many farms use fossil fuels.

By Alexander Salazar

It Is Unlikely that Paraguay Will Have a Bitcoin Law Like El Salvador

Alexander Salazar
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It Is Unlikely that Paraguay Will Have a Bitcoin Law Like El Salvador

in Paraguay is growing. However, many people and banks still associate Bitcoin and other cryptocurrencies with illicit activities.

Joaquín Morinigo Fiorio, CCO of Arapy Network and member of CryptoPy, explained why a Paraguayan cryptocurrency law is unlikely. The Paraguayan bitcoiner highlighted the trust in the national fiat currency, the beliefs about criminal activities, and the refusal by banks.

This Twitter user explained that Paraguay’s fiat currency, the guaraní, is one of the most stable and the oldest in the region. Since 1943, it has almost always had annual inflation of less than 30%, according to the World Bank. In the last ten years, the guaraní has suffered falls of less than 10% per year.

People Cannot Use Their Cards to Buy Cryptocurrencies

For his part, @CRIPTOBOI said that Paraguayan banks are mounting a powerful anti-cryptocurrency lobby. He added that those institutions do not allow opening accounts on exchanges or using cards to buy cryptocurrencies.

The tweeter and entrepreneur commented that the Paraguayan community wants crypto cards to reach the country to buy with cryptocurrencies. He explained that people could make transactions in cryptocurrencies with small amounts but could not put together the logistics to move large sums.

He explained that banks refuse to operate with cryptocurrencies, even though they were branches of large banks doing so abroad. He argues that most banks in Paraguay are very traditional and do not yet understand cryptocurrencies, which they keep in a gray zone.

Morinigo Fiorio said that those wanting to enter the ecosystem could not buy cryptocurrencies with their cards. Besides, many people still believe that cryptocurrencies only serve for laundering money and financing terrorism, among other illicit acts.

The bitcoiner highlighted that education would help change that situation since many Ponzi schemes still operate in Paraguay, promoting this taboo. He explained that Paraguayan cryptocurrency communities are fighting these scammers and warning people to avoid being their victims.

After the government of El Salvador made the Bitcoin Law official, it seemed that Paraguay could follow its path. In this regard, a congressman informed that he would present a project in July, but no one knows about it yet.

Bukele Says that Bitcoin Is a Bulletproof System

In recent days, Salvadoran President Nayib Bukele stated that he believed that the Bitcoin system would become the future. He argued that it was a bulletproof system that would work not only for El Salvador but for all of humanity.

Bukele spoke of large financial entities such as the International Monetary Fund and the Inter-American Development Bank (IDB). He referred to them as powerful institutions whose help his country needs, as it has done in the past.

The president was happy about this initiative to convert Bitcoin into legal tender in El Salvador. Those who support the Salvadoran Bitcoin Law include some politicians from Paraguay, Panama, Honduras, Guatemala, Costa Rica, Nigeria, and Tanzania.

Regarding whether people should trust him, Bukele said that they should not trust the government but Bitcoin. In his opinion, the pioneering cryptocurrency is a perfect system that can work for Salvadorans.

By Alexander Salazar

While the Number of Cardano Active Staking Addresses Increases, the Cryptocurrency Could Arrive in El Salvador

Alexander Salazar
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0
While the Number of Cardano Active Staking Addresses Increases, the Cryptocurrency Could Arrive in El Salvador

Cardano (ADA) has more than 50,000 new staking addresses, reaching the milestone of 650,000 addresses. Charles Hoskinson announced that he plans to travel to El Salvador, so the cryptocurrency could soon arrive in that country.

Currently, 659,172 addresses are betting on Cardano’s native cryptocurrency ADA and 2,647 active staking mining pools, according to data from Pooltool. The staked funds are worth USD 30 billion, representing 71.27% of the total supply of ADA.

That number of addresses represents an increase of more than 8% after having exceeded 600,000 active staking addresses. Various media have reported that the network had reached a total of 608,391 wallets and 2,561 mining pools.

The staking process is an alternative to traditional cryptocurrency mining but with fewer resources. A user can acquire cryptocurrencies and keep them locked in a wallet to receive profits or rewards. That means that more people are using their ADA funds as collateral to secure the project as they look for long-term performance.

Although the number of addresses betting on their ADA funds has increased considerably, the value of those tokens has decreased. At the beginning of the month, the figure was USD 43 billion, but the percentage of the total supply of ADA has not changed.

The recent drop in the price of Cardano led to that difference in its value in US dollars. It has gone from USD 1.7 to USD 1.30 in the last 30 days.

Cardano Is Becoming the Center of Attention

Cardano reaches that milestone in the face of a boom while it has been debuting on various platforms.

Publicly traded Canadian cryptocurrency company iMining backs ADA for its staking mining services. US exchange Kraken has already announced a staking service for ADA. Besides, the cryptocurrency has attracted attention after renowned exchanges such as Coinbase have listed it.

This cryptocurrency is in the middle of the blockchain scene in the wake of multiple announcements of technological development. In recent days, Hoskinson reported that his company plans to publish an article on algorithmic stablecoins soon.

There have been various improvements and advancements to the project, such as the arrival of smart contract functionality to the Cardano network. They have seen ADA and its blockchain platform grow considerably in 2021. While the AlonzoBlue 2.0 update is already on the testnet, the Alonzo hard fork will occur in September.

Hoskinson Is Planning to Travel to El Salvador

Cardano founder and Ethereum co-founder Charles Hoskinson recently announced that he plans to bring the project to El Salvador soon. The Central American country will become the first country in the world to adopt Bitcoin as legal tender. For that reason, several ecosystem leaders have shown their interest in participating in that historic initiative.

Hoskinson revealed that the Cardano team has spoken with the authorities and political parties in El Salvador. For that reason, he believes that there could be a new alliance with that country and does not rule out a meeting with Nayib Bukele.

By Alexander Salazar

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