Correlation between Bitcoin and other Cryptocurrencies Decreases

Willmen Blanco
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Correlation between Bitcoin and other Cryptocurrencies Decreases

The bullish trend is associated with the fall of that indicator. The decoupling between BTC and the market favors diversified investment

It is often said that having a cryptocurrency means having them all, as most assets generally follow Bitcoin’s moves. However, this trend has been progressively decreasing since early 2019, reaching annual minimums as the trend changes from bearish to bullish.

During 2018 it was observed that the levels of correlation between the main cryptocurrencies and Bitcoin were especially high. About 75% of the top 200 cryptocurrencies by market capitalization had an average correlation of 0.89. In early April Hodlbot said that 150 of the 200 first currencies by market capitalization had a correlation of at least 0.87 or throughout 2018.

One of the main issues among investors wanting to venture into the crypto market is the inability of their portfolios to diversify. This leads to problems for traders, since it makes it difficult to minimize risks through diversification.

Generally, when Bitcoin’s prices fall, those of other cryptocurrencies also fall. In fact, this year the market has experienced a phenomenon in which the quality of the projects generally affected the magnitude of the move but not its direction, making it extremely difficult to distinguish bad projects from good ones for those wanting to invest.

This has changed drastically in the almost two quarters of the current year, moving the average correlation coefficient of 0.89 marked in 2018 to 0.58 in 2019. Similarly, Skew, a provider of data and figures associated with the crypto market, reaffirms that the levels of correlation between the main crypto assets and Bitcoin have decreased considerably, going from a maximum of 0.92% to a minimum of 0.52% in the last 6 months. The assets BNB, XLM and XRP (0.45, 0.46 and 0.50) have been the least correlated to BTC in the last 30 days.

In late March, Binance Research reported that it had elaborated on the correlations of the cryptocurrency market in multiple periods of time in terms of yield, highlighting that the influence of the correlation is due to a variety of forces that impact the direction of the price. The exchange house also noted that the correlation coefficient between Bitcoin and several alternative currencies has been significantly reduced in the last three months.

The correlation of crypto asset returns based on BTC prices (that is, Bitcoin-adjusted returns) highlights the significantly lower correlations between crypto assets in relation to the correlations between the same currencies in USD returns.

Binance

Neither analysts nor investors welcome high levels of correlation between cryptocurrencies. This is perceived as a sign of immaturity and low market liquidity, since altcoins do not find their individuality to confront BTC and move independently. However, correlation changes over time, according to the stage of the market in which assets are active at the moment of the study.

The high levels of correlation in the market in 2018 does not imply immaturity, since in 2014, 2015 and 2016 the correlation coefficients between cryptocurrencies were not so high and the market had less capital than now.

It is the current asset cycle that can impact on these levels, since in bearish markets correlation normally contracts for prices to be directed to single moves between different cryptocurrencies. In bullish markets, prices fluctuate more independently from Bitcoin.

The increasing decrease in correlation between cryptocurrencies is a good sign for the market in general because it could generate a stream of optimism that encourages investors to diversify their portfolios among different cryptocurrencies, bringing more capital and much more liquidity to the market.

By Willmen Blanco

Bitfinex Presented its New Utility Token

Maria Rodríguez
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Bitfinex Presented its New Utility Token

The token would be tradable with Bitcoin (BTC), Ethereum (ETH), US dollars (USD), USDt, and EOS

After raising US $ 1,000 million in its initial exchange offer, Bitfinex cryptocurrency exchange announced that Monday, May 20th, at 8:00 UTC, it start trading with its new exchange token, whose name is LEO.

According to what the business explains, UNUS SED LEO is a utility token designed to empower the Bitfinex community and provide utility for those seeking to maximize the capabilities of the Bitfinex trading platform.

The expectation grows since the token would be tradable with Bitcoin (BTC), Ethereum (ETH), US dollars (USD), Tether (USDt), and the cryptocurrency EOS. This positive response related to the token sale represents a new milestone for Bitfinex and the blockchain community.

But said piece of news comes with a great controversy about the strength of the exchange. It takes place a week after the company published, last Friday May 10th, its official whitepaper to explain the offer.

“In addition to our excitement around bringing such an unprecedented and powerful token to the heart of our community, the Bitfinex team remains dedicated to continuing to grow and develop core infrastructure for our industry as a whole. We remain invigorated and humbled by the support of our users, personnel, and beneficiaries, and welcome everyone to the era of UNUS SED LEO, says part of the official communication.

Rumors Become Reality

In this way, the rumors that a month ago emerged about the possibility of Bitfinex launching a sale of tokens are fulfilled. These considerations took place considering that Bitfinex needed to compensate a fall in its funds of US $ 850 million.

The company’s Chief Technology Officer, Paolo Ardoino, assured that Bitfinex could obtain excellent results during the first sales of its tokens. “Bitfinex is able to raise 1b USDt in 10 days, in a private sale. Private companies, giants in our industry and outside, made investments for 100m each. A legion of inside and outside users made investments for 1m each”, said Ardoino on his Twitter account, @paoloardoino.

Although no more details have been given so far and it is not known exactly where the investment of the first token sale comes from, Bitfinex indicated that 100% of its tokens were sold. According to Ardoino, the sale of US $ 1,000 million was conducted successfully, with investments between US $ 1 million and US $ 100 million.

On Bitfinex’s whitepaper, the company ensures that each month it will acquire a percentage of its new exchange tokens. The publication explains that the magnitude of the purchase will depend on the monthly income, and also it will depend on the Crypto Capital payment processor capability to unlock its funds permanently.

Bitfinex is a company which started operations in 2012. Initially, it was one of the longest-standing exchanges in the blockchain industry. Since then, it has become one of the most recognized crypto-companies.

“We’ve removed our equity requirements to open our platform to everyone. Visit Bitfinex today to get started. Join us on our mission to create the most innovative & industry-leading cryptocurrency exchange, which is one of the invitations the company makes to the crypto-community.

By María Rodríguez

Ripple’s Reports Hide Destination of 255 Million XRP

Willmen Blanco
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Ripple’s Reports Hide Destination of 255 Million XRP

The XRP custodial system might have been used differently than announced. The discrepancies in these figures are equivalent to more than US $90 million

According to the Blockchain analysis and statistics company, CoinMetrics, the evaluation of Ripple’s supply program and custodial system reveal several inconsistencies regarding its release of new XRP and its reports on the subject. The total difference is of about 255 million XRP.

CoinMetrics conducted this research, whose report was published on May 16th, after adding XRP statistics and information to CM Network Data Pro, making sure to know the characteristics and peculiarities of its Blockchain and the records of its transactions.

The research allowed checking irregularities concerning the total amount of circulating XRP in the market and the process through which more XRP have been added to this figure. A crucial element in all this is the guarantee deposit (escrow) system, released by Ripple in March 2017.

The tool allows blocking a certain amount of XRP for a stipulated period of time or until certain conditions are complied with. Then, the company announced the blocking of 55 billion XRP owned by Ripple in this escrow, to manage the cryptocurrency’s circulation in the market.

“We will use the escrow to establish 55 one-billion-XRP contracts expiring on the first day of each month, from months 0 to 54. […] Then we will return what is unused at the end of each month. For example, if 500 million XRP remain unused at the end of the first month, this amount will be placed in a new escrow account expiring in month 55,” said Ripple

However, these figures do not match the records within the XRP Blockchain.

Irregularities in Custodial Deposits

First, the “custodial tail” (the difference between the billion XRP released and the amount spent) is implemented differently than announced. Similarly, Ripple has reported the release of up to 200 million less than what is reflected within the Blockchain.

There are 255 million XRP, equivalent to more than US $90 million, according to current market prices.

Ripple publishes reports on its custodial activity, but CoinMetrics explained that on two occasions (Q3 2018 and Q1 2019) Ripple reported the wrong amount of XRP returning to its custodial scheme. In both quarters it omitted reporting 100 million XRP, hence that difference of 200 million.

Besides, other actors (probably related with Ripple) also released 55 million XRP from an unknown deposit address, disconnected from Ripple’s main deposit account. The total amount of circulating XRP has been altered, with a release of tokens different from what was programmed.

A total of 17 custodial contracts have been exchanged and another 43 created, for a total of 17 billion XRP released from the same unknown address and 13.2 billion XRP returned to the custodial scheme for a net release of 3.8 billion XRP.

CoinMetrics

However, these irregularities do not seem to have particularly affected the cryptocurrency’s price. Currently, the assessment of XRP has suffered, as a consequence of the general correction process undergone by the crypto asset market.

On May 18th each XRP had a price of US $0.37, representing a fall of 10.23 within 24 hours, and its main exchange markets were BW.com, Upbit and ZBG, mainly against Korean Won and USDT. Recently, the crypto asset has had a volume of US $3,550,595,297.

Expert cryptocurrency users and novices need to consider all this information to decide whether to invest in XRP. Blockchains might provide wrong information that might lead them to avoid their crypto assets, but they have the last word.

By Willmen Blanco

Bitcoin Price and Commissions Rose in the Last Week

Willmen Blanco
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0
Bitcoin Price and Commissions Rose in the Last Week

BTC bullish rally has triggered the number of transactions, thus congesting the network. The blockchain registered up to 2,000 transactions awaiting confirmation in a single hour

It was reported that on May16th Bitcoin reached average commissions of over US $4 per transaction, twice the price of those registered last week. The increase occurred after the cryptocurrency reached its best price of the year, about US $8,000 per unit.

In the last week, the number of transactions with high commissions for confirmation has increased compared to that of last week, as shown by BitInfoCharts. At the time of writing this article, the average commissions for users with SegWit addresses were of US $3.21 per transaction, whilst those that own Bitcoin wallets with Legacy addresses have come to pay up to US $4.67, according to calculations made by Buy Bitcoin Worldwide.

This portal is also said to calculate that an average transaction with this price is confirmed every six blocks, which is equivalent to a total of 60 minutes awaiting confirmation. When consulting the Johoe’s Bitcoin Meempool portal statistical data, it can be observed that the Bitcoin network is currently congested, an event that can trigger the price of commissions.

The charts record more than 2,000 unconfirmed midday transactions for May 16th and up to 1,000 waiting to be confirmed several hours later. The average number of unconfirmed transactions for May 17th was 900, surpassing those of previous days, in which only 50 to 100 daily transactions were recorded.

Tariff per Bitcoin Transaction

The price of Bitcoin tariffs is intrinsically related to the network’s processing capacity. If it takes miners a long time to confirm transactions, there are users that are willing to pay better rates to take the priority over the processing of their transactions. In this sense, the more congested the network is, the more expensive the commissions will be.

The congestion of the Bitcoin network could be due to the rise in the number of transactions after the price of the BTC surpassed the US $6,000 per unit. Data from BitInfoCharts show that by May 15th more than 300 thousand transactions were registered throughout the day, an amount that has been maintained since the end of April. During the same month, users were beginning to perceive the increase in Bitcoin commissions, reaching almost two dollars per transaction.

The difference in the cost per transaction in the last two weeks has almost doubled as the price of the tariffs was only US $2 by May 6th. The increase in the number of transactions and the revaluation of the price of tariffs caused BTC transactions on May 18th to achieve their highest numbers this year.

After activating SegWit, the Bitcoin network had to wait for several months to register its lowest commissions since 2011, closing at US $0.58 per transaction. However, at that moment the Bitcoin market was in a bearish trend, which helped the commissions remain economic.

Bitcoin has proved to be a solid crypto asset that can recover from extreme situations, such as economic crises. Independently on the rise in the commissions for its transactions, it has always kept the demand high in the cryptocurrency market.

By Willmen Blanco

International Electric Company Launches Blockchain Pilot Program for Solar Energy

Maria Rodríguez
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International Electric Company Launches Blockchain Pilot Program for Solar Energy

The objective is to efficiently manage the exchange of energy in smart networks, using smart contracts and blockchain to store, verify and maintain transactions

The diversity of commercial sectors that can be supported by blockchain technology is increasing worldwide. Starting from the trade of food products, the record of medical histories, the possible follow-up to the changes of the pieces of airplanes and even the commerce of energy peer to peer (2p2) can be supported with the technology of the cryptocurrencies.

The international electrical engineering company ABB recently launched a blockchain pilot plan to explore how technology could promote and improve the trade of peer-to-peer (p2p) energy, as reported by specialized media in the technological world.

“The way people consume and use their energy is changing. Consumers who use their own photovoltaic systems are studying how they can produce and use the energy they create, as well as how they can share any excess energy between neighbors, communities and the wider network”, said Giampiero Frisio, Director of Smart Power at ABB.

The objective of the initiative is to get the project investors ready for the use of blockchain technology. In this way, participants in the energy market could reduce both capital costs and operating expenses. Blockchain could also facilitate faster transactions and automatic payments.

Association with Evolvere

To implement the project, the Swiss energy group ABB partnered with the Italian company for public services Evolvere to deploy a blockchain that it developed with its partner Prosume, which is a platform with a decentralized and self-regulated monitoring system for the exchange of different forms of energy.

The pilot will enable transparent and secure p2p energy transactions, investigate the role of blockchain technology in the smart network market and facilitate energy trade transparently and securely.

In this sense, Frisio commented: “We are willing to work with organizations such as Evolvere, to test the potential of blockchain technology in solar systems, which will give us a powerful platform for future energy exchange solutions”.

The ABB representative added that the Evolvere project has allowed them to develop “viable and proven solutions” for the market, which has new dynamics and regulatory frameworks for blockchain technology.

Both companies revealed few details about the project. Until now, it is known that smart networks would be based on the ABB Ability digital services platform and the group’s portfolio of investors. This includes its UNO-DM-PLUS solar investors and REACT 2 investors. This ABB Ability platform could facilitate the creation of smart contracts directly in the group’s investors.

More Blockchain-Energy Projects

The blockchain technology has already been used in the field of electric power. US blockchain company Data Gumbo Corp. raised USD 6 million from important energy companies, including the national oil and natural gas subsidiary Saudi Aramco, to improve the oil and gas supply by enabling automated payments.

In April, Austria’s largest energy provider, Wien Energie, developed a blockchain-driven refrigerator in partnership with technology giant Bosch, to increase the interest in sustainable consumption.

The Japanese provider of photovoltaic modules Kyocera is testing the possibility of using accounting books in a virtual power plant, which is based in The United States, using blockchain technology.

ABB has operations in Europe, North and South America, Asia, Africa and Australia. In 2018, the company had an operating income of more than USD 28.5 billion. According to ABB, its new project could allow other companies of the energy sector to reduce the costs of the Capex and Opex projects. In this way, renewable energy businesses without subsidies through a sustainable world can be accelerated.

By María Rodríguez

Samsung Plans to Integrate Cryptocurrency Wallets to the Entire Galaxy Line

Maria Rodríguez
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Samsung Plans to Integrate Cryptocurrency Wallets to the Entire Galaxy Line

The Galaxy series contributes with the global adoption of blockchain technology and allows an easy handling of digital currencies

Samsung S10 will not be the only device of the South Korean company to offer a wallet for its users. The technology giant Samsung is working on preparing the entire line of Galaxy models, which now will include a cryptocurrency wallet. The benefit will also be included in low-budget phones, according to local media reports.

After launching the smartphone with an integrated cryptocurrency wallet, Samsung Galaxy S10, the company has decided to include blockchain and cryptocurrency functionalities to the rest of the Samsung Galaxy devices for South Korean users, with the aim to expand these services to other regions of the planet.

Samsung S10 has wallet functions for Ether (ETH), Bitcoin (BTC) and two tokens. In this way, the Galaxy series has become a channel for the global adoption of blockchain technology since the users of these smartphones will continue exploring the characteristics of the Distributed Ledger Technology (DLT).

Chae Won-cheol, Senior Managing Director of the Product Strategy Team at Samsung Electronics’ Wireless Business Division, said that the next objective is to launch the new devices in countries such as The United States and Canada, according to a statement published by the newsroom of the firm.

“We will reduce the barriers to new experiences by gradually expanding the number of Galaxy models that support blockchain functions. We will also expand our service to target countries after Korea, such as The United States and Canada”, the representative said.

Cooperating with Telecommunications

In his statement, Chae also points out Samsung’s plans to work together with telecoms companies such as SK Telecom and KT in order to develop mobile identification cards based on blockchain technology, as well as local currencies.

“We will cooperate with telecommunications operators. We want to activate related technology, such as the identification of the blockchain and local currency”, he explained.

At the end of April, an anonymous source told a news channel of the crypto industry, Samsung could end up developing a complete public-private blockchain platform and would include its own token. This information is not official until now.

Another possible plan for Samsung is to improve budget models with cryptocurrencies wallets. This development will facilitate the common use of digital currencies like Bitcoin and will allow users to handle services based on that kind of financial technology.

Supporting DApps

Recently, HTC announced that a low-cost version of its blockchain smartphone would appear this 2019 with a full BTC node, as well as swaps between ERC-20 tokens within the wallet. This would be a clue that the Samsung firm will follow.

On February 25th, Samsung workers explained the new S10 cellphone characteristics during the Mobile World Congress, held in Barcelona, Spain. These functions include support for Bitcoin, Ethereum, the decentralized App of beauty (DAPP) Cosmee Token (COSM) and the Enjin token (ENJ).

In the run-up to the launch of the Galaxy S10, there were many rumors and leaks. In December 2018, Samsung assured that the information related to the wallet integrated in the S10 was a “rumor and speculation”. But in January, some photos were filtered and revealed that the smartphone would support an Ethereum wallet. The information was now confirmed, but there are some comments about new developments that would promote the giant of technology.

The truth is that the South Korean firm expects the new functionality of S10 to encourage companies to develop more innovative services based on financial technology. The idea is to contribute with the adoption of blockchain technology, even more and more.

By María Rodríguez

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