Amid the excitement about DeFi, analysts are warning of a possible repeat of what happened to ICOs in 2017. They recommend doing careful research before investing money in a DeFi project.

The crypto community will remember 2020 as one of the most important years. Amid a new Bitcoin bullish run, the crypto world is starting to feel enthusiastic about the emergence of new decentralized finance (DeFi) projects. However, several analysts warn of the overexcitement of DeFi.

It is important to note that ICOs are one of the most interesting mechanisms in the crypto market. They help new blockchain companies or projects obtain financial resources from the market, thus emulating the process of initial public offerings (IPOs) of traditional companies.

However, unlike IPOs, new projects in ICOs do not issue shares that investors buy. They rather allow buying a token within the blockchain, which can generate huge profits, if successful. If the project fails, the token value will be zero.

Given that no institution regulates ICOs, they are high-risk investments as they are a decentralized process. Big companies like Binance and innovative projects like Ethereum have emerged from ICOs. These have allowed the millionaire scam to thousands of people, after having invested in hopeless projects that then disappeared.

New Challenge from DeFi

Logically, the excitement about DeFi projects causes concern in the crypto market, in the face of the possibility that the history of ICOs repeats itself. This time, that would happen through failed decentralized finance projects.

DeFi projects, like ICOs, are mechanisms for decentralized financing through blockchain technology. In the case of DeFi, the objective is to grant loans in the same way as a traditional bank, but in a decentralized way, through smart contracts. This is the main difference between ICOs and DeFi.

People can invest money in a DeFi project, which another person will borrow, use, and return with interests, with these being the profit for the first investor. They do this without the need for a decision-making entity to intervene.

Probability of History Repeating Itself with DeFi

The excitement about DeFi has led this sector to increase in value by 291% from USD 3.4 billion to USD 13.4 billion in just three months, according to data from CoinMarketCap. It has been able to do this with projects such as yearn.finance, Chainlink, and Just, seeing its value increase several times in a matter of weeks.

For this reason, Changpeng Zhao has called for calm from the crypto community, remembering that only the best DeFi projects will survive in the long run. Therefore, everyone wishing to enter the sector should conduct careful research before risking their capital.

Fortunately, the difference between what happened to ICOs and the current situation with DeFi is that the crypto world now has a much stronger infrastructure. Companies like Binance and organizations like Tron Foundation provide a modicum of confidence in the market, while crypto users are much more informed and better connected than before.

Even if there are winners and losers with DeFi projects, the widespread scam situation of 2017 is unlikely to happen again. For that reason, everyone must ensure that the platform where they decide to invest has the technical capabilities that it promises.

By Alexander Salazar

Currently, the cryptocurrency market is undergoing a situation of volatility. Stablecoins like BUSD can become a safe haven in the face of sudden price changes.

Those who participate in the crypto market are aware that cryptocurrencies are undergoing a volatile situation. They constantly see big increases and sharp drops in the price of virtual currencies like Bitcoin. This is one of the reasons why many people decide not to enter the world of crypto assets. Fortunately, stablecoins appear as a safe haven against cryptocurrency volatility through projects like Tether and BUSD.

Many analysts consider that the main feature of the cryptocurrency market is the volatility in its price. Being a relatively young market, the price of virtual currencies like Bitcoin is vulnerable to mass buying or selling movements.

This occurs due to the size of the cryptocurrency market. Despite a capitalization of hundreds of millions of dollars, this aspect is still not enough to prevent the actions of the main investors in cryptocurrencies from affecting its price. This allows the investment decisions of a small number of users, known as whales, to strongly affect the price of cryptocurrencies.

For that reason, it is logical that many people think twice before investing their capital in cryptocurrencies. After all, when seeking protection for the value of money, a currency that may drop by as much as 50% in price in a single day is not a safe haven.

Besides, this would cause problems when buying goods and paying for services. At any given time, people may not have enough money to pay for the merchandise they want to acquire.

Stablecoins and Cryptocurrency Stability

Stablecoins are virtual currencies whose value is based on the reserve fund of a financial asset not belonging to the crypto world, be it fiat money or natural resources. In this way, the price of stablecoins would not undergo the constant changes that cryptocurrencies such as Bitcoin are subject to. On the contrary, its price would be pegged to that of the asset that constitutes the reserve fund that gives it its value.

Of course, stablecoins give rise to a new problem. While cryptocurrencies emerged to decentralize the financial world, stablecoins would be a step towards greater centralization. The latter needs an administrative organization in charge of comprising the reserve fund that ensures the value of the stablecoin.

Consequently, the confidence that this stablecoin administrative organization generates is critical to the future of the crypto asset. The most successful cases so far are Tether (with a fixed price of 1 USDT = 1 USD) and Binance’s stablecoins BUSD (based on the US dollar) and BGBP (based on the British pound).

In the case of Binance, its stablecoins also have an additional feature: they run on two blockchains at the same time, on Ethereum as ERC-20 tokens and Binance Chain as BEP-2 tokens. This gives its virtual currencies greater flexibility, making them the perfect safe haven in the face of the volatility of cryptocurrencies.

By Alexander Salazar

Joseph Sullivan concealed a hack that exposed the data of 57 million customers. No security officer had ever been charged with obstructing justice and misrepresenting a crime before.

Joseph Sullivan, former Uber chief security officer, was accused of obstruction of justice for concealing a hack that compromised the data of 57 million Uber users 4 years ago.

Sullivan paid the attackers USD 100,000 worth of Bitcoin, hid the data breach security institutions, and told his team not to tell anyone about the event. The case seems to establish a precedent as no security officer has ever been charged with concealing a hack before.

On August 20^th, the US Department of Justice stated that Sullivan is charged with obstructing justice since he did not report a serious crime. According to the document, the executive took “deliberate measures” to prevent the Federal Trade Commission (FTC) from learning about the hack.

The hackers who compromised Uber’s data contacted SullivanIn in November 2016. Through e-mail, the attackers demanded a six-figure payment in exchange for not destroying the data that they had stolen.

In the message, the criminals said that they had accessed and downloaded a database from the platform with private information on users and drivers.

In 2016, the hackers used their own GitHub verification tool to access other sites, according to court records. In this way, they targeted company employees whose accounts they would hack to gain access to sensitive information.

They accessed other people’s accounts and then searched for tools on the Amazon Web Services (AWS) computing services platform. After that, the hackers connected to the backends (codes running the operation of an application with access to the databases) of Uber. They aimed to obtain confidential information from 57,000 customers and 600,000 drivers.

According to prosecutors, Sullivan paid the hackers the required amount to buy their silence, rather than notifying the FTC of the incident, as required by law.

When that happened, the agency in charge of consumer rights in the United States was inspecting the security of Uber’s technology platform concerning a data breach that took place in 2014.

Sullivan paid the amount of money that the hackers demanded and concealed it as if it were a reward that Uber was granted. The company provides monetary incentives to those who find vulnerabilities in the technology platform before cybercriminals can exploit them.

Contributors need to sign an information nondisclosure agreement so that Uber can process vulnerability rewards. This procedure would have made it possible to identify the hacker.

However, the executive reportedly forced the criminals to renounce the nondisclosure agreement. Besides, the hackers signed a document where they swear that they did not steal Uber data, which was not true, at the insistence of Sullivan.

Sullivan paid the hackers an amount of money that far exceeded what Uber had paid through the rewards program, which did not cover the theft of private user and driver data.

Trues and Lies about Safety and Hacking at Uber

After becoming the CEO of Uber in 2017, Dara Khosrowshah learned about the hack that had occurred the previous year, reported it to the authorities, and then dismissed Sullivan. The former Uber chief security officer is now suspect of obstructing justice and misrepresenting a crime. He can go to prison for eight years if justice finds him guilty.

When Sullivan joined Uber in 2015, he began working as a federal prosecutor in hacking and intellectual property law. He had held other positions at companies such as PayPal and EBay Inc. before becoming Facebook’s chief security officer in 2008. Currently, he is head of information security at Cloudflare.

According to Uber security personnel, Sullivan paid the ransom to ensure that the hackers did not destroy the data. These included information on the driver’s licenses of the drivers who offer their services through the company’s application.

Brad Williams, Sullivan’s spokesman, said that the charges have no basis. “If it had not been for Mr. Sullivan and his team, it would never have been possible to identify the individuals responsible for this incident,” he said.

The investigation into the case found that Brandon Glover (26), from the United States, and Vasile Mereacre (23), from Canada, were the hackers that attacked Uber in 2016. Both criminals pleaded guilty in 2019.

By Willmen Blanco

Bears took control of the short-term trend in the price of Bitcoin. Analysts predict what could happen to the main cryptocurrency in the coming days.

The bullish momentum of Bitcoin’s price is at risk due to a strong recovery of the US dollar. The growing inverse correlation between the two assets has led to the decline of BTC, according to analysts.

Bitcoin is currently trading at around USD 11,619%, below the latest high of USD 12,468. This has caused a bearish transition of the trend in the short term.

Many believe that the recent big rally in the crypto market stems from the weakening of the US fiat currency and the inflow of capital from those seeking refuge.

Analysts at the exchange Kraken determined that the correlation between Bitcoin and gold has a maximum of 0.93. For this reason, investors sought refuge in this market, amid the tension generated by the spread of the pandemic, public expenditure, mixed corporate profits, inflationary fears, and the weakening of the US dollar.

Now the situation is opposite since there is a rebound in the US dollar that could lead the price of Bitcoin (BTC) to begin a strong correction or, at least, a consolidation phase.

Trend in the Medium Term

The current decline has barely affected the market, as indicated in the weekly graph. It is possible to see that the medium-term trend continues to remain bullish.

The 8-week EMA and 18-week SMA moving averages cross to the upside. Both are away from the price, indicating that the momentum is underway, but the reversal may be just beginning.

The resistance zone below USD 12,330 is the obstacle that bulls have had to face in recent days. For this reason, this could be the factor that finally determines a correction before a new rise.

As long as the support at USD 9,208 remains unbroken, the medium-term trend will remain bullish.

Trend in the Short Term

Bears’ recent takeover is the result of continued support breaks, as clearly shown in the daily graph.

The 18 SMA and 8 EMA crossed to the downside, supporting the short-term bearish transition. Therefore, they may work as dynamic resistances before a new drop.

In recent months, Bitcoin’s price has experienced a strong positive momentum. For that reason, the 200-day SMA remains bullish, quite far from the current price.

Analysts’ Predictions

Bears took control of the market in the short term, indicating that a drop is quite likely to occur in the next few days.

However, the long- and medium-term trend remains strongly bullish. For that reason, a reversal is healthy and will serve to cope with demand from investors seeking low prices.

That there has been a small bullish slope in recent weeks, as revealed in the daily graph. Breaking it will be an important confirmation of the search for lower levels.

Concerning breaks of horizontal levels, support at USD 11,392 recently had visits and rejections, which in turn converges with the aforementioned bullish line. Crossing this support effectively will make way for a deeper drop.

The current price has several levels of demand as a result of the compression in which the price of Bitcoin has been in August.

By Willmen Blanco

The author of “Rich Dad Poor Dad” wonders what the FED will do in a situation like that. He questions whether the Treasury Department will continue to send “fake money” to people.

Renowned businessman and author Robert Kiyosaki recently criticized the banking system of the United States, the Federal Reserve (FED) and the Treasury Department, but approved of Bitcoin once again. The writer of the book “Rich Dad Poor Dad” also predicted that a great banking crisis is rapidly approaching.

In his Twitter account @theRealKiyosaki, he questioned what US financial and monetary institutions will do when the potential crisis arises. The also speaker talked about business magnate Warren Buffet and asked his followers if they had already invested in gold, silver, and Bitcoin.

He said that Buffet does not have banks as they are bankrupt and he warned that a great banking crisis is imminent. He also wondered whether the FED and the Treasury Department would take over the banking system. He even questioned whether they would send “fake money” from the FED and the Treasury directly to the people to prevent mass riots. The investor said that there was no time to “think about it” and invited his followers to invest in gold, silver, and Bitcoin.

The “fake money” that Kiyosaki refers to is the financial aid that millions of Americans have received to fight the economic impact that the COVID-19 pandemic has had. Last April, the US government sent USD 1,200 in aid to around 150 million people, which the investor has criticized.

In a previous message, Kiyosaki reminded me about the market debacle that occurred in March. At the time, the World Health Organization (WHO) classified the COVID-19 disease as a pandemic.

In August, the author has analyzed what might happen if the stock market crashes again. He stated that a new collapse would be bigger than that of March 2020. He also reflected that Buffet left banks for some reason and went to gold.

According to Kiyosaki, Buffet reduced his equity exposure in JP Morgan and Wells Fargo. Besides, the billionaire exited entirely from Goldman Sachs to direct funds to gold miner Barrick Gold.

The businessman’s reflections caused reactions among his followers. While some support his points of view, others continue to question his ideas. The opinion of Twitter user @BTemelakiev, identified as Boicho Temelakiev, is that of the latter group.

According to Temelakiev, the price of gold, silver, and Bitcoin will eventually decrease while the US dollar will remain the king “until the dust settles.” He said that everything will be the same as usual and “the US dollar will finance the party.” From the other side of the shore, Twitter user @Chris78jc argued that “Bitcoin has outperformed any other asset class in the last decade.”

Bitcoin and cryptocurrency enthusiasts follow Kiyosaki’s statements closely. Last June, the writer wrote a message in which he stated that “the US Federal Reserve is dead.” Two months earlier, the businessman had also stated that “the US dollar is dying.”

By Willmen Blanco

The current Bitcoin market is similar to that of the beginning of 2016. The most important rally in its history occurred the following year.

The most important rally in the history of the main cryptocurrency occurred three years ago. Grayscale, Major analytics firm, recently published a report called “Valuing Bitcoin”, stating that currently, the Bitcoin market has similar characteristics to those of the period before the aforementioned rise in 2017. Price action and adoption by major investors, along with likely conditions of widespread fiat-money inflation, could push Bitcoin into a new bullish rally.

The Bitcoin market hit the bottom this year and, just 4 months later, came back to life. This leads to the conclusion that there is a power that is close to exploding the price at levels comparable to those of 2017.

Current Bitcoin Market is also Post-Halving

Another factor that contributes to understanding the qualities of the current Bitcoin market is that the crypto community is waiting for the respective post-halving explosion. It is necessary to remember that the deflationary nature of Bitcoin pushes for significant price increases after each halving.

In the first two Bitcoin halving events, which occurred in 2012 and 2016, the price of the cryptocurrency soared. This happened about a year after the reduction by half. Now, three months since the halving, a rally that balances the current Bitcoin market still seems to be lacking.

Halving events occur in cryptocurrencies like Bitcoin, in which it takes place every 4 years. This event consists of reducing by half the reward that the blockchain network pays to miners for each mined block.

Similarities to the 2016 Behavior

Grayscale believes that the current Bitcoin market conditions are extremely similar to those before the historic rally. The report explains that “it is a very similar structure to that of the beginning of 2016, before the start of the bullish rally the following year.”

On the other hand, Grayscale believes that actions by governments to try to keep the economy afloat in pandemic conditions can benefit Bitcoin. This is because investors seek to safeguard their income. In that sense, the main cryptocurrency works as a safe haven.

An excess of circulating money leads directly to inflation, one of the phenomena that investors fear the most. US Federal Reserve (FED) announcements to print “infinite money” increasingly push investors to adopt Bitcoin. This situation causes the current market of the main cryptocurrency to enter a boom stage again.

Institutional Investments

The massive adoption by investors like Wall Street is one of the most important drives that have led analysts to take Bitcoin into account in the face of a bullish rally.

In recent days, 90% of Bitcoin transactions in the United States have come from movements by stock market professional investors.

Legendary investor Paul Tudor Jones also expressed his optimism about the qualities of Bitcoin. This suggests that the current Bitcoin market could certainly be close to exploding upward, as it did in 2017.

By Alexander Salazar