A research study by two professors at USC Marshall shows that a bubble is a good thing for Bitcoin. Price bubbles and adoption can be mutually reinforcing and even benefit other cryptocurrencies.

People normally believe that the formation of a bubble around Bitcoin is a negative thing. However, a study by two professors at USC Marshall reveals that it may be something rather positive for the cryptocurrency.

Since mid-2020 Bitcoin remained on a bullish path, which allowed it to exceed its previous all-time high. In early October 2020, Bitcoin was trading at around USD 10,000. However, the pioneering cryptocurrency reached a price close to USD 40,000 in just about three months.

Even though these types of movements are not normal in traditional markets, they are in Bitcoin. Many people are starting to foster the fundamentals of a possible bubble around Bitcoin that could burst at any moment.

The term “bubble” has usually gotten a negative connotation purely because of when it could burst. However, the truth is that a bubble does not always have to be something negative.

A Bubble Can Be Beneficial

Investors usually give a negative connotation to the term “bubble.” The reason for this is that they relate it to the popular delusions and madness of the crowds behind the burst.

However, temporary excessive optimism about Bitcoin (or another cryptocurrency) sometimes forms financial bubbles. That may offer benefits to the crypto asset in the future, such as what happened after the Dot-com bubble.

USC Marshall Professor Yanhao Max Wei explained that volatility may be rather positive for Bitcoin as it promotes its mass adoption. He argues that a Bitcoin bubble can contribute to free and massive publicity for the cryptocurrency.

Investor Interest Awakens

Max Wei’s words are undoubtedly consistent with what is taking place. People were able to witness how the prices of Bitcoin rose during 2020. That situation caused the media to start talking about the cryptocurrency and its bold move again.

In this sense, Max Wei conducted a research study (entitled “Cryptocurrency Adoption with Speculative Price Bubbles”) jointly with his colleague Anthony Dukes. According to the results of the study, price bubbles and user adoption can be mutually reinforcing in the market.

Therefore, a bubble favors the adoption of Bitcoin and brings long-term benefits, even for the other cryptocurrencies. Max Wei explained that “price bubbles accelerate the growth of the Bitcoin user base. The expectation of those users is what fuels the price bubble,” said the professor.

Max Wei compared the effect of a bubble in Bitcoin to what happens “when a brand introduces limited-edition shoes.” The exaggeration surrounding the fall itself is what is striking about it.

The researcher said that scholars have tended to view price bubbles and user adoption separately. He added that his study points to the importance of the two interacting with each other. A bubble is beneficial for Bitcoin and other cryptocurrencies in terms of price and adoption.

By Willmen Blanco

Major institutional investors are diversifying their capital between Ether and Bitcoin as a store of value. Both the cryptocurrency of the Ethereum network and the DeFi ecosystem will be before them.

More and more institutional investors are buying Ether (ETH), which they view as a store of value. The cryptocurrency of the Ethereum network and the second most important in the market is gaining historical momentum towards its appreciation.

In recent days, the price of this digital currency reached a new all-time high. For this reason, it has become an opportunity for large investors and a new option to store value in the market. The second-largest cryptocurrency recently reached a price of USD 1,439 per unit. The current price of Ether is very close to USD 1,300, which is still a considerably high price.

Institutional Investors View Ether as a Store of Value

Bitcoin’s recent pullback may be one reason why investors view Ethereum as a store of value. The pioneering cryptocurrency dropped from around USD 42,000 to USD 31,000 in a very short time. This situation led many to seek alternatives to invest their capital within the cryptocurrency system itself.

Cryptocurrency exchange company Coinbase says in its annual report that they have observed a growing number of purchases of Ether. In other words, a greater number of institutional investors are taking positions in this digital currency, taking advantage of its significant returns. Another very relevant factor is that most of those investors have already opened positions in Bitcoin.

In this way, the level of trust that exists in this type of asset market encourages bettors to try different cryptocurrencies. On previous occasions, investors in the crypto environment have turned to other more traditional assets due to the weakness of Bitcoin.

In short, according to the digital gold narrative, this other cryptocurrency shares the monopoly of Bitcoin. For that reason, large investors seek Ether, together with Bitcoin, given that they view the former as an easily accessible option.

Decentralized Finance also Plays Its Role

Another factor that could be contributing to boost Ether, following this rally and growing adoption, is Decentralized Finance (DeFi). Cryptocurrency experts such as Arthur Cheong of DeFiance Capital recently explained that the most daring investors are looking for something besides Bitcoin.

Cheong believes that, after seeing Bitcoin, more adventurous institutions are exploring Ethereum and DeFi. This would validate the thesis that Bitcoin is the “Internet of money”, while investors could consider Ethereum the “Internet of value”.

The multiple options that DeFi offers in terms of finance, as well as the ease of access to them, lead this to happen. Unlike the traditional financial system, which poses multiple obstacles, operating in DeFi simply requires access to the Internet.

Once investors have entered Ether, they will find themselves immersed in a sea of great return opportunities. Apart from the native Ethereum currency, the ecosystem of Decentralized Finance will be before them. It is only a matter of time for the second cryptocurrency on the market to gain more prominence among expert investors.

By Willmen Blanco

The second most important cryptocurrency on the market recently marked a new all-time high. Short-term trends seem to indicate that it will reach new all-time highs shortly.

Ether recently reached a new all-time high of USD 1,471, entering unexplored territory. The cryptocurrency exceeded its previous all-time high of USD 1,439 from the previous week.

At the time of writing this article, Ether is trading at around USD 1,406. As “strong hands” continue to hoard the supply, the cryptocurrency has gained 7.16% in 24 hours.

A few hours earlier, the price of the second largest cryptocurrency set a new record. At the same time, the number of wallets with more than 10,000 Ether coins increased.

Ether’s trading volume is putting pressure on its price, indicating that the bullish rally will continue.

Many owners of wallets with more than 10,000 ETH have their eyes on the long term. For that reason, they do not consider that this increase is a reason to leave with a profit immediately.

Short-Term Trend Suggests a New All-Time High for Ether

A daily candlestick chart for Ether shows a clear short-term bullish direction. Momentum for this trend is currently under development and may even last several more days.

The cryptocurrency on the Ethereum network has been unable to leave the immediate resistance zone in the short term. If there is a pullback before the effective break of the ceiling, the gains will be useless. However, this is not the most likely thing to happen at the moment.

Ether’s Supply Shortage on Exchanges

It is possible to quickly confirm the strong bullish sentiment about Ether’s price through an indicator. This factor allows knowing the number of ETH coins that there are on exchanges.

A low ETH balance on exchanges indicates that investors are not looking to dispose of their coins in the short term.

Even though the price of Ether reached a new all-time high, this indicator plummeted. This means that, regardless of how tempting it is to sell at current profits, investors know that Ether still has a way to go.

Ether Still Has a Way to Go

This huge rise in the price of Ether is just the beginning of long-term momentum, which could last much longer. There may be a straight move toward the moon, but any pullback will encourage new purchases.

Ether had been pulling back for three weeks, but now it seems that bulls have already picked up enough demand. In 2021, ETH will continue to grow in the fundamental area of development with the launch of version 2.0 of the Ethereum network.

The second cryptocurrency on the market still has a way to go in terms of improvements. As investors know this, they have already been discounting the increase that the updates bring.

Various factors will exert upward pressure for Ethereum to reach consecutive all-time highs over the next months. These elements include the growth of the DeFi space, ETH stacking, a more scalable and comfortable network, and an entirely positive ecosystem.

By Alexander Salazar

OKCoin is running a node on the Bitcoin Lightning network. The minimum deposit and withdrawal reduction is from 0.001 to 0.0001 bitcoins.

The speed and low fees of the Bitcoin Lightning Network continue to gain traction among exchanges. OKCoin is the latest to announce support for deposits and withdrawals via the Lightning Network.

OKCoin reported on January 22 that the integration with Lightning would be available in the first quarter of this year, 2021, but they did not clarify the specific date. “By integrating the Lightning Network, OKCoin turns into a node inside the network, serving as a linker to other nodes on the network for transaction processing,” the exchange added through a statement posted on its blog.

The Lightning Network is a bitcoin solution that works with two layers. Unlike transactions on the Bitcoin network, you should not wait for inclusion in a block to confirm a transaction in Lightning. This solution reduces the waiting times drastically and sets an allowance for you to trade almost immediately. Also, there is no need for commissions to miners to issue transactions, so any amount of satoshis, the minimum unit of bitcoin (BTC), is at a low cost.

The exchange house stressed that the new modality would speed up deposits and withdrawals with bitcoin. Despite that, the limit for the two types of operations on the platform suffered a considerable reduction. In operations on the main chain, users must deposit or withdraw a minimum of 0.0001 BTC or 100,000 satoshis. For Lightning transactions, the minimum wage is 100 satoshis.

With a foundation in 2013 and with roots in San Francisco, OKCoin has become one of the most popular Bitcoin exchanges in the environment. Currently, around $ 40 million of volume in trades on its platform in 24 hours, according to data from LiveCoinWatch.

Growth and Support of Exchanges to the Bitcoin Lightning Network

Hong Fang, CEO of OKCoin, assured that the payment channel network’s inclusion responds to an exhaustive evaluation of Lightning. “We now feel that the network is strong enough to participate as an exchange with a high volume of withdrawals and deposits per day,” added Fang.

OKCoin is not the first extensive exchange that sees in Lightning a chance to improve its services regarding Bitcoin, allowing it to operate quickly and at low costs even in times of network congestion. Before them, Bitfinex and Kraken announced support for the payment channel network.

Before 2020 ended, The Lightning Network has been growing, and it shows that behavior through the network’s statistics. During the recently concluded year, an increase surprised both public channels and nodes with a peak of 100%.

Also, there were significant technological advances, such as the launch of Wumbo, which expanded the storage capacity of BTC in the channels of the Lightning network; or the creation of Loop, an implementation that improves channel management, allowing the load and release of funds without having to close the channels.

By: Jenson Nuñez

The BIS is trying to make international payments and transfers with stablecoins and CBDC. It will also implement blockchain to test the issuance of a tokenized green bond.

A new work program is the recent launch of The Bank for International Settlements (BIS). The work program includes research and a proof of concept on stablecoins and central bank digital currencies (CBDC).

The program receives support from a recently established innovation network made up of 63 specialists with central bank experience. By studying various aspects, including technological, regulatory, and financial, the entity will prove concepts regarding payments and transfer of funds at the international and inter-institutional level.

They will center their efforts on six topics: technology regulation, new financial market infrastructure, central bank digital currencies (CBDC), available finance, green finance, and cybersecurity.

BIS Innovation Hub is leading the research program. This innovation group, which works under the acronym BISIH, since 2019 has been interested in the process to “identify relevant trends in financial technologies and their values for central banks,” they explain in a report.

By carrying out proofs of concept, BISIH is looking forward to providing central banks with a set of more efficient solutions that could enhance their services in a cooperative framework between entities, institutions, academics, and financial service providers that focus more on the private sector. The initiative comes from the bank’s concern to enter the new monetary and economic dynamics regarding cryptocurrencies.

The research will occur among the Innovation Centers located in Hong Kong, Switzerland, and Singapore. The BIS hopes to open new places in the United States through an alliance with the Federal Reserve Bank of New York.

This entity set its operation in an iconic building in Manhattan, New York. They are expecting to activate more physical locations in Europe and will also have online meeting points throughout the year, they say. In total, experts from around the world will participate, with experience based on the 63 central banks.

The BIS is Aiming at Stablecoins and CBDC

Among the program’s projects is Helvetia, which will seek to test the operation of a CBDC for the Swiss National Bank (SNB). The BIS is also open to examining the feasibility of running a CBDC through a distributed platform that can link with outlets in the traditional financial system, the announcement said.

The entity states that it is only a proof of concept and not a statement of intent to issue a CBDC. Regulatory feasibility will receive a testing process without the results being legally effective by default.

Likewise, another proof of concept involves the development of a global market for CBDC transfers and exchanges. Central bank currencies would be transferable and interchangeable in a trading operation regarding issued coins by already regulated central banks. As specified, banks, financial entities, and participants, in general, would be able to buy, exchange, payor redeem these CBDCs in this test.

By: Jenson Nuñez.