A growing number of analysts warn of a possible bubble on Wall Street. This could have an impact on the Bitcoin market.

This seems to be a good time for international financial markets. After one of its worst declines, when COVID-19 hit the west in mid-March, the stock market has been rapidly recovering in value.

However, this growth may not be as sustainable as people might be thinking. For that reason, some analysts warn of a possible bubble on Wall Street, which could affect the Bitcoin market.

Correlation between Wall Street and Bitcoin

There is no doubt; this is one of the most controversial subjects within the cryptocurrency market at present. For many analysts, there is no question that there is no correlation between Bitcoin and the Wall Street Stock Exchange.

On the contrary, many of them defend the thesis that BTC is a store-of-value asset. In other words, the price of the cryptocurrency has no direct relationship with global financial markets, and therefore, remaining firm even in the face of a drop in them.

However, a growing number of voices are noting the correlation between Bitcoin’s price and Wall Street’s performance, especially during the crisis that the COVID-19 pandemic has caused. According to analysts like Twitter user PlanB, this relationship could have been existing for several years. Besides, it would be the most prominent fact to understand the cryptocurrency market.

If that correlation is true, there is a logical explanation for the drop and subsequent recovery in the price of Bitcoin after the arrival of COVID-19 in the western world. The same phenomena that led to the crash and boom of the financial market could have caused those events. For that reason, the risk of a bubble on Nasdaq would be dangerous for the first cryptocurrency in the market.

The Bubble in the Market

This is precisely the theory that several financial market analysts, such as Ned Davis, are promoting. He has already warned that a bubble is forming on Wall Street, especially pointing to tech company stocks as the riskiest right now.

The analyst explains that tech company valuations are the most extreme that anyone has seen since the tech bubble in 2000, basing on the existing relationship between Nasdaq and small-cap stocks. He finds that the Nasdaq 100 is bubbling; he considers this a sign that there is speculation.

This coincides with what other analysts have been warning for months. They say that the US Federal Reserve’s injection of money has gone directly to Wall Street. There it has caused the price of stocks to rise, even when the real economy is creaking under the effects of the COVID-19 pandemic.

Those who assert that there is a strong correlation between Wall Street and the price of Bitcoin may be right. If the bubble on the stock exchange bursts, the price of BTC will also drop dramatically.

However, Bitcoin has proven on many occasions that it can overcome its worst all-time lows. Therefore, it continues to be the best option for those who want to venture into the cryptocurrency market.

By Alexander Salazar

Amid the stablecoin boom, Tether has doubled its capitalization since January 2020. Cardano and Ether led among the altcoins that appreciated more than Bitcoin in the second quarter.

Media coverage continued to focus on Bitcoin during the second quarter of 2020. Meanwhile, stablecoins received a notable boost in that period, according to the quarterly report that eToro released on July 22^nd.

Since January 2020, the market capitalization of stablecoins has doubled. However, the inflow of fiat currency to stablecoins exceeded USD 5 billion in six months, according to the report.

Guy Hirsch, US Managing Director of eToro, says that a manager of a company in Pakistan or Iran can use a USD-pegged cryptocurrency, pay his suppliers, and even his employees, without worrying about uncontrolled inflation of fiat money. He says that they hope that “this will increase in the third-quarter and beyond, as a catalyst for a free and fair global economy that is resistant to censorship and corruption.”

Explosive Growth of Stablecoins

In 2018, amid euphoria over initial coin offerings (ICOs), stablecoins reached USD 1.4 billion worth of market capitalization. The quarterly report highlights that, two and a half years later, stablecoins have grown almost 10 times and are close to USD 11 billion worth of market capitalization.

Tether is in the vicinity of USD 10 billion worth of market capitalization, making it the third largest cryptocurrency by market capitalization. In comparison, Tether was number 28 in market capitalization in January 2018. The report also notes that Tether exceeds the value of assets like XRP, Bitcoin Cash, and Litecoin.

The eToro report highlights, among other findings, that investor sentiment about Bitcoin and gold became more correlated. The document states that “the price of Bitcoin and gold futures in June moved in the same direction 50% of the time, while the price of Bitcoin and the S&P 500 index moved in the same direction 62% of the time.”

Furthermore, many of the altcoins continued to show better performance than Bitcoin in the second quarter. Specifically, Cardano’s ADA and Ethereum’s Ether showed yields of 175% and 70%, respectively.

Decentralized finance (DeFi) has become an important part of the narrative in the field of cryptocurrencies, according to the report. The document notes that DeFi had more media mentions than the Bitcoin halving during the second quarter.

However, it highlights that these mentions of DeFi were limited to the specialized press. Furthermore, “despite the hype, the market is still extremely small, as it still has a few thousand users.”

Regarding eToro users, Tezos was the only cryptocurrency that recorded a growth in its investments on that platform. The rest of the cryptocurrencies recorded a decline in investments, whilst users invested more in stocks during the quarter.

Without a doubt, Bitcoin is the most prominent cryptocurrency in the market. However, stablecoins have shown significant growth in market capitalization. Novice investors can start by buying them before they venture into the first cryptocurrency.

By Willmen Blanco

Argentina is approaching a weekly trading volume of USD 1 million on LocalBitcoins. On Paxful, Latin America recently exceeded USD 300,000 per week.

The trading volume of Bitcoin through P2P platforms is increasing in various countries in Latin America. Argentina, Mexico, and Uruguay have recently reached their all-time high.

In recent days, Argentina exceeded its highest weekly Bitcoin trading volume through the platform LocalBitcoins. For the first time, the trade from the South American country was above USD 960,000 in a single week, according to data from UsefulTulips.

The same source shows that the trade from Argentina also reached record levels on Paxful during the last 7-day period. The trading volume was slightly above USD 39,000.

For its part, the trading volume of Mexico exceeded USD 636,000 on LocalBitcoins in one week. On Paxful, Mexicans moved more than USD 56,000 worth of Bitcoin. Both cases represent all-time highs for the country.

Uruguay also exceeded its maximum trading volume on the two platforms a couple of weeks ago. For LocalBitcoins, movements from Uruguay were above USD 48,400 in that period. However, the trading volumes on Paxful are much lower. The new high is just USD 633, but that amount doubles the previous record for a week.

In a broader picture, the accumulated volume of all Latin America also exceeded its record level on Paxful. For the first time, the exchange platform traded more than USD 300,000 from the region during last week, according to data from UsefulTulips.

Other countries also had their highest trading volumes recently but were much lower. The Honduras case on LocalBitcoins is particularly prominent. This platform moved more than USD 25,000 from the Central American country three weeks ago. The previous high was dated December 2017, with USD 16,326.

For its part, Venezuela exceeded USD 34,000 on Paxful last week, breaking the record for the second consecutive week. In the previous period, the trade from the Caribbean country was just USD 17,800.

Paxful Gains Ground in the Latin American Region

The increase in trade on Paxful has been significant in Latin America until now this year. During the first two months of 2020, the trading volume on the platform flirted with USD 100,000 in the best weeks. Since then, the increase has been sustained and currently triples the value of the weekly trading volume.

Comparing those volumes with those of LocalBitcoins, Paxful is still far from dominating the market in the region. However, both platforms currently move more than USD 40 million, in overall terms.

The accumulated volume between both platforms has even exceeded USD 86,000,000 in one week. With this record, it has broken last June’s all-time high of USD 84,000,000 during the last week.

Bitcoin’s relevance is increasingly evident in Latin America, of which the trading volumes of the aforementioned platforms are only one example. In countries with high levels of inflation such as Argentina and Venezuela, many of its citizens see the first cryptocurrency as a haven.

By Alexander Salazar

Visa displays the banners of privacy, consumer protection, and regulation. The multinational company believes that cryptocurrencies will play a role in the future of money.

The payment processing multinational company Visa unveiled on July 22^nd the pillars that will support its strategy oriented towards Bitcoin (BTC) and cryptocurrencies in general. The company released its perspectives on new digital currency payment flows and their potential for financial inclusion.

In the document titled “Advancing our approach to digital currency”, Visa presents seven points that reveal how it will adopt the business model with Bitcoins and other cryptocurrencies. The company believes that the most important values are: security, privacy, integrity, and trust.

On these four aspects, Visa stated that they will maintain a rigorous focus on data protection, privacy and consumer equity, and full compliance with all applicable laws.

The company also says that it will remain “agnostic” regarding cryptocurrencies and the blockchain networks on which they operate. In other words, Visa will stay open and support projects, based on demand from its customers and partners. However, it will not be officially linked with any of them nor will it promote a particular project.

This leads to the conclusion that Visa could support both financially oriented projects, such as Bitcoin, and proposals that lean towards the world of decentralized applications, such as the Ethereum network. The rest of the altcoins would also receive the go-ahead, as long as there is a demand that justifies their inclusion.

In the seventh point, Visa talks about establishing an “alignment with the company’s core capabilities”. This means that they will continue projects that allow them to apply their experience in new technologies and types of networks for the benefit of their users and partners.

Visa believes that digital currencies have the potential to extend the value of digital payments to a greater number of people and places. In this sense, they say that they want to help shape and support the role that they will play in the future of money.

In presenting its perspectives, Visa uses a graph of what its interaction with cryptocurrencies would be like. It is a kind of operational roadmap in which their platform would connect to wallets, exchanges, commercial establishments, and regulatory agencies.

With the disclosure of its strategy, Visa is preparing a further foray into the cryptocurrency ecosystem. Besides, the company admits that they are looking more closely at so-called stablecoins as a “promising payment innovation.”

The company has been gradually relating to cryptocurrencies, establishing partnerships with various actors who make life in the Bitcoin world. In July 2019, Visa led a USD 40 million investment in the company Anchorage, a startup that safeguards cryptocurrency investments for institutional investors.

In April 2020, Visa joined Bitcoin-focused Company Fold to launch a debit card that provides users with a Bitcoin rewards program. They say that the card would be available to the US market from July.

By Alexander Salazar

LBCoin has a hybrid system that integrates the bank’s private network with the NEM public network. It aims to show citizens how to store digital assets.

The Central Bank of Lithuania officially announced on July 23^rd the launch of its digital collection coin LBCoin, a cryptocurrency that runs on the NEM blockchain. The project represents a challenge for eurozone central banks that have not been very open to blockchain technology.

LBCoin is the first central bank-issued collectible digital currency that people have come to know about in the world. Its characteristics make it a unique case since it has a hybrid infrastructure. Its interoperable system integrates the private network of the Lithuanian bank with the NEM public blockchain.

The features of the system allow transactions to remain visible to the public. This is a prominent element, given that the use of a public network among projects managed by central banks is unusual.

The central bank described the project as a financial experiment aimed at showing citizens how to store, exchange, and use cryptocurrencies. At the same time, the institution itself will experiment with cryptocurrencies to know its characteristics and benefits.

The Lithuanian financial institution announced that the coins would be available for purchase and storage on the institution’s e-store website. However, it subsequently reported that it was facing technical problems and promised to resume the sale at a later time.

LBCoin’s Usefulness

LBCoin consists of 20 collectible tokens; each one of them represents one of the characters who signed the country’s Independence Act.

Users interested in digital currency from the Central Bank of Lithuania must access the institution’s e-store website, register, and comply with the identity verification procedure that the platform requests.

Once they transfer EUR 99 (equivalent to USD 111.30) for the cost of the package, they will receive 6 randomly selected tokens. They can exchange it for a physical silver coin for an additional value of EUR 19.18 (USD 22.26).

After receiving the tokens, customers will be able to transfer them to their wallet, which must be compatible with the NEM public blockchain, according to the webinar of Marius Jurgilas, member of the Board of Directors of the Central Bank of Lithuania.

Users can exchange these collectible tokens with other people, sell them, give them away, or collect them. They can also exchange them for a physical silver coin in the form of a credit card, which the institution also issues. However, they must understand that it is not a legal tender.

One Step for Banks in Europe

LBCoin is the first digital currency project that a bank in the specific euro area has completed. However, it is also a sign of the paradigm shift of traditional banking, which in the past was closed to cryptocurrencies.

Crypto assets are gathering momentum as more traditional financial institutions are daring to venture into the blockchain ecosystem. It was not until the appearance of Facebook’s Libra project that Europe began to change its vision regarding cryptocurrencies.

There may be further changes and cryptocurrencies may continue in the digitization plans of European central banks. The agency that regulates US banks has already stated that cryptocurrency custody services are a modern version of the activity that banks do.

By Willmen Blanco

It could be due to the increased use of services that favor high-fee transactions. However, users can avoid paying excessive amounts.

Bitcoin’s congestion has increased considerably in recent days. The levels are close to, but not higher than, those in days close to the halving of May 11^th, when there was a reduction of miners’ rewards by half. This has been the third-highest period of congestion so far this year.

On July 21^st, there were more than 83 thousand transactions in the Bitcoin mempool. Within the blockchain, this is the temporary memory that stores the transactions pending confirmation.

Fee Average Also Increases

As a consequence of this, there is also an increase in the number of fees for Bitcoin transactions. This is because miners first choose those that pay a higher fee. Besides, those in a hurry to confirm their transactions decide to pay more, thus creating a snowball effect.

The fee average of last July 21^st was USD 3.55. This implies a 438% increase since the recent low on July 12^th, when the fee average was USD 0.81.

A possible reason for the latter is the increased use of services such as LocalCryptos, which calculate very high fees by default.

A German developer, identified by the pseudonym “0Xb10C”, states that users send one-third of the amount of Bitcoin from the online wallet of the Company Blockchain.com.

0Xb10C shows that it is possible to reach these data, which the company considered valid, basing on common fingerprints that the transactions sent from that wallet leave. Among them, he mentions:

1. Miners only use P2PKH output addresses (those that start with 1, also known as “inherited”).

2. They do not use SegWit or multi-signatures.

3. With each transaction, the system creates one or two outputs.

4. All these outputs follow the BIP-69 protocol.

In general, Blockchain.com users follow the fee recommendations that the platform offers. A large number of them use exactly the fees that this wallet suggests to send Bitcoin. At the time of writing this article, users sent 89 sat/vbite (the “Regular” option) and 119 sat/vbite (the “Priority” option).

Debates, Complaints, and Tips

As usual, some altcoin promoters used these figures to criticize Bitcoin. At the same time, they praised their cult cryptocurrency, leading to numerous debates.

For example, one user claimed that “Bitcoin and Ethereum are not worth it.” Instead, he proposed the cryptocurrency Digibyte, of which he highlighted the fact that it has instant transactions, 15-second block times, infinite scalability, minimal fees, and decentralized products that work on its blockchain.

Another person expressed his displeasure, saying that he had to wait 5 and a half hours for the confirmation of a transaction. “Bitcoin is like gold: it is valuable but not always easy to send,” was one of the responses that he received.

To conclude, users should understand that, despite the high average value of Bitcoin fees, they can avoid paying excessive amounts. Among other steps, they should consider checking the current volume of operations on the Bitcoin network and selecting wallets with the flexibility to customize network fees.

By Willmen Blanco