Last September, the volatility in the price of Ether doubled that of Bitcoin. Although DeFi saw a decline, there was an increase in institutional interest in Bitcoin.

There was a sharp correction in the prices of tokens associated with decentralized finance (DeFi) last month, according to the latest monthly report from cryptocurrency data provider Kaiko. This drop led the volatility of Ether to double that of Bitcoin in September, states the report.

Most of the DeFi tokens that lead the industry experienced negative returns between 20% and 60% in September, according to Kaiko. The study indicates that the correction comes after the record levels of capital flow to DeFi platforms that began in July.

The trading volumes on decentralized exchanges were much higher than in August, despite the correction. For example, Uniswap liquidity pools reached a total locked value milestone of USD 2 billion.

There was a major boost for the Uniswap token after its launch. However, the other major tokens continued to decline, except for  yearn.finance.

The growth of DeFi has coincided with an increase in the issuance of stablecoins since the number of deposits of the latter in liquidity pools has increased, notes Kaiko. On September 30^th, 3 of the top 5 tokens used on Uniswap were stablecoins. They reached a total locked value (TLV) of more than USD 500 million, equivalent to one-fourth of the total value.

Bitcoin and Ether Recede

Last month, Bitcoin (BTC) and Ether (ETH) showed negative returns of 7.19% and 7.06%, respectively. Trading volumes fell by 18.31% for BTC/USD, and by 8.03% for ETH/USD, the report added.

The volatility of Bitcoin has decreased as a result of the stabilization of its price for more than two months, Kaiko notes. Furthermore, balances of Bitcoin on exchanges fell to levels not seen since November 2018. The report says that “declining BTC balances on exchanges may indicate that investors have decided to hold their assets for the long term.”

Kaiko’s study also highlights an increase in institutional interest in Bitcoin, which was reflected in the increased investment in Bitcoin that MicroStrategy made.

Although the monthly drop in the price of ETH was 7.06%, the initial drop in price was 17%. It fell from USD 388 to a low of USD 320 but then rebounded in the last week of September. The events in the DeFi sector largely influenced those price movements, Kaiko says in the report.

If Bitcoin maintains that short-term trend, investors would turn to other assets that they perceive as safe havens, says Kaiko. However, they also claim that Bitcoin has maintained a negative correlation with the US dollar. That situation poses a “conflicting bullish outlook” if the US dollar continues to weaken.

From the above, it is possible to conclude that Bitcoin is still the best investment alternative for those seeking a store of value. The fact that there is a greater institutional interest in the pioneering cryptocurrency proves this.

By Willmen Blanco

A group of unknown hackers moved around $ 26 million in stolen Bitcoin funds to Bitfinex yesterday during a hack perpetuated in 2016.

This transfer was reported by the Twitter account @Whale_alert, which indicated that seven transactions were conducted from the linked addresses, of which the majority transferred between $4.1 million and $4.8 million in BTC funds, accompanied by much smaller ones.

The movement of these funds comes a month after a group of transactions associated with crimes took place on the Bitcoin network, among which BTC funds associated with the 2016 Bitfinex hack were also mobilized.

It is worth noting that the numbers in Latin America have changed little since our report in May; however, in the world, the growth has been enormous in the period: in May of this year about 7,600 ATMs were reported, and they grew at a speed of 8, 6 daily.

If we review the growth of ATMs so far in 2020, we can see that January began with 6,362 ATMs. And if we go to September 2019 compared to the date, we find that the number of ATMs in the world has practically doubled, given that a year ago, there were just over 5,300.

Whatever happened?

A lot of personalities in the community searched for a scapegoat the moment the hacking happened. The most relevant one was Bitfinex itself, due to the possession of two of the three private keys, while others blame the weak points in BitGo’s model as well.

BitGo took to social media at the moment and released a clear statement saying that an internal investigation had turned up no evidence of a server breach on their end.

Some observers blamed the service for “blindly signing” the withdrawal of nearly 120,000 BTC and made serious questions about why no potential countermeasures were in place in the event of a movement of funds so big like that one. With 30-day transaction volumes just above 600,000 BTC, the hack was one-sixth of the size of the exchange’s monthly orders.

The status of deposits that are not denominated in bitcoin is a frequent question that some customers keep doing since the crime happened, Bitfinex stated that only its bitcoin holdings received the impact of the hacking. Other market observers speculated on whether the outage could lead to complications at other exchanges that could have been using Bitfinex as a source of liquidity. Bitfinex did offer an API and that it was at one time used by exchanges, though the primary end markets were mostly brokers and traders.

By: Jenson Nuñez.

A new 100,000-bolivar banknote would be equivalent to 0.22 cents on the US dollar. Today, an average Venezuelan would need 1,500 of these banknotes to buy food for a month.

It seems that the Government of Venezuela is taking steps to add a new monetary cone to the economy of the country. The plan would include the printing of new banknotes, including that of 100,000 bolivars.

This year, the Nicolás Maduro administration has imported around 71 tons of security paper from an Italian printing company. The government would use this supply to respond with monetary printing to the cash shortage that hyperinflation has caused.

In this way, the highest denomination ever printed in Venezuela would be the 100,000-bolivar banknote. However, it would only be equivalent to 23 US cents, hardly enough to pay for public transportation. The Central Bank of Venezuela is considering introducing even higher denominations in the future.

People required about VES 91,800,000 (about USD 230) to cover the cost of the food basket last August, according to the Center for Documentation and Social Analysis (CENDA). In other words, a Venezuelan would need about 1,500 of the new 100,000-bolivar banknotes to purchase the food needed for a month.

Venezuela has undergone two monetary reconversion processes in the last ten years. The first occurred in 2008, with the establishment of the “strong bolivar” (VEF). The second reconversion occurred in 2018, giving way to the “sovereign bolivar” (VES). On this last occasion, the Venezuelan government subtracted five zeros from the fiat currency.

The BCV added three new banknotes (VES 50,000, VES 10,000 and VES 20,000) to the circulating monetary cone in June of last year. However, they lost their value in a short time due to the inflationary indices surrounding the economy of that country.

That same year, the president of Venezuela promised to launch a monetary cone pegged to the state-owned cryptocurrency project Petro. At that time, he informed that the exchange parity of the sovereign bolivar would not be based on the value of the US dollar but on that of Petro. However, Petro has failed to boost the economy and stop hyperinflation.

Shortage of Banknotes

Economist Jesús Casique states that Venezuela has been in hyperinflation for 35 months, which is crushing the bolivar and, consequently, the banknotes of the national monetary cone. He noted that “the monetary reconversion of 2018 was a total failure. By adding the eight zeros removed, one US dollar is currently equivalent to VEB 42,419,400,000,000.”

He adds that, according to estimates, the fall in the Gross Domestic Product of 2020 concerning 2013 is 80%. That puts the economy of country in free fall, combining the picture with hyperinflation. “The Heritage Foundation published in its report ‘Economic Freedom’, on 180 countries, that Venezuela ranks 179,” he said.

In the average number of banknotes currently in circulation in Venezuela, those of VES 10,000, and VES 50,000 are a minority among all the pieces in circulation. Only 1% are 10,000-bolivar banknotes, 1.9% correspond to 20,000-bolivar pieces, and another 2% to 50,000-bolivar banknotes. Other lower denomination banknotes that the government incorporated in 2018, such as those of VES 100 and VES 500, have already completely lost their value.

The shortage of cash has led Venezuelans to resort to other means of payment, including Bitcoin and other cryptocurrencies. Venezuela is one of the three countries with the highest adoption of Bitcoin and other cryptocurrencies in the world.

By Willmen Blanco

Tesla investor Yassine Elmandjra says that Bitcoin’s market capitalization could reach USD 1 trillion within ten years. The number of investors will be responsible for this growth of the best performing cryptocurrency of 2020.

Tesla’s investor Yassine Elmandjra considers that Bitcoin will have a market capitalization between USD 1 trillion and USD 5 trillion in a period of 5 to 10 years. Many describe this analysis as exaggerated, but the analyst firmly believes in his arguments.

After the Bitcoin halving that occurred last May, the value of Bitcoin did not explode as many expected. On the contrary, it has remained in a band not very different from that of before the reduction by half.

The price of the main cryptocurrency has shown itself as a roller coaster throughout 2020. After the third halving, Bitcoin had a period of low volatility of several months. However, the price has not been able to consolidate.

Bitcoin Will Be Different in Ten Years

The experienced investor, Elmandjra, states that the value of Bitcoin will be high in less than ten years. The large number of investors who turn to the cryptocurrency as a store of value will make its market capitalization soar, argues the investor.

The unprecedented spending in printing money by the State is a consequence of the economic crisis that the COVID-19 pandemic brought with it. Amid this situation, many investors fear that the US dollar may have an inflationary escalation.

However, many analysts are certain that the coronavirus pandemic did not cause the current crisis, but simply accelerated it. In this sense, Elmandjra states that Bitcoin’s market capitalization will reach between USD 1 trillion and USD 5 trillion within five and ten years.

Everyone Should Acknowledge It

Elmandjra also says that, for their good, investors should not ignore Bitcoin. He explains that it is a digital currency that ensures high returns and security, so no investor should overlook it as an asset class.

Despite Bitcoin’s ups and downs, it was the best asset of 2020. When reviewing its performance/behavior, its numbers have been prominent not only this year. Everyone can be certain that it has been the best performing asset of the last decade.

“Bitcoin is in an early stage on its way to monetization with potential for substantial appreciation,” Elmandjra says. He adds that, within ten years, Bitcoin will cease to be a curiosity for hundreds of millions of people, and will become a reality of everyday life.

Some Obstacles in This Path

Besides, the investor considers that Bitcoin’s path to becoming the king of assets is not without obstacles. He claims that there is an uncertain regulatory future that may jeopardize the development of the massive market capitalization that Bitcoin is moving towards.

In recent weeks, there were some threats to a huge market capitalization of Bitcoin within ten years. Among them are the prosecutions by US justice agencies against cryptocurrency exchange firms such as BitMEX.

However, the picture of the future that Elmandjra has painted seems to be very secure for Bitcoin. It may not only consolidate its price but also an increase in market capitalization.

By Willmen Blanco

In Latin America and Europe, traders often move their money to the Asian markets. In Latin America, 57% of cross-border transactions are less than USD 100.

Exchanges are gateways to Bitcoin markets, as the money that users trade on exchanges reveal. People in Latin America and Europe use more than two-thirds of the exchanges to buy cryptocurrencies with national fiat currencies, according to a recent University of Cambridge study.

This report indicates that, in 2019, 65% of the internal volume of Latin American exchanges came from purchases of Bitcoin with national fiat currencies. Similarly, it was 74% in Europe, 83% in the United States, and 62% in the Middle East and Africa. The lowest percentage was 54% in Asia and the Pacific (APAC).

Traders enter the cryptocurrency ecosystem through exchanges located in those regions “before migrating to APAC markets for commercial purposes,” according to the study. The high volume of transactions targeting markets in Asia (69% of trading offerings from exchanges in that region) is a proof of this.

In Latin America, 72% of transactions occur in the markets or through accounts of the same exchange. However, 28% may go to external wallets from other platforms or personal ones, for cryptocurrency holding.

This possible migration of traders could influence the level of leverage of exchanges. Fifty-five percent of Asian exchanges offer high leverage ratios of up to 110x and an average of 15x. That is higher than any leverage on exchanges in other regions. For instance, only 30% of exchanges in Europe offer leverage.

In almost all the analyzed regions, the percentages of exchanges between cryptocurrencies (such as Bitcoin to Monero or Tether) are low. In Latin America, they represent 35% of transactions, compared to 41% in Asia.

National and Cross-Border Transactions with Bitcoin

Transactions between national fiat money and Bitcoin account for 65% of trading volume and 63% of transactions for payment service providers globally. The rest are international or cross-border transactions.

The report indicates that domestic low-value transactions (less than USD 100) account for 44% of all service provider operations. However, domestic transactions of more than USD 1,000 represent 31%.

Contrarily, low-value cross-border transactions account for 30% and high-value transactions represent 45% of the total. The study states that “this contradicts anecdotes of people using cryptocurrency payment service providers to facilitate personal international payments, which would otherwise be too small.”

To distinguish different exchanges and payment service providers, the University of Cambridge considered that large companies are those with more than 40 employees. In most of the regions analyzed, exchanges or small payment service providers represent 70% of the total.

The study indicates that large providers conduct cross-border transactions of more than USD 1,000 sixty-five (65%) percent of the time, compared to only 8% of small transactions. Transactions between USD 100 and USD 1,000 represent 27%.

Cross-border transactions of less than USD 100, USD 500, or more than USD 1,000 occur almost as often at the smallest payment service providers, the study indicates. These providers mainly facilitate small payments in low- and middle-income countries (both domestic and cross-border).

Latin American countries follow this pattern of low-value transactions. Amid the crisis, countries such as Venezuela, Colombia, Mexico, and Chile are the most prominent for their Bitcoin trading volume.

By Alexander Salazar

In late September, Venezuela launched its decentralized stock exchange BDVE. This organization is primarily based on Ethereum.

Through the National Securities Superintendency (SUNAVAL), according to Official Gazette No. 6,578 of September 29^th, Venezuela launched decentralized stock exchange BDVE.

With this new stock exchange, the government seeks to counteract the social impact of the sanctions, as well as the financial and commercial blockade that the Venezuelan executive has denounced.

This is the first decentralized stock exchange in the world, whose design would aim to facilitate the distributed trading of financial assets in the country.

According to the Official Gazette itself, “the stock exchange represents a new and innovative segment of the stock market.” The document says that this organization “provides the investor with security and control over their financial assets.”

The announcement of the launch of the stock exchange occurred shortly after the president of Venezuela reported on an anti-sanctions bill. This proposal would intend to mitigate the impact of economic sanctions in the country.

The draft law noted that users could use private cryptocurrencies that the state endorses to trade beyond the scope of economic sanctions.

Venezuela and Its Stock Exchange BDVE

Stock exchange BDVE connects to national and international markets, through the Decentralized System of Encrypted Markets (SIDEME).

Concerning digital currencies, Venezuela was the first country to issue its own cryptocurrency. Its value depends directly on national oil reserves, which they called it Petro.

In 2017, the president of Venezuela announced the development and issuance of the cryptocurrency. With this, the government of the South American country sought to be more financially independent and to solve all the problems of the Venezuelan economy.

Defining BDVE

BDVE is a stock exchange that connects to the Decentralized System of Encrypted Markets. Its power would reside in the ability to trade financial assets in a distributed manner, saving intermediation and custody costs.

The record-keeping seems simple and seems to guarantee full custody of assets. Besides, P2P trading allows the entry of anyone who wants to invest in Venezuela, from any country.

Behind this new stock exchange, there is a Spanish group that businessman Manuel Fajardo leads. He directed the Interbanex platform, a virtual currency market that the Central Bank of Venezuela (BCV) authorized in January 2019. However, it stopped working in May of the same year, after the approval of Exchange Agreement No. 1.

Stock Market Operations Manual

The Operations Manual even establishes, in its article 47, that all the securities on the platform have ERC223, ERC721, and Packable standards. The BDVE team specially designed the last one.

Depending on the specific needs of each particular asset, the Manual indicates whether other types of electronic protocols may obtain approval.

It is possible to observe that BDVE is a DeFi project that works with Smart Contract and multiple tokens, on the Ethereum network.

The Manual also explains that all participants considered brokerage firms may be auditors.

The decentralized stock exchange of Venezuela will be on a 90-day trial period. Then, Venezuelan authorities will determine whether granting a definitive license or revoking the ability to act in the securities framework.

Of course, users should keep in mind that they should never invest in businesses that they cannot understand. For that reason, they should do their research work before risking their funds.

By Alexander Salazar