Possible Effect of 2020 Bullish Start on Bitcoin’s Prices

Alexander Salazar
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The next halving and events of worldwide impact could be affecting Bitcoin’s price. Some analysts suggest that Bitcoin will surpass its all-time peak this year.

The performance of the main crypto asset last January was remarkable, with an increase of more than 30%. Besides, Bitcoin’s price reached in recent days USD 10,000 for the first time this year.

Cryptocurrency market analysts have renewed their perceptions of Bitcoin’s behavior, even daring to release new predictions in the coming months. Most of these views show optimism for the near future.

Among the most optimistic is Tom Lee, co-founder of financial analysis firm Fundstrat. He believes that this year has prospects of outperforming 2019. Among the possible catalysts for a good year, he precisely highlighted the halving.

Michael Sonnenshein, director of Grayscale, went beyond circumstantial elements. He believes that Bitcoin might be strengthening as there is a narrative in the investor community that the cryptocurrency is consolidating its place as a store of value.

Likewise, Willy Woo, one of the most recognized in the ecosystem for its indicator analyses, recently expressed his opinion. Woo asserted that the recent conquest of the USD 10,000 mark corresponds to the core investment activity, a concept based on the activity of those retaining the funds, not short-term traders.

Possible Future Movements

According to Tom Lee, Bitcoin’s prices resumed their 200-day average, which points to recovery from a sustained bullish trend. As a possible margin of profit for Bitcoin’s prices, the analyst referred to an increase of up to 197%, but he did not indicate a possible period for the rally to materialize.

The percentage suggested by Lee indicates that such increase would mean reaching new all-time highs for the cryptocurrency. At the time of Lee’s words, Bitcoin’s price was just over USD 9,200. That percentage increase would lead the price to reach about USD 27,300.

Bob Loukas, Founder of The Financial Tap, saw on February 5th a steady bullish trend in the short term, which has been confirmed in recent days with the arrival of USD 10,000. In the medium term, he sees “all the signs of growth,” as he wrote on his Twitter account.

Even though Loukas did not specify concrete time frames or prices, he had already predicted in late 2019 that Bitcoin prices would reach a new all-time high by the end of this year and possibly higher increases by 2021.

Among those that had been bearish regarding Bitcoin predictions, the market operator Tone Vays has changed his position. He now considers that consolidation in the USD 10,000 range increases the chances of a major bullish trend, even the possibility of new all-time highs.

Price Increase, Decrease in Dominance

While Bitcoin’s prices have gained more than 35% so far in 2020, according to data from CoinMarketCap, the market dominance by the main cryptocurrency has taken the opposite direction.

According to the same source, Bitcoin’s dominance over the cryptocurrency market began this year at 68.29%. However, at the time of writing this article, that percentage has dropped to 63.27%.

For that reason, some people in the ecosystem consider that the market momentum is not being given by Bitcoin, but that the so-called altcoins, those cryptocurrencies other than Bitcoin, have gained greater strength in this bullish season.

Despite this decline in Bitcoin’s dominance, the current percentage remains well above its lowest times in early 2018. The current level almost doubles the 32.81% that the cryptocurrency recorded against the rest in the middle of January that year.

By Alexander Salazar

Blockchain Project to Manage Social Bond on Electricity Supply Is Developed in Spain

Alexander Salazar
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Blockchain Project to Manage Social Bond on Electricity Supply Is Developed in Spain

The idea is to facilitate payment processes to beneficiaries of a subsidy on electricity supply. As a goal, it has been established that the project will be completed in about 6 months.

The Spanish national electricity company ENDESA is preparing a project to manage the blockchain-based social bond on electricity supply. For this reason, the firm is having the tool developed by two technology development companies.

ENDESA is currently conducting the project, which is called Confía, jointly with the companies Ayesa and Izertis, as reported by several Spanish media, including the digital newspaper El Comercio. According to this source, these companies are working on the development of smart contracts and the configuration of the nodes that will maintain the network.

Additionally, the website and the application programming interface (API) would be under development. The deadline for the initial activation of the project would be next July, according to the medium specialized in electric networks smartgridsinfo.es. The project was presented at the beginning of this month to the Alastria Technical Committee, an association that promotes the digital economy through decentralized technologies in Spain.

At an early stage, the project would be available for a period of testing in the town of Malaga, through its Town Hall. The objective is that the same dynamic be progressively replicated by municipal governments in other locations.

It should be noted that the social bond, which is a subsidy for vulnerable families, seeks to ensure access to electricity. This tool promoted by ENDESA is aimed at allowing the city council to have access to the data of these families “from the first moment in which the payment defaults occur.”

When the company announced the project for the first time last November, it said that it could allow social services themselves to detect vulnerable customers and contact affected families to inform them of the social bonus, rather than vice versa.

One of the possible concerns about this type of project could be its impact on the labor sector, particularly in the opportunities of those that currently serve as a bridge between the authorities and the electric service providers.

In this regard, the blockchain chief at Izertis, Urko Larrañaga, considers that the proposal goes even further. He said that the company is talking about localizing such an elementary need for people’s lives such as electricity in the shortest possible time, as quoted by El Comercio.

Other ENDESA Blockchain Proposals

ENDESA had already had approaches with blockchain-based processes. For example, in February 2018, its participation together with Gas Natural Fenosa in the initiative Enerchain, a network for energy exchange processes, was announced. This project especially focuses on network management processes, the development of a “smart market” for the energy sector and peer-to-peer (P2P) trade.

Besides, the company added in 2017 more than 40 proposals received in its blockchain laboratory. The initiative intended was to search for blockchain-based solutions for the energy sector. Some of the projects went through P2P exchange systems or services for energy certifications.

By Alexander Salazar

German Banks Are Looking for Government Support to Include Crypto-assets Research Services

Maria Rodríguez
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German Banks Are Looking for Government Support to Include Crypto-assets Research Services

A group of German banks asks the authorities to allow their clients to offer the digital asset protection service. Banks say they want to consider these crypto-assets as financial assets.

Technology is changing how financial activities are being conducted at present, and among the most prominent ones is crypto technology.

In 2019, it was known that the New York Stock Exchange would be accepting digital assets through projects with crypto initiatives, but this 2020 the actions of financial institutions are going much further. For this reason, it was recently announced that a group of German banks has decided to introduce the formal request to the legal authorities of their country to offer a crypto-asset protection service to their clients.

The Revelator Report of BaFin

The news was first released through statements by German government officials, who explained that they have received constant requests from banks and financial institutions which seek permission to launch a custody project for digital assets.

On the other hand, it was also revealed that the country’s financial regulatory authority, BaFin, would have prepared a report confirming the more than 40 requests to offer these services.

As reported by the local media Handelsblatt, the boom in offering these services may be the product of the reform that the Law against Money Laundering had.

The laws update states that financial institutions would now be allowed to offer securities management services, and asset and bond safekeeping. This includes digital assets such as traditional cryptocurrencies: Ether (ETH), Bitcoin (BTC) and XRP.

The news about the reform benefits the crypto industry in the European country and puts extra confidence in the use of these types of assets.

Regarding this growth in interest in the use of these types of assets, Frank Schäffler argued this position by declaring for the same media that reviewed the news.

“The market is growing faster than the Federal Ministry of Finance has predicted. That is both a blessing and a curse. The high demand for crypto custody licenses shows that companies are increasingly adopting blockchain technology, and this is also the result of the new legislation”, he explained.

In response to the requests introduced by German banks, the BaFin set a deadline, November 2020, so that the institutions that want to provide this service can adapt the necessary platforms to store crypto assets, as well as correctly and safely organize the appropriate standards to offer other services that are related to these assets.

The change in the regulation of the country could be the product of the recognition that was granted by the European Union (EU) to companies that use cryptocurrencies for their businesses. Although it turns out to be a small step for the industry, it is still important to highlight the adoption they have achieved within the traditional financial world.

This is something very important both for blockchain technology and for cryptocurrencies expansion in different fields, countries, and industries all around the world.

By María Rodríguez

USD 1 Billion in Cryptocurrencies Are Safeguarded by Ethereum DeFi Market

Alexander Salazar
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USD 1 Billion in Cryptocurrencies Are Safeguarded by Ethereum DeFi Market

Some members of the community issue a warning about possible market manipulation. In a year, the value that the DeFi space has in reserve has increased by more than 300%.

It was reported that the increase in Ether (ETH) prices is impacting the Ethereum decentralized finance (DeFi) market, since the reserve value of this ecosystem amounted to more than USD 1 billion, thus reaching a new all-time milestone in recent days.

This rebound can be seen on the DeFi Pulse monitoring platform, which reveals that in early February 2019 there were only USD 276 million in reserve in Ethereum DeFi applications. Consequently, this means that the new record represents an increase of more than 300 % in a year.

Bitcoiner Brad Mills believes that the celebration that was generated around the new all-time milestone with the USD 1 billion in reserve in DeFi is based on a “bold statement.” In this regard, he wonders what percentage of the “blocked” (unblocked however) USD 1 billion in DeFi is comprised of ICO (illiquid?) tokens and not inflated by ConsenSys or Ethereum foundations/founders.

It should be remembered that that, in March 2019, Maker DAO token holders voted to increase the network’s stability commission by 4%, through which smart contracts are paid to create DAI, Maker’s pegged token.

After the measure was approved, the users that requested loans with MKR to generate new DAI paid a 7.5% fee once their deals were closed. These programmatic loans are needed for the creation of the tokens to ensure the support of DAI in USD.

The development of the DeFi sector also allowed the emergence of a new paradigm that proposed an alternative to loans, assets and derivatives markets in the fiduciary world, with the advantages of decentralized protocols. Users that are connected to the Internet can now obtain a loan or trade-in open markets on the Ethereum platform.

In that regard, many DeFi projects require that users reserve an asset (ETH and DAI, among others) to participate in the protocol. These assets, “locked” as collateral, later became a measurement called “total value locked” (TVL), as shown by DeFi Pulse.

To calculate the TVL, DeFi Pulse analysts monitor the underlying smart contracts of each protocol in the Ethereum blockchain. They regularly update the graphics by determining the total balance of ETH and ERC-20 tokens in the hands of these smart contracts. The TVL is calculated by multiplying these balances by their price in USD.

Even though some analysts are skeptical, others consider that the figures indicated by the TVL can suggest that more reserve value in the DeFi ecosystem will lead to more liquidity and potential for the market to grow and become the basis of a new financial landscape.

“Blocked” Funds

Bitcoiner and coder Udi Wertheimer explained that the DeFi funds are not blocked at all but free to move and be dumped in the market at any time. The term dumping, or unfair competition, consists of selling a product at a lower price than the one handled by the market, aiming at competing more effectively.

In that sense, the application Compound allows making deposits and loans in ETH, 0x (ZRK), Dai (DAI), Basic Attention Token (BAT), and Augur (REP). The mechanism generates interests for borrowers and liquidity in the market, as more people participate.

With Compound, all cryptocurrencies are protected under a smart contract. Loans are requested for the number of cryptocurrencies desired, provided that a ratio of 1.5x is maintained over the amount to be requested and the amount deposited is left in reserve, but not blocked.

By Alexander Salazar

Removal of Bitcoin Payment Restrictions Due to Demands from BitPay’s Customers and Competition

Josselyn Avila
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The payment of BitPay invoices had been mandatory under the Payment Protocol since 2017. The company will integrate into its offer the payment of invoices from different wallets and exchanges.

It was announced that BitPay decided to remove its invoice payment restrictions, which allows users to choose the wallet or exchange from which they want to pay. The recent measure confirms that the deployment to incorporate new payment options will be gradually made.

The platform had been operating for two years with a reduced offer of around 17 wallets that could be used. The limitation had been imposed in 2017 when BitPay decided to implement a mandatory Payment Protocol. The company aimed to avoid erroneous transactions and reject incorrect payment amounts, thus reducing the costs and delays caused by money reimbursement.

The protocol is based on the BIP 70 function, which generates an invoice over a secure SSL connection. If a customer wants to pay an invoice, he or she can connect directly to the Bitcoin address of the recipient of that payment. In this way, the possibility of making mistakes when paying a trader for a product or service is reduced.

Although this method is in theory intended to secure transactions, it has caused dissatisfaction in the bitcoiner community. As not all wallets comply with BIP 70, a limited group of wallets can interact with BitPay invoices. For that reason, users of the platform were forced to move to other wallets to use their service.

Platforms such as Exodus, BTC.com, CoinText, and BitPay itself were among the few that provided invoice payment services. Only 13 Bitcoin address wallets and about 3 Ethereum key chains were compatible with BIP 70. This latest change in BitPay’s policies represents an opening to the market, after years of restrictions. Customers will now be able to use their favorite exchanges or wallets to pay traders, irrespective of company preference.

Several Reasons to Change

Stephen Pair, CEO of BitPay, says that the action was taken after listening to advice from traders and customers of the platform. He said that the move was made to give its users more freedom, as well as to seek a larger number of customers.

Even though this could have motivated BitPay to change its policies, there are undoubtedly other factors to consider, such as the rejection of the Payment Protocol in the Bitcoin community. In a discussion, users of the platform stated that the mandatory nature of the function was inconvenient.

Customers preferred BIP 70 to be an option rather than a measure to be fulfilled by all since it limited their possibility to choose. The feature had been active on the BitPay platform since 2014, but the company decided to make it mandatory in 2017 to reduce errors in transactions that represented up to 8% of its total volume.

It should be noted that the high level of rejection of the measure led developer Matthew Zipkin to create a tool to circumvent it. The BitcoinToolkit website converts BitPay invoice URL into simple Bitcoin addresses, thus allowing payment from any wallet.

Riccardo Spagni, a member of the Monero team, notes that the company lost several of its major customers and decided to take this action as a contingency. This theory is not unreasonable, considering that a growing number of cryptocurrency payment providers, such as BTCPay, manage to succeed in this market.

By Alexander Salazar

Soccer Teams Cannot Advertise Cryptocurrencies, According to Spanish CNMV

Alexander Salazar
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Soccer Teams Cannot Advertise Cryptocurrencies, According to Spanish CNMV

In its latest newsletter, the CNMV analyzes the sponsorship from investment companies to soccer clubs. It states that, among the European leagues, only the Spanish one noticeably promotes these services.

In its 2019 fourth quarter newsletter published last January 30th, the Spanish National Commission of the Stock Market (CNMV) ruled against soccer teams advertising “complex financial products”, such as contracts for difference (CFD), binary options (BO), Forex products and cryptocurrencies, among others.

The report dedicates a section entitled “Advertising complex financial products through the sponsorship of soccer teams”, which describes the type of advertising shown on Spanish soccer teams’ T-shirts. The CNMV says that it is mainly online advertising and notes that two Spanish teams specifically promote financial services: Atlético de Madrid (Plus 500) and Betis (Easy Markets).

Regarding other sponsoring financial service companies, the main sponsor of Valencia and Getafe is Libertex while those of Real Madrid and Seville are Exness and Ever FX, respectively. However, the brands of such firms do not appear on the shirts of those soccer clubs.

Even though these brands are not included in the equipment of the clubs, the CNMV notes that their services are prominently mentioned on the soccer teams’ websites or during the players’ participation in advertising and marketing events. Besides, the members of the soccer clubs that they sponsor receive special discounts.

After comparing the advertising done by the teams of the main European soccer leagues, the CNMV found that investment companies acted as sponsors only in the Spanish league.

The sponsorship of soccer clubs that includes advertising in sports equipment is not observed in the rest of the most relevant European leagues. This type of product is not considered appropriate for retail investors in general, due to its complexity and risks. For this reason, the CNMV has established limitations and has prohibited the trading of BO and CFD to investors of this type that do not meet certain requirements and limitations, with rigorous demands for customer information.

As the CNMV has described them, the Contracts for Difference (CFD) are complex financial products that involve an agreement between an investor and a financial intermediary that establishes the settlement in cash of the difference that occurs in the quotation of an underlying asset in a given period.

According to the financial regulator, the restriction on the advertising of financial products through a sport as massive as soccer has become widespread in Europe, which has led to partially justify the application of such measure to those products.

On this side of the Atlantic, the National Basketball Association (NBA) initially opposed the tokenization of part of the contract of the player Spencer Dinwiddie. However, he launched in mid-January a tokenized bond on the Ethereum network, with which he seeks to raise USD 13.5 million directed to private investors. The Brooklyn Nets star, who is a well-known enthusiast of Bitcoin and cryptocurrencies in general, is now offering 90 tokens called SD8, each of which has a price of USD 150,000 each.

By Alexander Salazar

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