The crypto asset is a government flag to try to evade sanctions. As a form of payment in commercial establishments, it is almost non-existent.

The moment Nicolás Maduro announced in December 2017 that Venezuela is looking for ways to use its cryptocurrency to seek international financing, the government tried to open a floodgate to relieve the country’s ailing economy. Hyperinflation, devaluation of the bolivar, international sanctions, distrust of investors, and a serious political crisis, outlined a dark panorama.

Three years after it became known that the petro (PTR) would be the cryptocurrency that will help stabilize the country, the situation only worsened. Venezuela registers 96% of poverty in its population; this situation brings a contraction of the Gross Domestic Product (GDP) of more than 70% and inflation of 4,000%.

The promise of the national government with the petro was “to advance in matters of monetary sovereignty, overcome the financial blockade and achieve new ways of international financing for economic development,” according to what Maduro said in a television broadcast at that time. The currency’s backing would be the country’s oil, gas, gold, and diamond reserves.

The national authorities are not unaware of the financial difficulties, but they frame them in an “economic war” that Venezuela is experiencing and that, according to Maduro, was born in the United States. In February of last year, the president further detailed what is happening when he said that there is also “financial persecution”, “economic blockade” and “trade blockade.”

In February 2020, Maduro made a speech saying that this year would be the “definitive implantation of the petro because it will serve as the ultimate mechanism to defend the society that has no foreign exchange.” Also, he cataloged the so-called cryptocurrency as the total solution to stop economic warfare.

The petro could be considered as a government experiment that does not quite fit and that, from time to time, receives push from the authorities to be used as a means of payment for, for example, government procedures, issuance of passports, or to purchase gasoline.

Be an instrument for financial autonomy

Although the petro has been a flag of Maduro´s government, it was the late President Hugo Chávez who made public in 2009 that they were working on a proposal for an international currency, not a cryptocurrency that would be based on oil reserves. That project was called petro and it would arise, according to Chávez at that time, because “the world is a victim of the dollar empire.”

The project did not materialize and reappeared as a crypto asset eight years later for Venezuela to try to finance itself. In any case, the petro has not fully served in this field. Three months after Maduro’s announcement about the petro, Donald Trump’s government sanctioned the project and prohibited US citizens or companies from that country from trading with it.

Monetary sovereignty

The bolivar is the national currency of Venezuela. However, due to high levels of inflation and devaluation, millions of people use other alternatives as means of payment, including the US dollar, the Colombian peso, the Brazilian real, and bitcoin (BTC) itself.

According to Asdrúbal Oliveros, managing partner of the Ecoanalítica firm, the use of dollars in cash to pay in the country businesses has reached 80%. Even Maduro has said that these kinds of operations have been allowed because it is a “self-regulation” of the economy, not as a state policy.

As a state policy, in theory, there is the petro, but the establishments that accept it are few or nonexistent. After three years of its announcement, pre-sales, and activation of exchanges, it would not be possible to speak of monetary sovereignty since there would be general ignorance among the population about how to use it or download a wallet.

Beat the financial lock

Venezuelan government authorities often claim that the precarious conditions in the country are due to sanctions that the government of the United States and Europe imposed on the Venezuelan government. This would also include a financial blockade and many financial sanctions on many political actors and other personalities closely related to the actual government.

Donald Trump’s government imposed those sanctions on individuals and the Venezuelan oil industry, which has cut the margin of maneuver for the authorities. Beyond good relations with political allies such as China, Russia, Iran, or Cuba, Venezuela is unable to turn to the financial markets in search of funds.

By: Jenson Nuñez.

Binance Futures’ funding rate exceeded Deribit’s on December, which has historically led to consolidation or a recession in the price of Bitcoin.

CryptoQuant’s data says that. Historically, every time this event has taken place, the dominant cryptocurrency features a local cap or consolidation.

The funding rate of the major cryptocurrencies, including Bitcoin and Ether (ETH), suffered a considerable increase in the last 48 hours. This increase indicates that the futures market is overheating, increasing the likelihood of a recession. According to Coinmarketcap, currently, the market capitalization of Bitcoin is $ 427,433,253,507.

What’s Next for Bitcoin?

Bitcoin has already exhibited a relatively minuscule pullback and some consolidation after its recent rally. The price of Bitcoin surged from $ 19,300 to $ 23,800 on Binance. After a 23% increase, a 3% to 4% correction seems to be relatively small in comparison to historical corrections after a large rally.

A Bitcoin pullback was destined to happen since the futures funding rate surpassed 0.1% on December on major exchanges.

The Bitcoin futures market uses a system called “financing” to create a balance in the market. If there are more long contracts on the market, the financing rate becomes positive. If this happens, buyers or holders of long contracts have to pay short-sellers, and vice versa.

The funding rate surpassed 0.1% on Bybit and other leading exchanges for the first time since the November rally to $ 19,000. At that point, after the futures market overheated, the price of Bitcoin marked a significant recession that reached at least $ 16,000.

A 20% to 30% pullback was likely at the time because the funding rate remained consistently high. The funding rate has cooled down comparatively fast. Therefore, the chances of consolidation rather than a correction are greater particularly as new retail investors keep their position largely on the sidelines.

A cryptocurrency trader trading under a pseudonym noted that Binance’s futures funding rate exceeded Deribit’s.

Although this data is not of specific relevance, historical trends show that when this occurs, the price of Bitcoin tends to decline. The trader said:

“It seems like most of the time that Binance funding outpaces Deribit funding we have a sideways move or a local top. It could be a” retail FOMO peak signal. “

One reason behind this trend could be the importance of Binance Futures as a way of measuring general market sentiment. Once the price of Bitcoin shows a larger price movement, Binance Futures tends to show large sell-offs due to its high open interest.

Binance Futures consistently keep on the top of the three futures exchanges due to its open interest alongside CME and OKEx. Therefore, when Binance Futures start to show signs of overheating, the market begins to move cautiously. Technical analyst Cantering Clark said that if the price of Bitcoin breaks above $ 23,350, an uptrend will likely occur.

By: Jenson Nuñez.

Form S-1 review is to verify corporate data. The value of the company value was about $ 8 billion in 2018.

The exchange of bitcoin (BTC) and cryptocurrencies, Coinbase, took the first step for what will be its potential entry to the stock market or Wall Street. The company filed Form S-1 as a registration statement with the Securities and Exchange Commission (SEC) for its consideration.

The information saw the light on Thursday by Coinbase after months of rumors that the exchange was getting everything ready for its application to get listed. The company would be considering a direct listing rather than making an initial public offering (IPO).

In the direct listing, there is no creation of new shares. On the contrary, it operates with already existing shares without the participation of intermediaries. This means that investors, promoters, or employees who own shares can sell them directly to the public.

In the case of IPOs, new shares receive issuing. This action requires the participation of an intermediary to approach their distribution among investment banks, stockbrokers, mutual funds, and insurance companies.

“Form S-1 is expected to go into effect after the SEC completes its review process, subject to market and other conditions. This announcement does not constitute an offer to sell or a request for an offer to buy of any security,” this was part of the message Coinbase shared on its blog.

The next steps Coinbase must take to become publicly traded include filing Forms S-2, S-3, and preparing an informational prospectus for investors. This must include information on the issuer, its shareholders, commercial and financial information on the issuer’s business, risk factors, and the destination of the funds from the arrangement.

In the case of the SEC, the SEC’s mission is to evaluate the request and issue a comment letter on the request. In case of notable faults, it will issue a letter of every noted deficiency to the issuer with an explanation of the faults.

The exchange’s request occurs at a historic moment for bitcoin, which this Thursday reached a new top, trading at over $ 23,000 per unit. The overall cryptocurrency market is prospering due to the arrival of institutional investors, pushing the market capitalization to more than $ 660 billion in recent weeks, according to CoinGecko.

The first information about Coinbase’s plans began to spread in July when the Reuters news agency revealed that the exchange was preparing to enter the stock market. At that time, the report said that: with completed procedures, the exchange house would become the first to make a public listing.

It is important to mention that, before the financing that took place in 2018 by Coinbase, the company had a valuation of about 8,000 million dollars. It is currently one of the bitcoin exchanges with the highest volume, showing a trade up to 129 pairs of cryptocurrencies.

Valuation could amount to USD 28,000 million

According to a recent report by the Messari firm, the entry of Coinbase to Wall Street could take its worth as a company to about 28,000 million dollars. For analyst Mira Christanto, Coinbase is one of the most “prominent exchanges with a daily volume of one billion dollars”.

The study bases its argument on a data model that relates to the commercial segments of the company and also includes: commissions for exchanges, fees for custody services, debit cards, and others. According to the researcher, the exchange’s volume comes from institutional clients, but the average holding per client is $ 703.

Concerning custody services, these remained at about $ 7 billion in 2019 but grew to at least $ 20 billion in 2020, which speaks of the growth of the exchange house and the interest that the exchange continues to arouse.

By: Jenson Nuñez.

The price of Bitcoin lost more than 2% overnight. The major altcoins fell as much as 10% within a few hours.

As a more aggressive strain of coronavirus emerges, the price of Bitcoin fell within hours. In recent days, the pioneering cryptocurrency had broken its all-time high and even exceeded the USD 24,000 mark. The fall of the cryptocurrency coincides with the traditional markets in the red, among which are stock indexes, stocks, and commodities.

At the time of writing this article, the price of Bitcoin is around USD 22,900, after falling by more than 2% in just 24 hours, according to data from CoinMarketCap.

At its lowest point, Bitcoin traded just above USD 22,100, according to the same source. This situation occurs in a period in which the main cryptocurrency reaches a market value above USD 24,000.

Traditional markets were also in red numbers within a few hours. The most prominent values are those of Tesla, since the company that Elon Musk runs saw a drop of more than 5% in the value of its shares. Other companies in the technology sector, such as Intel or AMD, have declines of more than 3%.

The S&P 500, Nasdaq, and Dow Jones indexes also show negative numbers, but to a lesser extent. Among commodities, WTI crude fell by 3.5% and is currently trading at around USD 47.51.

It is possible to observe that the main precious metals withstood the bearish momentum, with gold falling by just 0.1%. Meanwhile, silver has appreciated by more than 1%, but the price of other metals such as platinum, copper, aluminum, and lead continues to decline.

According to traditional media such as The Wall Street Journal and The New York Times, the market’s behavior is due to the uncertainty about a potential worsening of the pandemic. The finding of a more aggressive strain of coronavirus in the UK has led to the implementation of new restrictions between the island and the rest of Europe. This situation could be creating a climate of tension that is affecting the markets.

Bearish Cryptocurrency Market

Bitcoin is not the crypto asset that has lost the most in the market. Besides, the top altcoins by market capitalization have fallen by much higher percentages.

The main cryptocurrencies experienced a depreciation that even exceeded 10% in cases such as Bitcoin Cash (BCH). The cryptocurrencies that constitute the top 20 fell by at least 5%. Ripple (XRP), Cardano (ADA), and Binance Coin (BNB) followed in percentage the negative performance of BCH.

Despite the current red numbers, Bitcoin remained almost 17% up in recent days. In that period, the pioneering cryptocurrency broke the USD 24,000 mark for the first time in its history.

Of the top 20 cryptocurrencies on the market, only Litecoin (LTC) and BCH had a larger increase in percentage terms in recent days.

Bitcoin fell below the USD 23,000 mark but would remain the most valuable bank in the world. It would even exceed the total capitalization of US bank JP Morgan.

By Alexander Salazar

Institutional investments and ecosystem growth influence the price of Bitcoin. Inflation and devaluations have triggered interest in Bitcoin in Latin America.

In the last three months, Bitcoin’s growth has been the most prominent bullish curve since the rise that it experienced in 2017. This makes 2020 the best year for the pioneering cryptocurrency, according to the director of Bitso Alpha, Eduardo Arenas, and the CEO of Buda.com, Guillermo Torrealba.

Arenas and Torrealba agree with the CEO of Uphold, Juan Pablo Thieriot, on the factors that have influenced the Bitcoin rally.

Arenas notes that the fact that Bitcoin has exceeded 100% of its value throughout 2020, becoming an international trend, is related to several factors. He mentions the steady growth of the ecosystem in recent years, a better understanding of the market, and more widespread adoption.

He also highlights the institutional investment boom that has occurred in recent months. He mentions companies like Microstrategy, Square, the support of major investors such as Paul Tudor Jones, Stanley Druckenmiller, Ruffer, and One River Asset Management, who publicly declared to have investments in Bitcoin.

Besides, the decision that PayPal made last October allows its customers to buy and sell Bitcoin and other cryptocurrencies within its platform, says the director of Bitso.

Those who work at Buda.com agree with the previous statements. According to a note, the Latin American exchange says that “the reasons are very varied” and also links the rise to institutional investors. The influence of the words of defense from some well-known Bitcoin entrepreneurs, such as the Winklevoss brothers, adds to it.

Buda highlights remarks from Wall Street specialists, including those of eToro analyst Adam Vettese. He links that growth to the fact that many business people use Bitcoin to hedge against the inflation that the constant economic stimulus from the government has generated.

Likewise, Torrealba talks about the current support for Bitcoin in the industry, which did not exist before. He mentions the public entry into cryptocurrencies by figures like Paul Tudor Jones, Stan Druckenmiller, and Bill Millen, among others. Even the second richest man in Mexico confessed that 10% of his portfolio is in crypto assets.

The CEO of Buda adds to this the decision of the US banking regulator to authorize banks to safeguard cryptocurrencies, along with the delivery of the first federal bank licenses to companies in the ecosystem.

Bitcoin Market Grows Although Its Price Drops

The directors of Bitso Alpha and Buda state that these use cases for Bitcoin as a store of value are the most notable, especially in the Latin American market. This is something that not only happens during periods of price rise.

“We have detected a constant increase in the number of users since last year, even in very low periods. Specifically, in Latin America, we notice that people are increasingly using cryptocurrencies to satisfy their daily financial needs, as a safeguard of value, to protect their money from inflation and also to make payments between countries, regardless of price,” said the director by Bitso Alpha, Eduardo Arenas.

Similarly, the CEO of Buda.com, Guillermo Torrealba, notes that this year the sale of Bitcoin in Chile has recorded a growth of 270% compared to 2017 and 120% compared to 2019. “On average, there have been more of 27,000 Bitcoin purchase and sale transactions per month only on Buda.com, exceeding 300,000 per year for the first time in the history of the platform.”

Other Reasons for the Bitcoin Rally: Inflation and Devaluations

Uphold CEO Juan Pablo Thieriot introduces the issue of inflation and the devaluation of local fiat currencies as other reasons behind the Bitcoin rally. He thus highlights the fear that citizens and companies have about the loss of value of many sovereign currencies, including the US dollar.

He believes that the participation of institutions in the purchase of Bitcoin, as a protection mechanism against devaluation, is not the only factor that has driven this growth.

Thieriot also points to a “totally unexpected and unusual” situation: the substitution of gold as the main store of value in the world. Everyone knows that gold has always been the natural hedge, but people can sell it to opt for a placement in Bitcoin as the preferred alternative. The COVID-19 pandemic has accelerated the thesis behind Bitcoin: all sovereign currencies always devalue, sometimes very abruptly.

This movement occurs regardless of positions against the main cryptocurrency in the market. For example, Jamie Dimon, CEO of JP Morgan, called Bitcoin a fraud. On the other hand, Kenneth Rogoff, a former IMF chief economist, and Harvard professor claimed that its value was close to zero.

By Alexander Salazar

The amount of dollars in circulation has grown by 65% since last February. The number of transactions in the economy has decreased this year, according to Bent.

Much of the dollars that the US Federal Reserve issued this year is going directly to large corporations rather than citizens, says Marty Bent. The author of the daily Bitcoin newsletter “Marty’s Bent” and host of the podcast “Tales from the Crypt” recently said that US citizens “are experiencing the biggest heist in history.”

Bent supports that information with official data on the monetary issue from the Federal Reserve of Saint Louis. This source shows that this year there has been almost vertical growth, as well as a decrease in economic activity and an upward rebound in indexes such as the S&P 500.

Through a graph that Sven Henrich (@NorthmanTrader) shared on Twitter, Bent shows the growth in the money supply (M1) in the United States, which has grown by 55% since February. To emphasize the magnitude of the money printed this year, Bent says that the printing of 35% of all existing dollars has occurred in the past 10 months.

The graph shows that there was sustained growth in supply over the years. However, there was a marked change in the slope in 2020 since the money supply went from USD 4 trillion to almost USD 6.4 trillion. In other words, there was an increase in the year equivalent to that which occurred in the period between 2014 and 2019.

On another graph that Sven Henrich proposes, the money-issuance curve overlaps with the rise of the S&P 500 index.

According to Bent, what people “are seeing is a massive transfer of wealth from the poor to the rich in real-time.” He says that the people who had to stay home without being able to open their businesses and received a check for USD 1,200 in March “are not benefiting from the profits” that the stock market has generated. Also, he considers that “the kleptocrats in power are bleeding the most vulnerable, actively preventing them from counterattacking, by keeping them confined in the name of science.

Bent continues with the contrast of the other two charts: the rise of money M2, which includes M1 plus savings deposits, and the decrease in the speed of money.

The Saint Louis Federal Reserve explains that this last parameter is a measure of the dynamism of the economy since the speed of money determines the number of times a dollar changes hands on average.

This agency notes that the speed of money tends to decrease during recessions, since the number of transactions in an economy decrease. Consumers tend to save more and businesses tend to invest less, that is, people hoard cash instead of spending it.

Added to the above reasons are the massive printing of money, the increase in the value of large corporations, and the noticeable decrease in economic activity. All this has led to large corporations, rather than the economy as a whole, receiving a significant amount of the aid according to Bent.

According to the 2020 employment index curve, there has been a deficit of almost 15% at its lowest point, three times lower than in the worst scenarios in recent history: falls of 5% in 1948 and 6% in 2007, respectively.

The Federal Reserve anticipates that the US economy will worsen, given that there was the worst quarterly contraction (-32.9%) in gross domestic product during the second semester. This has been the largest quarterly decrease since the Bureau of Economic Analysis (BEA) began its records in 1947.

The massive printing of money, in addition

 to the freezing of interest rates near zero, prompted investors to move towards safe-haven assets against inflation. This flow of capital especially benefited gold and Bitcoin, with the latter having an advantage against the US dollar.

Numerous institutional investors, who had not entered cryptocurrencies as a means of diversifying their investments, have shown interest in Bitcoin. That situation gave way to an upward cycle for this cryptocurrency, which recently exceeded the USD 20,000 mark for the first time.

By Alexander Salazar