LocalBitcoins Volume in Chile Reaches Historic Peak Amid Pandemic

Maria Rodríguez
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LocalBitcoins Volume in Chile Reaches Historic Peak Amid Pandemic

Due to the difficult economic situation that the pandemic generates, some citizens decide to buy bitcoins to save money.

Weekly trading volume in Chile’s fiat currency recently hit a new peak in LocalBitcoins. Additionally, cryptocurrency market data platform CoinDance shows that LocalBitcoins volume in Chile hit a new record. During the week that ended on April 4th, the volume of LocalBitcoins in Chile was more than 330 million Chilean pesos.

As happens with the Argentine peso and the Bolivar in Venezuela, the Chilean peso has fallen compared to the US dollar. According to the Central Bank of Chile, last Friday 24th, each US dollar was equivalent to 859 Chilean pesos.

As the gap between the Chilean peso and the US dollar increases, the same thing happens between the Chilean peso and Bitcoin, as long as the price of this cryptocurrency remains stable or does not decrease. Depreciation occurs due to the economic difficulties Chile is facing.

According to data from the XE foreign exchange website, the Chilean peso fell more than 6.45 % against the dollar in the last two months. Likewise, the Chilean currency has lost 27 % of its value during the last year.

Savings in BTC

Despite the difficult economic situation, some citizens decide to buy bitcoins as a way to save money. By purchasing these digital assets, users contribute to the increase in the number of transactions that take place in a certain period, which is the so-called trading volume.

According to the cryptocurrency market data website CoinLib, in the Chilean cryptocurrency exchange CryptoMarket has also increased the volume of cryptocurrency trading. This increase in the purchase and sale of cryptocurrencies has been observed in recent weeks.

The daily trading volume in US dollars on CryptoMarket grew almost 270% compared to March 30th. Thus, the daily trading volume with Chilean pesos is around USD 281,000.

In this aspect, Bloomberg, the US financial advisory company, recently reported that the problems in Chile are now more acute, due to the current COVID-19 pandemic.

To try to stop the spread of the coronavirus, Chile had to apply a forced closure. Both the police and the army forces of Chile control the closure. Despite the difficulties that this measure could generate, Bloomberg explains that the plan is working.

“Thus far, there have been just 160 recorded deaths in a nation of 18 million. There were 464 new infections announced Wednesday, compared with a peak of 534 on April 16th, bringing the total to 11,296. Like everywhere, the true counts are probably higher”, said Bloomberg.

Besides, it seems that users are deciding to buy cryptocurrencies in the United States of America. This is a way to protect their money from the economic effects of the pandemic.

Brian Armstrong, CEO of Coinbase, explained that, during the last week, there has been a spontaneous growth in the purchase of cryptocurrencies on the exchange platform. Many cryptocurrency purchases have been made with deposits of up to USD 1,200. This amount is equivalent to the subsidy provided by the US government.

All of this is a prove that Bitcoin continues to function, more than ever, as a way to save money in times of crisis.

By María Rodríguez

Bitcoin Price in Argentina Approaches One Million Pesos Due to Dollar Rise

Maria Rodríguez
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Bitcoin Price in Argentina Approaches One Million Pesos Due to Dollar Rise

The devaluation of the Argentine national currency increases the price of BTC in exchange houses.

The devaluation of the Argentine peso, due to the political situation that the country faced and the Covid-19 outbreak, has affected the price of Bitcoin in that country. The Argentine peso has fallen compared with the US dollar. This is the reason why, the price of BTC is around 900,000 Argentine pesos in different exchange houses.

This figure is unprecedented in the country. The price of BTC approaches to one million Argentine pesos per unit. Currently, the price of Bitcoin is between 863,000 and 904,000 Argentine pesos, with an average for the sale of 877,644 ARS and 834,862 ARS for the purchase, according to figures from the service coinmonitor.info.

Due to this new depreciation of the Argentine peso against the US dollar, several cryptocurrencies have appreciated up to 15% in the Argentine market. This includes the main cryptocurrency, which is Bitcoin, and the main altcoins.

On the other hand, the volume of Bitcoin traded until this April 24th amounted to USD 43,700,000. This amount represents more than 28 % of the total volume transacted in the cryptocurrency market.

Dollar Types in Argentina

Argentines currently handle different dollar rates. Among the different types of dollars in the Argentine market is the “Bitcoin Dollar”, which is quoted at 112 pesos. However, the “Bitcoin Dollar” is below the so-called “Blue Dollar” (parallel dollar), which is the unofficial price of the dollar in Argentina.

This “Blue Dollar” was trading on Friday, April 24th at 120 Argentine pesos per dollar, a price that makes the currency more expensive.

Evidence of Increase

During the week of April 4th, traders sold 67 BTC for 38,906,745 million pesos. Meanwhile, two weeks later, on April 18th, users sold 66 BTC (almost the same amount) for a total of 46,899,002 Argentine pesos.

That is, between the last and the first week of April, when users practically sold the same amount of bitcoins, there is a difference of almost 8 million Argentine pesos.

BTC Rises in Dollars

It is important to note that the price of BTC in dollars has also increased in the last three weeks. BTC price went from USD 6,700 per unit to USD 7,522 per unit. This increase is evident in the final price in pesos.

The depreciation of the Argentine peso against the dollar causes digital assets to appreciate in the local market. This occurs because the market adjusts internationally referenced assets that are quoted in dollars.

For now, the community has to wait if crypto buyers in Argentina exert any kind of pressure to stop the rise in prices in local currency.

A similar scenario occurs in Venezuela. In this country, which is facing an economic crisis, the BTC traded above 1 billion bolivars per unit on LocalBitcoins.

The increase in Venezuela has not stopped. Last Friday 24th, the price exceeded 1,370 million bolivars, since the parallel dollar has a price of 200,000 bolivars.

The BTC halving is just a few weeks away. That day, the issuance of the main cryptocurrency will go from 12.5 BTC to 6.25 BTC for each block mined. Analysts consider that this event could further increase the price of BTC, as long as there is a demand to support the price.

By María Rodríguez

In the First Quarter of 2020, Cryptocurrency Markets Traded USD 8.8 Trillion

Willmen Blanco
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The cryptocurrency spot market witnessed a growth of 104% growth in the first quarter. The cryptocurrency futures market saw an increase of 314% during that period.

In the first quarter (Q1) of 2020, the trading volume in the cryptocurrency spot and futures markets was about USD 8.8 trillion, according to two industry reports. This amount represents a huge 314% increase for futures trade and a 104% increase for spot trade. Besides, the correlation between the trading volume in spot markets and Bitcoin’s price in the quarter was too low.

Two recent reports by TokenInsight revealed the status of the cryptocurrency spot and derivatives markets in the first quarter of the year. In its “2020 Q1 Cryptocurrency Spot Exchange Industry Research Report,” the company studied more than 300 cryptocurrency spot exchanges.

However, due to unreliable information from some small exchanges and the challenges of determining the authenticity of the data, the analysis only included 295 exchanges, of which 41 were new and 16 decentralized. The report states that the total trading volume for the entire market in this quarter was USD 6.6 trillion, representing a quarterly increase of 104%.

The actual volume shown in the report was USD 6,647 trillion. Despite a volume of false exchanges, the industry is still developing significantly, according to the report. The analysis noted that the correlation between the trading volume in the market and Bitcoin’s price was extremely low in the first quarter of 2020.

Besides, the study found that Bitcoin’s dominance had increased compared to that of last year. The report states that the investors in the bearish market did not have enough confidence in non-major cryptocurrencies, reaffirming that Bitcoin will maintain its dominant position in the first half of the year.

USD 2 Trillion in Crypto Derivatives

Another report by Tokeinsight, titled “2020 Q1 Cryptocurrency Derivatives Exchange industry Report” details the state of the cryptocurrency derivatives market. The analysis includes 12 derivatives exchanges: BitMEX, Okex, Huobi DM, Binance Futures, Deribit, Bitget, Binance JEX, FTX, Gate.io, BFX.nu, Bitz, and Kumex.

In the first quarter of 2020, the total volume of futures trade in the industry reached USD 2.1048 trillion, which represents an increase of 314%, compared to the average of the four quarters of 2019.

Except for a small decrease in the fourth quarter of 2019, the trading volume of cryptocurrency futures grew steadily in 2019. The total market turnover in the first quarter of 2020 is approximately 8 times greater than that of the first quarter of 2019, according to the report.

Three major cryptocurrency futures contracts (BTC, ETH, and EOS) accumulated over 90% of the total crypto derivatives market turnover in the first quarter of 2020. BTC alone accumulated 78%.

The analysis also found that the correlation coefficient between cryptocurrency futures trading volume and spot trading volume declined from 0.76 to 0.34 in the previous quarter. This suggests that the futures market participants may have been relatively independent from the spot market, as the report concluded.

Whilst research on the derivatives trading industry for 2019 shows that last year’s cryptocurrency futures market selling volume was around 20% in cash, the percentage for this year is expected to increase substantially. It is worth noting that the total selling volume of cryptocurrency futures has reached more than 33% in cash in the first quarter alone.

The report states that the futures trading volume for the year 2020 is expected to be more than twice that of the spot market. Compared to the idea that cash is king in current market conditions, the cryptocurrency futures industry is still developing rapidly.

By Willmen Blanco

Number of Acquisitions and Rounds of Crypto Fundraising Have Decreased since 2019

Willmen Blanco
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Number of Acquisitions and Rounds of Crypto Fundraising Have Decreased since 2019

More companies merge and buy in Asia, Europe, and Africa than in the Americas. Companies are seeking opportunities in industries like mining and blockchain development.

During 2019, there was a significant decrease in the number of funds destined for the acquisition, merging, and financing of companies specializing in blockchain. The same happened with the amount and value of the fundraising rounds, according to the firm PwC.

The Second Global Report on Cryptocurrencies and Fundraising indicates that, during 2019, there were 114 purchase or merger agreements for these companies for a value of USD 451 million. Previously, in 2018, there were 189 agreements for a total of USD 1.9 billion. This now shows a decrease of 40% in the number of agreements and 76% in terms of their value.

Regarding fundraising rounds, during 2018, there were 662 rounds for a value of USD 3.8 billion, representing a decrease of 18%. Meanwhile, in 2019, there were a total of 540 fundraising rounds worldwide.

Besides, there is a greater concentration of financing from companies specializing in cryptocurrencies and blockchain in the Asia-Pacific (APAC), Europe, Middle East, and Africa (EMAC) regions than in the Americas, according to a trend identified by the firm.

The EMAC and APAC regions geographically account for 51% of all business fundraising and acquisitions in 2019. During the same period, the Americas contributed 48% of these commercial movements around the agreements reached. However, in 2019, the American continent saw this trend reversed for the first time since it dropped to less than 50%.

Previously, in 2018, the Americas gathered 55% of investments in the sector, which shows a notable decrease in contrast to other regions, a trend that has continued in 2020. The study indicates that, during 2018, emerging companies raised 71% of the funds, while in 2019 they received 59% of the total funds and others with more experience increased their financing funds.

Bithumb and Ripple Received the Most Financing

The top three fundraisers of 2019 in the area of ​​cryptocurrencies and blockchain are Robinhood (USD 300,000), Ripple (USD 200,000), and Bithumb (200,000). Other companies such as Thundercore (USD 50,000) and Blockchain Capital (USD 200,000) are next in the list. Five of the ten financing agreements in the USA are to develop wallets or digital payment platforms.

The top three mergers or acquisitions in the sector of 2019 are due to Crypto Facilities (which Kraken acquired for USD 100,000), Coins.ph (Go-Jek, USD 70,000), and the Argentine exchange Xapo (Coinbase, USD 55 million). Immediately, in fourth place is CoinGeek, which Square Mining acquired for USD 45 M.

Another trend is that in 2018 most financing funds were destined for projects that work around the development of blockchain infrastructure. That year, investment and fundraising in the sector tripled, compared to the previous year.

Even though regulation is a point of interest, companies could also want to invest in the mining sector to diversify their portfolio and interests. Likewise, they may be interested in investing in mass media, research agencies, and consulting.

The crisis that the coronavirus caused worldwide has similar consequences for companies specializing in blockchain. This could also affect the fundraising, mergers, and acquisitions of companies in the area. However, this crisis may lead the main players in the ecosystem to acquire smaller companies.

Finally, PwC claims to be able to help companies that invest in the cryptocurrency area in many ways. It would assist in their operations, strategic planning, and compliance with cryptocurrency tax laws.

By Willmen Blanco

Oil Shows Greater Volatility than Bitcoin, after Nearly Two Months

Willmen Blanco
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Oil Shows Greater Volatility than Bitcoin, after Nearly Two Months

US WTI crude oil futures contracts for next June fell by more than 43%. As the price of oil plummeted, Bitcoin remained in its current trading range.

Oil futures dropped in the past few days, showing negative prices for the first time in history. Since then, the cryptocurrency ecosystem has been enjoying the fact that Bitcoin suddenly seems to have become a relatively stable asset.

Markets were shocked when West Texas Intermediate (WTI) crude oil futures contracts plummeted last April 20th. The measures against the coronavirus pandemic caused fears of oversupply, which affected even the main oil benchmark for the USA.

One day later, crude oil futures contracts for next June fell more than 43% to the lowest point in 21 years, that is, USD 11.57 per barrel. In contrast, Bitcoin barely faltered and maintained its recent trading range of between USD 6,400 and USD 7,400.

The first cryptocurrency has performed better than oil for much more than two days regarding price stability, according to data from CryptoCompare. The non-renewable resource first began to show greater volatility in early March, which has remained largely higher in April.

CryptoCompare recently showed in a graph the volatility of oil, Bitcoin, gold, and the S&P 500 between April 10th and April 24th. Volatility above 5% in 14 days translates into 25% or more on an annual basis. “The more volatile, the greater the percentage move, and the riskier the asset, regardless of the direction,” the company said through an e-mail message.

While Bitcoin was the “riskiest” (or most volatile) asset of the four participants at the beginning of the year, oil rose to levels above 0.10 in early March and even as high as 0.15 at the end of the month.

The disagreement between OPEC and Russia, along with the impact of negative demand as the year progressed, caused oil prices to drop. This situation made this commodity riskier than Bitcoin, according to James Li, an analyst at CryptoCompare.

The growth in the volatility of Bitcoin, which came soon after, is probably related to the “Black Thursday” crash that occurred on March 12th. The latter event saw the cryptocurrency plummet to as low as USD 3,867, at the same time that all the markets suffered the consequences of the coronavirus quarantine.

Since then, both assets have seen a drop in volatility, but the swings in the price of oil do not seem to have come to an end yet.

If there is no significant catalyst for the demand, it will be impossible to find a place to put oil, according to Daniel Masters, president of CoinMetrics, the UK-based asset management company. Masters believes that continued problems with the oil futures market could be on the horizon, due to the shortage of facilities for oil. He said that the worst is not over yet since the contracts for next May were recently rolled over to the contracts for June, and when the contracts for June expire, there will be a “total massacre”.

By Willmen Blanco

Bitcoin Reaches USD 7,500 with a 5% Boost in 24 Hours

Alexander Salazar
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Bitcoin Reaches USD 7,500 with a 5% Boost in 24 Hours

The expiration of a CME futures contract could be affecting Bitcoin’s price. The market price of the first cryptocurrency has been the highest for 43 days.

The cryptocurrency market showed positive figures last April 24th, when Bitcoin exceeded the USD 7,500 barrier. That had been its highest price for 43 days since the price crash of March 12th. The first cryptocurrency exhibited a 5% boost, with a trading level of almost USD 42 billion, between April 23rd and 24th.

According to data from Messari, at the time of writing this article, Bitcoin has a price of USD 7,502. That value exceeds the reference price that it showed on January 1st when it traded at USD 7,194.

The expiration date of a CME (Chicago Mercantile Exchange) futures BTC contract on April 22nd could have driven Bitcoin’s price, amid the global coronavirus pandemic. BTCJ20 began trading on December 16th, 2019 and closed last April 24th. The next one to expire is BTCK20, which will occur on May 29th.

Another factor could be the upcoming Bitcoin halving that will occur in a few days. That event will reduce the issuance of coins, or reward to miners, from 12.5 BTC to 6.25 BTC per block mined. In other words, operators could be taking greater positions before a possible increase in the price of BTC, due to the decrease in the number of new coins that come into circulation.

In 2020, the top price of Bitcoin has been USD 10,350, a figure that it reached on February 15th. That took place almost a month before the sharp drop that led the cryptocurrency from USD 7,900 to break the USD 4,000 barrier. The situation arose after the World Health Organization (WHO) decreed COVID-19 as a global pandemic. However, Bitcoin has already been able to recover almost 100% of its price.

Regarding the rest of the cryptocurrencies, they also exhibit positive figures. Ether (ETH) and Ripple (XRP) show similar behaviors, with a 0.5% advance. The former recently traded at USD 186.76, whilst the latter had a price of USD 0.193934 per unit. Hive showed the greatest advances within 24 hours with a gain of 58.5% to trade at USD 0.283762. Digibyte went up by up 19% (USD 0.01168220) and Aave gained 15% (USD 0.03512427), according to data from CoinGecko.

The total market capitalization amounted, in the last 24 hours, to USD 216 billion with an increase of 3.8% and total marketing of USD 81 billion, at the time of writing this article. Market dominance has the following distribution: BTC (63.4%), ETH (9.55%), and XRP (3.95%).

The global economic recession that the coronavirus pandemic has caused is leading traditional securities and commodities markets, among others, to all-time lows such as the recent drop in oil prices. Despite this dark scenario, Bitcoin is showing favorable behavior in the market. However, some analysts consider that its price could break the USD 4,000 barrier again.

Analyst and trader Alberto Cárdenas considers that, in the face of the expansion of the SARS-CoV-2 coronavirus, the price of the main cryptocurrency could fall to a range between USD 3,600 and USD 4,300.

By Alexander Salazar

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